For the last few weeks, we have focused on the house flipping process and how you can use this real estate strategy to build wealth and passive re-occurring income. Understandably, it can be quite scary when you’re on the road to flipping your first house. So many unknowns, the hows, the whose, and the wheres, all seem vaguely abstract at best. There are so many moving parts that getting a handle on them can seem frustrating and overwhelming.
So today, I wanted to talk about two of the most significant fears that cripple most new real estate investors and how you can overcome each one of them!
Fear #1: The Fear of Picking the Wrong Property
This is a big one, after all, if you pick the wrong property your entire flip may as well be thrown out the window. No one wants to mess up nor do they want to look inexperienced or even stupid. I know I wouldn’t!
When it comes to finding and evaluating properties there are tons of variables that you must think about to determine if a property is lucrative or profitable. This can seem like a lot and often leads to analysis paralysis.
You have to sort through tons of properties in your area just to find the ones that are for sale, then you have to figure out which one of those properties land within your selection criteria. With this data, you now have to analyze the property to see if it’s worth putting an offer in and determine how this property stacks up with your other potential candidates. Then you have to determine what can be repaired or upgraded and if it’s even worth it.
You should get the point by now…it all seems like mission impossible!
So how do you get rid of this fear?
First, take a breath of fresh air and realize that each of the problems/unknowns mentioned previously all stem from a lack of knowledge/education. Proper deal analysis is not something that you just pick up right away, but with practice and guidance you will learn how to spot and analyze these properties faster than ever before.
The key to squashing this fear is education and knowing that it’s ok to not know every little thing. There are tons of resources out there that will help you along the way including myself. That’s why I am here!
Think for a second….before you learned to drive you had no idea what was going to come next, you may have had a rough idea, but the entire process was slightly alien to you.
So what happened? You got out there with either a family member or instructor and slowly began working through those uncomfortable fears until driving became second nature!
When you drive now, do you constantly think about what to do next? Absolutely not!
House flipping and property analysis is exactly the same way!
Fear #2: Fear of Making Offers
One of the largest hurdles for most first time flippers is the fear of making the wrong offer. After all, who wants to pick a property that they can’t rehab, can’t sell or can’t make a profit from. When faced with this fear, most people are afraid of going down the wrong proverbial “rabbit hole”, a rabbit hole that their mind convinces them might lead to bankruptcy and the attached shame that comes with it.
This is fear is purely rooted in negative thinking and the fear of the unknown. Let me tell you one thing, in entrepreneurship you need to make the unknown your very best friend. If you don’t you will NEVER…and I mean never make any progress towards your goals!
Now, this doesn’t mean you have to jump out of a plane with a blindfold and no parachute, you still have to do your homework and create a plan. This plan will help mitigate the associated risk involved with the property you are actively engaged with.
Once you have your process, you know your odds of success. In a worst-case scenario, if the property doesn’t pan out you will still be able to recoup your base investment with zero to minimal loss. Which means that you will be prepared to go out and fight another day.
Quick Note: In entrepreneurship…you will almost never come close to making a perfect decision. Do your homework, take calculated risks, make decisions, and make adjustments accordingly.
Do your research, look at the comps, and understand the repairs needed, even get expert opinions on them if need be. Once you have analyzed the data points and common points of failure, your chance of success increase exponentially.
The real key to overcome this fear is simple and I’ve stated it time and time again. Take action. The more action you take the more you will learn. Go out and analyze properties, practice on properties you may not even pull the trigger on. Do a few dry runs to get the action muscle churning!
Risk is a natural part of life. Get educated and take action!
Practice the fundamentals…
Take massive action.
That’s how you beat these two fears.
Want to learn everything you need to know to succeed at real estate investing?
Check this out —-> How to find, fix, and flip properties!