6 Easy-to-Follow Steps that Can Stop Disappointment from Turning into Deathly Discouragement for the Beginning Real Estate Investor
When you first start any new activity, it is entirely possible that you will experience pitfalls, set backs and even disappointments. This is almost inevitable for most new real estate investors as they attempt to duplicate the success of others. However, long-term discouragement that can cripple your investment efforts need not be the final result of real estate expectations that don’t come to pass as planned.
The words “disappointment” and “discouragement” may sound alike, but that is certainly not the case. Disappointment comes from unfulfilled or broken expectations and is generally a short-term effect. Discouragement, on the other hand, happens when you can no longer see the light at the end of the tunnel or when you abandon hope. As a new real estate investor, you are setting out on a path toward success, and success is a continual process. As you progress towards your goals and objectives, you will encounter both small and large things that may disappoint you and possibly lead towards discouragement. Our goal is to learn from these disappointments and avoid discouragement.
Let’s suppose that you have decided to go into the business of finding good properties that can be used as rentals. You have read and studied about the requirements for such properties and decide to find your first rental property. After reviewing advertisements and using your spare time to drive and survey the area in which you want to invest, you notice a For Sale sign on a property with the number of the listing agent. You note down the number and make a call to see the property. After meeting with the listing agent, you are convinced that this is “the right property.” You have studied how to fill out an offer to purchase, but you elect to have the agent you met at the property help you fill out the offer. As you are making the offer, the listing agent says there is another offer on the property and maybe you can outbid them. Before long, you have gone through a couple of different counter offers and you were outbid. You lost the property and are extremely disappointed, but should you be?
Ask yourself, “What went wrong? What could you have done differently?” Now is the time to become proactive and change those things you can control. The real question is, “How do you change your attitude and what specific strategy can you take to ensure that a simple disappointment, like a rejected offer or a lost property, doesn’t lead to long-term discouragement that can bring death to your new real estate investing business?” Let’s examine a simple strategy of six steps that can make all the difference in the world.
Step #1 – Identify What Went Wrong
This identification process contains three individual elements: review, describe, and record. Unless you can identify exactly why something happened that lead to disappointment, you will never be able to make the changes necessary to stop disappointment from happening again and again.
- Review exactly what happened. Before you can understand how to solve any problem, you must know exactly what the problem is and how it happened. As a new real estate investor, you must know what strategy you are following. There is a difference in finding a property that works as a fix up property and one that might be ideal for a rental. You must also be acutely aware of why the problem occurred. Why were there multiple offers on the property? Did you wait too long or did you fail to follow a proven strategy in locating the property?
- Describe in detail the problem that occurred. In our example of being outbid because of multiple offers, there were multiple reasons why you may have lost the property. Let’s start by examining what happened when you first saw the property. You immediately called the listing agent and made an appointment to see the property. What’s wrong here?
The listing agent is not your friend and he or she certainly doesn’t represent you. By law, the listing agent is representing the seller and will do all in his power to get the very highest price possible for the seller. Because the agent is representing the other party in the transaction, you have no control in the negotiation process. In effect you were bidding against yourself. Finally, the price you might have paid for the property was probably too high. If you are forced into paying more than the current market price for the property, you are already in a losing position.
As you are doing an analysis of why a problem occurred, make sure that you are realistic in that review. Don’t hide behind sayings like, “It was not my fault.” The truth of the matter is that it might have been your fault from the time you decided to look at the property.
Record your findings. It’s true that we can learn from our mistakes, but unfortunately, we often hide or forget those mistakes. When you actually write down what happened and why it took place, you have something you can refer to. I like to call these mistakes “min failures.” They are not major failures because you can correct them. Dale Carnegie is recognized as a foremost authority on self-improvement. He once said, “Develop success from failures. Discouragement and failure are two of the stepping stones to success.” There is real value in recording these mini failures. You can use this record to create an ongoing learning experience because identification of a problem truly is the first step in this all-important strategy.
Step #2 – Describe Corrective Behavior
Understanding what went wrong is important, but if you can’t correct the mistake, it will surely happen again. When it does, you are on the road to long-term discouragement. Identifying the problem should allow you to come up with possible solutions to the specific problem. These are the corrective steps you can take to get past the disappointment and avoid long-term discouragement.
Let’s go back to our earlier example of losing a property to a higher bid. What corrective steps could you take if you were to start over again? In essence that is what you are going to want to do – start over again and find another, and perhaps better property. In your journal or record, open up your mind and explore all the different ideas. First of all, you are going to want to ensure that you have an agent who is going to work for you and not for the seller of the property. Second, did you spend enough time finding the right property? What could you have done differently? Take the time and try and come up with multiple ideas and explain why each one might have been a better solution. Be specific and give the reasons behind the choices.
What you are doing is moving from a reactive situation to a proactive one. Just by doing this, you will become more positive, but even more importantly, you will become more realistic. Writing it down will help you remember what to do when the time comes.
Step #3 – Change Your Mindset
Simply by following the first two steps of this strategy, you are becoming a more positive person. You are in effect starting to change your mindset. When you adapt your thinking in a more positive manner, you are moving to a positive mindset. When you have a positive mindset, you are able to control what happens around you.
The first thing you want to control is the environment in which you live. Don’t become a negative person who wallows in self-defeating thoughts and actions. If there is anything around you that influences you in a negative manner, you need to get rid of it. That may mean that you need new friends and associates. Negative thoughts feed on other negative thoughts. Anything you can do to rid yourself of these negative influences will benefit you. Willie Nelson, the country singer, once said, “Once you replace negative thoughts with positive ones, you’ll start having positive results.” He may not have been the greatest philosopher, but he certainly had wisdom when he left that thought.
