What Makes Real Estate Investors Prosperous

August 30, 2008

There isn’t a mystery when it comes to becoming a successful real estate investor. It is not just a matter of jumping into the challenge, and crossing your fingers for the best, or being born with an “investment gene”. There are, however, two things that every moneymaking real estate investor does, and that is prepare. When a real estate investor makes money, you can tell that he has prepared himself and kept himself and his team of professionals focused.

Ken McElroy, author of “The ABCs of Property Investing,” speaks of what happened to one real estate investor who finally hired McElroys firm to take over the handling of his building. Because the property investor had not concerned himself enough to research the area in which he was considering investing in, or the structure itself, he was left holding a criminal-infested eyesore in a crime-dominated area. It was a wreck he could’ve avoided if he had just done his research.

In addition, he wound up shelling out a lot more money repairing the building than he believed he had “saved” by not employing a crew of professionals to guide him along. Not to mention the missed income from not being able to rent to good tenants in such a devalued part of town.

Successful property investors never withhold when developing their teams. This is because there’s just too much information that must be expertly handled when you are managing real estate acquisitions. You don’t have the time to become an expert in everything - you need an attorney, accountant, broker and others to guide you.

Another trait of the successful is focus. Rather than trying to fish an entire city for any ol’ property they might be interested in, many investors opt to save time and resources by initially choosing the type of investment property they want – say an apartment building with a specific number of rental units. Then they keep honing their focal point until they have found, not only an appropriate metro area in which to look for property leads, but an appropriate neighborhood.

When they cant locate anything within their preferences in their 1st choice neighborhood, they try other neighborhoods. For instance, if down-town is the target area, they might work their way into the suburbs. And they always stay focused.

One concept to remember, as well, is that you dont have to wait in expectation of the For Sale sign is posted in order to approach the owner. Actually, Ken teaches contrary to this practice. This is because you dont want your competitors of other investors artificially inflating the price of the property.

Ken says that highly effective real estate investors also remain impartial. As for himself, he said that he walks into each and every transaction with the assumption that he will ultimately walk away from the transaction. In reality, quite often he DOES walk away. That’s because most transactions aren’t worth making. The individual who becomes hooked on the notion of closing the sale usually ends up paying more than they should.

That isn’t so hard to recall. If you want to have success as a real estate investor, do your due diligence and stay focused.

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