If you’ve tried starting a real estate investing business but haven’t yet reached the success you want, then you need to learn these 11 deadly mistakes and how to avoid them.
Mistake #1: Not Treating What You Do As A Business
A hobby and a business should both be what you love to do but the reality is a hoppy usually costs you money whereas a business should make you money. Take REI seriously and focus on building a profitable business.
When you treat real estate investing like a business, you are much more focuses and serious about turning a profit.
Mistake #2: Being Distracted By Too Many Good Strategies
“The sun’s rays do not burn until brought to a focus.” – Alexander Graham Bell
The same is true with your efforts in real estate. Too many “would-be” investors lack the will power to stay focused on any one strategy or technique for long enough to see it work. There are hundreds of different ways to make money in real estate but chasing too many different good ideas often leaves them exhausted, frustrated and with little to show for all their work and effort.
The key to success in real estate is to select one strategy that most fits your goals, personality and strengths and then develop it completely before moving on to another.
Mistake #3: Not Selecting a Specific Niche
Even after you’ve focused on a specific strategy in real estate, it’s imperative that you specialize in a niche. Focusing on a smaller slice of the pie may sound counter intuitive but when you do, your business will grow faster and make more money sooner.
For example, when I first started investing I focused on wholesaling as my strategy. My niche was to wholesale low income rental homes to landlords in a town with a population of approximately 60,000 people. In a few short years I dominated my niche and had flipped hundreds of properties in that town. I was a big fish in a small pond rather then a small fish in a big pond.
Real estate is market driven. That means what works well in one market or economic climate may not work as well in another. I’ve said it before and will say it again: “The most successful investors adapt with the market.”
During the past 10 years as a full time investor I have pretty much stuck to “flipping” but the methods and techniques for how I’ve done that have changed drastically.
Don’t get married to any one technique. Be flexible and willing to learn new methods because it’s not a matter of if the market will change but when.
Method #5: Thinking You Can Get Rich Overnight
While I firmly believe real estate is the fastest way to wealth, you cannot shortcut your way to success.
Millions are attracted to real estate thinking they can make millions overnight. Sadly they buy into empty promises that only leave them broke and disappointed.
Beware of promises of getting rich without putting in any time or effort. I am often asked if so-and-so guru is legit or what I think about a specific investing program, course or system. Of course, while my programs are all the best (wink), most “work” to the extent that you do.
Before jumping into real estate with both feet, make a firm commitment to pay the price to be successful.
Mistake #6: Going All-In, Too Early
I can’t tell you how many times I’m asked, “I read your book or I watched your webinar, should I quite my job and flip houses?”
What I typically advise is to do what I did. I worked my real estate business part time until I had earned 1 year’s worth of my current income (wasn’t much) before doing real estate full time.
Mistake #7: Expecting Everything to Be “Done-For-You:”
Some of my students want me to tell them word for word how to overcome every objection that might possibly arise. As a result, most of my training programs include scripts and step-by-step action items. Even with everything imaginable included there is an element that is perhaps the most important ingredient to your success…YOU!
What works for me or someone else won’t work exactly the same for you..
Take my programs (or anything else you learn) and customize them to fit your own personal style that is natural and builds on your strengths and background.
Mistake #8: Wasting Time and Money Getting Ready
You’ve probably heard the phrase “paralysis analysis,” which is when you are frozen in the preparation stage instead of just going out there and doing something.
This is such a common set back for a lot of people. There is one indicator above all others that will let you know if you are stuck “getting ready:”
Are you making offers?
You will never get deals unless you are actively, consistently making offers.
Don’t worry if you don’t have everything 100% figured out, just go find a good deal (make offers) and everything will work out.
Mistake #9: Not Building Key Relationships
Most people think of starting a real estate business in terms of doing a deal and making a quick buck with no prior relationships with key people.
The reality is you’ll be more successful when you focus on building relationships with real estate agents, contractors, bird dogs, title and closing agencies, etc.
If your new real estate business isn’t making money at first, don’t throw in the towel too soon. Many successful investors have multiple failures in their background, which are actually lessons on what NOT to do.
Evaluate the areas in your business that need attention and seek out expertise in those areas.
Often times, a mentor can give you a new perspective or how to help you reposition your business to make it profitable.
Be sure to give your business enough time to build momentum.
Mistake #11: Being Too Cheap!
While every good business needs to take cost-saving measures, don’t confuse saving money with being cheap. Remember, the things you pay for aren’t always expressed in money. It’s also the time, effort and increased productivity.
I have a note on my laptop that’s says, “Is this the best use of my time right now?” It helps me to focus on the highest priorities.
Ask yourself, “If my time is worth $1000 per hour, would I be doing this particular task right now?” If the answer is “no” then consider delegating what I call “licking envelop” tasks to someone else.
My training programs are so effective because, if implemented, they utilize technology, systems and tools to do much of the heavy lifting, freeing you to be more productive.
Smart real estate business owners continually invest in their education. They buy marketing and training programs and timesaving software tools and systems that allow them to grow their businesses faster and with less effort.
Have you made any of these mistakes in your real estate business? What did you do to course correct and fix them? Share in the comments below…