What do you think of when you hear the word education? Do you think of the fundamentals, like the ABC’s? Do images of the hallowed halls of your alma mater come to mind? What about practical education? Did you need a certain degree or even certification for your current profession? Any or all of these things are reasonable interpretations of what it means to be educated in today’s society. That said, how does education apply to real estate?

Real estate investing, for as valuable commodity as the product is, is a profession that doesn’t require a degree to get started. Sure, policy makers when it comes to real estate interest rates and such have a finance background. Sure, some of your team members have a solid educational background (CPA’s and attorneys come to mind) but most were not trained in real estate specific areas. What about realtors and mortgage brokers? Basically, it works like this. You take a training course over a few weekends, pass a test, and you can be licensed to either broker real estate or issue mortgages. Not exactly the pinnacle of educational scrutiny, now is it?

Don’t get me wrong here. I’m not scoffing at the training certifications for these professions because you, as a real estate investor, need even less formal education to do what you do. There is no requisite certificate or degree that stipulates you are able to invest in real estate. All you need is the desire, right? Oh, I wish it were just that simple. If you think about it, part of the animosity faced by real estate investors from other professionals in the field may be due to just that. We’re out there making offers, working deals (at least if we’re doing what we’re supposed to) without any sort of training. From the standpoint of the critics, it’s just a step shy of real estate anarchy! I of course don’t see it that way and yet I find it useful to see things from an alternative perspective from time to time.

Although informal and absent professional credentials or certificates, education for the professional real estate investor is available and can take any number of forms. Many investors to their credit and benefit take advantage of several of the education options available to them. Some of the most common forms of real estate investor education include:

• Books and/or audio materials
• Attending meetings at a local Real Estate Investor Association (REIA)
• Seminars
• Personal coaching/mentoring
• Experience (aka the School of Hard Knocks)

Let’s take a moment to explore books/audio material. In posts to follow, we will go through each of the forms I listed previously. Again, while no one educational outlet can ever promise to deliver everything you need to be successful, every little bit helps and can help build your arsenal of knowledge.

Books and/or Audio Materials

Never underestimate the power of a good read. I heard someone say that once and I have no doubt there is truth to the statement. As an investor, however, you must look at books (or their audio equivalents) as resources, rather than your primary source of education. Just to rehash, books can provide you with the following: Basic real estate knowledge, inspiration, a financial vocabulary, an overview of real estate techniques and examples of how to interact with clients.

The list could be longer but my point here is that books are a basic type of resource, giving you so-called ‘literacy’ in your craft. They may also be your source of inspiration. Perhaps it was a book that first gave you the idea to become a real estate investor and, if so, that’s great, because for me it was a book that originally sparked my intrigue with this business. What books do not and cannot give you however, are real world experience and they should never be a substitute for going out, interacting with other investors, building a professional team, and simply working the business.

I’ve seen many an investor who had an impressive real estate “library”, full of books, home study courses, and even audio and video materials. Sure, it looks impressive, but the real validation of a real estate investor comes from actually doing deals. I’m in no way discouraging you from acquiring reading materials, as these will all help you educate yourself in some way and build the confidence in your ability to step out of your comfort zone to succeed.

What you want to avoid is the tendency to keep acquiring more books, looking for that proverbial ‘golden nugget,’ when your fear of taking action is what is actually holding you back. This may not apply to you, but if it does, take a more rounded approach to your education, get out there and start physically working the business, and it will be easier to cross that hurdle into success.

Meetings with team members are less frequent than other meeting types but are no less important. I think these are some of the easiest meetings to work with, because you can have a set agenda and expect that it can be followed with little deviation. For example, you schedule a meeting with your realtor to discuss a new market niche you want to pursue. While you aren’t exactly sure what the meeting will produce as a result, you should have a pretty clear idea of what you are going to talk about and that will make the meeting go easier.

