Real Deal REInvestor Network

10 Habits Of Highly Effective Real Estate Investors
by Jean Folger, Investopedia

Real estate has long been regarded as a sound investment. Wholesaling and property management of commercial and residential property are just a few of the ways investors can profit from real estate, but it takes a little savvy to become successful in this competitive arena. While certain universities do offer coursework and programs that specifically benefit real estate investors, such as the Johns Hopkins Carey Business School’s Master of Science in Real Estate, a degree is not necessarily a prerequisite to profitable real estate investing. Whether an investor has a degree or not, there are certain characteristics that top real estate investors commonly possess. (From caves to condos, we look at how Homosapiens have hunted for homes over the years. For further reading, check out No Longer Nomads: The History Of Real Estate.)

Treat Investments as Businesses

It is important for real estate investors to approach their real estate activities as a business in order to establish and achieve short- and long-term goals. A business plan allows real estate investors to not only identify objectives, but also determine a viable course of action towards their attainment. A business plan also allows investors to visualize the big picture, which helps maintain focus on the goals rather than on any minor setback. Real estate investing can be complicated and demanding, and a solid plan can keep investors organized and on task.

Know Their Markets

Effective real estate investors acquire an in-depth knowledge of their selected market(s). The more an investor understands a particular market, the more qualified he or she will be to make sound business decisions. Keeping abreast of current trends, including any changes in consumer spending habits, mortgage rates and the unemployment rate, to name a few, enables savvy real estate investors to acknowledge current conditions, and plan for the future. Being familiar with specific markets allows investors to predict when trends are going to change, creating potentially beneficial opportunities for the prepared investor.

Maintain High Ethical Standards

Realtors are bound to act according to a code of ethics and standards of practice policy, and real estate agents are held to each state's real estate commission rules and standards. Real estate investors, however, unless they are associated with membership-based organizations, are not usually required to maintain a particular degree of ethics in their business practices, as long as they operate within the boundaries of the law. Even though it would be easy to take advantage of this situation, most successful real estate investors, and especially those who remain in the business for the long haul, maintain high ethical standards. Since real estate investing involves actively working with people, an investor's reputation is likely to be far reaching. In the case of an investor lacking in ethics, the consequences can be damaging. Effective real estate investors know it is better to conduct fair business, rather than seeing what they can get away with.

Develop a Focus or Niche

Because there are so many ways to invest in real estate, it is important for investors to develop a focus in order to gain the depth of knowledge essential to becoming successful. This involves learning everything about a certain type of investment - whether it is wholesaling or commercial real estate - and becoming confident in that arena. Taking the time to develop this level of understanding is integral to the long-term success of the investor. Once a particular market is mastered, the investor can move on to additional areas using the same in-depth approach. Savvy investors know that it is better to do one thing well than five things poorly.

Strive to be Good Customer Service Representatives

Referrals generate a sizable portion of a real estate investor's business, so it is critical that investors treat others with respect. This includes business partners, associates, clients, renters and anyone with whom the investor has a business relationship. Effective real estate investors are good customer service representatives by paying attention to detail, listening and responding to complaints and concerns, and representing their business in a positive and professional manner.

Stay Educated

As with any business, it is imperative to stay up to date with the laws, regulations, terminology and trends that form the basis of the real estate investor's business. Keeping current does require additional work, but it can be viewed as an investment in the future of the business. Investors who fall behind risk not only losing momentum in their businesses, but also legal ramifications if laws are ignored or broken. When it pertains to the law, ignorance is no excuse. Successful real estate investors take the time and make the effort to stay educated, adapting to any regulatory changes or economic trends.

Understand the Risks

Those choosing to invest in the stock or futures markets are inundated with myriad warnings regarding the inherent risks involved in investing. Numerous agencies, such as the Commodity Futures Trading Commission, require disclaimers to warn potential market participants about the possibility of loss of capital. While much of this is legalese, it has made it clear to people that investing in the stock or futures markets is risky; meaning, one can lose a lot of money. Greenhorn real estate investors, however, are more likely to be saturated with advertisements claiming just the opposite - that it is easy to make money in real estate. Prudent real estate investors understand the risks associated with the business - not only in terms of real estate deals, but also the legal implications involved - and adjust their businesses to reduce any risks.

Invest in a Reputable Accountant

Taxes comprise a significant portion of a real estate investor's yearly expenses. Understanding current tax laws can be complicated and take time away from the business at hand. Sharp real estate investors retain the services of a qualified, reputable accountant to handle the business's books. The costs associated with the accountant can be negligible when compared to the savings a professional can bring to the business.

