Are you new to the real estate industry? If yes, have you found a mentor from which you can emulate and seek guidance from yet?
Learning from others has always been an effective and quick way to upscale your own knowledge. The idea is to read widely, do your own background searches, create your own “Dream 100 list”. Understand the investment philosophies behind these people you admire and model them.
Here are 6 life-changing real estate investment related perspectives and advice that may work for you.
Real Estate Lesson Every New Investor Must Know
1. Learn the how
How many times have you asked yourself if you can do something? And what answer do you usually follow up with? Is there a better question you can ask to get yourself in the right mindset?
This is a common real estate scenario. For example, we become hesitant, or even afraid, when contemplating a certain real estate decision. We think twice about going beyond what we can. Instead of asking if we can do something or dwell on the possible failure, a good question we can ask ourselves is, “how do we get started?” and “what is the worst that can happen?”.
Asking good questions and getting into the right mindset is so important that Ryan Serhant, the highest performing Real Estate Agent in New York City has attributed it as his greatest source of success.
In fact, Ryan has a dedicated time slot every morning where he will prime himself mentally before he starts the day. During this time, he will acknowledge all his insecurities and find a way to answer them with strength and resolve. By doing this, he found that no matter how big a problem comes his way during the day, nothing knocked him off his stride.
2. Learn from Like-Minded People
Would you take advice from people who are not part of the real estate industry? The answer may be pretty obvious, but there are instances when we forget and we listen to outside influences that have nothing to do with our end goal.
Think about it. It really happens more often than you think!
Take the advice from people whom you find credible. In any endeavor, we can’t really do everything all on our own. We need other people to help us, mentor us, learn from, and get inspiration from.
Barbara Corcoran, Real Estate Mogul and New York City’s Real Estate Queen, has been famously quoted as saying that if she had listened to her mother, she would have never had the courage to take a step out and venture into Real Estate. Instead, she would have remained as a waitress all her life.
In contemplating a career decision, don’t just take advice from your relatives or the neighbours next door. Take it from people who have already invested their time in the area you are asking about. Take it from people who have succeeded and study their reasons and motivation for entering this industry.
What do these experts say? What do these people recommend? Take your advice from them!
3. Learn to Assess Properly
There is no doubt that speculation is rampant in this industry. Get your news and analysis from more than one source and talk to as many people as you can. Find out how to spot “speculation talk” and do not be seduced into the sexiness of a 400%. If it is too good to be true, chances are, it is indeed!
Follow your ideal Real Estate mentor. How and what do they consider a good property to buy? Study their timing, market fundamentals, exit strategies and contingency plans.
“Never invest in a business you cannot understand,” says Warren Buffett. It’s easy to fail when you get involved in an investment that is too complex for you to even comprehend. You can be a better entrepreneur and investor when you have a strong grasp on how the industry works and who the best investors are in the real estate space. It’s always much, much better to stay within what you are passionate about and what areas you are really good at, and explore further from there.
How smart are you financially and do you have the necessary financial IQ to ride out this coming recession? Take our free quiz here to find out.
4. Learn Facts and Figures
We’ve already mentioned the repercussions of speculations in this industry. And we’ll give more emphasis to that in this section. Do you know why people speculate? Are you aware what causes this? Well, it’s interrelated. Speculations are brought by emotions, and we typically become emotional when we don’t know what’s going on.
Real estate and emotions don’t go well together. And, we are fortunate to have smart investors who teach us that. At the end of the day, it’s still about facts and figures. If you don’t understand them, that could be a big problem. Don’t get this wrong. We’re not saying you’re not supposed to feel anything. After all, in any business, human interaction is essential and we’re bound to be faced with different opinions, perspectives, ideas, feelings, and the ways we approach problems and come up with solutions. There’s always going to be a natural (that is, human), response.
Warren Buffett believes that the most important quality of an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd. When you know how to handle your emotions in this industry, you’ll go places.
5. Learn Proper Risk-Taking
Every real estate investment comes with a certain risk. You’re certainly aware of this. What we’ve learned in the process though is that it is possible for us to minimize risks and maximize rewards instead. Again, this doesn’t happen in an instant. It takes the help of not just the best, but the right mentor, to make this a reality.
“Progress always involves risk. You can’t steal 2nd base and keep your foot on 1st.” And this is true in real estate investing. At one point, you would have to take bold decisions that require risks. The only question is, is it worth it?
What does this imply? It is beneficial to collaborate with a smart investor who you share the same risk profile with. The last thing we would want is to work with mentors whose portfolio is far from us. That would be unrealistic. It doesn’t matter what the seller’s intention is – the property is all that matters. It either passes the due diligence test or it doesn’t. There shouldn’t be any rooms for emotions in this endeavor.
6. Learn the Reason
Have you ever asked yourself – why are you investing? Are you aware of your purpose?
Good thing is, there isn’t a right or wrong answer when it comes to this. But, it is a must that you’re aware of what you’re investing at, and why you’re doing it the way you do. It always goes back to knowing why.
The richest man in Malaysia, Robert Kuok, whose net worth is $10.7 billion according to Forbes, at the time of this writing, is a very humble and hardworking man. He kept himself up to date and studied all about the business and economy of sugar from production to consumption and shipping. When he almost got bankrupt for being too ambitious in his earlier days in the business, he learned the hard way that even natural disasters such as typhoons can cause loss of money and resources so he needs to be smart and act faster than his competitors.
His late mother also taught him and his siblings not to be materialistic so Kuok makes sure to remain generous and help others, even without media attention despite him being the “Sugar King of Asia.” He is clear with his goals and purpose in doing business – providing a source of income for his employees and a steady, reliable sugar supply in the market.
Warren Buffett, the billionaire investor highlighted that “games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard,” if you are in the process, and you understand what you do, you’re on the track to success.
Rubbing Shoulders with the Right People
Getting in the real estate business entails deep preparation and knowledge. If you’re just starting out, that’s the best opportunity to really delve in the basics of the industry and develop an investing approach that would drive profit. Fortunately, there are many ways for us to go about this.
How smart are you financially and do you have the necessary financial IQ to ride out this coming recession? Take our free quiz here to find out