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In my opinion, there are six secrets that characterize wildly successful real estate investors. If you’re going to get into the real estate game, it’d be worth reviewing these critical traits.
It truly is the secret to success.
If you embody these critical traits, then by all means, dive into real estate investing headfirst.
The truth is, more millionaires will be created from the current recession than were created in the past DECADE—and maybe longer.
Traits of Successful Real Estate Investors
So, what do successful real estate investors tend to have in common? The answer is…
1. You have to commit
If you’re going to buy your first investment property, you have to love the idea of real estate. I mean, really LOVE it.
If you’re also interested in stocks, bonds and Bitcoin, I seriously doubt you’ll ever do much in real estate beyond own your primary residence.
That’s the tough truth.
2. You have to be willing to work
Real estate, especially when you’re first getting started, will take some tough work.
You’re going to have to submit a bunch of paperwork to lenders, go view properties with realtors, track properties using apps on your smartphone, and once you acquire a property, either hire a property management company or learn how to acquire a tenant.
If you decide to self-manage your property, it will involve online and offline advertising, property showings, pulling tenant screening reports and running background checks. Then, you’ll sign a lease with your new tenant and potentially put pen-to-paper on additional pet addendums and move-in/move-out inspections.
Of course, you’ll also be responsible for maintaining the property over time and solving problems when they arise—like leaks, fires and broken toilets, for example.
Ask yourself, are you willing to do the work?
3. You’ll do better with money
While there are lots of strategies for creative financing, you’ll ideally have some savings before you get into real estate.
The reason is, stressful and unexpected things happen when you’re dealing with real (“hard”) assets.
Having a solid amount of money in savings will let you be best positioned to get a loan, as well as fix unexpected problems quickly when they come up.
4. You have to be a problem solver
I’ve never seen anyone do well in real estate who didn’t have a resilient attitude.
The reason is that there’s frequently problems that need to be solved in real estate, such as an issue during the closing period that almost blows the deal, an expensive repair that you didn’t expect, or a tenant that doesn’t uphold their end of the lease.
If you know how to view problems as opportunities, then you’ll do extremely well in the real estate investment world.
5. You need to value people
People think real estate is about properties, but it is really about people.
Over time, you’ll want to develop relationships with realtors, lenders, title companies, sellers, repair technicians/contractors, and property management companies.
I have yet to see anyone do well in real estate who wasn’t willing to pick up the phone to make an uncomfortable phone call. I’ve also never seen someone do well in this area, who wasn’t honest and focused on building long-term relationships.
You don’t have to be an extrovert to buy your first investment property (I’m not), but you do have to be invested in fostering relationships with other people.
6. You Need to Understand Passive Income
Finally, if you’ve never been taught the basics of financial freedom, then you’re going to have to learn them fast.
Simply put, successful real estate investors know that the goal of acquiring physical properties is to convert active (earned) income into passive income.
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Passive income means that you get paid every month.
With real estate, you still put in some work, but the reason that the income these assets produce is called “passive” income is because you:
- No longer have to pay high earned income tax rates
- You get numerous tax advantages, like real estate depreciation and mortgage interest deductions
- Your property has the potential to appreciate (go up) in value over time
- You can sell your properties and buy new ones without paying a cent of tax using 1031 exchanges
- Done right, you’ll get paid cash flow on a monthly basis
These perks are the reasons why passive income can rapidly facilitate financial freedom.
How to Become A Successful Real Estate Investor
When people learn I’m a real estate investor, how to buy their first investment property is one of the first questions they often ask.
Want to learn about this next? Check out this step-by-step plan on how to buy your first investment property.