The biggest thing that keeps potential investors from becoming successful, fulltime investors is their real estate mindset. Big egos can ruin any deal.
I’ve seen it happen. Some newbie trips and falls into a deal. They make a few repairs and 6 months later, they flipped a house for $20k.
Suddenly, they’re Leonardo DiCaprio on the helm of the Titantic yelling “I’m the King of the World“.
They’re thinking that “real estate investing is easy” or that “I’ve got this all figured out“.
This ego and arrogance will cause them to make mistakes. They become overconfident, don’t work the numbers because they follow their gut (yeah, a gut after 1 deal) and don’t learn new strategies because all they have mastered flipping. Also, they don’t seek any help from others because they figured it out. And they start taking chances.
Eventually, they’re like DeCaprio at the end of Titantic, watching their ship go down wondering what the heck just happened.
A Chip (of Entitlement) on the Shoulder
Eventually, I learned the ropes to investing. I grew two successful businesses and successfully closed several deals. In 2013 – 15, I was president of the Real Estate Investing Association (REIA) of Austin. Even though I became what many consider a local pro, I’ve made my fair share of mistakes.
Why did I make those mistakes? I believed after those first few deals that I was entitled to success.
I had the wrong real estate mindset and reality slapped me in the face. But I learned from it and continue to this day to be a student of the real estate industry. I’m always looking to learn something new or learn from someone new.
I often host meetings for new real estate investors. These meetings are a great place to come, learn something new, chat with a local pro, or to build up your network.
Unfortunately, you’d be amazed at how many new investors come in with the wrong real estate mindset. Here’s a short video where I talk about that chip on the shoulder.
Lose That Chip On Your Shoulder
If I had a dollar for every time someone at the meeting said one of the following, I’d own half of downtown Austin:
- “I’m a quick study.”
- “I can do this myself.”
- “Haven’t had a bad deal yet.”
- “Real estate investing is easy.”
- “I don’t need to learn anything new.”
- “I’ve done big deals in other industries. How different can this be?
Honestly, I’d be embarrassed to be at an event and display such an arrogant real estate mindset. I’ve seen investors and homeowners ruined because the investor thought they knew everything. There is always something that you can learn from others who are in the same industry as yourself.
Become an All-Star With The Right Real Estate Mindset
Real estate investing is a discipline like any other. Nobody becomes a pro overnight. You need to put in the hard work and hard work means learning the principles of real estate, shadowing local pros, applying your knowledge, and studying what went right or wrong.
Step 1: Education
When I was starting out in the early century, flippers were turning deals left and right. They were only looking for flip opportunities and turning down any other type of distressed homeowner deals (leaving thousands on the table) that didn’t match the buy low – minimal repairs – sell high equation.
The pickings were easy, so why learn other ways to buy & sell houses? Sounds like effort, right? When the economy turned, they lost big money on their flips and didn’t know how to acquire properties with little, no, or even negative equity. They weren’t educated in multiple strategies. Because of this lack of education, they couldn’t adjust their business and closed their doors.
Regardless of the economy or real estate market, you can always do profitable deals. The only thing that changes is the strategies you use to acquire and sell properties. If you don’t know multiple strategies, you don’t have a long-term business. You have a seasonal business without any clue of when the season is changing.
Step 2: Shadow
I often tell newbies to get a mentor or do a joint venture with a local pro. Shadowing an experienced investor is a great way to gain experience the right way. You’ll learn what they do, how they work, & why they do what they do. Most of all, you’ll be able to take advantage of their experience, their successes, and failures. All of these items will minimize your risks of losing time and money as well as making your first deal your last.
Ready to work alongside a pro? Call me.
Step 3: Take Action
Eventually, you need to apply what you’ve learned. Take the knowledge and wisdom from your mentor and get out there. Keep a good record of how your deals go. Take notes. What went well and what didn’t. You’ll need this information to sharpen your game later.
Step 4: Review
Let’s face it, you need a coach or a group of investors you can talk shop with. All professionals at the top of their game routinely review their performance. Call us for advice on coaching or check out a local real estate investment club meeting.
Remember, building the right real estate mindset takes time, hard work, and hard-won experience. I tell all my clients: You can do it!
The Winning Real Estate Mindset
So what is a good real estate mindset that creates powerful deals that make money? The pros who close the most successful deals all have a few things in common. Every pro approaches the real estate investing game differently, but they all learn to develop the right mindset. I call this the winning real estate mindset.
- Humble
- Patient
- Team-oriented
- Open to new information
Pros know that arrogance is the quick road to a bad deal. They take their time, develop a good team to help with the deal, and are always open to details that might make or break a deal.
When I coach newbies, we take a look at top deals from local pros. We look at what worked, what didn’t, and why. Good coaching helps you discover how to get better and how to become successful. You’ll learn the mindset first-hand when you work alongside a pro.
Work With Us And Win Faster
Working with me here at REI Consulting, either through coaching or a joint venture, is a great way to develop your investing experience. Through coaching, I’ll help you develop your real estate “swing”. In a joint venture, we’ll be playing on the field side-by-side.
Work with me and you will:
- Avoid classic mistakes
- Find better deals
- Negotiate healthier and stronger deals
- Close faster
- Make more money
I’ve worked with many newbies here at REI Consulting. Those newbies that come in with a strong real estate mindset, who study hard and work hard, and who aren’t afraid to take advice, come out ahead. They avoid big mistakes and build a solid foundation for future success.
Toss off that chip of entitlement on your shoulder. Get into the real estate game with an open mind. When you do, your network will grow, your deals will become profitable, and you’ll be on your way to becoming a pro.
