949-392-1999
SHOW NOTES FOR EPISODE 466: 17 BEST HABITS OF HIGHLY SUCCESSFUL REAL ESTATE INVESTORS
There are certain attributes and habits successful real estate investors share that are an integral part of their success. In this episode, Bill shares 17 of those best habits and discusses how you can incorporate these habits into your everyday real estate investing activities for success now and in the future.
TIP OF THE DAY
Join Us!
We are having our first Old Dawg Nation REI World Summit!
Who: Anyone who listens to the Old Dawg’s REI Network Podcast
What: To connect with fellow old dawgs and a maybe even some young pups – to share success stories, struggles, ask questions or just hang out
Where: On a Zoom call
When: Wednesday Night, November 18, 2020 at 6:00pm PST
Why: Because it will be fun!
How: Click here to sign-up for the zoom call and we will email you the link prior to the event
See you there!!!
17 Best Habits of Highly Successful Real Estate Investors
Introduction
As I have looked at various properties in many different states, I get especially excited about buildings that are built of brick. I don’t know what it is but I know, when I see a building made out of brick I know it is very solid and that it usually has a very strong foundation. You see, the foundation has to be solid and well developed for the bricks to align properly. With wood-framed buildings, they can be strong too but you don’t know if there are underlying problems until you dig deep. You have the possibility of termites, wood rot and other issues that could seriously impact the fundamental structure of that building.
In the same way, with real estate investing as a whole, there are certain foundational principles that, when properly applied early on and throughout your investing activities, will significantly impact the success of your business.
I have put together a list of 17 attributes or habits that I see utilized by many successful real estate investors I have either met or interviewed that I think will greatly help you in your future real estate activities and business.
A number of these things areas I have discussed in previous episodes, so, in the interest of time, even though I will be zipping through this list, I will include the specific links and references to those previous episodes here, in the show notes, so you can explore topics in more depth.
OK, so, let’s begin…
1. Know Your “Why”
- Why are you investing?
- It could be as simple as:
- Something to do to keep your mind active
- For additional cash?
- If so, how much?
- What will you spend the cash on?
- To help out your kids and or grand kids
- Provide my daughters/granddaughters with the wedding of her dreams
- To travel more
- For security
- To know I can deal with emergencies
- Get the best medical care, etc.
- Leave a legacy to my children and children’s children
- Be a philanthropist
- Change the world
Check out this podcasts to find out more: 122: The Importance of Knowing Your Why
2. Treat your Real Estate Investing like a Business
- It is important that you treat your real estate activities as a business in order to establish and achieve short- and long-term goals.
- Write a basic plan that will allow you to not only identify objectives, but also determine a viable course of action toward attaining your goal. A simple business plan will also allow you to see the big picture, which helps maintain focus on the goals rather than on any minor setback. Real estate investing can be complicated and demanding, and a solid plan can keep investors organized and on task.
- Keep in mind, just because you look at it as a business does not mean you have to have goals to become a real estate mogul. You goal could be as simple as just buying a 4-plex and call it quits. Manage it well. Pay your bills on time. Treat your tenants well. And just enjoy the income.
See episode #102 “How to Set Up Your Real Estate Business for Success”
3. Have a Plan
- It doesn’t have to be some 500 page document
- But take the time to put the “How” behind your “Why”
- How do you hope to achieve your goals?
- State your mission, vision, goals and strategy
- Outline your goals and how, specifically, you will achieve your goals
- To write your plan, begin with the end in mind! And work your way backwards from there.
See episodes #010 “Setting Your Real Estate Investing Goals,” #362: Putting Together Your 2020 Strategic Real Estate Investing Plan“
4. Stay Focused
- Don’t get caught up in the “Shiny Object Syndrome.” Should I flip, wholesale, buy and hold, buy raw land, buy deeds and liens, buy single family, homes, multifamily, syndicate… and the list goes on and on.
- Pick your niche and be an expert in it. Later if you want to branch out, you can, but it’s best to stay focused – learn one thing well, before you go anywhere else.
- Focus on what you know well and do your very best to be the best at that one thing.
- Kater on, you can start to diversify your strategies but not until you’ve master one strategy first.
