We’re a couple weeks into 2021 and when looking at the goals you’ve set for this year with your real estate investing, how are things looking?
You may be thinking, its only two weeks in how much could I have really done. In terms of progress toward your goals, a lot actually.
As my post a couple weeks ago mentioned; Get your Names on Deeds to Succeed in 2021. With that said, how many offers have you put out in the first two weeks of the year? If the answer is none, what is stopping you?
The Cost of Analysis Paralysis in Real Estate Investing
Think about this, if the goal is to get one property in Q1 of 2021, and I’m not saying this should be the goal as that is literally the bare minimum, but for arguments sake – one property by the end of Q1 means you need to be under contract by the end of February the latest, which is only 42 days away. Yes you read that right, we are in January and if you want to own a property by the end of Q1 you have just over a month to get under contract.
On average it takes 30 days to close, but the reality is since COVID hit closing have generally taken longer. I didn’t have single closing come in on time last year, so you probably have less than 42 days to get under contract. And yes, you can close in as little as two weeks if you are using hard money on a flip or BRRRR, so there is that which could give more time.
The point is atleast one offer should have already gone out. Especially because the odds are not in favor of your one and only offer getting accepted. I make multiple offers and get under contract on just a percentage of them.
As investors, we are rarely offering asking price so the rate of “yesses” isn’t going to be at a high level. This is more than fine as we are only looking to buy deals at the price that makes sense.
Reasons Analysis Paralysis Costs You
Now that I have finished my little rant, lets get into a couple reasons analysis paralysis and procrastination is costing you.
1.) Slows Your Progress
When talking to sellers or negotiating a property one of the biggest fears is making that initial offer. You wonder if the offer is too high or too low, or if your reno estimates are correct and how good your comps are.
You become afraid to make a mistake and then you start to OVER ANALYZE. Ask me how I know!
I was guilty of this in my first few years of investing and what it does is create delays, you take longer to pull the trigger, to make that offer and then someone else scoops up the property. This literally happened to me twice back in 2015.
Essentially, stop over thinking it because your analysis will never be 100% perfect. You never know what random stuff will pop up during a renovation, for instance. This is why in the end your analysis is an estimate. Yes, we want that estimate as good as possible which is why we learn about comps and insurance costs among other things, but in the end the property on a whole is an estimate when making your offer.
2.) Puts a Framework of Fear in Place
Here at scaredycatguide we are all about going from scaredy cat to courageous lion!
In the end analysis paralysis is fear. You’re basically scared and look at the same deal data over and over for hours. Reviewing your numbers and running an analysis a few times to ensure you didn’t make any mistakes is one thing, but after that 99% of the time the numbers aren’t going to change.
The only thing that changes as you keep analyzing is the what-if scenarios in your head. What if XYZ goes wrong…and then you start to think of all the worst scenarios that have you broke and on the street.
Don’t go down this fear spiral, in fact instead when you start saying what-if, ask what if the best outcome happens?
As the saying goes, you plan for the worst and wish for the best.
Ironically, more often than not it lands somewhere in the middle. When it comes to real estate investing landing in the middle is more than enough to have immense success. Yet another reason I love real estate investing!
If you are stuck in analysis paralysis or just can’t seem to get offers in or grab that next property I’m here to help. That is exactly what we move past and get done in my one on one coaching.