When meeting with team members, let them know in advance why you are meeting and how long you expect the meeting will last. This is referred to as the meeting before the meeting. Ultimately if you want your meetings to be successful then the appropriate parties should know what to expect. This allows them to prepare and also is respectful of their likely busy schedule. As far as meeting conduct goes, be sure you are on time and, minus a little friendly chitchat, keep things on task so nobody feels like their time is being wasted. I suggest also summarizing the meeting when it ends so each party knows the answer to ‘So where do we go from here?’ When you can do these basic things, your professionalism as a goal-oriented and organized entrepreneur will shine through and impress your team members.

Meetings With Business Partners

Some of you have formal business partners, some of you are married to your business partners, and some of you may simply be considering whether or not a partner is right for you. For many investors, partnerships can be good ways to capitalize on the strengths of the members and should result in more overall productivity. Some partnerships are simple relationships between a financier and an investor for a particular deal. Others are more detailed relationships, which impact the business on a more regular basis. Regardless, your meetings with them will have some similarities.

Chances are your association with a business partner has already been at least partially established so the whole first impression thing is less of an issue. However, if you’re in charge of getting something ready for a meeting or have progress to report on, then it is a good idea to have done what you were supposed to do. This is very logical but is also often overlooked. It is wise to make sure partners have proper accountability to each other and that each partner is comfortable with both receiving and giving opinions or criticisms as warranted.

Whatever you do, if you decide to operate with a partner make sure that you get everything in writing up front. Each partner should know at the outset of the partnership what the other person is accountable for. I’ve personally seen and been involved in business partnerships that have succeeded as well as those that have failed. Sadly, partnerships seem to end because one person is doing more than the other that in turn creates bitterness and hostility. Know your roles and do what you say you are going to do to the best of your ability. Another option you may choose to consider if you are unsure about establishing a long-term partnership is to create a partnership on a deal by deal basis. This way you are not locked in to any long term commitments to anyone. If you can’t or don’t want to be accountable to anyone then don’t go into a partnership. The good news is a partner is not at all needed to be wildly successful in this business.

As you’ve seen from my little discussion here, meetings in this type of business are critical to your success. Sometimes meetings are cut and dry, right to the point if you will. Sometimes they are speculative and involve a lot of brainstorming. Sometimes they are a mystery, giving you little advance notice of what to really expect. Regardless, your approach to meetings and ability to handle them will be a huge part of your business arsenal. Treat each and every meeting as if it was worthy of your full and undivided attention and your various clients will never be left feeling like they were a waste of your valuable time, even if the meeting doesn’t end up being as productive as you might have hoped.

The way to approach meetings is a lot like approaching a client for the first time. In an initial meeting, the first impression a client has of you will have a lot of bearing on whether they choose to do business with you or not. Similarly, a scheduled meeting is basically a continuation of that first impression a client has of you. You may have to use a little intuition or gut instinct to gather what their first impression may have been. Beyond that, you have a great opportunity with meetings to either:

• Continue a good relationship that started off on the right foot
• Right the ship if your first encounter with a client ran into some snags

When you are organized, attentive, task-oriented, and just plain personable, the general flow of most meetings will be in your favor. Clients know that you are meeting for a reason and, more often than not, they will be expecting that you will dictate the flow of meetings. Be prepared to run the show, have an agenda, and be ready to adapt as needed. When you can do these things, you will get the most out of meetings you have and your productivity will shine.

Meetings with prospective buyers are very exciting, as sales usually are what directly put money in your pocket. I suggest a few guidelines that will help you manage these kinds of meetings and also make them as productive as possible.

First, prescreen your buyer prospects over the phone. Countless time is wasted by investors showing properties to buyer prospects who are marginally or even poorly qualified. Especially now with tighter mortgage rules, you just can’t afford to drive across town to show a property twice a day to marginal buyers. Ultimately there are only two things you need to know about a buyer to determine immediately if they are a prospect or a suspect. They must either have money and/or credit. If a buyer has money then you can consider a lease option. If a buyer has credit then you can consider getting them a conventional loan. If they have neither, then there is virtually nothing you can do for them at this time.