See episode #079 “Buy & Hold Investing and Avoiding ‘Shiny Object Syndrome’”
5. Always Keep Learning
- Read books
- Listen to podcasts
- Watch YouTube
- Attend seminars/webinars
- Talk with experts
- Network
See episode: 174: How to Get a Real Estate Investing Education for Free
6. Find a Mentor
- Define exactly what you want from a mentor. For example, I want a mentor who…
- has at least 10 years of experience in the area I want to learn
- will take time with me, listen to my questions and answer my questions thoughtfully
- not just tell me what to do
- is accessible – will take my calls and promptly return my emails
- is not afraid to correct me when I am wrong
- will challenge me
- Then go after that person
- Where would I find that person
- How can I get an introduction
- Or how can I get their attention
- Ask yourself, what do I have to offer that person that would be of value to their goals
- Offer that service, skill or expertise
- For example: web design, Excel expertise, phone calls
- If you can’t find one, you can always hire a coach. Just make sure you hire one that will see you through at least your first deal
See episodes: #069 “Finding a Good Mentor”and #075 “Finding a Sponsor for Your Deals” and #080 “Should You Pay for a Mentor”
7. Strive to be a Great Communicator
- Referrals generate a sizable portion of a real estate investor’s business, so it is critical that you communicate well with and treat others with respect. This includes business partners, associates, clients, renters and anyone with whom you have a business relationship. Effective real estate investors are good communicators who value and practice good customer service by paying attention to detail, listening well and responding to complaints and concerns, and represent their business in a positive and professional manner.
- Focus on being a master communicator
- With sellers
- Your investors
- Lenders
- Your team
- Evaluate your communication skills and abilities
- Ask yourself and others what you can do to be a better communication
- If you have a spouse or significant other, ask them how they think you communicate (if you have a couple extra hours on your hands – haha)
- Always strive to be a better communicator
See episode #105 “Mastering Selling Skills for Real Estate Investing Success”
8. Build a Strong Team
- Good Attorney – Very important!
- CPA
- Property Managers
- Mortgage Brokers
- Lenders
- Brokers/Agents
- Contractors
- Surround yourself with people that are much smarter than you
- If you’re in a regional market, the same goes there
See podcast episodes #020 “Building a Great Out-of-State Team” and #085 “Finding the Best Property Manager”and #089 “How to Get Quality Boots on the Ground”
Read: Building a Powerhouse Real Estate Investing Team
9. Delegate
- Read Tim Ferris’ book – The 4-Hour Work Week
- Where can you off-load specific tasks you do regularly!
- Direct your time and effort on the areas YOU ARE BEST AT and delegate the rest!
- Even if you can’t afford it, there are ways to delegate without costing a lot
- At some point, depending on your goals, you might want to hire a part-time assistant with the intention of growing them into full-time management – especially if you have a high goal like 500-1,000 units
See episode: 406: Investors Biggest Mistakes #3 – Not Allowing REI to Run Your Life
Read: Top 15 Ways The Real Estate Industry Uses Virtual Assistants
10. Network Regularly and Well
- Real estate has always been and will always be about relationships
- Always make a point to meet new people and strengthening relationships of old friends.
- Find people who can help you AND people whom you can help
See these podcast episodes: 392: Who Do You Know?, 332: Mastering the Art of Real Estate Investing Networking, 273: Passive Cash Flow Investing & the Art of Effective Networking, 273: The Art of Networking
See blog article: 6 Best Tactics to Grow Your Real Estate Investment Contacts
11. Always be on the Hunt for Great Deals
- Program deal-hunting activities into your day/week/month
- Multiple activities going all the time:
- Direct mail
- Scheduled calls to brokers
- Driving for dollars
- Social media
- Online research
- Look at com, realtor.com, etc.
- Write thank you notes
- Regularly send mails
- Get on broker, wholesalers and others’ email lists
- Make regular calls to other referral sources
- Call your team and network
- When you find a potential deal…
- Underwrite deals on a regular basis
- Make offers often
- Follow-up
See podcast episodes #093 “Working With Brokers and Finding the Best Off-Market Deal,” #012 “How to Find Great Deals,” #016 “What is a Great Deal” and #002 “How to Acquire 3,000 Units in 36 Months”
Read blog article: 10 Best Ways to Find Great Investment Properties
12. Become an Expert in Your Market/Markets
- Know your target city or cities
- Know the neighborhoods
- Where are the good/bad parts of town?
- What regions are transforming?
- Where are the paths of progress and what areas are in the path of progress?
- The areas with good schools
- Where are the big employers?
- What businesses are coming to town and how many jobs are they bringing?
- What is the city or chamber doing to bring in more business/jobs?
See episode #095 “How to Find Hot Emerging Markets for the Best Deals”
Read blog article: 10 Tips for Successful Real Estate Investment in Emerging Markets
13. Know Your Numbers
- There are lots of numbers to know
- For your market:
- Unemployment
- Population growth
- Average income
- Vacancies
- Typical expenses
- Cost per units
- $ per sq ft
- On your property
- Ratios
- ROI
- Cap rates
- Cash-on-cash
- Cash flow
See these episodes #036 “Analyzing Rental Properties – Part 1”and #040 “Analyzing Rental Properties – Part 2” and #042 “Analyzing Rental Properties – Part 3” and #024 “What is Cap Rate and Why is it Important”, 198: What is a Good ROI for Your Rental Property?
