There are a lot of skills needed to become a savvy and successful real estate investor. Do you enjoy the challenge, have the time and/or have the comfort? Are you comfortable with investments backed by real estate but do not want to deal with the hassles and time? Here are some of the skills and questions you must ask yourself to find out if active or passive real estate is right for you.
1. Are you a people person – Networking, sales, relationships – Real estate is a relationship business. Investors network, build relationships and are constantly selling themselves. The best investors often seem to be the ones who are well liked and good with people.
2. Negotiations – Negotiations is a huge in real estate and a skill you must have. You cannot be a push over, cannot step on everyone in your way, rather create win-win situations.
3. Willing to put in time and hard work – It amazes me how many people get excited after hearing a speaker and jump into real estate head first. They spend 10 hours then think they are magically going to be handed hassle free deal and all their dreams will come true. It takes time, hard work, persistence, ability to improve and learn from mistakes.
4. Willing to take risks and overcome comfort barriers – We cannot control the market and many things in real estate. It is an investment because there is risk of lose and also big returns when successful. Real estate investors must do thorough due diligence and acquire comfort taking risks and overcoming barriers of comfort. Many investors follow the herd, but the most successful investors do exactly the opposite of the herd.
5. Make it business not personal and emotional – Countless investors fall in love with a deal and act like it is going to be their home. Real estate investing is a business, stick to the numbers and leave the emotions for your personal life.
6. Problem solver – You will be faced with challenges, become a problem solver and face the challenges head on. Most home run deals have big time problems that need to be solved like vacancy, needed repairs, etc.
7. Entrepreneur or Do-it-yourselfer – The most successful investors are or become entrepreneurs. They build systems, teams, delegate tasks and separate themselves from the daily processes in order to make high level decisions and grow the business.
So what is it you are looking to achieve in real estate? Do you enjoy the time, hard work and challenges of a deal? Or are you looking to make great returns without dealing with the hassles? If you are comfortable with investments backed by discounted cash flow real estate, I highly recommend looking to be a passive/private investor with a trustworthy investor with a successful track record. There are tremendous opportunities for passive/private investors as well as active investors in real estate, especially in the current market for the next 3-5 years. Happy Investing!