Failure is a loaded word.
Throughout school as young men and women, we’re taught that if you don’t make a certain grade, you have failed. In the real world, however, failure has a different face.
In most cases, there are allowances for mistakes and setbacks, but none of these are necessarily failures. You learn from each of these missteps and push yourself a little further toward your goal.
In the real world, failure does not have to be as permanent as a grade that follows you around and a judgement from others each time you try to push forward.
Failure does not have to be a label that follows you forever. Just ask almost any successful real estate investor what failure has done for them and most will tell you that failure can be a great teaching moment.
Failure can be a great learning lesson in real estate investing. The reality of failure is that it does not have to define you in any endeavor…especially real estate!
As the saying goes, “failure only happens when we stop trying”!
Real estate investment is not an easy road. Yes, there are dozens of cable network shows that chop up 30 minute segments of instant success full of drama and decision.
Do they show the real world?
Not one that I am intimately familiar with. But they do tell a story that all real estate investors should remember. When you take out the dramatic cuts and the obvious acting and pay attention to the messaging, most are gilled with a message that you push through mistakes (failure) and learn to work with and motivate your team (to avoid failure) and cut your losses early on problem houses (limiting your failure).
For most investors, their real estate investing projects do not start off with instant success and if they do, most are not followed by continued success – at least not success only!
We’re seeing now, as the number of foreclosed homes decreases and the market becomes less of an easy win for real estate investors, that many are starting to leave what was once a crowded field.
It’s getting “too hard” for some folks. But this just leaves more room for serious and dedicated investors. Real estate investors who have been seasoned by failures big and small and have learned the secrets to finding success.
Real Estate Investors: Redefine Failure
As a newbie real estate investor, you’re going to make mistakes.
You’ll probably lose deals, waste money and think at least a few times that you aren’t any good at this and should throw in the towel. You will over pay…for everything. You will over pay for the investment property.
You will overpay for the materials, the insurance, one or more of your contractors etc… Remember, though, that there is a learning curve to investing in real estate – just as there is in any serious pursuit.
No amount of mentoring, hand-holding, program buying or life altering programs can eliminate the learning curve entirely. As with anything in life worth doing, there is a process that you have to go through.
A growth pattern that every successful real estate investor has to go through regardless of active or passive investing. Failure is part of that process. For some it will be small failures and others it will be large failures, but they will exist in the path that every investor takes.
Determination will take you a long way. Even in face of naysayers, believe that you can learn and you can do this. Be your own best cheerleader. You haven’t failed at investing until you give up on it. If you never give up and can avoid making the same mistakes over and over, you will learn and grow.
Deals will come and go, and you can learn from every interaction until you’re a seasoned veteran with your investments. See “failures” not as dead ends, but as opportunities for growth.
While there will always be other real estate investors who are more experienced, better connected and better funded than you are, it doesn’t mean that you can’t find success in your investments.
Surround Yourself with Positive Influences
If you can, make connections with people in your life that will be encouraging and offer sage advice.
They will not all act as mentors so do not expect them to. But listen when they speak and ask questions that matter. Do not waste time with how much they make or how great their last deal was.
Those things do not matter.
Ask how they did it. How they found the deal and what steps they took to get it under contract and finalized. Ask how they saved dollars on the renovation and any tips they have for saving a few dollars while still having great quality. Ask how they rented or sold a property so quickly and if they held out for the highest price or believe in taking the best price as fast as possible.
You will glean little secrets to philosophy from the best in the business and those philosophies will be where the success is made. Maybe it’s another investor who you have a rapport with, or a family member who believes in what you’re doing.
It could be an investor who always sits off to the side at investor meetings or possibly the one surrounded by everyone. While you may find yourself in moments where no one seems to think you can do it, it’s always good to have someone who does.
I know from experience that most successful real estate investors want nothing more than for you to be successful too. They operate with an open mind and openly share advice and tips. They understand that there are no secrets nor are there any shortcuts.
There are, however, things you can do and things you can avoid that will make your life easier and your investments more successful. It does not matter if you are actively looking to fix-n-flip a single-family house, buy a multi-family property or passively invest in long-term buy & holds.
Many investors have gone before you and the more you can listen and learn from those that are successful the better off you will be. Most will share their mistakes (failures) and openly tell you that they have not been 100% right every time. Those are the ones you listen to the most…
Let Others Pick You Up
Learn from other investors and allow friends and family to offer a pick-me-up when you’re feeling low about investing.
One of the best investment strategies is to surround yourself with a good network of support. Having a good support team is sometimes as important as the working team. Now, you can’t get all caught up with the niceties and pick-me-ups and forget that you have to learn when you are struggling.
Surrounding yourself with support will not replace learning. Pick-me-ups are important, but if you find yourself needing a pick-me-up at every stage of a deal….and on every deal, then you may need some re-evaluation as well!
No one starts off with instant success. Be patient with yourself and with the process of real estate investing. Dedicate time and energy to learning the most you can and surround yourself with great influences. Your best tool is going to be a closed mouth and open ears with a pad in front of you and pen in hand. Take notes and learn!
If this sounds like a bunch of business book mumbo-jumbo, well, I read a lot of business books. I am a firm believer in the basics that so many business books espouse and when I look back at my own business and investing experience, I know that the above tips were crucial in my own growth.
My family has built 10 businesses that have reached $10 million in annual sales and have placed hundreds of properties in our personal and combined portfolios. We have also all had our share of failure and learning curve experiences. I tell you there is a process to becoming successful, I speak as someone who has traveled the road.
Be open and honest and always aware of where you are as an investor, and you can over-come any failures, big and small. How do you keep enthusiasm for investing when circumstances aren’t going your way?
Tell us your investment strategies in the comments section!