ForeclosuresMass - ForeclosuresMass Monthly - Success Strategies - The Top Three Fears That Prevent You From Making that First Deal (January 2008)

As a real estate trainer and coach, I work with two types of people: those who see real estate investing as a business and want to get better at it, and those who see it as an emotional situation fraught with barriers and pitfalls.

Those who see it as a business make decisions based on facts. People who see real estate investing as an emotional situation generally see it that way due to fears.

Over the years, I've noticed that people generally have three fears that prevent them from making the leap into real estate investing: they think they don't have enough knowledge to make good decisions, they're afraid they'll lose money, or they believe they aren't the real estate investing "type". Let's look at each fear more closely - and the steps you can take to help alleviate each one.

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Education is a wonderful thing. Enrolling in real estate courses, attending workshops and boot camps, and reading books are great activities for learning the "ins and outs" of real estate investing. What happens to some people who take too many classes without initiating any follow-through action, however, is "analysis paralysis." In other words, the more you learn, the more overwhelmed and "stuck" you become because you think you'll never know enough to be successful. You're like a deer in the headlights.

The secret to getting unstuck is taking action - preferably sooner rather than later. Although you may think that you need months (or years!) of in-depth education to begin investing in real estate, all you really need to get started is one good class.

This is not to say you never need open a book or attend another workshop. But, don't let a perceived lack of knowledge prevent you from moving forward.

Should you run into a problem, you can always ask for help. Become a member of your local REIA (real estate investors association), attend the meetings, and build up a network of successful investors you can call on.

Once you close your first deal, be sure to analyze what went right and wrong, then go back and read the books and take the workshops to see how you can improve the next time around.

People encounter this fear when thinking about renovating a property - either they have no clue about renovating, they're worried they'll spend too much money, or they believe the contractor will leave them high and dry. You can overcome this fear in a number of ways:

Work with a real estate agent - Real estate agents know properties and neighborhoods and can tell you if a house has been "over-renovated" for a particular neighborhood. Promise a real estate agent that you'll give him or her the listing when you're ready to sell the property, then ask this person to help you determine what needs upgrading and what types of materials you should use.

Attend open houses - When viewing potential investment properties that need rehabbing, ask yourself, "If I were to buy a house in this neighborhood, what should I expect?" You can answer this question by attending open houses in the neighborhood to get a feel for what other homes similar to your property look like. You don't want to spend good money on granite countertops if most of the homes in the neighborhood have Corian or Formica.

Don't visit just one house. Visit as many properties as possible in order to understand what buyers have come to expect from homes in the neighborhood.

Build a good team - It also helps to have a team of experts you trust, including a real estate attorney, a mortgage broker, and an accountant who specializes in real estate. These experts will ensure your contracts are up to snuff and that your finances are in order - easing your fears about losing money.

This fear is based on an identity issue. You may think about real estate investing and wish you could do it, but you don't believe you are the type of person who can do it.

What's happened is that you've become stuck in the mindset of who you are now versus who you want to be. With your current mindset, you'll never buy that first investment property because the voice in your head is saying, "You're not really a real estate investor."

To overcome this fear (and the negative voice), you have to step into the "headspace" of a successful investor. The following exercises can help you shift your mindset:

Practice visualization and affirmation - When you have some quiet time, write down the traits of a real estate investor. Then, visualize yourself as this person. Picture yourself successfully negotiating deals, working with lenders, viewing properties, and putting money in the bank. Also develop affirmations that counter the negative voice in your head, i.e.: I'm a successful real estate investor.

Own the title - Have cards printed up with your name and the title, "Real estate investor," then find friends willing to help you. Go to a party or networking event and have them introduce you as, "Jim Smith, real estate investor." When you own the title, you start thinking like the person you want to be - and that's when things start happening. When you hand someone your business card, for example, he or she will introduce you to someone else; the two of you will begin talking and the next thing you know, you learn of an opportunity.

Make an appointment with a mortgage officer - Until you know exactly how much property you can buy, you're not committed to being a real estate investor, which is why I advise clients to set up a meeting with a mortgage officer ASAP. Setting up this appointment gets you to take that all-important first step: once you have financial information in hand, you can then begin looking at properties in your price range. Now you're acting like a real estate investor.

Hang out with successful people - Another way to shift your mindset is to network with successful real estate investors. Try and stay away from people in the same boat as you - those who want to invest but for whatever reason haven't yet done so. Why? The people you hang out with are the people you become - both good and bad - so if you want to be successful, seek out and network with successful people.

To confront your fears, take action now rather than after the next workshop or boot camp (especially if you've already attended three or more), learn from your experiences, build a network of experts you trust, and start acting as if you are a real estate investor. Next thing you know, you will be one!

Kelle Sparta is an author, trainer, speaker and the Principal of Sparta Success Systems, a Newton, MA company that specializes in real estate coaching and training. She can be reached by phone at 508-243-6257 or via her website at www.spartasuccess.com.