Find Help When They Need It

Real estate investing is complicated and requires a great deal of expertise to engage profitably in the business. Learning the business and the legal procedures is challenging to someone attempting to do things on their own. Effective real estate investors often attribute part of their success to others - whether a mentor, lawyer, accountant or supportive friend. Rather than risk time and money solving a difficult problem on their own, successful real estate investors know it is worth the additional costs (in terms of money and ego) to find help when they need it and embrace other peoples’ expertise. (Don't let a slow real estate market drag you down - steer clear of these pitfalls. To learn more, see 5 Mistakes Real Estate Investors Should Avoid.)

Build a Network

A network can provide important support and create opportunities to a new or experienced real estate investor. This group of associates can be comprised of a well-chosen mentor, business partners, clients or a non-profit organization whose interest is in real estate. A network allows investors to challenge and support one another, and can aid significantly in advancing one's career through shared knowledge and new opportunities. Because much of real estate investing relies on experiential-based learning, rather than on reading a book, for instance, savvy real estate investors understand the importance of building a network.

Conclusion

Despite abundant advertisements claiming that real estate investing is an easy way to wealth, it is in fact a challenging business requiring expertise, planning and focus. In addition, because the business revolves around people, investors benefit in the long run by operating with integrity and by showing respect to associates and clients. Tough it may be relatively simple to enjoy short-lived profits, developing a viable real estate investing business that can last for the long-term requires additional skill and effort. Whether focusing on apartment buildings or commercial property, highly effective real estate investors share these 10 essential habits. (Owning property isn't always easy, but there are plenty of perks.)

My story begins at my first job right out of school in the early 70’s.  I had made the decision to pursue a job in Information Technology (at the time, it was simply called computer programming).  I started with a small insurance company in Wisconsin that was looking for ways to automate their processes.  Believe it or not, insurance applications were submitted on paper, sent to the “data entry” department which was made up of key punch operators entering data into punch cards that were read into a computer for processing. 

I was blessed with the opportunity to work directly with IBM to replace the key punch process with online terminals.  This became an exciting relationship as IBM was looking for a “beta” partner for their new terminals and they offered resources that I worked with side by side to create the first online insurance processing center.

We became the show case for IBM and before I knew it, we were providing testimonials and demonstrations of what could be done with this new technology.  Insurance companies from around the world were visiting our offices including a company from Sweden that left me a little wooden horse as a token of their appreciation that still stands on my desk to this day.

That was the first two years of my career which gave me great pride since my aunts and uncles always claimed my dad’s children wouldn’t amount to much.  My dad worked three jobs to put food on the table and we weren’t afforded a lot of opportunities … but what we all learned was a work ethic to do what you need to succeed. 

These first two years set the stage for the rest of my career as I was recruited by other insurance companies for process reengineering or entity startup and integration projects.  However, somewhere along this journey, my career took me out of the rewarding roll of project development and reengineering and moved into an Executive roll of data stewardship, bureaucracy, regulatory compliance, privacy and security.  It just wasn’t fun anymore and after 30 years, when I fell victim to a merger and acquisition that left me standing on the outside for the first time in my career, I embraced the opportunity to reinvent myself and pursued real estate investment.

This was GREAT!  I was reenergized and filled with passion to learn anything and everything there was to learn in real estate and in 2006 I began to amass our real estate empire, buying into every strategy that was promoted.  I was buying foreclosures and REOs from the bank and keeping them for rentals in markets I believed would cash flow.  I was investing in land development, preconstruction, apartment conversions, commercial development and a development project in Costa Rico.  I was so focused on “building” this empire that I never stopped to look at the risks and warning signs that were starting to appear about the real estate market and when it crashed, I drove our real estate empire right off the cliff ….. Without a safety net.

Whoa … we lost EVERYTHING!  But that’s OK!  I know I was successful once, and I know I could do it again.  BUT, I made a fundamental mistake.  Rather than approaching new ventures in a position of confidence, I was pursuing them in a mode of desperation.  I started chasing shinny objects and unicorns that made promises of recovering what I had lost in a short amount of time.  These unicorns were presented as Bulk REO tapes and commodity transactions for Gold and Oil.  The reality is … “There is no quick fix” and it was going to take hard work and determination to recover what had been lost and achieve the goals I had lost sight of.

At the end of 2010, I made the fundamental decision to go back to the basics of real estate investing and laser focus on a single strategy … one with reduced risk and could leverage OPM to begin our recovery.  My research for this strategy led me to a course that initially appeared to provide the coaching I was searching for to regain my confidence at an affordable price to reenter the real estate market.  However, the first weekend seminar quickly revealed that in order to “qualify” for the coaching program, I would have to buy the next two levels of training that would total approximately $20,000.

This was the straw that broke the camel’s back.  That’s it … I QUIT!  I could no longer take my family down this black hole of real estate gurus and I was going to have to reenter Corporate America and find a J.O.B.  WELL, I now thank God for putting me at that fork in the road.  All things happen for a reason and as I started to look for JOB opportunities, I stumbled across the Facebook link and/or email that talked about an intern/mentorship opportunity with a national real estate company and the rest is history!

