Personal Development

3 Steps to Overcome the Fear of Purchasing Your First Investment Property

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Lately, I have been cruising the BiggerPockets Forums searching for interesting questions from new investors I can write about. The question that inspired what you are reading really surprised me. It made me stop and think.

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“How can I overcome the fear of getting an offer accepted on my first property?”

I had to read this question a few times to really let it sink in, and it made me think of the first property that I purchased. I realized when looking back that I wish a little fear had been present. It might have helped me do things differently.

Can Fear Be Helpful?

When I bought my first property in 2007, I did everything wrong. Why, you ask? Because I didn’t have any fear. Long story short, I called a real estate agent in another state and told her I wanted to buy a cash flowing investment property. She sent me a list of 20 properties she felt fit the description. I narrowed it down to five. I then told her to pick the top three out of the five. Then, I picked one. Thirty days later, I closed. I never stepped foot in the property until after the purchase. This is not how the business is done.

Moral of the story, fear can be helpful and beneficial when you are approaching your first purchase. It may keep you on your toes and out of trouble. Having a little fear is nothing to be embarrassed about.

house hack

When Does Fear Cease Being an Ally?

Fear ceases being an ally when it overcomes your “why” for investing.

As I continued to ponder over this question I read, I started to put myself in this investor’s place. I asked myself:

What are some of the reasons I would be fearful of my first purchase?

Sitting at my desk, I started to write down reasons that may inspire fear. (Feel free to make your own list right now.) After I finished, I stared at the reasons on the paper. Eventually, I came up with the following actions that would virtually eliminate the entire list. I hope they are helpful to you.

Related: How to Overcome Your Fear of Making Low (But Fair) Offers to Sellers

3 Steps to Overcome the Fear of Purchasing Your First Investment Property

Establish a more powerful “why.”

If you have not come across the concept of having a strong “why,” this simply refers to the reason why you invest. This “why” must be so strong that when you think about it, tears come to your eyes. Anything less than that will be no match for fear.

As an example, my personal “why” is that I want to be able to control my time, and I want the one tool that, when large enough, has the potential to solve any problem (money).

I never want to have to explain to my future wife and children that I have sacrifice time with them to go to a job. I never want to be in a position where I am forced to explain that I am not able to give them every opportunity available for success or the tools to simply enjoy life. My “why” is tied to those that will be closest to me.

Increase your real estate IQ.

Lacking confidence in your education will keep you from closing on that first deal. The bright side is, you are in control! Get out and hit every real estate club meeting in your area, then narrow it down to the individual groups that bring the most value. Network with the individuals at these meetings. Some will even let you tag along when they inspect, appraise, remodel, or perform other tasks associated with their deals. This will give you an on-the-ground education.

Next, get on Amazon and have a stack of books hitting your mailbox every week. Some of the best books I have read I bought for one cent plus shipping. Vary your reading — not everything should be on real estate. If you want to become more sophisticated, you have to improve knowledge in every area of your life. I have broken my life down into health, wealth, love, and happiness. A large portfolio of properties giving you huge amounts of cash flow will be worthless if your health and relationships are in the toilet.

Increasing your knowledge will bring confidence to close the deal like a pro even when you may be a novice.


Related: 6 Empowering Strategies to Conquer a Paralyzing Fear of Failure

Destroy perceived obstacles.

The most difficult roadblock that we can ever encounter is a perceived obstacle. Why? Because it’s all in our minds. A fight against your own mind will almost always end with you losing. Some of the most common perceived obstacles that I see are the illusion of what a “good” credit score is and the amount of a down payment needed for the purchase of a home. Your credit does not have to be perfect, and with all the programs available from our local and federal government, these perceived obstacles to home ownership are an illusion.

What are some of the other perceived obstacles that stop us from taking the next step to our dreams?

I have found it helpful to make a list of the things I see as obstacles and then pass this list to another set of eyes that are independent of my situation to get feedback to help me identify any perceived obstacles that may be blocking me.

