fbpx

Fear Factor: 4 Steps for Overcoming Fear in Real Estate Investing

Fear of Real Estate InvestingI’ve been in real estate for over 11 years and done dozens and dozens of deals, but time and experience doesn’t totally get rid of my fears. How I look at my fear is different but I think I will always be scared that people won’t like what I have to say. I’m sure I will always worry a little bit that something could go wrong with a deal. But those fears serve an important purpose in my life – they always make me stop and double check what I am saying and doing in my business. The key is that it doesn’t freeze me in place – it just serves as a good double check.

Fear is an emotional response to perceived dangers. Trying to ignore or suppress fear doesn’t work. I also don’t think you should try. It’s our ability to recognize potential danger so we can choose whether to confront it or run away.

Fear in real estate investing is common. It can be scary at times. There’s a big fear of losing money. There’s concern over the stress that you can feel if something goes wrong with a tenant or a partner or a deal.

Running from what scares you, doesn’t work though. Doing nothing doesn’t change anything either.

I think the best thing you can do is acknowledge you’re afraid of something, understand it, and then decide if you need to run from it or confront it. When you do it this way you’ll be able to recognize the fear that is protecting you and move past the fear that is holding you back for no reason. Specifically, here’s how I overcome my fears and how you can too:When you do it this way you’ll be able to recognize the fear that is protecting you and move past the fear that is holding you back for no reason. Specifically, here’s how I overcome my fears and how you can too:

1. What are you really afraid of?

I’ve met hundreds of investors that are stuck – they want to do deals but aren’t. Sometimes they have been stuck for years and years!

When I ask what’s holding them back the answer is almost always because they can’t find good deals in their area or they don’t think their market is a good one to invest in, but they don’t know where else to invest. Sometimes they don’t have investment capital and feel stuck without money to put into the deals.

It’s possible these issues are actually the issue, and in hot real estate markets with bidding wars and limited supply, lack of good deals is quite possibly true. However, in most phases of the real estate cycle, there are always plenty of deals out there for investors willing to work hard to find and create them. And there is definitely money.

Rarely are these actually the obstacles holding you back. More likely, it’s something deeper like a fear of making a mistake that leads to you being judged poorly by someone you love. In other words, you’re likely not just afraid you will do a bad deal and lose money. You’re afraid that if you do a bad deal and your Dad finds out he’ll say “I told real estate was a bad idea – now quit trying to make money in real estate and get a real job like I taught you.”

You have to look at WHY you’re afraid of losing money. What is it that you are really afraid of?

Until you get into it and actually uncover that real fear, it’s hard to move past it. But once you realize that you are afraid your husband or wife will think less of you if you do a deal that doesn’t make money, you have something you can tangibly deal with.

2. Get Comfortable with that Fear

Again, I am not a big believer that you’re going to get rid of the fear so the better plan is to acknowledge it’s there, figure out what is driving it, and then do what you need to do to feel more comfortable with it’s presence.

Let’s just say you’re biggest fear is that your husband or wife will be upset with you for a deal that isn’t that good. What can you do to get more comfortable with that fear? My suggestion would be to sit down and have an open conversation with your spouse.

Listen honey – you know I’ve been wanting to get into real estate for awhile. I really believe it’s the best way for me to ensure we’re all taken care of in our retirement and to hopefully have some additional money to pay for our kids to go through University if they want to do that. I just feel a bit stuck. I’ve done my homework. I have taken some courses and done lots of reading as you know, but I am not able to move forward. I think it’s because I am really scared that if I make a mistake it will change how you feel about me.”

Maybe that’s not a conversation you’d normally have but if you’re married it’s probably time you opened up and started to talk openly about your fears around your investments. What you’ll probably find out is that your spouse appreciates your concern but supports you. He may even offer support, suggestions or other ideas to help you achieve your goals.

It’s unlikely you’ll erase the fear but now you’ll feel more comfortable to move forward.

If your fear doesn’t involve a desire to be liked or a fear of being judged then a conversation might not solve it. If, instead, you’re lacking confidence in yourself and feeling terrified you’ll pick an awful tenant you still have to get comfortable with it. My suggestion? Think about the absolute worst thing that can happen to you if you pick the world’s worst tenant. Now, think about what you will do to resolve it. In most scenarios I can think of, it’s a pain in the ass to deal with but insurance will cover me or I have to spend several thousand dollars handling the issue. I can almost always come up with half a dozen ways to find the money to pay for that kind of damage and I am sure you can too if you really think about it. After you’ve done that, you have to remember that your absolute worst case scenario is very unlikely to ever happen but if it does, are you going to survive it?

