Being in the real estate industry over the last 20 years has allowed me to see many forms of success and failure. I have learned a lot from each of these categories. You might think I’m going to tell you how to make sure you run your numbers correctly or not overbuild for the neighborhood. You might think I’m going to suggest that mistakes are made by not seeing all the hidden costs in a fix and flip property. Yes, these things are important and I’ve made my share of mistakes with these along the way but the biggest mistakes I’ve seen in my 20 years of experience is that real estate investors forget to PLAN for their success and they don’t realize the most important success habit is your mindset. Investors seem to have a hazy idea of what they want to happen and then they just throw all their efforts at it to see if it sticks without really taking the time to create the success they want. I’m going to share some of the top mistakes I have seen over the years and the success markers I’ve implemented in my business and have helped successful real estate investors implement in their business.
The first mistake I see entrepreneurs make, especially real estate investors, is they are not clear about what they want. They say “I want to be a successful real estate investor” but they really don’t know what that means nor have they taken the time to really find out what that means. In order to be successful, you need to know what it’s going to take to be successful. You need to know what education you are going to need, what foundation of your business you are going to need to build and how to create a power team around you to help you build your success. For example, take some time today to ask yourself.
- “How much money do I want to make on each of my real estate deals?”
- “How many will I need to close each year to accomplish the dollar amount goals I have set for myself?”
- “What needs to be done to make this happen?”
As you can see, there is some planning that needs to go into setting yourself up for success. When you begin to ask these questions, then what needs to be done to make it to the next level of success in what want to accomplish will become clearer.
The second mistake I see entrepreneurs make is not prioritizing what needs to be done to create their own success. Too many times I hear the excuse, “I don’t have enough time.” My answer is a little blunt and not really easy to accept if you are committed to this excuse. I gently say we all have the same 24 hours in a day. The way that we use those 24 hours will determine our success. My suggestion is to make a list at the beginning of each week of everything you NEED to get done for the week. Then make a second list of all the things that you must do to be successful as a real estate investor. Go through both of your lists and prioritize each activity with an A, B, or C for priority level. Sometimes it also helps to put a time frame on each item. Then grab your PAPER calendar (yep, we’re going old school for a minute) and put all the “A” activities on your calendar for the week, then add your “B” activities. Your “C” activities will fill in any free time you find for yourself during the week so keep your list handy throughout the week. This is going to be a work in progress and I will GUARANTEE…. Yes….. GUARANTEE you will fail the first week you put this in place so realize that this is going to be a work in progress and you are going to have to keep doing it to get better at it. Remember that failure is just information. It doesn’t mean you give up; it means you do it better the next time. Your calendar is going to be somewhat flexible but you are also going to start becoming very responsible with your time and learn to manage it, so you can master it. My favorite saying for time management is, “Either you run your day or your day runs you.”
The third mistake I see investors make is giving up. The commitment level is there when the hope is high and the excitement level is at its peak but when it comes to doing the hard work, putting in the hours, staying persistent, trying something new when one thing doesn’t work, I hear, “This doesn’t work”. I want to say, “Does this not work or do you not work?” Sometimes success is not found overnight. In fact, I would say in most cases success is not found overnight. If you interview any successful entrepreneur, they will tell you it was a long climb to the top and they fell down a few times. They will also tell you that staying the course and being persistent with successful habits is the reason they found success. Decide now that you are “in it to win it,” that “if it is to be, it’s up to me” …whatever silly mantra you need to come up with to remind yourself to stay the course and be consistent and persistent with your efforts.
The fourth mistake I run into over and over when working with new real estate investors is they are blown like a plastic bag in the wind with everything they read or are told. They become consumed with what everyone else is saying instead of doing the research themselves and coming up with their own opinion. They go to a real estate investment club and listen to everyone whine and complain about “how hard it is right now.” They jump right on that band wagon and complain that this can’t be done. I’ve got news for you. It can be done but you have to do what others are not willing to do so that you can have what others will never have. It’s really that simple. What you focus on you will create. If you are going to dwell on what someone else said and drag it along as your victim story, you are not focusing on the solution. You are not creating something new. You are stuck, and I promise you are not going to go very far, and you will end up right back up in mistake number three — giving up! You must be aware of the people you are surrounding yourself with, the news you are allowing to come into your life, and you must determine that you will only “listen” to what is working. The great thing about real estate is that when it’s good, it’s really-really good and when it’s bad, it’s even better but you have to know what strategies to employ. You must become a problem solver. You must know that there is always a solution, and you must be determined to find it.
A fifth mistake I see people make when building their real estate business is they forget to take a little time to evaluate what has worked in the past, what could be done better and what needs to be done completely different. Taking a step back to evaluate every so often — maybe monthly, maybe quarterly or maybe even more often — helps you to build on the strengths and define where the weaknesses might be. This isn’t a time to dwell on the problems and what’s not working, it’s a quick evaluation to see what needs to be tweaked. When you can identify what is working and what is not, you can play to your strengths and put practices in place to build the weaknesses into strengths. For example, if you are getting more properties than you know what to do with and you’re getting accepted offers but your cash buyers are not interested, then maybe you need to re-evaluate how you are running your numbers. Take a little time to question what is working — and do more of that. Then making sure if something is not working, you find a solution. You are learning equally from your failures as well as your successes, both have great information to share with us on our journey to success. By evaluating what is not working and finding a solution to make it work, then evaluating what is working and doing more of that, you keep “building” a successful foundation for a thriving business.
These are the top mindset mistakes I see real estate investors make. There are other mistakes you will make along the way and that’s ok. As long as you have the right mindset, you will make it through the other slip-ups. Remember to plan your way to success, make small and attainable goals. Become friends with your calendar and make it work for you. Make sure you are aware and conscious about what you are putting your focus on and commit to your success with consistent and persistent effort. After putting all these success habits in place, stop from time to time to do an evaluation of your efforts and make them better. Buying a house to flip in the wrong neighborhood is not as detrimental of a mistake as doing the same wrong thing over and over and over again. You must have a plan for your success, so take some time today to make it happen. Good luck and happy investing!