A Real Estate Investor’s Three Main ToolsPosted on January 11, 2012 by
For some reason, many folks think luck plays an important role in whether a real estate investor is successful or not. The truth is, luck plays almost no part in an investor’s success – or lack thereof.
Think of it this way: Let’s say you decide to run a five-kilometer (3.1 miles) race three months from today. You run every morning. Each morning, you run a little further than the day before. Finally, two weeks before your big race, you’re able to run four miles without stopping. When race day comes, you easily cross the finish line – raising your arms in celebration for having achieved your goal. Here’s the important question: Was your success due to luck or was it due to persistence and determination?
You may also think that you need special tools to be successful. You’re right, and here are the three most important tools every investor needs: 1) shoe leather, 2) brainpower, and 3) pen and paper. These three tools will take you further than you can possibly imagine – and I’m proof that shoe leather is way more important than brainpower.
For me, real estate investing begins and ends with shoe leather. This means meeting with a lot of sellers and looking at a lot of properties on a regular basis. Too many would-be-successful investors go out of their way to find reasons to NOT meet with a seller or see a property. If you want to be a good runner, you have to run a lot. If you want to be a good investor, you have to see a lot of sellers, look at a lot of properties and make a lot of offers. It really is just this simple!
Next, let’s talk about brainpower. IQ isn’t nearly as important as a creative imagination. After talking with a seller and fully understanding his or her real estate problems, you need to come up with a solution to their problems.
Now comes the magic. Once you have the first solution in mind, then think of a second, third, fourth and fifth solution. Making yourself come up with multiple ways a deal can be done helps you to become a master at creative deal structuring.
Finally, let’s talk about pen and paper. When investors work with me, they’re often surprised that I don’t use realtors’ prewritten, 300-page contracts written in mouse type. Most of my agreements are handwritten on a single piece of notebook paper. Sometimes I stick with the handwritten contact, other times I type up the agreement. Bottom line: Our agreements are short, simple and easy to understand…even for attorneys! Once we put our agreement to paper, all interested parties sign the agreement.
One last thing, if the other party changes his or her her mind before the closing, I don’t force the issue. I never want to make someone buy or sell a property. After working with us, it’s very important that the other party feels like they ended up in a better place than where they started.
Folks, real estate investing is simple, but not easy. If you are thinking about retirement and seek mailbox money, meet regularly with other like-minded investors in your area.