Whether you’re an aspiring real estate investor or are looking to embrace your entrepreneurial spirit in a different industry, you can learn a lot of business lessons from successful real estate investors.
It’s no secret that they’re hard workers. They need to build and maintain a strong network, handle large transactions and always have to be on top of current trends and events.
Zolo asked the top names in real estate for their most valuable business lessons and tips so you can learn from their experience, apply them to your industry and already be one step ahead of the game.
Why Successful Real Estate Investors Are Great Business Role Models
The lessons we learn from successful real estate investors can be applied to any business. Whether you’re managing a store, starting your own business or are a college student with big dreams, these tips apply throughout many industries and are sure to get you a step closer to success.
They Are Problem Solvers
Whatever industry you work in, it’s crucial to understand what your job truly is. For example, Sharon Vornholt, real estate investor in Louisville, Kentucky, says that “investors think they are in the ‘house business; In reality, [they] are in the problem-solving business. If you are able to solve people’s problems, you will do very well in this business.”
Knowing your market and having the resources to break your job down to the most simple definition can help you become a more successful entrepreneur. Uncovering your market’s needs and creating solutions for its problems will help you establish a strong product, trusting client base and make you a valued and sought after expert among colleagues in the business.
They Know Their Industry
If you’re unfamiliar with your industry’s ways and don’t keep up to date with the changes within, you’re ultimately going to fail. “Don’t fool around hoping or guessing,” says real estate master Don Campbell. “Do your homework before and during your business operation of investment choices. You, and ONLY you, are responsible for your results (both good and bad).”
Find efficient ways that allow you to stay on top of trends that can impact your business or industry. Listening to podcasts, subscribing to newsletters or following experts on social media are great ways to get the most important news in digestible portions. Carve time out every week to further research anything that caught your attention. The more you know about your industry, the better you’ll be able to navigate it successfully.
They’re Patient… but Will Move Quick
As an entrepreneur, you can’t rely on luck and opportunity. It takes hard work, dedication and another virtue all entrepreneurs have in common: “Being patient is the next feature on the list to become a successful real estate investor,” states Shalom Drizin, real estate investor from Brooklyn, New York. Snap decisions can cause you to overpay or undersell which can put a big dent in your budget. It often takes patience, endurance and intuition to navigate the market and make decisions that will reward you in the long run.
“Above all, the person must know how to identify when is the perfect time to sell, remodel or build.” Managing this balancing act of practicing patience and knowing the right time to make your move is essential, whether you’re a real estate investor or an entrepreneur. An important business lesson for entrepreneurs is to understand patience and that success doesn’t happen overnight, you need to work toward it gradually. However, don’t wait too long when opportunity does knock on your door!
They Build a Strong Brand
If you’re looking for a one-in-a-million success story, you’ll have to build a one-in-a-million brand for yourself. Sharon Vornholt urges anyone starting out to “get really good at marketing and branding. Marketing is how you get leads and branding is why they choose YOU […]. It’s critical that you have a good website.”
She draws from her own experience: “I think the biggest mistake I made is the same one that new investors are still making today, and that has to do with branding. You should start building your brand right from the beginning, and I didn’t do that. I felt like I didn’t need to worry about building a brand while I was learning and getting experience, but I was wrong.”
Sharon Vornholt encourages rookies to “think about this business for a minute, investors are all pretty much the same. We all buy houses. The one chance you have to differentiate yourself is through branding. My advice is to start building your brand from day one.”
They Know That Their Network Is Their Net Worth
You’ve heard of location, location, location, but what’s the point if you’re going there by yourself? Your networking skills can make or break your career, especially as a beginner in a new industry.
Never turn away a learning opportunity. Jon Kessler from We Buy Houses Cash Baltimore says: “Whether it’s [neighbourhood] trends, good contractors to use, new techniques, a small obscure lender offering a favourable new loan product or potential partners, none of this information can be gathered by just one person.”
If you start thinking of like-minded folks as your competition, you may lose out on networking opportunities. Instead, “think of them as your team and you will get much farther much faster.”
