Success vs. Failure In Real Estate: A Very Fine LineBy JD Esajian on February 16, 2017
Starting out in real estate is like opening a new business. Depending on the study you read almost 75% of all new businesses fail in the first year. Out of those 75% exactly zero business owners think they aren’t going to make it. As the numbers indicate it takes plenty to go right to be successful. However there are also a few common mistakes that can be easily avoided. By avoiding these mistakes and knowing what to do and when to do it you give yourself the best possible chance for success. Here are five areas where making the right choice has an immediate impact on the success of your business.
- Commitment. It takes more than just desire to be successful. Every new investor has dreams and aspirations of real estate domination. However few have the willingness to make it happen. There is often a big difference in what you want from your business with how it actually plays out. Hard work is important but not enough to guarantee success. You need to be focused, driven and committed to working in areas that your competition is not. These areas are often boring, frustrating and won’t deliver immediate returns. However if you are willing to grind away every day regardless of the results you will eventually see some returns. Where many new investors, and business owners in general, struggle is not seeing immediate success. Most think that upon entry in the business they will have more sales, leads or deals then then can handle. When this doesn’t happen instead of working harder they actually become less focused and dedicated. Commitment to your business is something that has to a constant action regardless of whatever else is going on.
- Open To Change. The vision you have for your business today may be completely different three months from now. As any real estate investor will tell you running a business is a fluid situation. Something that works at the outset of your business may not work down the road. On one hand you need to be committed to your vision and stay true to who you are and what you are doing. On the other you can’t be stubborn enough to keep doing the same things over and over again. This is often where investors and business owners get in trouble. Give yourself enough time to make things work the way you plan. Only after you hit 60 or 90 days should you evaluate how things have been going. During this phase it is important to look at things as objectively as possible. If something didn’t work get to the bottom of why. Many times the idea may be sound but the implementation or execution is poor. The minute you feel you are headed in the wrong direction pull the break and shift gears. This is never easy to do but essential for business success.
- Education. One of the things that is often a blessing and a curse for new investors is the limited barrier of entry. If you want to invest in real estate tomorrow there is nothing permitting you from doing so. However just because you can doesn’t always mean that you should. Investing in real estate takes a good amount of education to be successful. Anyone can find some basic information online and present an offer. The best investors look for specific information and knowledge. They look at market trends, sales history and target motivated sellers. They also know that realizing 5-10% more profit on every deal makes a difference at the end of the year. Successful business owners and investors take any extra time they have to improve their education. Even if you don’t want to go to an investment club meeting or seminar it is worth it. Education isn’t just something you will store and save for a rainy day. It will help make decisions that will shape your business and impact your bottom line.
- Capital/Expenses. As with any business the bottom line is the most important thing. Sure, growth and future earnings make a difference but success hinges on the how much capital you have at the end of the day. Successful investors know that throwing money at problems will not always fix them. In fact some of the best fixes are often the least expensive. Increased capital gives you the ability to make the right decision for your business at all times. When cash flow is limited there is a temptation to go for the quick fix and a short term strategy. When this doesn’t pay off you are left right back at square one without the capital you started with. Until you have established your business every expense must be monitored and thought through.
- Attitude. Business has a way of beating you up at times. Some days you will be on top of the world and others you will wonder why you got started in real estate. It is remarkable at just how important your attitude is to your success. Your attitude impacts the relationships you make, how you look at a situation and whether or not people want to work with you. A positive attitude will put you in situations where a bad attitude never would. Staying positive in the midst of turmoil isn’t always easy but it is an essential part of success.
In real estate you determine your own path and often times create your own breaks. These five areas will go a long way in determining just how successful you will be.