Why Do Most Beginners Fail at Real Estate Investing?

Posted by: theinvestortoday / Category: Articles

There are tons of new people who hear about the goldmine of real estate each and every day and then decide to give it a try. Unfortunately, for about 90% of people who take a real estate investment course, they will leave having never purchased a property. Why is it that the numbers are so staggering?

There are a few reasons for the failures

Firstly, not everyone has the right skill set going in. There are subtle techniques like negotiation and impeccable communication skills that typically get glossed right over by most courses. However, they fail in comparison to the biggest reason. Let’s look at the 3 biggest reasons and break them down.

  1. Unrealistic expectations
  2. Commission breath
  3. Knowledge and skills

Marketing Hype Creates All Kinds of Problems

Being a great investor requires that you harness the ability to create marketing hype around your properties. For example, our company can get 20 people to a lease option property in a down market with 5 homes for sale or more on every block. Most real estate courses are sold with the same kind of marketing hype. The problem with that is that it can lead to unsubstantiated claims.

In order to sell the product, it has to protest to provide all the easy answers. Marketing 101 is to identify your target market’s emotional triggers and then state reasons why it can fulfill those. The hype has a really big downside though and that is that it leads to unrealistic expectations.

The single biggest reason newbies fail is because they believe it will be easier than it is. At the same time, it’s not the hardest thing either. The difficulty of real estate investing probably falls somewhere in the middle. At the same time, if a person goes out with the anticipation that it will be really easy and that sellers are just waiting to earn them millions, they end up disappointed after just a few attempts.

What is Commission Breath All About?

When people get paid as a result of their efforts, it’s honestly difficult to trust them sometimes. Used car salesmen are often considered as shady as they come. When you go and meet with a homeowner, sometimes they resist you simply on the basis that they don’t trust your intentions. People can spot commission breath a mile away and even if everything else about your deal makes sense, you can and will still get sellers who will push you away. Understand that this will happen and only work with sellers who want your help. You can’t force your help on anyone so just focus on where it’s wanted and then give it to the best of your ability when it’s needed.

Sometimes They Just Don’t Know Enough

Many new investors just don’t have the ability to pull of the deal they are trying to do. Sometimes it’s because what they are trying is more complicated than they have been taught but most often, it’s because their current understanding of how to do a deal is flawed. For example, how many courses talk about the fact that your tenants aren’t going to pay on time all the time every time? It doesn’t exactly sell the dream but it’s a reality. Having the skills to fix problems when it doesn’t go as planned will go a long way.

Let’s get to the most important part.

How do you fix these problems before they happen?

Unrealistic expectations

You will do yourself a great service to expect some problems on the way. That doesn’t mean you should put negativity out into the world and go into it with a bad attitude. Rather, just remember that there are always complications involved in putting a deal and learn to expect them enough so that you can quickly solve them. It’s not about the problems that come up but what you do to solve them.

Commission breath

If a seller naturally distrusts you, that’s normal. Don’t take it personally. Learn to listen to people. I mean really listen to people. Work with people who want your help the most and focus on providing relief to their problems. If you focus on that, you’ll get your pay in the end. It’s extremely ironic that the less you worry about your payday and the more sure you are that it will come, the easier it is. Once you’re less focused on needing the individual deal, the more you can focus on helping where possible.

Knowledge and skill set

You can never have too much knowledge in real estate. The single best place to learn is at your local real estate investment club. Don’t get caught up though in following other newbies at the club. Find out first who is successful there and learn from those individuals. You are best served by doing what they do. Read as much as you can. If you can’t afford to buy low priced real estate courses like ours, go to your local library and read for free. Do your best to learn to separate marketing hype from real information and focus on the latter.

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2 Responses to “Why Do Most Beginners Fail at Real Estate Investing?”

  1. tami tainey Says:

    Please send as much info as possible as I am very interested in a thorough real estate investment education.

  2. theinvestortoday Says:

    Tami,

    There’s lots on our site. What are you looking to learn specifically?

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