New vs Experienced Investors

What’s up, everybody. Hey, welcome back to the “Real Estate Investing Secrets” show. Today, I want to talk to you about the three main differences between a new investor and an experienced investor. What makes experienced investors experienced? How do they get to that point? We’re going to talk about it today.
Welcome to “Real Estate Investing Secrets.” We’re all looking for freedom and the opportunity to live better more fulfilling lives. But most of us we’re trained our entire lives to work for someone else and chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom? My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your life and the world around you and to enable you to turn your dreams of financial freedom into a reality. My name is Mike Hambright from flipnerd.com. And your questions get answered here on the “Real Estate Investing Secrets” show.
So, let’s talk about the difference between new investors and experienced investors and specifically, what allows experienced investors to continue to excel. And I’m going to talk about three things today. Two of them are going to be a little bit obvious maybe but we’ll talk about them and you might pick up a couple of nuggets there. The third one I think is going be a little less intuitive but I think it’s really helpful to talk about.
So, I have the benefit of probably running one of the more successful coaching programs in the country. I’ve been a coach and a mentor to new investors for about 10 years and my students have bought thousands and thousands of houses. And I’m also in the very unique position and probably the thing that I love to do the most out of my entire kind of career in real estate investing is being an advisor and being able to be friends with some of the most experienced and most looked up to real estate investors in the country largely through the Investor Fuel Mastermind that I run.
So, we have a lot of America’s top real estate investors in there where we share ideas and knowledge and partner together and all sorts of stuff. And so I have this unique experience and obviously been a real estate investor myself for over 11 years now. So, I have this unique experience to help lots of people at different points in their business or their career. And so I think the comparison here will be helpful for you. So, the first thing that I want to point out again, three things that differentiate an experienced investor over a new investor and if you’re a newer investor how you can utilize what I’m about to share with you here.
So, the first one is going to be a little more obvious but it really needs to be discussed is commitment, commitment to the business. I will tell you that statistically and I don’t have an exact statistic to share with you but it’s in the probably mid to high 90s of people that try to get started in real estate investing fail. And I don’t have this statistic but I would tell you that I believe that the majority of them, by far, almost all of them, they fail before they ever do a deal and it’s because they’re not fully committed. They try. “Well, I bought some coaching program and I listened to part of it and I didn’t do most of the things they told me.” But in the back of your mind, it’s subconscious. It’s subconscious, right? Is that your mind knows that that is risky and your body . . . that’s how the human body is designed to try to keep you safe. It, because of everything we’ve been taught, has taught you to believe that working for somebody else or staying where you’re at now no matter how much you hate it or may hate it is less risky because there’s a little more certainty.
Now, you could lose your job tomorrow like I did. That was my situation. So, I had a ton of risk but I didn’t know it until I knew it until it was too late. But your mind will convince you that you’re safe there because at least it’s easy. You just you don’t think about it just get up and go tomorrow and don’t worry about it. Yeah, you’re not making as much money as you like or you’re not getting enough time off or whatever you don’t really enjoy it. But at least it’s known. You know what’s going to happen or you think you do, again, until you don’t. So, it’s commitment.
So, a lot of people that fail they dip their toe in the water, it’s a half-hearted attempt to try to do something and they’re very quick to say, “Well, it’s a bad time in the market or I tried and it doesn’t work for me or I don’t think that really works.” Or you find excuses and truthfully, most people point at everything other than themselves instead of saying, “Gosh, I’m the problem here.” And that’s one of the reasons in our coaching program, we put everybody together. We want them to collaborate. We want to see you talk about success stories and failures and all that so we can learn and grow together. That’s why we build communities. And so I think those are the biggest opportunities. But again, number one is commitment to success.
Some of the most successful people that I’ve known lost the job, had major health issues, were living in their car, like all sorts of things, not everybody. You don’t have to hit rock bottom before you make that plunge into real estate investing but you have to have that same level of commitment to say, “I will only accept success and I’m going to fail along the way. And that’s just part of my path to success.” And that is exactly what successful real estate investors do. They fail and they know they’re going to fail and they don’t care because it’s a steppingstone to success. Confidence, I’m sorry, commitment.
Number one, commitment to success even though failure will happen all the time all along the way. “No matter what happens, I’m going to figure this out.” That’s commitment. “And I’m not going back to that shitty job.” That is commitment, my friends.
Confidence. Confidence is number two. This is going to sound a little counterintuitive depending on how long you’ve been in the business. It’s not confidence that all these things have happened. I’ve bought hundreds of houses. I’ve been doing this for a long time. People often ask me, “Well, what did you do when this happened?” I have coaching students all the time, “I’m in this situation. What do I do?” I’m like, “That has never happened to me before.” So, it’s not so much confidence that you’ve done it before and you know exactly what to do. That will happen sometimes for sure but it’s confidence that no matter what comes my way I will solve it like that. I have the confidence to make decisions decisively and know that sometimes my decisions will . . . sometimes there’s not a right answer, it’s just an answer. A path forward. I don’t know what to do but this is what we’re going to do. This is how we’re going to solve it.
It’s the confidence to know that I’m going to get hit with everything in the book along the path and I will deal with it instantly, even though I may not know the answer. The truth is a lot of what we do, there is no right answer like I said. There very clearly are some wrong answers sometimes. But sometimes it’s like, “I don’t know if I should do this or that or this or that.” And it’s like, “Well, you could do any of them. Just decide and go.” And so that is the makes of a successful entrepreneur ultimately. And you’re going to make mistakes. Back to the commitment part, you’re going to fail along the way. But too many people are indecisive and they don’t know what to do. They get frozen by analysis paralysis and they’re just like, “I don’t want to do. Maybe I should just stop or do nothing.” And that is almost never the answer.
