How do you get over the fear? - Posted by Charity

Posted by JohnG on June 04, 2000 at 07:02:38:

I was thinking of this post for a day or so and I had an answer - it was exactly as you have written it except you did a way better job in putting it down on paper.

Fear is not real - its False Evidence Appearing Real - and most of us really learn to use fear to keep us from going to the next level. After all, its so darn easy to rationalize the fear.

You are saying the fear is out there - its real and it ain’t going away. Go and do it anyway.

Thanks for this and other great posts.

How do you get over the fear? - Posted by Charity

Posted by Charity on June 03, 2000 at 16:28:25:

I have been reading this board and studing for awhile now, but I cannot seem to make that first step. I have absolutely no qualms about finding a good deal, but I am scared to make the move and then not be able to get financing. We cannot afford to lose money right now because we are adopting a baby from Guatemala and we have to use every cent for that.

Every private/hard money lender I have spoken with says that they will need $2000-2500 down payment and to pull credit. My credit is not bad, but I have high balances (which is why I want to start investing and paying off bills). I also do not have the spare money to pay a downpayment.

Secondly, I would love to do a wholesale, but again I am scared I will lose the deal because I can’t find a buyer or something. Then, I’ve studied Ron LeGrand and it seems that he never really explains how to fill in the contract on the wholesale deals in detail. It also seems he does things in Florida that may not be proper where I am. I just don’t really know…

I’d love to buy a rental, but there again all of the owner financing I’ve found has been with a hefty down payment. All of the assumable loans have had high payments with no room for profit.

Lease Puchases are hard for me being a real estate agent as far as the cloudy legalities on the non-refundable down payment…

I just wish I could find a private lender who would loan me the money based on the property itself and the value it would bring and let me get started. I WANT to do a rehab and start getting deeper into REI, but it seems there is an obstacle at every turn and I end up sitting here doing nothing.

Please, no bashing. This is a “venting” post for sure, but I truly need some guidance or ideas.


Re: How do you get over the fear? - Posted by Steve-Atl

Posted by Steve-Atl on June 04, 2000 at 10:23:19:


The first deal is by far the most difficult. It was that way for me too. My background as an architect gives me a tendency to over analyze. Deep down this tendendy is based on my fear of making a mistake. That has been both a blessing and a curse. Its been a curse because I let several good deals get away in the beginning.

Six months after my first deal, REI was no longer scary to me. The key is education and knowing how to reconize a deal. If its really a deal, I’ve learned that the risks are typically very small compared to the rewards.

By the way, you did not talk to me about hard money lending. I don’t require $2,500 down.

Re: How do you get over the fear? - Posted by Laure

Posted by Laure on June 04, 2000 at 07:48:45:

I don’t get scared anymore, but I still second guess myself, and even get buyer’s remorse sometimes ! I just closed on a house on Friday, and I had a buyer the Saturday BEFORE I closed, and I still wondered about this deal ! My husband just says it’s my “female hormones” LOL And that I am just being a woman ! This neighborhood used to be a war zone about 6 years ago, but has cleaned up a bunch.

When ever I start getting scared, I just remember this:

If I stay on the path that I’m on, I’ll get exactly where I am going.

Laure :slight_smile:

Meditate on your unfulfilling life… - Posted by HR

Posted by HR on June 04, 2000 at 06:33:25:


I had the same fears as you. Haven’t we all at some point? I was scared of losing money. I was scared of losing property. I was scared of losing my good credit rating. I was scared of being scammed by the sub contractors. I was scared of being hurt by my tenants. I was scared about filling out the paperwork wrong and being sued. I was scared about underbidding on property. I was scared about not finding investors to flip to… yada yada yada. About the only thing I wasn’t scared of was my truck… and if you gave me enuf time, I might be able to conjure up some catastrope to worry about there, too.

So how does one get over all these (and other) fears? For me, I was sick and tired of being sick and tired. The fear of my life staying the same was greater than the fear of doing all this new stuff. When another, competing emotion is stronger than the fear, you will overcome the fear.

You can not will yourself over the fear. You can not rationalize yourself over the fear. The fear is a very deep seated, unconscious expression of core beliefs and is not easily overcome. The only way over it is thru it. Because in the end, someone with this level of fear isn’t worried about contracts; it’s about making big personal changes in the way we think, act, make a living, etc. And those kind of personal paradigm shifts are life changing and… fearful.

