April 17th, 2024
Are You Built to Succeed in Real Estate Investing?
We’ve seen thousands of would-be real estate investors at The Hard Money Co., each arriving with a dream of building lasting, generational wealth through real estate. But how many of them do you think have stayed true to that dream and are still actively investing today? Unsurprisingly, it’s not 100% of them. Although investing in real estate—particularly using the Fix and Flip or BRRRR strategies most of our investors employ—is accessible to everyone, it doesn’t mean it’s suitable for everyone. Everyone can succeed in this industry, but not everyone will.
Over the years, our experience has allowed us to identify key characteristics exhibited by our most successful investors. These traits have nothing to do with education, pedigree, experience, or capital. Instead, they are almost universally about an individual’s willingness to work hard, jump into the unknown, and adapt to the changing environment around them.
Are you built to succeed in real estate investing? Read on to see if your characteristics align with those we’ve observed from successful investors over the years.
Bias for Action
Real estate transactions have been occurring literally forever. They’re ongoing now, and they’ll continue until we’re all well and gone. You can always find a reason to say, “I’m going to wait until the market turns,” or “I’m just looking for the perfect property in this specific community.” But do you know what’s happening while you’re waiting on the sidelines? Other dedicated investors are flipping properties, generating cash flow, and building wealth. There is no such thing as a perfect deal, and waiting for one will only keep you on the sidelines permanently.
In our experience, the most successful investors are those who exhibit a bias for action. That means they are more inclined to take steps to execute on a flip today, even if the deal isn’t perfect, than to sit on their hands and wait. This proactive approach does a number of things for them. The first, and most important, is that it means they are ready to execute when the opportunity arrives. When market dynamics shift, or a seller is willing to take a 30% cut on the price, these investors don’t have to start from scratch to make the deal happen. They’ve already done the groundwork and can execute at a moment’s notice.
The second benefit of this bias for action is that it gives these investors practice they otherwise wouldn’t have gotten. If you’re performing property valuations, submitting financing applications, and making purchase offers on five properties per month, you’re gaining valuable industry experience even if you never actually close a deal. These are all experiences that will pay off on the next property you do close and will allow you to execute more efficiently and profitably in the future.
Finally, a bias for action manifests in every facet of their lives, not just in exploring new deals. These investors are proactive in everything they do. They set up their LLCs in advance and submit applications on properties when the opportunity presents itself, not just when they’re sure it will close. This proactive mindset ensures they’re always a step ahead, ready to capitalize on opportunities the moment they arise, making them more successful and resilient in the ever-evolving real estate market.
Successful Investors are Communicators
The number one indicator of whether or not a loan will close at The Hard Money Co. isn’t the size of the loan, the location of the property, or the exit strategy. It’s whether or not the investor answers our emails. It really is that simple. If an investor responds to our questions and establishes a clear, direct line of communication from the start, the loan is highly likely to succeed.
This line of communication signifies a few key things. First, it shows that the investor is organized. If they respond promptly or are willing to take our calls, it indicates they are not concerned about being unprepared. If we have a question about their strategy, they have an answer ready. If we need documentation, they have it on hand. Their preparedness is clear when we’re in constant communication.
It also suggests that they are more likely to be honest with us about their personal circumstances and the specifics of the deal. Concealing the fact that you don’t have the cash on hand to close your deal doesn’t benefit anyone; it only leads to frustration and missed opportunities to find solutions. We want to see your loan succeed, and your ability to communicate clearly and honestly with us is a crucial factor in making that happen.
This principle of communication extends to everyone you will interact with in the real estate industry. Tenants, agents, contractors, and others all value direct and frequent communication. It simplifies their tasks and helps them understand your business approach. This not only sets the groundwork for future interactions but also helps you build credibility in a competitive industry where communication and transparency are often lacking.
The Hard Money Co.
Using hard money loans allows real estate investors to maximize leverage when purchasing a property and close within just a few days, all while freeing up their own cash for other uses.
Solution Oriented Investors Succeed
Problems are inevitable as you work to close your deal and complete your project. How you respond to these challenges and implement positive solutions will ultimately determine the success of your project. Issues can arise at every level and in various forms. For instance, an unexpected discovery during your rehab might significantly skew your repair budget and cut into your profits. Simply throwing your hands up and accepting a loss won’t benefit anyone. A successful investor will evaluate all the alternatives available and choose a path to profitability that confronts the challenge directly, aiming for an outcome that aligns with their end goals.
Too often, investors face a problem and attempt to sweep it under the rug or ignore it, hoping it will disappear. This approach has never worked and never will. If you aim to achieve long-term success in this industry, you need to be the type of person who tackles problems head-on with accountability. This proactive and responsible approach not only resolves individual issues but also builds a reputation for reliability and effectiveness in the challenging world of real estate investing.
Conclusion
There are many more characteristics that The Hard Money Co. would identify as signifiers of success. However, if you were to walk into our office and exhibit these traits—a bias for action, strong communication skills, and a solution-oriented mindset—we would confidently bet on your success in real estate investing. These traits not only set the foundation for effective investment strategies but also foster the resilience and adaptability necessary to thrive in the dynamic real estate market. Demonstrating these qualities shows us that you’re prepared to navigate the complexities of real estate investing and capitalize on opportunities as they arise.
Recent Blog Posts
Connect with The Hard Money Co.
Sign up for our mailing list and receive educational material, insights into your market, and exciting offerings from our partners.