3. Plan For Success

When my husband Dave and I are preparing to present an investment opportunity to one of our money partners we always plan for them to say yes. We prepare and practice what we’re going to say so that we can deliver the message clearly, concisely and with confidence. Sometimes they say no. Once in awhile we turn them away because we don’t want to work with them. Usually they say yes because we’re ready for it.

You might feel like there is no point lining up your mortgage broker, lawyer and property manager until you’ve found a good deal. The reality is that you’ll probably never find a good deal until you’ve planned for your success. Your own self doubts are holding you back from doing what you’re going to need to do once you find that great property. And you know what? Once you are ready for that deal it will probably be right there under your nose!

4. When All Else Fails, Take Action

There’s almost no fear that can’t be overcome by simply taking action that moves you squarely towards what you’re afraid of. If you’re afraid of rejection from a potential money partner, nothing else will help you truly become more comfortable with that fear than sitting across from someone and risking that NO.

The objective here is not to eradicate fear. Fear is important. The day you stop fearing you could make a mistake is almost always the day you screw up big time. Fear will keep you checking in to make sure you’re taking precautions. Let fear do it’s job to keep you safe but do not let it anchor you.

Get to know it so you can recognize when it’s protecting you from something real versus scaring you from becoming as great as you can be. Once you feel better that it’s a fear of something that won’t kill you or damage your life forever, you can move forward to planning and taking action.

Want more articles on this subject?

>> How to Use Fear to Your Advantage in Real Estate Investing

>> Goal Setting For Real Estate Investors

 

 
Image Credit: © Francesco83 | Dreamstime.com

How to Think Like a Successful Real Estate Investor

 

Success Focused You are what you think you areGo ahead and eat that new mini Blizzard at Dairy Queen or indulge in an extra piece of fish when you go out for fish and chips because you aren’t REALLY what you eat. What you eat will determine whether you have energy or not. And it will determine whether your pants fit or not. But you aren’t actually going to turn into a cookie dough Blizzard or a batter coated piece of halibut.

But if you THINK you are going to be a successful real estate investor and you focus your thoughts on that then you probably will become a successful real estate investor. If you THINK you are going to be the kind of boss that gives yourself Tuesday afternoons off to go to the Spa then you have a good chance of becoming that boss to yourself.

Now I am not about to say that all you have to do is think it. I hope you’ve been around the Rev N You scene to know that I believe the missing piece to your success is almost always ACTION. Think whatever the heck you want – if you just sit on the couch watching CSI reruns you aren’t going to be anything different than what you were when you sat down.

The only thing holding you back from being 20 times more successful than we’ve been is YOU. You are standing in your own way right now. All you have to do is get out of your way.

The life you are living today is thanks to the thoughts you have had so far in your life. If it’s not quite the life you want then it all begins with a change in thought and a change in focus.

Now, if you’re sitting there thinking, that’s great Julie how can I think I am a successful real estate investor when I don’t have any money to invest or how can I can think about being a successful real estate investor when I have no idea where to start? Or, I already am a real estate investor but the bank has stopped loaning me money so I can’t get any more properties.

If one of those thoughts are similar to the ones you’re having then here’s what I suggest:

  • Change your focus: Instead of thinking that you don’t have money or the banks won’t loan you any more money figure out how you can get money to do your deals. Stop thinking about all the things you can’t do and focus your attention on the things you CAN do. For example, you CAN find joint venture partners with down payment money and you CAN find private lenders to loan you the money you need for financing and you CAN find creative ways to buy property that require less money down or have seller financing or no financing requirements at all. We’re going to be rolling out a program in August to help you find, present and sign up joint venture partners which is our primary strategy for finding money for down payments and getting financing. Or, if you just want to learn how to get private money we highly recommend the program we used to become private money magnets- the Private Money Blueprint.
  • Take Action: You kind of do have to ‘fake it until you make it’ but it’s not so much that you have to be phony about it. Rather I’m suggesting you act like a successful real estate investor would act in a given situation. Successful real estate investors are typically great problem solvers who hustle until a deal is done. When confronted with an obstacle they see an opportunity. So until you feel confident and knowledgeable enough to be that way make yourself pretend to be that way. A little thing like lack of funds wouldn’t hold a successful real estate investor back so it won’t hold you back either – when you’ve made the bold and unwavering commitment to become one.

Comfort ZoneListen, this is uncomfortable. It sounds easy but it’s not. Your comfort zone is a powerful place and it tries to pull you back every chance it gets. You have to be conscious of the pull of the comfort zone and always fight it. Because the comfort zone is clever with the excuses that sound like real reasons to not do what needs to be done to become the person you want to be.

