A lot of would-be real estate investors quit before they have even begun.
Why is that?
Well, their expectations were set incorrectly.
Having realistic expectations will ensure your real estate investing career gets off on the right foot!
These five expectations are all too common, and you need to manage them now!
Expect to get rich fast!
All too many people think real estate is a quick way to build wealth.
They watch HGTV shows like Fixer-upper and get googly-eyes.
Or maybe they met a wholesaler and got sucked into the fast-paced, used-car-salesman world of wholesaling.
Side note, I love wholesalers.
Perhaps their friend convinced them to join a Guru program, and they see how much money can be earned.
The reality is that real estate investing is a get rich slow game.
Yes, some people get rich fast…but that is the exception, not the rule.
You need to expect things to be slow, and allow yourself to be pleasantly surprised!
Expect to flip mansions
The next big misconception is that you will be flipping mansions.
For whatever reason, people expect to be able to score a “lipstick flip” mansion right off the bat.
A lipstick flip is a property that only needs minor cosmetic repairs.
Yet people seem to think that by simply low-balling tons of these homes people will say yes.
Is it possible, sure…but again it is the exception, not the rule!
The reality is that you’ll be getting rejected by people who think their home will sell for market value with holes in the ceiling.
I’m not kidding, it took me 6-months to talk somebody down $110k on a house that was falling apart.
Prepare yourself for working on teardown quality homes.
Hoarder homes are a gift from the heavens!
Expectations of glamour
Getting started as a real estate investor is not glamorous.
There is no “AHA moment” that leads to you transforming into a sexy, wealthy, person.
You are building a business.
It takes long hours, hard work, resourcefulness, and grit.
You may also find yourself crawling through an attic or crawl-space much more frequently than entering mansions.
Understand this going in, or you will quit when the going gets tough.
Trust me, it happens more than you might think.
Expectations of Lamborghini-lifestyle
That doesn’t mean you have to!
These guys use exotic cars as motivation and buy them as a reward for achieving goals.
They do not, and I repeat DO NOT, buy these cars prior to achieving these goals.
When you begin investing you need to focus on increasing your savings rate by mitigating expenses.
The more frugal you can be, the more money you will save. The more money you can save, the more money you can invest.
This isn’t sexy, but it is necessary!
Fearful the worst deal will crush you!
I have seen many investors get wrapped up in “analysis paralysis” and never make a move.
Analysis paralysis is when you allow the phrase “what if” to get in the way of taking action.
For some reason, people think that a failed deal will be unrecoverable.
They fear failure more than they desire success.
That sucks because it will become a self-fulfilling fantasy if you never get started.
I recently had the biggest deal of my life go south, and I’m still saving for the next investment.
It is not the end of the world, and I am learning a ton about the legal system throughout the process.
Your worst deal isn’t going to equate to a ruined life, or you becoming the homeless guy with the sign.
It will result in you learning a ton, then doing better next time. Obviously, it won’t be an enjoyable experience, but it will be worthwhile in the long run.
Now, I say this, but you still need to be cautious and analyze deals thoroughly. Also, please don’t forego having cash reserves to help you out if the deal turns out to be a dud.
Look, here’s the deal guys.
Real estate investing isn’t easy.
It isn’t a “get rich quick” game.
It isn’t glamorous like HGTV would have you believe.
real estate investing is, however, fun!
Watch how easily I can manipulate the expectation vs reality when explaining real estate.
I love real estate investing, and watching my wealth grow! Last year my net worth went up $8,400 with just the debt paydown on ONE of my properties.
Not too shabby when you realize this doesn’t include cash flow, tax write-offs, and other properties!
The best part?
I spent no more than two hours on that property in any given month!
…but it took a lot of time, money, and system-development to get that property to such a great place.
Even with how amazing that sounds I had a U-Haul take out a section of the roof, three evictions, and a Furnace go out…in just that one property!
See, investors can make it (the real estate game) sound amazing, or lame depending on how real (or fake) they are with you.
Mentorship Expectation vs Reality
The trend is for every newbie to immediately go on the hunt for a mentor.
While mentorship is great, understand it is a lot to ask from somebody.
Being a mentor takes a lot of time, effort, and responsibility.
It isn’t likely that anybody will mentor you without a previous relationship.
If you find somebody that would make a good mentor you need to build a relationship with them.
Do this by finding ways to constantly add value to their life.
Focus on bringing them value, and helping them as much as possible…over time, you’ll learn a lot, and maybe even gain a mentor.
This needs to come naturally though, don’t just run around asking people to mentor you!
It will be challenging, but it will be worth it.
Managing your expectation vs reality mindset is a huge win!
It will take your precious time and hard-earned money…but it will be worth it.
Real estate investing is not what you expect it to be, but it is a great reality to live!
Get out there, take action, and begin building generational wealth today!