If you are just getting started with a new career in Real Estate, it is very important to prepare, plan, and execute. But going beyond the basics and executing some specific plans of attack will ensure your success.
In this article I am going to write about how to be successful in Real Estate and offer you one rule which will keep you safe on the vast majority of your deals.
Real Estate or any other business opportunity is very exciting and the prospect of financial freedom, spending time with family, charity, and time freedom make the hard work worth it. It is important to keep these things in mind as you build your business.
For starters, remembering WHY you are doing this in the first place will shift your mindset from negative thoughts about failure and how things won’t work to thoughts of success and finding ways to make it work. As soon as you lose sight of this, things get hard. When the pain of building your business is easier than the pain of the bleak outlook in life or the challenges that we face daily, building becomes easier.
If your WHY is big enough, the rest will fall into place.
It is also important to keep a helicopter view of your business at all times. If you get too caught up in emotions, it is easy to fall into the “guru trap”. This is when you feel great, excited, and emotional about getting educated all the time. It is necessary to have knowledge if you want to fail less, but it is not necessary to know everything to get started.
In fact, I would recommend that you pick one mentor, coach, or instructional system to get educated in the niche that you pre-determine is where your interest will be and then build a business in that until you are successful. No more courses, bootcamps, trainings nor coaching programs unless it is required to build your skills.
Once you are successful in your niche, then you can add income streams to your existing business. You can also leverage your time with employees, virtual assistants, and systems.
When it comes to investing in Real Estate, there is one rule that will make or break a newbie. This factor is simple in nature, sensible, practical, and doable. If you follow this one rule on every deal you do, you will never fail unless the analysis went wrong. In fact, if you follow this one rule, you will make a lot of money on virtually every deal you do. This one rule will also help you assess whether people you are dealing with in the Real Estate industry know what they are talking about and are helping you or they are preying on you.
And the one rule you must follow to be successful in Real Estate is:
Buy it right!
Yep, that’s it!
If you get good at this one thing, you will succeed on virtually every deal you do.
One of my mentors (residential fix and flipper) followed this rule and he set his profit minimum at $25,000. He analyzed opportunities, made offers, and closed on the ones where he knew for sure he would be making at least $25,000. If it didn’t pass that test, he would pass on the deal. He flipped several hundred properties and never lost money on a deal. Pretty cool, huh? Did he always make at least $25,000 on each deal when all was said and done? No!!!! That is the point.
Real Estate is a dynamic commodity. Markets are ebbing and flowing, prices are going up and down, latent defects go undisclosed, environmental issues arise, and on and on. You don’t know what you don’t know and you have to prepare for the unknown. If you factor in 25k for profit and you make a $10,000 mistake, oh well, you still made $15,000+.
The same applies in apartment buildings. If you plan to cash flow $100,000 your first year, cut that in half. Does the deal still seem sweet? If you check, check, and re-check all of your numbers including the value of the property, the income and expenses, the condition, market conditions, and all other due diligence and you feel 100% confident and even excited, then you may have a deal.
When you buy a property for a discount from a motivated seller and you combine that with education and good mentorship, you are setting yourself up to be successful in Real Estate.