7 Essential Habits of Top Notch Investors
An old one, but a good one! Check out last year’s post on tips for investing in Hawaii real estate.
Real estate investment is both a science and an art form. Thus, there is a lot of imagining, strategizing, and number crunching that goes into successfully investing in Hawaii real estate. While there are, of course, essential processes and tactics that you must master as a prominent real estate investor, learning the basic ins and outs is not enough to launch you to the top of your field. Oftentimes it is mentality and daily practices that set top notch investors apart from mediocre ones. Below we explore seven of these essential attitudes and habits for investing in Hawaii real estate.
1. Be Realistic
Those new to investing in Hawaii real estate are often idealistic to a fault. They believe that they can take on multiple house flipping projects at once, or close several deals in their first month of investing, or dominate multiple aspects of the market. Oftentimes newbies are met with a harsh reality check early in their careers, and these setbacks can scare them away from investing in Hawaii real estate entirely.
Top investors are honest with themselves; they understand that even the most energetic, knowledgeable, and experienced investor simply cannot dominate every aspect of the field. The most successful investors set realistic goals, using past performance and market conditions to determine obtainable outcomes.
2. Treat Setbacks as Learning Experiences
Most top investors have run into roadblocks at some point in their careers. Maybe they spent a lot of time on a house flip that generated little to no profit, or maybe they failed to do their research and ended up investing in a property in low demand. Investing in Hawaii real estate is a process of trial and error. All investors will make some sort of mistake somewhere along the road.
What differentiates successful investors from mediocre ones is not how many setbacks they experience, but rather how they react to them. Mediocre investors respond to obstacles with frustration and resign; top investors troubleshoot, determine where they went wrong, and treat their failures as learning experiences that will inadvertently foster future success.
Self-reflection is a critical element of the investing process. Top investors reflect upon and record their successes and errors for the sake of improving their business strategies. Investors that instead barrel forward without pausing to reflect on their strengths and weaknesses are likely to run into the same problems over and over again.
3. Find Your Specialty
A new investor might think it’s a good idea to try their hand at several different things—commercial real estate investment, residential investment, flipping foreclosed properties. However, it is difficult to master just one of these investing niches at once, let alone several of them. New investors that adopt a “do everything” approach often find themselves underprepared and overwhelmed in their first few months of investing in Hawaii real estate.
Top investors recognize that spreading yourself too thin can seriously compromise your success. They instead focus on specializing in one form of investing. In so doing, these investors quickly cultivate extensive knowledge and expertise in their fields. For example: focusing exclusively on house-flipping will help you learn how to estimate repair costs, prioritize remodels, price your house, and work with contractors more rapidly than if you were to also divert attention to purchasing properties for short-term rental.
4. Reach Out
New investors make the mistake of treating others investing in Hawaii real estate as competitors. Top investors, however, treat other investors in their field as allies and resources with which to exchange expertise. Developing strong connections with investors in your field is a great way to establish your reputation, showcase your knowledge, and learn from the mistakes of others. Fellow investors can also keep you afloat of market conditions and alert you to lucrative opportunities that they don’t have time to take on.
There are several different ways to network with your local real estate community. Facebook and LinkedIn are both excellent mediums for establishing connections, as both are host to local real estate groups. Posting relevant articles and answering others’ questions through these mediums showcases your passion and insight. Most communities also have local real estate groups that meet in person incrementally. You may even consider seeking out a mentor—someone experienced in investing in Hawaii real estate willing to consult on your business.
5. Plan
It’s important that you invest with deliberation in order to ensure a return on your investment. Before purchasing an investment property, top investors calculate critical figures, such as repair costs, market demand, after repair value, and other relevant costs. If you don’t exercise precision in predicting necessary costs and probable returns, you’re at risk of losing thousands of dollars.
Once a top investor runs all of their numbers and decides to buy a property, they create a business plan. These plans prioritize tasks and include hard deadlines. Creating to-do lists helps top investors conduct deals with thoroughness and efficiency, further bolstering their reputation in the field.
6. Consider Outsourcing
Top investors are able to determine which tasks to outsource and which would be more profitable to complete independently. Commonly outsourced tasks include marketing, negotiating and closing deals, reaching out to sellers and buyers, and completing repairs. Outsourcing can make your business more efficient, but it can also lose you money if you don’t budget properly. Again, it is critical to be honest with yourself: what tasks are you able to do effectively and efficiently? If you were to outsource certain tasks, would the time you save free you to do enough work to cover the cost of outsourcing? Do you really have enough experience with repairs to remodel a kitchen on your own? Recognizing your strengths and weaknesses will help you to determine what tasks you should outsource.
7. Always Learn
Networking isn’t the only way to expand your knowledge base. Blogs, articles, and podcasts can be excellent sources of advice and information. Consider subscribing to a blog or magazine and commit to reading just one article a day. If you have a long commute, listen to real estate podcasts during your car ride. Top investors are passionate about real estate and are always looking for new sources of information. Just reading and listening can be a great way to become a real estate expert before you even begin conducting negotiations.