In regards to letting buyers see your properties you also have two options. First, you can put a lock box on the front door and give people the code to go inside and view the property at their convenience. Second, you can drive out to the property and show the home to every Dick, Jane, and Sally that wants to see it. For me personally, the decision is easy, I’ve never shown a house and don’t plan to because it is not worth my time. I would much rather let someone show himself or herself in and out without me being there. You’re allowed to disagree with me on this subject, but before you do, I recommend you try this system (which is exactly what it is, a system) before you completely knock it. If it is going to keep you awake at night wondering if someone might steal something then don’t do it, but again, what is the worst that can happen? So they steal the fridge (the odds are against it) so what. The only thing I had someone take were the plug in air fresheners I put in the house. Imagine that, air fresheners! They must have really needed them.

So why operate this way? Well, aside from saving you hours and hours of time, believe it or not, it relays a sense of integrity with the way you conduct business. People appreciate the ability to view a property without someone breathing down their neck. Believe me when I tell you, nothing says ‘I’m desperate to sell this place’ like you herding a client through a property and asking them if they like it five or ten times. A client will make their own decision anyway so just let them do their thing. After they’ve seen the house all I ask is that they call and let me know that they’ve locked the house up. At that time I find out what they think. If they like it then we meet and reach an initial agreement. If they don’t then I just saved 2 hours of wasted time. Buyers like this system and feel a strong sense of initial trust with you because you are showing professionalism and trust with them.

Lastly, don’t be afraid to call these buyers to action. This means scheduling a meeting with them and ultimately collecting a good faith deposit. Take the bull by the horns, handle the follow up’s proactively, and your success will increase. The follow up aspect, a subject of another time, also displays to others that you take this seriously and will act accordingly.

I think it’s safe to say that you are well on your way to being more informed about the reality of operating a real estate investing business. Over the last several weeks, I’ve covered much of the basic mindset; skills and traits that you need to have, and now would like to move into a sequence of chapters that addresses more of the operational side of your business.

Operations in real estate investing include things like client relations, customer service, transactional processing, accounting, and fundraising. Since these factors are critical to the growth and stability of your business, they are worth mentioning on their foundational merit alone.

Let’s start by discussing the all-important meetings that you will be having with clients. Meetings with clients occur frequently in this business and it should not surprise you that these meetings will largely reflect your professionalism. Some of the basic kinds of meetings you will experience on a regular basis include:

• Meetings with sellers
• Meetings with prospective buyers
• Meetings with team members
• Meetings with business partners

Since you are operating a very dynamic kind of business, one in which two of your “work” days are likely never going to be exactly alike, it is hard to point to a single strategy for each kind of meeting that will work for you each and every time. This ‘moving target’ nature of real estate investing makes it a very exciting business to be in. It can also make it a challenging one to get accustomed to, especially when you are new to the business. For this reason, I will discuss each of the listed meeting types and what you should be trying to do to get the best outcome and results from your efforts.

Meetings With Sellers

When most real estate investors think of meetings, they will envision going to a new property and seeing if it meets their criteria for a profitable deal. This breeds natural excitement and also some apprehension, especially when one is new to the business. I think a very common pitfall for the novice investor is putting too much pressure on oneself when meeting with sellers. This isn’t rocket science. Take it easy on yourself and not only will your stress level go down, but also your meetings will be more productive.

The tendency is for the novice investor to think they must try to ink the deal on the spot during that initial meeting with a client. Does this happen? Sure it does, but you don’t need to put pressure on yourself to make it happen each time. Let’s review some of the basics with a little quiz. Your primary mission in a meeting with a seller is to:

a) Gather information

b) Get a feeling for how motivated they are

c) Develop good rapport with the client

d) All of the above

As you might expect, the correct answer is (d) all of the above. Your primary mission is not to ink a deal, although if circumstances call for it, you should always be ready, as this is your number one objective. In the majority of other cases, your mission should be to learn what is going on, why they may be motivated to do something, and make yourself positively memorable to the client. When you do these things, each and every time, your meetings will be a success, and you will also spend far less time and energy worrying about trying to get contracts signed on the spot.

Please note here that I am not openly discouraging you from being expeditious about getting good deals put to contract, because time is often of the essence for the great deals that are out there. Don’t spend so much time thinking about inking a deal that you lose sight of the other important parts of a successful meeting with a seller.

