Let’s get this straight right from the start: Real estate isn’t an overnight “rags to riches” fairytale. It takes a lot of hard work, plenty of patience, and a good dose of perseverance to succeed in this line of work. It is extremely competitive, dynamic, and ever-changing. But then, real estate investment can be a fascinating journey, provided you channel your attention to the right aspects.
When people think about getting started, they think about the details like looking for a property online or checking out all kinds of databases for important data. Well, in today’s blog article, we’ll be looking into a very important aspect that most investors, especially beginners, ignore almost completely: people. Just like in any other line of work, real estate is all about the people. So despite everything the statistics and demographics tell you, focus on people before everything else. And if you’re wondering which people I’m speaking of exactly and why, well, here’s a list that covers them in detail.
The 20 Best Books for Aspiring Real Estate Investors!
Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.
The Information Experts
From the old woman shopping for a nice salad at the grocery store to the commuter on the train, every person can be a source of information on real estate. So whenever you encounter people, whether at the bus stand, grocery store, a party or an event, build up your people skills and talk to them. Tell them subtly that you’re in real estate, property management, or whatever else — and talk to them. Wear your brand proudly and talk about the neighborhood.
- In all probability, you will hear about potential deals. You get to know about houses that sold in their area and sometimes even for how much or how long they’ve been on the market.
- You may also hear about houses that are about to sell in the area and at what price.
- You might even hear about the average going prices in a particular area and what kinds of homes are in demand.
All this will give you a far better pulse of the market than any amount of paper-based research. As I’ve said before, real estate is a numbers game, and the focus has to be on staying on top of the right information at the right time. It is only people who can get you there. So, instead of reading through the demographics and paperwork data (that in all probability is older than you’d want anyway) to come up with “guesstimates,” focus on the now through people.
Your Circle of Influence
Most real estate investors tend to focus on statistics and demographics of a market before they step in. They pay more attention to employment rates in the region. That’s truly a commendable effort, but let me tell you this: The numbers aren’t more important than the people. In the excitement to master the numbers, people’s current needs are ignored. And before you know it, some other investor benefits from the deal. However, your circle of influence (the markets that you can influence) can help you with that. It grows only with people, so network with as many people as you can.
- Know your competitors and find out what their market-focus is. This is especially important when you’re starting out fresh in the market. Knowing what your competitors are doing can help you understand the market trends better.
- People who are working in the same geographical region as you can give you pointers on what markets are faster moving.
- Get to know the buyers, as this is where your income will come from. Befriend them because in all transactions, it is the relationships with people that make or break a deal. Find out what they really need from a home and try to get them something that exactly maps those requirements.
- Look for good property managers on your team. A good property manager can help you screen tenants, evicting them when the situation calls for it, and look out for legal loopholes. There will also be lower repair costs and assistance on taxes, so that you can focus on other aspects of real estate.
- Finally, get to know as many people as you can in your entire value chain, and interact with them on a regular basis. From the bottom up, every person is an important link, and when you’re friendly with them, they are happier to pass on information to you.
While lone real estate professionals were the norm a few years ago, today a growing number of buyers opt to work with real estate teams instead. Promising a higher degree of professionalism, teams tend to get work done faster without pressuring any single individual. In fact, when you look at it internally, the right team can make all the difference in a deal. Here are the advantages.
- More places, more deals: As a real estate investor’s work begins to grow, they realize it is impossible to be in many places at once. A good team looks out for each other and ensures that more deals come in.
- More strengths: In fact, a team will usually have a wide variety of strengths, and that ensures that you are good at more things than one. For example, you may be a good negotiator, while another team member may have an eye for legal loopholes, and a third person could be good at scouting the market.
- More income: While you may feel that your income would be reduced when you have a team, you should realize that that’s not entirely true. With a team, you get more work done with a wider range of strengths and fewer legal hassles. And your costs get divided, too.
- More support: People who work with others as a team can achieve much more than those who work individually. A good team will have members who look out for each other, catch each other’s mistakes, and a whole lot more.
- Training: Finally, even if a team comes together with an average set of skills, each can help the other to identify the gaps and then fill them in with the right kind of training.
Build your team in a way that promotes camaraderie rather than competition, delegate work according to the strengths, and share the burden of accountability. This in turn increases the efficiency of the organization, which in turn results in more deals being closed as compared to the traditional format. Also, ensure that your team believes in delayed gratification rather than pushing a product for a quick profit and instant joy.
The Right People for You
So, if you are an investor looking to put your money on a real estate project, then don’t fall for “the cheaper, the better” plot. Over time, I have seen many investors make that mistake. When you can start to afford it, hire an assistant to look into sorting your paperwork and organizing your work, so you don’t have to fret over the small things. Build a team as you go from here, or you can even become part of an existing one. Look for people with whom you enjoy a sense of camaraderie and whose skill-set is well-suited to your needs.
An ideal team would be one where each member complements the other in terms of strengths. For example, you may have the skill to identify good property at great locations. However, even if you have such a property at great prices, you wouldn’t be able to do much without the right paperwork. And that comes along with the property management support. So ensure that you work with good property manager teams because they can help you make or break a deal. They also reduce the legal hassles involved. Also work with people who have their nose in the market and can get you great deals. Have someone with good negotiation skills on your side.
Let me sum up by saying — If you buy the best house, in the best area, with the best capital growth predictions, but your property manager is incompetent or a cheat, you will still end up losing on that deal. In some cases, he or she will even steal or simply lose your money. Finally, it’s a good team that brings it all together. Keep the perception of people in mind, be it your customers, team, or experts you respect along the value chain. And then, a good mentor is another essential person you should have during your career since a mentor can lead you towards new strategies and give you the skills that you require in this line of work.
Teamwork makes the dream work stress-free and makes the impossible achievable. So as you get deeper into the world of real estate, focus on people more than you focus on the numbers. While in the end you may be the only person dealing with the client, the confidence of a team supporting you can work wonders in any situation, as it reduces stress and improves performance, even giving you a more relaxed schedule to work with. An incompetent team that doesn’t get along can make your life a living hell. So focus on working with a team that is motivated, energetic, and one that you can bank upon.
Investors: How do you network with others to create win-win business situations?
Let me know with a comment!