So, so far I’ve talked about two. Commitment to success no matter what. Confidence that you will not know all the answers but you can make quick decisions and decide on an answer. The third one is going to be a little less intuitive here. I’ve got a little sticky note which is why you see me if you’re watching me is resourcefulness. Now, a lot of new investors think that “Well, to be successful you have to have capital, you have to have these relationships, you have to have all these things.”
And a lot of that is true. But I will tell you that what is false is that successful investors always have all the resources they need. What I would tell you is that they are more resourceful. They don’t have the resources but they know where to get it or they know how to get it or they know who to get it from. Hope that makes sense. There’s a big difference there between, “I have tons of cash around and I can do whatever I want in real estate investing.” It doesn’t matter how much cash I have. It could be tens of millions of dollars, that will never be enough. No matter how much money you have, it will never be enough. That’s why we use leverage and we borrow money from other people. We’re resourceful.
So, last week, it was with a member of my Investor Fuel Mastermind, Richard Brown from the UK. He’s actually our first international member. Awesome guy. He was on my podcast last week for the “Investor Fuel” show. If you don’t know I have two different podcasts, “Real Estate Investing Secrets” and the “Investor Fuel Mastermind” show which is basically me interviewing my Mastermind members. So, Richard Brown was on. And the show that we recorded with him was talking about eight forms of capital. And it was insightful and I’ve been thinking about it ever since and that’s one of the things that has inspired me to talk about this right now is resourcefulness. So, there is the obvious capital, which is financial capital. We need financial capital in this business. And if you’re used to just wholesaling or more accurately assigning properties and you’re like, “Well, I don’t need capital.” That’s actually BS.
The truth is if you’re assigning every property, it’s a good way to get started. You should always assign properties. But if you’re not keeping rentals or you’re not fix and flipping some cherry rehabs that you could make two or three times more money every once in a while, and you’re never going to get out of that transaction-based business. So, I’ve assigned plenty of properties and it’s a very, very important tool. But it should be one tool in your tool belt. If you’re not building up some wealth through rental properties or other residual income type investments that you often will need capital for, then you will regret that eventually. So, anyway. But in terms of resourcefulness, capital is just one of those and I’m just going to talk about a few of them today.
The main difference with people that are in the Investor Fuel Mastermind experience highly accomplished real estate investors and brand new investors are things like resourcefulness to find knowledge capital, knowledge. “I don’t know how to do something so I’m going to go find a person that knows that as best as anyone else and I am going to find a way to work with them whether it’s me paying them, whether it’s joint venturing with them, whatever it is. They have knowledge, they have a resource. Knowledge is a resource that I need and I will go get that right.”
A lot of new investors just try to go figure it out on their own. And I’m not saying that you can’t but it’s a whole lot easier and ultimately way less expensive if you go tap into that whether it’s partnering with somebody on a deal or paying for their program or whatever it might be. And I believe that. I sell a lot of products but I’m a consumer of a lot of products. I’ve spent over $1 million on education and fees and other things to learn systems processes or learn from other people. And I’m not ashamed of that. That is what has accelerated my learning curve.
So, capital, financial capital, knowledge capital, human capital. Experienced investors are focused on scaling a business as quickly as possible so they can afford to build out a team to help them grow. Human capital, human resource. We’re talking about resourcefulness. So, I don’t want to carry this on forever and ever but think about the resources you need in your business. It could be financial capital, it could be knowledge capital, I need this type of information, it could be human capital, it could be that I need to surround myself with people that have all these things.
That’s one of the beauties of a mastermind like Investor Fuel. I got one of my Investor Fuel shirts on right now from Phoenix and that’s why people join a mastermind is there’s so much knowledge there. Yeah. There’s a cost to join a mastermind but the value they get in terms of resources and the opportunity to even financial capital, lend from one another. We have people there that are some of the biggest lenders in the country, for example. Just those resources there are way, way a bigger return than the investment in a group.
And then like I said, talk about human capital, there’s also natural capital like natural resources. I need wood, brick, land. Whatever it might be for your business. There’s lots of different forms of capital but those are all resources. And so what I’ll tell you is that a lot of new investors are thinking, “Deal the deal, how do I get the next deal? How am I going to get this?” And a lot of more experienced investors are thinking about resources. How do I get the resources to build something much bigger than any one transaction?
So, that’s what I want to share with you today are the three things that differentiate experienced real estate investors from new real estate investors and those are commitment to success, confidence to basically clear any obstacles that get in your way, and resourcefulness. Find the resources you need. You don’t necessarily have to learn all these things on your own. Find somebody that knows these things. So, hope you got some value out of this.
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Thanks for listening to today’s show. There are three ways I can help you start or grow your real estate investing business. If you’re a new investor and just getting started, the FlipNerd Investor Coaching program is the most effective program in America. I’ve been coaching and mentoring new real estate investors for 10 years and my students have literally purchased thousands and thousands of properties. Many of them started with little to no experience at all. Our program is a paint-by-numbers program where we tell you exactly what to do week by week to make sure that you don’t get distracted on your way to results. We show you how to build a real business not just create another job for yourself. New memberships are limited. You can learn more and apply or schedule a call with me and my team at flipnerd.com/coaching.
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