It is not uncommon for the biography of a successful individual to include some scenario in which they overcame a major setback. Whether it is financing difficulties, sudden employment termination or a seemingly impossible task, there is usually a period of failure that preceded their success. The same is true for most successful investors. The idea that you will enter the business and make millions of dollars is simply unrealistic. Again, it is possible, but unrealistic. Sometimes the best thing to happen to a new investor is facing failure. How they react and learn from it will be an indicator of just how successful their business will be. The way in which they deal with setbacks is instrumental in their development.
The real estate investing business is difficult. In spite of what you see and what you may hear, not every new investor makes it. The biggest reason for this is not lack of knowledge or lack of drive, but the willingness to see the big picture and fight through rough patches along the way. There will come a point in almost every new investor’s career that they will want to give up. There will also come a time when they will make an error that can cost them a deal, a contact or in some cases a large sum of money. They may not realize it at the time, but if they can learn from it and make a point to never do the same thing again, this can oftentimes be the best thing to happen to them.
Failure at any point as an investor isn’t a bad thing. The best investors are the ones that will put themselves out there and be willing to face rejection or failure. With any marketing campaign, if you can get 3% of the people to call you back you are doing pretty well. Out of those 3%, if you can convert just 1% that is a successful campaign. Simple math tells you that plenty of people will not want to work with you. In some cases these can be leads and deals that you spend months working on. Any error you make when you have time and possibly money invested will be one that you probably won’t make again. By dealing with this experience, it will make you sharper and smarter moving forward.
Another byproduct of dealing with setbacks and failure is to keep you humble and grounded. You now know that deals are not guaranteed and you have to work for everyone. You may have thought the business was too easy and that you would always have more leads than you know what to do with. One or two lost deals will quickly knock you off your high horse and refocus you. These are painful lessons to learn, but they will be the ones that you remember the longest.
When failure comes your way, you can either grit your teeth and allow the mistake to never happen again or it could beat you up and lead you out of the business. Every investor will go through ups and downs and face some adversity along the way. How you deal with it when it happens will define you and your investing career.