I got a phone call yesterday from one of my clients. This client doesn’t make millions, yet she has studied her market, picks her deals carefully, has learned to manage the entire process with precision, and her profits continually reinforce her approach.
In short, she is successful!
So, why would she be calling with essentially this question; one that many real estate investors, including you, might be asking right now, “with everything that is happening in our nations’ politics, our economy and the housing market, is it even possible to expect continued success as a real estate investor?”
I fully appreciate where she is coming from. This business is not getting any easier . . . just take a look at this CBS Market Watch article: Housing Market Predictions for 2010: How Good Will It Get?
Well if you hang around BiggerPockets, you know that it is possible to be successful as a real estate investor. But, what about those who are aren’t so lucky or only “tune” into the mass media for their information? What must they be thinking regarding the possibility of success for real estate investors?
Let’s pick this apart just a bit to see what real estate investors can and should be doing to remain successful, in spite of all of the challenges present today.
First, and keep this in mind . . . on Maslow’s hierarchy of needs scale, shelter is one of the basics. And if you haven’t figured it out yet, that is exactly what real estate investors, for the most part, provide: shelter. We supply one of the basic necessities of life! The demand for our product is not going to disappear!
Second, if you pay too close attention to everything that is written by all of the “experts,” yes even me; you will find that no one really knows for sure what is going to happen regarding our economy. In fact, on any given day you can find two diametrically opposed opinions regarding almost any topic, although the conclusions of these opinions seem to be trending more and more negative. As a real estate investor it is critical that you stay informed; just keep an open mind regarding what you are taking in and how it may be affecting your outlook. Because…
Third, changes brought about by Government policies (think the impact of the Homebuyers Tax Credit), overall economy (think unemployment close to 10% or home ownership slowly trending downward), or your local housing market (steadily declining home values) all demonstrate the following: things never stay the same. In fact, the only constant is that things are going to change, and in our world today the pace of that change is rapidly increasing. And that is where the opportunities are!
Fourth, just like the dinosaurs, if you as an investor do not adapt to the changing environment around you, you will not only be unsuccessful, but you will very quickly become extinct; and you’ll only be replaced by an other investor who was able to adapt and make a killing in the process! If you doubt this, just look at the slaughter that occurred when the housing market dramatically shifted in 2006. It was messy, yet many, many investors have been able to swoop in and acquire deals that have reaped substantial profits.
So, lets recap…
- Real estate investors supply a basic need to our customers, one that will always remain in demand!
- Be careful who you allow to influence your thinking. Develop your own opinions!
- Change is constant, and in the real estate investing world you can expect major changes every 24 – 36 months.
- If you don’t adapt, you will not be able to sustain your success and you will end up leaving or otherwise somehow be pushed out of this business.
In closing, I think it is important for you to understand that your success as a real estate investor depends on many factors, and while it is important to understand what is happening in the environment around you, it is more important to your success how you respond to that environment.
Oh, and one more thing. Lets hear about your successes. They only help to reinforce to others that this business is doable, and everyone loves to live vicariously through others’ success!