Over the past decade I have faced a lot more than 10 hurdles, and I’m sure you have as well. However, below I’ve outlined my top ten hurdles and how I overcame them. Can you identify?
1. Technical Know How
If you wait until you “know how” to do everything you will NEVER start. The vast majority of jobs are like this. You simply have to jump in and learn as you go.
I have a friend who is probably the smartest real estate investor on earth. He has read hundreds of real estate investing books. However, he only owns one investment property and that’s because he moved and turned his previous place into a rental.
“If past history was all there was to the game, the richest people would be librarians.”
2. Fear of What Could Be
This is so common – it should probably be number one. Without a doubt, every time I tell someone I own rental property – the vast majority of people tell me about some crazy tenant story they have experienced or heard about.
They also go into some kind of a story about how they would like to own rental property but don’t want to answer calls at midnight to fix a toilet.
It took me a decade to learn this and here is the solution to the phone calls at midnight: HIRE A PROPERTY MANAGER! By the way, hiring a property manager is also the solution for dealing with crazy tenants!
3. Finding a Focus
If you are looking at every type of real estate investment out there, you will definitely burnout quick (see # 5).
Finding a focus takes time. Unfortunately, you usually find your focus by figuring out what doesn’t work for you. Think about what your competitive advantages are in the market place.
I love how James Vermillion said in a recent podcast that he mainly focuses on houses with mold or foundation problems. By focusing on this he has basically eliminated all of his competition. His competitive advantage is that he knows how much to bid on these houses because he knows how much the true repair costs will be.
4. Financial Block
Without a doubt, you will experience some kind of capital block that will inhibit your growth. Whether it’s a bank who thinks you have too much personal or business leverage or your own liquidity needs, there is a limit to the amount of money you have.
Every situation is different, but usually these situations are resolved if you just control expenses and are patient.
Maybe you are tired of answering the crazy tenant phone calls. Maybe you are tired of dealing with banks. Maybe you are tired of dealing with contractors (as I am currently).
It’s important to realize that real estate is a long-term game.
I heard Barbara Corcoran say on CNBC that the only people who lose money on real estate are the people who play real estate for the short-term.
When you find yourself burned out, think about why you got into real estate. Think about your long-term wealth strategy.
6. Personal Attack
Unfortunately, most people will attack you for being pro-active about your real estate investing and be very quick to point out the risks. Additionally, they might call you a slumlord.
Whenever I encounter a personal attack, I remember my favorite quote from Theodore Roosevelt:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
? Theodore Roosevelt, Excerpt from the speech “Citizenship In A Republic”
7. Building Relationships
When you are building a real estate business, relationships are vital. All relationships – from wholesaler to lenders, real estate agents to title companies – are important.
I have had bad experiences with almost all of the above. However, I’ve also had amazing experiences with all of the above. The important part is to get in the game!
“Action will delineate and define you”
8. Finding the Right Monetization Model
My mentor gave me some great advice several years ago. He told me whenever I was evaluating a business to get into, think about how that will look in five years. If you don’t want to be involved five years from now, don’t start it now.
Currently, the fad is to get into wholesaling for some quick cash. As usual, there is no shortage of “guru’s” touting how you can make some quick cash with this strategy. This might be true for 1 or 2 deals.
However, let me tell you that the wholesalers I work with work their tales off! Additionally, it took them years to get to where it paid a full-time income.
Wholesaling is VERY tough. No, I don’t know this from experience I’ve just seen so many people fail at it, I know this to be true.
9. Time Management
Most successful people suck at time management.
This will take time, but don’t feel guilty for taking a break from real estate in the short-term. I always think most clearly when I have taken a break. Additionally, I found my best deals when I was taking a break and the deals were coming to me, compared to me looking for the deals.
Finding your focus will also help time management (see above).
10. Scaling Yourself
This simply takes time. Unfortunately, if you own 5 or less properties you are kind-of half pregnant (I’m obviously generalizing here.) You have all of the pains with owning property, yet probably aren’t making enough money to be gaining any traction cash flow wise.
Remember to Build Relationships (see above) and Find Your Focus (see above).
Also, read Tim Ferris’s The 4 Hour Workweek.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
What Hurdles Have You Faced as a Real Estate Investor?
Which of the above resonate most with you? What would you add?
Photo: Rayce Sugitan