In a world where most college students have no clue about retirement funding, but own at least 3 credit cards, and the average American household debt is just shy of $250,000, I’m always a little leery of playing with intangible assets in my personal finances.
But is real estate investment worth the risk and confusion? Should I take the time to learn about it?
REI is no small endeavor, and most people who get into it end up being involved in it for the rest of their lives. But to me, that’s evidence that, for those who diligently put time, effort, and strategy into REI, it pays off — and not just their debts.
So how do you know if you’re the kind of person who would succeed at REI? Here are some characteristics of most investors out there who thrive in this practice.
1. They’re not all gurus.
Yes, most of the blogs and journals you’ll see feature some of the world’s so-called top investors. However, as much wonderful wisdom and knowledge as they may have, nobody knows everything about investment. Just as college courses are more specialized than elementary school courses, most investors will move on over time to specialize in just one type of investment (commercial or residential, REIT or crowdfunding, etc.).
Believe it or not, everyone starts somewhere and eventually gains expertise over time. Be patient with yourself and be assured that you’ll learn as you gain experience so long as you’re serious about being success.
2. They’re not all nerdy math whizzes.
While many successful investors are Ivy League business school graduates and professional finance connoisseurs, you don’t have to be 100% left-brained to invest in real estate.
RE Investment is not an exact science: It is part strategy and part art form. Investors are diverse in their talents, strategies, investment styles, and personalities. An intuitive risk-taker is often at least as successful as a calculated, conservative investor. The main idea is to figure out your unique investment style over time, find out what works, and stick with it.
With that being said, you definitely need to know a few things about math to invest well. Thankfully there are calculators and spreadsheets available to help make performing algorithmic functions as easy as plugging in numbers and hitting enter. So make sure to take advantage of the tools used by other successful investors when developing your strategy.
3. They aren’t all self-interested crooks.
Just because you’re working with large sums of money doesn’t mean you’re a greedy, heartless businessman, whose only concern is the bottom line. In reality, there are many investors who have become extremely successful by investing money in philanthropic projects focused on a cause, rather than monetary gain. Real estate investment is actually a wonderful way to help build up communities and cities, bringing value to a group of people. Commercial REI catalyzes the work of people with amazing businesses that will help other people. Residential REI also helps increase the standard of living for people who are good stewards of their neighborhoods. If you want to make a positive impact on your community, RE is a powerful way to do that.
4. They aren’t ignorant of laws.
Some of us detail-oriented folks might enjoy reading up on laws and making sure we abide by them. But not all of us are that way. Even if you don’t like legal things, there are still ways to learn the laws and contracts involved in REI. For example, our site provides various videos that help explain the way crowdfunding works with the law to provide our clients with great investment opportunities. Overall, it’s important to know the laws so you don’t get into any legal trouble, but also because you don’t want to get taken advantage of. So read up, talk to the experts, watch videos, and be careful.
5. They’re not all multi-millionaire businessmen.
Since most Americans are in the middle-class, many individuals end up starting with small investments and building their wealth over time. For some, a first investment might become their first home — a residential house flip or rental property.
If you already own a house, RE crowdfunding is a great way to start small, with a minimum investment of $5,000 on most sites, some even less.
For the record, not all investors are men, so don’t be intimidated by the stereotypes and stigmas surrounding real estate investment. Regardless of your style, background, and personality, you can be successful at investing. Just make sure you soak up information from various knowledge sources, use the tools made available, don’t dodge the legal and financial details, and find projects you can stand behind.
Real estate investment is a type of business. Treat it as such, and mix in your unique style, and you’ll very likely find it will not only increase your personal wealth, but teach you valuable wisdom and even help enrich your community.
Do you believe you have the traits of a successful investor? Leave a comment and let us know what other characteristics you possess that make you successful.
