How many of you out there, especially the newer folks, run into issues of skepticism when it comes to jumping into this world of real estate investing? (I have a feeling a lot of hands went up.) The good news is: Skepticism is critical in this industry because if you don’t have it at all, you might get into some really funky deals. The bad news is, though, that skepticism very often holds people back from getting started at all and it can rob people of perfectly good opportunities for making great money and establishing financial security through owning real estate.
So what’s the solution? How do we balance skepticism in our real estate investing journey?
Two Kinds of Skepticism
One of the most beneficial things in anything in life is awareness. In the case of skepticism, just understanding that there are two types of skepticism at work and identifying your own skepticism as one or the other may be all you need to figure out how to let skepticism work in your favor and not against.
The two (unofficial) types of skepticism, both in life and in real estate investing, are:
This is the skepticism that keeps you safe. Without this skepticism, we might all follow our friends off that cliff. Or change our lives to accommodate what people tell us. Or buy that property that absolutely depletes our bank accounts (or more).
If you don’t have any skepticism, like I mentioned before, you could really get into some trouble. You will become a victim to so many things and in so many ways because there are a million voices around all of us at any one time. I’d venture to say 75% of those voices will cause harm to us (to varying degrees) if we listen to them! Healthy skepticism can keep us on our track, keep us safe, keep us moving along positively, and keep us in the best investing deals.
And then there is this kind of skepticism — the one that holds you back from all of the good stuff. This kind of skepticism is driven by fear rather than safety. I wrote an article a while back about the different types of paralyzing fears that cause investors to never make a purchase. Based on the comments on this article, it was very clear that there are in fact a rampant number of people paralyzed by fear that causes them to not move forward as investors.
Oftentimes skepticism can be pretty easily categorized as healthy or unhealthy. But other times, it’s not so easy. In those cases, how do you determine which version of skepticism you are experiencing, so you can adjust your next move appropriately? Well, I can’t really say. It’s situation-dependent, it’s comfort level-dependent, it’s education-dependent, and there is really no definitive answer. BUT I can give you some guidelines to help you figure out if your skepticism is warranted, or if it’s just there to hold you back.
7 Strategies for Conquering Skepticism
And by “conquer,” I mean “understand.” If you can understand your skepticism and the true root of it — if it’s skepticism for good reason or skepticism that will hold you up unnecessarily — then you can make an accurate assessment as to how to go forward.
As soon as you catch yourself feeling leery about an investment opportunity, slow down and go through this checklist in order to determine the source of your skepticism.
If you have to rush into any deal, you should definitely be skeptical (in the healthy way!). Now, it is true, however, that oftentimes good deals do get picked up fast, so there are times you will have to move fast accordingly. But the quickness should only come from signing the papers, not from making a decision.
See what I mean? If you know you want it, and you know it’s a good deal, move in and fast. But deciding whether you want it (or something like it) or if it is a good deal is the part that should not be rushed. If you have enough education under your belt, you should be able to decide fast if the deal is worth it. Speaking of…
The more education you have on how deals work and what deals are good and bad, the less skeptical you need to be and the faster you can move. One nice thing about real estate investing is that most of it is based off of numbers (and facts), rather than emotions. That makes it easier to determine what constitutes a good deal, so if you see the numbers and the facts and they support the deal being a good one… there you go. Knowing numbers and facts only requires education.
Look at All Sides
This is often the pros and cons, but possibly some other random sides as well (whatever those may be). Basically, just be open-minded to see various perspectives of any deal you come across. Who is involved, what is the deal, how much education do you have going into making your decision, what are the potential outcomes, what is your own motivation, and what is the risk?