For anyone starting out in real estate investment, Jon Kessler recommends meetups or local Facebook groups to connect with fellow investors. Here are a few great starting points:
- Money. Life. Balance. Community
- Investing For Beginners (CANADA)
- Personal Finance For Canadians Subreddit
- Canadian Real Estate Investing Mastermind
- Plan, Budget & Invest
- Canadian Real Estate Investors Association
No matter your industry, check platforms like Reddit or Facebook for like minded people or join a local networking group to expand your network, make valuable connections and share your vision with other entrepreneurs.
They Stay True to Themselves
Losing sight of your goals is one of the quickest exits off the highway that is your career and an important lesson in business. As an entrepreneur, you’ll likely encounter opportunities that can change your career path. Don’t get enticed by big promises if they don’t align with your values.
David Baddeley, Director of Scottish Trust Deed, knows that “so many people have gotten wealthy by investing in real estate that it is hard to ignore the opportunity.” But he also shared that “wanting in and being able to make it happen are two very different things. […] Stick to what you know and don’t let money influence your decisions.”
Discover the purpose of your business, your “why” and stay true to it. Ask yourself why you get out of bed in the morning, why you founded your company, why you created your product or service. If an opportunity presents itself that doesn’t align with your “why” it’s likely not worth pursuing.
They Have a Positive Attitude
How do you stay positive and confident when you’re just starting out? Justin Pogue remembers: “It’s dealing with those voices that say, ‘You’ve never done this before. Are you sure you know how to do this? What if you have to evict people?’ Silencing these questions is a really important step in becoming a true real estate investor.”
Shifting your mindset doesn’t happen overnight. It’s a process you’ll have to go through. “Know [your doubts] will only disappear when you can respond to those questions with the experience you develop over time with your investment.”
It’s normal to feel like an imposter when you’re new in the business. Whenever you feel doubts creeping up on you, try to separate these feelings from facts and shift your mindset by visualizing success. Remember, every time you encounter a new situation, you’re learning new valuable skills that will bring you closer to your goals. Just keep going and never stop believing in yourself!
They Don’t Rely on Luck
Any amazing success story is the result of hard work, dedication and a dash of luck. Know that relying on opportunity to get you to the top won’t cut it – this is an important business lesson for any entrepreneur. In real estate investment, you need to “ensure that the price you pay [for a property] is relatively consistent with prospective rental income.”
This advice comes from Phil Hogan of Hutcheson and Co. LLP Victoria, British Columbia. He knows that “if you don’t overpay for your rental properties and ensure you buy in a relatively low vacancy rate neighbourhood the property will pay for itself throughout the lifetime of the mortgage. Any price appreciation will be extra return on your investment. Simply relying on price appreciation is terrible risk management.”
Translating this advice from real estate to any other industry simply means that you should always make sure that your cash flow is positive. If you rely on luck to break even, you may end up in the red.
They’re Prepared for the Unexpected
There’s a lot that can go wrong when you’re taking a big financial risk like investing in property or your own business. To ensure that you’re not losing out, you should always prepare for the unexpected. You can do so by calculating a contingency budget that will cover any road blocks you may encounter later on.
For real estate investors, Ethan Taub, CEO of Loanry, suggests that “rent has to be sufficient not only to cover the monthly cost of financing, property taxes, insurance, and landlord paid utilities, but it also has to provide a profit, as well as an allowance for some of those unexpected expenses […] like a new roof or furnace.”
As an entrepreneur in a different industry you may not need to worry about replacing the roof of a building but unexpected costs like hiring new employees, renting more work or storage space or investing in new materials for your products shouldn’t throw you for a loop. A well calculated contingency plan is an important business lesson that will help you prepare for these kinds of unexpected expenses.
Real estate investing is all about maximizing gains and minimizing risks. As an entrepreneur in any industry, this is a smart concept to rely on. It takes very specific character, patience and lots of devotion to make it from entrepreneur to CEO, but if you follow the advice from the real estate professionals above, you have a better chance to succeed.
