Learn how to overcome the fear of investing in real estate

In my previous blog post, Feel the Fear and Do it Anyway, I identified four types of fear that hold people back from investing in real estate. They are:

Fear of FailureFear of the UnknownFear of InadequacyFear of Rejection

Anyone of these fears can torpedo your chances of buying your first rental property. In that article I talked about Fear of Failure and the Fear of the Unknown. In today’s article I want to discuss two more types of fear, that are far more subtle, but just as debilitating. They are, Fear of Inadequacy and Fear of Rejection.

Fear of Inadequacy

Over the past few years, I have read several books on real estate investing. As an author of a book on real estate investing, I was curious to see what other authors were saying about how to invest in real estate. What I discovered is that most real estate investing books can be divided into one of two categories:

“You can do it” is the first group. These books are long on “rah-rah” and short on any meaningful content, orThey teach you things you really don’t need to know…

Let me explain.

Assemble a RE Advisory Team

Most real estate investing experts agree that every successful real estate investor needs to assemble a highly competent real estate advisory team. And the team members should be seasoned experts in their fields of interest, including, but not limited to:

Real estate brokeringGeneral contractingMortgage brokering, andProperty management

You should add those individuals to your team who are more knowledgeable than you are in their area of expertise. Makes perfect sense, doesn’t it? So why then do these real estate investing experts then focus the remainder of their books or online courses on checklists that are needed for one of their real estate advisors?

What’s their motivation?

Call me cynical, but I believe these real estate experts want to generate the Fear of Inadequacy in their readers. When a new investor sees all these checklists the natural response is to think, “I can’t do this. I’m clueless.” Why would these authors do this? What is their motivation? I believe that most of these authors wrote their books as a lead magnet. A lead magnet is a product that is offered, in this case a book or even an online real estate investing course, for the purpose of generating new business.

The author wants to make a new investor feel inadequate so that the new investor will hire the author, typically at an over inflated price, to be their real estate investing coach. That’s where the real money is, not in book royalties or online courses but in fat fees or commissions for helping the new investor find his first rental property.

You don’t need to know these things

Don’t be fooled. You, as the new investor, don’t need to understand all the things shown on these endless checklists. For example, as the real estate investor:

You don’t need to know how to negotiate the details of the Purchase & Sale Agreement that will protect you from a nefarious seller. Your real estate broker should know those details.You don’t need to know what things you should be looking at during a walk-through of a property to determine its condition. Your general contractor should know these things.You don’t need to know how to get the best possible financing for the property. Instead you need to have a mortgage broker who does.

If a task can be delegated to one of your real estate advisors, delegate it! You as a new real estate investor will never be as good as your real estate advisors in their areas of expertise. So why shoulder their responsibility? Empower them to give you their seasoned advice. Does that make sense?

How to overcome Fear of Inadequacy

Fear of Inadequacy melts away once you understand that you don’t need know everything about real estate investing to be a successful real estate investor. Simply put, delegate those responsibilities that your real estate advisors are more capable of performing than you are. Conversely, save your time, energy and brainpower for those decisions that you alone should be making.

Fear of Rejection

Thirty years ago, I was transferred by my employer to Atlanta, Georgia and within 18 months, due to no fault of my own, I was laid off. Now imagine my predicament. I was new to the city and I knew virtually no one. And now I had to find a job with no safety net of people to call on. I began with a measly list of three people that might be able to help me. Slowly over time, that list of three grew to 332 contacts during the 17 months it took to find my next job.

I got very good at overcoming rejection

I would call a prospect and say something like this: “Hi, my name is Doug Marshall, (name of referrer) suggested I give you a call. I was recently laid off and I’m looking for a new job. May I come by and briefly introduce myself to you?” Over time I realized that if I called ten people, four of them would say “yes” to my request for a meeting. Regardless of the outcome of these meetings before I said goodbye I would ask if they knew of anyone that they could recommend that I should contact. And that is how I got my list to grow from 3 to 332 names. But realize that if four were willing to meet with me, that meant six people said “no.” I got very good at overcoming rejection.

How do you overcome the Fear of Rejection?

So how does the Fear of Rejection affect real estate investing? As a new investor, people in the real estate business and those who own real estate will be constantly sizing you up. Are you a player, they’ll be asking themselves, or are you just wasting my time? And many will reject you as credible and will not want to do business with you.

Be Prepared

When I was seeking a new job those many years ago, I not only had a script that I read from when making my calls and I also had a script that I followed religiously when I met with my prospects. By being prepared, it took away some of my anxiety about finding a job. I knew what I wanted to say, and I could relax a bit. When you’re buying your first rental property, be prepared when you meet with the listing broker and other real estate professionals. Act professionally. Don’t act like this is your first rodeo, even if it is.

Focus on the Prize

I had great incentive to find my next job. I had a wife, who was a stay-at-home mom, and two pre-school children to support. I had no choice but to find my next job! In the same way, many first-time investors are financially motivated. You know that if you don’t do something to change your financial situation for the better, retirement may be meager at best, and for some you, you may not be able to retire at all. So focus on what motivates you to become a real estate investor and not on the very real possibility you’ll be rejected many times along the way.

Mastering Fear: A Navy Seals Guide

Finally, I strongly recommend you read the book, Mastering Fear: A Navy Seal’s Guide by Brandon Webb. Mr. Webb is a retired Navy Seal. The book has many practical tips on how to master your fear. There is a quote in the book that I have adopted as my own: Everything you really want in life is on the other side of fear. Think about that statement. Is it true? I believe it is. Is it true for real estate investing? Absolutely! Don’t let fear get in the way of what you truly want in life.

Those are my thoughts. I welcome yours. What holds you back from investing in real estate?

Doug Marshall is the award-winning author of Mastering the Art of Commercial Real Estate Investing and the recently launched online course The Great Game of Real Estate Investing.

The post Learn how to overcome the fear of investing in real estate appeared first on MarshallCf.