Making the shift from the “9-5” to the more entrepreneurial lifestyle of real estate investing requires more than just packing up the cubicle and learning how to execute a wholesaling deal. It requires a dedicated (and focused) mindset; one that doesn’t always come easy for those used to working for somebody else.
This is doubly true for the first-time real estate investor. The individual making the transition from employee to real estate entrepreneur, often finds the biggest obstacles are not about a lack of industry knowledge or investing savvy, but rather cultivating a positive (though pragmatic) mindset that helps them take massive, focused action toward their real estate investing goals.
So, while you could certainly spend months, if not years, learning what it takes to be a successful entrepreneur, here are five keys to developing the successful first-time real estate investor mindset, and perhaps cut years off your learning curve.
4 Ways to Cultivate the Perfect First-Time Real Estate Investor Mindset
1. Focus on value, over time spent
There’s an uncomfortable truth every first-time investor must face, especially those coming from a more traditional work setting: As an entrepreneur, you are compensated for what you produce (the deals you complete), not the time you spend working on a project.
This may sound simple, but it’s a nagging issue many first-time investors bump up against again and again. That’s because, if you’ve spent time working for somebody else, you’re probably conditioned to think about (and organize) your work time according to an eight-hour day, often more, in which you’re paid based on how long you sit in a chair, not based on what you physically produce.
Whether a deal takes five days or five months, you are not paid for the amount of blood, sweat and real estate investing tears you expend on a project. Luckily, once you master this key entrepreneurial mindset, you’ll find yourself working with much more focus and clarity, not to mention a heck of a lot more speed.
2. Plans are only worth the action they create
Business plans are great, a fantastic tool for laying the course for your future business, and ensuring that you stay on track through the twisted maze that is your first-time real estate investor career.
But business plans, or any other kind of plan, are only valuable to the extent that they inspire you to take action. Or, as Barbara Corcoran, co-star of TV’s Shark Tank, recently shared with Entrepreneur magazine, “I hate entrepreneurs with beautiful business plans.”
Instead of spending hours perfecting your business plan, and filling it with pretty charts and graphs that would make a Staples employee delighted, get as much of your real estate investing plan established as you can, and then get started.
Don’t worry, many elements of your business plan will change along the way. As Corcoran advises, it’s always better to get started today, and “invent as you go.”
3. Treat your network like an asset (which it is)
You’ve probably had people advising you about the “power” of networking since high school (maybe even before then). And while the term “networking” can conjure images of stuffy hotel conference rooms filled with eager professionals handing out business cards at lightning-speed, there’s no question networking is a vital ingredient to the success of any first-time real estate investor.
But what many investors — and entrepreneurs in general — don’t realize is that networking isn’t some contest where the goal is to amass more “connections” than anybody else. Instead, your “network” is an ever-changing, organic element to your business that must be cultivated and appreciated, in order for it to bear fruit. “Cultivate” and “appreciate” — not “badger” and “use.”
Or as Jason Nazar, co-founder and CEO of Docstoc.com, puts it in a Q&A with the My Treat Blog: “Networking is the lifeblood of a professional. It’s the process of expanding and adding value to a network of contacts you intend to help and ask for help.”
As a first-time real estate investor, your network may be not quite as expansive as you like, and that’s okay. Just keep cultivating it — looking for ways you can help others — and before you know it you’ll have a truly, valuable asset that can not only help you complete your first deal, but also lay the foundation for the rest of your career.
4. Visualize success (as if it’s already happened)
Much research has been done about the power of visualization. As the New York Times reported, athletes have been using positive visualization, or “mental rehearsal,” since the 1960s — to both imagine positive athletic outcomes, and prepare for any unexpected situations that may arise.
First-time real estate investors can use those same visualization strategies to create a “goal picture” of them buying a first investment property already having taken place. Jack Canfield, author of Chicken Soup for the Soul, recommends spending a few minutes a day imagining a “movie of you doing perfectly whatever it is that you do do better.”
One way to start the visualization toward success is to come up with a list of real estate business names that convey the image and impression you want would-be clients to receive.
You could even go a step further, as Canfield did, and create physical representations of that big successful deal, just around the corner. As Canfield relates in his blog, before his Chicken Soup for the Soul book was finished, he and his co-writer scanned a copy of the New York Times bestseller list and “using the same font as the newspaper, typed Chicken Soup for the Soul into the number one position.” A year later the impossible become possible.
Putting It All Together
This isn’t to say that a successful beginner real estate investor mindset is the only thing you need to reach your investing goals. You have to actually put your beliefs into action, in the form of consistent real estate investing effort, and eventually master the practical abilities of buying and selling a home.
But whether you’re trying to secure your first wholesaling deal, or just learning the difference between a rental property and a rehab deal, it’s important to remember, as the mind goes, so follows the body. And with a focused, positive real estate business mindset, you can maximize your potential as a first-time real estate investor, and possibly reach investing heights you never thought possible.