Nearly every real estate investor out there, from the greenest “newbie” to the most experienced industry veteran, has one thing in common: they know about investing fears. Think Realty Resident Experts Eddie Wilson, Sonia Booker, and Pam Goodwin have very different perspectives on what fear can do to an investor and how to leverage it to make your leap into real estate as profitable as possible. Here, they explain in personal detail how they overcame their fears to create successful real estate investing careers.
Pam Goodwin, The Power Broker
Expertise: Commercial Investments
Sometimes fear is really an indicator that it is time to break out of a comfort zone. Of course, that’s scary! One of my proudest moments and best deals came as a result of getting into something that I was not comfortable with: the financial fine print on the deal. I wanted to learn that angle of commercial real estate, so I went to a variety of banks to get financing for a $1.6-million project that I was working on.
“I had presented it to several investors I knew already and they had turned it down. In the past, I would have probably assumed they knew something I didn’t and given up on it, but I had run the numbers myself and I knew it was a great investment so I did not. That in itself was scary.
“I ended up partnering with a friend who is also in commercial real estate. When we sold that property last year it was the most profitable property I have ever sold. Furthermore, it was one of my proudest moments because I didn’t give up. I knew it was a good deal, and it was really one of the best.”
Sonia Booker, The Wealth Builder
Expertise: Wealth Building
It’s incredibly important to start off right in real estate, but you cannot let the fear of starting off wrong prevent you from taking action! My focus as a Think Realty Resident Expert revolves in large part around getting people started in real estate correctly, looking at the industry and digging in to find the path that fits your goals, your budget, and your lifestyle. I think that people fear real estate mainly because they cannot visualize themselves in the molds that a lot of industry voices and teachers have tried to place them in.
“For example, if you’re the type of person that doesn’t want to do fix-and-flips and you don’t want to learn about them but everyone tells you that is how you get started, you are probably going to be afraid to take the leap. Really, you probably just should be looking at something else, an option that might let you do some long-term buying and holding. You just need the right plan.
“I see so much failure and frustration in this business, and it does not have to be that way if you will just take time on the front end to map out what you want to accomplish and what investing strategy will fit you and your goals. We’re all investing for an end result, be it legacy-building, wealth-building, or just replacing an income or paying the bills. Self-discovery of who you are and what you want to accomplish will go a long way toward eliminating that initial fear.”
Eddie Wilson, The Deal Maker
Expertise: Private Lending & Lead Generation
So often, people miss opportunities that they should be jumping to take because they are afraid of missing something better. Real estate investors who are completely equipped for success end up sitting on the sidelines their entire lives instead of getting into the action.
“For example, a lot of private lenders will pass on great loans because they are afraid that once they deploy their funds, a higher rate of return will come along. There are huge opportunities on the table for asset-based lenders thanks, in large part, to regulations that were placed on banks after the housing crash. However, that huge opportunity means that there is more demand, and that means that private lenders are having to get more competitive with their rates.
“Before 2008, a hard-money loan might have earned you as much as 20 percent. Now, there are groups lending to real estate investors at seven percent, which, by the way, is still an incredible rate of return on a really safe, highly-collateralized investment.
“Don’t be afraid to get into the action at a competitive point rather than holding out for a home run like that 20 percent loan that may never come your way or that really might be too risky anyway. At the end of the day, fear of missing out can be as real a threat to real estate investors’ success as fear of failure.”