There is literally only one reason real estate investors succeed. Get your notebook out, get a fat magic marker out, and write this one word down on a sheet of paper that you can post somewhere and see it everywhere you go. Or set a reminder on your phone for daily reminders of this one word.
Ready for it?
That’s right. That’s all you need to know to be able to succeed in real estate investing. Pretty easy sounding, huh?
Yeah, good luck with that.
I don’t know if you know this or not, but there is a lot of headache and learning that comes with real estate investing. There is really no way to become ultra-successful as a real estate investor without goofing up probably quite a bit. Goofing up in real estate usually means you are losing money. Losing money does a number on one’s psyche. And if losing money isn’t the current issue, you’re probably still dealing with some kind of absurd level of headache — at least, intermittent headaches.
Welcome to real estate investing. Not to bring an overused old adage into the picture, but truly:
“If it were that easy, everyone would do it.”
If you buy an investment property, any kind of investment property, you really are lucking out if everything goes completely smoothly all the time. Most properties will involve, at some point, evictions, stressful tenants, delayed payments, high repair costs, or stress with the numbers (cash flow, valuation, appraisals, etc.). The miscellaneous stressors you may incur can range from minimal or mild to financially devastating.
I like to consider these kinds of situations as being rights of passage. What successful real estate investor do you know who doesn’t have a good pile of real estate war stories to share around the campfire? The key for anyone trying to get into real estate investing is being able to answer, “How do I survive the challenges that I’m inevitably going to hit along the way?”
You have got to just keep going. It may be stressful, it may seem like there is no end or resolution in sight, but you have to keep going. If you don’t, you will not make it as a real estate investor.
Hopefully you are in the percentage of people who don’t experience anything too serious with their investments, but regardless of whether the challenges that come your way are mild or severe, perseverance has to always be the one word in your head at all times.
I don’t care how much money you lose.
Now, with that said, perseverance does not translate to continuing to make the same mistakes over and over again and assuming that you will get to success.
You must learn something from each and every challenge you experience as a real estate investor.
In order to help you combine these ideas of success, perseverance, and learning from the challenges, I’m giving you a quick 8-step guide to help you survive any challenge that comes along in your real estate investing path.
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8 Steps to Survive Any Real Estate Investing Challenge
1. Remain calm.
You may be inclined to freak, and you are welcome to freak for a second if that helps you calm down a little, but ultimately, calm yourself down. Help yourself do that by especially focusing on the next two steps…
2. Take the emotions out.
Believe it or not, there are logical reactions and emotional reactions. I’m the queen the emotional reactions, so don’t feel bad if those are your default. Oddly enough, I’m not even an emotional person, but for some reason, my brain goes straight to thinking I’m being scammed or tricked or something. I’m fortunate to have a mentor who quickly tosses some logic my way and talks me off my emotional cliff’s edge.
Him doing that is really the only reason that I understand the difference in emotional reactions versus logical reactions. Emotional reactions are more like thinking people are obviously out to get you, whereas logical reactions are things more like actually breaking down the situation and finding out any details about it that you don’t already know before you let your brain go anymore forward with it. On that note…
3. Don’t make assumptions.
Part of the emotional reaction is to make assumptions. Maybe it’s that there is a conspiracy against you, but more simply it could be something like believing a contractor overcharged you (and getting all steamed up about it), but not having the line item breakdown presented to you yet. That’s a really benign example, but you get what I mean. If there is any room whatsoever to gain more information that you can use to assess the situation more accurately, ask for it. Seriously, you know what they say about assumptions. In this case, and in several of my own cases, it’s proven to be true more often than not.
4. Contact someone related to the problem.
To help you in not making assumptions or working off of assumptions, the best first step you can do after you’ve cooled your jets (and as a way to help you cool your jets) is to reach out to a good contact person related to the situation. For me, it’s usually my property manager. If you are rehabbing houses or flipping or whatever, maybe it’s your contractor. If you are the landlord, maybe it’s your tenant. It’s probably true more often than not that somebody is involved in whatever the situation might be, and you’d be crazy not to make that person your first reach-out.
5. Contact someone else related to the problem.
To help yourself even more, see if there is even someone else that you can reach out to for more information. Maybe there isn’t, but sometimes there is, and this can only help you with that not making assumptions step. Reaching out to a second person when applicable can help you gauge the facts better.
6. Reach out to a support or mentor.
Truly, one of the best things that has ever helped me (if not THE thing that has helped me the most) is having a mentor. This could be a single person who acts as your actual mentor or maybe even a friend or someone who understands you and what you are involved with and who can be a solid support system. After gathering all the facts (keyword after), reach out to your mentor/support system and run the situation by them. You’d be amazed at how helpful someone outside of the situation can be.
As I mentioned, this is especially helpful in my case for talking me down from the cliff of emotions and refocusing me onto logic. This person or system is very important, but more importantly than just having this person or system is making sure they are in line with what you are doing. You don’t want to reach out to someone who frowns on your investing path when something goes wrong, or you’re just going to get an obnoxious “I told you so” that doesn’t help you and may even unnecessarily deter you off your investing path.
7. Make a logical decision on how best to move forward.
After gathering all of the facts about the situation, talking to everyone you can, and running it by your mentor or support system, decide on a path to go forward. Think logically. You also don’t need to solve the entire problem at once. Maybe think instead about small steps that will lead to full resolution. For instance, let’s say the city is claiming you have some violations on your property, and your manager swears he did something about them. Before going into a full-blown panic, ask your manager for documentation supporting the fixes. Then, if you get those, present them to the city or ask the manager if he has taken them to the city, etc. See all the small steps in there? Don’t go pulling out all your ammo against the city right away — instead, start small.
8. Recheck your emotions.
This time, check your emotions in relationship to your action plan towards resolution. Make sure your plan is based on logic and is full of logical steps, and not emotional, reactive steps. It can’t hurt to check your emotions several times through the issue resolution process. At the end of the day, absolutely nothing that happens to your property or your investment is personal towards you. It just is what it is. Treat it as such.
There you go — the only thing you need in order to be successful at real estate investing and a survival guide to overcoming any challenge you may encounter along the way.
Cheers to happy investing! And remember, whatever challenge may arise will only make for a great campfire story later! You don’t want to be the only boring one sitting around the fire.
All of you experienced investors out there — do you have any war stories you can share? And more importantly, how did you handle them and what did you learn?
Leave your comments below!