1. Rental properties suck money.
Even though it seems like buying rental properties is the way to wealth, it only works if you have a good income coming in from another source.
If you’re like me, one of the first books that you read about real estate investing and wealth building was Rich Dad Poor Dad. Now, this book is a MUST READ if you haven’t read it already, but if you go out and start buying rental properties without having a solid income to keep buying rental properties, you’ll find yourself in trouble.
This is because rental properties don’t always make the cash flow that you’re expecting month after month. Sometimes the renter decides not to pay, or you need to fix something about the house, or there’s some random unexpected bill that comes up.
If you have an income that can cover for this unexpected loss, you’re fine. But if you dump all of your savings into a rental property (or three), this can hurt bad.
This is why you should set a rental property goal at 7-10 properties (or units) before you start to rely on the income coming in.
At 7-10 rental properties you can have the income from the properly functioning properties cover the losses from the unexpected bills that come up.
2. A good property manager is worth his or her weight in gold.
When you’re looking at building your rental property portfolio make sure that you have found 2-3 decent property managers in the area.
Property managers aren’t necessarily hard to find, but you need to make sure you can find them. Believe it or not, but there are some areas of the US where you will have trouble finding a good property manager.
When looking for one, you can simply find them online, but make sure to ask for references. AND CALL THEM! When you have the references on the phone make sure to ask how the manager has handled tough situations, such as a tenant that stops paying, repairs needed, or filling an empty unit. This will tell a whole lot about the property manager. And you must know these answers.
3. You better like to learn (a lot).
If you want to be successful at this real estate investing game you need to be always adapting, reading the market, reading people, and getting better at your game.
The more that you can read about other successful people the more successful you will be. It doesn’t have to be success in real estate either. It can be in any business.
The people who fail, just don’t adapt. Losses are going to happen, and you need to learn from them. In fact you will definitely learn more from your losses than from any of your wins.
The problem is that most people don’t keep going. They have a loss, and they quit.
You can’t really blame them. I mean, our educational system breads people to be that way. It teaches us that losses are a bad thing. Can I let you in on a little secret? Losses are the key to your success. If you try something and it doesn’t get you the results that you want… try something else. Keep trying until you get the results that you are looking for.
4. People are the key to your success.
The people that you surround yourself with will make the biggest difference on your success or failure longterm. And the speed at which you succeed or fail.
So, go to meet ups. Go to real estate meetings. Socialize, and make friends with people doing cool things. This can even be online. Talk with people on forums, and social media. Make quality lasting relationships.
But! Also, be quick to let people go if you’ve discovered that they are pulling you down.
5. Success isn’t easy.
This doesn’t mean that you have to spend a ton of time doing things that you don’t like doing. But it does mean that the majority of people who find success have to work hard for it.
It will take time, and work towards mastery. Find that love for learning. Then teach it, and learn more. Get lost in loving to work hard.
6. Success can lead to a loss of balance.
Once you’ve figured out what works for you, you’ll want it more and more. And you’ll want to put more and more time into it.
What can happen is… other parts of you life that don’t get the time they deserve, start to fail, and fall apart.
This can be health, relationships, spirituality, etc.
It’s a great idea to consistently ask yourself (daily) what’s important to you, and how you’re doing in those areas of your life. How’s your fitness? How are your close relationships? How’s your diet? How’s your mental health?
You can even benefit quite a bit by having an accountability partner. This is someone that you can talk to in regular intervals about how they think things are going for you.
A third party will always have a better perspective on your life than you.
7. You might need a runway.
What’s a runway?
A runway is an income source to get you beyond the “dip” as Seth Godin calls it.
Unfortunately, there is almost always a touch patch that you have to work through when starting a business. And unfortunately this time usually puts you into a money crunch, unless you have an income source that you can lean on until you get out of the dip.
Sometimes people have a large savings that they can rely upon, or sometimes it’s not a bad idea to keep you job until you find some predictability in your real estate investing business.
Everyone wants to get excited about the business, and go “all in”, but just be careful. I want you to be successful, and success can take some time.
8. A mastermind group is worth it’s weight in gold.
If you can hook up with a good mastermind group from the beginning of your business you success will come much faster.
The best thing you can do is get into a mastermind situation with a group that’s ahead of you in business. The others in this kind of mastermind will pull you and your business up to success faster.
Once you have some success I recommend that you join some mastermind groups that have people in different industries. You can always learn great things from different kinds of businesses.
I have learned a TON from my mastermind friends in the hotel and beauty industries, and applied some of what they are doing successfully into my real estate investing business.
9. Partners are great (sometimes).
I lucked out and partnered with my childhood best friend in our real estate business, but I have attempted to partner several other times without as much success.
Partnering sounds like a great idea, and with the right people it can help your business grow MUCH faster than without. But it can also destroy businesses, and friendships.
I’m not even really sure that I have a fail proof way to find a good partner. In the beginning you almost always think you’ve found a great partner.
What I would say is… always make sure that each of you has a way out of the business. Write up a simple contract that allows you to get out without messing up the business as a whole.
10. It’s about the journey and not the destination.
I’m sure that you’ve heard this a million times, but it’s so true.
Business (and life) can be hard, but really appreciating the day to day actions is so important.
Make sure that you’re doing what you enjoy doing. Do things that make you shine on the inside, and positively impact the world.
For example, I shine when I get to write, and teach people what I’ve learned. When I do this everyone benefits, and I feel fulfilled. It’s great!
But, I didn’t realized that’s what I really liked to do until a few years into my business.
I could (and sometimes should) hire someone to write for me. And sometimes I do, but probably not as often as I should. But I just love the creation of writing, making videos, podcasts, whatever. It’s just so fun.
Find what you have fun doing, and run with it. And if there are things that you hate doing that are essential to your businesses survival, hire someone to do those things.