A lot of people want to be successful real estate investors, but not everyone is able to accomplish this feat. What is it that makes someone successful at real estate? Are they smarter? Do they work harder? Were they just lucky? I think there are many traits that make someone more likely to be a successful real estate investor, and I will talk about them in this article. I have many of these traits as well, and I have been flipping houses, buying rentals, and selling as an agent for almost 20 years!
Why is it difficult to be a real estate investor?
Real estate can provide some incredible opportunities, but it is not easy. Houses, apartments, commercial properties, and even land can be really expensive. Most people don’t have the cash to go out and buy a house. They need to borrow money, which can be a relatively simple process if you want to buy a house to live in, but it is not as easy if you want to buy an investment property.
When buying a house to live in, you may only need 3% down or even less with a VA or USDA loan. When you buy an investment property, you probably need 20% down. It can take $20k, $40k,, or more to buy one investment property. Most people just don’t have that money.
There is also the question of what type of investor you will be. You can flip houses, buy rentals, wholesale real estate, be an agent, or even invest in notes. There are different strategies and amounts of money needed for each type of investment. If you flip houses, you might be able to put less money down using a hard-money loan. If you wholesale, you can be successful without as much money, but you will need to put in a lot of effort and time.
What are the traits of a successful real estate investor?
I have been a real estate investor since 2002 and have met many other investors through my blog, YouTube channel, and other social media. Most successful investors tend to have these traits. These are not set in stone, and people who don’t have these traits can be successful in real estate, but in my experience, it helps to have these traits.
Good at math
Real estate is all about the numbers. If you are buying rental properties, you need to know how much a house makes each month based on the actual and possible expenses. You need to be able to estimate repair costs and how much cash you will need.
If you flip houses, you need to know all the costs involved—not just the repairs. The other costs like financing, carrying, and selling costs can be more than the repair costs. It is not as easy as they make it seem on TV!
If you want to be a wholesaler, you need to know what price will work for a flipper or landlord. You need to be able to calculate the costs and formulas that work.
You don’t have to take calculus, but you need to be able to do simple math well.
Willing to learn
We already talked about how much there is to know about real estate. You aren’t born knowing these things—you must learn them. Most people think they don’t have time to read or learn, so they don’t. They make excuses for why they don’t have time, and nothing changes in their lives.
Those who are successful make the time to read! They make time to look at houses and write out strategies!
Willing to take risks
I have bought a lot of properties in my career, including many I probably shouldn’t have bought. While I have had some house flips that did not turn out exactly how I hoped they would, I have had many more great deals that more than made up for the bad ones.
To be a real estate investor, you must be willing to take some risks. Successful investors spend a lot of money buying properties and fixing them up. Sometimes you lose that money, and sometimes you make money. You cannot let the risk of losing money scare you away.
We are still buying during the pandemic! You can see the video below that shows I may be willing to take on more risk than the average person.
Willing to spend time
People often want to become investors because they want freedom and more time. It takes time to be a successful investor. It is not something that is easy or happens overnight. Owning rentals can be mostly passive once you buy the property and have a good property manager, but you need to take the time to find the best properties and managers.
If you are investing out of state, it makes sense to visit where you want to invest. If you are flipping houses, it takes time to find contractors, lenders and deals, and you need to be overseeing everything constantly. You have to be willing to put time into the business if you want to be successful.
Becoming a great real estate does not happen right away. It can take months or even years to buy a property. If you give up easily, real estate is probably not the best business for you. I did not buy my first rental until 2 years after I decided I wanted to invest in rentals. I was in the real estate business at the time!
You also may fail or lose money in the beginning. You have to chalk those up as learning experiences and be willing to keep trying. Some of the best investors I know lost money on their first deals, but they did not give up.
You almost always need money to be a real estate investor. There are ways to invest with little money and maybe no money, but it is a lot easier if you have money to start with. Most successful real estate investors save money before and after they become investors. Once you become successful, you need to keep putting money back into the investment to grow.
You don’t have to have the entrepreneur mindset to be a successful investor, but it helps! Even being a real estate agent means you are running your own business. I personally have to be an entrepreneur. I cannot work for anyone else. Real estate is perfect for me.
If you need someone to tell you when to work and how to do everything, it could be rough trying to be an investor. You need to be decisive and willing to act fast without confirmation from a boss that you are doing the right thing.
What if you don’t have these traits?
Don’t give up if you don’t have all of these traits. There have been many successful investors who still made it even though they lacked math skills or the entrepreneurial spirit. They may have had a tougher time or may have had to work harder, but they still did it. If you can recognize your weaknesses, that can help you figure out where you need help. You could work on being stronger in those areas or find someone to help you or work with you that is strong in those areas.
I have written 8 books that go into more detail on how to actually invest in real estate and the exact steps to take. You can find them all on Amazon.
Real estate is an amazing business, and it can provide some amazing investments. It is not easy, and it does not happen overnight. I see these traits in many successful investors but I also see people who never graduated high school have real estate empires as well.