Real estate investing is one the pillars of wealth creation in the world today. The last time I looked at the Forbes list of 400 richest Americans, I could still count over 31 tycoons listed as billionaires.
In the same vein, you have individuals in your city and state who have made their fortune and hold their wealth in property investments.
Why you need to invest
In his essay “Theory of Human Motivation” first published in 1943, Abraham Maslow, father of behavioural psychology observed, that people are motivated to fulfill three basic needs. The three basic human needs are food, shelter and clothing. And many people will try to fulfill these three needs, before any other need.
When you invest in real estate, you add value to your customers in one of the important area of human needs-shelter. You are investing in an evergreen industry.This is why, I believe you should include property investing as part of your wealth-building portfolio.
However before you go out and buy your first property you need to have the right plan of action to succeed. The first thing you have to be aware of is that…
Goals are important.
Your need to know, what you want to accomplish:
- Are you looking at wealth accumulation within a short time frame (3-7 years)?
- Are you investing for the Long term (retirement)?
- Do you want be a Full time investor and derive all your income from your real estate investment?
When you ask yourself these critical questions, you are able to focus and achieve your dreams.
You need to develop critical success traits.
It is important you develop or become aware of the traits, you need to win as a real estate investor. Five main traits are important for success:
- Competency in your niche, this means you know about the basics, at the minimum and then become excellent in the niche you decide to invest.
- Control over your emotions. This is important if you are going to stay in the investing arena for the long haul because there will always be difficulties in the real estate market. The difference between a novice and a professional is the ability to ride the eye of the tiger without getting into the belly of the tiger. Being a real estate investor takes guts and you need to have them if you want to become wealthy
- Comprehension. This means know your market cold. You understand who your customers are, what they are looking for, why they want to deal with you. If you lack these key trait-insight into your market-you are doomed to fail.
- Consistency. This means you have focus and discipline to, take action daily, weekly until you accomplish your goals.
- Integrity. You stay true to your principles, because integrity is important in real estate. This means you are trustworthy, to your bankers, investors and tenants.
Strategy vs. tactics
The strategy (what to do) is more important than the tactics (how to do) of real estate investing. Let me explain.
If for instance, you wanted to gain wealth in a very short term then to buy and hold real estate, which is a long-term strategy-will not be the right strategy to achieve your goals. Flipping and wholesaling properties- buying undervalued properties and selling at a higher price to gain profit-may be the best strategy.
Knowing enough vs. Knowing it all
I think it’s important to have an understanding of real estate investing, however you don’t need to know all about real estate investing to start.
You need to one thing that I think is important for an investor… You need know enough about the basics-how to analyse properties, how to get financing, and how to assemble you real estate team together. That is it.
If you wanted to make a full time career as a real estate investor, then you would have to know more. You would have to specialize in a niche.
I am not going to spend many hours learning about short sales, wholesaling and foreclosing investing especially if I am not going be a full time investor. It would be counterproductive for me, when I should spend my time doing what I am best at doing.
Let’s recap, to succeed investing in real estate…
- You need to understand why you are investing in real estate.
- You need to develop critical traits for success as a real estate investor.
- You need to choose the right tactics to match your investing objectives.
- You need to know enough about what you want achieve
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Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com