You’ve read the books. You’ve taken some classes. You’ve listened to podcasts. You think you are ready to begin your real estate investing journey. However, have you considered the most crucial element of real estate investing success? If you haven’t worked on creating the right real estate investing mindset, then the answer is no.
Here are six key mindset characteristics you will need.
Without patience, you will fall for every “get rich quick” real estate investment scheme out there. The truth is that making money in real estate takes time. If someone could really get rich quick, then everybody would be doing it.
Real estate investors not only need a plan, but they also need the patience to stick with the plan. It takes patience to figure out the right strategies. It takes patience to find the right properties. Patience is even needed when executing your plan. Many investors lose money by changing plans midstream if they don’t see immediate results. Patient investors who stick with their plan, on the other hand, are far more likely to get the ROI they were seeking.
For those with long-term investment strategies, holding rather than flipping, for instance, patience is even more essential. In fact, many investors who lost everything during the housing crisis in 2008 did so because they did not have the patience to stick with a long-term strategy. Those that did hang on, have since recouped their losses and created incredible gains.
The next characteristic is the ability to focus on your goal. As you become more seasoned as an investor, you will find many investment opportunities come your way. However, understanding and focusing on your goal will help you determine which opportunities are the right ones for you.
Remember, investments are not good or bad all by themselves. In fact, what is good for one investor could be terrible for the next. It depends on your goals and the strategies you employ to reach them. Staying focused will help you choose the best investments for your circumstances.
Real estate investing is a business, so you need to run your business like a business. This means eliminating emotion from the equation. When you choose an investment property, the choice should be due to tangible elements like price, location, and economic drivers. It should not be due to emotions.
Emotion often crops up during due diligence. You’ve found a great property, but during the inspection, you find that there are issues that make the property a lot less desirable. Don’t be so emotionally attached to a property that you can’t walk away when the property no longer matches your investing criteria.
Even those who have been investing for years can learn new things about the real estate market. Never get so set in your ways that you no longer feel there is anything to learn. Something that I’ve learned over the years is that more information about REI always leads to more investing options.
There are many sources for learning, including:
- Books and ebooks
In order to be successful in real estate investing, you have to do more than read about it. You actually have to take some action. In fact, a 2017 RealtyShares report shows that although 77% of those 35 to 44 feel that flipping homes is a great way to build wealth, only 15% of Americans invest in real estate.
The same survey shows that 70% believe it is too complicated. These are the people who will read, study, and take classes, trying to know every detail before getting started. But, as I said about continual education, one can never know everything there is to know. Eventually, you have to just get started.
You can find mountains of advice about real estate investing with a simple online search. The problem is determining what is good information and what is not.
Unfortunately, the Internet is full of real estate investing information from people who are not real estate investors or from people who are not actively involved in REI today. Be sure to use good judgment when seeking out quality information. Beware of things such as:
- Get rich quick claims
- Someone who cannot show you current REI experience
- Lack of credible references
- Doesn’t use their own name
Use your good judgment to weed out the impostors and then focus your energy on high-end information for real estate investors who understand their business and want to share it with you.
As you work on these key mindset characteristics, you will find far more success in real estate investing. At Real Estate Knowledge Institute (REKI), our mentors will help you gain the needed knowledge, discover your REI goals, learn the right exit strategies to reach those goals, and provide opportunities to take investing action. Call us today to see how we can help you create a winning real estate investing mindset.