There are hundreds of reasons why real estate investors fail. But if I had to narrow it down to the top 5 reasons why, well it would make this blog a lot easier for you to read and for me to type. So here we go:
1. They Haven’t Taken the Time to Get Educated
I’ve met so many people over the years that think that HGTV shows a real life investment property deal. I wish they’d show you what really happens. When the proverbial s*&T hits the fan when rehabbing a property. What they don’t show you is how to shop your deal to lenders to fund your deal. They don’t show you how to market the deal beyond sticking a realtor’s sign in the yard. They don’t show you how to maximize your profit on a deal. Spending the time to get educated on sourcing private money, learning marketing systems and strategies to make sure you make the most on every deal will pay huge dividends.
2. They’ve Paid Way Too Much for Education
You don’t need to spend $50,000 to learn real estate investing. You really don’t need to spend $10,000. There’s not much you can’t learn online these days for free or through books, but there is always some guru looking to sell you their course. I’m not saying some of them aren’t worth it, but before you invest in those kinds of things, make sure you verify that they have done what they say they’ve done. If they can’t show you HUD statements to verify that they’ve done the hundreds of deals they’re claiming to have done, then they’re not legit. Sorry gurus, I’m so sick and tired of seeing people get hustled out of money that they could have used to buy a deal and get their investment business moving. If you really want to learn, find yourself a quality mentor that you can work with. Bring them value and you will learn more than you ever could from an internet guru.
3. They Get Educated and Take no Action.
If you’re going to invest in your education, and not take action, you may as well just give your money away to charity the next time. The only thing that is going to change your life is taking massive amounts of action. If you don’t know what this means, then go to the library and get these two books “Awaken The Giant Withing” by Tony Robbins and “The 10X Rule” by Grant Cardone. Both can help you identify the limiting beliefs holding you back from greatness and how to set goals so massive that you have no choice but to take massive action in your days.
4. They Rely to Heavily on Traditional Financing Methods
I made this mistake early in my investing start up. I would use banks to finance my first deals where I’d have to come up with 20% down to acquire a rental property. I’d take the money I made, stash it away and then do it again when I’d built up enough cash. Then do it again. I did this for 3 years and it as a massive mistake. Banks for the most part are garbage. You need a private money lender. Let me be clear, not hard money, PRIVATE MONEY. Private money lenders are people that aren’t like you. They have money and they don’t know what to do with it. They’re people with CDs in the bank earning less than 1.5%. They’re people invested in a stock market at record highs and they don’t want to lose what they’ve made back since the recession. They’re people who want security. They’re people that don’t trust Wall Street. They’re people with old 401(k) accounts just sitting on the sideline. If you want to get to a high level, you MUST find yourself a private money lender and you must do it now. Banks still can work for you and I’ll explain that further in a future post.
5. They Simply Do Not Work Hard Enough
In the beginning you must work harder than you ever have and you must work harder than everyone else. The goal is to get passive income, but that just doesn’t happen overnight. You’ve got to be completely committed to dominating your marketplace in whatever it is you’re doing. If you’re doing door knocking, you better be knocking more doors than everyone. If you’re doing direct mail, you better be sending more letters than you competition. You also need to be doing it better and differently than your competition so that you’re standing out. The other thing to focus on is building systems you can duplicate and that you can outsource to others. You’ll never have a passive lifestyle if you’re in the business 24/7. Grinding out 60-70 hours a week is great when you start, but you don’t want to be doing that stuff when you’re 50. The whole point is to get free right? Visualize what being free looks like and work backwards to build what you need.
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