7 Ways Real Estate Investors Fail

seven ways real-estate investors fail hi I'm Phil I'll ski with freedom mentor calm I'm a full time real estate investor real estate mentor and coach and in this video I want to share with you the seven most common ways that I see real estate investors fail miserably and why am i qualified to be able to provide you such information it's because I've been a part of so much and I've experienced so much they're part of thousands of real estate deals I coach people all across America Canada and I get so much feedback people send me emails they make comments hey I'm in this situation I'm stuck I deal with all these motivated sellers that they get stuck I've seen where things fall apart and in the real world where there are great opportunities to make money there are great ways to lose money and fail miserably so in this video you can be rest assured what I'm sharing with you is what I call the signal it's the accurate most truthful information on how it really works as opposed to the noise and I'll talk a little bit more about the signal versus the noise I do in some my other videos as well on the very last one so number one on this list is quitting so if you quit I know that sounds simple it's somewhat cliche this idea that you know if you work at it long enough to be successful but here's the bottom line in real estate first of all a lot of people they quit too soon and I see it where they get some momentum they get things going but there's an epidemic these days in this country where people see what's happened with companies like Groupon that in two years with from zero to six billion they see things like Facebook and they see the kind of money that can be created with some of these technology companies and they think that translates to every other small business in America and it just doesn't so what ends up happening is they don't make money in the first three months and they quit and they give up now they may not say they're quitting or giving up they may use certain excuses like well I didn't see results or or this is a good one well this is not a good use of my time because I've got a new opportunity that's even better I call it the grass is always greener syndrome where people are always looking for something new and different after a couple of months it doesn't work and you've seen this when people go on diets or people try to get healthy and those kinds of things it's very similar so a lot of people quit too early I I submit to you that if you get active in your marketplace and you start to find out who the other competitors are in your local area that are also real estate investing that the majority of them in two years will no longer be there in five years you'll probably be the only one if you're still sticking it out and hopefully you're extremely successful most people are so transient whether it's real estate or anything so few people can just stick to it long term and that's where the power play is the longer your amp the more success you are and if you don't if you fall victim to any of the other seven about to share with you if you just do this one you'll succeed I mean if it takes you 25 years if you stick to it long enough you'll eventually figure it out so the number one way that people fail in real estate is they quit pretty simple right alright number two run out of money this one seems pretty obvious right well right out of money is not just not having access to money for a deal it's literally not being able to feed yourself and you have to go on and move on to something else it's it's getting excited about an opportunity but then not having the ability to stick it out long enough for things to really start to make sense so I made this mistake in the beginning I actually quit my job and started role stay full-time I didn't have any money and I literally ran out of money I was living out of my truck eating on beans bad idea so right out of money is very very very common so that's why you'll see in another video I say should you quit your job the answer is no stick it out you need to have a little bit money coming in what about money goes a long way in real estate it keeps you in the game long enough to be successful a freiza we like to use in my coaching team and i's staying power if you're in there long enough great things are going to happen so run out of money is an easy way for people to fail they just don't have enough or they are not making enough at it and so they literally move on to different pursuits and they fail because they they quit that make sense number three doing bad deals listen obviously sounds simple enough okay yeah I get it Phil so I feel because I did a bad deal wait a minute this is what I mean by this it's a lot more difficult to say no to a deal that is to say yes especially if you're in a situation where you have to make a deal work because maybe you got started in this and maybe your spouse significant other parent friend family member somebody's riding you hard and they're saying well you're not making anything happen I haven't even seen you do a deal yet so you get anxious and you start jumping on deals that aren't that good of deals typically the reason why bad deals happen is either a you don't know what you're doing or be even worse you're anxious you have to have a deal happen maybe you're in this full-time and you need a deal to work so that you can actually keep your your rehab crew active I've seen that one before that's just ridiculous just to keep your guys working you go get a marginal deal so simple for people to take on a marginal deal what takes real discipline is being able to say no especially when the deal is kind of close and when you if you're really active and maybe you've got some competitors in the area and maybe you're looking at a deal and some other competitors are I've seen where people bid up just to compete and beat their competitors stupid you know every deal has to stand on its own two feet so doing bad deals very very easy way to fail and fail miserably another one bad partnership this is surprisingly common there are some wonderful benefits of being in a partnership or a partnership like arrangement where you've got more than one party involved in the deal they both bring tremendous amounts of value the problem is what most people do is they go out especially if they're brand-new because they're nervous and they're new and it's brand new in the industries you know it's got somewhat of a bad name I mean think about it when you tell friends or family at a cocktail party hey I'm gonna be a real estate investor oh one of those we buy houses people or it doesn't sound all that attractive and exciting so what happens is to buffer someone's confidence a lot of times they'll go grab a partner Fran somebody else to bring in just so that they can both be doing it together well that's typically a terrible idea I have seen so many good friendships lifelong relationships bust up over one bad real estate deal one I examples I shagged on