Once you start thinking in a positive manner, you will be able to see clearly in the fog of depression that often accompanies disappointment. In a short period of time you will be able to have a positive mindset. When this happens, you will begin to express the traits of a new positive mindset:
- Optimism. You will have the willingness to make an effort in your real estate strategies and to take a chance instead of assuming your efforts will fail.
- Acceptance. Soon you will acknowledge that everything doesn’t turn out exactly as you thought it might. This allows you to step back and then move ahead in life and in your real estate strategies.
- Resilience. You will have the ability to get back up when things in your real estate adventure seem to knock you down. When you meet stumbling blocks, you will smile and realize that next time things will go better.
- Gratitude. You will appreciate the opportunities you are given and be thankful for learning from them.
The important thing to remember when adopting this positive mindset is that you should never “go it alone.” Loneliness is the enemy of a positive mindset. The last thing you want to do when meeting a disappointment is to separate from the world and believe you are alone. Find friends and associates who are willing to build you up and support you in those times of mini failures. Consider working with other real estate entrepreneurs and possibly coaches and mentors. If you have the opportunity to attend live training events with other real estate entrepreneurs like yourself, do so. It is a great way to create friendships with positive minded people. It is also an opportunity to learn real estate investment strategies from experts who have gone through similar disappointments.
Step #4 – Explore Your Options
Now that you have recorded your alternative options and begun to think in a more positive manner, you are ready to change outcomes. It’s time to control what is going to happen in the future. The old saying “If you get thrown from a horse, get up and get back on” is true in the field of real estate investing. You may need help getting back on the horse, but the ride will be worth it.
Once again, you must be realistic in why your disappointment occurred. As you come to grips with why you were disappointed, you may have the tendency to move toward discouragement with real estate. This is a negative thought and should not be part of your new positive mindset. However, if you find yourself in this situation, consider asking for help. Start by using all available educational options that discuss and explain your specific real estate strategy. If you were going to invest in rental properties, make sure you understand all you can about how to find, fund, and purchase the right properties. Continue your studies to find out everything you can about landlord experiences.
If at all possible talk, to other investors like yourself. Spend the effort to meet with professionals who can guide and mentor you. Once you decide to engage a professional mentor or coach, make sure that they have both the experience and the knowledge to help you on your journey to success.
Now, go ahead and make concrete goals and objectives for moving ahead in your real estate adventure. Be specific with timetables and exact objectives. If you are going to engage a buyer’s agent, write down exactly how you are going to find the right agent in your area. Whatever the task, write down how you will go about completing it. Every option or goal should have a specific action step involved. The very act of describing future behavior ensures that positive results can occur.
Step #5 – Focus Your Behavior Through Personal Action
Your initiative will create positive results. It really is up to you to move the ball forward and to ensure that your real estate goals are achieved. Up to this point, you have identified the problem and found corrective options, but now it’s time to actually make some changes. It’s time to complete your goals through personal action.
There are specific reasons why direct personal action is crucial to your success when starting to invest in real estate.
- Action activates information. You can gain all the knowledge imaginable from multiple sources, but the knowledge will remain silent and without meaning until it is activated by action. Only when you personally take action will the knowledge be changed into results. Only through direct action can real estate knowledge come to life. This is especially true when solving real estate investment disappointments.
- Action helps eliminate techniques that don’t work. Your time is valuable and you must be able to focus on things that work. Trial and error is only valuable in real estate if you take action and do something. Yes, there are times that things don’t work, but unless you take action and try, you will never know.
- Action create positive habits. The strategy of eliminating discouragement in real estate is a process and that process is based upon developing positive habits, and these habits can only be developed when action is involved.
- Action builds self-worth. As you accomplish anything in life, your confidence grows. When investing in real estate, this new confidence helps you move forward, while at the same time it creates a value in your accomplishments. Success is built upon action and personal real estate success is built upon personal action.
Step #6 – Understand the Past, But Always Move Forward
Disappointments should be the key to learning, not the foundation of failure. You must be aware of exactly what went wrong, but once you determine the cause, don’t dwell on past outcomes. Your goal is to live both in the present and to move toward the future, not to continue to worry about events in the past. Now it’s time to focus on learning how to improve your real estate success by eliminating the causes of those setbacks.
Be specific about making changes. It’s not enough to say “I’ll do it differently next time.” Rather, you need to be able to say exactly HOW it will be different. Recommit to taking positive action. Make your goals realistic and then publish them and let others know what you are doing to change your life. When you tell others about your future goals, this will give you the incentive to take positive action. Perhaps even more importantly, you won’t want to disappoint your family and friends.
As you start to have success, reward yourself with each small achievement. You’ve done the work, now it’s time to start collecting the rewards. If you find a property below market value that fits your investment criteria, that is a success, even if you personally don’t purchase it. Go ahead and treat yourself to something as it is a step in the right direction. Even better, reward yourself by making an offer on the property (through your personal buyer’s agent).
Above all else, eliminate emotion from your investment decisions. Never believe that you “must have” any property. Such a belief will lead to more discouragement than anything else. When emotion in real estate is eliminated from the equation, answers will always make more sense – and yes “CENTS.”
Don’t let disappointment turn into discouragement that can destroy your real estate future. Try this strategy of six simple steps and eliminate discouragement from your investment outlook. Real estate investing can become a vehicle for financial success but achieving that success will be a process. When you learn from your disappointments and leave discouragement behind, that process can truly be the key to your future.