Read blog articles: How to Determine the Accurate Market Value of a Property and How to Determine an Apartment Building’s Value
14. Understand the Risks!
- Those choosing to invest in the stock or futures markets are inundated with myriad warnings regarding the inherent risks involved in investing. Numerous agencies, such as the Commodity Futures Trading Commission, require disclaimers to warn potential market participants about the possibility of loss of capital. While much of this is legalese, it has made it clear to people that investing in the stock or futures markets is risky–meaning one can lose a lot of money.
- Greenhorn real estate investors, however, are more likely to be saturated with advertisements claiming just the opposite: that it is easy to make money in real estate.
- Prudent real estate investors understand the risks associated with the business–not only in terms of real estate deals, but also the legal implications, as well as market fluctuations –and adjust their businesses to reduce any risks.
See podcast episode: #011 “Protecting Your Real Estate Assets” and 206: How to Reduce the Top Five Rental Property Risks
Read: Risks of Real Estate Investing and Common Risks Involved in Real Estate Investments
15. Develop Systems
- Document everything you do as if you were going to one day be a franchise
- Create a “Policy Manual” notebook
- Spell out your policies & procedures regarding:
- Tenant screening
- Evictions
- Property evaluations and purchases
- Criteria
- Look for more efficient ways to do regular tasks
- Look for ways to save time
- Allow you to delegate more
- Review/refine/move smarter/repeat
See podcast episodes: 464: What is the Best Real Estate Investing Strategy for Older Investors?, 449: Knowing Your Market Down to the Floor Boards
16. Have a Positive Outlook
- No one wants to be around someone who always grumbles and complains, blames or shames!
- You will have challenges
- You will have great days and you will have horrible days
- You will make some little mistakes and you likely will make some huge mistakes!
- Regardless, do not go down the negative rabbit hole that leads nowhere and only results in discouragement, a horrible disposition and hopelessness
- Face and embrace each challenge as an opportunity that you can learn from and become better
- Keep your eyes fixed on the prize
- Look at your end goal – not the steps and slip-ups along the way
- You will reach your goal if you are persistent, dedicated and don’t get caught up in the slime along the way
See episodes: 460: Is Real Estate Investing for You?, 027: Smiling Investor’s Positive Attitude Yields Big Profits and 445: Words of Encouragement in Troubling Times
See blog article: Experience is the Best Teacher – Learning From Mistakes in Purchasing My First Three Properties
17. Maintain High Ethical Standards
- Realtors are bound to act according to a specific code of ethics and standards of practice policy, and real estate agents are held to each state’s real estate commission rules and standards.
- Real estate investors, however, unless they are associated with membership-based organizations, are not usually required to maintain a particular degree of ethics in their business practices, as long as they operate within the boundaries of the law.
- Even though it would be easy to take advantage of this situation, most successful and real estate investors don’t because they understand that in a relationship business, untrustworthy people do not last long.
- Those who remain in the business for the long haul, usually maintain high ethical standards. Since real estate investing involves actively working with people, an investor’s reputation is likely to be far-reaching. In the case of an investor lacking in ethics, the consequences can be damaging. Effective real estate investors know it is better to conduct fair business, rather than seeing what they can get away with.
- This is key to me. Being dishonest, disreputable, anything but completely transparent is not an option for me. Because to me, I’m accountable to my wife, my family, my kids, my employees, the people I buy from, the people I sell to, the people I borrow from, the people I landlord to and ultimately, I am accountable to God.
- Always, always, always. Be above reproach. Communicate everything clearly and accurately. Disclose everything regularly and be transparent.
See episodes: 350: Leaving a Legacy and 368: Let’s Get Real About Goals
Well, there you have it – 17 tips/habits that can make you a better real estate investor! Each of these items should seriously help you, for the short and long term, to become a successful real estate investor. And, as a little bonus, I have an INFOGRAPHIX with the 17 items on this list as something you can print out and post as a reference for your daily real estate investing activities.
Get the Infographix
DISCLAIMER: Many of the above strategies take knowledge and have a higher degree of risk. You need to do your research and/or work with someone who is experienced to reduce your risk.
IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher, GooglePlay, iHeartRADIO and Spotify and Subscribe, Rate & Review our podcast. This will greatly help in sharing this podcast with others seeking to learn real estate investing as aCBRE means to achieve a successful retirement.
Check out our other podcasts at olddawgsreinetwork.com.
Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com.
Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com
