Are You Stuck on Your “Yeah, But…?”

Every month I get literally hundreds of emails from investors all over the country asking for my advice on their investment strategies, deals and problems they’ve encountered. Many of these investors have outdated strategies that don’t work anymore, unrealistic expectations or worse, they are so entrenched in doing something the way they’ve always done it that they’re stuck.

Let me give you a few examples of what I mean.

A few years ago, I saw the writing on the wall with regard to stated income loans. I just knew that they were going away. (If you’re thinking, “What? Whaddya mean no more stated income loans?” then you especially need to keep reading).

I had several self-employed residential mortgage clients that were going to be affected by that so I contacted them all two years in advance and told them that if they wanted to be able to continue to use conventional loans to finance their properties they needed to start showing income on their taxes. What was the response?

“Yeah, but then I’ll have to pay more taxes.”

Last week one of the investors contacted me and was desperate for a refinance of one of his properties to pay off a private lender. Yep, you guessed it.  He had no income on his taxes to document his income and owns more than 4 properties so he is unfinanceable.

He asked, “What should I do now?”

I told him that he could start working with portfolio lenders to refinance his properties into his LLC so he can pull them off of his personal credit. They also may be a little more lenient in the income qualification – using deposits and business income.

He said, “Yeah, but the rates are higher than what I have right now.”

People, the “yeah, but” is lethal.

Real estate investing (like a good marriage) is a series of compromises. You have to weigh the consequences of your decisions. Pay taxes and remain financeable or don’t. Lose a little cash flow to become financeable or don’t. It’s your decision. But that decision will have consequences.

The investor in this example is stuck. He has “yeah, butted” his way right into failure.  He is still trying to do business the same way he has always done it and he is so entrenched in his ways that he is losing tons of opportunity.

What about you? Are you still trying to run your business using outdated strategies? Or are you flexible enough to pay attention and take the advice of the ones who are doing their best to advise you?

Be smart enough to immerse yourself in “what’s working now” because I guarantee you it isn’t the same stuff that worked a few years ago.