Now, charity, the stuff that used to make me fearful no longer does. Literally. Looking at houses, estimating repairs, making offers, backing out of offers, finding investors, managing rehab crews, selling the properties, etc etc etc… this really isn’t hard. What’s hard now is doing it all efficiently and effectively for max profit. I laugh at myself now, over what used to worry me. Now, it’s crystal clear that this biz is like all other businesses: the more experience you have doing it, the easier (and more profitable) it gets. It really ain’t rocket science (thank God).

The name of the game is jumping in.

Charity, I saw so many people making so much money, my greed and pride also forced me into the water. They aren’t better people than me. They aren’t smarter. They don’t deserve it more. They just had some knowledge, skills, and experience, and it’s what I needed, so I jumped in. And it hasn’t been NEARLY as bad as I catastrophised it would be.

May I make some suggestions?

First, knowledge helps. I made the BIG mistake of thinking I would FEEL ready when I felt I KNEW enough. Big mistake. Why? Because in rei, with it’s 10,000 things that can go wrong and different, you can never know enough to feel confident in every situation. You can certainly know enuf to get started. But not enuf to feel like you can cover your fanny for whatever may hit you… which is what I realized later I was unconsciously trying to do. Solution: have a good re team around you. I’ve joined my local reia group and have great support/advice there. I’ve found a great re attorney, and have great support there. My cpa is also invaluable. Find individuals, in other words, whose job is getting folks out of binds when they find themselves in them, and you will be ok when you fall into a puddle.

Charity, you are also a realtor. Recognize that you have been conditioned (brainwashed) by your training to look suspect at rei. When my wife got her training, I even had to deprogram her a little to accept some of the creative stuff as legal and do-able. Your knowledge and access to the mls is invaluable. Now learn how to use it to make serious money, not as Robert Kiyosaki says, “tips.” And he’s right: realtors work for tips when they could be making the big bucks.

Finally, close friends of mine just completed their adoption of a girl from Guatamala. She is beautiful, and they are so happy. The process, as you know better than any of us, was difficult and fraught with uncertainty. Think of it as a metaphor, Charity, for rei. It really is a good one. Just as you have succeeded there, you can succeed in rei as well. It too will reward you with a “baby” of sorts, more wealth, cash flow, etc and these too are good things.

Meditate on this stuff, and what you want for your family. You will never overcome the fear; your other, stronger emotions will push you reluctantly thru the fear, until, one day, you will find yourself on the other side, and say, “Now that wasn’t all that bad; what was I so scared of?”

Good luck! Congrats on your adoption.


Re: How do you get over the fear? - Posted by JohnBoy

Posted by JohnBoy on June 03, 2000 at 21:36:23:


These are NOT hard money lenders you’re dealing with. A TRUE hard money lender doesn’t care about you, your credit, down payment, job, income, etc. The ONLY thing a true hard money lender cares about is the PROPERTY ONLY. They only care about the value vs. the amount they’re lending on it. Usually 65% LTV is the most they will loan on this.

Your statement about doing lease options because of non-refundable down payment is incorrect. These are not considered as non-refundable down payments. This is a “Non-refundable OPTION CONSIDERATION”. A big difference between the two.

The option consideration is your compensation for giving the tenant an option at a predetermined price, taking the property off the market for a set period of time, taking a risk of losing future appreaciation OR a risk of future depreaciation should the value go down, and taking the risk of having a tenant leasing the property and hoping they don’t tear the place up. You are being compensated for taking these risks by getting paid some option consideration which is and should be non-refundable. That is payment to you for doing this. Has nothing to do with down payment money. If they exercise the option you can agree to deducting the amount of option consideration from the purchase price. That’s “IF” they exercise the option. Otherwise the money is not refundable.

As a realtor, and if you owned a property that someone just wanted to get an option on to have a right to buy it at some predetermined date in the future, you would charge them a fee for giving them that option. Doesn’t matter if they were leasing the property or not. That has nothing to do with it. The same applies here with a lease option. Only in this case they would have a lease, with an option to buy. Keep the lease agreement and the option agreement seperate from each other by using two sets of documents.

Re: How do you get over the fear? - Posted by Warner(ATL)

Posted by Warner(ATL) on June 03, 2000 at 21:26:51:


Since you are in the same town I’m in, I wanted to respond to one of your concerns regarding finding investors to buy the deals you wholesale. Believe me when I tell you that if you have a “true” deal here in Atlanta, investors will come out of the woodworks to buy it. You can ask any of the Atlanta area investors who visit this board to verify this. As an example, I am closing on a wholesale deal on Monday that I tied up three weeks ago. Although, I have regular investors who will buy deals from me, I decided to put an ad in the AJC to build a buyers list. Last count I had over 40 responses for a one day ad. All investors looking for a good fixxer upper deal.

