By Kelle Sparta

After working and training in the real estate industry for over 10 years, I know one thing for certain: investing in real estate is a great way to create a life you can love.

Each year, as January arrives and many people stop to evaluate the direction of their careers and lives, I find that friends ask me: "How do I know if real estate investing is for me?"

Today, I'm happy to share with you the same guidance I give to my closest friends. Because while this industry can certainly help you achieve your personal and financial dreams, it clearly is not for everyone.

Over the years I've worked with many real estate investors. All of the successful ones had several attributes in common. If you're thinking about taking the plunge into the real estate investment pool, consider whether or not you possess these essential attributes:

1. Do you know what you're looking for? Successful investors develop a set of very specific criteria for their investment properties, and while those criteria can (and should) differ from person to person, the good ones know what they want. Some look for fix and flip investments. Some look for rentals that need work. Some want rentals that are already tenanted and in turn-key condition. Still others look for break-even cash propositions that will result in a net loss for tax purposes. Whatever it is, as an investor, you need to know what you are looking for - and not get distracted from that goal by spending time with properties that don't meet your criteria.
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2. Are you willing to do the work? Make no mistake, real estate investment is not an easy game to play, and it takes a lot of legwork to find the right properties at the right time. You may need to scour newspapers for legal notices of tax sales, auctions, etc., or even better, check your ForeclosuresMass account for the latest new foreclosures each week. You need contacts with many real estate agents to keep you informed when new properties come on the market. And you need to be willing to drop everything to see a hot new listing.

   Special Download! When investing in any property, it's important to get as much information as possible up front. Click here to download a simple form, courtesy of Kelle Sparta, for gathering the information you'll need. multifamilyinfo.pdf

   You should expect to look at 15-20 properties before you find one that might remotely fit your needs, expect to make a lot of offers that get rejected, and expect to encounter resistance from many people along the way. To be successful however, you can't take any of this personally. Professional investors stick with it and don't dally when the opportunity arises.

3. Can you resist getting emotionally involved in properties? The biggest mistakes are made by investors who become emotionally attached to the properties they are considering purchasing. If you're going to succeed, you need the ability to follow your head - not your heart. If you let the adorable charm or the beautiful woodwork and fireplace sway your decision, you may end up owning the money pit with no way out. Your best bet is to use this rule of thumb - "If you love the place, don't buy it."

4. Are you able to walk away? The best investors keep their egos away from the negotiating table. They understand that in a business deal, either the numbers work or they don't, and there's no in-between. If you're the kind of person who needs to beat or impress the other guy (even if the property isn't really what you want or the price is too high), you're in for a bumpy ride.

5. Do you know when you need a break? A good investor, like a world class athlete, knows when he needs a break - and is willing to take it. Trying to find investment property while you are frustrated or emotional is like grocery shopping when you're hungry - everything looks good. For that reason, you need well-tuned internal awareness to tell you when to slow down and rest to be successful in this business.

6. Are you willing to commit? I have to admit that I've always hesitated to work with new investors. The problem is that often, when it comes time to do the deal, they back out over something trivial. What they're really saying is that they are not ready to commit to being an investor. You need to make a commitment to yourself before you put in the considerable time and effort required to find the right property. Then, when your offer is accepted, you need to keep going until you cross the finish line.

The fact is that buying your first property (or your fourth or your tenth) is an intimidating proposition. You're going to be scared. You need to accept that fact and do it anyway. Trust that if you have done your homework and the math, that you are making the right decision. Invest well in real estate and it will change your life for the better. If you can face your fears, be diligent in your efforts, not be blinded by your emotions, and be patient enough to wait for the right property to come along, you can and will be successful in this business.

Kelle Sparta is the author of The Consultative Real Estate Agent and has been a trainer in the real estate industry since 1996. She was a top producing agent in the Connecticut real estate market and specialized in working with real estate investors. For more information, visit her website at www.spartasuccess.com.

« Change Your Focus - Change Your Life

January 2006

Nothing Succeeds Like Success »

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