Their are a ton of reasons why most people who get involved in real estate investing FAIL... Instead of digging into the hundreds of reasons, I have narrowed it down to just several that I feel are the most prominent.
Not in any particular order, but here are the main reasons for high failure rates:
Lacking in persistence
It is easy to come up with an idea that you want to get involved in real estate investing. You are motivated and ready to take on the challenge. Until you hit your first bump in the road. This is where most people will put it off and say, "I will get back to this later." The motivation dips a little and maybe the confidence level drops a bit. This is the point where you come up with excuses that you are too busy with other things to keep pushing forward...
Lacking in belief
I lied. I listed a bunch of main reasons, but truly feel this is the #1 reason why most will fail. I know most of you with kids would recognize the saying in the book called "The Little Engine That Could" where he always says, "I think I can, I think I can." This single line is so true. The easiest path to take in any tough situation in life is the easy route. This in many cases may be the "safest" route, but certainly not the most rewarding. Why did you get into real estate investing in the first place? To create a lifestyle? Make more money? Freedom? Retirement? Family time? Whatever the reason, it would be beneficial to highlight that on your desk, so you are reminded daily of why you need to continue on. You need to believe in yourself! Why not ME, should be a question you ask when faced with adversity or if you doubt that you can pull it off.
Attach emotions to deals
It is important to remember why you got in real estate investing in the first place. To make MONEY! Just because you really like a particular property, or part of town it is in, it must make sense financially. Too often investors let their emotions creep in when making decisions on purchases. It is a business, and needs to be treated as such. Real estate is a numbers game, and the numbers must make sense.
What is your business model? Are you a fix & flip, buy & hold, or wholesaler? You need to figure out what you are best at, what niche you would like to establish, and go after that wholeheartedly. If you are going to focus on fix & flips for example, don't try being the expert in locating properties direct from seller. Find a good reputable wholesaler to get your deals from. Too much time can be spent on areas that you are not an expert in, when you could be focusing on your strong points to maximize your time and profits. Also, find a mentor and others in the real estate arena that can help you along the way. Don't try going at it alone! Get surrounded by others in the industry you can lean on.
Don't Try do too much!
Good Luck in 2014 and Get After It!
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P.S. We work with hundreds of investors and help them achieve their real estate investing goals. Visit our site for more information on what we do, and who we are. www.bakerson.com