Why 95% of real estate investors fail miserably

Why Real Estate Investors Fail Miserably

Is it true that 95% real estate investors fail? Well, this number was not proven empirically so the number may not stand. However, what we know is true, overwhelming majority of would be "real estate investors" would never do even a single deal. Many just wonder why it is so difficult for them just to do one thing - finding that best property at the best price. Oh right one other thing, price of that property would hold or rather must appreciate. Sounds familiar?

There are many reasons most people find it difficult to becoming a successful real estate investors. Here, I'll present some of biggest and most common obstacles for most would be real estate investors that are driving down the success rate and discourage a lot of people from even starting real estate investing.

1. Go after that quick buck. Undoubtedly the most common obstacles. Like what you hear here? I made X amount of hundred thousands of dollars in just one year in this property investment. Yes! Not hundreds of dollars, it's couple of hundreds of thousands. Well, the most Extreme One that I have heard, believe it or not "luckily I bought this Good Class Bungalow. It only costed me S$4m during the crisis in early 2000. Now it's worth S$40m. WOW an eye popping S$36m profit! How many people can earn a whopping S$36m in his or her life time? Well, enough of these BS stories, (well some may be true, it is quite possible as I have witnessed it myself and certainly I was responsible for some of these success stories) the point I am going to bring across to you is most of these successful investors (or unknowingly became one) did not first go after the quick buck. Why because some buy when the market is going down. Obviously, it is unlikely there will be quick buck to be made in the near future. In additional, almost all never say the price is too expensive nor I will wait for the price to drop another 20%. They can sniff opportunities, they know the market rate and the value of the property, they certainly know what is the potential value of the property. More importantly they took action and this action translated into future earnings. Lucky break?   
2. Trying to get everything perfect and know 100% everything before they get started. Perfection always never happens. The truth is nothing can be absolute perfect and one would probably never know 100% everything. Heard many of these "Wow, rooms are very small." "This property is not very near to MRT leh... the older one is nearer" "My HDB is bigger". Well, while these are all valid concerns, but things are hardly perfect! Things are always evolving. One of the biggest progress killers to taking action is waiting for the "perfect" or "get the best" before taking action. This is one mistake real estate investors make. If you try to wait until you get everything set up perfect and you know 100% of everything about how to do a deal and are getting that perfect property… chances are other people would have gotten that property before you. It is important to know that they are always the so called "the best units" or "premium units" in every development. The key here is are we able to identify them, get these units  at a reasonable market rate and not at an overly inflated price. Good example, The Sail@Marina Bay. The price at that time was the most expensive for a leasehold project and many people would not even have considered investing. The pricing is far from perfect. The bay facing units cost about 10-15% more than the city facing. Fancy paying a premium over what is already considered expensive? This cannot be perfect, this is foolish.  But look at how much the different between a city facing unit and one that faces the bay on the same level? These successful investors are lucky again?
3. Focus on too many things. Confucius said, "a man who chases 2 rabbits catches none." When you try to study on too many topics and for real estate investments, too many developments.... you won't get anything done. Internet has brought about great convenience and offer a great deal of information at your finger tips. Everyday when I surf the net or read my emails I would be bombarded by tons of messages that says "Priced to Sell", "Must buy", "Best this Best that", "Don't buy regret". It may sound like a good idea to try to learn all and as much as possible... but it is not. Stay focus. Look at those properties in the area you think would have more potential for development and future growth. Do not be distracted by looking around the island you are likely to get more confused. Does it help you in making decision and more importantly to take action when an opportunity present itself? I am not sure? Focus on one thing at a time… I guarantee you will get much more done.

Well, that’s my take on real estate investing.  Too many people are focusing on the wrong things and are being their own worst enemy. 

What do you think… why do so many people fail in real estate?  Comments.

sgpropertyinvestors

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