Real Estate Investing Basics

4 Areas Newbies NEED to Master For Real Estate Investing Success

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Flipping Houses, Business Management, Personal Development, Mortgages & Creative Financing, Real Estate News & Commentary
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When I first got the idea for this post, I thought it would be about technical items—items like a contract or lease, a marketing letter or property analysis spreadsheet. The more I thought about and outlined the article, the more it became apparent that the things newbies (and more seasoned investors) must master are a bit more complex than simple spreadsheets and contracts. In fact, what follows are items that perhaps we really never quite master, but instead that we keep learning about and trying to improve upon as we grow and become more experienced.

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So what do investors need to work on mastering?

4 Areas Newbies NEED to Master For Real Estate Investing Success

Your Market

Markets are cold and heartless. They do not care if you do not understand their dynamics. They do not care if don’t look before you leap, and misjudging a market can be the quickest way to crash and burn. Sounds horrible, but it has to be that way. The market quickly clears out those who make mistakes. On the other hand, the market can provide you with all you ever wanted and more. It comes down to knowing and understanding the market you plan to work in.

So where are you going to work? Can you define it? Who is buying there? Who is selling there? What are the prices it will bear? To be successful you need to master the answers to these questions or at least be able to figure out the answers very quickly. Otherwise, how can you spot potential profit-making opportunities? Mastering all of this takes time and learning. In fact, the learning never stops. Markets change all the time.   This means you have to change, adapt, and relearn things as well. Always work to master you market. If you can, you will be very, very successful.

Related: The Five Success Principles of Rental Property Investing

Deal Analysis

Deal analysis is one of the keys to success in the real estate investing world. You simply have to run the numbers on any potential deal. However, newbies also have to understand that some of those numbers are just a "best guess" for lack of better words. They are numbers based on past experiences. And as we know, past performance is no guarantee of future returns. But sometimes a guess is all you have. You cannot expect every number to be perfect, and you cannot expect to find the perfect number every time. If you do, you will end up paralyzed, always searching for more data before you make your first move.

Your Fear

This is a big one. Becoming a real estate investor means overcoming fear—a lot of fear. And there are quite a lot of things to be fearful of. There are lots of dollars that can be lost. There are the unknowns and leaps of faith you have to make. There are angry sellers who have to be negotiated with. There are contractors who have to be hired, managed, and paid. All of this and more is often very new to the first timer. That little voice in your head begins to raise doubts: "What if I get yelled at," "What if I make a mistake," "I can't make such a low offer—they will never accept such a thing," "Contractors are all crooks; I can't manage them." And while these all may have some validity, you have to master your fear and try.

Remember that fear is simply a reaction to the unknown. You have never made an offer, never done a rehab, never screened tenants, and never done whatever. But often the best way to get over the fear is by doing. We have all had (still have) these fears, and you will make mistakes, but I can tell you this from experience, the fear goes away and it gets easier every time. Eventually you will be able to look back and laugh at what seemed to be such big and looming fears.

Yourself

Newbies (and seasoned investors), the last thing you have to master is yourselves. As demonstrated by the discussion points above, you will be entering uncharted and ever-changing waters. This voyage can be really scary, but if you do not go, you will never achieve your goals or find success. You will never realize all of the wonderful things real estate investing can do for you.

Related: 3 “Secret” Steps to Ultimate Real Estate Investing Success

Remember, though, that it will not be easy. Do not get sold on a dream. It takes a lot of work and effort before you can successfully do this job sitting on a beach sipping drinks with umbrellas in them. You will need to master yourself. What do I mean exactly? You will need to master your time, your emotions, your money and spending habits, your personality. You may actually have to transform yourself quite a bit from the person you are today to be a successful investor/entrepreneur. It will take time, but it can be done.

I know this sort of sounds like a psychology paper, but the truth of the matter is that it kind of is. Being a successful real estate investor starts in your head. Yes, you have to learn about your market and how to analyze a deal, but you may also have to overcome psychological and personal barriers as well. We have all had to do it—are still working it, and you can too.

Have you mastered these four areas? How did you do it? What did you have to change? 

Please share with your comments.

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in ...
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    Oiluj Lopez Investor from Middlesex, NJ
    Replied about 5 years ago
    Great Post! Especially about mastering yourself. I didn’t realize how difficult it would be to change my mentality and thoughts! It’s a work in progress and a very important part of my success.
    Kevin Perk Rental Property Investor from Memphis, TN
    Replied about 5 years ago
    Oiluj, It is also a enlightening process. You really learn a lot about yourself but ultimately I think you become a much better person. And yep, I am right there with with you on that work in progress. Thanks for reading and commenting, Kevin
    Bolawa Fadoju Rental Property Investor from Toronto, Ontario
    Replied about 5 years ago
    Kevin _ As always speaking to my inner RE entrepreneur soul. Great article!!!
    Kevin Perk Rental Property Investor from Memphis, TN
    Replied about 5 years ago
    Thanks Bolawa!
    Synette Belfon-Valentine Instructional Designer from White Plains, Maryland
    Replied about 5 years ago
    This is such a great post. I’m glad I took the time to read because FEAR and the fear of failing has been my biggest hurdle. As my mom says, sometimes you just have to get out there. It’s also important to know that just like anything else, I’ve got to put the work in. Thanks!
    Kevin Perk Rental Property Investor from Memphis, TN
    Replied about 5 years ago
    Synette, Fear is conquered by doing! Do your best to try and take that first step! Thanks for reading and for the kind words, Kevin
    Karl Kyler Investor from La Jolla, California
    Replied about 5 years ago
    FEAR makes such a huge difference. People always ask me, “If it is easy to make such a good return on a property then why don’t more people do it?” My response is always, “Because you are too scared to.” Great blog/article! Thanks!
    Kevin Perk Rental Property Investor from Memphis, TN
    Replied about 5 years ago
    Karl, Nice response. I’ll have to remember that one. Thanks for reading and for your kind words, Kevin
    Dave
    Replied about 5 years ago
    I use the Rich Dad Cadhflow simulator (game). It will work wonders Cheers
    Gianni Laverde Investor from Corona, NY
    Replied about 5 years ago
    Great article Kevin. Definitely mastering ourselves is the most difficult task. Changing habits, conquering fear, setting the right mindset and stopping analysis paralysis are the biggest blocks to one’s success. Thanks Gianni
    Matt Mortensen Real Estate Agent from Las Vegas, Nevada
    Replied about 5 years ago
    You can’t “win” the game unless you put yourself in the game. Meaning, after researching and doing all the initial work you need to follow through! Put offers in until you get one accepted! Love the attitude that new investors need to conquer fear because it is a very real hurdle! Awesome post.
    Janos Koos from Hilton Head Island, South Carolina
    Replied about 5 years ago
    There are a lot of useful thoughts in this article. Thanks Kevin!
    Jonna Weber Real Estate Agent from Boise, ID
    Replied about 5 years ago
    I am sharing this post – very succinct! Thank you.
    Luisito Espanola Real Estate Salesman from Las Vegas, Nevada
    Replied almost 5 years ago
    Great article. I want to know where to get information about my market. I live in Las Vegas, Nevada and I plan to work here. Thank you for you time. I appreciate people like you who are willing to help others.
    Davina Jackson
    Replied 11 months ago
    Great article. Thanks for the insight and honesty.