I also need to thank my WIFE who has been an absolute rock through this whole experience.  Not once has she blamed me for destroying our goals for early retirement and philanthropy … nor has she ever berated me to get a JOB.  Instead, she has reminded me of how unhappy I had become in Corporate America and she did not want to see me stop “Three Feet From Gold”.  She encouraged me to learn from the experts, shadow what they are doing and regain my confidence to become successful again through the only real method to success of blood, sweat and tears.  There is no such thing as GET RICH QUICK in the real world.

I am renewed by the same energy I once felt for the opportunity I had early in my career to work side by side with IBM to develop a business opportunity that benefited each other.  Once again, I am blessed with an opportunity to work side by side with the experts at the HIS Real Estate Network to build business opportunities in Real Estate that I KNOW will benefit all parties.  I will be forever indebted to and thankful for this opportunity offered by Danny, Rick and the Directors, Sam, Dana, Jo and Alex.  God Bless You All!

"As A Man Thinketh" by James Allen is a wonderful little book full of heavy concepts of truth and peace that strike chords within your intelligence and logic to produce harmony.  I have now given a copy to our children and have requested them to read and share their thoughts.

As I take each step through the MMM Challenge, I continue to be amazed by how tightly integrated and interwoven our exercises are and the lessons they bring forth.  It is clear that this is not by accident, but by careful design that we read “As A Man Thinketh” which suggests the garden of our mind is cultivated intelligently by ourselves; paired with the identification of Time Sucking activities; and the Burn Exercise which releases the Past.  ALL of these activities free the mind, creating room to embrace and freely accept positive affirmations and cultivate the mind toward perfection with useful and pure thoughts.

My closet is symbolic of my cluttered mind.  Since I grew up as a child with very little, drinking powdered milk on my cereal, EVERYTHING has value to me and I have developed a bad habit of not wanting to “let go”.  The result is a closet “STUFFED” with things that I don’t use and leaves little room to allow newer and fresher ideas that would be used in my life.  Therefore, what I have learned by this book and the other exercises is the “URGENT” need to weed out those things that are holding me back, or at a minimum, blocking other opportunities from coming to me.

As I read through this book, I had strong personal feelings toward certain passages … “Following the inmost desires, aspirations, thoughts, by which he allows himself to be dominated, (pursuing the will-o'-the-wisps of impure imaginings or steadfastly walking the highway of strong and high endeavor), a man at last arrives at their fruition and fulfillment in the outer conditions of his life. The laws of growth and adjustment everywhere obtains.” 

I have experienced this throughout my career by staying true to my guiding principles of honesty, integrity and the value of the team.  This put me on course of steadfastly walking the highway of strong and high endeavor … BUT, I must admit that my thoughts were constantly challenged as other individuals flashed by me in the growth of their career.  Fortunately, my beliefs would be reaffirmed shortly after when these individuals who flashed to their successes found themselves at their level of incompetence and without the conviction to sustain, quickly fell from the peaks to which they ascended.

There is another passage that I would like to preach from a soap box whenever possible … “Not what he wishes and prays for does a man get, but what he justly earns. His wishes and prayers are only gratified and answered when they harmonize with his thoughts and actions.”  Whether a person is of faith or believes in the manifestation of thought, they MUST “act as if” and take decisive action to realize the results of their thoughts and prayers.  Moreover, circumstances don't just "happen" to you; once you cultivate a thought, you eventually act on it, and that effects your outward circumstances.

I really resonated to Allen’s quote on fear, "Thoughts of doubt and fear never accomplish anything, and never can. They always lead to failure. Purpose, energy, power to do, and all strong thoughts cease when doubt and fear creep in." How profound and how true. How we let fear run our lives - again proving how powerful our thoughts can be. Allen further expounds by saying, "He who has conquered doubt and fear has conquered failure."

This highly inspirational book cannot help but to motivate you in some degree. I feel like I have been given the keys to a door that was once rusty and would not open, but now will yield freely in my hand. Another great quote is, "The Vision that you glorify in your mind, the Ideal that you enthrone in your heart - this you will build your life by, this you will become."

This book is a MUST read if you are desiring to change your negatives into positives! The power of the mind is incredible - in all areas of our life!

Read or download/print this book here: http://hisrealestatenetwork.com/James-Allen-As-A-Man-Thinketh%20Free%20Ebook.pdf

As a side note, I wanted to thank Hector for sharing the website that provided an audio copy of this book which allowed me to enjoy its content during my one hour (two with traffic) commute to and from the HIS Los Angeles Office. It provided an excellent time management tool and avoided a costly collision that is caused by people texting or reading books and/or the newspaper while they are commuting to and from work.

