by Dennis Henson, REI Club
Most of the time success in business is the result of what you know. In every industry there are key elements—secrets—that if known will help to insure success but if not known, will certainly lead to failure. Real Estate investing is no different. Success begins with knowledge. What are some of the critical lessons that every real estate investor should know? Here are ten of them for starters…
The first secret is probably the most important of all the others—using other people's knowledge. There are only two ways to gain knowledge. Either you gain it from other peoples mistakes or make the mistakes yourself. If you refuse to learn from other people's mistakes—you are destined to learn from your own mistakes. The secret is to learn from others and avoid the pain of learning the hard way. Here is the secret—you can jump start your investing success by getting a good mentor and constantly reading and listening to CDs by successful real estate investors.
The second secret is also very important—it is the power of consistently making a lot of quality offers. In order to become a successful real estate investor, it is absolutely necessary to place many offers that, if accepted, will result in great deals. Without offers there can be no good deals and good deals are the basis of success in real estate investing. If you do not ask you will not receive.
Secrets three through seven are the skills that will have to be developed in order to run a successful real estate investing business. These skills are:
1 Finding good deals
2 Obtaining the money to purchase the good deals you find
3 Fixing up the property so that it is marketable
4 Effectively marketing the property
5 Property management
Master each of these skills and real estate investing becomes much easier but fail to develop them and you are in for a rough ride.
Secret number eight is that you must prepare quality offers that have a chance of being accepted. These offers must be high enough so that some of them will be successful. But they must be low enough so that, when one is accepted, it will result in a substantial return on your investment of time and money. This can be easily accomplished by using some of the effective software on the market today such as Turbo-Bidder or similar real estate analysis software.
The ninth real estate investing secret is that you must be able to determine the true value of property. True value is the amount that the property can be sold for in a reasonable period of time. The quickest way of determining true value is by paying a professional appraiser to work their magic. But that is not necessarily the best way. It doesn't make sense to be paying an appraiser to look at thirty properties when you only expect to purchase one of those deals. That means that you must find an inexpensive way to determine true value. There are professional realtors who work with investors. These realtors can provide accurate comparable sales (comps) of similar properties. These comps can give you a very good idea of what a property is worth.
And finally, secret number ten is you need to have a burning desire to become successful. Your attitude and drive can make up for lots of early mistakes and pitfalls that might sink a lesser person. As Calvin Coolidge once said, "Nothing in the world can take the place of persistence".