You can perhaps thank the real estate trainers out there for making everyone think they should always be ‘Johnny on the Spot’ when it comes to working with sellers. I simply find that good basic communication is a constant and better focus area for you as you are getting started. As you grow in this business, opportunities to act on the spot will appear so be patient and don’t fall into the trap of thinking it works like that all the time because it just isn’t so. Many of your best deals will come from following up and patiently working a deal, rather than trying to be unnecessarily pushy. You will also be viewed as more respectful if sellers don’t feel you’re trying to rush them into a decision they may need some time to think about. Just remember that time and circumstances often changes people’s minds so always leave the door open with clients.

Paperwork with buyers can be remarkably similar to that for your sellers, so long as you don’t forget to remove many of the protective features you might want to see in there as a buyer. You don’t want to extend the same flexibility to your buyers unless it is absolutely necessary and just remember that how you buy and how you sell are not the same. Other types of “sales” contracts include those used for rental properties or for creatively financed deals like lease options. Examples of such documentation include:

• Residential leases
• Options to purchase
• Land contracts
• Promissory Notes
• Mortgage

When you are working with a tenant, a lease form that is approved for your area is advisable, since tenant/landlord rules can vary from place to place. Some tenants are very savvy, and a poorly drafted lease can haunt you later. Creative financing documents come in several forms and your choice may just be a matter of personal preference.

The key thing to remember is that the paperwork may change but the basic idea remains the same. A lease option is basically a lease that is accompanied by an option to purchase agreement that gives the occupant an effective first right of refusal to buy the property for a set price. A land contract (also referred to as a contract for deed in some places) is basically a purchase contract that stipulates the completion of the terms between a buyer and seller will result in a transfer of ownership to the buyer. A promissory note is the written promise that one party agrees to repay the other party. A mortgage is the legal instrument that is publically recorded and officially attaches the note to the property as collateral.

I strongly suggest that you always have your attorney close your standard closings and your lease option agreements with your clients. No “table-top” closings. Why you may ask? There are multiple reasons; (1) the fact that you use a professional attorney exhibits a tremendous amount of trustworthiness with the people you do business with. (2) It should cost you nothing because you are going to have your buyer pay the attorney fee. (3) You have your attorney’s blessing when they close your deals. (4) You’ll find no better witness if somebody wants to come back and cry foul about something in the agreement down the road. (5) Your chances of people doing what they say they will do are much greater than they would be if you signed closing paperwork with them at a coffee shop. Bottom line, let the professionals do what they do best so that you can do what you do best.

Supporting Paperwork

The paperwork that is more ‘behind the scenes’ is often as important as the basic contracts you will use, because they serve two primary functions. First, this type of paperwork helps glue your deals together by answering questions your clients may have and disclosing various other specifics to a deal that your contract might not expand on. Second, this type of paperwork protects you. Whether it’s to authorize you to do something pivotal to the completion of the deal or simply what I call a ‘CYA’ form (CYA standing for “covering your assets”), sometimes the simplest of forms can go a long way by keeping you from getting into hassles or even legal entanglements with your clients.

Examples of supporting documentation might include the following:

• Authorization to release information (allowing you to contact a client’s lender)
• Affidavits of agreement (allowing you to file the existence of your purchase contract against the title of the property in question, securing your interest in it)
• Disclosure forms (good for foreclosures and creative financing deals)
• Waiver forms (disclosing what you are and are not responsible for)
• Short sale package documentation

Any of these types of documents are available in many real estate software or contracts packages and a real estate attorney can also create them. The more you educate yourself in the business, the more apparent it will be when and where these types of forms need to be used, so pay attention, keep learning, and you’ll know better how to use these documents properly.

Always have your attorney review your paperwork to make sure that 1. It is your state friendly and 2. your attorney is comfortable with everything.

My suggestion to help you get past a basic ‘contractophobia’ is to first sit down and really take a close look at the documents you will be using with your clients. No, you don’t have to know them line-by-line and I have yet to work with a client who wanted to go through one line by line. That doesn’t mean skipping through major sections with no explanation. What it does mean is that you should try and capture the gist of each section and be able to explain this gist in layman’s terms to your clients. This will satisfy most and, if they have issues or questions you can’t address or answer, then have them consult with an attorney. This way, you’re never on the spot or feel like you need to elaborate on something you don’t have the professional qualifications to address.

