My husband is an abstract artist. When he first started to paint, he was afraid to make a mistake and ruin a canvas. He was slow and tentative. He eventually overcame his fear by realizing that painting something was better than staring at a blank canvas.
Starting out investing is like looking at a blank canvas. You have a lot of choices and can get bogged down thinking about mistakes you might make. The problem with taking too long to act is that nothing gets done. I’ll let you in on a secret. As an investor, the faster you can make a decision, the better off you are. The investor who acts quickly lands the deal.
Six Hints to Help you Speed up your Decision Making Process
1.) Have guts
Have guts. The emotion of fear is ever present when you buy a real estate investment. For me, I still feel fear every time I close. Excitement, yes, but fear too. Learn to deal with the fear and press on. If the numbers work and your intuition is saying “go,” don’t let fear hold you back.
2.) Understand the Numbers
Get a grip on the numbers then quickly act on the numbers. Know what purchase price makes a good deal. Have a good feel for repairs costs. Input the numbers in a spreadsheet and wait to find the investment with a good return. When you find that investment, get it under contract quickly. You can always terminate the contract with a contingency, but if you don’t sign a contract, you will never get the deal. Like they say in the lottery: “You can’t win if you don’t play.”
3.) Decide Based on the Numbers, not Emotion
Use numbers not emotions when making decisions. The numbers will tell you whether the deal is good. If you only rely on emotions you might pull the trigger on an overpriced “cute” little house with a great kitchen but pass on the ugly tiled ceiling, paneling house that will hit a 20% return.
4.) Use your intuition.
So you did your homework and ran the numbers. Great! The numbers work, what now? If your intuition is saying “buy,” then buy. The numbers have to work of course, but your intuition will help steer you. Sometimes I start thinking about a property I have seen. I have a gut feeling of sorts about the property. When I feel that, I listen and follow up on it. Listen to your intuition and you will make better decisions.
5.) Don’t be perfectly stagnate.
No investment is ever perfect. When analyzing a deal, forget about needing the perfect investment. Take action and do something. Needing perfection can keep you perfectly “nowhere.”
6.) Focus your Efforts.
Figure out your game plan and stick to it. Come up with a plan for the next 12 months. How many will you buy? Where? What type? Write down your goals and focus on attaining them.
When it comes to making decisions on buying, the most important thing is to actually make a decision. Many investors miss out on deals because they can’t make a decision. If you decide “no,” then move on. If you decide “yes,” don’t hesitate, go ahead and make the bid. Want to improve your real estate business? Increase your decision making speed.