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. Instead of suffering through trial and error while learning the business, look at the experiences of fellow investors. What you will find is that there are a few common traits that most successful investors have. Look at what makes them successful and ask about the steps they took to get there. Regardless of how long you have been in the business, there is always room for improvement. Here are five qualities that the most successful real estate investors share.
- 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.
- 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 most 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. Getting involved in a bad deal leads to lost opportunity on future deals. It is important not to confuse intuition with emotion. You may hear about fellow investors who purchase property based on a good feeling. What you don’t know is that good feeling is based on research and past experience. 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.
- 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. With every new deal you entertain, you need to look at the bottom line: what you are losing to acquire this property? By dedicating your time and energy to a new property, you lose a chance at future ones. The other problem with average deals is that you need things to run perfectly if you want to ensure a profit. This slim margin for error is stressful to work under and filled with risk. On the flip side, 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.
- 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. The same is the case if your contractor suggests you make a change on your rehab or if your attorney wants to waive a contingency. There is a difference between listening to the advice of your team and saying yes to everything. You need to ask as many questions as possible until you are comfortable with the answers. 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 is an important part of being successful.
- 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. Every person you meet and property you look at is a potential opportunity. The next time you are in your car, keep your eyes open for distressed properties or properties for sale by owner. Attend networking meetings and go to real estate investment clubs. 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.