10 + 1 Reasons Why Real Estate Investors Underperform

by Dave Peniuk

Alright, I confess, this wasn't my original idea. I actually stole the idea from one of my real estate mentors, Jim Randel. Jim is author of one of the best real estate books out there Confessions of a Real Estate Entrepreneur. He is also writer and creator of the Skinny On series of books. These books can be read in less than 2 hours and are full of fun stick people sketches and easy to understand concepts but they pack a punch full of information.

I read Jim's weekly newsletters and a recent one was about "10 Reasons (Some) Entrepreneurs Underperform". It got me thinking about the reasons real estate investors underperform.
 
Now, this is not a scientific study. I did not go out and survey 5,000 real estate investors and determine who were successful and who were not and then look at the characteristics that shape their success (or lack thereof). This is based on years of investing ourselves and what we have learned from other successful real estate investors.

If you lack these traits (or characteristics), there is a good chance you will underperform as a real estate investor. You don't have to have ALL of these, but the more you have, the more likely you will be highly successful.

So, without further adieu, here are my 10 + 1 Reasons Why (some) REI's Underperform.

1. Passion - I feel strongly that if you have passion, real passion about real estate (and investing in it), you will perform better than if you don't. We know quite a few investors that are not passionate about real estate that have been successful but they feel worn out and want to leave the business. The only reason they don't leave is because it's making them money ... but they aren't having fun and they aren't making as much money as they would (I think) if they were passionate about it. Besides, why spend so much time, energy, focus, and money on something you don't love? Life is too short!

2. Mental strength - There are so many times where you may want to just give up because you're doing so much heavy lifting mentally. Challenges like insurance issues, and property financing troubles, and tenant challenges are part of the business of real estate investing - be strong and you'll do well. And by the way - the more physically fit you are - the better you'll perform mentally. That's a fact that has been proven by scientific study.

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