They have been friends, acquaintances and business partners. I have seen some succeed and some fail, some prosper while others struggle.
And I have learned from all of them.
4 keys and characteristics to success for real estate investors
What I have witnessed consistently over time is there are some key characteristics to those part-time investors who I have seen succeed, endure and profit from their part-time real estate investment activities. I would like to share some of those key characteristics, which I have tried to capitalize on in my own investment approach.
Whether a part-time investor, weekend investor or new investor, whatever you may be, you have a unique challenge. As someone starting out, you are not necessarily going to have the scale or volume that is going to consistently motivate you and pull you through on its own.
You’ve got a journey ahead of you and it is going to be a slower journey for the part-time investor. Because of this slower pace, the lower volume of activity, the extended time between deals and the inevitable frustration wondering whether or not you are making any progress in building your investment business, you expose yourself to talking yourself out of things; letting others talk you out of them; drifting away from your goals, objectives and purposes; and perhaps not achieving the success you are after.
Characteristic No. 1 – Be a goal setter
You have got to set a goal for yourself. As cliché as it sounds, it is so critical especially for the part-time investor.
Great real estate investments are not going to fall in your lap the day you determine or announce you are a real estate investor.
You are going to have to go get those deals, those rental houses, those flip houses – whatever you are seeking. You have to go get them.
If you sit back without a goal and expect those investment opportunities to fall in your lap – they won’t and, your first year as an investor will come and go and you will not have bought a single property.
If, on the other hand, you set a goal for yourself to buy one house this year or 100 houses you will naturally hold yourself accountable to that goal.
If you hit the end of June and you are halfway through the calendar year and you realize, “Hey, I have not bought that one house yet,” you are hopefully going to go out there and find and purchase that property to achieve your goal.
Your first action is to set the goal—whether one house or 100. Set that goal for the year, and break it down by the quarter or the month. Maybe it’s one house a month to hit 12 for the year, or one house every other month to hit six houses your first year.
Set the goal. It is critical. It is where you are going to establish your accountability and ultimately achieve your success.
Characteristic No. 2 – Be an action taker
The one characteristic I have seen consistently—bar none—across all successful part-time investors is that they are action takers.
Our industry is famous for those who sit on the sidelines permanently engaged in “paralysis by analysis.”
Those bench-warmers are buying books, reading magazines, going to seminars, attending real estate investment clubs, surfing websites and watching weekend home investment television shows.
But they never actually take the valuable action of purchasing a property and investing in real estate.
They confuse all these other activities with true action. Yes, successful investors also read books, go to seminars and join investment clubs, and my intent is not to criticize any of those things. My point is, the successful investors convert those learnings, activities and networking events into results. The results being: they are actually purchasing real estate investment properties.
To be an action taker, you have to focus on what you are looking for.
Figure out the number of houses you are going to buy, the price point you want to spend, the neighborhood you like and the type of houses that make sense for your investment strategy. Are you buying a turnkey house, or buying a house to rehab it? Are you going to rent it, or are you going to flip it?
Decide on your objective as an investor, then when the opportunities do arise you will be prepared to take action and purchase the property and achieve your goals and objectives.
Characteristic No. 3 – Be a resourceful achiever
I have seen successful real estate investors, both part-time and full-time alike, be resourceful achievers.
What I mean is that those I have seen thrive over the long-term as part-time investors and in many cases ultimately full-time investors, are those who are able to adapt to the market. And, they adapt themselves to whatever the market is doing.
The market will never adapt to us as investors; we will always have to adapt to the market.
I have witnessed over time the real estate investors who only focused on rehabbing houses – buying houses, fixing them and selling them.
I have seen them graduate or develop a component of their business into seller-financing those houses, for example.
I have seen wholesalers buying houses and selling them for cash “as is” and then migrate all or part of their business into buy-and-hold: buying properties, fixing them, then renting and managing them in a rental portfolio.
I have seen investors add hard money lending to their business.
My point is: the successful investors who I have seen thrive and survive are those who adapt their business and their competencies to the market. They do this by being resourceful and finding new tools, new people and new resources. Consistently, I see successful real estate investors as persistent producers no matter what the market is doing. No matter whether it’s a good day, or bad day, good year or bad year, good market or bad market—they hang in there, and they are diligent, and they produce results.
Many of the investors who are no longer here today are the ones who had a bad week, a bad month or a bad year, threw up their arms said, “This doesn’t work.” They gave up because they failed to be persistent, and they failed to produce the results on an ongoing basis.
You’ve got to be able to celebrate the peaks of this business and survive the valleys, because they are there—trust me. You will go weeks, months or maybe even years-depending on what you are out there trying to accomplish—where you don’t purchase a property because it’s difficult to find the deals. As I mentioned earlier, they don’t simply fall into your lap.
In the real estate investing business you won’t have purchased a storefront or fleet of trucks or hired employees or bought a bunch of equipment. You will not have surrounded yourself with very costly, tangible infrastructure.
Therefore, when the times do get tough, it’s easy to cross your arms and walk away. You don’t have those hard-asset investments in this type of business that remind you every morning when you wake up, “Wow, I cannot give up. I’ve got to pay rent on that storefront, I’ve got to make payroll, I’ve got to pay off that fleet of trucks we bought and wrapped with that fancy logo.”
Good news is, we do not have to build that type of infrastructure as real estate investors. But bad news is, some people, when they don’t have those types of tangible commitments, they walk away very quickly and turn their backs on their business, give up, and quit.
So you’ve got to be persistent and be a producer in good times and bad. You must never waver. Never waver in your advertising, never stop talking to sellers, never stop looking at houses, never stop making offers, never stop telling others what you do. Constantly build your network and you will survive those peaks and valleys, and you will achieve your objectives as a part-time real estate investor.
Characteristic No. 4 – Be a disciplined doer
Successful real estate investors are hard workers.
Despite what you might see, or hear or think, it’s not all flip-flops and T-shirts and 20-hour work weeks.
Those who succeed at it are those who work hard. They are disciplined and do whatever it takes to meet their goals and objectives in order to be successful. They do that so that ultimately—not the first week, the first month or the first year, but ultimately—maybe they ARE living the flip-flop and T-shirt lifestyle and working 20-hour work weeks.
But I am here to tell you it does not happen right away—especially for the part-time investor, and especially if you are a new investor who is just starting out. If that is what you are seeking, you will be very discouraged very quickly and you will end up walking away from your real estate investing business.
It does not always mean you are ALWAYS working, but it does mean you are going to have to work in all ways. You have to constantly be looking for opportunities and constantly be pushing yourself forward. This business does not fall in your lap. You’ve got to go out and find the deals, find the people, find the resources and find the motivation in order to be successful.
You will find you make some sacrifices, too, as a part-time investor. Your regular job may pay you an annual bonus. And your buddy in the office or cubicle next door may boast of that new boat he bought with his annual bonus and how he’s spending his weekends out on the lake on that new boat.
There is a good chance that you, on the other hand, as a part-time investor—and I will speak from personal experience because I did it—took your bonus and bought a rental property. Now you spend your weekends painting, cleaning up the yard and fixing up that house. It’s not as glamourous or exciting as a weekend on the lake, but it is a sacrifice you will make to be successful.
Set your goals, take the necessary actions, focus on the resources, produce the results and do whatever it takes, and you will be that successful part-time real estate investor that you want to become.