When we first came into investing, we had a goal of 17 properties. We thought if we achieved that, we’d be set. In our eyes, we might as well have been shooting for 1000 properties – it was overwhelming, especially since we didn’t even know how we would get our first one.
Nowadays we talk to many Newbies that come in with sights set on 50, 100, even 500 properties, from day one.
Now I know conventional wisdom says dream big, shoot for the stars, don’t limit yourself.
Though there are some star struck investors that are driven by those big goals, in talking to the thousands of investors that we do every year, what we see, is that it overwhelms and paralyzes more people than it drives.
Yes, reaching too high can be an obstacle for many.
But we got some very good advice from someone when we first started out and we still feel that it was extremely influential in helping us reach the heights we have; Just Focus on the Next One. So we did. We worked on one at a time, that didn’t seem too overwhelming. It was just one. We ended up not even worrying about our mortgage broker trying to “set us up so we could buy more later, not pigeon holing ourselves”. We just focused on doing whatever we could do to get the next one bought and closed. And one by one, those added up to over 100 properties. Without paralyzing us with fear.
How else do we see investors reach too high?
They won’t settle for little wins. If they can’t win BIG on a place, they don’t consider it a win. I know not everyone started where we did (with nothing!) so perspectives are different however, if we made 10 or 15,000 on a property, we were ELATED! It was champagne time (ok, sparkling wine, Baby Duck even, lets face it, champagne was still out of the price range 😊)! We speak to many investors today though that are not content until they make big wins; tens or even hundreds of thousands – anything less and they refuse to sell, or buy, or otherwise act; and they miss out on many opportunities. By taking the little wins as they came, we built up our confidence, fed our bank account which kept our emotions down (see Why Investors Quit Too Early) and appreciated every step of the way. All those little wins added up to big wins.
They hit the ground running. Normally a good thing right? Not from what we’ve seen. Anyone that witnessed our buying years knows that we are extremely guilty of this – and it almost took us out. We started with a goal of a property a month – we went on to close 4 or 5 a month for some time after that. This pace is fun, exhilarating and motivating in some ways but just like any sprinter in any race, the energy required to keep up that pace is unsustainable. If we had slowed down, we probably would have bought smarter and not ended up with so many headache properties that we then had to sell or realign, which took even more time and energy. So slow down. Its not a race. And if it were, we’ve seen from experience, that in real estate investing, the tortoise would win it.
They over commit. To their team, their joint venture partners, their families, themselves. By reaching so extremely high, we set ourselves and those around us up for high expectations. When life or the market or whatever else hits, and we don’t make that unreasonable target we set for ourselves, we run the danger of deflating. We’ve spoken to many an investor that has extremely high expectations when first starting out and within a year or two after, they are disillusioned, overwhelmed and exhausted. They feel they’ve failed themselves, their families and anyone else they made big plans with or for. Its self sabotage with great intentions, at its best.
So slow down, focus on getting your next property, set your heights on reasonable goals that support your lifestyle now and enjoy your sustainable portfolio for years to come.