If you have been in real estate for some time take a minute and think back to when you started. There is a good chance some of the decisions you made are downright laughable even just a few years later. Every day you are in the business should be a learning experience. Everybody makes mistakes, the key is never to make the same mistake twice. The knowledge you gain must be acted on or it is essentially useless. It is always better, and far less expensive, learning from the mistakes and missteps of others rather than constantly banging your head against the wall. Regardless whether you are new to the business or a seasoned vet, there is always something you can learn. Here are five valuable lessons any investor should follow.
- Listen to opinions (but don’t necessarily act on them). It feels like everybody has an opinion on the real estate business. The minute you proclaim yourself a real estate investor, you will be inundated with opinions and strategies on how you should invest. Instead of blindly dismissing these opinions you should actually take a minute and listen to them. You never know when you will hear an idea that sparks action. This doesn’t mean you shouldn’t have personal convictions but the more information you hear the easier it is to make decisions. Some ideas and opinions will be outrageous that may only sink in when you hear them from other people. Some opinions can work, but not for your personal business and your market. There is no such thing as too much education. By hearing as many people and voices as you can it will help narrow your focus and help choose the best path for your business.
- Take calculated risks. Everything you do in business, and in life, carries some kind of risk. Driving to work may not seem like much of a gamble, but if you dig deep enough it is. The key to real estate is knowing when to take risks and when to walk away. There is no such thing as a slam dunk deal. Every deal you are part of will have risk attached to it. Before getting involved you need to do your homework and make yourself comfortable enough to make a decision. Once you have an opinion you need to act on it. There is a thing in the real estate world known as paralysis by analysis. Simply put you know what your gut is telling you to do, but you look at the deal from every possible angle until the negatives slowly outweigh the positives and you fail to act. You go back and forth for days and when you are finally ready to do something the property is off the market. You don’t need to make over-aggressive moves with limited upside, but when an opportunity presents itself you need to be willing to take calculated risks.
- Be willing to change. It is impossible to know if what you are doing now will work a year down the road. In any business there is a balance between sticking to your guns and knowing when the change. Change is never easy, but it could help save your business. Before making any changes, you must be willing to see whatever your initial plan is through to completion. This could be sticking with a marketing idea or trying a new lead generation service. It could be working with a new business partner or trying out a new real estate contract. Changing does not mean prematurely jumping ship until you are 100% certain you have given it a fair chance. At that point, you need to make quick, decisive, well thought out actions that prompt change. You may have thought something was going to work, but if the data shows something different you need to be willing to shift gears and change things.
- Find a voice of reason. In real estate there are literally dozens of decisions to be made every day. Knowing what to do all the time can be difficult. To ease the burden and help you sleep at night you should find someone you trust to bounce ideas off. This can be a trusted mentor, a long-time networking partner or someone you are considering partnering up with. They shouldn’t be someone who says yes to every idea you have or every plan you come up with. Someone who is willing to tell you no can be a great ally to have.
- Success is easy, sustaining it can be difficult. If you follow sports you see it all the time. A team will go on a good run, win some games they are not supposed to and eventually win a championship. The next year, with all the same pieces still in place, they do not get back to the same point. Essentially the same players do not have the same success from one year to another. The biggest reasons is because getting to the top of the mountaintop is the easy part, staying there can be difficult. As hard as you work to achieve success you need to work twice as hard to keep it. There are always distractions when you are on a good run. You feel like you don’t need to work as hard because you think you have it made. Anyone successful can tell you that things can change on a dime. If you stop working you will be left wondering what happened.
Every day in real estate you should learn something new. Start by focusing on these five valuable business lessons.
