Why Do 97% Of Real Estate Investors FAIL?

Specialist · South Bay, CA · Member since 2015 · 132 posts · 34 votes

There's a lot of REAL Estate educational platforms out there promising to show you how to invest in real estate or flip houses, so why is it out of the hundreds of people that sign up for these seminars, these educational platforms, these personal coaching sessions, etc. ONLY have 3% success rate?

Is it that the people don't stick around long enough to have success or is there no REAL TRAINING involved to actually ensure your SUCCESS?

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Don Mangiarelli

Rental Property Investor · HI · Member since 2019 · 38 posts · 93 votes

@Sadrud-Din Williams real estate investing is like any other business. It takes time, patience and persistence to be successful. 97% of people get really excited when they start a business, but when they don't see immediate results, they quit. That's why only 3% succeed. If it was easy, everyone would be doing it and would be successful at it. Most people aren't willing to work hard to get results.

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Don Mangiarelli
Rental Property Investor · HI · Member since 2019 · 38 posts · 93 votes
7y
@Sadrud-Din Williams real estate investing is like any other business. It takes time, patience and persistence to be successful. 97% of people get really excited when they start a business, but when they don't see immediate results, they quit. That's why only 3% succeed. If it was easy, everyone would be doing it and would be successful at it. Most people aren't willing to work hard to get results.
64 Reply
Paul Choi
Rental Property Investor · San Ramon, CA · Member since 2017 · 350 posts · 611 votes
7y
You don't need any seminars or training programs and pay thousands of dollars to do real estate. You need the right mindset and perseverance to succeed in this business.
62 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7y
Originally posted by @Don Mangiarelli:
@Sadrud-Din Williams real estate investing is like any other business. It takes time, patience and persistence to be successful. 97% of people get really excited when they start a business, but when they don't see immediate results, they quit. That's why only 3% succeed. If it was easy, everyone would be doing it and would be successful at it. Most people aren't willing to work hard to get results.

This just about covers it. Add this to the mix. Most of that 97% are followers...and they would rather follow the majority...even if the majority fails. To them, all that proves is it can't be done the way the majority tried.

This make no sense to me. The answer is staring them in the face...don't follow the majority if they failed. Why not follow the minority if they succeeded? What's more important to them...success, or being part of a majority.

I wonder what the success rate is for those that just go for it...with no training, and learn as they go? I also wonder what was used to measure success in both the original question, and mine?
19 Reply
Brant Richardson
Investor · Santa Barbara, CA · Member since 2013 · 658 posts · 315 votes
7y
I'm not sure how that 3% success rate was calculated. Failures are probably based on unreasonable expectations as far as the timeline, we are an instant gratification culture. Here in California all a person had to do is buy any typical 3/2 house, at full market value 30 years ago and keep making the mortgage payment, be it cash flow positive or cash flow negative, they'd call it a huge success right now. I am sure the same is true if you bought right now. Of course with some education you can do a lot better than that.
14 Reply
Gary Singh
Houston, TX · Member since 2017 · 4 posts · 17 votes
7y
Lack of action because of fear is the main reason for failure in RE business. Don't spend thousands of dollars on rehashed Real Estate courses. The only thing you need is pro membership in BP. Its has all kinds of training to succeed in RE business. Most important is to learn to evaluate the deals. TAKE ACTION and you will succeed.
13 Reply
Dean Letfus
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
7y
You're also mixing up stats here. I ran an education business in NZ for several years and it is true that only 4% of people who pay for an education take action AT THE TIME. But the other 96% includes people who are seminar junkies, people looking for more info who have no intention of doing anything at this stage, people looking for dates, and a big chunk who eventually take action later. In smaller numbers it is possible to get more participation, I had 9 out of 10 people buy their first property from my small group coaching.
9 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7y
Originally posted by @Dean Letfus:
You're also mixing up stats here. I ran an education business in NZ for several years and it is true that only 4% of people who pay for an education take action AT THE TIME. But the other 96% includes people who are seminar junkies, people looking for more info who have no intention of doing anything at this stage, people looking for dates, and a big chunk who eventually take action later. In smaller numbers it is possible to get more participation, I had 9 out of 10 people buy their first property from my small group coaching.

