I've written about the mindset required when buying investment real estate in the past and it always creates a bunch of questions.
Here's one of the first blog posts that started the discussion in our office... click here to see it.
I'll summarize it like this:
I mentioned in my previous post on this that the book by Neil Fiore, Ph.D., titled "The Now Habit" is by far the best resource for explaining the reasons why people procrastinate that I've ever come across. Highly recommended.
So a bunch of people started asking about why we get that initial feeling of overwhelm that seems to cause all the problems.
Again I'll have to refer back to Neil's book that provides some great insights.
And after working with MANY investors I can share from first-hand experiences that his thoughts on this seem amazingly accurate.
Buying Investment Real Estate: A Marathon, Not A Sprint
The feeling of overwhelm that a beginner gets when thinking of buying investment real estate initially comes from insisting on the right place to start.
When buying investment real estate, especially when buying it for the first time, people often spend tremendous amounts of time scrambling for the perfect place to start.
Is it a single-family home, a condo, a property under $750,000, over $750,000, downtown, in the burbs, a condo conversion project, a flip, or new construction? And the list goes on and on.
What most people buying investment real estate don't understand is that your path to wealth is not linear.
All of these may be the right choices given the right mentor and education.
What you really need to do is begin.
By beginning with ANY of the possible investments you build a base of experience that you can learn from and make even better decisions in the future.
But without that base of experience to lean on you have nothing.
So initially, it's more important to find a mentor, get some education (six months of reading is more than enough) and then take action.
You are building your base of experience by taking the first step and that's almost more important than the investment itself.
...
When beginners start buying investment real estate they typically don't allow themselves the time to develop their confidence.
They want to be perfect at negotiating the lease, picking the property, collecting cash, and they want to be perfect at it right now.
This is wrong and builds that feeling of overwhelm.
When buying investment real estate you need to learn as you go. Each step in the process of finding a home, negotiating to purchase it, closing on it, renting it out and making a profit from it is part of the process.
And if you've never done any of the steps before you will make some mistakes. It's those mistakes that build your experience and make you better at it.
So you must expect some mistakes. You must ask for help. You must give yourself permission to be less than perfect.
This attitude will go a long way in making the process of buying investment real estate bearable for you.
I see this one almost all the time with beginners buying investment real estate.
They will think that they need to be "finished already". Neil Fiore has really hit the nail on the head with this one.
Often beginners won't accept that they are "not finished already". They didn't get the tenant they wanted for their first property during week one and they get discouraged.
They get frustrated with their level of accomplishment at the beginning and compare it with the "ideal" they set out with at the beginning.
See most people just focus on the end, in this case having a property rented, and not the process.
So when they begin showing their property and don't get it rented out immediately they begin to freak out because they only saw the finish line and forgot about the journey.
This leads to massive overwhelming and stressful feelings.
The above observations is applicable to almost anything. Neil Fiore has done an amazing job with the book. And for the second time, I'll throw out a strong recommendation for it.
You can find a copy of it right here.
