There are many stages to becoming a successful real estate investor. Simply stating that you want to invest in real estate is not enough to guarantee success. There is often a series of growing pains that most new investors go through before they really understand the business. What you will find here are a few common traits that most successful investors have. Regardless of how long you have been in the business, there is always room for improvement.
Successful real estate investors are not born with an innate disposition for real estate investing, and as absurd as that sounds, some people think luck plays a role, but in reality, it is about how hard you work and the hours dedicated to learning, failing, re-learning, and growing as a real estate investor. For beginner investors, starting out in real estate is probably the hardest step, and it will take lots of patience and perseverance to overcome the hurdles in the beginning.
1. Patience
Having patience may sound simple, but that’s not always the case. When it comes to real estate investing, there is a lot of pressure on you to move and move fast. The best deals go quickly, and allowing projects to run past the agreed-upon timeline can be expensive. Investors are constantly facing pressures to do more, do it faster, and do it cheaper.
The best investors have learned to temper this pressure with wisdom and patience. They know when they need to run fast, and when they need to stop and wait to see how things develop. Patience can take several forms when it comes to real estate investing. Learning to recognize areas where you’ll need to practice can save you from a lot of expensive mistakes.
2. Focus On The Numbers
Successful investors don’t make decisions based on their gut. They realize that emotions aren’t always the best predictor of future results. While nothing is a guarantee, looking at numbers is a good start. Numbers make up almost everything you do in business from marketing to analyzing deals. It can be easy to get attached to a property that you have watched for months. As hard as it may be at times, if the numbers don’t make sense, you need to walk away and move on.
The numbers are an emotionless predictor if they are used wisely. You can make a property look as good as you want by tweaking some of the numbers but you are only kidding yourself. Successful investors take the numbers at face value.
3. Quality Over Quantity
You do not get any bonus points for the number of deals you close. Successful investors realize that it is better to close quality deals over a handful of average ones. If you are patient and look for better deals, you will run a better business. Not every deal will be a home run but your time is too important to work on every marginal deal that comes your way. Be patient and look for quality over quantity.
4. Learn To Say “No”
You can’t do everything, be everywhere, and work with everyone you meet. Successful investors know how to say no. There may be times when your real estate agent shows you a property and pushes you to make an offer. If you don’t like it, you need to put your foot down and say no. There will always be situations, people, and properties that just aren’t a good fit for you and your business. Learning to say no is not easy but it is important to be successful.
5. Never Stop Working
It is no surprise that the most successful investors are typically the hardest workers. You don’t need to drive yourself into the ground but you do need to understand the amount of hard work it takes to be successful in real estate. Real estate is not a career where you can wait for deals to find you. You need to put the work in if you want to give yourself the best possible chance. Successful investors understand the value of hard work and never stop working.
6. Know Your Limitations
You are your biggest asset regardless of where you are in the business. This is especially true when you are just starting out. It is important to remember your skill set and focus on what you do best. Even if you are qualified to do some of the rehab work or manage a rental property, it doesn’t mean you should. Successful investors think about where their time is best spent. Trying to do everything is often a recipe for disaster.
Take an honest evaluation of what you are good at and where your time is used best. Everyone has heard about the jack of all trades and the master of none. It is easy to fall into this trap when you are watching every dime. Don’t cross over the dollar to pick up the penny. It takes a lot to learn how to let go and trust the people around you but it is an important part of success. Successful investors know their limitations.
7. Relationship building
If you want to know what the best business people focus on relationship building. Those with the best relationships always seem to win. Whether it’s getting the deal first, getting their permits approved by the city, winning the bid for the project, or getting the best pricing for the construction, those who have the best relationships are going to succeed.
We’ve all heard “it’s not what you know, it’s who you know”. The top investors have stopped fighting this fact and embraced it. These people understand that assets like these can open doors for relationship building that pay off bigger later.
8. Listen to the professionals
If you want to invest in property but have no idea where to start – don’t worry. Nobody is born knowing the who, what, where, why and when. It all has to be learned one way or another, and there are multiple great guides and webinars out there to help you get started on your journey.
Speak to a professional who can offer independent financial advice tailored to your needs as an investor – and listen to every word they offer.
There is nothing wrong with seeking advice from a mentor or a real estate professional to speed your learning and help you make smarter investment decisions in order to grow your real estate investment business.
9. Build your network
Having a strong network in business can be vital to future success. Having one as an investor is no different. Being a member of a network of like-minded investors opens up multiple opportunities, such as the latest investment deals on offer and the hive of market knowledge.
Much of real estate investing is positively correlated with experience-based learning, hence why successful real estate investors understand the importance of building a real estate investment network.
10. Adapt Your Real Estate Strategy to the Market
Successful real estate investors keep up with the ever-changing market conditions to forecast upcoming trends and the potential effect they will have on their real estate investment strategy and real estate investing business. The advantage of continuous changes in the housing market is the window of potential opportunity they create for real estate investors. Successful real estate investors have the right forethought to anticipate and tap into potential opportunities before everyone else. This becomes their competitive advantage.
When it comes to real estate investing, the vast majority of the best investors are simply learning from what others are doing and then putting it into practice better than their competition does. If you want to be the best yourself, start studying what other investors do, how they negotiate, and the way they think. Someday you’ll become the best yourself!
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