My biggest problem with starting investing in real estate is the fear factor. Scared of losing my money, a wrapped house burning down and not getting any insurance to pay out the loan, the problems i may encounter, etc etc.
This has paralyised me for ages now – I should have overcome this ages ago but dont know how.
Can anyone help me with facing my fears? Can you tell me what you did to overcome yours?
Your comments would help.
Northy
“Fortune favours the brave.”
Regards,
Brett [
]“Even if you’re on the right track you’ll get run over if you just sit there.”
My biggest problem with starting investing in real estate is the fear factor.A few thoughts:
Educate yourself fully on your niche area of investing.
Plan in advance, and structure your business to minimise risk.
Also check out material on NLP eg. Tony Robins for giving yourself tools to overcome your fears.
Happy [
] investing,Nathan.
A good technique is to list your fears.
For each fear:
a. define the risk/fear
b. list preventative measures
c. list your responses if it did happenYou will find that in many cases the consequences aren’t as bad as you fear, especially if you have a response to them.
My IP risks were as follows:
1. Interest rates could increase repayments, making property casflow negative
2. Problems finding tenants
3. Bad tenants
4. Property shows no capital growth
5. Loss of job
6. Something happens to the propertyResponses and preventative measures might include careful property selection (to be in demand by tenants), adequate insurance, adequate margins (ie not buying too expensive), supplementing repayments from other savings (not desirable, but pay off loan quicker), etc.
Once you go through these you might find some risks are groundless[
], others are slight annoyances only[], while some do need serious thought given to managing them[:0)].F E A R (False Evidence Appearing Real)
We can all relate to your situation Scott, I
recommend Anthony Robbins tapes/cd’s (Personal
Power II, great value at less than $200!) and
Zig Ziglar is good also.Perhaps a question to ask yourself is ;
What will it cost me if i dont act? or How will
my future look if i dont do anything?You have the courage to share your post, i am
sure you have the courage to make it happen!!Gav
I wholeheartedly agree with the Anthony Robbins reccomendations. Overall though there’s a few things that can be done.
1) Research – Not knowing your market should be cause for genuine fear that shouldn’t be ignored! [
] Sometimes *specific* research can dull *specific* fears nicely. eg fear of paying to much – research comparable sales figures. The problem is when fears are general (ie what if I make a mistake????) which can never be answered. Research also becomes a problem when it is mixed up with *taking action*. Both are necessary. Neither alone is enough.2) Mittigate. As suggested above, if you have a clear idea of the risks and the odds of them happening, and have plans that limit your downside here, then not only is it defined (and thus less prone to being blown up in your imagination) but you also have a clear vision of yourself overcoming any challenges.
3) To quote Anthony Robbins know your outcome and your purpose. ie know what you want and even more importantly WHY you want it.We’re talking the EMOTIONAL reasons here. Be specific. Really think about what all the benefits will feel like when you have them. ie “Because investing will set me free financially letting me spend as much time with my kids as I choose, giving them a role model of a parent who loves what they do. Investing will let me choose what I do with my life allowing me to go surfing right when the waves are beating down perfectly on my favourite beach which is deserted because everyone else is off at work! [
] Taking action will teach me more about who I am and give me the leadership skills to start my own company called XXXX.” etc. etc. For all I know NONE of these may mean squat to you, so write your own list. Use powerful, emotional words. Make as long a list as you can. Think about it, imagine it and feel it as you do it.4) As much as possible, hang around people who are successful in the areas you’re most afraid (eg negotiating, getting finance etc). The more you see and hear success the more likely it becomes (even if you only see/hear/feel it in your imagination). Unfortunately the same is true for failure.
Realise that what you do to overcome this fear is more valuable than anything else you get from investing. In my opinion learning to overcome fear is one of the greatest assets to a life of happiness available. You have already shown a willingness to look for ways to get past fear by posting on this forum. Keep going and you get *all* the rewards. Good luck and go for it!
Quasimodo
___________________________________________________________________________
Funny how action has a way of answering all of our fearful questions…
___________________________________________________________________________Hi Scott,
I think that we can all relate to your fears. My advice may seem a bit simplistic, but here it is anyway.
When you are satisfied you have found an area which you are happy with, start small. Buy something that doesn’t need $15,000 spent on it to make it liveable. (You can try these later on!) With the global uncertainty at the moment, I can sleep better at night by fixing my interest rates for a set term. This will help with budgeting.
When you can see that you are actually MAKING MONEY every month, and you feel comfortable, TRY IT AGAIN!!!, AND AGAIN!!!!
Rome wasn’t built in a day. Don’t feel that you have to impress anyone with buying 10 houses in one month. Just impress yourself with what you are achieving for YOUR future.
When you feel comfortable with buying and renting houses, perhaps THEN consider wrapping. Steve and others may disagree with what I am advising, but if you are not comfortable, then maybe it’s not right for you AT THIS MOMENT!! Dont rush in and do anything you may regret, however,
LIFE IS TOO SHORT TO WATCH IT PASS YOU BY!!YOU CAN SUCCEED – JUST BELIEVE IN YOURSELF!!!!!
(If I can do it you can too.)Research and motivation will help, I will be at Steve’s seminar in May. I hope to see you there.
Good luck,
Get out there at make it happen!!
