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Fear and Real Estate Investing - Winning Formula
By Don R. Campbell
Aug 16, 2005, 21:34
The Psychology Of A Successful Real Estate Investor… And How To Use Their Secrets To Give Yourself An Advantage In The Marketplace!
The Results of an 8 Year Study Into The
Mind-Set of The Super Successful Investor
By Tim Johnson & Don R. Campbell
Volume 1 Edition 1
Over the last 8 years, we have taught thousands of people the secrets and strategies of successful real estate investing. And, we are proud to say, that during that time many of our students created success more quickly and easily than we ever did.
Why, in such a competitive world, would we think this is something to be proud of? Its really rather simple. It proves two key things:
#1 The strategies that we teach truly are life changing and anyone with self motivation can make them work. (Just check out Success Stories for a small sampling of the many testimonials we’ve received over the years.)
#2 Knowledge (just like money) can be leveraged. The more “knowledge leverage” you use, the fewer mistakes you make, and the more success you can create.
By having direct contact with thousands of real estate investors over the past 8 years, we have compiled an amazing amount of ‘first hand’ data on the “Psychology of Success.” And the results of this study have been fascinating and are real eye-openers In fact, when talking with investors, it is now very easy for us to identify those who have the habits to propel themselves to be one of the “Super-Successful.”
What we also discovered is the average investor can become one of the ‘Super Successful’ just by learning and following the success habits of this elite group. Many of these habits we share on a quarterly basis with our closest Members through the Quantum Wealth Program™ and many more will be shared with you in this series of articles.
There was another important insight that went against all of the ‘success myths.’ The majority of our clients all started at roughly the same level (both in knowledge and financially). The elite group started with o unique advantages. In fact, many of the “Super Successful” started at, or below, the average both financially and in real estate knowledge.
And even then, the elite group’s successes came more quickly and with more regularity than the average.
The secrets this study revealed is what you’ll discover in this unique series of Reports designed to provide the tools for you to create the “Psychology of Success” in your life.
We begin this Special Series by covering an ever present emotion in the life of an investor… and how you can turn it into a positive force in your life. That emotion is…
F E A R
Fear can show-up in many different areas of an investors psyche. From fear of success, to fear of making mistakes, it can be pervasive and if you allow it to be, it can become a paralyzing force. O.K., that is the bad side of fear.
Using the good side of fear is one of the major steps that assist the ‘super successful’ to rise above the crowd. This elite group all admit that fear exists… but they have learned the habits of turning this fear into a positive motivator. And how they have used fear in this positive sense is what you’ll discover in this Report.
“Fear always lurks behind perfectionism. Confronting your fears and allowing yourself the right to be human can, paradoxically, make you a far happier and more productive person.”
Dr. David M. Burns
In the following strategies, we will discuss the key areas where fear arises and how you can use the habits of the super-successful investors, to create the success you want in your life.
FEAR OF TAKING ACTION - The Ultimate Key To Success?
The ability to take action is the number one difference between super-successful real estate investor, and wannabe investors. Having the confidence and motivation required to move boldly forward is the one single thing every one of these over-achievers rated as their most important attribute.
Our 8 year study revealed that the one characteristic which holds back investors from taking more action is FEAR! This ‘Fear Of Action’ reveals itself in many different fashions, but you can immediately identify it as ‘The Web Of Excuses.’
You would be shocked to hear the many different excuses we’ve heard from investors explaining why they can’t act right now. This ‘Web of Excuses’ includes, but is definitely not limited to, making excuses about their lack of knowledge, lack of time, lack of financing, lack of good deals, all the way through to the ultimate excuse of blaming others for the investor’s lack of action. I believe in 8 years we’ve heard them all and each and every one is based in fear.
So if this ‘fear of action’ is ever present, how come it doesn’t stop the super-successful? Well, the first lesson to be learned from the super-successful is their ability to turn these fears into action… instead of excuses.
