5 Pitfalls and Potholes of Being a Real Estate Entrepreneur
When looking across the real estate landscape and taking it in for all of its’ beauty, do you see the picture of doom and gloom that the news is painting? Or do you see a landscape full of opportunity? In today’s real estate environment, where there is clearly a trail of destruction from poor lending practices to poor borrowing practices to out-right fraud, there are also the seeds for new growth and new opportunity for those that are willing to tackle the obstacles that come from such a challenging landscape. Now is a great time to lie out a few pitfalls and potholes that can slow your progress as a real estate entrepreneur. Make no mistake, today’s real estate market is full of both opportunity to succeed and opportunity to fail and having even a few guiding lights can make all the difference.
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You will become whom you surround yourself with!
Before starting any new venture, but especially in the over-hyped real estate industry, you must remember to surround yourself with high-quality people with “real estate” minds. I also caution you to seek the guidance of general business people who have had success in whatever field they have expertise. It is vitally important that you not only have really good advisers who can help guide you, but they will also help encourage you to push through obstacles and stumbling blocks. If you surround yourself with the wrong crowd, you could very well be lacking quality, motivating advice when you need it most.
Real Estate is generally simple – don’t make it complicated.
One of the fastest paths to disaster is to suffer from what we like to call “Shiny Object Syndrome”! This is a common ailment for many young entrepreneurs who see every opportunity as paved in gold. Sometimes our energy and enthusiasm boil over into wasted action and adventures down the wrong paths. Conserving time, money, relationships and other precious resources for that true calling can lead to profits much sooner than chasing every opportunity regardless of our plan. If you are going to be a realtor – then commit to being the best realtor in the business. If you are going to be a remodeler who fixes REO’s for retail sale – then be the best craftsman at your business. If you are going to purchase single-family homes for long-term buy & hold – then commit to learning every detail of the market where you are investing and build the best portfolio possible. Bottom line – Keep It Simple!
Constantly educate and work on your self and your team.
One sure fire way to find your career as a real estate entrepreneur coming to a quick end is to think you have it all figured out. No matter what level of businessperson you are, i.e.- beginner, advanced, all-pro, you must always be educating your self. Simply picking up the latest real estate titles at the bookstore will not suffice as education either. You need to inter-act and learn from others if you want to stay at the forefront of education. As much as real estate events are knocked, not all are created equal. Some are definitely better than others and well worth the attendance. Professional association meetings, continuing educations seminars and gatherings such as Bigger Pockets Summit are all designed for real estate professionals to come together and share and learn from one another what is working and what is not working within the profession. Often times these are great places to brush up on best practices and glean practical tips for success. Entrepreneurs never stop educating themselves and those that are successful in real estate will always echo that advice.
When it is time to Grow – get Growing!
As a business grows and begins to thrive, one of the key lessons entrepreneurs must learn is the value of delegating important tasks to others. You are the engine of the train and it is your job to drive forward. All of the ancillary (but extremely important) tasks that a company develops must be maintained and handled as you grow your company. Just as a train adds cars and the engine pulls them forward together, so must an entrepreneur grow and add to his or her company. This is one of the hardest obstacles to over-come as often times entrepreneurs have an obsessive need to control and be in charge of every minute detail. This is not a formula for everyone and a very select group of entrepreneurs are able to find success working this way. Vast majorities of entrepreneurs look back to lesson one and surround themselves with good and capable people to handle the details as they continue to move forward.
How do you handle the unexpected?
Maybe when you started your company you realized there would be bad days – maybe not. Did you realize that everyday would be a mix of both bad and good? Did you realize how often you would be faced with what could be considered minor catastrophes? I had no idea that so many things could go wrong in one day when I started my first business. Cancelled contracts, bounced checks, stolen materials, disappearing buyers, sellers or buyers remorse, etc… The list could go on and on with problems. The real point of this potential pothole is how do you deal with adversity? Are you prepared for glitches in your system and problems to occur? How are you going to deal with those problems when bills are due and your closing does not go as planned? I will interject one personal note here because it is a trait that I am most proud of and one that I am hyper-aware of at all times. I try to remain calm and level-headed at all times no matter the situation. Riding an emotional roller coaster will certainly not help me solve problems and would lead those around me onto that same roller coaster. Whether or not I am in control is not the point – everyone around me believes that I am and regardless of the unexpected occurrence, I am moving towards a solution. This is a characteristic that has to be worked on constantly because as a real estate entrepreneur, your ability to handle the unexpected will be tested almost daily.