I initially intended this post to be a response to Tony Reynolds http://www.realdealcommunity.com/members/profile/10874 when he asked if there was a Tutorial for the Real Deal Website. However, it became too long to post on his wall and thought others could benefit from this as well.

 

Hey Tony,

 

I was amused by your comment “Where am I and what am I doing”.  It reminded me of a comment made by a colleague while on a business trip.  After traveling all day from the West Coast to the East Coast, we rented a car, loaded our bags in the trunk and left the airport.  After 30 minutes of speeding down the highway at 80 mph, my colleague declares “I don’t know where I’m going … but we’re getting there fast!”  This was obviously before GPS’.

 

Unfortunately, this sight does not come with a GPS; or a tutorial, or a lot of “search” functions for that matter.  There is a Search field in the top left hand corner of the screen, but it seems to be restricted to profile information and Titles of postings.  As an example, if you search for “korotko”, you will receive the following links to my profile and Blogs ... but not everything that my name appears:

 

 

HOWEVER, if you search for “lucky 36 mmm student”, you will receive a link to every blog written with those key words in the title.

 
The site does require some diligence and navigation to stay informed.  Here are some basic guidelines I have learned through my personal experience.  There could be features of the site I have not discovered.

 

Your personal profile provides a WALL that you and others can write on … but people have to visit your profile to see what has been written on your wall.  Envision this as the outside wall of your house.  Anything posted to the outside wall of your house is visible to everybody else, but they have to drive to your house to see what has been written.  If you specifically need somebody else to see what you are writing, you need to post the comment on their wall or within a forum or blog.

 

You will receive notifications anytime somebody writes on your wall or comments on your blog.  I suggest you make it a habit to also click on the “All Notifications” tab while viewing your notifications to see all the notices generated.  I would also strongly recommend you frequently visit the “What’s New” Tab which will provide an overview of EVERYTHING that is occurring within the Community.  But I must warn you; this tab does not keep a complete history of activity and only posts the most recent events.  SO, you want to visit this tab frequently to keep up with what is going on.

 

You also asked what the difference was between a forum and a blog.  According to Wikipedia …

 

A blog (a blend of the term web log)^[1] is a type of website or part of a website. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order. Blog can also be used as a verb, meaning to maintain or add content to a blog.

Most blogs are interactive, allowing visitors to leave comments and even message each other via widgets on the blogs and it is this interactivity that distinguishes them from other static websites.[2]

 

An Internet forum, or message board, is an online discussion site where people can hold conversations in the form of posted messages.^[1] They differ from chat rooms in that messages are at least temporarily archived. Also, depending on the access level of a user and/or the forum set-up, a posted message might need to be approved by a moderator before it becomes visible.

Forums have a specific set of jargon associated with them; e.g. A single conversation is called a 'thread'.

A forum is hierarchical or tree-like in structure: a forum can contain a number of subforums, each of which may have several topics. Within a forum's topic, each new discussion started is called a thread, and can be replied to by as many people as wish to.

 

Depending on the forum set-up, users can be anonymous or have to register with the forum and then subsequently log in in order to post messages. Usually you do not have to log in to read existing messages.

 

 

This should get you started ... But I am a strong believer that “Brevity” is the best form of communication and I fear I have already made this post too long. Therefore I am going to end this post here and invite others to comment and post their experiences and tricks they have learned with this site.

Good Luck to all the MMM Candidates and God Bless …
Craig Korotko

WOW … I just returned from the HIS Real Estate Network Office in Los Angeles.  I am so grateful for the opportunity to visit with the team here in Southern California.  This is the Real Deal (NO PUN INTENDED) … the energy of the staff within the office is infectious and my desire to be selected for the MMM Challenge has been multiplied 1,000%.  Thank you Sam for making this introduction.

 

I had the privilege of meeting with Luis D Roque, Principal Director of the HIS Real Estate Network, Los Angeles Office. Luis also introduced me to Adam O’Neill and John Joire who have many years experience as developers and real estate brokerage focused on investment opportunities in real estate. This group has worked with real estate developers, hedge funds, private equity funds, real estate brokerages, regional banks, and mortgage servicers to sell properties, negotiate terms on existing mortgages and short sales.  I already feel smarter and more energized through the brief meeting with this team … I can only imagine what the six month menternship will result in (the hairs on my arms are standing on end).  The opportunities are endless.

 

Once again I would like to express how grateful and blessed I am for this opportunity and anxiously await the final selection. Anybody who is selected to be a member of the 36 MMM Students will be offered a once in a life time experience … We all need to treat it as such!!!

 

God Bless to everyone involved …

Craig Korotko

949 WE BUY RE (932-8973)