As a kid, I used to watch Michael Jordan lead his team to professional basketball championships year after year. Before every game winning shot, momentum-shifting defensive play, or pass to the right person at the right time, you could see the unshakable confidence in Jordan’s face. He knew the eventual outcome of the game would be a win. And I got to experience the exhilaration (or anguish when I cheered for the opposing team!) of watching it all unfold.
Where do elite athletes, risk-taking entrepreneurs, and extreme sport enthusiasts get this kind of confidence? Is it something they’re born with?
It’s true that we’re all born with certain strengths, skills, and talents, but confidence is something each of us can build and learn.
Most relevant for you and me, you can certainly build confidence – eventually even unshakable confidence – as a real estate investor.
The Essence of Confidence
The root of the word confidence comes from two latin phrases – (1) con and (2) fidere. Con means with and fidere means trust. So, the word literally means to have trust in something.
Fidere is also the root of other modern words:
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- Confide means to trust someone enough to tell them a secret.
- A fiduciary is essentially a person you trust to do things in your best interest.
- Even the old dog name Fido reminds us that we can trust man’s best friend!
So, when Michael Jordan stepped to the free-throw line and knew he would succeed, the look of confidence in his eye was really about trust. He trusted the outcome because he trusted himself.
The question is how do you build that kind of trust for yourself?
How to Build Self Confidence With Anything
When Jordan stepped up to make a game winning shot, it was not the first time he took a shot like that. For years, Jordan had practiced this exact shot and situation over and over until it became automatic. As a result, his mind and every muscle in his body knew he could do it because he already proved it to himself!
So, self confidence isn’t magic. Jordan wasn’t born making game winning shots.
Just like Jordan, your confidence is directly related to how much and how well you practice and demonstrate mastery of something to yourself.
I used to be a member of the local Toastmasters Club in my hometown. Toastmasters is an organization with groups all over the world whose purpose is to help you practice public speaking. And remember, public speaking is that thing that people often fear more than death!
Yet I saw amazing transformations happen over and over again. People with a fear of public speaking became more and more confident in themselves by practicing speaking regularly. They also received constructive feedback (i.e. coaching), which allowed them to improve and increase their confidence even more.
So, just like athletics or public speaking, the key to more confidence in real estate investing or anything else in life is practice! And not just practicing one time, but practicing over and over (with feedback!) until you begin to gain confidence in yourself.
“Yes, yes. Practice and hard work. But what about that person I saw on social media yesterday with all those cash flowing properties? They’ve only been investing for 6 months!”
Let’s take a look at the truth behind many social media success stories.
Social Media Success Stories
Success seems to happen so fast in a social media world. If you scroll on Instagram long enough, you’ll find plenty of examples of new investors crushing their goals left and right.
But as you scan the impressive cash flow numbers and their confident and triumphant photo, isn’t it natural to feel some jealousy and deflation in your own confidence?
“I mean how come THEY are so successful so fast, and I’ve been trying this for years? I must not have what it takes.”
That’s the little voice in the back of our minds.
But let me tell you a secret you probably already know. Social media success doesn’t tell the whole story!
One of three things happen behind the scenes of a typical social media success story:
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- The person has been practicing a LOT leading up to the success
- The person got lucky (which isn’t repeatable)
- The person is lying or exaggerating
The main point: There is more going on behind the scenes. So, don’t judge yourself based on their success.
Here’s the truth about real estate investing success that you can count on.
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The Path of Real Estate Investing Mastery
The investors I know who succeed in buying properties, building wealth, and then keeping that wealth commit to long-term mastery of the real estate craft. Yes, there may be some impressive Instagram pictures along the way. But their true confidence comes from the consistent work they do behind the scenes.
This every-day work isn’t exciting enough to garner attention on social media. Who wants to watch someone persistently practice anything for hours on end?
Yet, this is the path of success and of mastery. Mastery is a mindset and a commitment to keep getting better, whether you’re experiencing short-term success or failure.
Most people agree that Michael Jordan was one of the all-time greatest basketball players. Yet, for all his celebrated successes, he also missed more than 9,000 shots in his career, lost almost 300 games, and missed the game-winning shot 26 times.