for hours the two guys that invented big wave surfing I won't use their names but these two guys they invented what's now that's incredibly popular sport those two guys in a real estate deal together to buy some land near one of these these wave breaks for these big breaks and it went bad and so they don't talk anymore but okay another example um people I used to spend the holidays with with my family would be three families three of three different families would spend together on the holidays well not my family with the other two families they their real estate deal together with bad boom they no longer talk these people but we spent holidays together for 20 years no longer talk boo to friends of mine from college they graduate from college they started doing deals one was an attorney one was a contractor the attorney brought the money at the contractor to the renovation work one deal went bad they never talked again they have been friends since they were kids I mean I can go on and on and on bad partnerships is such a toxic thing happens all the time so what's the solution only do a partnership if the partner is bringing a tremendous amount of value either extraordinary knowledge money or both or just something that you don't have that's critical and then you also need to know exactly what is going on with the partnership when's it going to end I know a lot of people don't get married thinking about how they're going to get divorced but in the business partnership you need to know how things end because what most people do is they grab somebody with knows as little or less about real says they do and they do it for an indefinite period of time partnership and things fall apart this this happens so common I can't even tell you and it's probably happening to you right now some of you watching I'm sorry but now you just learn bad idea okay and I'm not laughing at you I'm simply making light of the fact this is a very serious situation that you may be going through okay so you quit Ronna money you do bad deals bad partnership oh but there's more I call it bigger and better things and better I'll say bigger and better deals okay what do I mean by this well another funny thing that happens is that sometimes people are successful and then they go well if I'm successful at this I can do bigger deals and I can do bigger deals and so what they do is they leave their bread and butter that's making great money and that's killing it and doing terrific and they go off and they try bigger and better deals and they go into something that they love little or nothing about and then they end up the whole thing falls apart I can tell you all kinds of business stories both real estate and in this business world where somebody has a cash cow something that's extremely successful but they get bored with it or whatever and they want to do something even bigger and they go on to that and they lose everything and you may know somebody that's gone through so there's a phrase that that's been used in some business books called it stick to your knitting stick to your knitting where you stick to what's working as you notice I I stick to my knitting I practice what I preach I'm in residential real estate I am doing the simple single-family home condo and duplex triplex quad simple residential stuff I've been doing for years in years and years and years and people ask me all the time fill you to these big commercial deals now no I stick to my knitting because I know it in the dough all right here's an interesting one you get lucky and this is going to follow up with the last one too this can be very toxic because what can happen is you can do your first deal and make a killing and you you may think you know what was the reason for the success but you may be completely wrong about that and so what ends up happening is you getting lucky gave you a false sense of security and you end up and falling apart on the next couple of deals so I actually like it if somebody has to struggle a little bit in the beginning because it helps them understand what produced the success so you don't have a Mis association you know so you don't think to yourself well it's because I'm so so awesome I'm such a genius when it might have been just cuz the market was booming that in that area for a short period of time so getting lucky is a very very big reason why people fail it's because they get this false sense of reality where they think they were the ones in charge of that success when it had nothing to do with them it may have been some external factor and then two years later they go completely kaput and they all fall apart and they realize oh maybe I wasn't such a genius so getting lucky can definitely be a very very common reason for people family to this business and seventh one you don't know what you're doing don't know what you're doing okay if if you are just getting started in real estate hopefully you are trying to amass some level of education but you have a problem yes you have two problems the first problem is this you may have difficulty with intelligence absorption what does that mean that means the ability for you to retain the information you're learning in fact what happens to a lot of people is as they distance themselves away from school year after year after year they put their brain on autopilot in a lot of ways and the brain doesn't get exercised the brain is like a muscle and the more you use it the better the stronger it gets the better it gets it being quick at absorbing things it also has to do with your your diet your exercise all sorts of things play a role in your ability to absorb information especially intelligent information the stuff that's going to make you productive in life and so the first problem is even if you have access to good information if you have if you've ever been in a situation where you feel like people have to tell you something 30 times for it to stick in that brain it means you got to start exercising this thing some more now outside of having a legitimate medical issue the biggest thing you can do is exercise your brain by using it and that will make a big difference so intelligent absorption but you have another even bigger problem what is signal which is truth and what is the noise what's going to lead you astray I submit to you the majority of stuff that you're going to watch you're going to read here and listen to a lot of it's lousy now you don't know it's lousy but it is and it's because in a lot of ways in a lot of situations there are different first of all there are different angles that the the information provider has you know so maybe maybe they sell turnkey properties and so their angle is to tell you about a certain city and why now's the perfect time to buy in that city because of the jobs and buh-buh-buh-buh-buh well that may be because their son turn-key properties maybe it's a real estate like educator trainer guru that that really hasn't been involved in the real estate business in a long time but they've got really