THE TRUTH ABOUT REAL ESTATE INVESTING
The circus came to town. I know this because I see the road rash of bandit signs flaring up like a bad case of the… well, fill in the blank. Invariably, I run into a lot of these newbies who, upon getting frustrated that the road to real estate riches didn’t happen as the guru under the big top paved out, give up on real estate and move to the next shiny thing.
I feel for these new investors. And I just have to speak what’s on my mind. So, if my tone is a bit heated – understand, it’s because I love this great opportunity that is real estate and I feel it is given a black eye, and many would-be investors lose hope in something that can realistically change their circumstances.
In real estate, you have the ability to create your own income. You have the ability to start something with a very low start-up cost and barrier to entry. Contrast this to a traditional business, where an owner is expected to invest lots of start-up capital, and it takes about 3 years before they even break even… with a lot of up-front risk. And that’s just what’s expected.
Now why is it that in real estate investing, if we aren’t making a profit in 30 days, after putting out only our first wave of bandit signs or dropping our first marketing campaign, we start to complain? “I don’t think this business works” or “real estate is a scam.” We start to doubt the systems, the industry and even ourselves.
It’s all because of this crazy expectation of how fast we are going to make tons of money and quit our J-O-B. That is not how it works in the real world.
Why should real estate investing be any different?
The same holds for the learning process in real estate investing. I heard that the average attorney or doctor will spend 18,000 hours of practice…read that again..18,000 hours! And they pay for the privilege to pay for their education, to do all the classwork, the unpaid internships, the stress, the long hours of PRACTICE before they even get a chance to go to work.
Yet, inside of real estate investing, most people have not even given 18 hours of practice… learning the skills of marketing, negotiation, deal analysis, etc.
PATIENCE AND PRACTICE
When I’m coaching a new student, and while I applaud the enthusiasm of wanting to go get a deal right away, there ARE some skills and learning that needs to happen. I can understand the impatience to get paid, like yesterday… but would a medical student just grab a knife and jump into surgery all excited and start carving away and expect any good result?
I’m not suggesting we have to put 18,000 hours into real estate investing before you can start making some money. Thankfully, this IS a business in which we can learn and earn. But it requires learning and practice. If you do that, your chances of getting results and success go up so dramatically.
Let’s talk about expectations…
I hear these same people complaining that they spoke to 10 sellers and everyone wants retail… There is too much competition… I can’t get an offer accepted…
I’ve written about this before… I guess I didn’t say my piece, so here I am again because it needs to be said. I know my numbers. It takes me about 20 sellers telling me ‘no’ to get the one who says ‘yes,’ that pays for all those ‘no’s’ and ‘not nows.’
You need to realize that this business is like every other business: It takes customers (sellers) and enough of them to make the thing work. You think a restaurant closes down in the first month because only 5 people came to eat there? They work on marketing, menu, hire hotter hostesses and bartenders… whatever they need to do to get more butts in the seats cramming their mouths. Why is our industry any different?
So want the real scoop that the hotel guru didn’t tell you? Yes, ladies and gentlemen, the truth will set you free:
- Go to work.
- Stop complaining if you don’t get results right away. Push past the frustration.
- Give it some time. Work on your skills. Develop yourself.
What we have with real estate is that you can take something with a little seed capital and some effort, and turn it into something of real value. That is the reality of what we do. Is it going to take some time? Of course! If you make a deal in your first 3 months, great. But if it took you 6 months or even a year to create a new business, wouldn’t it be worth it?
Are you going to become an expert overnight? Of course not! But thankfully, you CAN collapse time frames and jump some of the learning curve with good mentorship. And that is why I LOVE mentoring. I get off on helping others punch out of their jobs forever.
But it WILL take some time. That’s called the real world, friends. These aren’t magic beans we are planting here. They are normal beans. And they require time, effort and attention. Will storms come that threaten the harvest? Maybe. Yes. But if you have the right roots in, you will weather it just fine.
The average person will invest $50,000 to $100,000 in a college education, yet I hear some people moan about putting any real amount into investing in their real estate education or feeding their marketing.
This is a great business. It isn’t easy. It can be simple, but it isn’t always easy. But it IS worth it.
Off my soap box. Mic drop.
The Real Estate Rock Star