Business Management

The Single Character Trait That Predicts Who Perseveres (& Who Burns Out) in Real Estate

Expertise: Mortgages & Creative Financing, Business Management, Landlording & Rental Properties, Commercial Real Estate, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Personal Development, Real Estate News & Commentary
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“Every day is a new life to the wise man.” — Ancient Chinese Proverb

It should go without saying that real estate investing has a lot of highs and lows. There aren't a lot of other businesses where things can feel as great in one moment or as catastrophic the next. It's basically a roller coaster ride. If you flip a house and make $50,000, it’s a high unlike any other. On the flip side (pun intended), if you put months of hard work into a flip and then end up losing $20,000, it’s hard to get much lower. We’ve done both, so I can tell you from experience.

Furthermore, it’s not just the experience of these things happening, but the anticipation or worrying that precedes that loss (or even profit) that can be emotionally exhausting.

The Secret to NOT Burning Out

Such rollers coasters can burn people out. That’s why, if you’re in real estate for the long haul, a critical skill to work toward is level-headedness — in other words, the ability to not get too high in the good times or too low in the bad times. It sounds simple — but is not that easy to achieve.

Related: Most Top Investors Fail Before They Succeed: Here’s Why You Should, Too

My brother is a former poker player, and he likes to bring up variance and how much there is in poker (and real estate, for that matter). Namely, no matter how well you play a hand, sometimes the cards won’t fall your way, and you’ll lose. Statistically, you will win more often than not if you play by the law of averages (and know how to read people a bit), but it won’t always work out that way.

You have to be prepared for this variance (which is one of the reasons learning poker can be helpful for real estate investors). You have to accept that sometimes you will lose, even if you play everything perfectly.


The temptation is to change your strategy if you lose. But while it’s critical to constantly be monitoring how you’re doing and adjusting your strategy, you don’t want to respond in an ad hoc fashion to any given stimulus. Basically, you don’t change your strategy just because you lose. And on the other side, you don’t change your strategy if you win, either. Daniel Kahneman emphasizes this concept when discussing stock brokers in his great book Thinking Fast and Slow:

“Individual investors like to lock in their gains by selling ‘winners,’ stocks that have appreciated since they were purchased, and they hold on to their losers. Unfortunately, for them, recent winners tend to do better than recent losers in the short run, so individuals sell the wrong stocks. They also buy the wrong stocks.”

In other words, people try to hang onto their mistakes in hopes they will get better and sell short their good investments because they’re afraid of it turning into a loss. They’re getting off the roller coaster in the middle of the ride.

So stay true to your strategy in good times and bad. Again, that obviously doesn’t mean that you shouldn’t adjust your strategy. You should. But you should do it in a controlled manner based on good evidence and careful reflection, not as a reaction to what could just be variance.

Make More Mistakes

More importantly, you also have to be prepared to make mistakes. No matter how good you are, you are going to make mistakes. Don’t fear them, expect them, and even go so far as to embrace them. My brother has a sign in his office I love to reference. It simply reads, “Make More Mistakes.”

Mistakes are often just a sign you are trying something new or challenging. Learn from them and move on.

Indeed, as I wrote in a previous article:

"More than once I've bought houses with broken sewer lines that I didn't know about. More than once I've missed that a house had galvanized plumbing that was so rusted out it needed to be replaced. More than once I have misjudged the HVAC or windows or roof or missed knob and tube wiring or substantially underestimated the necessary budget of a project or used bad comps when analyzing the LTV of a property. I've hired a receptionist with a severe drinking problem and used a contractor who was uninsured unbeknownst to me. I've passed on deals I regret. I've bought deals I regret."

But we’re still here despite all of that.

Related: How to Use a Fear of Failure to Empower Action (in 4 Simple Steps!)

My dad likes to tell me he regrets selling every property he’s every sold other than flips. There are some exceptions, of course, but he’s found it to be generally true. He once sold his percentage of a $2 million apartment that later appreciated to about $3 million over the next few years. We have the habit to hunker down or get out when we make mistakes, but that temptation doesn’t make it a good strategy.


Twenty-Mile Marching

And, of course, sometimes it’s just good or bad luck and has nothing to do with making a mistake or making a great decision. But not matter what the cause, it feels like it was a mistake or a great decision.

Regardless, as Jim Collins showed in his fantastic book Great By Choice, hunkering down after bad luck or a mistake is exactly the wrong way to do things. He calls the appropriate strategy “20 mile marching,” which amounts to consistent, solid growth, or:

“… [An] unwavering commitment to high performance in difficult conditions, and […] the discomfort of holding back in good conditions.”

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And the other side is just as important. After a large refinance a few years back, we had a lot of capital and felt very good about ourselves. And, well, we got a little cocky. We ended up buying an apartment that we shouldn’t have that turned out to be a money pit, while simultaneously expanding too quickly in Kansas City. Before we knew it, we had drained our capital reserves and had to scrape our way back out of it.

Being level-headed is absolutely critical to avoid both the mistake of hunkering down too much after a big loss or leaping ahead carelessly after a big win.

Mistakes, luck, and variance happen. Don’t just go with the ebb and flow of the tides; be prepared for the bad times, and while you should go ahead and celebrate the good times, make sure to always keep things in perspective. Stay consistent and stay level-headed. That mindset is your seat belt. Without it, the roller coaster of real estate will throw you right off it.

Investors: What have YOU learned from the highs and lows of real estate investing? What do you believe kept you hanging in there when the times got tough?

