The No. 1 Mistake New Real Estate Investors Make and 4 Ways to Avoid It
When I was brand new to the real estate investing (REI) world and the FIRE (financial independence, retire early) community, I was super excited to learn as much as I could.
Raise your hand if you’ve ever asked yourself any of these questions:
- What does that word mean?
- How am I supposed to remember all this stuff?
- How can I possibly find the time to keep this up?
- When do I get to be as good as that person?
- Which way to invest in real estate is best for me?
- What’s the first thing I should do?
- Do I really have the ability to do what they’re doing?
- Where do I even begin?
- How does everyone on these podcasts and videos already own a bajillion properties?
- What if I fail miserably?
Overwhelming, huh? Yeah, I think so. If you are two years or less into the REI or FIRE world, there is no doubt you have felt completely overwhelmed at some point. (And maybe many points.)
But DON’T give up!
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The Biggest Mistake New Real Estate Investors Make
Giving up as a result of feeling overwhelmed is the biggest mistake newbies make.
Many get overwhelmed and quit. The sheer volume of information and the constant need to compare themselves to those who have spent decades pursuing FI act like a wrecking ball to their wall of enthusiasm and excitement.
Please, please, please don’t make that mistake!
Here are a few ways to help calm yourself and regain the initial excitement you once had.
How to Ensure This Doesn’t Happen to You
1. Have the courage to say no.
You don’t have to do everything. (Surprised?) When an opportunity comes up, don’t automatically agree to take it.
Think about the opportunity and what it would involve. Ask yourself if it’s going to help advance you toward your goals and whether it’s worth the time needed. Oh and by the way, this advice is about saying no to others and also yourself.
When I was discovering the world of real estate investing, I once agreed to attend a workshop on REI with a friend who had been doing it for a long time. I didn’t ask for info. I just said, “Yes, I’ll go!”
It turns out the workshop was for veteran investors. The content was way over my head. I spent a day of my life (not to mention a couple hundred dollars) at the workshop when many other options would have served me much better.
2. Cross things off your list without doing them.
I’m a list person. I’ve been known to have a list of my lists. They help organize my life and allow me to breathe easier, because I’m not worried about forgetting something.
But a list is just a tool. It’s not a doctrine. When I’m feeling overwhelmed, I try to take a minute and start crossing things off my list that aren’t really that important. Or at the very least, I push them to a later day or week so that the present is much less overwhelming.
3. Come to peace with the fact that it takes time.
Every successful real estate investor was in your shoes at one point. They’ve just had years or decades of additional time to learn and succeed.
You can only do what you can do—today. Don’t compare yourself to others who have a 10-year head start. And try to find some peace and gratitude that you were lucky enough to even find the REI world and all its benefits.
4. Rank your priorities.
Your priorities should align with your goals. And there should be no more than three or four of those.
Ranking your priorities gives you a starting place each day. When you sit down to “do REI” for the day, begin with the most significant priority. If your No. 1 goal is saving $20,000 to buy your first property, then start there for the day. Don’t spend time on other tasks until you’ve made some headway toward building your savings.
Way too often, I begin my “REI time” with the tasks that I enjoy most—even when they don’t align with what’s most important. Instead, I have to consciously prioritize the tasks so I can advance toward my top goals every day.
Cut Yourself Some Slack
We all need to realize that if we go too fast or hard at a goal, we often burn out before we even get close to the finish. And this pertains to all aspects of our lives, not just REI.
Do what feels right each day and no more. Just because a guest on your favorite podcast said that he’s staying up until 2 a.m. every night working does not mean that you need to, as well. Just because the author of the book you’re reading decided she would forgo a social life to grow her portfolio as fast as possible does not mean it’s the best track for you.
Building a passive income investment portfolio is not a sprint. It’s not a marathon. It’s a steady and strategic walk across the country. You cannot magically skip ahead 500 miles overnight. You have to do it one day at a time by spending your energy on the most essential tasks while realizing that your happiness is at stake, too.
By heeding some of this advice, you will likely find yourself where you want to be someday instead of being one of those burned-out, would-be REI investors, who tried to do too much too quickly and quit because they felt overwhelmed.