Your comfort zone fills you with fear and makes it seem like what has to be done is way harder than continuing to live the life that doesn’t satisfy you. But when you feel that pull simply go back, change your focus and take action. Bit by bit your old comfort zone will fade into a new comfort zone – one which is hopefully closer to the one in which your ideal life exists.

You are what you think you are – so start feeding your brain great thoughts!

 

Published July 28th, 2010

Image 2 Credit:Christopher Bernard Istock Photo

Success Strategies: The Life You Live and the Life You Want to Live

the life you want to liveResistance …

Is there something scratching at your insides saying “This isn’t enough …this isn’t the life I want to live? There’s more to life. There’s more I want to do?”

I felt it everyday when I worked for someone else. I thought maybe I just had to give more money to charity or devote myself to a few good causes. But, even when I would raise thousands of dollars for Breast Cancer, ALS or the SPCA I would still feel uncomfortable that it wasn’t enough. I sat on the board of the Heart and Stroke foundation for awhile and that still didn’t satisfy the itch.

I thought maybe the resistance was a desire to achieve more career success so I applied myself 100% to my job. I learned what I needed to learn and I worked hard. And I rose up within the organization to hold two different positions as Vice President. Short of taking over the company from it’s owner and operating President, there was no where else to go within that company. Yet, the itch was still there.

In fact, the more I tried to address this incredible feeling that there was more to life, the worse it got. Just like when you allow yourself to scratch a mosquito bite… even just a little bit … the itching gets ten times worse.

The problem was that none of those things were really causing the itch. None of those things were really the root issue of the resistance I felt in my life.

At the time, I didn’t really see it clearly. I sort of knew but I wasn’t certain. I had ideas but not a real plan. Until one day a series of events unfolded in my job that led to me sitting across from the President of the company discussing a single piece of paper. This piece of paper had the 3 objectives I was to achieve. The very specific financial results that he expected of me to champion as Vice President of Sales and Client Services. And under each objective were the the things that I had to do to achieve those objectives.

This probably would have just been a bad day on the job, not the day of my epiphany if it weren’t for the fact that he also told me these were the ONLY things he wanted me to do to achieve those objectives AND I felt very strongly that it wouldn’t work. I believed a very different plan needed to be made to reach the goals he had.

So there I was … fully responsible for the financial results but totally powerless over how I achieved (or didn’t) achieve them.

I felt like someone who had to go into a knife fight with my feet and hands tied together. Sure you have wiggle room but so little that unless you’re Jason Bourne you’re probably not coming out of the fight victorious.

At that very moment I understood the resistance I had been feeling for years. Like I said, I had always known but never really allowed myself to see it clearly. I had ideas but not a clear vision. But at that instant I became completely calm and certain. I understood what I had to do.
I realized that “Someday Starts Now”.

I’d had this plan of freedom 35. I had begun investing in real estate in my early 20’s with the intention of leaving my job at 35 and doing whatever I wanted to do at the time. I had been waiting for this arbitrary age when there wasn’t a really good reason why.

And it’s like MaryEllen Tribby said at the Early to Rise Information Marketing Bootcamp in Delray Beach last week … “Someday never comes until you say that someday starts now.”

MaryEllen Tribby said What are you saying to yourself when you say “Someday I will … ” and why are you waiting? Why can’t your someday start today?

Listen, I didn’t quit my job on the spot. I spent 6 months preparing to leave my job. Both for my own benefit and for the benefit of the company. I respect and admire the President of the company as well as the people who work there. I wasn’t about to just abandon ship because I had an epiphany. Not to mention we had to make a few changes to our lifestyle to be able to afford to live without my income. Let’s face it … we make money from our real estate investments but it’s not the same as a nice cushy VP salary that hits your bank account every 2 weeks!

So we started making changes. My someday started that moment … and even though the real “someday dream” hasn’t arrived yet, I feel at peace because we’re working towards it every day. We’re working towards the day where we’ve built our business and investments to the point where we have a large supply of time, money and energy that we can devote to helping two causes we’re both passionate about … helping abused and abandoned dogs and helping children in foster homes find good families.

 

I’d like to challenge you … what is your someday dream? What can you do today… even if it’s small … that will make your someday start now?

And if there is something we can do to help you let us know. It would be our pleasure.

If you liked this article, you’ll really enjoy:

When Quitting Was My Best. Decision. Ever.

Item added to cart.
0 items - $0.00