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.
“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.
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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.
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.
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.
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.
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!