Are You Really an Investor?
This article is a result of self-reflection. It is a Sunday morning as I am writing this. I am taking the time to think about what it really means to be an investor in real estate (and in general). What traits does a real estate investor have versus someone who only likes the idea of being an investor but never does anything to actually become one. I compiled the following list as a guide for building my own real estate portfolio through the BRRRR strategy and generally, and the traits I need to make sure I am living daily.
Does this list describe you? Leave a comment with your thoughts or anything you think is missing from the list.
1. You always look for opportunity.
For most real estate investors and BRRRR investors, “Rich Dad, Poor Dad” is a staple book in your library. I love the quote “There is gold everywhere, most people are just not trained to see it.” How true is that? So much of being an investor is just keeping your eyes open for deals. You can do this intentionally or passively. Intentionally of course is the process of actually searching out and finding deals through your preferred means. Intentionally finding your next fix and flip or rental property can include dedicated time each week looking at zillow, the MLS, driving your preferred neighborhood for investing, talking with investors or a whole host of other intentional deal-finding efforts. Opportunity can also be something you train your brain to see. Maybe you have taken the time to understand prices in your market and what a deal looks like so you can act fast whenever one arises. Maybe you can use the conversations you have in your daily life to understand where opportunity may exist and where assets may be becoming distressed due to life circumstances of others (job moves, family relocations, etc.).
I would suggest this – (a) deliberately spend time looking for real estate investments that you schedule each week and (b) remind yourself each day that you are an investor and to always keep your eyes open for the next great deal – your mind will alert you to those opportunities.
2. You can recognize value where others cannot.
A huge part of being an investor is being able to think outside of the box. Everyone can spot the easy ones. But real estate investing is not about spotting the obvious, but rather what could be. Can you see the potential for converting a two-bed, one-bath house into a three-bed, two-bath that others cannot because of square footage, a separate basement entrance, an attic or some other aspect of the project that allows for expansion. Investors win when they become creators.
3. You can make confident decisions.
Hesitancy, excessive deliberation and fear of jumping in all lead to missed opportunities and mediocracy. I am not saying to be ignorant or uninformed. Buy know your real estate investing criteria and when something fits that criteria, invest. Tell yourself now that you are someone who makes firm, unequivocal decisions based on your knowledge and education (see more on this below) and just decide. Check out our blog on defining your investment criteria to help you with this aspect of confident decision-making.
4. You ́re disciplined.
Confident decision-making and discipline are directly related. So many “investors” want to look at every deal that could be a good BRRRR, rental property or fix and flip and, especially in the current sellers ́ market throughout most of the country, are willing to relax on the discipline in their investing to simply get a deal when they are fewer and farther between. Great investors know that every deal is simply a mathematical calculation. Real investors do not emotionally invest themselves in any given house, asset or property or make investments the math tells them are not in their best interests. Real estate is a commodity, and there will always be a “next” deal. Always listen to the numbers, not your gut.
For the BRRRR or fix and flip investor, check out our BRRRR calculator to make sure you are doing the math correctly every time when you analyze your deals.
5. You believe in the long-term.
BRRRR investing and real estate investing in general is a long-term play. No one deal is likely to dramatically change your life or give you the financial freedom so many seek from real estate investing. That said, disciplined investing over the long-term can provide amazing results. We wrote this blog to concretely demonstrate the domino effect on investing, wealth creation and financial freedom from the BRRRR strategy. Do not get sucked into the allure of get rich quick schemes or otherwise take the easy way out. Real investors know that the compound effect of their actions is what truly generates the wealth and financial freedom they desire.
6. Your education never ends.
Successful investors have a thirst for knowledge. Successful investors know that their first and most important investment is in themselves. Knowledge will always give you an edge. Whether it is learning a new way to structure deals, how to make yourself a more appealing business/investment partner or more concretely understanding economics and the financial aspects of investing, there is always more to learn. All self-improvement will lead to your growth as an investor as well.
7. You always search for an edge.
What are you doing today and consistently to make sure you are the most-informed, most-prepared and most diligent you can be? What can you see that nobody else can? What sources or knowledge are you exploring? Mediocre is never an option. Growth is a never-ending pursuit.
8. You have an attitude of persistence.
Do you know anyone who has ever been truly exceptional who has not experienced failures, defeats or growing pains? Sometimes our greatest failures are our best gifts. Investors do not get discouraged…they know that any failure is an opportunity to learn and just one step closer to the goals they have set for themselves. Quitters are the ones who get left behind.
9. You do not allow fear of the unknown to limit you.
How often have you feared something just to realize you were totally wrong? That the results you feared never came to be. Speculation and the fear of the unknown can cause great deals to slip through your fingers. With discipline (see above) and knowledge (see also above) what is there really to be afraid of? Investing is not a life or death game, it is just a game – have fun with it and don’t ́t let unfounded fears hold you back from the life and financial freedom you are striving for.
10. You have a path you are ready to take.
I love the expression that “if you do not know where you are going, all roads lead you there”. Nobody should embark on any journey in life, whether it is real estate investing, BRRRR investing, or otherwise, without a clear path of where you hope to end up. The answer to what your goals are will be different for most everyone. But get clear and concrete on what those are. Write them down and remind yourself of them constantly. Is financial freedom your goal? If so, what does that really mean in terms of rental income from your real estate portfolio? Is increasing your net worth the goal so there is more cash there for you in the long-term?
So what do you really want? Treat your life goals like you are ordering at a restaurant – do you just let circumstances or someone else choose for you?
I will leave it there – what did I leave off the list I should have included?
I wrote this article today on a whim and out of enthusiasm for real estate investing, personal growth and the opportunities life presents all of us. Maybe it was the coffee I drank while writing this or just a true love for living in line with the list of items covered above. Either way, I am excited, and I hope this article has provided a little inspiration. If so, leave me a note, or let’s look at some deals together – remember “there is gold everywhere” – maybe we can find it together.
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