Today I want to talk about a mistake I see new investors make all the time. It boils down to letting emotions get in your way and cloud your judgement in this business.
For example, you find a deal and you run the numbers and maybe they’re not that great, but you really want to do a great deal so you convince yourself it will be fine. You talk yourself into it and come up with reasons why it might be better than it actually is, because you really want it to be a deal. Unfortunately, when you’re really desperate for a deal, that’s when you really need to be careful because you’re most likely to talk yourself into a bad deal.
When you decide what you would pay for a house or when you’re calculating rehab, it should be a completely emotionless process. In fact, you should be conservative no matter how optimistic or desperate you’re feeling. The numbers will never lie to you.
Believe me, I want you to start your business. But you have to look at the numbers. I’ve talked many times about how to run numbers and know whether a deal is good. If you’re not sure, ask an experienced investor. Them shooting down your hopes and dreams can save you a lot of trouble and even money.