Let me know with a comment!

Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip ...
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    Martin G. Rental Property Investor from Cincinnati, OH
    Replied over 4 years ago
    Excellent content. Thanks for posting !
    David Krulac from Mechanicsburg, Pennsylvania
    Replied over 4 years ago
    In to every ones life a little rain must fall. If at the first trouble, or things not going just perfect and you quit, you don’t have the “right stuff”.
    Jerry W. Investor from Thermopolis, Wyoming
    Replied over 4 years ago
    Wow, I really liked this post. it is easy in this business to react when we should step back and take a breath and think about it. it is especially hard when we get real busy and think we have to make a decision right now. Thanks for posting.
    David Roberts from Brownstown, Michigan
    Replied over 4 years ago
    I appreciate the candor of this post. I have had a roller coaster ride over the past year and there were times i was thinking to myself why did i get into this, but just about everything worked out, so far positively.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 4 years ago
    It usually does turn out positively if you persevere and learn from your mistakes. Glad to hear it’s working out for you!
    John Daley Real Estate Investor from Kansas City, MO
    Replied over 4 years ago
    I have an ‘amen’ to add to this post. Real estate really is a high risk, high reward type of investing. The more you know, the more you can mitigate the risk, but there are a lot of moving parts involved with each and every property…and surprises can be costly. As full time investors, we have to play the odds as best we know how. If you haven’t lost money on a deal you’re being too cautious. (Something I found out for myself this year.) But what can cost you even more in the long run is not being willing to take risks at all.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 4 years ago
    That it certainly is. Although, I think one of the great things about real estate is it’s a lot easier to get a great deal in an inefficient market like real estate than a relatively efficient one like the stock market. And getting great deals can definitely help mitigate risk for a buy and hold investor (they are an absolute must have for a flipper obviously).
    Judy Lintus from Conroe, Texas
    Replied over 4 years ago
    Thank you for this post. I have been reading blog and posts and listening to webinars and podcasts and they have all discussed the subject of losing in real estate investing. I figured if I learned enough, I could avoid losses. The sentence that clicked for me was: “You have to accept that sometimes you will lose, even if you play everything perfectly.” So much so, that I printed it out and framed it. It reminds me to do my best, be prepared and it’ll be ok.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 4 years ago
    That’s awesome, I don’t think I’ve ever had a quote of mine framed, well, I guess it’s sort of from my brother, but whatever. I’ll take credit for it. Good luck investing Judy!
    Lyall Michael Wholesaler from Paarl, Western Cape
    Replied over 4 years ago
    Thanks for this post, I am a completely new investor (1house but grand plans to expand to many more) and as I listened to pods and read posts I felt a sense of dread and excitement at the prospect of making mistakes which in real estate have severe punishments in many cases. Your post helped calm me down and gave me perspective. I will continue my prep and strike when ready, and will be more confident when I do thanks to this post!
    Philip Kauppila from Oklahoma City, Oklahoma
    Replied over 4 years ago
    Love your post. Milton Erickson, a famous therapist, once said “make many mistakes and learn well from each one of them.”
    Ronald Perich Investor from Granite City, Illinois
    Replied over 4 years ago
    Really good post. This message hit home for me and is easily extended to any area of one’s life. Parenting for example. Parents know their children will make mistakes. And if they really care for them, I think they should let them make mistakes (within reason). My son was struggling with fear about riding a new Zike (that is spelled correctly) his grandparents gave him for his birthday. He was so fearful of falling and getting hurt, that he went into a 20 minute crying fit. Literally crying and I know he was genuinely scared of riding it. But at this point in his life, it is critical he start learning to push through those fears because they hold him back unnecessarily. We finally convinced him that he had to try – at least try – to ride his newest toy. That we weren’t going to let him hurt himself. We had to remind him that there are going to be times when he falls down and gets hurt. We had to remind him of the arm he broke (while playing with kids innocuously after his cub scouts meeting in the cafeteria). Yes, it hurt at first. Yes, it meant he had to work around a cast for a few weeks. “But you survived, didn’t you?” “You didn’t quit the cub scouts, did you?” “You didn’t stop playing with your friends, did you?” He eventually rode the Zike. He still has that fear in him and it’s going to take a lot of work on our parts to work him past those fears. But every time he battles through and past those fears, he gets a little stronger. He becomes a more complete and capable young man. And he grows a little more. I’m certain he’s going to hurt himself again. He’s just too active a kid to not bump his head or scrape his arm. Maybe even break a bone or two. He has enough natural fear in him to stop him from jumping off the roof or doing something overly dangerous. That’s why fear exists in the first place. It’s a protection mechanism meant to stop us from unnecessarily taking too much risk. But we’ll provide him with all of the safety equipment he needs. We’ll be there right beside him to keep him upright when he gets started. We’ll be there to help push him through those fears when they are holding him back. And we’ll revel in his accomplishments when we finally let go and he’s able to do it on his own. When he’s pushed through his own fears and accomplished something he never thought he could do. Thanks for the post and the reminder that fears can prevent us from getting hurt in the first place. But they can also prevent us from growing if left unchecked.
    Replied over 4 years ago
    Great post! Thank you for this simple yet profound reminder!
    Kevin Izquierdo from Hillside, New Jersey
    Replied over 4 years ago
    “You have to accept that sometimes you will lose, even if you play everything perfectly.” This is a great quote- able article. So much good information on this. Thank you 🙂