The 5 Biggest Roadblocks Of Real Estate Investing Success (and how to deal with them)
By Paul Esajian on November 30, 2016
Dealing with roadblocks is part of any business. It is not how you deal with the highs but what you do when things are low that defines your success. As most every real estate investor can attest the real estate business is not easy. There are plenty of times when things don’t go your way. Instead of letting these roadblocks get you off track you need to figure out a way to fight through them. No business owner enjoys getting a proverbial punch to the gut. However it happens much more than you anticipate. Here are the five biggest roadblocks you will face in your real estate career and, more importantly, how to deal with them.
- Increased Competition. With the increase in real estate investing popularity comes an increase in competition. Instead of letting this change your mindset you should embrace it. Sure, deals may not be as easily assessable as they were just a few months ago but there are still many deals to be found. Finding them may require a little more work but that is part of a changing business. Start but evaluating what has worked for you and in the past and make a determination on the level of competition moving forward. If your niche is something popular such as foreclosures or short sales you need to change your approach. You can look for a different market or tweak your investing strategy all together. Whatever you do you should recognize that there are plenty of real estate deals closing every day. Competition may make things harder but it doesn’t mean the end of your business.
- Loss Of A Key Team Member. Nothing in business, and in life, lasts forever. Even the most successful teams, bands or groups eventually break up. While this can certainly sting you need to be able to bounce back quickly. Losing a key member of your real estate team may feel like the end of the world but you have to take it in stride. This doesn’t mean that good partners, real estate agents, attorneys and contractors grow on trees. It simply means that you need to always be able to adapt to any situation. When you lose a key team member you need to take an honest assessment of what they brought to the table. Whatever their strength was you need to find ways to supplement it. Many times this will not be done with just one person. You can’t expect your new real estate agent to have the same qualities as the one that left. You may have to pick up the slack and change what you bring to the table. Losing a key team member will take the wind out of your sales but it can be an opportunity to bring on someone else who can change the way you do things for the better.
- Decreased Lead Generation. Your real estate business is largely dependent on the quality of leads you generate. When leads are coming in the number of closed deals typically increases. When that number drops off your business will come to a screeching halt. Declining leads means that you need to find alternative methods. There are literally dozens of ways you can produce leads and generate interest in your business. Many of these are relatively inexpensive and won’t break the bank. Some of the best options are the ones where you are forced to think outside the box. The greater number and variety of lead generation options you have the less reliant you are on any one of them for success. You never know when you will find a cost effective option that transforms your business. A lack of leads is an easy fix if you have an open mind.
- Cash Flow Problems. Running a business means staying on top of the finances. It is not enough to bring money if you are spending it quicker than you make it. At some point most every business experiences a cash flow crunch. When dealing with low cash flow you first need to get to the root of the problem. As simple as it sounds there is either a lack of income or an increase in expenses. A lack of income can be fixed by generating more business and closing more deals. If you are overextended and your expenses are too high you need to find ways to reduce your payments. Break down where your money goes on every deal and the cost of running your business. This exercise is never fun but you can probably find hundreds of wasted dollars by doing this. You may have to stay home a few weekend nights and live lean for the short term but eventually your business will pop and you will reap the rewards.
- Changing markets. The best real estate investors are flexible and able to adapt to whatever is thrown their way. Real estate markets rarely stay the same for very long. Oftentimes something that happened a few months ago may no longer be relevant today. If there has been a shift in your market you need to shift with it. If foreclosures and short sales have run dry you need to find a different niche to invest in. If new construction is slowly taking off you need to adjust the quality of your work. You should never put all your eggs in one basket. The more open you are to change the easier it is to adjust.
Roadblocks are simply an opportunity to steer down adversity in the face. Don’t let a roadblock stand in your path to success.