“What is the number one reason a person fails at becoming a successful investor in the multifamily business?”
I get asked this question a lot. In my experience (20 years investing, 10+ years teaching it) I have come to one simple answer. Boredom.
That’s it. People just get bored when they don’t have huge success right out of the gate, and they wander off. Making money in real estate may come quickly but that doesn’t happen often, and it doesn’t happen constantly. Success in real estate (any kind) is about doing many things right over a long period of time.
If you have a lot of financial success early on, that’s great, but don’t let that go to your head. It’s more likely luck or the market than your own personal investment genius. Being successful in real estate means that you stay at it regardless of whether you are up or down at the current moment.
Passion is the greatest enemy here. It’s fine if you are passionate about real estate but it’s not good enough to ONLY be passionate about it. I would make the argument that it would be better to be competent at real estate than passionate about it.
Passion can come and go easily but skills and competencies are forever.
I’ll let you in on a little secret. I am not passionate about multifamily real estate. Some days I don’t like it at all. But there is never a day when I would prefer to give up the freedom in my life that I get from it for a 9-5 job.
This means that there are days I run my companies and complete the task of a multifamily owner/operator, even though I am not in love with the work. There have been days that the lowest paid staff member of my team took home more money than I did. That’s being a real estate entrepreneur and that’s what it takes to not only BE successful in real estate but to STAY successful in it.
If all I had was passion on those hard days while building my portfolio, I would have quit. You must have more than passion. It’s good to have but not good enough. Competency before passion.
If you are good at something it becomes easier to be passionate about it. Get good at multifamily and then worry about how much you do or don’t like it. In the end it probably wont matter. If you are good at it and you can make good money at it, passion is just the “cherry on top”. Besides if you are good at making money in multifamily real estate, you probably can afford (time and money) to be passionate about something else!
- Deal Flow
- Deal Analysis
- Networking
These are the three core competencies you must become competent in to be successful long-term in real estate. You need to get good at finding deals. This will be either going to owners directly or by working with realtors. Second you will need to know math. What is a good deal? Third you will need to have the net-worth or network to be able to pay for the deals. That’s it.
Now that you have the skill sets in place…be patient.
You need to apply these skills every day. This means you work your systems on days when the market is good AND when it’s bad. You run your company and look for deals regardless of the current interest rates in the market. Not finding any good deals right now? So what? Look for them anyway! Build your teams and relationships when the market is slow. Find something that will move your business forward every day of the week. Even when you don’t get paid to do it. That’s how you will BE and STAY successful in real estate.
Want to get better at these core competencies? Go to www.RealEstateRaw.com