good at selling so maybe they're just selling their information maybe they're just rehashing old stuff maybe this is the worst maybe they have all of the best intentions but they just are wrong maybe they're really good at their local area for investing but they're still inaccurate so you need to be able to find the signal now whether or not you think I'm the signal that's gonna be up for you to decide I've been doing this thing a very long time in what is my angle well what I do is I teach people I train them I hope they watch videos like this I hope it helps them be more successful and for a select few what some of them do is they take gosh I like to learn more about Phil cigarette they watch my videos they read my books they do and then some of them apply for my apprentice program and my my angle if you will is that I out of out of the thousands and thousands of people who want to be your in real estate investing I select just the just the top ones that I want to work with that are going to fit from my program and then we we do deals together okay and that's part of my apprentice program so that's my angle and so if if you're watching one of this and you become an apprentice I need to make sure that all my videos are accurate and they have the just the absolute signal in here because you may become one of my apprentices I want to make sure you're you're doing it right you've got your head on straight you know exactly you're supposed to be doing but again that's up for you to decide whether or not I'm providing signal or noise so not knowing what you're doing is obviously a huge problem in any endeavor you you move into but especially in this business because there's a lot of noise a lot of smoke signals a lot of rabbit trails you can go down that are just going to end up in and you just feeling like well I'm more lost than I was before I can't tell you the number of people I talk to but after they really dig into this industry and they try to learn more and more about it they get a year or two down the road they're like Phil I'm more confused than when I was started it's very easy for that to happen because there's so much information out there coming at you from so many different angles so it's easy for me to say to you okay one of the best ways to not fail is to know what you're doing but that's easier said than done because that means number one you've got to find the signal the absolute truth the best information out there number two you've got to be able to absorb it right okay so these seven right here these are what I've seen are the most likely places where people fail so let's talk about number one don't quit number two keep your day job number three have the discipline to say no to bad deals now if you don't know what a bad deal is that's another problem altogether I would avoid partnerships unless you're working with the right people that are providing a tremendous amount of value and you know the terms of that partnership in other words you know what it's going to end those sorts of things bigger and better deals as you probably learn from technology upgrades are not always upgrades so stick to your knitting and your knitting you might end up go on to bigger deals and let's say you don't you don't graduate maybe from single family to apartment buildings and all that sort of great stuff and maybe you end up building the tall building the world one day but do it in a calculated fashion whereby you don't get rid of your cash cow keep your cash cow going and then go try something new but don't give up what was working so well to go try something new I would hope that you don't get lucky on your first deal where you think you know it all and then you start making moves that put you in a potential precarious situation but you're so confident from the luck the deal you did to begin with they got you lucky that puts you in a bind and lastly you got to figure out what you what you're doing I am a huge believer in Mentors I do believe that there are some geniuses out there they can read a book watch a video listen to an audio and bang go out and do it and they don't need any more help but I have discovered with real estate there's only so much I can share with you from up from an easel board there's only so much I can share with you in a video some of the greatest knowledge and real estate happens in the real world that you do in deals and so I discovered that I couldn't move forward and become successful without a mentor okay and so you might be able to do that but probably not you're going to need coaches or mentors around you some people that have been through this to really walk you through this if you truly want to learn exactly what to do now I do have a great video on that called choosing a real estate mentor because I'm not a good option for you by the way if you're just going to be a traditional investor you've got a bunch of money in the bank or to buy some properties locally you may rent them out you may fix them up sell them so I'm not a good fit for everybody I'm only a good fit for those that want to be in the creative style of the business and I'm obviously not going to be a fit for everybody either we're not very good company so so what happens is you've also got the added task of being able to locate the right mentor you can check out that video choosing the right role statement where it's in one of my videos and I've got some other great videos that kind of go into more depth on these subject matters I got a great video called the worst way to invest in real estate which if you look at the comments you hear all these stories terrible deals that people did that learn that teaches you some bad deals not to do all right well I'm Phil offski with freedom mentor calm and I really appreciate you watching this video if you like what you hear if you have some comments to make some questions you can submit that below here in the comment section I try the best I can to carve out a little bit of time my schedule each week to answer YouTube questions now you can also grab my book how to be a real estate investor on Amazon that will give you a whole lot of signal on this business and if you really are interested in potentially working with us head over to my website Frieda mentor calm and apply to the apprentice program and we'd love to speak with you we will go through it we go through an interview process and that all that sort of stuff and then please don't take it personal if we don't accept you because the majority of people that do apply we are unable to work with either because of location we haven't got some other people there myriad of reasons all right well thank you so much for watching and happy investing

Channel: Phil Pustejovsky

Views: 132,010

Keywords: real estate investing, real estate investment, real estate investor, Real Estate Entrepreneur (Profession), phil pustejovsky, freedom mentor, real estate mentor, Investor (Profession)

Id: swYEWx5qDR4

Length: 20min 1sec (1201 seconds)

Published: Mon Mar 17 2014