I would also encourage you to sit down with your real estate attorney as you are getting your business going. Have them review your paperwork, make suggestions for changes, make them your state friendly, and as needed, help you understand what the content means. This one-time expense can give you a lot more confidence and also permit you to announce when appropriate that your attorney has reviewed your paperwork. You’ll also naturally become more comfortable with your paperwork as time goes on so that should be of some reassurance as well. Take this seriously, but also take it easy on yourself and the paperwork dilemma you may be facing right now should work out just fine over time.

One of the things that can strike fear in the heart of the novice investor is the idea of doing paperwork. Call it lack of familiarity or just fear of fine print, but this issue can be very intimidating and it also can have a big impact on your perception with others. Your clients will expect that you have some basic understanding of the paperwork you present to them and the alternative of just running everything through an attorney can get expensive real quick so where does that leave us? I suggest a happy medium and that medium is the subject of this article.

Paperwork Overview

Let’s start with a basic overview of what it means to effectively use paperwork in a real estate transaction. Unlike other commodities, real estate can be structured and greatly leveraged when you have a strong command and understanding of the paperwork with your deals. This is also why paperwork is sometimes intimidating for most people. However intimidating it may seem to you or people you do business with, it is imperative that you strive to fully understand the paperwork you use. The good news is that having a thorough knowledge of paperwork is something that can be simplified and that can be learned over time.

As far as simplifying paperwork, my basic suggestion is to create packages of forms for each type of deal you commonly do. For example, subject to deals vs. short sales.

The hard way is to obtain a new client, scramble around feverishly to gather and print the forms you’ll need (hoping you don’t forget something), and then go meet with them. The easy way is to get the same phone call, grab a packet of pre-prepared forms off your shelf, and go. Which way seems easier to you? Which way will be less stressful? I think you see my point. Beyond that, let’s discuss this further by highlighting the three main kinds of paperwork you’ll need.

• Paperwork with sellers (purchase contracts)
• Paperwork with buyers or tenants (sales contracts, leases, etc.)
• Supporting paperwork

Purchase Contracts

First of all, remember that I don’t say the words “purchase contracts” with anyone I do business with. Instead, I say, “this is the piece of paper that says you are selling and I am buying.” This is less threatening to the other party. For some reason, the word “contract” scares people.

The types of purchase contracts you may wish to use for your deals may vary considerably and I’m not one to hang my hat on one in particular and suggest it will work well in any situation. First, I’m not in a position to rightfully do so, and second, it just wouldn’t be fair for you to be thinking this is the way to go. Every situation is different and your choice of contracts should reflect this. Some basic choices to consider include the following:

• A formal Realtor contract
• A private contract that is “full-length’
• A private contract that is intentionally short

When selecting a purchase contract, remember that beauty is in the eye of the beholder. It’s not just about what you prefer to use; it’s also a function of what the recipient will think. For example, you may have learned the business from someone who subscribes to the theory that you should use your own paperwork at all times. This is a decent theory but what happens when you want to pursue listed properties such as a bank repossessed property? Realtors will often avoid and discourage contracts they are unfamiliar with so you need to be prepared to use something that is not your own for certain situations.

I tend to have a more liberal view of contract selection and can easily adapt contracts that aren’t from my own ‘library’ by adding certain key addendums if necessary. Addendums to consider might include a right to show, right to assign, or a right to inspect the property and can include whatever you want to include. In this way, any prohibitive features of a foreign contract can be “undone” by the addendums you choose and make the contract more like one you would more normally use. Keep in mind that too many addendums and contingencies in a contract can and will very often kill a deal because it scares the other party away. Keep it simple and only add when necessary.

Some sellers are accustomed to receiving contracts that are of the full-length variety and might object to something that is unusually brief. That said, for simple transactions like cash purchase wholesale (contract assignment) deals, a brief contract is all that is really needed and you can sell the simplicity to your clients as a reason why you are easy to work with. This can add integrity in the right situation. For other more traditional deals, even the simple addition of addendums or specific terms can show that you are on the top of your game and give you a defined amount of professionalism.

