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With getting started on real estate, you will be making a lot of mistakes. It’s normal, even the best investor you can think of has gone through their fair share of losses. But real estate investing has been around for decades. So, let’s tackle some common mistakes that investors make that can ruin your business.
Investing in real estate is one of the best and safest ways to create generational wealth. Market prices will go up and down, but it is hard to beat the cash flow that real estate can produce once you own property.
If you want to get started with real estate, here are some common mistakes to avoid:
Many people get into real estate investing, thinking it’s a fast and easy way to make money. This couldn’t be further from the truth.
It can take months before new investors see any profit from their hard work. Say they decide to go with cold calling to find deals. That’s going to mean hours of calling sellers and dealing with rejection every day. (In this entry we talk about the many things investors need to consider!)
Many give up because of this, but other keep grinding while seeing no results. And this takes me to my next point.
Jumping into a pool if you don't know how to swim would lead to terrible results, in the same way that it's a mistake to get into investments that you don't know anything about. A lot of investors suffer from shiny object syndrome when they first start investing. Because of this, they start pursuing all kinds of deals and strategies that promise fast cash and many deals.
Moreover, after not making money fast, they jump on to the next strategy that promises success.
The reality is that for a strategy to be successful, investors need to know what it requires. Different strategies have different demands regrding time, equipment, and even manpower. If you get into cold calling, you should expect to spend hours on the phone. If you get into inbound lead generation, you should expect higher expenses.
By being educated on different strategies, you can choose which one fits you best and give it a fair shot before moving on to the next.
Most new investors start off on their own, but many make the mistake of not outsourcing responsibilities as their businesses grow.
It is normal to think that there couldn’t possibly be anyone better than you to do things in your busines. But the reality is that you are not saving money, or doing a better job, than people with years of experience in a particular position. If your business has grown to a point where you find it challenging to keep up with every task, your best bet is to outsource.
By finding people to take on roles within your company, you can focus on growing your business in other ways. And believe it or not, if you hire the right person, they will bring much more value to your business than you could when you were doing that job.
We’ve established that outsourcing responsibilities can be great for your business. But what happens when you get the wrong people?
If you are a new business owner, it makes sense that you’ve never hired anyone before. This is why you should keep a couple of things in mind when hiring people.
Don’t just go for the cheapest option
Bringing new people into your company shouldn’t be where you sacrifice talent for money. There are some amazing ways to save money when hiring people, but always priorizite experience and talent.
Hiring remotely is a great way to get amazing talent into your company. With proper screening and a good agency's help, you can get some amazing workers from overseas. (We have our very own agency to bring investors the best talent from overseas!)
Prioritize experience and talent
As I mentioned, there are ways to save money when hiring workers, but always prioritize experience! If you find the perfect person for your company, hire them. You will likely find people who will work for less money, but they may not meet your expectations.
Properly compensate your workers
Good work is not cheap. If your new hires are doing a fantastic job, encourage them to stay. Offer bonuses and commissions. And if you see that they are not doing great, show them how they can improve.
Know what you are looking for
Make your expectations clear to your employee. If you are looking to outsource a task, you should sit and write down exactly what you want your new employee to take care of. What their responsibilities are, and the results you expect from them.
Not doing this is a mistake on your part. You will feel disappointed and your new hires may feel frustrated with their new job.
The root of many mistakes. As an investor, the best way to avoid failure is to have a plan. This means, knowing what you need to do if you want to succeed. Moreover, investors need to be aware of their limitations: Money, time, manpower.
Plans won’t always go the way you want them to. But having a plan is the best way to stay organized, and to identify when something is going wrong in your business.
Having a plan and keeping realistic expectations are crucial to the success of your business. In addition, don't be afraid to outsource tasks within your business, but be mindful of the people you are bringing in. Talent and experience are what you should be looking for, you may want to save money here, so be smart about it. Always prioritize the value someone can bring to your company, hiring remotely is a good way to bring great value for lower prices.
And finally, don't be afraid to make mistakes. You should indeed avoid them, but mistakes are how we learn. You will make mistakes. What's most important is that you are self-aware, and willing to put in the work to improve.
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