We hear excuses all time time about why a real estate investor hasn’t gotten a deal or why they’ve quit after a short period of time. When we start digging deeper into why they’re struggling, there are common reasons that could be easily solved.
Let’s discuss 6 of the most common reasons investors fail.
1. They don’t treat it like a business
If an investor doesn’t treat their investing like a business, it creates vulnerabilities that make the business extremely difficult to succeed. You need systems, processes, and routines that make your business run smoothly so as it grows, you’re able to scale efficiently.
From scheduling out postcards to go out to following up to rehabbing a house, you need to document your processes, follow through the necessary steps, and it needs to be done by the book. Otherwise, crucial steps will be missed and it could open your business up to unnecessary challenges.
2. They don’t realize that leads are #1
Without leads, you don’t have a business.
You need to be generating leads every single month. In addition, you need to be sending out mailers to the same list for multiple months in a row. Don’t just send them one mailer and hope for the best.
If a seller isn’t ready to sell until mid-year, they’re most likely going to wait until they’re ready to sell before deciding who to reach out to. If you only mail to them in the fall, you’re likely missing out on that deal purely because your information isn’t in front if their eyes.
3. They get too comfortable
Once you get a deal or two, don’t stop advertising!!!
You always need leads to keep your pipeline going and as you continue to mail, you’ll gain momentum and you’ll get more leads reaching out to you from your follow up advertising.
Even if you made more on one deal than you made in Corporate America in a year, don’t get comfortable!
Always keep your pipeline open so that you can get deal after deal and you don’t end up with lulls.
4. Don’t realize it’s a business of helping others
It’s not about the money.
We repeat, it’s not about the money.
Sure, it’s nice to get a nice check after closing a deal, but if you’re only in it for the money, your business will not thrive.
It’s key to realize that you’re in the business of helping others out of tough situations. They’re contacting you because they’re going through a tough time and need to sell quickly and might not have the time or money to fix the property up.
When meeting with sellers, it’s important to figure out why they reached out to you, what their pain points are, and come up with a solution for that works for both of you.
This will help you secure more deals, all while helping another person out.
5. They think they need money
Don’t get us wrong, you do need money, but you have opportunities that don’t include you needing to use your own money.
Most investors use OPM or other people’s money. This could be from private money such as from friends or family or from a hard money lender. By doing this, you’re able to purchase more properties without the limits of your own bank account.
It can take some time and experience to build up trust for private lenders because they want to know their money is going to be in good hands. Once you show your track record, they are normally more likely to understand and trust how you’ll be using their money.
It’s good to research types of lending that is available to you based on what your exit strategy is so that when you are ready to secure a deal, you have an idea of how you’ll obtain the financing needed.
When it comes to advertising, you’ll need money for this. There are ways to do this cheaply such as driving for dollars but if you’re going to be sending out mail or advertising online, you’ll need money so that you can advertise to the same property for at least 3 months.
6. They’re not willing to invest in themselves
You spend 13 years in school, followed by usually 2-8 more years in college to learn a specialty for your career. In addition to your time, education is not cheap and many are in debt from student loans for years after graduating.
With real estate investing, there isn’t a formal training per se but it does make sense for you to learn from someone who is active in the business and you can learn from their successes and failures.
Typically, this sort of mentorship or coaching is not free.
You can learn a good bit of information for free online through podcasts, blogs, and from watching other investors post their stories on social media.
This type of information though doesn’t help you when you’re meeting with the seller and don’t know what to do to secure the deal.
What contract do you use?
How do you know if your offer is appropriate?
How do you know if your repair estimate is accurate?
How do you secure your financing?
What happens if there are title issues that arise?
That’s what you’re paying a mentor for. Those first steps come with so much uncertainty when you’re brand new and you need someone to help you through it.
With the right mentorship, you’ll be able to make back your money plus more after just a deal or two.
Comparing it to traditional school loans that you’re paying back for years and years, the investment in your real estate investing education could be made back in just a few months after you complete a deal or two.
Don’t give excuses.
The beginning of this journey is going to be the most uncomfortable so set small milestones and hold yourself accountable of taking action and getting your first deal done.
Many times, the only one holding you back is yourself.