There is a certain euphoric bliss when entering any new endeavor. You are so excited that you finally took a leap of faith that you fail to see the bigger issues ahead of you. Being a self employed real estate investor is one of the greatest professions in the world, but it doesn’t guarantee success. There are many minefields that you need to avoid. Just when you think you have everything figured out something new will come out of nowhere.
As an investor you are the CEO & President of your real estate business. You steer the ship of which direction you want your business to go. One poor decision can set you and your business back months and make it difficult to recover. You don’t need to labor over every single decision you make but you should know that everything you do has consequences. Here are five business crushing mistakes you need to avoid.
- Thinking you climbed the mountain. There is a saying in sports that becoming successful is the easy part, maintaining it is difficult. As hard as you worked to build up your business and grow your pipeline you need to work twice as hard to maintain it. For many new entrepreneurs, and investors, getting to a point where you commit to the business full time is the top of the mountain. You think you have finally made it simply because you are now investing full time. The reality is that now is when your work really starts. Without maintaining the same edge you had to get to this point you will quickly fall behind your competition. Just as you have committed full time there are other investors in your market with the same vision. If you let your foot off the pedal you will lose deals & opportunities that used to be available to you. Entering the business is just the start of your real estate journey.
- Emotional decisions. There are dozens of decisions needed to be made on a daily basis. Some are obviously more important than others but everyone is important in its own certain way. It is essential that you base your decisions on facts and logic rather than emotion and instinct. There will be times when you come across a property that you love personally but it may not make the best investment. The numbers don’t quite add up or the seller won’t budge off their number. You look at every possible angle to try to make the deal work but deep down you know it just doesn’t make good business sense. As difficult as it may be these are the deals you need to walk away from. Sometimes, some of the best deals you are a part of are the ones you don’t get involved in. It is ok to say no if you need everything to break right just to scratch out a small profit or the deal will engulf too much of your day. Never let your emotions influence the important decisions in your business.
- Lack of action. If you are like most business professionals you probably have dozens of ideas floating in your head every day. What separates success and disappointment is often the ability to act. It is not enough to say what you are going to do or even write down an action plan. You need to get up and do it every single day. There are days when you don’t want to spend a few hours at a local networking meeting or want to drive to a business engagement. There is nobody telling you that you have to go so you choose your action based on how you feel. Before you know it, you find ways to justify not doing something and slowly it will negatively impact in your business. The action you take is the one thing you can control that separates you from the competition.
- Putting all your eggs in one basket. There should always be a delicate balance between striking while the iron is hot and putting all your eggs in one basket. Just because something may be going well in your business now it doesn’t mean it is going to last forever. There should always be a safety net if the market shifts or changes unexpectedly. Foreclosures & short sales were a great source of business last decade but have since come back to Earth. If you put all your resources to marketing and generating deals in these areas you may have had a tough time finding good deals and generating a profit. Conversely if you marketed in several areas and had a diverse portfolio you can weather almost any storm the market brings you.
- Poor time management. As obvious as it sounds you need to focus on doing the right tasks. There are only so many hours in a day. It is easy getting caught up on a simply task for hours if you are not careful. Before you know it half of your day is gone and you haven’t been nearly as productive as you would like. You need to take time to plan your day so you can be as efficient as possible. Wanting to act is great but you need to be able to fit everything in on your schedule. Something as basic as time management can influence how productive you are.
Being your own boss and running your own business can be a difficult adjustment. It is important that you keep working every day and understand the potential pitfalls out there.