When your business is that of buying foreclosures, you need to be more than someone that is good with numbers or has good contacts. There are certain personality traits that separate the top dogs from the mongrels and can be instrumental when buying foreclosures from banks, auctions or distressed homeowners. Don’t be disappointed if you don’t posses these traits yet, they can be learned and honed into becoming second nature.
Empathy- When you are dealing with a distressed property owner, you must exhibit empathy to make the connection and allow them to open up their hearts to you. This may sound like psycho-babble, but if someone doesn’t like you, they are going to be incredibly resistant to anything that you have to say. Can you fake empathy? You really don’t have to. Being foreclosed on sucks. Put yourself in the homeowner’s position or better yet, picture the person you love most being foreclosed on and how that would make you feel. Yes, we are here to make money, but make every deal a win-win situation and you will see how much more smoothly your business will run and how much better you will sleep at night. These homeowners need to feel like you not only understand their problem, but that you are really trying to help them in a new phase of their life.
Organization – If you aren’t organized you will miss out on making money- period. Organization allows you to take on any deal with a precise process that maximizes your time and energy and allows you to focus on what is truly important. The simple process of being organized will allow you to follow up on leads that you have generated, follow through the process of your deal and help you build the trust and confidence of the people you are working with and that will bring you more deals over time. By having a system that allows you to recall notes, conversations, and the deal process you will keep yourself one step ahead of your competition, maximize the time you put in to your real estate business and allow you to make more money than you thought possible.
Confidence – This is without a doubt the most important trait for successful real estate investors. Confidence will bring others to the table and make more people want to deal with you than any amount of industry knowledge. Now, you may be confident because you possess knowledge of the industry, but knowledge alone will never get to the level of Landshark. Let me give you an example. I had gone into contract to buy 2 foreclosed mixed use buildings from a lender at $550,000 and they gave me 45 days to perform. My partner and I had $350,000 committed to the deal and knew we would have to find another investor for $250,000. We secured the property with a $55,000 down payment after I had received a tacit agreement from someone to commit that $250,000. 2 Weeks before we were set to close, that 3rd party backed out, leaving me in the position to raise a quarter of a million dollars in 10 days. I knew the deal would be a money maker, so I put together my presentation model and went to work. With 3 days left to go before the bank would cancel the deal and keep our $55,000, I found someone willing to bridge the money needed to secure the project. Because he knew that we had to close in a few days, he could have really took advantage of us, but my confidence in myself, the deal, and my partners, we secured fantastic terms on his investment and were able to move forward with our purchase.
“Failure will never overtake me if my determination to succeed is strong enough.” – Og Mandino
Most people fail at making money in real estate before they even get started. If you think the reason is lack of credit or access to capital, think again. Most people simply stop at the first sign of rejection, or the first time that something does not go exactly the way they wanted it to go. Making money in real estate requires the determination and tenacity to see your plan through; overcome obstacles that others may see as mountains, but you realize are simply molehills. Your competition may have more money, better contacts and more experience, but no one can stop you if you are determined to make money, create wealth and build your real estate business. Like the great Wayne Gretzky said, “You miss 100% of the shots you don’t take.” Here’s a simple trick I learned that makes rejection fun- I keep statistics on how many times that I get a “no,” to how many times I get a “yes,” and then how much that “yes,” is worth to me. If I divide the dollar amount of yes by the number of times I hear “no.” I realized that each no was worth hundreds of dollars to me. So go out there, get rejected a few times and see how much richer you are because of it.
Creativity – There are two types of people in the world. Those who see things as they are, and those who see things as they can be. To truly be successful in real estate, you have to see things as they can be. You don’t have to re-invent the wheel, but you have to be able to look at each situation on its own merits, see what the challenges are and where you can maximize the value to each side of the equation. Fear not, you do not have to be the Leonardo DaVinci of real estate to be considered creative, you can be extremely successful by taking solutions that have worked in similar markets, with similar conditions and bringing them to your property and your market.
Through my years of investing in real estate I have been fortunate to come across many successful investors, and without a doubt these 5 characteristics are the most common traits in all of them. You may be blessed with all of them, I know I have had to work hard to develop some of these traits along the way, and you can too. Most importantly, remember the words of Og Mandino: your determination to be successful investing in real estate and buying foreclosures will make up for what you may lack right now but will acquire along the way.