The 6 Must Have Investor Virtues

[wgraham]

The 6 Must Have Investor Virtues




WRITTEN BY WADE GRAHAM | 28 MARCH 2011


By no means is Investment Real Estate the quick and easy road to financial freedom. In fact, truth be told it might be one the most difficult. I don't think it is as purly an investment but I think of it more as a business unlike stocks, bonds and mutual funds. As an operator of an Investment Real Estate Business I get asked at least once a week "What it takes to be successful in this business?" by want to be investors. Here are the virtues that you MUST HAVE:





[list type=decimal]
[*]Determination
[*]Patience
[*]Action - The Ability to Pull The Trigger
A Love For Numbers
Vision - Preferably Long Term
Optimism
[/list type=decimal]


Determination - This business can be a grind. In every type of market their are challenges. For example, in a hot market it is tough to find good properties but investors are plentiful but in a soft market properties are easy to find but investors are too nervous to get involved. It really is the great oxy moron of investing as you would prefer it to be exactly the opposite. My point is that this business will challenge you at every step of the way! Nowhere a long the lines is this going to be easy. If you don't have the determination to push through you might as well not get started and save yourself the disappointment.



Patience - We have all heard the phrase "Patience is a virtue" and it certainly rings true for real estate. Whenever I am negotiating in the back of my head I am always thinking from an attitude of abundance "There is always another deal." This attitude lets me walk away from mediocre deals and wait for another good investment to come my way. Patience will let you survive making poor investments and that is why I think it is one of the Investor Core Virtues.



Action: The Ability To Pull The Trigger - Patience is a core virtue but the ability to recognize a great investment and pull the trigger is where most investors get stuck. Let's face it writing big cheques still makes my palms sweat. It takes some kahonas to pull the trigger and most can't do it so they use Patience as an excuse when really it is fear. In this game you have to know the difference and take action when necessary.



A Love For Numbers: If you are not at least somewhat intrigued by numbers then this is going to be a tough way to make a living. Let's face it this is all about the numbers. If you are overly emotional and ignore what the numbers are telling you then you will not be long in this business. If you don't like crunching numbers daily then you will not enjoy one of the keys to success. Are you making money on this investment or not?



Long Term Vision - My last blog was about creating a powerful "Why". A Why that almost brings you to tears will help you get through the day to day minutia. Similarly you need to have a long term vision. You need to know what it is that you want out of this business. If you don't have this you will be making reactionary decisions instead of proactive ones and this is a quick way to disaster. I encourage all investors to write a vivid description of their lives 5 years from today. What does your life look, smell and taste like. Who is with you? Who isn't with you? Close your eyes and tell me about your life 5 years from now!



Optimism - I am a glass half full guy. Always have been and always will be. I prefer to think about the good things that could happen as opposed to dwelling on all of the negative fear. This has helped me get through some sticky situations. This business of investment real estate will do everything it can to drag you down. Tenants that don't pay rent, roofs that leak, demanding investors, and markets that you have no control over. If you are not optimistic then you are doomed.



For you folks new to the investment real estate business I hope this keeps it real for you. I see investors daily with diamonds in their eyes and I wish them well but unless I see these virtues in them as well then those diamonds tend to dull over time. But for those with a passion for real estate and these virtues it is really fun to watch! They have found their calling and quickly become a power house in the industry!



Good luck out there!

 

[Thomas Beyer]

That's a good list, Wade !!



Let me add a few .. and amend one.



7) you have to know something, i.e. an area of the world and/or a type of property. This takes a while to learn, and of course your list shows how to get those skills. But you have to build those skills or have those skills, especially before you ask others for money [I call it a track record]



8) EQ, not just IQ. IQ is Intelligence Quotient (i.e. how smart you are) .. EQ is Emotional Quotient, i.e. how well can you relate to people. This is a people business: tenants, buyers, sellers, realtors, investors, property managers, lawyers, accountants, .. they are all people you have to interface with one-on-one (face-to-face, email, letter or phone) or one-on-many (email, blogs, presentations, meals, ..) and a certain level of "friendliness" or humour or ability to connect is critical.



9) Ability to take calculated risks. maybe you call this optimism, coupled with ability to pull the trigger. Any business venture, such as real estate, has a degree of risk, as vacancies arise, mortgages have to be paid and values in the future are not certain. But you have to sift through all this information rubble and assess if property A or B or C is the best choice, in location X or Y or Z. [REIN certainly helps in this information sifting]



10) Faith is important too as many variable are beyond your control, such as your health, interest rates, tsunamis, explosions, people you meet. It helps to understand that you alone are not in control. Some call it God. Others fate. Others Allah or Karma or Spirit or mother earth "the environment".



I'd amend your "optimism" with realism. Having a positive world outlook helps. But being too optimistic can hurt you, as I see with many rookie investors that take on too much debt or expect too high a rent level or expect too high an annual value growth, and then lose a lot if the market wobbles a bit like it did in 2008/2009.



But overall, a great list, Wade .. and I think you have all 9 .. and I encourage you to reflect on 10 !!!

 

[dplummer]

Great list guys! It really can be applied to any entrepreneur who wants to succeed in any type of business. Onward & upward :>)



Doug

 

[LizzieChua]

Gentlemen, Thank you so much! Very inspiring indeed.



Wade, this is your second post that truly made an impact to my husband and I as we are going through this journey. Thank God, we now have a good working team in building our real estate portfolio. It came together when we took the courage to buy our first property after joining REIN.



'Much appreciated!



Lizzie Chua

 

[wgraham]

@Lizza - Replies like yours are the reason I write! It gives me great pleasure to inspire others to take action and move towards their goals and ideal lives. So thank you for taking the steps necessary to build the lives you want.



@thomas - those too are great additions. I am sure that their are many many more virtues that help propel us on our own journeys to this thing we call financial freedom and life.



As for point 10, I don't believe one can go through life without a certain degree of Faith. Some ascertain theirs through Churches, Bibles, and God (what ever you may call Him) and others have a broader ideas of faith. I fall into the later half although I do believe in God but the Mountains and the Earth will always be my church, the great explorers its profits and adventure is where I find my truth on any given day. But I digress....



See you all at the next REIN meeting!