There are a number of different strategies to achieve this, but one of the most effective ways comes from one of our most successful clients. It is called the “Positive Spin Strategy” and is something you can start using in your life immediately. Here’s how it works:
Every time an excuse based in fear pops into her head, there three distinct steps she follows:
#1 She stops whatever she is doing and writes it down on a piece of paper.
#2 She physically crosses it out with her pen
#3 She then writes out the ‘Positive Spin’ version of the excuse and states it out loud.
For example:
The Excuse: “I don’t have any more money to buy real estate”
Positive Spin Version “I have access to all the money I need, I just have to ask the right questions of the right people!”
Now, this occurs at some very ‘interesting’ times of the day (in meetings, at dinner, while driving, out for a walk etc.). But, those who use this strategy, commit to doing it no matter what… and the changes they see are immediate! The key difference you will see is…
It keeps you focused on what your positive options are.
The super-successful know that if they allows excuses to exist, they can stop them in her tracks. So in this strategy, you literally destroy the excuse (by crossing it out) and then turn it into a positive motivator. This strategy is brilliant, and obviously, when you see the results these people are getting… it works.
Take the fear and excuses in your life and turn them around. Commit to use her strategy for just one month and watch what happens… you’ll be amazed. And so will may others around you!
THE FEAR OF MISTAKES - Where Wrong is Right and Right is Right!
This is the second most prevalent fear for investors… the dreaded fear of “Making A Mistake.” This fear has been trained into us through years of schooling and upbringing… and if not taken control of, can stop you from taking action.
Once again, the good news is, it too can be defeated and turned to your advantage!
Throughout our lives, we are taught that mistakes are bad and wrong… when in reality they’re not. The difference is in how we handle the results they bring… and in most cases turn into very positive experiences.
What truly successful real estate investors understand is that mistakes are going to happen, no matter how much knowledge you have, or how careful you think you’re being. The key is to minimize (not avoid) your mistakes by learning from the mistakes and successes of others. Talk to them, surround yourself with them and never be afraid of asking a question.
The support network you surround yourself with will prove to be one of the most important keys to your success in real estate. Find people in your area who are on the path you wish to take…and hang out with them. Share your results and ask them to share theirs. If the group is good, you will discover just how to leverage your knowledge with other’s. This will greatly decrease the ‘mistakes’ you make.
Successful real estate investors follow these steps in order to minimize their mistakes:
A They Follow A Proven System That Steps Them Through The Complete Buying Process – From Finding The Properties To Managing The Properties.
B They Don’t Skip Any Steps In The System.
C At Least Once Per Year They Review Their System From Top To Bottom – This is much like an athlete’s annual training camp. They review and practice the basics so when the time comes to use their talents, the steps become automatic… this minimizing their mistakes
The super-successful investors don’t wait until they ‘know it all’ because they are acutely aware that if they wait, the market and the boom will pass them by. We recommend that you adopt this philosophy, especially in this hot market.
THE FEAR OF MAKING OFFERS – When Either YES or NO Makes You Nervous.
In all our years of buying and selling real estate, neither of us have ever bought a property without first making an offer. A good friend of ours, Alan Jacques, describes making an offer “The Critical Success Event” in real estate, and we thoroughly agree!
Although it is a well known fact that: The More Offers You Make, The More Real Estate You’ll Buy, our research shows that average investors make significantly less offers than the ‘super-successful.’
Successful real estate investors are continually making offers, whether formally through realtors or informally on napkins while sitting at a vendor’s kitchen table. They understand that most of these offers will not be accepted, but the mindset of success is: With each ‘NO’ they hear, they just moved a step closer to receiving a ‘YES!’ You see, it really is a numbers game… the more offers you place, the more offers will be accepted.
Through our research, we’ve discovered that the main reason why some investors don’t make offers, is a rather unique type of fear. We call it “Double-edged Fear.” It encompasses both the fear of rejection AND fear of acceptance!
This sounds like a rather bizarre mind set to be in… but this combined fear, traps more investors than all the others combined. Here’s how it works:
Up until the time of the offer, finding properties can be a lot of fun (due diligence, talking with realtors, even number crunching)… but as soon as it becomes offer time, the whole process becomes more ‘real.’ It is time for the buyer to step up and take action and that’s where the fear kicks in.
