The more you master the 10 keys below, the more likely you are to achieve the investment goals you’ve set for yourself. Please note that these 10 keys are not listed in order of importance. You can handle many of them, but if you struggle with some, your investment project may not go as well as you had hoped.
Key #1: Become a real estate agent looking for leads
The very first piece of advice is not to wait for the market value to drop drastically before you start, as you may have to wait many years. Enter search mode immediately. Remember, you need to look for motivated sellers who will be willing to sell below market value, allowing you to make a profit on your purchase. However, the ideal is to find extraordinary situations! Don’t give up and keep going, you will have what you are looking for!
Key #2: Learn to finance your buildings 100%
In any type of investment, the less capital you use, the higher your returns. When it comes to infinite returns in real estate, it means that the building you just bought was built 100% with other people’s money. This is what we call maximum leverage.
However, do your calculations wisely and be very careful because using leverage at its peak carries a much higher risk than investing capital at the time of purchase. Among other things, you expose yourself to a relatively low and sometimes negative cash flow.
In the event of a lack of liquidity caused by the building, will you be able to personally contribute capital to meet your financial obligations?
Key #3: Learn how to prepare creative sales pitches
One of the keys to your success in real estate depends on the purchase offers you prepare. That is, the number of offers you make, but above all the way in which you prepare them. Are they in your favor? Does it protect you enough? Do they allow you to reduce the initial capital as much as possible? In fact, this key is often what helps you get what you want. To achieve this, you will need to develop the art of negotiation.
Key #4: Have the discipline to follow up effectively
Many first-time investors make the mistake of letting go of a property because their purchase offer has been rejected. They believe the reason it didn’t work is because the building wasn’t supposed to be theirs! Responding in this way can be very costly. Juicy profits slip through your fingers without you even knowing it.
What you want is not by giving up! Since you will be looking for motivated sellers, you will have to expect them to become more and more motivated over time. The more time passes, the more inclined they will be to lower their prices and/or relax their terms.
Key #5: Develop the art of negotiation
Throughout your career as a real estate investor, you will constantly have to negotiate with either:
- Your tenants
- Suppliers
- Bankers
- businessmen
- Buyer, seller
- Real estate agents
- Partners
- And with a partner!
Your spouse is one of the best “allies” you can have in investing, no matter what investment field you choose. Real estate is no exception to the rule. Read books on the art of negotiation, follow training, practice negotiation on a daily basis. You will be surprised by the results.
Key #6: Perform thorough and flawless inspections
Buying real estate should be taken seriously. Therefore, it is important to check as many aspects as possible before signing the purchase contract. Rushing this step is often a very costly mistake. Seasoned investors, who have already paid dearly for their mistakes due to a lack of due diligence, are making fewer and fewer mistakes of neglecting the due diligence process.
A thorough inspection is ideal, but you still need to know what to inspect. That’s why we have to rely on the experience of seasoned investors. Join networks and meet experienced investors, they will share their tips with you.
Key #7: Building a Dream Team
In business, your success will depend on your relationships. The more you surround yourself with competent and reliable people, the more likely you are to succeed. As in any other business, human capital is essential in real estate. Happy customers demand good products, but what is the best product when customer service is lacking?
The company is one entity, its founder, good purchasing, good employees, good business philosophy, good working conditions, etc. Reconnect as often as possible to meet those who will be part of your team.
Key #8: Get the right training
A common mistake among beginners, intermediate and seasoned investors is a lack of education. They have no training but hope to succeed in the field. Even worse, they seek opinions and advice from people who don’t even own the building. It is not uncommon to buy buildings and invest thousands of euros in them, so why not add a few hundred euros for training?
Lack of knowledge can cost tens of thousands of euros. The reverse is also true. Some things learned during training are worth their weight in gold. So there are no limits to the knowledge you can gain.
Key #9: Develop an action plan
To build your action plan, it’s important to break down your annual goal until you reach your daily goals. If for some reason you fall short of your annual goal, you should at least take steps to achieve a large number of small and medium-term goals.
Your self-confidence will increase, you will have reason to be proud of yourself, and you may not be far from achieving the annual goal with a few extra actions. Do you understand now why some people do not progress despite the goal set in five years?
Key #10: Get rich by accumulating buildings
There are 2 worlds in real estate investing: the first, where you turn your fortunes around a bit to generate cash quickly in the short term. The second is to accumulate buildings that will allow you to become rich and generate passive income.
As you accumulate real estate, your net worth will increase over time due to the combined effect of mortgage capitalization and the increase in value of your real estate.