This idea can seem pretty difficult to swallow. Most of us have trouble tolerating our mistakes. We can barely grasp the idea of learning to be okay with our missteps. You can forget liking them, and loving them is totally out of the question.
Here’s what real estate investors really need to learn about mistakes, though. It’s a lot less about the actual mistake and so much more about your response. What you can love is how a mistake can change your trajectory and begin to shape and refine you into a more experienced, more skilled, and more able investor than you ever were before.
“Okay, but can’t I do that without the mistakes?”
They say that experience is our best teacher, but if you can learn from other people’s mistakes, you’ll spare yourself a lot of pain!
Still, every real estate investor, no matter what strategy you employ, how many properties you own, or how much money you have, you’re bound to slip up along the way. Here’s how to ensure that you handle errors the right way as you’re investing in real estate.
4 Steps to Better Investing Through Your Mistakes
When we make a mistake, particularly a big mistake, emotions tend to run hot. These emotions often cloud our ability to see the situation for what it really is. Whether we’re angry, anxious, or busy self-flagellating, we’re not spending our time on what is really important: actually looking at what happened and discerning why it happened.
Miss out on a deal? Property going south? Stuck in a lawsuit? Whatever the situation, there is an event or string of events that lead to it. For you, it’s valuable to understand what lead you to this point, whether it was a series of conscious decisions on your part or a neglect of important details. These are things you can only see when you push feelings aside.
Once you identify the cause, don’t allow it to crystallize as a limitation. Believing that a one-time mistake is a character flaw sinks careers. For example, “I lost that deal,” doesn’t translate to, “I’m a bad negotiator. I will lose every deal.”
We have to see situations for what they really are.
Secondly, look for patterns. Human beings are creatures of habit, both conscious and subconscious. Whether you realize it or not, you probably gravitate towards certain things and behaviors. Your investment career isn’t immune! When it comes to your mistakes, you likely have some patterns of behavior that may be damaging your success.
Step back with that objective lens and pull out those common threads between mistakes—even between successes—so you can destroy bad habits and reinforce good ones.
One of the good things about making mistakes is that they often expose things that aren’t working that we may not have even been aware of. They allow us to stop and re-examine the whole machine. Some of the best opportunities to hone in on weak points and flaws in the system are when something breaks down.
These aren’t fun moments, but they give us an opportunity to “punch up” and improve something that we didn’t even know needed improving upon. In a way, we can be grateful for mistakes and missteps when they expose problems.
Take them as an opportunity to ask yourself, “what’s not working as well as it could?”
Maybe it’s a business relationship. Maybe it’s your own workflow. Maybe your continuing real estate education isn’t where it needs to be, or you don’t have the support network you need. Mistakes can help you identify these deficiencies.
For any sort of business—investing included—the ability to see clearly and execute decisions with restraint and level-headedness is key to success. Impulsiveness almost always leads to disaster. One of the ways we learn to control ourselves is when we have to deal with mistakes.
We have to control our emotions. We have to wrestle with our response and determine the right course of action. We have to more carefully weigh our future course of action so that we don’t repeat those mistakes. Mistakes simply teach us, as real estate investors, to be more diligent in our actions and more in control of what we do and say because we begin to more clearly see the consequences.
While no one enjoys the mistakes and the loss that can come from them, the lessons learned can be invaluable in shaping the most successful minds in real estate investment.