What made Jordan great, in my opinion, was a deep commitment to his craft. Whether he made or missed the game-winning shot, he kept practicing the details and the fundamentals. It was his superpower, and it can be yours as well.
So, now let me share some of the most important skills you need to build confidence and mastery as a real estate investor.
The 10 Key Skills of Real Estate Investing
Believe it or not, I got started in 2011 writing and teaching online because of MY own commitment to real estate investing mastery. I wanted to share what I learned and continue to learn in my ongoing quest to become a better investor.
Here are the skills I consistently teach about AND practice improving for myself:
1. Real Estate Value
The value of real estate exists because of the collective demand for properties by billions of people in the world. They all need a place to live, work, and play.
Real estate markets exist as collections of transactions from buyers, sellers, landlords, and renters of properties. Understanding how these markets work and what motivates people in these transactions can help you become a better investor.
Fortunately, you don’t actually need to understand most of the markets in the world. You really just need to understand the smaller sub-market where you choose to invest.
That’s the topic of my guide to picking the ideal investing market.
2. Financial Analysis
Understanding value is one important piece of the investment puzzle. But you must also understand what it means to have a profitable and safe investment. This skill is called financial analysis or running the numbers.
You can take entire courses on the fundamentals of analyzing investment properties. Start with a free rental income calculator, and read up on how to accurately forecast real estate cash flow.
3. Real Estate Contracts & Law
Contracts and real estate deeds are underappreciated but brilliant human innovations. These important pieces of paperwork translate promises made between two people (or entities) into legal agreements.
Using a system of laws and legal precedents (i.e. prior course cases), mere paper and ink can become legally binding. The legal weight of these agreements gives a complex market of people who don’t even know each other enough confidence (notice that word again?!) to spend their money with one another. And specific to real estate, a system of public recording of documents gives buyers (and their title insurance companies) even more confidence to invest their money.
If you need help in this area, my course Contract-to-Closing is all about the details of the process and paperwork for putting a property under contract, performing due diligence, and actually closing on a purchase.
4. Real Estate Financing
Because of the confidence people have in real estate markets and legal agreements, they’re willing to spend a lot of money to buy properties! And these high prices mean that most of us have to find financing from third parties to help come up with enough money.
Real estate financing is a BIG universe. You can start with banks and other traditional lending institutions. This is often where you get the lowest rates and best terms, as long as your credit, income, and other requirements are acceptable. Compare investment property loan terms before committing to a single lender.
The other way to finance your properties is a category I call “creative financing.” This just means you use strategies or financing sources outside of the traditional financing system. This includes private investors, self-directed retirement accounts, lease options, owner financing, subject-to the mortgage, and more.
5. Marketing & Negotiation
Buying, selling, and leasing real estate don’t just happen. In order to make the most of your investment, you need to learn how to market and then negotiate to get the best transactions possible.
While marketing and negotiation skills matter in all parts of real estate, consistently finding good deals to buy is probably the most difficult part of the business. So, getting good at generating leads from potential sellers and then negotiating win-win deals is probably the most valuable skill in the real estate investing business.
Also explore ways to find good deals on investment properties, even in hot real estate markets. It takes work and skill!
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What short-term fix-and-flip loan options are available nowadays?
How about long-term rental property loans?
We compare several buy-and-rehab lenders and several long-term landlord loans on LTV, interest rates, closing costs, income requirements and more.
6. Construction & Remodeling
Your real estate investment is a physical object that can be broken down into land and construction materials. While you don’t need to learn to do the work yourself (I never have!), you do need to understand how construction works, how much it costs, and who to hire to do the work for you.
Watching YouTube and studying free information online is a great way to learn the basics of constructing and remodeling houses. I also recommend The Book on Estimating Rehab Costs and The Book on Flipping Houses by my friend and master investor J Scott. They are the resources I buy for my own students to learn best practices of remodeling as an investor.
7. Rental Property Management
I’m a buy and hold investor. I love the steady monthly income and long-term wealth you can build from rental properties.
