I often wonder if there is a percentage of real estate investors out there who feel that the only people who make money in real estate either have a boat load of money to invest, have perfect if not near perfect credit, or just chow down on some Lucky Charms every morning and just happen to miraculously be a the right place at the right time with the right seller, who is motivated to the highest degree.
Many new investors try to break into the market place, but find it tough to scratch the surface. Many seasoned investors gave up when the market hit hard after not making the necessary adjustments in their business to keep them on par. Now that they’re trickling back in and now that more and more people are showing an interest in real estate, I want to tell you 3 ways to make money in real estate on purpose. It’s not all about your credit, your cash, or your luck.
Purpose #1- Why are you investing in real estate in the first place?
This is an important question you need to answer when getting started in real estate or even questioning whether or not you should let it go. The quick and easy answer is that people invest in real estate because they want to make money. However, I challenge you to dig even deeper than that. What do you want to do with that money? What type of lifestyle do you want to shape for yourself? Are your goals important enough to pursue by using real estate as your vehicle to get there?
These are questions you can ask yourself in order to dig a little deeper and truly identify your own motivation for getting involved in this type of business. I actually wrote an article on this topic alone a while back. You can check it out here: Why Do You Invest In Real Estate
Purpose #2 – What is the purpose of your real estate investing strategy?
There are so many ways to invest in real estate in this day and age. As the market shifts you’ll see that some ways to invest in real estate might become more dominate than others. However, behind each strategy there is a purpose that needs to be identified upfront before you attempt to use it. You see, the purpose of your strategy should not only be to make money, but to solve a problem. In fact, solving problems and making money go hand and hand. Have you run into sellers who want to sell their house, but don’t NEED to sell their house? I’ve heard many sellers say it outright, “I don’t need to sell my home right now…I can wait”. Given the condition of the market, I beg to differ. However, if that is how they feel, then I cannot help them. I have no problem to solve. They’re not motivated. Your goal should be to help people who have a problem for you to solve today.
Think about reasons people NEED to sell their home. By the way, I’m speaking from a stance of controlling properties, rather than buying them yourself. If you buy the home yourself and you want to attract investors or renters, then you need to be able to show how your home is the solution to their problem. Some problems could be finding a profitable investment or getting into a nice home where the rental payments, security deposits, and maybe even incentives are reasonable.
Purpose #3 – What is the purpose of your daily activity?
I put this one in there because this is an area where you need to ensure that the activity you do is productive in some way. Social Networking would be a really good example of this. A lot of real estate investors and real estate agents are on social sites like Facebook and/or Twitter. However, what is the purpose? Are you actually working on connecting with other investors/agents to grow your business or are you trying to get the top score in Mafia Wars? I’m not here to say you can’t have fun in life, but you should always focus on using your time wisely in order to be productive as possible.
Ask yourself, Why am I on Facebook right now? Is it going to get me closer to my goals? Can I build genuine business relationships? Of course, I’m speaking from a standpoint of those who use Facebook for business. When it comes to lead generation… Are you generating leads for your property? Are you generating leads to get a property under contract? It’s all about separating your money making activity from your general activity. Focus on the money making activity first. I wrote an article a while back called- Are You Wasting Time With Social Networking?
In conclusion, by focusing on the importance of why you invest in real estate, why you’re really using the strategies you use, and what the intentions of your daily activity are, you’ll be closer and closer to your goals. Forcing yourself to invest in this manner will cause you to making money on purpose, whether you use your own money and credit or not! It will never be by accident!
To Your Success,
J. Lamar Ferren
“New Breed” Investor