5 Reasons Why Most Real Estate Investors Fail

Posted on 15. Apr, 2010 by in General

It’s a known fact that the overwhelming majority of “Real Estate Investors” will never do even one deal, will quit after only a few months, and wonder why real estate investing is so difficult.

But the reality is that success in real estate investment depends not simply on certain investment techniques, but rather on business acumen, management skills and money-smart psychology. Here are five reasons why investors struggle and some sound advice any wannabe investor might want to consider:

1. They are hoping to make “easy” money: You know the ads I am talking about, they are everywhere. Gurus portraying real estate investing as simple and easy and showing you how you can make fortunes in no time at all. Well, I have news for you. It’s not true, these scams do not work! Starting in real estate isn’t as simple as reading a book and making offers. Too many people get caught up in the get rich quick hype and will spend hundreds of dollars for courses, seminars and boot camps that will teach them step by step how to become a successful real estate investor, but they omit the biggest step – taking action! If you happen to be one of the people looking to get rich quick… you will most likely end up in the category of those who will fail.

2. Cash Flow: The most common management mistakes in any business naturally involve money. In real estate investment, money troubles can include paying too much for the property, taking on too much debt, ignoring the true cost of such major expenditures as property taxes and capital improvements, failing to increase rents to reasonable market rates, and trying to operate a property with inadequate cash flow.

3. Treat Real Estate Investing as a part time business or hobby: To be successful in real estate requires huge commitment and focus. Most of the wannabe real estate investors start by using the “techniques” they learned at boot camp. The techniques should come after you decide to treat investing like a business. If you don’t treat it like a business, taking steps to having a registered business name, website, business cards, and checking account, you are telling yourself that “I don’t want to make the commitment of starting a business because I’m not sure that I will succeed… also it will be embarrassing if I take all that time to start the business only to have it fail”. This is programming you for failure – and that you will!

4. Have no clear goals that they are working towards. This is what separates the small percentage of real estate investors who succeed from those who fail. Goal setting is vital for success. Your goals and priorities must be specific and measureable. If you don’t have a specific target to hit by a specific date, it is far to easy to forget about it and never achieve it. Be very careful not to confuse goals with dreams. A dream becomes a goal when you detail specific steps to get there and dates on when it will happen. Successful people are very good at setting goals… while unsuccessful people are really good at setting dreams. A goal without a specific game plan to achieve it is simply a dream.

5. Fearful of taking action until they know it all – One of the biggest mistakes real estate investors make is the idea that they have to get everything right before taking action. If you to wait until everything is perfect and you know 100% of everything relating to real estate investing… you will never get started. You need to get ready, fire, and then aim. Get started and take action first… then everything will fall into place. If you live by “ready, aim, fire”, you will spend your whole life getting ready and aiming… but never firing. So, stop procrastinating, start today by taking action to get you where you want to be tomorrow!

To Your Investing Success!
Submitted by Jane Killeen-Payne of INVICTA Property Investments
“Your Future Wealth is Our Business”

Tags: , , , , , , , , , , , , , , , ,

Leave a Reply