One of the biggest reasons small businesses fail is because the owners cannot separate themselves from the daily processes to focus on improving, growing and making their business a success. They are stuck working 12 hours a day handling the daily processes and burn out. Real estate is similar in many ways. Here are 5 reasons most real estate investors fail.
1. Lack of business plan – Many investors try every strategy possible with 10% the focus they need to have success with one strategy. Pick one strategy, document it in a business plan and master it before moving on to a 2nd strategy.
2. Poor or lack of a mentor and support group – It is always good to get advice from a mentor and other experts. They will point out unnecessary risks, provide solutions and even save deals or save you from a failure
3. Wrong strategy – Many investors are followers and do what everyone else is doing or they choose a strategy that just does not work in their market. Some of the most successful investors do exactly what everyone else is not doing. Do your homework and choose the right strategy.
4. Lack of effort and time – This one is obvious, many investors get excited and work hard for 2 days then do nothing for 2 months. You have to write down goals, what it will take to achieve them, have daily tasks and complete them on a consistent basis.
5. Lack of knowledge – I have seen my share of messy deals. From do-it-yourselfers who do everything poorly, to inexperienced investors in way over their head. You should master your strategy and have the knowledge, systems and team in place. And always be thorough in your due diligence.