Characteristics of Successful Real Estate Investors
Many have become incredibly successful, while there are some who have experienced dramatic failures. During this time, I've noticed that there are certain characteristics that come with real estate investing success. In fact today, it's even possible to predict with a fair degree of accuracy whether a particular individual will make it as successful investor. All I have to do is find out a little about their attitudes and actions, and I'll know what their chances of becoming successful are.
Before going into the specifics, it's important to first define what I mean by a "successful investor". A successful investor is not the person who owns the most number of properties, or does the most deals, or who has the most zeros in his net worth. A successful real estate investor works to become as financially secure as it is necessary for his peace of mind, and he must be both happy and comfortable with his investment activities.
A successful investor also knows exactly what he wants, not just financially but also on a personal level in terms of what he wants to contribute back to his loved ones and society. He uses real estate investing as a way to obtain things that matter to him. To him, real estate is a means to an end, not an end unto itself.
Let me share a true case of this dynamic young couple who attended my seminar in 2002. After completing the program, they have accumulated 14 properties over the last 5 years and their properties today are worth RM6.5 million giving a positive cash flow of over RM10,000 per month. The primary factor that drives them is not the number of properties they own, or their Net Worth, or their Bank Balance. Rather, what motivates them to make all the necessary sacrifices as well as take the risks to be where they are today is that after years of practicing delayed gratification, they want one day to be able to live their dream lifestyle and give the best education to their children. They have even purchased new cars as well as sponsored overseas trips for their parents to show their gratitude.
While there is no single predictor of success, here are some things that I've found that all successful investor have in common:
Successful Investors are Life Long Learners
Successful people are continuously upgrading their knowledge and skills to keep abreast. They would be investing on self-help books, motivational audio programs and seminars. After all, the best investment you can ever make is in the real estate between your two ears!
Successful Investors Network
Real estate investing is one of those professions that have no accepted curriculum of formal training. There are no formal courses on important topics such as how to evict a non-paying tenant. Your success as a real estate entrepreneur relies on your ability to get reliable information and advice when you need it. The best way to get whatever information you require is to network with other property investors as well as professionals such as bankers, lawyers, valuers, property agents and others in the industry.
Successful Investors have Mentors
It's imperative for novices to find a knowledgeable mentor who can teach you the ropes as well as challenge you to reach for greater heights. Don't abuse your mentor by constantly asking for advice or information that you easily get from the internet or other sources. Also don't forget to thank your mentor by taking him to lunch and letting him in on good leads when you find them.
Successful Investors have Exciting Plans and they Work at it Daily
There is a popular saying "People Don't Plan to Fail … They Just Fail to Plan". You need to have all your plans written down, along with the exact dates for achieving them and a detailed Action List needed to accomplish them. Keep all your goals realistic, challenging and exciting, the sort that makes you want to wake up early, go out and get things done.
Say your goal is to acquire 2 properties over the next 3 years. Does that get you excited? If No, then why bother setting such goals in the first place as the chances of achieving them are minimal. What if you were to revise it to: Acquiring 5 Properties over the next 3 years, all at 20% below market with positive cash flow! That sounds much more exciting and will prompt you to set the time aside, find the resources and more importantly put in the effort to acquire them.
It's also important to measure every little step or things that you need to do on a daily basis. What gets measured will ultimately get done. If you don't keep track of your list of activities, you will not be able to keep track of your progress.
Successful Investors Cut Their Losses
Successful investors review their portfolios at least once a year, and aggressively get rid of their loss-making properties before they can damage the profits from their winners. It would be a major mistake to hang on to a property year after year despite the fact that it loses money, doesn't fit with your goals, is a huge management hassle or is in a neighborhood that has turned from good to bad.
Successful Investors have a Code of Ethics
The real estate business is about people. Without sellers, tenants, contractors, agents, and so on, you would have no real estate business. And since your real estate investing activities affect so many other people, it's important to decide how you are going to treat the people you come into contact with. If you think that your past reputation as a buyer or landlord doesn't affect you, think again. What goes around comes around.
Since there is no formal code of ethics, it's up to us to decide how we behave toward others. It's wrong to have a mindset of "what can I get away with?" or "what allows me to sleep at night?". Take the time to think about your activities and how they affect people that you come into contact with. Always be fair to others and work towards having win-win relationship with everyone. When you take the trouble and go the extra mile, both profit and success will follow.
Successful Investors involve their Families
Because your real estate activities generally involve spending both hard earned money and time away from your family, it's important to have the support of your spouse and family members. It's very important to sit down with everyone and explain what you're doing, and why, and that you'd really like to have their help or at least their understanding.
If you have a spouse who's reluctant to allow you to refinance your home in order to invest in the deal of a lifetime, try sending her to a seminar on property investment or get them to read up book on the subject matter. Some of your spouse's natural fears may be overcome by an understanding of what you're doing. I always believe that Two Heads moving in the Same Direction at the Same Speed is better than a lone ranger!
