What distinguishes the hobbyist from the professional, or the wannabe real estate investor from the elite real estate investor?
It can be difficult to quantify. To begin with, what is “elite”? Certainly, elite implies a top tier in a given endeavor. Yet real estate investing covers a lot of territory, from the billionaire developer to the occasional flip, and each person’s goals are different.
Regardless, top-tier performers in any category — meaning those who set and reach their goals — tend to have a lot of the same things in common.
Consider this a list of the must-have traits and habits of elite real estate investors:
Big-picture vision AND attention to detail
A lot of people excel at one or the other, but top real estate investors need to be good at laying out a vision and also tracking the details that make that vision a reality.
Most investors know how many houses they want to flip in a year, their ROI, and what net profit they’re aiming for. But the elite investor goes beyond the dream and creates a detailed plan to carry it out. They also know when to shift and how to make corrections.
And then there’s the day-to-day. Each project includes a long list of small details that can’t be overlooked, whether it’s the specifics of a Scope of Work or knowing how to spot trouble areas during a walk-through.
The elite investor understands the importance of shooting for a lofty goal while also knowing they need to spell out the exact number of outlet covers that need to be replaced.
There’s a caveat, however: the investor doesn’t need to replace those covers himself (they probably shouldn’t, in fact) and, after designing a system, doesn’t need to count them for every project, either. That leads to the next trait.
Not afraid to delegate
The successful investor — or successful people in any field — have usually learned how to delegate. This typically involves setting up systems and processes to create consistency and a manual for how things should be done.
So that Scope of Work mentioned above? Once you learn how to put one together, you can teach someone else how to follow the system. Perhaps you want to continue being the person who creates it, but once the SOW is drafted, someone else can visit the site and check in while you spend time looking for other opportunities.
The more you delegate, the more time you free up to do what you’re best at. This is unique to each person, but in rehab projects, the successful investor generally hires out the construction and other tasks that can easily be done by others.
The key is to identify the areas where you need to be hands-on versus those you can hand off. For example, if you send direct mail to find leads, you may decide that it’s best for you to personally field the responses and negotiate with sellers. Sellers likely want to speak directly with you rather than a team member.
There are a variety of ways to delegate, and each investor will decide what works best for them. Bottom line: the more comfortable you are with it and the better you get at finding skilled team members, the more you can grow.
Everyone gets distracted at times. But successful people hone in when they need to and focus until a job is done.
Focus can be in the moment: sitting at the desk and concentrating on research; doing a walk-through of a potential rehab project and focusing on the surroundings instead of the chaos at home; filling out an application for funding and minding all the details.
It can also be a sustained focus: seeing a rehab project through all its phases, staying abreast of details for months at a time.
Focus generally comes down to priorities: knowing what to do and when. This keeps your to-do lists shorter and more meaningful, and it helps you keep procrastination at bay.
Successful rehabbers need to navigate a number of circles. In the same day, they could be meeting with a distressed seller, talking to a lender, and visiting a contractor on a job site.
Each of those situations involves a different set of social skills, not only to interpret and respond to the needs of whom they’re meeting, but also to understand individual personality types.
Negotiating, whether it’s purchase price, lending terms, or a bid for work, often comes down to people skills.
Investors shouldn’t change who they are according to a situation; you should always remain genuine and consistent in your own unique personality. But it’s also important to understand how to listen effectively and how to connect with people — because even though you’re renovating properties, there are a host of people in every project.
One thing that’s guaranteed with every project: something unexpected will happen.
Pipes burst, surprises lurk behind walls, contractors get sick, rehabbers get sick, weather happens. This is the stuff contingency budgets and plans were made for. The bigger question is, are you quick to adjust?
Flexibility and focus go hand-in-hand. Focus allows successful investors to keep an eye on the goal, while flexibility is how they find their way to that goal. A rehab project will hardly ever go the way you drew it up, yet you can still meet your deadline and your profit projections in spite of surprises.
Open-mindedness is a companion to flexibility. Successful investors stay open to new ways of doing things while remaining discerning when deciding what to change.
There will always be new building materials, new ways to market, and different ways to tackle stubborn problems that arise on the job site. When you remain open to hearing different opinions and learning new ways to do a job, your options are nearly limitless.
Another way to phrase this is, top investors are lifelong learners. They read, listen to podcasts, speak to experts, and network with smart and savvy people.
“Humble” doesn’t mean self-deprecating or under-valuing one’s worth. It’s more of an honest assessment of one’s skills and a willingness to recognize that others may be better in certain areas.
Humility is also a form of confidence. Elite investors are so confident in their own abilities that they don’t feel threatened by others. They have no (or few) qualms about recognizing others’ skill sets.
The best investors (and entrepreneurs) surround themselves with people who fill in the gaps. When you recognize your own areas of weakness, you can find people who excel in those areas and create a formidable team.
Find good contractors, bookkeepers, and site managers — anywhere it fits the budget and the project, surround yourself with people who are smarter than you.
Elite investors don’t stop and start, quit and begin again, or chase the latest shiny object and trend.
The best investors choose a strategy and focus on it. Whether it’s single-family flips, multi-family rentals, commercial … they stick with it. Many investors add layers to their portfolios, but not before mastering one at a time.
The best in any field also put in consistent effort, showing up day in and day out, regardless of what else is happening.
“Mindset” is a word that gets used a lot, but it’s a good way to summarize the thread that runs through all of the above traits and habits. Mindset drives everything, from people skills to consistency.
Mindset fuels confidence and focus, and it’s what helps investors know, without a doubt, that they’ve got a good plan in place. And dreams with execution are what set the elite investor apart from the rest.