Success Tips for Real Estate Investors (part 2 of 2)

By Than Merrill

To learn about Real Estate Marketing, look at Marketing For Deals or to attend Than Merrill’s exclusive weekend seminar, check out the Marketing and Wholesale Bootcamp

On one of my monthly coaching calls I was speaking about the three core traits of all successful real estate investors and a very interesting question was posed by one of my students. The student inquired about how much time they should spend acquiring knowledge before they take action and buy their first property. The question struck a chord in me and I addressed it immediately because this is a question that many new investors want to know the answer to. This question moved me because this is also one of the biggest mistakes many investors make and that is they take action in a disproportionate amount to the knowledge they have acquired. This is also a mistake I have made in my investing career. (Special Note** When I make mistakes I usually blame them on Paul!)

Knowledge is Your Base

Knowledge is power and the more knowledge you acquire the more successful you will become. However, knowledge without action will result in a lifetime of learning and zero earned income. Likewise, action with minimal knowledge will result in a lifetime of economic peaks, valleys, and moments of self destruction. (If you pass this article on to 10 sub-prime lenders within the next 10 minutes you will have a lifetime of good luck and prosperity.)

The key to becoming a successful real estate investor is to have patience. You must build up a very large knowledge base before you take action and purchase your first investment property. This philosophy is based on my own personal experiences. During my first year in the business, I seriously overleveraged myself and put my business at risk. This was the result of making business decisions without the proper knowledge. For example, I read four books on buying rental properties before I went out and bought my first property. I then acquired three other rental properties within a two month period without any further education. Within months I had transitioned from a student to full time landlord dealing with twelve tenants who seemed to be allergic to paying their rent on time. My business was operating on “E” and I knew there was something I was missing.

Wholesaling Systems Create Stability

Thankfully, at this point in the game I sought further education as Paul and I had a feeling we were operating in the wrong niche of the business. It was at this “tipping point” that we discovered the business of wholesaling properties. We knew wholesaling is where we needed further education because it would take care of our cash flow problems and lack of capital reserves. I have a saying that you must take care of today’s cash needs before you acquire long term assets.

After we wholesaled our first two properties for a $52,000.00 profit we were addicted. We knew we had to create wholesaling systems in order to replicate this result over and over again. We also knew it would take a lot of time to build these systems and we would have to have the patience to do this. We wanted to become wealthy quickly, but we understood the importance of building our business properly. We knew once the systems were built it would it make it much easier to take action with a lot less risk. We also realized we would never be able to remove ourselves from our business without having the proper systems that would run it when we weren’t there. This is why you must spend time more time building business systems in proportion to taking action. Action produces revenue, but without systems you will never remove yourself from a business. (Just ask your local restaurateur)

Action Is The Final Step

When you have properly educated yourself and built business systems then it becomes relatively easy to take action. Knowledge gives you confidence, systems eliminate some of the risk, and action is what produces revenue. It is in the replication process where you will make all of your money. If you don’t understand the importance of building a strong knowledge base, sound business systems, then your business and life will be in a constant state of imbalance.

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