Overcome fear in real estate investing
This is for anyone who has ever had a little fear that prevents them from making deals. Fear and faith are really the opposite and I want to delve into the psychology of investing and overcoming your fears so you can take the steps you need to. Nothing great is ever easy and it always takes a leap of faith to achieve anything.
So you investors who have never done a deal, this is for you. For those of you who know this business and have the tools and education to do it, this will help you too. Everyone has been there.
I sat next to a woman not too long ago at a real estate investing seminar and she told me that she had spent over $40,000 on her investment education. She had almost all the books and tapes at her disposal. She Knew so much that she could teach me the business! I asked her a lot of questions and she knew what she was doing. I asked her why she hadn’t bought a house and she told me it’s because she never had the opportunity. I asked her why she never put an ad in the paper and her answer was, “I was afraid someone would call.” I said that’s what we do, don’t let fear stop you! I told her she could write a script for herself and if they called, she could follow the script and end up buying a house. Her exact words then were: “I was afraid that if I bought a house, I wouldn’t know how to get rid of it!”
If you have the education and really want to do this business, but haven’t pulled the trigger, read on. Fear and faith are the opposites of each other. If you have the faith that you are going to make it with the fear that you are not going to make it, it will always overlap. In your heart of hearts, you believe you can do this, don’t you? If you didn’t believe you could do this, you wouldn’t be receiving this Newsletter, would you? Would you spend your time learning about this business if you really didn’t believe you could do it?
Here are some tips for overcoming fear:
Have a mentor. You don’t have to join a high-priced training program to be your mentor. Your mentor may be a real estate investor at your local real estate investor’s club with whom you’ve struck a good chord. Ask them if they mind if you call them every once in a while with a question or two. They probably won’t mind if you call them once a week and they talk for 10 minutes.
Another way to handle it is by knowing someone in your area who is doing deals. Just let them know you’re getting offers on your desk and you’re not sure if they’re any good. Let them know that you are looking to make your first deal. Ask them if they mind if you call them to check it out and maybe you can work out the deal together and split it up. Let them know that you will do the work, but you just need someone to do it for you. Many investors will accept this and even tell you that they don’t need your money.
It could be a real estate agent who works with investors or even a landlord who owns a handful of houses or apartment buildings that have been around for a while. He could be a mortgage lender. Financing is a big part of this business. Nobody knows the mortgage business more than a mortgage lender. The key is to get out. Don’t sit in your office or living room thinking about all the problems that could go wrong. You have to network. If it wasn’t for networking, I wouldn’t be in business. I went to as many real estate investment clubs as I could and met people, and little by little over time I suddenly got to know the business. And you are always learning. You can’t be afraid to go out, reach out, shake someone’s hand, get to know them and ask them a few questions.
Another idea is a think tank with other members. There is nothing that has helped me more in my business than a group of experts and talking to other investors. Sometimes you just need a pat on the back or a kick in the butt to get you going and not be so scared. Don’t let fear overwhelm you!
The types of offers you can start with are wholesale offers, bird tracking, or option offers. There are no risks with these. With an option agreement, you find a nice house at a good price and get an option to buy it. You tell the seller up front that you may never buy this house. Let them know you’re getting an option so you can buy it if you want. Tell them the truth. Let them know that you will try to find someone else to buy it for a little more. Let them know that when you go to bed at night, you’ll be thinking about home, and when you wake up in the morning, you’ll be thinking about home. And you’ll also be thinking about his house in all that waking time in between, looking for someone to buy your house from me when the time comes. Tell them not to get too excited. What is your risk? Maybe give them $50 or $100 as a deposit option. Again, what is your risk? Any! And you haven’t risked your integrity, because you told him from the start that you might never buy the house. The same goes for a wholesale offer. If you’re selling wholesale (usually we don’t tell the seller we’re going to find someone else to buy it for us), but you might if you’re afraid to go back to the seller and say you’re not buying it. If you’re dealing with the right sellers, they don’t care WHAT you tell them, as long as you’re trying to help them with their problem. With wholesale, what is the risk? If he can’t find someone to buy the house, he drops the deal.
What are you afraid of? Sometimes “the only thing to fear is fear itself.” I know it’s an old adage, but it’s the truth. There is nothing to fear.
Even with short sales, you have nothing to fear. You’re telling the seller up front that he’s going to try to work with the bank to get it cheap enough for us to buy it. Let them know up front that you can’t buy it if the bank doesn’t work with you. So what do you have to lose? Don’t let that fear overwhelm you.
Do wholesale deals, option deals, short sales (which are a lot of work), or even scams for other people. Be honest with people if you find a good deal.
Remember, everyone in this business got help when they started. One deal becomes two, two deals becomes three. But, you have to do that first. So, focus on just one type of deal. I suggest not doing a replacement or a rehab for your first deal, if you’re nervous. Choose a wholesale or option offer for the first.
You can do this business! If I can do this, and so can a thousand others, so can you! Turn your fear into faith. Wake up every morning and say, “Yes, I can!”