Personal Development

5 Ways Failure Can Help You (Not Hurt You) While Cash Flow Investing

Expertise: Personal Development, Real Estate Investing Basics, Business Management, Mobile Homes, Real Estate News & Commentary, Landlording & Rental Properties, Mortgages & Creative Financing, Real Estate Marketing
223 Articles Written

Humans are preconditioned to avoid pain and to move toward pleasure. We avoid failure because we associate that with pain. As a society, we also view failure as a sign of weakness and defeat. However, you may be surprised to know that you should embrace failure and fail often. Here are 5 reasons why.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

5 Ways Failure Can Help You (Not Hurt You) While Cash Flow Investing

1. You discover what’s missing.

Failure is simply a signal that something is missing. Failure reveals what needs to change for you to succeed. Through failure, you uncover gaps in yourself, your strategies, your systems, your business, and your team. You learn where your weaknesses and limitations are and what needs to change and/or be improved. Through failure, you discover where the obstacles are. You may then formulate a plan to push through the barriers, climb over them, or go around them.

My Story: Like many real estate investors, I struggled with building my “power team” while growing my cash flow business. Only by closing multiple deals successfully was I able to piece together what was needed, what could be outsourced, who was available to help, and many other questions I did not even know to ask. An experienced mentor or trusted real estate investor friend can absolutely be helpful in foreseeing common pitfalls and mistakes you may make moving forward.

Pro Tip: Outsource tasks you don’t like or that you are not good at if possible. Some tasks, like speaking with sellers, may be best for you to do personally and may require you to learn and grow.


2. Failure makes you pause.

Failure forces you to pause. It gives you time to analyze what you are doing and consider whether you should be pivoting, continuing, or giving up. It makes you consider, “How badly do I really want this?”

My story: For the first three years of my personal real estate investing career, I would rent or sell (via payments) to anyone with a little bit of money and a pulse. I inevitably had 100% of my tenants and payment-buyers default after a few months or handful of years. At one point, I was holding 20% of my portfolio vacant for a total of two months. It was during this point I vowed to properly screen all future residents thoroughly and consistently. From this point on, I would only rent and sell to qualified occupants.

Pro Tip: It may be wise to take one hour of every week to list and review what activities have been worthwhile, time wasters, neutral, hurtful or successful with regard to advancing your real estate investing activities. Without time for reflection, you may end up wasting effort, energy, resources, and time on the wrong ladder.

3. Failing often builds an immunity to fear.

A fear of failure limits you. If you are afraid to fail, you may also be afraid to take risks and scale fast. A fear of failure may stump forward growth. By failing often, you learn to build an immunity to fear. When you are not afraid of failure, you may embrace feedback and not be paralyzed by criticism.

Related: Why It’s OK to Fail in Real Estate (And How It Can Actually Make You Money)

As Aristotle said, “There is only one way to avoid criticism: Do nothing, say nothing, and be nothing.”

Throughout my real estate investing career I have been:

  • Rejected and said “no” to countless times
  • Lied to countless of times
  • Almost ripped off many times (by sellers, buyers, wholesalers, handymen, and mentors
  • Successfully ripped off a few times (by sellers, buyers, real estate agents, handymen, and mentors)
  • Laughed at on numerous occasions

Still, I’ve successfully helped and educated hundreds of sellers and buyers in my local communities.

4. Failure builds entrepreneurial character traits.

Failure is necessary for building of valuable character traits for entrepreneurial success. Character traits such as tenacity, perseverance, and resilience are all vital for any kind of long-term success. Your ability to push through failure where others may quit will lead you on the road to success.

Pro Tip: Do your best to plan ahead, but welcome the challenges that come your way. The challenges and failures will make you and your business stronger. There is a highly probable chance nothing you are going through is new. Please check with other members on this website and in the forums for help and directions in your real estate investing business.


5. Failure makes for a great comeback story.

Failure makes excellent comeback stories. Failure can also motivate the people around you, such as your employees, your fellow investors, family members, friends, and your peers to work harder for you, stand with you, or offer more assistance.

Related: How to (Gracefully) Handle Epic Failure as a Real Estate Investor

My Story: For the first three months of my real estate investing career, I obtained zero homes under contract. I knocked on hundreds of doors, mailed hundreds of letters, posted signs, and followed all the instructions in the “get rich quick” real estate handbook I was learning from. After three months of actively working every day, presenting numerous offers and giving myself more anxiety that I thought was possible, I completely shifted gears and started investing in mobile homes and manufactured home properties. My story from failure to success only came about through hard work, the ability to get back up after failure, and the conscious decision-making ability to refocus my efforts in a niche that seemed to have a better supply and demand than anything I was looking at previously.

There is another great advantage of having multiple failures on your belt — it keeps you humble. A real estate investor who has never experienced failure tends to be arrogant. Even worse, this arrogance can feed the false belief that you are infallible, which will expose you to devastating mistakes down the line.

Failure may hurt, but we should view it as a positive experience. We should fail and fail often. In doing so, we may open ourselves to opportunities for success.

How have you failed in your investing career — and how did that change you?

Let me know your experiences with a comment!

Investing since 2002, John started in real estate accidentally with a 4-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to his cash-flowing portfolio. Since these early years, John has gone on to help 150+ sellers and buyers sell their unwanted mobile homes and obtain a safe and affordable manufactured home of their own. Years later, John keeps to what has been successful—buying, fixing, renting, and reselling affordable housing known as mobile homes. John shares his stories, experiences, lessons, and some of the stories of other successful mobile home investors he helps on his blog and YouTube channeland has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest here and on other prominent real estate podcasts, authored a highly-rated book aimed at increasing the happiness/satisfaction of average real estate investors, and spoken to national and international audiences concerning the opportunities and practicality of successfully investing in mobile homes.

    Lisa Bryant from Washington, District of Columbia
    Replied about 3 years ago
    Hi, John- What a well-written article. My challenges are the foundation of how I got here. I know your article is geared towards real estate but it applies to whatever endeavors we seek out. I am grateful that God, saw fit to make me stronger through my negative professional experiences. Thank you, for sharing it. It was raw. Learn, Apply, Produce!
    Replied about 3 years ago
    $ mistakes are tax deductible
    Kevin Andrews Investor from Seekonk, Massachusetts
    Replied about 3 years ago
    Great article John. I feel like I want to go out and fail now! Haha. But seriously failure is how we learn and grow. I am committing right now to trying something new at least once a month in my personal life and professional life. More often if I can. And hey if i get laughed at or do something out of the ordinary I’ll be glad to have gone through the experience than to have never tried it. Thanks John.