5 Secrets of Successful Real Estate Investors
You’ve been peddled a massive lie your entire life. And if you don’t wake up, you’ll continue to believe it for the rest of your years. The lie goes a little something like this:
- Spend your teenage years building the perfect resume so that you can parlay your high school diploma into acceptance at a major college or university.
- Spend four years and $100,000-plus at a college to obtain a degree.
- Use said degree to get an entry-level position in your industry of choice, making somewhere in the neighborhood of $30,000 to $40,000.
- Make the minimum payments on your student loan debt and pay it off in 25 years.
- Slowly climb the ladder and enjoy small bumps in salary (and maybe the occasional Christmas bonus).
- Acquire a house, a couple of cars, and hundreds of thousands of dollars in additional debt.
- Invest in your 401(k).
- Retire by age 65.
- Enjoy the last 15 years of your life pinching pennies and hoping you saved enough for retirement.
That’s the story that we’re told from the time we’re young kids until we retire. And it’s the story that millions of Americans live.
If you’re fine doing that, then more power to you. But if you want to build wealth, enjoy freedom, and architect a meaningful life, you need a better plan.
Ask 100 successful people how they built their wealth and at least 75 of them will make some mention of real estate. So why not follow their game plan instead?
5 Secrest for Real Estate Investing Success
No two real estate investors use the same exact approach. But if you poll them and study their decision-making, you’ll discover that they often implement very similar systems and processes.
1. Set Goals
Stop saying things like, “I want to be successful” or “I want to invest in real estate.” Get specific with your goals. Instead say, “I want to have a $3 million investment portfolio by age 37, consisting of at least six properties in the Greater Chicago area.” Do you see how much more powerful that sort of goal is? It catalyzes your thinking and forces you to act with precision.
2. Find a Mentor
Real estate is one of those fields where it pays to learn from someone who is in the business. Find a mentor and hang on their every word. (Better yet, find a couple of mentors so that you can benefit from different schools of thought.)
3. Understand/Use Leverage
If you think you actually need cash to invest in real estate, think again. While it’s helpful to have some, real estate investing is all about leverage.
“Leverage in real estate is using borrowed money to buy a property,” commercial real estate broker Kevin Vandenboss writes. “When leveraging a property, you borrow funds from a lender to be able to purchase an investment property instead of having to cover the entire purchase price yourself. Being able to leverage your investment is one of the reasons real estate investing is so attractive.”
During times like these, when interest rates are as close to zero as they’ve ever been, leverage is everything. If you can master the concept of using leverage to invest in properties, you’ll have no trouble scaling your business.
4. Maximize Your Time
There are only 24 hours in a day. At least six or seven of these hours are dedicated to sleep. Another couple of hours (minimum) should go to spending time with your family, investing in your health, and recharging. That leaves somewhere in the neighborhood of 13 to 15 hours to work each day. And if you think about it, that’s not much time.
If you want to be a successful real estate investor, stop wasting time on administrative tasks that are time-consuming and depleting. Hire a property management company to take care of things like tenant screening, maintenance requests, accounting, and property marketing. Use your time for finding and analyzing deals.
5. Network Like Crazy
As the saying goes, it’s not what you know, but who you know. And if there’s any industry where this is true, it’s real estate. If you can meet the right people early enough in your investing career, everything else will fall into place.
Don’t worry about owning millions of dollars of real estate right away. Instead, build relationships with people who have money. Offer to do a service for them – like manage one of their properties or refer leads – and then do it exceptionally well. People with money hang out with other people who have money. If you impress them, they’ll refer them to you. And once you get into a circle of wealth and influence, your wealth and influence will increase by default.
What Will Your Story Be?
It doesn’t matter if you’re 18 or 48. There’s still time to shift your view of the American dream and pursue real wealth, freedom, and happiness. Real estate is the answer. Will you take the leap?