The economy, interest rates, and political climate are major forces that are always changing and threatening business for real estate investors. Every real estate market, time in history, and individual investor is also unique. Today is no different. Fortunately, there are some basic success principles that most successful real estate investors follow.  Here are 6 of them:

Principle 1: Take Action


 

This principle comes first for a reason. “Paralysis by analysis” isn’t just a catchy phrase. It’s a human trait designed to keep you safe. Unfortunately, it also keeps you in your comfort zone and away from growth.

Growth is uncomfortable, and going through something for the first time is scary. No one wants to fail. However, failure is actually part of your growth. With the right perspective, taking action will always have a positive outcome, even if you don’t hit a home run.

 

Staying with the sports analogy, the Great One, Wayne Gretzky, has a famous quote: “You miss 100% of the shots you don’t take.” Taking action - thoughtful, calculated action - is the only way to improve your knowledge base, gain experience, and move toward your financial goals. Successful investors make more mistakes, and failure only sets in if you give up. This does, however, have to be paired with our next principles to ensure failure isn’t a setback, but rather a learning experience that propels you forward.

Principle 2: Take Advice From Those Who Have Done It



 

Everyone loves to give advice - it usually comes from a good place. Unfortunately, the opinions of others often come from their own insecurities. We are fortunate to be surrounded by abundant thinkers, but don’t be surprised when someone close to you has a pessimistic view of the goals and ambitions you share. If you wanted to get in shape, you would take advice from someone who is healthy and has a body, energy, and lifestyle that you aspire to emulate. The same applies here! 

Principle 3: Buy Below Your Means
 

One negative commonality with a lot of investors is the tendency to push investment capacity to the max. This is another human trait that must be managed. When your mortgage pre-approval comes back and says you can purchase up to $800,000 with 20% down, it’s natural to start looking at that price point. The successful investors fight this urge and find confidence and security in looking below that number.

No one has ever gotten into trouble from the asset side of their balance sheet - only the liability side. Investors make money when they buy, and being able to weather a storm of higher interest rates, decreased rents, unexpected maintenance, or other unknowns is part of the game. Remember, there’s risk in everything, and real estate investing is always a get-rich-slow strategy.

A second benefit of buying below your means is that it leaves room to plan for your next move. Diversification, even within real estate, has to be part of your long-term plan. If you are just starting out, acquiring your first income property won’t allow you to diversify yet - but your road map should at least include a plan for your next investment. Diversification can be geographic, property type, ownership structure, passive vs. active, and more. As you take action and grow, your plan will evolve too. But always stay below your means so you don’t get stuck and can keep moving forward.

Principle 4: Follow Your Gut

Your journey is unique. What worked for one investor may not work for you. Try this exercise: think of the difficult times in your life that led you to make a change - a divorce, career shift, overcoming addictive habits, or something else. Now think back to before the change. Did you already know? Hindsight is 20/20, but most of us realize there was a point when we felt - or knew - that something was wrong and needed to change.

That instinct is a superpower we all have and need to learn to trust earlier. When you as an investor speak about a potential investment, it’s important to have the confidence that you can see the project from beginning to end. That doesn’t mean you know all the steps, but it should feel clear and simple to you. Your gut knows it.

This may sound contradictory to growth being uncomfortable, but it’s not. The difference is in the energy. When you’re in alignment, challenges feel exciting rather than terrifying. Trust your gut and learn to recognize when you’re in the flow of the universe - and, more importantly, when you’re not.


 

Principle 5: Use an Investor-Focused Realtor



 

Not all real estate agents are created equal. Many of the issues come from investors purchasing property with real estate agents who aren’t focused on investment real estate. Through no fault of their own, most real estate agents are salespeople who excel at selling homes, but they aren’t trained to think like long-term investors, or don’t own an investment property of their themselves.

Principle 6: Have a Strategic Plan

There’s a saying: “Begin with the end in mind.” Similar to Principle 4: Follow Your Gut, your plan will be unique to you. You have unique skills that are assets and will shape the investments to add to your portfolio. Each property must be part of your plan - one that leads toward the ultimate goal of financial freedom.

Your plan should feel big but exciting. You can be ambitious without stepping into managing a real estate portfolio you’ll grow to regret. Remember - it should always feel exciting and fun, even as you stretch your comfort zone!

Thanks For Reading Today’s BLOG!

If you would like to see any of my previous blog posts, please click here.

Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com

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