Re: How do you get over the fear? - Posted by eric-fl

Posted by eric-fl on June 03, 2000 at 21:19:07:

One of my favorite phrases is “there’s more money chasin’ deals than deals chasin’ money”. I later found out this is 100% true. Find a real deal, and someone will for sure give you the money. If you have to question it, if you’re “just not sure”, it’s probably a good deal, but not a great one. Marginal deals are easier to find, but harder to do. Like everything, there is a tradeoff. You have a choice - you can start beating the bushes, find a marginal to good deal, and close it maybe, or at worst, maybe, lose a couple of hundred dollars on a deposit, or an appraisal, or an inspection, or you can wait forever for a great deal and then get it under contract to be sure you can close. Risk and reward are directly related, and if you are looking for a risk free way to become a real estate investor, that’s probably not going to happen. It seems like you need to clarify your goals - what kind of investing do you want to do? There’s a million ways, - cash cow, lease option, mobile homes, pre-foreclosures, auction foreclosures, estate sales, REO, back end in from buying bad paper, rehab/wholesale/retail/flip/fixer upper, multi-family, single family buy and hold, discounted mortgages, tax lien certificates, condo rental, condo conversion, just to name a few. You can’t do them all, find one or two methods that meet your clarified goals, then attempt to find the deals, and if you find something that doesn’t meet your parameters along the way, but is still a deal, see if you can find someone who DOES know what to do with it, and sell it to them for a couple hundred or thousand bucks, if just to get your feet wet.

“Industry need not wish, but those that live on hope will die fasting” - Benjamin Franklin

Re: How do you get over the fear? - Posted by phil fernandez

Posted by phil fernandez on June 03, 2000 at 20:25:23:


The $2,000 - $2,500 cash upfront to pull your credit sounds like a scam to me. A credit report can be done for $10. I do them all the time.

At one time , many moons ago I was like you, worried that I couldn’t get financing. All that was, I found out later was me being scared of rejection. If you are going to make it in this business rejection is common place. But remember for every no, you are getting closer to a yes on a super deal.

If you tie up a property, inserting the proper weasal clauses, so what if you can’t find an end user or financing for your deal. On to the next one. Of course when you enter into a contract, you will want to pull out all the stops to close the transaction.

Sometimes it takes awhile to consummate the first deal. Don’t give up.

It’s easy, and it’s not. - Posted by Carol

Posted by Carol on June 03, 2000 at 16:45:38:

Charity, this IS NOT bashing!
Your post is full of wishes… literally.
I can tell you are a person who in some domains takes the bull by the horns… look what you are doing about your family! that is courageous and determined, and my guess is that NO ONE and NOTHING is going to stop you from that goal.

Transfer that level of intention to your REI.
What did you know about the adoption process when you first started looking into it? What was your level of ignorance and how did you over come it? What were your fears, and how did you overcome them? That’s the biggie. That’s all that’s holding you back. But it is not holding you back from that baby, by gosh!

You are a BIG person. Don’t wish. Just keep acting. I mean, what if you didn’t get the first baby you tried to adopt (bet you’ve been there!), what if some birth mother ripped you off? What if the authorities mess it up at the last minute? What if, what if?

That isn’t keeping you from the child that awaits you. With that same power focused on your REI, it will not keep you from ironing out the ‘details’ there either.

If you feel this is bashing… please email me, so I can clarify. I send this to you with all love and support and assurance that the pebbles in your path can be brushed aside as soon as you are ‘bound and determined’ that they are out of there!


Re: Meditate on your unfulfilling life… - Posted by Zulema

Posted by Zulema on June 04, 2000 at 20:42:47:

HR, thank you for a wonderful post. I know you wrote it for Charity but it touched my soul. You see I ,too, have a great fear about the (real estate) unknown. I’m a newbie with a passion for real estate investing but have done nothing with it. I’m a school teacher and about two years ago my world was turned upside down when my only child became disabled. My husband and I have to develop /create a plan for our daughter’s financial security. I have to overcome this fear and JUST DO IT. Your words of wisdom have inspired me to take that first step. Thank You, Zulema

Re: Meditate on your unfulfilling life… - Posted by AS ALWAYS, BRILLANT HR!!! (nt)

Posted by AS ALWAYS, BRILLANT HR!!! (nt) on June 04, 2000 at 16:31:52: