Some people get it. It seems like every project they touch turns to gold and they can simply do no wrong. Other people don't and sometimes it seems like the world is set dead against them. They couldn't get a lucky break with a four-leaf clover and an army of rabbits donating their little furry paws to the cause. Why is this? Why do some people turn their real estate side ventures into multi-million dollar hobbies, while others put every last ounce of effort into their investments only to result in a sub-500 FICO?
The success of your venture in real estate is determined long before you sign your first tenant, long before you buy your first house, even long before you first read Rich Dad, Poor Dad. The difference between successful investors and amateurs is evident in every aspect of their lives. I'm going to write a series of articles about the various "indicators of success", but I don't plan on writing them sequentially. I'll just throw one together every once in a while (and not even in numbered order! Take that!)
The sixth indicator of success isn't the most obvious. While you may think towards school grades, financial savvy or boldness, the first indicator of success is far more subtle. The first thing to consider when either when looking at investing in real estate is "Do I finish the things that I start?"
Let's take two case studies, my wife and my sister. I love them both dearly, but they are very different people in just about every way.
My wife is 25 years old. After graduating, with honors, from her undergrad university she moved to Northern Virginia to pursue her career in non-profits. She applied to grad school, George Mason, and was turned down. Unfazed, she applied again and was admitted into their master's program for non-profit management. She spent the next three years working full-time for a national trade association while taking classes at night. When we decided to get married and move to London, she increased her class load while working 50 hours a week and planning our wedding. Now that we're in London she's finished her degree and gotten a new job fund raising for Down's Syndrome Research. So far, she has met every major goal that she has set for herself.
My sister is a very different story. Over the last ten years, she has pursued careers as a veterinarian, a personal trainer, a firefighter, an elephant trainer, a brail transcriber, and as a 911 operator. She hasn't, yet, actually held jobs in any of those fields. She ran, for a while, her own pet sitting business. Now in her mid 30's, she's looking into getting a Masters from an on-line university to pursue her latest interest, becoming an instructor for the blind. And no, not one of the jobs listed above is a joke or an exaggeration. Not even the elephant trainer.
I love both of these women, and think they both have fantastic lives. But if I had to place money on one of them to become a successful investor, guess who I would go with? There's more than just a determination to meet your goals, there's also an intelligence in picking goals that you can meet. My wife, as wonderful as she is, would probably not been as successful if she had a goal to become the next Brittney Spears. Her talents, though many, simply do not lie in her ability to carry a tune.
Let's take a look at two more real world examples. Casey Serin, the famed 24-year-old investor who's still struggling to figure out how to make a buck has, over the last 9 months, pursued web site hosting, real estate, penny stocks, commodities, and book deals.
Compare that to Warren Buffett. He is famous for following his strategy come hell or high water. He values companies that he understands, and stays away from the ones that he doesn't. He finishes what he starts:
"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it."Obviously a tendency to finish what you begin isn't a tell-all indicator for success. But if you take a look around you and you see a stack of mail you never answered, that hole in the wall you always meant to patch but never did, the shirt you always intended to return... you probably have some personal growth to work on before you begin your real estate empire.