What makes an investor successful? What makes an investor fail?
Successful investors share several mindsets and habits and these are things that every investor needs... not only as they’re starting out, but at every stage in their investing business.
Let’s take a look at the top five of these traits.
1. Be Willing to Fail
Successful investors shouldn’t expect to succeed at everything, every time, immediately. Being your own boss is a risk, which means there’s a possibility (more like a probability) that you will fail.
And failure is ok. It brings you one step closer to success if you can learn from that experience and try something different moving forward.
Successful investors weigh the risks and potential rewards and go for it—and when they do fail, they get right back up again.
2. Be Persistent and Consistent
In everything you do as a new investor, you need to be persistent and consistent. Make a list of potential private investors and don’t stop calling until you get to the end of that list. Make a marketing plan and don’t stop making bandit signs and collecting addresses until you’ve executed the entire plan.
This will involve hard work. Successful investors make 25–30 offers a week. But eventually, success will come, if you’re willing to work persistently and consistently for it.
3. Surround Yourself with Successful People
Who are you rubbing shoulders with? This should apply to both the people you interact with professionally and to your friends. Real estate investing is a people business.
Surround yourself with people who know more than you do and take opportunities to learn from them. Ask good questions. Ask successful investors how they fund their business and how they meet new private lenders. Be a good listener.
And look for people who are hustlers, A-players, not just those with the most income. I met a mortgage broker a few years ago who was clearly a hustler. We’ve stayed in touch, and just recently he contacted me with a list of properties he thought I might be interested in. You never know where a relationship you maintain might take you, but you only have so much time to invest, so make sure you’re investing strategically.
Look for opportunities to help other people improve their businesses too—you should be both taking and giving.
4. Follow a Plan
Successful investors follow a plan. This plan should be well thought out with your end goals in mind. It might be one you create or one a coach helps you create.
But the real key here isn’t the plan itself, it’s the follow-through. The plan needs to be executed.
If you’re a new investor and you’re working another job full time, you might only be putting in a few hours a week. Are you following a plan? Are you doing what’s actually going to make you money? Are you making offers every week?
5. Be Disciplined
As you execute your plan, you need to be disciplined. Don’t go through hot and cold streaks. Do what’s on your list every day. Do the important tasks first.
It’s easier to be disciplined if you’ve figured out your priorities and long-term goals. When you’re distracted by a task that’s not on your list, go back to your top priorities and remind yourself why you’re making sacrifices now.
Why People Fail
So now you know the hallmarks of successful investors. But why do some investors succeed while others fail?
1. Get Scared Off by the Risks
Sometimes investors get to a certain point and then panic. They secure one or two private lenders and then they start asking whether their investment property is even going to sell. They become really negative and lose momentum.
What’s really happening here is a fear of failure. When you’re faced with failure you can let it propel you from behind or you can let it stand in your way. And that’s a choice both new and experienced investors face on a regular basis.
2. Have Unrealistic Expectations
If you think you can make $2 million in your first year by buying a couple of houses, you either need to reset your expectations or rethink your decision to be a real estate investor.
You’re going to need to work hard. Your first few years are going to be tough. It comes with the territory. This isn’t a get-rich-quick scheme. But it does have amazing long-term benefits—if you’re willing to put in the effort.
3. Lack of Cash Flow
New investors need to be strategic. It is possible to do too many deals and get in over your head.
Cash flow is king, so before considering a second, third, fourth, or fifth property, think about your cash flow. If you take on half a dozen rehabs using traditional loans, you may very well have more bills than you’ve got cash.
4. Failure Mindset
There are always properties to buy. If you’re believing reporting or realtors who say there aren’t any deals or you can’t buy houses that cheap, you’ve got it all wrong.
Successful students are the ones who believe that there must be a property out there for them to buy. That belief causes them to hustle and make offers. And you can’t succeed without those offers. Competitive markets might require more creative thinking and more hustle, but there are always opportunities for people who are willing to look for them.