When I wrote How to Win in Commercial Real Estate Investing, I spent all my words on the process of investing. Not the psychology of the business. Below is a great (and short) article on the 4 P’s of being a successful investor. I would recommend that everyone think about these words before they jump into the CRE investing world.
- Be passionate about investing in real estate. This is what ensures longevity throughout the investment.
- Be persistent when the going gets tough. You will have your fair share of problems, you must stay strong and get through them.
- Be patient. Rash decisions can get you into trouble in this type of investing.
- Know and trust the process. Shooting from the hip can result in bad decisions along the way.
Investing in CRE can be very rewarding and frustrating and fantastic and horrible and well…every emotion. I was recently on the 7 Rules Podcast with Nick Raithel where we discussed my 7 Rules for Real Estate Investing. It’s a great podcast to listen to if you want to focus on the important issues when investing in Commercial Real Estate. If you want to listen, let me know and I will email you the link. If you decide to get on board, enjoy the ride.
So you want to be a successful real estate investor? It seems so easy looking in from the outside. Working for yourself, setting your own hours, making money on vacation are just some of the perks of being a real estate investor. But it takes a lot of hard work and the 4 P’s to be truly successful as a real estate investor.
“Passion will move men beyond themselves, beyond their shortcomings, beyond their failures.” – Joseph Campbell
Do you wake up ready to take on the world? You can hardly sleep because you are excited about what you are doing. Passion is what makes it no longer work. You don’t even realize how many hours you put in because it isn’t work. It is deeper than that. It is in your soul to be a real estate investor. This passion carries you and makes it easier to get through those difficult times.
“Persistence is to the character of man as carbon is to steel.” – Napoleon Hill
Your passion allows you to persist when things are bad. And believe me they will get bad. Whether it is problem tenants, a down turn in the market or too many repairs; at some point you will question what you are doing. But your persistency is what will keep you going and you will persist through because of the passion that you have for investing in real estate.
“The key to everything is patience. You get the chicken by hatching the egg not by smashing it” – Arnold Glasow
I can’t say enough about patience. Patience is what keeps you out of trouble. So you have all this passion and you are fired up, ready to buy your first real estate investment property. Your patience is what prevents you from jumping into a deal too quickly. Patience allows you to do your due diligence. Patience allows you to realize that if you don’t get this deal, it is ok because there are many deals after this one. I’ve been around plenty of people that couldn’t just sit on their hands and wait. Sometimes there isn’t anything to buy and you have to be OK with that. Spend that time on something else in your business. It is the deals that you rush into that cost you the most. It could cost you time, aggravation and worst of all money.
“If you can’t describe what you are doing in a process, you don’t know what you are doing.” –W. Edwards Deming
Process brings everything together under one united system. Without the processes, there is no business. There is a free for all where you make decisions based upon a gut response rather than the facts. The process keeps you in check. The process is like a safety net. If you set it up and stick to it (assuming it catches everything) you should be in good shape. Typically problems happen when you decide that you know better than the process that you spent hours working on.
Passion, persistence, patience and process will help you become a successful real estate investor. It is what gets you out of bed in the morning. It keeps you going when the going gets tough. It allows you to be at peace while you wait for the right opportunity. It brings all of these together into a plan, so you can stay focused on what you are doing. These form the foundations of a successful real estate investor.