If the real estate investing business was easy, everyone would do it. All you have to do is turn the TV on, and you will find a show dedicated to real estate investing. It won’t take you long to realize that every show will introduce some sort of conflict. These problems usually get resolved by the end of the program, but it is more important to simply remember, or perhaps familiarize yourself, with said conflicts. Bad things happen to even the best investors. However, it is how you face adversity that will set you apart. The sooner you can confront the following problems and overcome them, the better off your business will be:
1. You will lose a deal: In the real estate investing business, there isn’t anything worse than losing a deal. However, not everything is in your control when multiple parties re involved. As the deal approaches the finish line, someone may get cold feet, there may be trouble with financing or someone simply may just want out. When this happens, you probably want to scream. Instead of looking at others, simply take a step back and see if there was something you did that either caused the problem or could have prevented. Were you pushy during the process? Did you properly explain all of the steps? Were you unwilling to compromise, even a little bit? There are times when you can honestly say you did everything possible to make the deal happen. Other times, you have to admit that you could have handled things better. Learn from your mistakes, and try not to make them again.
2. You will make less than you anticipated: No two deals and properties are exactly the same. There are times when you mind your due diligence and something falls through the cracks. This can cause you to make much less than you anticipated, or even lose money on a deal. Instead of vowing never to take a similar deal, you need to examine what the issues were. Were you reckless with your numbers? Did you spend enough time doing your homework on the deal? Did you not account for an item that you should have? Making less than you thought or even taking a loss is a tough pill to swallow. Don’t look at this as time that was wasted. Look at this as a learning experience, and something that will never happen again. If the loss isn’t too big, it can actually serve as a great learning tool. Nothing will cause you to focus more on your next deal more than losing money.
3. Someone will try to scam you: There are bad people in every industry. If you are in the business long enough, you will eventually be approached by someone who tries to scam you. This could be someone you may have seen at clubs and meetings for years. It could even be someone you worked with in some capacity before. Like anything else you do in the real estate business, you need to do your homework. If a deal sounds too good to be true, it just may be. If someone asks you for money up front, you should ask why. There are times when a deal will be time sensitive, but never to the point that you should act impulsively. If you do fall victim, don’t let the mistake define the rest of your business.
4. You will think the business is easy: There will be times after you close a few deals when you think the business is easy. As great as things may be going, things can change on a dime. Having said that, it is important to remember what got you to that point: hard work. The minute you let up, you will start to see a few deals slip through the cracks. One or two lost deals means anywhere between four to six missed networking opportunities. Some deals will be easier than others, but the business is never easy. To be successful, you need to work as hard as possible, at all times. The minute you start to think the business is easy, you will start to see deals slip away.
5. You will lose a contact by not following up: The real estate business is made up of people within a local area. In many cases, how well you follow up could be the most important factor in your success. There is a point that almost all investors lose a precious contact by not following up. Following up is one of the most basic things you can do. A simple text message, phone call or email just to stay in touch or to give an update can make all the difference. There is really no excuse not to follow up. That being said, it happens much more than it should. If you lose a contact, offer up an apology and make an effort to get them back. One or two good contacts can change your business.
You should learn from every mistake you make. There are things that will happen during almost all investing careers. How you react to them make all the difference.