Help Overcoming Fear!
I've been studing investing for three yrs. But, every time I get hold to a property I find a way to back out. I just can't shack this fear. I want it so bad. I look back at all the time I have wasted and want to kick myself. Please give me some advise. I would say that my biggest fear is messing up.
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[ Edited by wendi6 on Date 05/27/2004 ][ Edited by wendi6 on Date 05/27/2004 ]
If your personality won't allow you to just go for it, try taking baby steps. Look at your reserves, look at what you have to invest. If you have, say $20k , look at that 20 and say okay, worst case scenario is I lose the whole 20, what happens? Deal with it. Think of the worst possible consequences. Would your whole world turn upside down if it evaporated? If so, then you probably don't REALLY have it to invest. If life goes on, then whatever happens will more than likely better than you expected. Look at it as an educational expense. Maybe you'll recoup some of it, maybe you won't. Life goes on. With the 20k number, look at properties with values 40-60k. In that range, it'd be very hard to lose more than 20k on any deals (possible, but not very likely, even if you screwed up a lot). After you've done one, you should have some confidence built up and you can shoot a little higher.
Good luck and start taking small steps!
Ok, lets say I'm not even working with that kind of money. Am I out of luck. I have always been told that I don't need money or little money. I have some money. But, nothing close to that.
Wendi, the biggest obstacles to success in this business are Fear and Greed.
The best way to counter fear is to proceed slowly. Find a property that would be a good rehab investment and put an option on it. Then find an investor and offer to assign the contract for a small fee (3K). Ask if you can tag along though various steps of the process he undergoes right up until closing day. You'll see firsthand that there's nothing to be afraid of. Everything is scary the first time to do it, but after it's done, you usually wind up saying, "What the hell was I so afraid of?"
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I had the same problem, so heres what i'm doing. I wanted to buy and hold(rent the place out). but my biggest fear was what if I cant find anybody to rent it? I would have to pay 2 mortgages and believe me I dont have the money to do that for very long. So I got a interest only loan on a property at 3.5 percent. I also didnt buy in the most expensive neighborhood, not a slum, but not the best so it only was 60k. so my payment total is going to only be 275 a month and I should be able to rent it for 650-700. And I like what HRparks said about worse case senario because thats just what I did. I said worse case senario is I will never get it rented out(highley unlikely but I wanted to have worse case) so can I afford a extra 275 a month? the answer was yes,things would be a little tight but I could do it. so then I did it and I will close on my first house in a couple of weeks. so just do it, but do it smart. good luck! ps I do not have much cash either so I found a loan that required only 5 percent down.
[ Edited by dlitedan on Date 05/28/2004 ]
[ Edited by dlitedan on Date 05/28/2004 ][ Edited by dlitedan on Date 05/28/2004 ]
wendi6,
If you can't bring yourself to do the deal yourself, then work with someone that's not afraid to pull the trigger. Find a mentor, and bird-dog for them. in exchange for allowing you to tag along and watch how it's done. If you are involved in the business this way, you gain experience without being at risk yourself. When you see it done a few times, you will get the confidence to maybe do one of two with your mentor as your partner, sharing the risk. Then go solo, when you're ready.
Wendi,
All the advice given so far is good food for thought. Whether you bird dog and tag along in the deal to learn, wholesale to an investor that will let you stick around and learn, you need to take the first step. Your fear of making a mistake has cost you more in three years than you know. This is especially true if you have considerably less than 20k to invest. You are making yourself a professional "student"!
REI is not for everyone. Make a decision. Good Luck.
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Wendi6
Fear is natural and will always be a part of deal making for most people. Yesterday I made a 450K offer on a property and last night I could not sleep. Why? I have been doing this a long time I should be fearless. But I'm not, I am scared to death that I will make a mistake that I can't handle.
How do I overcome the fear and do a deal? Just as the previous post have said look at the worst case senario. If I buy this property I have enough reserves to carry the note for a couple of years. Even if I have to sale at a loss, it want be so great that I can't handle it. My fears have no rational. Guess what the fear is still there. I know form experience that the fear will remain and I will be second guessing myself up untill I close the property. After closing I will be so busy making the project work that I will not have time for fear.
I also know that the fear is what makes REI so exciting. Overcoming that fear and doing a successful deal is one of the best feelings in the world. The day I become fearless and can do deals without worry is the day that I will quit and find something else to do.
Follow up to my previous post.
In my last post I wrote about the emotional aspect of fear and how it is natural. But, how do you overcome that fear and not let it paralize you?
Simple. All of your investment decisions should be made before you ever analize a deal. Before you ever look for a propertey to buy you should define that property. If a property meets that definition, buy it; if it dosn't, keep looking.
For example: You want to rehab properties. Define your requirments.
1. Retail < 150k
2. 20% net profit
3. 5k max out of pocket
Now look for properties that fit these requirements. Find a house that you can buy for 60K spend 20k rehabing sell for net 100k. Find a lender to make this work with only 5k down payment. What do you have to fear? If it fits, do the deal.
"There is more money lost from indecision then there is from wrong decision."
Good ideas. I think there's a lot of us here who deal with fear. No matter how long we have/haten't been doing this.
Thanks for all of the thoughts and helping us break down the elephant into little bites.
Robert
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Elephant goes good with A1 Steak Sauce and a case of Heinekin when you celebrate that first deal.
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And everyone has to eat that elephant one bite at a time. A-1 you say! I'll have to try that next time. LOL
Jeff
Several years ago I bought the TOny RObbins course on ebay for $50 (30 day one). I would have paid 5000. after taking it. I suggest getting it.
RAndall
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