Top 5 Traits Of The Most Successful Investors
By JD Esajian on November 3, 2017
There is a lot that goes into being a successful investor. There typically isn’t one trait that stands out above the rest. It is not enough to be strong in lead generation if you are poor in analytics. Having all the education in the world doesn’t do very much if you don’t understand the numbers. The best investors know that it is a collection of traits that leads to success. Most of these traits are things that can be learned over time. Every deal you are part of, networking meeting you attend and fellow investor you talk to should be a learning experience. Over time you will develop traits and gain education as an investor who is strong in every aspect of the business. Here are the five most common traits that successful investors possess.
- Sponge for education. The best real estate investors live and breathe the business every day. Instead of spending an hour on their phone playing games they are reading articles related to the business. They make it a point to add something to their investing tool box whenever they can. You may not think you need to know how a tax lien auction works or what the write offs are for a rental property, but the business has a way of throwing you for a loop. Those investors who are most prepared to act typically get the best deals. Swift action is usually a case of being confident in your decisions which is a byproduct of your education. There are literally dozens of ways to learn and things you can do every day to improve your education. If you are truly committed to excellence you will find ways to learn the business every day.
- Lead generation. A lack of lead generation brings every other aspect of your business to a halt. Not only do the best investors know how to find leads but they find leads they actually want to work on. It doesn’t do you any good working on leads you have no desire to close. In fact, this can end up doing more harm than good. By finding leads that are in your market, with the right price point and fit your buying criteria you will be much more streamlined in your approach. You will end up closing more deals and being more efficient with your time. Lead generation is about knowing where to look and how to market yourself. It requires the patience to stick with a campaign but the flexibility to know when to shift gears. Once you get a lead you need the ability to know how to talk to them and ultimately close the deal. The best investors do something daily to add leads to their pipeline. They understand that lead generation is a numbers game and not every hot lead will close. As obvious as this may be the more leads you have the more deals you will close. Everything in business revolves around lead generation.
- Savvy with numbers. One of the most intimidating aspects of the investing business is dealing with the numbers. There are numbers and formulas on every deal. One numerical error changes everything with the offer and impacts the bottom line. You don’t need to be a mathematical wizard to understand the numbers. The best investors start by understanding what drives the numbers and why they are important. They don’t get too hung up on memorizing the formulas until they understand their importance. They never make an offer until they see hard data for themselves. A real estate agent may swear on the amount of rent or the cost of utilities but until they see proof they always use the worst-case scenario. They also know the cost of financing and are always looking for ways to reduce the rate and get a better deal. There are numbers everywhere in real estate. It is important that you know as much as you can about them.
- Negotiation. There is plenty of negotiation in any business. The average business negotiates with suppliers, wholesalers and even customers daily. In real estate you negotiate with sellers, contractors, property managers, your real estate agent and possibly your mortgage broker. The best negotiators understand there is a certain give and take involved that is important. If they dominate every negotiation eventually people will avoid working with them. On the flip side if they give too much of the farm away it will impact their bottom line. The general rule of thumb in any negotiation is to have both sides feel like they won and walk away happy. This often requires making concessions but not to the point they can’t continue. The more negotiations you are a part of the better at them you will become.
- Patience. The fifth critical trait that most successful investors possess is patience. They never give up on a marketing campaign or new deal too early. They are willing to continue to work it long after other investors would have given up. There are typically a handful of deals every year that can be gained simply by diligence and patience. This doesn’t mean you should bang your head against a wall without switching things up. It means that you need to fully exhaust all your options before you cut rope and move on.
If you are strong in these five areas there is a good chance your business is successful. Do something every day to improve and develop these five important traits.