You want to buy real estate investments, you’ve done research, you’ve almost pulled the trigger… but you haven’t done it. Well, you aren’t the only one. There are so many people out there who want it so bad they can taste it, but they don’t do it. Why?!
Very likely, if you are one of these people, you fall into one of three categories of non-buyers. I wish there were a Myers-Briggs style test for this, but I think you will be able to figure out which category you fall into without the long, fancy test.
Today, I’m going to tell you about the most popular types of non-buyers out there, and you can then tell me which you fall into (if applicable).
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The 3 Types of Non-Buyers
1. The Engineer
Oh yes, you know this one, you know this one well. Commonly known for Analysis Paralysis. And I don’t mean literally engineers; you can be a real engineer or completely not an engineer and still fall into this category.
This non-buyer type is definitely in the running for most common. If it’s not really the most common, it’s for whatever reason the most talked about. I bet if I shouted out to the entire BiggerPockets community right now and said, “Everyone, without taking time to think about it, shout out the biggest reason people don’t jump in!” that the immediate majority response would be “Analysis Paralysis!”
Anyone who didn’t respond with Analysis Paralysis probably responded with the name of my next category of non-buyer.
2. The Worrier
Agh, you’re terrified! The next most common answer I think would have been shouted out in response to my BP-wide poll would be “Fear!”
Am I right? How many of you are just absolutely terrified to throw a stupidly large amount of money into a piece of real estate and hope to high heavens/God/ the universe/Allah/Buddha/(any higher power that feels better to you) that it works out? Kind of scary, isn’t it?
The interesting thing about this non-buyer type is that I actually think there is at least a little bit of this type in not only the other non-buyer types, but also in buyer types, as well! I mean, who isn’t at least mildly scared that they could lose a lot of money if they dive into real estate investing? Or even if you have jumped in already, that doesn’t mean there is no longer any risk. There will always be risk in real estate, so it makes total sense that fear would be a common thing amongst us all.
There is one more thing I bet just about every real estate investor can say they have experience with: some to a mild extent, but others may be completely held back by this, making them the third category of non-buyer.
3. The Easily Influenced
How long is your list of family members and friends who have tried to scare you out of real estate investing? We all have them. It’s like a rite of passage to fight against your loved ones who try to hold you back. We can still love them because they do have good intentions in trying to stop us, but at the end of the day, you either have to fight past them or let them win.
It may not even just be people who are close to you, or who even know you, who try to hold you back. Some of the people may not even know their words are impacting you! For instance, if I listened to every naysayer of turnkey properties just here on BiggerPockets, I wouldn’t own any rental properties! I love turnkeys and think they are the best thing to happen to those of us who have no interest in putting a lot of work into investments, but I am very much in the minority ons that. Good thing I didn’t let the people who hate turnkeys influence me!
Overcoming Being a Non-Buyer
If you really want this real estate investing thing to happen, you’re going to have to get past whatever it is holding you back. I’m going to give you some basic advice to get you started in overcoming each non-buyer type. You might be a combination of non-buyer types, or you may have your own special concoction of reasons for not jumping in, but you can use these pieces of advice as a starting point to overcoming your own reasons for not buying.
1. Advice for the Engineer
Realize there is truly no way to account for every little thing with an investment property.
After you run your initial analysis, run it a second time to make sure you didn’t skip anything, and assuming you did a solid analysis in the first place, if the numbers look good, just do it! There is nothing at that point for you to keep stressing over.
The trick here is to understand what numbers and factors you should know before buying. This takes some education, and in no way is getting over Analysis Paralysis an excuse for foregoing being smart about analyzing a property, but figure out where the line is between being smart and being overly analytical. The first sign of Analysis Paralysis creeping in is when you catch yourself questioning the investment opportunity, but you can’t figure out what else you can verify to deem it a good decision. You’ve verified everything you can!
Once you’ve verified everything you can and know what is necessary to qualify an investment opportunity as a good one, realize that there is no other precaution you can take against something quirky happening. Its real estate — things just happen. So just pull the trigger! If you still can’t pull the trigger, keep reading because now you are just plain fearful.
2. Advice for the Worrier
Ask yourself: What is the worst that can happen?
You might have just responded with, “Exactly! What is the worst that can happen? Eek!”
But I promise, if you really sit down and figure out what is literally the worst thing that could happen, you might find it to not be as daunting as you initially thought. Sure, tens of thousands of dollars might be a gnarly blow to your finances, your financial security, or your ego — but it’s far from unrecoverable! Even if you do a high-dollar investment ranging in the hundreds of thousands, it’s still not the end of the world if you lose it!
Not to suggest losing money is no big thing, but put it into perspective. If you do this, and the amount of money being discussed really would flatten you if you lost it, maybe you should look at lower-priced opportunities to start. Start with whatever is comfortable and smart for you. Don’t risk something you can’t afford to lose. But if losing something won’t destroy you, try it out!
The best way to keep your risk minimal in any investment is to be very educated going into it, to understand the risk factors and mitigations, to work with trustworthy professionals, and to know what you are doing. Don’t confuse all of that with over-analyzing, but there are so many ways to lessen risk that there really is no reason to not try it at least once. Don’t even make me tell you how much Warren Buffet or Bill Gates or any of those guys had to lose before becoming successful! Everyone will fail at least once. It’s another rite of passage of investing. So don’t sweat it so much!
Also, try restricting yourself to only talking about investing with people who are (successfully) doing what you want to be doing, and limit how much you mention your investing desires with anyone who isn’t supportive of you doing it. Naysayers will only make your fear worse! Speaking of naysayers…
3. Advice for the Easily Influenced
Only take advice from the people who you would trade shoes with!
If someone is so kind as to “offer” you advice, first ask yourself about that person’s credibility in the sense of: Are they leading the kind of life you want to live? Are they in the same kind of financial position that you hope to get to? Are they someone you would trade shoes with? If the answer is “no” to any of these questions, take their “advice” lightly, if at all!
I remember my first ever meeting with someone who was offering me real estate help/mentoring. I had no idea if I could trust him, or how I would know if what he was telling me was legit, or what the what. When I met him, though, I realized he worked whenever he wanted to, all via the internet, so he could travel (and did travel) as much as he wanted, he had enough money to be living in a downtown LA high rise (we met at his building’s insanely nice rooftop pool deck), and he was a fun, chill guy. I thought to myself, Would I trade shoes with this guy? Yes! I would!
So I was suddenly incredibly inclined to follow his advice. Sure enough, minus the rooftop pool deck, I’m now leading the same type of lifestyle he is.
We all love our family and friends dearly. Okay, well, some of us. Those people close to us who insist on giving us advice usually do really mean well, but if they aren’t living the type of lifestyle you want to be, and their “advice” is geared towards holding you back… thank them for their thoughts and keep going.
Have you ever heard the analogy about the crabs in the bucket? If you put a lot of crabs in a bucket together, there will always be one or two crabs who attempt to crawl their way out of the bucket. The rest of the crabs who are on the bottom of the bucket will constantly try to pull on those trying climb out so they can either keep them in the bucket with them or climb out by using them as a handhold. If you are interested in investing in real estate, you are that crab trying to crawl out. Most people are going to try to pull you down and not let you get to where you want to go.
Be confident in knowing what you want, and don’t let anyone tell you that you can’t do it or you will fail at it. If you are slipping with your confidence, connect with people who are doing it as a way of gaining confidence.
Are you one of these non-buyers? Were you ever one of them? Are you or do you know a type of non-buyer I didn’t mention here?
Share your stories of fear, paralysis, or non-buying!