5 Things To Remember When You First Start Investing
By Paul Esajian on April 30, 2016
Every veteran real estate investor starts out looking to close their first deal. Many of them had the same fears and aspirations that you may be experiencing. What got them through their first few months was focusing on what is really important. It is easy to get pulled in a dozen different directions as you are searching for your first deal. Instead of listening to the opinions of everyone around you focus on the most important items for your business. When these items become second nature you will begin having the success you are looking for. Here are five critical items to remember as you are just starting out.
- Problem Solver. The most important quality of anyone in business is the ability to solve problems. This is especially important in the real estate world. As a real estate investor there will be problems thrown at you all the time. Instead of wondering why this is happening or becoming frustrated you need to embrace it. The best investors are often the best problem solvers. If you watch one of the various real estate shows on TV you can see just how important problem solving is. Regardless of how you invest there are potential problems every step of the way. Not only do you need to solve them but you need to do it in the right way. The people around you remember how you act in pressure situations. If you throw everyone under the bus you can bet they will never work with you again. Conversely if you step up when issues present themselves you will gain the respect of everyone around you. Even though you may consider yourself a real estate investor you are really a glorified problem solver.
- Focus On Profits. In the world of real estate less is often more. You are not judged on the quantity of the deals you close but rather the quality. This is often lost on new investors. There is a tendency to pursue every potential deal that comes their way. Instead of working on only the great deals they end up pursuing the average ones too. What ends up happening is they spend months on a property only to be disappointed with the bottom line. To cure this you need to look for better deals. It is ok to only close a handful of deals that are profitable. Not only does this keep you motivated but it greatly impacts your bottom line. This is the only true scoreboard in the real estate world. Don’t focus on deals, focus on profits.
- Pick One Area. There are literally dozens of different ways to invest in real estate. Between the type of property, location, condition and deal structure there are numerous different combinations. Instead of trying to master every niche you are presented with pick a handful that are you are the most comfortable with. There is an investment type and strategy for almost every personality. By investing to your personality not only will you be more successful but you will enjoy the business more. Start by figuring out the types of deals and properties you want to pursue. Are you interested in condos or commercial buildings? Do you want to work with distressed homeowners? Is there a location that you want to focus on? What makes real estate investing so great is that you can do it any way you like. You don’t need to follow the way everyone else is doing it. If you are looking for where to get started pick a niche that you enjoy and go from there.
- Run A Business. Investing in real estate can be done for 30 minutes or 30 hours a week. The time you spend isn’t as important as the mindset you have. Regardless of how many deals you close you need to remember that you are running a business. This calls you to stay on top of any numbers, systems and procedures that pertain to your business. Without this mindset you will work twice as hard for a fraction of the profits. Any success that you may have will be very short lived. You don’t have to be a wiz with numbers to run a business. You just need to have systems in place that will help interpret what the numbers mean. You also need to have systems that help with your business structure so you can build on any success you have. Real estate investing can be done on a part time basis but you shouldn’t treat it like a hobby.
- Real Estate Is A Contact Sport. Even though investing in real estate is typically done by individuals it takes a team to be successful. As you are just starting out you need to develop as many new contacts as possible. Attend every networking meeting in your area. Join the local real estate investment club. Reach out to real estate agents, attorneys, mortgage brokers and contractors. You never know who you meet that will change your business. The more people you make contact with the better chance you can generate leads. There are times when you need to step out of your comfort zone and put yourself in places or situations that are uncomfortable. This will be uncomfortable the first couple of times you do it but it gets easier. Constantly focus on develop contacts and meeting new people.
As you and your business develop you can tinker with what works and what doesn’t. Until then focus on these five items to help your business grow.