So what do the super-successful do to deal this special double-edged fear? Well, as with the majority of effective strategies, this one is also very simple. Here’s what our research has revealed:
The super-successful real estate investors acknowledge their fear of placing offers… they admit that it exists at two levels (rejection and acceptance). Then, they use a tried and true strategy to turn this fear around by asking themselves: “What’s The Worst That Can Happen By Placing This Offer?” And there are very simple answers. The following are the potential outcomes… along with the no-risk solutions to each:
A OFFER REJECTED: If the offer is rejected outright then you know you haven’t found the motivated vendor you’re looking for. And as described in the real estate Money Funnel in the REIN Quickstart Program, successful investors understand that they MUST be dealing with motivated vendors! The successful investors understand that the vendor is rejecting their offer, not them personally. Remember, this is a business not a popularity contest.
B OFFER COUNTERED: Now you have the power back in your court, you can do whatever you like at this point. You have just been handed three options, all of which put you soundly in the power position:
1 You can reject the counter offer outright, and move on to another piece of real estate. Releasing you of any obligations on this property.
2 You can make a counter offer to their counter offer. At this point, if you are following a proven system (as we talked earlier), you have completed a major portion of your due diligence. You already know what you can pay for the property and what terms you need to make it fit your system. YOU set the price and terms and send it back.
3 You can accept their counter offer. If they counter-offer at a price and terms that fit your system, you can just accept their offer knowing that you’ve bought a property that works in your portfolio. And because you have structured the offer properly (with the proper clauses), even if the remainder of your due diligence reveals and surprises you can still walk away from the deal. A truly no lose situation!
C OFFER ACCEPTED: Because you are following a proven system, you can celebrate because you’ve just identified, and received an accepted offer on, a property that you wanted. Once again, because you’ve structured the offer using a proven system, you can still get out of it if you are unable to close or your additional due diligence reveals any surprises. But in reality, you have just found another property to add to your portfolio!
In other words, no matter what the vendor says about your offer, you still win. And you’ll note that in ever option above, you are always in the power position, meaning YOU decide whether to move forward or not.
Successful real estate investors understand that they are the ones who “hold all the cards” when they are buying… and so should you. This one change in your mind set will give you a huge advantage in the marketplace… while others fret and worry before placing an offer, you will have already jumped into first place by stepping up to the plate and placing your offer. You’ll have acknowledged the fear and understand that there is never any downside to placing a properly structured offer. (as detailed in the REIN™ Quickstart Program).
Here's a truth in this business: You have to make offers to make money! If you aren't making offers, you’ve stopped before you’ve started.
Never be afraid of making an offer after you have done your initial due diligence. If the property seems to fit your system… place an offer. Use a ‘sophisticated investor’ clause such as “Subject to buyers lawyers approval,” just to ensure you have a safety valve.
The worst thing that can happen is the vendor doesn’t accept your offer and you must move on to another piece... the best thing is you end up owning a property that fits your system. You will be shocked at the success that comes to you, seemingly out-of-the-blue, when you place offers.
YOUR ULTIMATE ADVANTAGE
The bottom line is, you can give yourself an amazing advantage in the marketplace, just by being aware of the above strategies and acknowledging that fear exists. Remember, the majority of investors out there allow fear to rule their lives. It will be an interesting step for you, now that you are aware of the power that fear can have… listen and watch carefully to others around you. Watch how it manifests itself through their excuses and lack of action.
By using the above tools to turn fear into a positive motivator, you follow the footsteps of some of the most successful real estate investors in North America. And while others will be stuck in fear, you will be moving forward, making offers, buying properties and creating whatever level of success you want.
Move boldly forward, acknowledge the fear and let it propel you to greatness! And Make A Commitment To Yourself… Place Offers This Week!
"Courage is resistance to fear, mastery of fear –
not absence of fear."
Mark Twain (1835 – 1910)
This Edition of Real Estate Insiders Reports is Proudly produced by the Alberta Real Estate Investment Network™ and AlbertaREIN.com
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