To sum it all up, there is nothing that should keep you in fear of purchasing that first property. There is so much money, knowledge, and professional help out there just waiting for you to grab it. You just have to take that first step to make it happen. 

What’s holding YOU back from that first property — and how do you plan on tackling that fear?

Let me know your thoughts with a comment!

Brandon is a U.S. Army veteran, serial entrepreneur, and real estate investor who helps others improve their life through writing for online publications such as "Bigger Pockets" and "The Good Men ...
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    Tapanga Matthews from Mississauga, Ontario
    Replied over 4 years ago
    Great read! We all tend to let fear cripple us sometimes. But with the right knowledge and application as well as mentoring we can be unstoppable. Best Regards, T.Matthews
    Brandon L. Real Estate Agent from Falls Church
    Replied over 4 years ago
    Good Morning Tapanga 🙂 I totally agree with you. Thanks for taking the time to read and share your thoughts. Hope you have a great day!
    Dwayne McGee from Chicago, IL.
    Replied over 4 years ago
    Yes, very interesting article. It applies to me, because I have yet to make my first real estate investment, outside of my own home. Thanks, D. McGee
    Brandon L. Real Estate Agent from Falls Church
    Replied over 4 years ago
    Dwayne, thanks for taking the time to leave a comment. What do you think is holding you back from pulling the trigger?
    Ashley Watkins Accountant from San Francisco, Bay Area
    Replied over 4 years ago
    Thank you, Brandon. As a recent college grad, I find myself wanting to leap into new adventures and learn, but you’re absolutely right… that fear can be crippling. The obstacles seem larger than life. I love the idea of writing themy all out to eliminate them. Thank you.
    Brandon L. Real Estate Agent from Falls Church
    Replied over 4 years ago
    You are absolutely right Ashley. What are the things you feel are obstacles?
    Nathan Brubaker from North Richland Hills, Texas
    Replied over 4 years ago
    My business partner and I are just breaking in to investing. We’re intensely looking for our first property and just got pre-approved for a loan. For us, the newbie fear is twofold: 1. Is this really going to work? The numbers look good on paper, but what if something unexpected happens once we take ownership and responsibility for any repairs? 2. How do I know how much this home is going to require in rehab costs? The first fear is lessening over time the more we look at properties, but the second only seems to be growing, likely because neither of us have any experience in home repair. I’m confident, though, that with some walk-throughs of a potential property with a contractor, we’ll be able to dispel our concerns. Anyone else have thoughts on getting cold feet while staring down your first rehab project?
    Brandon L. Real Estate Agent from Falls Church
    Replied over 4 years ago
    Hello Nathan, thanks for taking the time to share your thoughts. I think you have a good plan to mitigate your risk by bringing in an experienced professional. You might also try to network with an experienced investor that completes a large number of rehabs in your market. For a fee, or maybe free they can check out your project and share some of their knowledge.
    Kathy Marshall from Buffalo, NY
    Replied over 4 years ago
    What’s holding me back is not knowing one or more contractors that I can trust. Holding cost can eat away the potential profit, so this seems like the biggest deal maker/breaker.
    Brandon L. Real Estate Agent from Falls Church
    Replied over 4 years ago
    Hello Kathy, Thanks for taking the time to leave a comment. Is there a local REIA meeting in your area? In my opinion, attending the meetings are one of the best ways to find out who is real in the business, so that you can have a successful and profitable project.
    Replied about 4 years ago
    Thanks Bandon I have recenly got a mortgage loan pre-approved but my main fear is whether I should invest in a property where I am underborrowed or overborrowed.I have come acroos four properties three in the medium density one costing $40K , another one for $25k and another one for $16K(with a 3 beds cottages and needs renovations)(all on 2000 square metres) .The other one is in the high density area 4 beds sitting on 300 square metres.Picking on the the right property is now my main dilemma.
    Brandon L. Real Estate Agent from Falls Church
    Replied almost 4 years ago
    Good Morning Maggie, thanks for taking the time to reply. The numbers will never lie to you when making a decision on which property to purchase.