Small business owners and entrepreneurs have long been revered for their tenacity and willingness to take risks. Perhaps not so coincidentally, these same characteristics that define successful small business owners and startup entrepreneurs also describe successful real estate investors – and the similarities don’t stop there.
They’re surrounded by great people
As any small business owner will attest, you can’t do everything yourself. Being the boss is often a lonely and scary endeavor, so being surrounded by the right people helps alleviate some of the stress. In addition to carrying some of the burden, successful entrepreneurs understand the need to enlist the help of people who bring a different set of skills to the table.
Likewise, successful real estate investors find value in putting together their deal management team. Even a professional investor needs the help of a real estate attorney to protect them, general contractor to complete the renovations, real estate agent to sell the finished product, and possibly a lender to finance the project.
They think big picture
The early days of a small business are rife with failures, miscalculations, and various other setbacks that could potentially cause a new business owner to feel discouraged. One quality they all have in common, though, is that they never lose sight of their ultimate objective; the big picture.
No one does this better than a real estate investor looking down the barrel of a gut renovation at the start of a property flip. A good real estate investor looks at a dilapidated property and sees the beautiful finished product – regardless of the blood sweat and tears that will go in to getting it there. Don’t just take our word for it; we have the before & after pictures to prove it.
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They are just the right amount of emotional
When you’re running the show and everyone looks to you for a decision, it can sometimes be difficult to separate emotion from business. You’d be hard-pressed to find a small business owner that doesn’t get emotionally attached to their product, service, and employees. You’ll also find that the best are able to compartmentalize their feelings in order to make decisions that are in the best interest of the company.
One of the easiest ways to tell a seasoned property flipper from a new one is by their level of attachment to the property. New flippers tend to get overly invested in building the perfect house with only the most premium details – regardless of the cost. Seasoned flippers understand that they are managing an investment property, not the house they’re going to live in themselves. This rationalization allows them to find a balance between building a quality product that they can take pride in and managing their return on investment. These differing emotional attachments are also visible in the new investor who continues to hold out for better and better offers, while the experienced investor recognizes the value in selling the property and collecting their profits as quickly as possible.
They do whatever it takes
If you’ve ever had a conversation with a small business owner, you’ve learned that it’s not what they do – it’s who they are. There is no such thing as a typical 9-5 day, and the phrase “that’s not my job” doesn’t exist in their world.
The same mentality applies to real estate investors trying to squeeze every ounce of profitability out of a project. It’s not uncommon to see a motivated investor picking up a hammer to chip in, or spending hours driving the neighborhood looking for their next deal.
When it comes down to it, real estate investing is the ultimate entrepreneurial endeavor. The eventual success or failure of the deal is almost entirely up to the tireless effort and unrelenting obsession possessed entrepreneur; just the way they like it.
If you’re a real estate entrepreneur looking for a hard money lending partner to finance your next deal, we’d love to speak to you. Asset Based Lending works with real estate investors looking to quickly fund fix and flip or new construction projects.