The more you master the 10 keys presented below, the more likely you will be to achieve the goals you have set for yourself. Note that these 10 keys are not ranked in order of importance. They are all equally important. You might master a few of them, but if you have problems with some of them, your real estate investment project may not be working as well as you hoped. Let’s get started without further ado.
Key #1: Become a real estate Investment Colombo
The very first piece of advice is not to wait for the market to drop drastically before jumping in, as you may have to wait several more years, in my opinion. If you haven’t already, get into prospecting mode right away.
Remember that you need to look for motivated sellers who will be willing to sell below market value, allowing you to earn your profit on the purchase. However, you will agree that you are looking for exceptional situations, which are sometimes difficult to identify. But don’t be discouraged. Persevere and you will find motivated sellers!
Key no. 2: Learn how to finance your buildings 100%
In any type of real estate investment, the less you use your capital, the higher your returns will be. When it comes to infinite returns in real estate, this implies that the building you have just acquired was 100% with other people’s money. This is referred to as maximum leverage. However, do your calculations wisely and be extra careful, because using leverage at its maximum involves much greater risks than if you inject capital when buying. You are exposing yourself, among other things, to relatively low, and sometimes even negative, surplus cash flow. In the event of a lack of cash generated by the building, will you be able to personally inject capital to meet your financial obligations? Please, if you finance your acquisitions at 100%,
Key #3: Learn how to write creative purchase offers
It is well known, one of the keys to your success in real estate depends on the purchase offers you make, that is to say, the number of offers you will make, but above all, on how you write them.
Are they to your advantage? Are they protecting you adequately?
Do they minimize your down payment?
This key is often the one that will allow you to achieve your goals, that is to convince the seller and possibly acquire the building. To achieve this, you will need to develop the art of negotiation explained in Key 5.
Key #4: Have the discipline to do effective follow-ups
This fourth key is the logical continuation of key no. 3.
I regularly meet investors who tell me that they have found great opportunities thanks to the follow-up they did shortly after making an offer to buy that was initially refused by the seller.
Many first-time investors make the mistake of dropping a property because their offer to purchase hasn’t been accepted. They tell themselves that if it didn’t work, it’s because this building wasn’t for them!
This way of reacting can be very expensive. Beautiful profits will slip through your hands without you knowing it. It’s not the right thing to do to put the file in file 13! The file should go into your tracking system instead!
Since you will be looking for motivated sellers, you should consider that they will become more and more motivated over time. The more time passes, the more they will be inclined to lower their price or ease their conditions.
Key #5: Develop the art of negotiation
Throughout your career as a real estate investor, you will have to negotiate constantly, whether with:
• Your tenants;
• Providers;
• Bankers;
• Contractors;
• Buyers, sellers;
• Real estate brokers;
• The associates;
• And even with your spouse!
The latter turns out to be one of the best “allies” you can have when it comes to investing, regardless of the area of investment you choose. Real estate is no exception to the rule. For more details on couple investing, read an article I wrote on the subject.
Read books on the art of negotiation, take training, and practice negotiating daily. You will be surprised at the results.
Key #6: Do flawless due diligence
The purchase of a property is to be taken seriously, which is why it is important to check as many elements as possible before affixing your signature to the deed of sale.
Skipping this step is a blunder that often costs new investors dearly. For their part, more seasoned investors, who have already paid dearly for their mistakes for lack of verification, neglect the due diligence process less and less. At least, I dare to hope for them that they have learned with time and experience.
Due diligence is all well and good, but you still have to know what to check. I admit that when you have no experience, it is a bit difficult to know what to check. That is why it is necessary to use the experience of experienced investors. Network and meet experienced investors, they will be able to share their tips with you.
Key #7: Build a Dream Team
It is well known, in business, your success will depend on your relationships. The more competent and reliable people you surround yourself with, the more likely you are to succeed.
In real estate as in any other business, human leverage is essential. Indeed, what would companies be without their staff? You may answer customers! My answer is rather: “Your dream team above all”.
For customers to be satisfied, you need good products, of course, but what are the best products if customer service is absent?
A business is a whole. Its founder, good purchases, good employees, good business philosophy, good working conditions, etc. Once again, network as much as possible to meet those who will be part of your team.
Key #8: Train yourself properly
A common mistake that I often see with both beginners, intermediate and advanced investors is lack of training. They embark on real estate investment without following any training. Worse still, they seek opinions and advice from people who don’t even have a building.
It is not uncommon to buy buildings and invest several thousand dollars in them, so why not add a few hundred dollars more in training to optimize your real estate investment? Remember that in real estate, you juggle thousands of dollars at each stage. A lack of knowledge can cost tens of thousands of dollars. The reverse is also true. Some tricks learned in training are worth their weight in gold.
As the saying goes: “The entrepreneur never graduates!” “. So there is no end to the knowledge you can acquire.
Key #9: Develop an Action Plan!
When it comes to goal achievement, the important thing is to break your yearly goal down into daily goals. If for one reason or another, you don’t reach your annual goal, you will still have taken action and will have achieved a large number of small and medium goals. Your self-confidence will be increased, you will have something to be proud of and you may not be very far from achieving your annual goal with a few additional actions.
Are you beginning to understand why some are not moving forward despite a goal set in five years? They don’t take action to achieve their goal.
For the subdivision of your goals, here is a metaphor from my friend Jean-Pierre Du Sault, a real estate investor:
“You wouldn’t think of swallowing a salami all at once, but cut it into slices and you will! I think this metaphor sums up my point well.
Key #10: Get Rich Through Building Accumulation
Did you know that real estate investing can be divided into two worlds? That of FLIPS, which will allow you to quickly generate cash in the short term, and that of the accumulation of buildings, which will allow you to get rich and generate passive income.
Through the accumulation of properties, your net worth will grow over time due to the combined effect of the capitalization of mortgages and the appreciation of your properties.