In order to get to that goal of income and wealth, however, you have to learn how to serve your tenants and maintain your properties. Of course, you can (and should!) hire people to help you, but you need to understand and create your own systems.
My Landlording 101 article shares my own systems and processes for running a rental property business.
In the near future, I’m also going to offer a course called Rental Property Management to teach all my systems and paperwork in-depth. You can get on the waiting list HERE.
8. Business Management
In your real estate investing business, you’ll always have a lot of details. If you fail to manage these details well, you could master the other skills in this list and STILL fail (or at a minimum drive yourself crazy)!
Under this umbrella of business management I put bookkeeping and administrative tasks. Bookkeeping involves paying your bills and tracking and organizing all of your financial transactions. I use the software Quickbooks to help organize our bookkeeping.
Administrative tasks include saving and organizing receipts, contracts, and other paperwork involved in the business. It also includes the sometimes overwhelming amount of licensing, paperwork, and filings required by the many levels of government.
If you want to see the tools and services I use to run my business, check out my real estate tools page.
9. Team Building
Hall of fame basketball coach John Wooden once said “The main ingredient of stardom is your team.” Since real estate is a team sport, his advice applies directly to you.
You are the star of the team, but the people around you will determine your success.
I share more in this article about building your real estate team.
10. Self-Mastery
Last but definitely not least – confidence and mastery in real estate investing involves working to master yourself.
When I graduated from college, I was lucky enough to find the book The 7 Habits of Highly Effective People by Steven Covey on my dad’s bookshelf. I loved the book so much that I’ve reread it many times over the years.
In the book, Covey says that “private victories precede public victories.” In other words, if you don’t seek to master your own thoughts, habits, and actions you can’t expect to master your other external goals in life.
How you approach this arena is very personal to you. Find one of the MANY excellent paths to self mastery that resonates with you.
In my own journey, the philosophy of Stoicism has been extremely helpful. I even wrote an article about how you can apply stoicism to real estate investing.
Confidence Is Not Perfection
Now that you’ve read the 10 skills to master in order to become a more confident real estate investor, it would be easy to get overwhelmed. That’s a lot to learn and master!
First, realize that you don’t need to master everything at once. Michael Jordan continued to master different parts of his game throughout his career. You can do the same thing as a real estate investor.
Pick one or two areas to focus, and then commit to learning and practicing those until you improve.
Second, remember that confidence isn’t the same as perfection. Mastery is a path towards perfection, but no one – even the best – ever reaches it.
So, give yourself a break!
Third, have fun with the process! Real estate investing, like basketball, is a game. And games are meant to be enjoyed.
It just so happens that in this game you can build wealth, create cash flow, and increase your personal freedom WHILE having fun. It’s one reason I’m such a big fan of this sport!
Best of luck with your path to mastery and increased confidence as a real estate investor. I’ll be right there practicing beside you!♦
Which skill(s) do you need to work on most? Which ones will you start practicing?
More Real Estate Investing Reads:
About the Author
Chad Carson is a real estate investor, world traveler, father of two beautiful children, husband, and founder of CoachCarson.com. His mission: to help you do more of what matters to you personally. And he walks his own talk, too — he spent nearly two years with his family in Ecuador, running his business and real estate portfolio from abroad while adventuring with his family.
This article originally appeared on CoachCarson.com and is republished here with the author’s permission.
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This is an interesting topic. Being confident in what you do is a key to success!
Glad you found it interesting Irina! And I agree 🙂
Thanks Irina! Definitely agree confidence in anything you do is the key.
The thought of making a mistake is one of the reasons why I am holding back on pursuing Real Estate Investing. I am still on the theorem part where I read a lot of books to build up my confidence, learn from the experts, and understand the law that governs the property. I am afraid that I might go bankrupt in a snap and won’t go back on track. The worst part is I might end up in jail time.
That is absolutely right! Real estate is a competition too! You won’t win it without the right skills and the right tools.
I can relate! When I was new to real estate investing I turned down deals that I later realized would have been winners. It takes time to build confidence as an investor.
I hear you Cyrille!