Overcoming Your Fears of Purchasing Real Estate Investment Property
If you are like many real estate investors in today’s marketplace you have undoubtedly considered purchasing a bank foreclosure. Even if you are a newbie and have not yet put your game plan into action, you have at least dreamt of what it would be like to buy an ugly house and make tons of money on making it a beautiful estate. So, maybe you are a little further along and you have self directed your IRA and linked up with a knowledgeable real estate wholesaler who can find you profitable investment properties. You have all of your ducks lined up, but you somehow wonder how and if ever you will actually be able to find the right deal?
You see the truth is, for most people, this is how the process goes. You get educated and become resourceful, you meet smart and successful people and you want to do what they do right? I mean they did make a million dollars on their own secret strategy? They have purchased tons of properties and have successfully transacted hundreds if not thousands of deals. They have been doing it for some time now and you ponder how they stuck around for so long.
There is one main reason these successful investors have been able to stick around for countless years. It is the same reason the ones who haven’t been around that long have had instant success over night. The answer my friends is “FEAR.” Fear will control your mind and manipulate your emotions. It will preclude you from any further positive action you try to take in purchasing your dream investment. You will second-guess wholesale deals, property managers, appraisers, contractors or maybe just the market as a whole. It will paralyze your will to adapt to situations and stifle your motivation towards achieving your full investment potential. You must overcome your Fear to dominate this market.
Today’s single family investment market is the scariest possible for some people. Daily talks of government intervention riding the coattails of multi-billion dollar fortune 500 banking mistakes have become the norm for the real estate industry. Just when you thought you had the real estate market figured out a major bank moves forward and freezes their foreclosure inventory and releases reports of fraudulent and negligent dealings on their part. Talks of some of the top banks withholding inventory in the short term and manipulating home valuation are common among seasoned investors. Fannie Mae, Freddie Mac, HUD and other government agencies have laid claims on a large portion of the bank foreclosure inventory and distressed vacant properties in the real estate market. Each of them has their own rules, procedures and guidelines for controlling inventory and trying to keep real estate investors from scooping up too many good deals.
Billion dollar hedge funds have entered the real estate market and are bulk buying bank foreclosures and strategizing to sell the assets in 5-7 years. One month the market is hot with tons of purchasing going down. The next month investors struggle to purchase profitable deals.
There seems to be only one major trend that stands out in this marketplace over the last few years, “It’s Unpredictable”. Even the experts cannot truly predict this market. From an economic viewpoint: There are too many outliers or unforeseen variables in the real estate market to correctly predict real time expectations of a short term hedonic pricing model. In English, “This market is too crazy to predict within the next few years.” In the near future, there are no signs of the bank foreclosure market becoming any easier to invest in.
So, now that I have scared you once again, allow me to set you free. The only way you will ever beat the Fear of purchasing a bank foreclosure or earning a healthy return on fixing up and renting out an investment property is to educate yourself. You must keep up with what happens daily in the real estate industry. You must learn how to make an educated decision in real time. Find real mentors who operate in this market every day. You will want to pick their brains and get as much information as you can. Once you hear about a good deal you must learn how to pull the trigger on purchasing. Most good deals will sell within the first few days of hitting the market.
Here at Locklear Real Estate Partners we spend countless hours tracking down good deals. Our deals sell on average within a 24-48 hour time period from the moment we email them to our preferred buyer’s list. You will never have the time to mull over a deal and make a decision during a few week time period. By the time you feel comfortable the deal will be gone. With solid education and the ability to master your nerves you can make a killing in this market. This will in turn depend on how well you overcome your natural human fears of failure.