I’ve been thinking a lot about “success” recently.
Not only about success in real estate investing, but also success and just plain happiness in general.
No doubt, there’s been a ton written about “the steps to success” in real estate investing. Reading what’s here on BiggerPockets is a tremendous way to learning so many of the skills needed to achieve success in real estate.
There’s been a lot less written about the mindset or what many might call the “the soft skills” that countless self-improvement gurus talk about but many real estate gurus tend to gloss over.
Sure, self-improvement gurus like Stephen Covey, Tony Robbins, Wayne Dyer and Dale Carnegie all teach people how to be successful. Books by Malcolm Gladwell, Richard Branson and Ivan Misner all teach important concepts on success. But how do any of those concepts actually relate to the real estate investor?
The more I thought about it the more I realized that the pillars to success in real estate investing are not altogether different from the lessons those success gurus have been teaching their students for so many years.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Pillar # 1: “Master Your Fear”
There’s no question that one of the most important obstacles to overcome when you’re first investing in real estate is overcoming, then mastering your own fears. Those fears could be fear of failure, fear of loss, fear of the unknown or for many students I’ve had the pleasure of coaching, the fear of “putting yourself out there”.
For anyone who’s just starting out in this business, most don’t realize that one of the most important things to achieving success in real estate investing is mindset. The mindset to overcome your fears and take action is so critical to achieving any level of success in real estate investing or in life. True, real estate investing is not for the faint of heart; and for those who aren’t well suited for it may want to look at other career choices.
However, if you have a deep desire to be a successful real estate investor, at some point you just have to take a stand and say: “Yes, I am going to take charge of my life and do this!”
It wasn’t until I mastered my fears and started to put myself out there; at REIA meetings, at networking events at family functions that I started to gather momentum to any level of success.
Pillar # 2: The 10,000 Hour Rule
Aside from those “get rich quick in real estate” guys we all hopefully avoid like the plague…there is no such thing as “overnight success” in real estate investing. When you start out as a brand-new real estate investor, if you think that you can make your first real estate deal and achieve unbelievable financial success on one deal, you’re deluding yourself. Yes, you might get lucky and make a few bucks, but one thing is for sure you’ll definitely get experience. Experience that will become a part of your 10,000 hours.
As Gladwell says in his book Outliers, the Beatles slaved away in the sweaty, dingy rock clubs of Hamburg, Germany night and day for nearly two years before they achieved their “overnight success” in America.
They were underpaid, their audiences didn’t appreciate them and they slept in the van that brought them to the clubs. In one instance, they slept on top of each other, stacked like cord wood in their back of their van to stave off frostbite, too poor to stay in a motel.
But by the time they reached America, they had played over 1,200 gigs together. And the rest, as they say, is history.
In real estate investing, on-the-job experience, and actually doing it day in day out is all a part of your 10,000 hours.
Pillar # 3: Relationships Are Everything
The old cliché “it’s not what you know – it’s who you know” believe it or not, is actually true in real estate investing! Many of us, myself included, love to toss out timeworn clichés when we lack the vocabulary to express ourselves clearly. These words, as dull as they may sound, are perhaps the ten most important words you could ever learn as a real estate investor.
Sir Richard Branson (a pretty successful real estate investor and sometime owner of very large billion-dollar businesses) states that the key to your success in business is one thing: RELATIONSHIPS . . . period.
Whether it’s finding just the right real estate broker to source your properties, meeting the right private money lender to fund your deals or networking to find just the right contractor to rehab the properties you buy, your relationships make the difference. And to keep those relationships working properly for you, this includes keeping your word, doing what you say, following up with people and being honest and ethical.
Pillar # 4: Giver’s Gain
Picture a cold winter’s night in New England . . . the house is cold, the heat hasn’t kicked in yet and you decide to light a fire in the fireplace. So you step up to your fireplace and say to it: “give me heat!”
It doesn’t quite work that way, does it?
You need to give the fireplace the wood, the kindling, the rolled up newspaper and strike the match. The point is that the fireplace doesn’t give heat to you without you giving to it first.
It’s the same with real estate investing. To be a huge success in the real estate business, always think what you can give to others before you can take anything back in return. This is one of the pivotal concepts of Ivan Misner, the founder of Business Networking International. BNI, which has thousands of local chapters throughout the United States and Canada, base their entire success on this principle. This makes BNI one of the best places to network your real estate investment business and I highly recommend you getting involved.
But the key is you need to give, to get. That’s giver’s gain.
Pillar #5: Focus On Your Strengths
I got a newsflash for you . . . there’s only one you. In my case, (and my wife may agree) thank God!
As Brandon Turner reported here last week, there are over 100 ways to make money in real estate. That is a staggering amount of choices. And I think he’ll agree that there’s probably another hundred that he didn’t put on that list!
Do you know which ones are for you?
If you’re new to real estate investing, that may be a tough question to answer.
You might not know until you actually get started investing in real estate. But once you do, dig deep to find out what kind of real estate investing is the one that’s best suited for your personality, your finances and for your personal situation.
Look in the mirror and figure out as quickly as you can what your top core competencies are and then match those to a certain kind of real estate investing. For me, I like fast moving, constantly changing, quick profit real estate investing. Buy-and-hold real estate investing doesn’t suit my personality. But house flipping does, which is why I do it full-time.
Although there are many “shiny objects” that constantly distract me away from my core competency of house flipping, I do my very best to focus on what I’m good at and block out the other distractions.
Pillar #6: Never Stop Learning
One of the most common traits of all successful people, let alone real estate investors is the thirst for continued learning. From the “multimillionaire next door” private equity investors who helps fund some of my house flips to the most successful real estate investors of national and international notoriety that I’ve had the pleasure to work with, they all have one particular trait in common: they constantly learn new skills and never stop learning.
Whether it’s waking up at five in the morning to devour town tax documents or traveling 2 to 3 weeks a year to attend real estate investing seminars, the most successful real estate investors (and the ones who make millions of dollars a year in earnings) are the ones who are always learning.
You don’t necessarily have to wake up at five AM to study town records, but I would recommend doing your own education, and one of the best way to do this is by finding a mentor. As I stated in my previous post, some of the best mentors and partners can be found just outside your front door.
In fact, some of the most successful real estate investors I know don’t even know that their car radio works because they are constantly listening to self-improvement and real estate investing CDs, podcasts and audio programs to further their knowledge, while at the same time expanding their bank accounts.
Thanks for reading! This is by no means an all-inclusive list, so please leave a comment below to tell me what you think are some additional pillars of real estate investing? I’d love to hear what you think!
Photo: Rachel Sarai