Take a few minutes to think about the successful people around you, not only financially, but also those who embody personal success. Consider the characteristics each of them possess and how these characteristics have fueled their achievements in their given field. Over the past several years I have come in contact with quite a few real estate investors, both directly and indirectly, and have recognized many I consider to be very successful. These people have not only started successful real estate businesses, they also seem to have mastered balance in their life, a very difficult goal to achieve. I have identified 8 key traits that these investors display, (not surprisingly, this same list can be applied to the leaders in any field):
The 8 Traits that Successful Real Estate Investors Embody
1) Passion for investing: The time and personal equity that is required to become a successful investor is overwhelming for many people, which is why most people who plan on becoming real estate investors fail. Passion fuels drive and drive fuels action; without action the chance of becoming successful is zilch. Passion provides the boost needed for difficult days and enthusiasm on routine days. In short, without passion, real estate investing is just another job.
2) Discipline in decision-making: I have yet to meet someone I would consider both undisciplined and successful, and doubt I ever will. While discipline may be a difficult trait to define, I find it is often fairly easy to pick out, as disciplined people plan for the future, work diligently in the present, and learn from the past.
3) Understanding core principles: Failure is almost certain if you do not understand the foundational principles of business, real estate, and the specific niche you are engaging in. Long term success requires not only an understanding of buying and selling real estate, or how to be a landlord, but also basic economic principles. Understanding market fluctuations, economic cycles, monetary policy and other facets of economics will ensure you can react intelligently when changes do occur. Learning the basics is not always fun or exciting, but it is critical in achieving long-term success.
4) Integrity in business dealings: Real estate is notorious for attracting people looking for a quick buck at all costs, but if you look at successful investors, their success spans years and is attained through incredibly hard work. While it may seem easier to look for a short cut (and rip someone off in the process), a long real estate career must be built on a solid reputation.
5) Flexibility: Murphy’s Law is alive and well in real estate, and to survive inevitable surprises, market fluctuations and bad deals, you must be flexible enough to adapt your plan as you go. Planning is absolutely critical, but equally so is the ability to quickly decide when it is necessary to deviate from the plan. Successful real estate investors know when they need to re-evaluate their current blueprint and make adjustments to preserve the long-term success of their investments and business.
6) Money management skills: Most small businesses fail due to poor money management. Forecasting, budgeting, and financial planning is becoming a lost art among small business owners, and it can be lethal to your business. This is why understanding the basics of accounting, tax law, cash flow management, debt management, and other financial principles is so important, even if you have a great accountant and book-keeper.
7) A Team of Successful People: You can only take your business so far, and at some point you will be forced to rely on other people. Real estate is a people business and every real estate transaction requires a team of people to close. Once a transaction is complete, even more people are involved so it is important to form and maintain relationships with lenders, attorneys, contractors, agents, accountants and other people who can contribute to the growth of your business.
8) Superior communication skills: You have probably heard it a million times but that is because it is true, being able to effectively communicate with other is vital. How else will you be able to negotiate prices, interview contractors, screen potential tenants, partner with others, and so many other daily tasks? Communication goes beyond face to face discussions too, email and text messaging are ever-growing in the life of most business people, and the occasional written note will never go away, so make sure you hone your writing skills as well as your verbal skills.
All investors can say they are involved in real estate, but very few can say they are among the best. Find those whom you consider to be the best and study their habits and practices. Try to understand where they have been and how their skills helped prop them up during difficult times and propelled them during good times. Figure out which areas you have mastered and which you can improve upon; self-realization will lead to positive changes and others will begin looking to learn from you.
Image courtesy of FreeDigitalPhotos.net8 Traits of Successful Real Estate Investors by James W. Vermillion III