Del [^]Hi Scott
I really love this comment from Quasimodo
If we were all as afraid of inaction as of being conned (ie making a mistake) our results would amaze us.Quasimodo
Cheers
Leigh K“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiWow. There are some awesome calls here. For me Scott the fear is where the fun is. Property is a passion for me and that is where I find the most solace when I do get nervous and or fearful. I look at the poeple I am helping and the benefits I am recieving. What a buzz. When you buy shares you get a bit of paper. When you buy a house you are able to provide shelter for someone else maybe even a home. I think that all these others have said it before me so I’ll leave you with just one more truth. I am an adrenaline junky so I really work my best when the heat is on. For me I am looking for bigger and bolder deals to test my mettle. I think that Del said it with doing what you feel comfortable with. Just remember every avalanche starts with one small movement of snow or dirt. So it is with property, try it out and let the avalanche build.
Hope this helps.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinSeems to me that we (humans) need enough uncertainty (=variety=growth) to test us, but enough certainty (=security=assurance) to protect us from running smack into doing something stupid!My instinct is that the key is constantly looking at where we are between these two poles and investing there accordingly. That way, you start with something simple that you can feel secure enough to have a good experience (as opposed to an experience that associates investing to terror and pain! [xx(] ) and then work up to the higher return, more complex deals. Most successes I’ve read about weren’t satisfied with inaction, but they did start small.
I have to admit that I personally am more the “Let’s jump off a cliff to see if we can fly! [
]” type of personality. It’s given me some great experiences, but I won’t pretend I never hit the ground! []. I believe that Shakespeare summed what I’m saying up best: “To Thine Own Good Self Be True”.*sigh* School was good for something I guess! [
]Quasimodo
___________________________________________________________________________
Funny how action has a way of answering all of our fearful questions…
___________________________________________________________________________Thanks EnjoLady!
We get good stuff from so many people here!
Some of it occasionally about real estate! [
]Quasimodo
___________________________________________________________________________
Funny how action has a way of answering all of our fearful questions…
___________________________________________________________________________Hi Northy
I tend to agree with Del and would strongly suggest that you simply concentrate on getting going on a rental property.
Then as Peter suggest look at the potential problems that may occur and plan to negate each one.
At the start of our investment adventure the main risk I identified for myself was the vacancy factor. So to overcome that we opened a seperate bank account which had sufficient to cover three months rent plus the expenses.
This not only covers you for vacancies but also if for some reason the property is not habitable due to the previous tenant having trashed the house and gives you funds to do any repairs required. Helps if you can actually do some of the work yourself.
This emergency fund also covers the no job senario and just about any other situation that could be of concern.
hth
Hey ZIZ,
I agree with what you said about the vacancy rates being the biggest risk. (Well, the likeliest risk that may / will occur from time to time).
The 3 month emergency fund is a great idea. I think that I will do that as well.
Thanks!!
Del[]NOrthy
Cant recommend Anthony Robbins enough, the guy has the gift of getting right into thecore of your beliefs and helping you attack anyhting which may be holding you back.
Ive also come accross another book by Naploean Hill title Think and Grow Rich. This is my bible, it has a full chapter dedicated to overcoming fear.
Good Luck and believe in yourself. What is going to happen if you dont do it?[
]There are those that LET it happen, and there are those that MAKE it happen!!
Dear All,
Wow – what a response. I was expecting only a couple of messeges. Thank you very much for your advice, your experience and suggestions.
I like the suggestions about detailing all my fears about each investment decision. Would people mind if i posted back some questions i may have on overcoming some of the risks? I guess i can only answer my fears within my own mindframe and may need someone elses perspective on these to add to what i dont know.
I guess starting with a simply buy and hold strategy or buy/reno/sell or rent out are the areas i should start to introduce myself to the property investment world rather than start with a wrap. This would give me experience with property and start in wraps after a few deals.
I am keeping in mind the whole positive cashflow mindset and have had some luck recently with some properties that provide positive cashflow but they do not provide a large surplus ie $50 month over loan repayments, rates, insurances etc. I guess this is better than having to pay $50 a month to keep a property.
Have been asking property managers about rent buy deals with tenants, lease-options, etc. These seem like the way to go. If anyone else here is a beginner and wants someone to share ides with drop me a line.
Hope to see you all at the top of your mountain soon.
Northy
[email protected]
Dear All,Wow – what a response. I was expecting only a couple of messeges. Thank you very much for your advice, your experience and suggestions.
I like the suggestions about detailing all my fears about each investment decision. Would people mind if i posted back some questions i may have on overcoming some of the risks? I guess i can only answer my fears within my own mindframe and may need someone elses perspective on these to add to what i dont know.
I guess starting with a simply buy and hold strategy or buy/reno/sell or rent out are the areas i should start to introduce myself to the property investment world rather than start with a wrap. This would give me experience with property and start in wraps after a few deals.
I am keeping in mind the whole positive cashflow mindset and have had some luck recently with some properties that provide positive cashflow but they do not provide a large surplus ie $50 month over loan repayments, rates, insurances etc. I guess this is better than having to pay $50 a month to keep a property.
Have been asking property managers about rent buy deals with tenants, lease-options, etc. These seem like the way to go. If anyone else here is a beginner and wants someone to share ides with drop me a line.
Hope to see you all at the top of your mountain soon.
Northy
[email protected]
]
] Sometimes *specific* research can dull *specific* fears nicely. eg fear of paying to much – research comparable sales figures. The problem is when fears are general (ie what if I make a mistake????) which can never be answered. Research also becomes a problem when it is mixed up with *taking action*. Both are necessary. Neither alone is enough.
] Taking action will teach me more about who I am and give me the leadership skills to start my own company called XXXX.” etc. etc. For all I know NONE of these may mean squat to you, so write your own list. Use powerful, emotional words. Make as long a list as you can. Think about it, imagine it and feel it as you do it.
]. I believe that Shakespeare summed what I’m saying up best: “To Thine Own Good Self Be True”.
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