We talk a lot about CRE, investing, and running a successful business. But when it comes to CRE, what is success, exactly? Maybe success is simply the long-term outcome of consistently following a specific, and often boring, set of habits. It turns out that highly successful commercial real estate investors do share a set of habits, so understanding and adopting these habits can set you up for success as well.
Top Effective Investing Habits:
- Successful investors have a group of trusted advisors. The members of the team will vary with the type of commercial real estate involved. An accountant, attorney, banker, title company, and mentor are standard. Contractors, business partners, and property managers might also be required.
- Focus. Find a niche and stick with it until branching out makes sense. If office buildings interest you, then stick with office buildings. Apartment buildings are a viable option, too. But become an expert and maintain your focus in this area.
- It’s a mistake to spread yourself and your attention too thin. Choose a niche and learn everything you can.
- Stick with the numbers. Finding good deals isn’t easy. It can take months to find a good deal. Many beginning investors fudge their numbers out of frustration so they can finally do a deal. Get better at looking for deals instead of lowering your standards. Lowering your standards increases risk and the likelihood that you’ll lose money.
- Never stop farming. Since deals take time to find, it’s important to always be looking. It can be argued that the real job of any real estate investor is to find deals. The rest of the team can handle the rest of the work. Spend some time each day making the necessary phone calls, reviewing the real estate listings, and staying on top of the market.
- Ideally, you’ll always have a deal in the pipeline and a few good prospects ready to go. It takes time to reach and maintain this level of inertia.
- Have a long-term plan. What is your plan for the next 5, 10, 25 years? Are you looking to obtain a few good buildings or do you dream or billionaire status? Your decisions are easier to make if you know your end goals. What are yours?
- What short-term goals can be set to make those long-term goals a reality? Start with the end in mind and work forward to the present.
- Create a strong and vast network. Many of the best deals are never listed nor advertised. Know who the players are in your market. Ensure they know who you are, too. Become prominent in your community and good things will happen.
- When you find a deal that doesn’t suit you, pass the information along to someone else. Maybe the favor will be returned. Real estate is a people business. You can’t be successful on your own.
- Understand that real estate is a business, not “just” an investment. Other kinds of investments might be something that you can purchase and forget about for a while. Real estate investments, like any business, require regular attention. A commercial real estate investor that attempts to treat his buildings as an investment, rather than a business, will struggle.
Commercial real estate is a viable way to create wealth, but it requires time, energy, and commitment. Creating a commercial real estate business is easier when you have effective habits in place. These habits help prevent disaster, keep the business running, and maximize profit. Consider what other habits would be helpful to adopt. If you want to chat about how we’ve helped clients establish some of these habits, grab some time with us today!