Successful Investors Pass On What They've Learned
Just as successful investors have mentors, successful investors will become mentors to others. By passing on their knowledge to novices, they give others at chance a financial independence, and get a wonderful sense of their own accomplishments. Now that's what I call success.
Before going into the specifics, it's important to first define what I mean by a "successful investor". A successful investor is not the person who owns the most number of properties, or does the most deals, or who has the most zeros in his net worth. A successful real estate investor works to become as financially secure as it is necessary for his peace of mind, and he must be both happy and comfortable with his investment activities.
A successful investor also knows exactly what he wants, not just financially but also on a personal level in terms of what he wants to contribute back to his loved ones and society. He uses real estate investing as a way to obtain things that matter to him. To him, real estate is a means to an end, not an end unto itself.
Let me share a true case of this dynamic young couple who attended my seminar in 2002. After completing the program, they have accumulated 14 properties over the last 5 years and their properties today are worth RM6.5 million giving a positive cash flow of over RM10,000 per month. The primary factor that drives them is not the number of properties they own, or their Net Worth, or their Bank Balance. Rather, what motivates them to make all the necessary sacrifices as well as take the risks to be where they are today is that after years of practicing delayed gratification, they want one day to be able to live their dream lifestyle and give the best education to their children. They have even purchased new cars as well as sponsored overseas trips for their parents to show their gratitude.
While there is no single predictor of success, here are some things that I've found that all successful investor have in common:
Successful Investors are Life Long Learners
Successful people are continuously upgrading their knowledge and skills to keep abreast. They would be investing on self-help books, motivational audio programs and seminars. After all, the best investment you can ever make is in the real estate between your two ears!
Successful Investors Network
Real estate investing is one of those professions that have no accepted curriculum of formal training. There are no formal courses on important topics such as how to evict a non-paying tenant. Your success as a real estate entrepreneur relies on your ability to get reliable information and advice when you need it. The best way to get whatever information you require is to network with other property investors as well as professionals such as bankers, lawyers, valuers, property agents and others in the industry.
Successful Investors have Mentors
It's imperative for novices to find a knowledgeable mentor who can teach you the ropes as well as challenge you to reach for greater heights. Don't abuse your mentor by constantly asking for advice or information that you easily get from the internet or other sources. Also don't forget to thank your mentor by taking him to lunch and letting him in on good leads when you find them.
Successful Investors have Exciting Plans and they Work at it Daily
There is a popular saying "People Don't Plan to Fail … They Just Fail to Plan". You need to have all your plans written down, along with the exact dates for achieving them and a detailed Action List needed to accomplish them. Keep all your goals realistic, challenging and exciting, the sort that makes you want to wake up early, go out and get things done.
Say your goal is to acquire 2 properties over the next 3 years. Does that get you excited? If No, then why bother setting such goals in the first place as the chances of achieving them are minimal. What if you were to revise it to: Acquiring 5 Properties over the next 3 years, all at 20% below market with positive cash flow! That sounds much more exciting and will prompt you to set the time aside, find the resources and more importantly put in the effort to acquire them.
It's also important to measure every little step or things that you need to do on a daily basis. What gets measured will ultimately get done. If you don't keep track of your list of activities, you will not be able to keep track of your progress.
Successful Investors Cut Their Losses
Successful investors review their portfolios at least once a year, and aggressively get rid of their loss-making properties before they can damage the profits from their winners. It would be a major mistake to hang on to a property year after year despite the fact that it loses money, doesn't fit with your goals, is a huge management hassle or is in a neighborhood that has turned from good to bad.
Successful Investors have a Code of Ethics
The real estate business is about people. Without sellers, tenants, contractors, agents, and so on, you would have no real estate business. And since your real estate investing activities affect so many other people, it's important to decide how you are going to treat the people you come into contact with. If you think that your past reputation as a buyer or landlord doesn't affect you, think again. What goes around comes around.
Since there is no formal code of ethics, it's up to us to decide how we behave toward others. It's wrong to have a mindset of "what can I get away with?" or "what allows me to sleep at night?". Take the time to think about your activities and how they affect people that you come into contact with. Always be fair to others and work towards having win-win relationship with everyone. When you take the trouble and go the extra mile, both profit and success will follow.
Successful Investors involve their Families
Because your real estate activities generally involve spending both hard earned money and time away from your family, it's important to have the support of your spouse and family members. It's very important to sit down with everyone and explain what you're doing, and why, and that you'd really like to have their help or at least their understanding.
If you have a spouse who's reluctant to allow you to refinance your home in order to invest in the deal of a lifetime, try sending her to a seminar on property investment or get them to read up book on the subject matter. Some of your spouse's natural fears may be overcome by an understanding of what you're doing. I always believe that Two Heads moving in the Same Direction at the Same Speed is better than a lone ranger!
Successful Investors Pass On What They've Learned
Just as successful investors have mentors, successful investors will become mentors to others. By passing on their knowledge to novices, they give others at chance a financial independence, and get a wonderful sense of their own accomplishments. Now that's what I call success.
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