5 Costly Assumptions To Avoid When Starting Out
There are always plenty of unknowns with any new business. Investing in real estate is no different. There are many new investors who feel they have an idea of what they are in for based solely on what they see on TV. After they get started they quickly realize that their vision doesn’t match reality. There are plenty of hurdles regardless if you are working on your first deal or have ten years’ experience. The biggest hurdle is battling the common assumptions that are made about the business. Blindly following these assumptions can lead you to trouble and set your business back months. Here are the five most common assumptions you should avoid when you are just starting out.
- You Can Do Everything Yourself. Just because you can do something doesn’t mean you should. One of the great things about the real estate business is that anyone can do it. A real estate agent with years of experience has the same chance of success as a new investor from the technology world. In fact someone with no prior connection to real estate will often be more successful. They understand that they don’t know everything about the business and are willing to bring on help where needed. It is tempting to try to do everything you can yourself but this isn’t always the best strategy. When you are just starting out you need to focus on areas that offer the biggest bang for the buck. By tackling every task that comes your way you will get bogged down in the small stuff. You also want to make sure that things are done right. Being able to handle small electrical doesn’t mean you can work on an entire rehab property. It is best to pick and choose your battles and know your limitations.
- Deals Will Just Fall Into Your Lap. Now that you have decided that you want to start investing in real estate you can just wait for the deals to start rolling in. Of course this is much more fiction than reality. Investors with years of experience still struggle with finding deals. They understand that they need to do something every day to build their pipelines. The single biggest reason that new investors get frustrated with the business is because they are not satisfied with the speed at which new deals come their way. Every investor wants good deals but few are willing to go out and get them. To get the deals you want you need to meet contacts, network in your local area and develop systems. Hard work is not enough to guarantee success. Whatever you do you need to accept that finding deals is much more difficult than you anticipated. Deals will not just fall on your lap.
- Everything Will Go Exactly As Planned. One of the things that make the real estate investing shows you see on TV so interesting is that there is always a plot twist. Usually around the middle of the episode something happens that forces the investor to shift gears. Most of the time the issues are resolved by the end of the show and everything ends up working out. However they should illustrate that everything does not always go exactly how you plan. There always seems to be something on every deal or every property that becomes an issue. How you handle these often defines your success. There are many investors who make excuses and blame everyone else around them. They feel that they are the victim of bad luck and the business is out to get them. Obviously this is not the case. This is simply the nature of the real estate business. You need to be ready to react for whatever comes your way and accept that this is part of the business.
- You Will Close Every Property You Make An Offer On. It is no secret that there has been an increase in the popularity of real estate investing in recent years. With this there is also a rise in the competition. It is important to accept that following a property for several weeks doesn’t guarantee you will acquire it. Even being the first to submit an offer doesn’t necessarily put you at the front of the line. You can make offers on several properties and not get any of them accepted. With every offer you make you should learn how they need to be structured and at what price point gives you the best chance of acceptance. There will be plenty of times when you will be frustrated but you need to move on. Real estate investing is a numbers game and the more offers you make the more likely one will get accepted.
- Your Team Shares Your Vision. As a real estate investor you are the leader of your team. As the leader you need to make sure that everyone is on board with your vision. You can’t assume that your real estate agent knows exactly what types of properties you are looking for. You need to sit down and discuss location, property type, price point and everything else that is important to you. The more you can get out in the open with everyone on your team the less chance anything can be misinterpreted. The people you work with, especially in the first few months, can often make or break your business. Make sure they share your vision.
Instead of making assumptions go into the business with an open mind. Some assumptions may end up being true but many of them are false.