As an investor, you’re meeting with motivated sellers and cash buyers with the goal of finding attractive deals, getting them under contract, and then rehabbing, renting, or wholesaling those properties.
The more credibility you have in the eyes of those sellers and buyers, the more deals you can do. The problem that many new, inexperienced investors face is: How do you gain that credibility if you have zero experience? (You’re stuck between the proverbial rock and a hard place because how do you get experience if you have no credibility?!?)
You might be surprised to discover that I don’t think you actually NEED experience to have credibility. There’s a formula for credibility and the more components of this formula you demonstrate to the seller or buyer, the more credibility you’ll achieve.
Here’s the formula:
Knowledge + Plan + Experience + Confidence = Credibility
I’ll break that down for you…
- The knowledge you have of the seller’s problem or the buyer’s opportunity
- The plan you show the seller or buyer to do the deal
- The experience you have from successful deals in the past
- The confidence you have to complete the deal
Now here’s the best part: You don’t need to have all of these components; you just need to have as much of each one of them as you can. All four is great, of course, three is okay too. Fortunately, you can get 3 of the four components even without doing any deals!
Get the knowledge you need by getting educated and working with a mentor and reading everything you can get your hands on (plus listen to podcasts). Create a step-by-step plan – that’s something you can do once you know what needs to be done. And you can demonstrate confidence in your ability to do the deal even if you don’t have experience… because confidence doesn’t come from experience but from your own belief in your ability to work until you achieve a goal.
If you have an abundance of knowledge, a plan, and confidence, then experience may never even come up in the conversation with your sellers and buyers – you’ll have more than enough credibility earned from just those three components. (Just make sure you compensate for your lack of experience with a lot of education, a clear and detailed plan, and plenty of confidence.)
If you do want to gain experience to add into the credibility formula, you can do this by partnering with other investors – such as a joint venture to get your feet wet as an investor as you work with another investor on a deal.
Real estate investing is such a powerful space to make money in because it’s one of the few where experience doesn’t matter and where knowledge, a plan, and confidence can get you pretty far.