Same here. I had people buying almost as they were walking out the door. Every seminar and teaching option have attendees that come for so many different reasons that you can't just lump a number on it and have it mean anything. It depends on what and who is teaching...and it depends on why the students showed up in the first place.
0 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
7y
Fear and comfort are what keep us from taking action on anything new (relationships, finances, family, fitness, health).
17 Reply
Calvin Thomas
Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
7y
I would say costs and under capitalization are the big ones. If you have a partner, then that can cause issues too. Picking a bad neighborhood is another one. Living too high on the hog and a bad property manager are also biggies.
3 Reply
Joel Fine
Rental Property Investor · Leander, TX · Member since 2018 · 183 posts · 264 votes
7y
Can you share your source for the 97% failure rate you cited? Im curious where it comes from and how they define success.
8 Reply
Jason Vo
Investor · Cypress, TX · Member since 2016 · 80 posts · 28 votes
7y
@Sadrud-Din Williams
Great topic, just curious to know where you get that 3% success rate from?
10 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Joel Fine:
Can you share your source for the 97% failure rate you cited? Im curious where it comes from and how they define success.

Its as WAG he has another post with a meet up to show people how not to be a 95% er
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10 Reply
Terry Lao
Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
7y
@Sadrud-Din Williams
There are key elements for success regardless of any specific investment, such as individual determination, knowledge, networking, hard work, access to capital, luck, and timing. For real estate, timing is crucial, if you purchase property during 2012-2014, this was the lowest price period for pretty much any property in any location. However, you would need the courage to say "YES" during a recession where loans were hard to obtain, bad economy, high unemployment, and lots of capital.
Even Brandon of Bigger Pockets says that 90% of the people on BP never purchase a property.
Terry

1 Reply
Jim Chuong
Rental Property Investor · Toronto, Canada · Member since 2012 · 102 posts · 95 votes
7y
@Sadrud-Din Williams where do those statistics of an alleged 97% failure rate come from? What is the definition of “fail” and what time frame are we talking about? Thx!
4 Reply
Andrei Zamfir
Rental Property Investor · Arizona City, AZ · Member since 2019 · 21 posts · 15 votes
7y
@Sadrud-Din Williams
2 reasons in my opinion:
1. There is no other business endeavor where there are some many ways one can be separated from his/her capital through ignorance, incomplete knowledge, dishonesty, impatience and so on.
There are so many blind spots, landmines, at every turn, regardless of one’s strategy.
2. Refusing to spend on education and professional advice.
Real estate is one of the hardest things to do right. Please read Real Estate Investing Gone Bad. It blew my mind.
5 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7y
Originally posted by @Andrei Zamfir:
@Sadrud-Din Williams
2 reasons in my opinion:
1. There is no other business endeavor where there are some many ways one can be separated from his/her capital through ignorance, incomplete knowledge, dishonesty, impatience and so on.
There are so many blind spots, landmines, at every turn, regardless of one’s strategy.
2. Refusing to spend on education and professional advice.
Real estate is one of the hardest things to do right. Please read Real Estate Investing Gone Bad. It blew my mind.

You would not want your Cardiac Surgeon to "learn as they go"...that would be heartless. You wouldn't want your barber/hairdresser to "learn on the go"...that just wouldn't cut it. Why would you want to depend on your knowledge from the "learn as you go" method when you will be responsible for handling Millions of dollars of your's and other's money?
9 Reply
Jess Kinzel
Investor · Missoula, MT · Member since 2019 · 100 posts · 10 votes
7y
Originally posted by @Paul Choi:
You don't need any seminars or training programs and pay thousands of dollars to do real estate. Youj need the right mindset and perseverance to succeed in this business.

Do you ever mentor people and split costs with the first few deals they do with your help?
1 Reply
Jess Kinzel
Investor · Missoula, MT · Member since 2019 · 100 posts · 10 votes
7y
Originally posted by @Dean Letfus:
You're also mixing up stats here. I ran an education business in NZ for several years and it is true that only 4% of people who pay for an education take action AT THE TIME. But the other 96% includes people who are seminar junkies, people looking for more info who have no intention of doing anything at this stage, people looking for dates, and a big chunk who eventually take action later. In smaller numbers it is possible to get more participation, I had 9 out of 10 people buy their first property from my small group coaching.

Are you willing to help newbies? If they are in a different market?
0 Reply
Jess Kinzel
Investor · Missoula, MT · Member since 2019 · 100 posts · 10 votes
7y
Originally posted by @Mike Dymski:
Fear and comfort are what keep us from taking action on anything new (relationships, finances, family, fitness, health).

So true!

1 Reply
Marian Smith
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
7y
@Sadrud-Din Williams i think you may have RE confused with restaurants. I can’t imagine only a 3% “success”:rate in RE. If an investor sells within 5 years it could be for a plethora of reasons, one being taking profits. No way do 97% end up in foreclosure or no one else would be able to get a RE loan, banks would just get out of the business. Or do you mean never buy property? That just doesn’t count because it isn’t a failure, it is choosing to go another direction. Imo. That said, RE isn’t for everyone.
7 Reply
Dean Letfus
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
7y
@Jess Kinzel, yes I help lots of people wherever I can. My business was in New Zealand, (just for clarity), but I have invested and flipped in Memphis for several years now. Message me anytime if I can be of any help. Although I have to say the knowledge and skill of many BP'ers far outweighs mine.
2 Reply
Martin NealPro Member
Rental Property Investor · Chicago, IL · Member since 2017 · 293 posts · 383 votes
7y
@Sadrud-Din Williams Real Estate is just like any other business, if you don’t have the mindset (meaning the drive, persistence, dedication, learning attitude) then people become just another statistic. The vast majority that I’ve seen in those seminars are looking for the quick fix, not the learn, lose, learn some more and then start to win mentality.
3 Reply
Joel Fine
Rental Property Investor · Leander, TX · Member since 2018 · 183 posts · 264 votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @Joel Fine:
Can you share your source for the 97% failure rate you cited? Im curious where it comes from and how they define success.

Its as WAG he has another post with a meet up to show people how not to be a 95% er
That was my guess, just wanted to give the OP a chance to defend the assertion. If it's just a WAG then it sounds like the opening pitch for an expensive mentorship.

2 Reply
Jess Kinzel
Investor · Missoula, MT · Member since 2019 · 100 posts · 10 votes
7y
Originally posted by @Dean Letfus:
@Jess Kinzel, yes I help lots of people wherever I can. My business was in New Zealand, (just for clarity), but I have invested and flipped in Memphis for several years now. Message me anytime if I can be of any help. Although I have to say the knowledge and skill of many BP'ers far outweighs mine.

Thank you very much for the reply.
I sent you a message.
Ive been learning for about a year and doorknocking for a couple of months.
I really want to succeed.
0 Reply
Tony Kim
Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes
7y
Originally posted by @Sadrud-Din Williams:
There's a lot of REAL Estate educational platforms out there promising to show you how to invest in real estate or flip houses, so why is it out of the hundreds of people that sign up for these seminars, these educational platforms, these personal coaching sessions, etc. ONLY have 3% success rate?

Is it that the people don't stick around long enough to have success or is there no REAL TRAINING involved to actually ensure your SUCCESS?

Yeah? That's very interesting. Well the folks who do not sign up for seminars and proactively learn stuff themselves out of a hunger to succeed and a drive that pushes them to do whatever it takes, have a 99.99% success rate.
2 Reply

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