Welcome to real estate investing. Not to bring an overused old adage into the picture, but truly—
“If it were that easy, everyone would do it.”
If you buy an investment property and everything goes smoothly all the time, you’ve somehow gotten extremely lucky. The list of challenges that can come with real estate investing is a lengthy one. I don’t tell you that to scare you out of being a real estate investor, but I assume it’s better to be prepared for what can happen.
In my experience, the more mindset preparation I have prior to experiencing challenges, the better equipped I am to handle them when they come up. This goes for everything in life, but in real estate investing it’s especially easy to get your mind ready to win the battles as they start to come. And now, you can be ready too!
8 Steps to Survive Any Real Estate Investing Challenge
- Remain calm. You may be inclined to freak, and you are welcome to freak for a second if that helps you calm down a little, but ultimately—calm yourself down. Help yourself do that by especially focusing on the next two steps…
- Take the emotions out. Believe it or not, there are logical reactions and emotional reactions. I’m the queen the emotional reactions when it comes to my properties, so don’t feel bad if those are your default. Oddly enough, I’m not even an emotional person but for some reason my brain goes straight to thinking I’m being scammed or tricked or something. I’m fortunate to have a mentor who quickly tosses some logic my way and talks me off my emotional cliff’s edge. Because he does that is really the only reason that I understand the difference in the emotional reactions versus the logic reactions. The emotional reactions are more like thinking people are obviously out to get you, whereas the logic reactions are things more like actually breaking down the situation and finding out any details about it that you don’t already know before you let your brain go anymore forward with it. On that note…
- Don’t make assumptions. Part of the emotional reaction is to make assumptions. Maybe it’s that there’s a conspiracy against you or you’re getting scammed, but more simply it could be something like believing a contractor overcharged you (and getting all steamed up about it) but not having the line item breakdown presented to you yet. That’s a really benign example, but you get what I mean. If there’s any room whatsoever in a situation to gain more information that you can use to assess the situation more accurately, ask for it. Seriously, you know what they say about assumptions. In this case, and in several of my own cases, it’s proven to be true more often than not.
- Contact someone related to the problem. To help you in not making assumptions or working off of assumptions, the best first step you can do after you’ve cooled your jets (and as a way to help you cool your jets) is to reach out to a good contact person related to the situation. For me it’s usually my property manager. If you are rehabbing houses or flipping or whatever, maybe it’s your contractor. If you are the landlord, maybe it’s your tenant. It’s probably true more often than not that somebody is involved in whatever the situation might be and you’d be crazy not to make that person your first reach-out.
- Contact someone else related to the problem. To help yourself even more, see if there is even someone else that you can reach out to for more information. Maybe there isn’t, but sometimes there is and this can only help you with that not making assumptions step. Reaching out to a second person when applicable too can help you gauge the facts better.
- Reach out to a support or mentor. Truly, one of the best things that has ever helped me (if not THE thing that has helped me the most) is having a mentor. This could be a single person who acts as your actual mentor or maybe even friend or someone who understands you and what you are involved with and can be a solid support system. After gathering all the facts (keyword- after), reach out to your mentor/support system and run the situation by them. You’d be amazed at how helpful someone outside of the situation can be. As I mentioned, this is especially helpful in my case for talking me down from the cliff of emotions and refocusing me onto logic. This person or system is very important, but more importantly than just having this person or system is making sure they are in line with what you are doing. You don’t want to reach out to someone who frowns on your investing path when something goes wrong or you’re just going to get an obnoxious “I told you so” that doesn’t help you and may even unnecessarily deter you off your investing path.
- Make a logical decision on how best to move forward. After gathering all of the facts about the situation and talking to everyone you can and running it by your mentor or support system, decide on a path to go forward. Think logically. You also don’t need to solve the entire problem at once, maybe think instead about small steps that will lead to full resolution. For instance, let’s say the city is claiming you have some violations on your property and your manager swears he did something about them. Before going into a full-blown panic, ask your manager for documentation supporting the fixes. Then if you get those, present them to the city. Or ask the manager if he has taken them to the city. Etc. See all the small steps in there? Don’t go pulling out all your ammo against the city right away—instead, start small.
- Recheck your emotions. This time, check your emotions in relationship to your action plan towards resolution. Make sure your plan is based on logic and is full of logical steps, and not emotional reactivity steps. Can’t hurt to check your emotions several times through the issue resolution process. At the end of the day, absolutely nothing that happens to your property or your investment is personal towards you. It just is what it is. Treat it as such. (coming from the one who notoriously freaks out every time something goes wrong…)
Challenges are inevitable in real estate investing. Sometimes it’s harder to deal with the emotions than it is the actual problem. Hopefully this guide helps you keep yourself in check so you can be as successful as possible as an investor! No matter what, you have to just keep going. It may be stressful, it may seem like there’s no end or resolution in sight, but you have to keep going. If you don’t, you’ll miss out on what could be a really amazing career!