We get it, investing in real estate is challenging, complex, and often overwhelming when you start trying to wrap your head around the competition. To help inspire the day, take a quick 3-minute walk with us and explore what successful real estate investors all seem to bring to the table, whether they had them from the get-go or developed these traits along the way.
#1: A Genuine Focus on Quality Networking
Real estate investing as a platform gives you the opportunity to meet and mix with influential people across the world from all walks of life. How influential? On one end of the social spectrum consider the fact around 90% of those who become millionaires get there through real estate. Afterwards, it’s the preferred asset class of the top 10% financial elite. Once you wrap your head around that and the implications, in every city you visit you know all you need to do to mingle with the most influential people is look at the real estate – residential, commercial, and industrial.
Take Seattle Washington, for example, the so-called Los Angeles of the Pacific Northwest. Who owns Columbia Center and Safeco Plaza? Who do the owners of the Doppler and 1201 Third Avenue buildings socialize with when in town? Between 2000-2016 more than 300 multifamily apartment buildings (Virtus Property Group specializes in these types of properties) were built around the downtown area, giving Seattle in 2016 the highest concentration of new apartments in the 50 largest U.S. cities…
Look at the people behind these deals and meet the upper echelons of the socioeconomic pecking order.
Point being, wherever you set the bar for ‘successful real estate investor’, what you’re really gauging is that person’s ability to make themselves known (and gain access to capital). At a certain level it’s not who you know, in real estate investing it’s about who knows you? Networking is your most powerful social tool.
#2: Dedication to Knowledge Building
Shoulder to shoulder with networking, sort of its partner if you will, is knowledge, and just like the many subtle layers of successful real estate investing there are many layers of real estate knowledge with many schools of thought.
- Getting comfortable with the art of interpersonal communication and body language.
- Mastering the lingo of real estate investment and industry at large – conversational, financial, outlooks, data and analysis, etc.
- Short, medium, and long-term trends in consumer habits, demographic shifts, basic economic factors, mortgage rates, prices for upgrades and services, and so on.
- Staying abreast of the legal aspects of real estate investment on local, state, and federal levels – including tax-related issues.
There’s so much to know! For the most successful real estate investors it’s literally like learning a new language. First they get the fundamentals down to entertain basic conversations. Then through exposure and studying the language on a daily basis, using it, employing it, every day, they become increasingly fluent. With computers there’s no excuse. Whenever you’re wasting time you could be studying the market and taking steps to get further your business. Speaking of which…
#3: Performing as a Legitimate Business
Is your real estate investment operation a hobby, something you’re entertaining, or a legitimate business? If you’re looking to replicate the traits of the most successful, then the answer should be a professional platform with solid financials and specific short, medium, and long-term goals; well organized and efficient. You know, the infamous well-oiled machine! Not just something you’re looking into or giving a whirl to generate a little extra gas money.
#4: Putting Numbers & Analysis on a Pedestal
Once you dig down into the knowledge bank of real estate investors, you reach this area that’s almost entirely composed of relatively simple mathematical formulas – the data sets of the deal! For real estate these numbers revolve around taxes, costs, expenses, incomes and equity, interest rates and property values, et al. In the beginning most folks start off on their own, but the dues paid in research, analysis, and putting money on the line weathers their skin quickly. Successful real estate investors know these numbers, data sets, and formulas inside and out. They shine on a pedestal, because if the numbers don’t add up, there’s no deal.
#5: Maintaining an Ethical Code of Conduct
Outside the hard confines of cash, reputation matters. In real estate reputation is a yardstick of success (see #1), especially when investments are on the table. Who knows this person? How many successful deals have they been a part of and can we trust them? What does their inner circle of fellow investors and partnerships look like? Seek to understand the ethics involves in real estate investment, along with behaviors and actions used to build credibility and a genuinely positive image!
#6: Partnerships with Professionals
Networking aside, there are such things as professionals in the field who come with many titles, but there are a few you’ll find indispensable:
- Real estate tax professionals and accountants.
- Real estate lawyers.
- Realtors and brokers.
- Investment firms like Virtus Property Group, or resources where you can browse potential deals. Deal streams.
#7: An Eye for Spotting Properties
For those getting started, without an interpersonal doorway into the industry, otherwise known as so-and-so who introduces you to a deal, what’s the first step? Where do people go to find outstanding deals outside basic internet searches?
There are some trading platforms where deals can be found, but when you’re talking about highly successful real estate investment you need to either have an ‘in’ or get involved with a firm like Virtus Property Group who go through a select number of deals throughout the year for a much smaller pot of investors. The focus is 15+ unit multi-family apartment buildings.
Life is a balance of chance and destiny, all wrapped up in chaos theory. To the degree you set your mind to task on becoming YOUR definition of a successful real estate investor, is what determines how fast you’ll get there – networking, knowledge building, professional conduct, solid industry partnerships, finding access to great deals, an eye for spotting those well-suited to you, and a deep respect for data.