The Psychology of Successful Real Estate Investors

In the BIG 80’s, in regard to dieting, periodicals would suggest that you “think thin.” They were reluctant to explain what that meant, but people knew they were supposed to do it. Adopt the psychology of the thin, whatever that was supposed to be. A logical extension of this idea would be that in order to make money, you would be able to accomplish that by adopting the psychology of the wealthy, right? Actually, this does work. Specifically, you ought to internalize the attitude of the successful property investor.

Successful property investors see the world through an opportunistic lens. They constantly have their feelers out for new moneymaking opportunities. They place themselves in the center of the flow of information. They “walk the walk” of the property investor, so to speak. And because of this behavior, they take notice of things.

Ken McElroy, author of The ABCs of Real Estate Investing, part of the Rich Dad, Poor Dad series, says it's all about noticing patterns. If you look at enough properties, study enough areas, talk to enough people, McElroy claims, you'll start seeing these patterns. Then certain things will begin to change. You may begin to seem lucky. And, McElroy says, this may be luck, however it is a kind of luck that comes from being prepared.

Remember: fortune favors the prepared mind. Opportunities for profit are all around us, but if we don't stay alert, it will seem as though it doesn't exist. The prepared mind notices opportunity.

McElroy emphasizes over and over again the fact that becoming a successful real estate investor is a process. It isn't just something that happens overnight. It is something that you do each and every day. As you work through this process things begin to happen for you.

A successful property investor focuses on doing things step by step, on learning this or that thing, or making a certain deal. It's a “walk before you can crawl” process.

For instance, McElroy says that if you've located a potentially profitable deal, you will be able to get the necessary funds because others will want a piece of the action. It isn't necessarily about skillful negotiation, McElroy said. Of course, skillful negotiation can get you an even more advantageous deal at times, but you don't need to worry about whether or not you can hold your own when negotiating. Focus on searching for good deals.

Although they are always evaluating risk, always cognizant of it, successful investors aren't scared off by it. They decide whether or not a risk appears reasonable. If the numbers work out correctly, McElroy says, it's a good deal. If it is a good deal, the smart real estate investor goes for it.

Piece of cake.

People who don't know how to accurately evaluate risk may believe that every deal is too risky. They assume, for example, that a bigger deal may be too risky for a novice to handle. They assume that because they have the misconception that the investor is investing a prodigious amount of his own money into it when, in truth, a larger deal stands to make a larger sum for the participants. For this reason, you may be able to find backers for this sort of deal. At the end of the day, you may put up less money than you would have on a smaller transaction.

Property investment is just like anything else you want to learn how to do. For one thing, you have to learn how to do it. And you learn by doing. Get out there and look at pieces of property. Visit cities as if you intended to make a purchase. Log on to the Internet and educate yourself about areas. Check out what others have to say regarding the real estate in a particular area. Get to know people. In no time, you'll know enough to begin thinking about making a deal. You do not need to have a pile of cash in hand prior to entering the game. Just go out in the world and enjoy the process. Start by searching the MLS in Minnesota for investment opportunities and everything else will come eventually.

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