Recently I was asked for some do's and don'ts to being a successful real estate investor for a radio interview and it was an interesting exercise to grab all of these thoughts together.
I thought I'd share these with you and a few select comments from some members of REIN™
Enjoy the list and if you have a few of your own to share you can always post them on or send us an email note to info(at)reincanada.com
Do's
#1
Build a strong team that supports your long term vision, all of whom should have extensive experience with real estate investors. These include: accountant, corporate lawyer, real estate lawyer, mortgage broker, realtor(s), research source, fellow investors.
#2
Eliminate 'Day Trade' mentality with real estate. Stock markets can move substantially on a day to day basis and because of this many investors watch their stocks every day. With real estate, there is no get rich quick... it is a long term process that is driven by long term economics. Fluctuations will always occur in the market.
#3
Study the economics that support your region - rather than national 'averages.' Become a specialist in one or two geographic areas. The smaller your niche the more apt you will be to be successful. It will be easier for you to stay focused on what matters to YOUR bottom line.
#4
Focus on positive cash-flow - no matter what the market conditions positive cash flow is important and makes your life easier and allows you to get closer to your Personal Belize.
#5
Don't be afraid to ask anything of anyone. Learn from those more successful (or more experienced) than you. If they are too busy to help, ask someone else. There are no bad questions and definitely no reason to play the lone wolf trying to solve problems on your own.
#6 (Courtesy of REIN™ Member Garth Chapman)
Have a long term plan, and regularly measure your progress towards the goals on that plan. Adjust the plan annually and when your life changes significantly. Then adjust your sails and continue on.
#7
Stay on top of your cash flow projections. Making sure you have enough cash to fund your business is absolutely key. Many businesses have failed only because they lacked sufficient cash - even businesses that were profitable! Remember, "Cash is King".
#8 (Courtesy of REIN™ Member Thomas Beyer)
Act Quickly! Do not analyze too long, as usually a good deal is also being seen by others .. this allows you to act quickly and sift through the overpriced stuff very fast and focus on the very good deals that do come along from time to time .. don't get stuck in ready, set, set, set .. mode .. get to GO after you've done enough homework to at least write an offer to look under the hood .. then spend more time analyzing once it is under contract !
#10 (Courtesy of REIN™ Member Brett Turner)
Check in on the members of your team even if you aren't presently doing business. A quick phone call or email can humanize your relationship a bit and when you really need them they will remember you showed a bit of heart when you didn't really need to.
#11
Take time to review your systems and make sure you are implementing them correctly. When you aren't acquiring property or placing new tenants the 'down time' is a great opportunity to fine tune your business.
#12 (Courtesy of REIN™ Member Manjula Salvarajah)
Find yourself mentors, join a small group of like-minded individuals to discuss your Real Estate goals and current situation (e.g. a mastermind group). Finally, surround yourself with balanced, hardworking, positive, ambitious people.
Which leads to...
Don'ts
#1
Don't allow yourself to get too high when you hit a home run or too low when you make a mistake. This also goes for market conditions. If the market is screaming hot, don't get caught up in it and when it comes back to normal don't talk yourself into being too low. It is what it is and, as a business owner, you can't afford the emotional roller-coaster.
#2
Don't line-up for a pre-build condo. That is speculation, not investing.
#3
Don't buy a property just because it seems cheap - you may quickly find out that it wasn't so cheap after all.
#4
Don't let a property promoter sell you a property without doing your own due diligence on the area. If you feel pressure to buy, step away! The quick decisions are always the ones that turn into the mistakes.
#5
Don't ignore tax planning in your overall scheme. Speak to a real estate accountant, give them your plan so they can help structure your whole program.
#6
Never, Ever buy a piece of real estate based on a 'Tip'. Always follow your system and don't skip steps as they are there to protect you during market fluctuations. Many investors skip steps in the ACRE System during hot market times only to find that the steps they skipped are the ones that would have saved them during real market conditions. The steps are there for a reason not just for fun.
#7 (Courtesy of REIN™ Member Thomas Beyer)
Don't tie up too many properties as this will be known in the "community" of realtors and buyers/sellers .. so focus on a few deals that make sense to you after you have become an expert in an area and a type of property that suits your lifestyle, depth of cheque book, holding period and income goals.
#8 (Courtesy of REIN™ Member Brett Turner)
Don't let the small stuff take up more headspace than it should be allowed to. IE don't stew all day over a $500 issue with a tenant when you should be thinking of who your next $100k JV partner will be.
#9
Remember that no deal or property is perfect. There will ALWAYS be some concessions and trade-offs!
Enjoy ... and if you would like more information on how you can be part of Canada's leading Real Estate Investment Network visit to get all the details