There are five major skills that must be mastered to become a successful real estate investor. I call these the “5 M’s of Real Estate Investing. They are:
Let’s take a closer look…
“Mining” means finding really good deals. Anyone can find a property to purchase. There are thousands of them in the MLS, newspapers, at auctions and For Sale By Owners. But to become a successful investor you must develop the skill of, not just finding a property to purchase but, finding a “golden nugget” (a really good deal).
What is a really good deal? It is a deal that will almost guarantee and exceptional return on your investment of money and time. Are these really good deals hard to find? No—there relatively easy to find--once you have developed the Mining skill.
There are many books and CD’s on the market that clearly detail the tactics for locating and purchasing great investment properties. Some of those tactics include:
• Sellers Ads in Papers and on the Internet
• Your Ads In Papers & Internet
• Short Sales
• Real Estate Owned By Banks (REO)
• Sale By Owner (FSBO)
• Empty Homes
All of these tactics work--but by focusing on one or two of them, you should quickly develop the skills needed for success.
The second skill I call “Money”. Money means finding the funding to purchase your real estate investments. Unless you have an endless supply of money—it will be necessary to develop the skill of finding an endless supply. This is the part the guru’s don’t tell you about and where many new investors stumble. It is much harder to find the money to purchase the great deals than it is to find them. Some sources of money may be found from:
• Mortgage Companies
• Credit Unions
• Credit Cards
• Home Sellers
Again—reading Real Estate Investor Training books and listening to CD’s will help you find some of the strategies necessary to start developing your Money skill. Again finding the Money is not easy and must be worked equally as hard as Mining for deals.
Maintenance on the other hand is the by for the easiest of the 5 M’s. The skill you need to develop to get your investment property ready to market involves finding the right people to do the work. It’s that simple. Just find a good and honest maintenance contractor, train him or her to do what you want and how you want it and you are done.
The forth skill—Marketing is critical to the success of real estate investing. You must learn how to rent, sell or lease option the property quickly. Learn quickly and move the property quickly. A real estate investment sitting unoccupied for any time at all can and will put a dagger in your chances of success. This skill of marketing is one that simply cannot be overlooked. You must learn to market the property yourself for just turning this important part of your investment to a realtor or agent to handle could be a very big mistake.
“M” number five is the skill of managing the investment property. Next to the Money M this one is usually the most difficult skill to master. Not because it is the hardest to learn but because many investors just don’t spend the time and effort necessary to learn how to manage their investment properties. Some gurus recommend that from the very start all properties should be managed by a property management company. That sounds like a good plan. Just find a company that will take your one or two properties and put them at the top of their list over their customers with twenty to fifty properties. Good Luck!
Here is the “wake up and smell the coffee” truth. For all parties concerned--YOU need to learn all the aspects of property management. And do so before you even consider whether you want to manage the properties yourself or farm out this very important part of your success to someone else. The real estate gurus are split on this issue but by learning and doing it yourself before you decide--you can’t lose.
I hope this article will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my website at www.dennisjhenson.com. Also on that site, you may sign up for free reports, articles, and e-books and find free forms, documents, MP3 downloads and much more. Also visit www.turbo-bidder.com for a great real estate investing tool.