Unlocking success in Real Estate Investing hinges on one crucial factor: Mindset.
A college degree? Not a prerequisite. Genius intelligence? Average intelligence will suffice. A large bank account? While starting with no money is challenging, it’s not impossible.
To achieve remarkable strides in real estate investing, we must nurture two distinct mindsets.
First, we cultivate a general mindset for success – fostering the right thought processes, behaviors, and actions.
Second, we embrace a worldview different from the conventional path of school, job, and retirement.
Breaking free from self-limiting norms allows us to realize our fullest potential, and the world of real estate investment is our canvas for achieving financial success.
As you learn and explore from those who’ve walked this path before you, two books stand out as common inspirations for the mindset leading to Real Estate Investing success.
These books and the words from the authors act as invaluable mentors, empowering you to shape the mindset essential for success in the real estate world. Drawing wisdom from Hill and Kiyosaki, you’ll pave the way for your achievements in real estate investing.
While we won’t go into all the principles covered in Think and Grow Rich (but you should!) there are a number that are worth mentioning as we discuss developing the mindset required for Real Estate Investment Success:
Desire, Belief and Commitment
To achieve success you must embody and bring a strong and consuming desire to learn this business and do the work, you must fervently believe and faith that it is possible, and that you will succeed, and you must be fully committed to do what is necessary.
There is no substitute for the persistence that must embody your thoughts and actions. You will encounter setbacks; you will make poor decisions that you must recover and learn from.
The general concepts and strategies for real estate investing are fairly simple. They will not however, be easy to execute for consistent and lasting success. You must have persistence to work through challenges that will arise, you must develop the spirit to be relentless in your pursuit of your goals and objectives – otherwise, you have failed before you begin.
A Win-Win Approach to Deals, Negotiation and Dealings with Others
A common misconception by some investors, and by many outsiders, is that the real estate investor (think landlords, land barons, and greedy developers) are only out for personal gain at the expense of others.
The investor is out to put one over on someone unfortunate, uneducated or unaware. Going beyond the moral implications of that approach, such tactics are also short-sighted. The investor that bases their success on that philosophy will see fewer deals, find it difficult to establish alliances and partnerships and will constantly be trying to outrun a poor reputation.
The success mindset approach requires finding common ground and benefit, solving problems for others, and building with the future in mind. The proverbial “golden rule” of treating others as they wish to be treated (not the rule that states “he who has the gold makes the rules”) is a way to earn success over time, as well as a good night’s sleep.
Taking Responsibility for Results
Unfortunately, it seems many segments of our society have embraced and respond to life from an approach that someone else is always to blame when things go wrong. The successful real estate investor recognizes that the only way to improve and get better is to take responsibility for results, both good and bad.
Sure, others may have impacted an outcome, but what could you have done differently? What will you learn from your setbacks, and how will you use that insight to improve in the future?
There’s no reward from blaming others, maybe a few moments of solace feeling better about yourself, but it will not provide you a path to future success. Don’t forget to celebrate your successes as well, you had something to do with that!
Masterminds and Alliances
No person is successful in endeavors solely on their own. This holds more true for those in the real estate investing business.
The synergy that arises with multiple minds focused on a common goal and objective far surpasses what a single individual can muster on their own. Seek trusted relationships with those that are like-minded and aligned in purpose, but also that bring specialized expertise that you do not have on your own.
The skills and disciplines required for real estate investing are wide, varied and deep. Alliances with skilled partners and professionals to bring specialized knowledge when needed, to leverage your most valuable resource – time.
Taking Meaningful Action
Many new investors who have not yet found success, can look to this principle as one of the most difficult hurdles. It is important to educate oneself, to evaluate situations, to analyze opportunities, to develop strategies and plans – but, at some point all of that is pointless if real action is never taken.
You will never have perfect information; you will never be able to remove all risk from an investment, at some point – and it should be sooner rather than later – you need to make an offer, you need to commit funds, you need to sign the contract. It is only from real action that results will follow.
You will learn from real experience more than you can from a book or another podcast. Do enough research and education to avoid obvious and foolish mistakes. But act – and you will learn, improve and find real success along the way.
Rich vs. Poor Mindsets
In the book Rich Dad Poor Dad, the reader experiences the juxtaposition of two different mindsets and approaches to living that an individual can take. The most pervasive we see is personified in the “Poor Dad” mindset.
The alternative mindset of the “Rich Dad” however is the one that leads to greater financial well-being and success that we seek with Real Estate Investing. Here are some brief comparisons of the two.
|RICH DAD THINKING
|POOR DAD THINKING
|The rich are generous
|The rich are greedy
|Learn formally or informally the skills that are needed, but take action to own and build the company
|Go to school, get a job and work for a good company
|Hire smart people to work for you
|Be a smart person that will get hired
|Risk is good if controlled and managed
|Avoid risks, especially financial ones
|Learning and growing is most important
|Security and safety are most important
|Being broke is a temporary state, being poor is a permanent mindset
|No matter how hard I work at my job I will never be rich
|I am not entitled to anything. I must make my way and be self-reliant
|I work hard for others, so I’m entitled to wages and benefits
|What can I do, other than take a job from someone else to make money – beyond just a salary?
|If I want more money I can go back to school and get a raise or another job
|If I want something, what can I do to generate the money to afford it and pay for it?
|If I want something I can get a loan or buy on credit and pay it back from my salary over time
|Your house is a liability
|Your house is an asset
There are other numerous examples of Rich Dad vs. Poor Dad thinking, but the difference is clear. If you bring the Poor Dad mindset to your goals to be a Real Estate Investor, you will have a long road ahead and will struggle to achieve measurable success.
A Final Word on Mindset: Emotions vs. The Numbers
Real Estate is a tangible asset, you can see it – touch it – even smell it. Numerous television shows portray “investors” rehabbing, flipping and doing real estate deals – bringing a sense of drama and excitement to the business.
We all have places we live ourselves and for most of us, they are inextricably tied to our personalities and identities. As a result, Real Estate Investments can often bring a sense of emotional attachment unlike most other investments and businesses.
This is great, in the sense that it keeps us engaged, interested and enjoying the work we do. The downside though, is that emotional attachments can tend to cloud our judgement from time to time.
Your investor mindset needs to recognize this risk, and if you are susceptible to that emotion, you need to remind yourself (and perhaps your overzealous partners) that the numbers must work for the investment to succeed.
Does your apartment rental really need the high-end tile and fixtures in the bathrooms? Will you be able to charge a higher rent in return for that investment and find a renter willing to pay it? Will the luxurious short term rental property be successful if there is not accessible parking, or proximity to amenities?
This is a business, you are an investor, remember that in all your decisions – a consumer mindset will not bring you the success you seek.
If you can develop and nurture these mindsets, you are likelier to learn Why Real Estate can be your best path to obtain long term and lasting wealth.