In my next post, I’ll discuss contracts with buyers/tenants and supporting paperwork.

When my retail coffee shop business failed, I knew that I needed to pick a direction to go from there. My choices were, (1) pursue the passion that I had acquired for real estate from my books, or (2) go find a 9 to 5. Well, since I wasn’t married, didn’t have children, didn’t have money, I decided that I didn’t have much to lose, so you guessed it, I went after my passion for real estate investing.

Upon doing some networking in my area, it turned out that one of my business relationship friends knew someone who was active in real estate investing. The problem was, he lived in Louisville, KY and I lived in Lexington, KY. I asked my friend to introduce me to this guy. Little did the investor guy know at the time, that I was a man on a mission and I was going to work for him whether he liked it or not.

With time, I professionally pursued the new relationship and became an “apprentice” if you will, to this investor. It really was a win-win relationship. I would drive an hour to Louisville every day to work for this guy, willing to do whatever it took to give me more knowledge about the business. Overall it was about a six month period where I wasn’t making a penny, but I was getting an invaluable education about how to make money as a real estate investor.

Eventually, the time came where I was either going to move to Louisville and work for this guy full time, or stay in Lexington and start my own real estate investing business based on the knowledge that I had acquired. At the time, it was the scariest thing that I ever did, but I decided to make a go of it on my own. I was extremely fortunate to have been able to experience the business from someone already in it. This mentor, mentee relationship was invaluable to helping me gain confidence and get started as a real estate investor. I wouldn’t wish for it any other way.

This method of learning was so beneficial to me in my early days that I have made it a personal commitment of mine to reciprocate and give back to other aspiring real estate investors looking to achieve great success in this business.

You must constantly invest in your education as a real estate investor if you want to achieve great success and longevity.

That said, businesses also don’t succeed on pure drive and determination, although it could be argued that these things are ultimately what helps keep businesses afloat through growing pains and other challenges. In short, your vision and courage are most admirable but they aren’t a substitute for properly educating yourself on the nuances of your business. In this case, you still need to be able to understand the numbers, prepare paperwork, evaluate market conditions, interact with people, negotiate effectively, and ultimately determine the profitability of the real estate deals you pursue.

The adage ‘Do your homework’ has multiple applications in the world of real estate investing. Sure, it can refer to proper evaluation of deals, adequate due diligence, or even timely reliance upon your professional team. I’ll discuss these things in future articles. In the here and the now, the idea of doing your homework also means getting yourself properly educated in the business and, if you haven’t done enough to this point, there’s never been a better time than now. Now, make a commitment to education and treat this part of the process just like you would any other aspect of your business and success will soon be at your doorstep.

As a real estate investor, it is imperative that you recognize and respect that your knowledge of the business makes you fairly unique. Most of your clients and many of your peers will not have the same knowledge as you and you need to be ready to properly explain things in so-called ‘layman’s terms’ or third grade English, so that you communicate effectively with everyone. Never assume, for example, that a client understands the foreclosure process in your area or that another investor speaks the language of real estate investing as you do. This approach will generally serve you well.

Here are four tips to help you communicate more clearly:

1. Ask probing questions that presume the client or peer knows what you are talking about. This way, you’ll avoid unnecessarily patronizing them if they are more knowledgeable.

2. Welcome feedback so, if a client or peer is not up to speed with what you are talking about, they’ll feel comfortable asking you questions.

3. Use analogies to explain concepts to draw parallels between real estate and things a client may be more familiar with.

4. Avoid terms that might confuse or scare away your client.

    For example, instead of saying Contract or Purchase and Sales Agreement, say, “this is the piece of paper that says you are selling the home and I am buying it.”

    Instead of saying this is the Deed, say, “this is the piece of paper which transfers ownership in the property from you to me.”

    Instead of asking a seller if they will Owner Finance for you, say, “Will you allow me to make payments to you for the house.”?

By following these tips, you’ll be more effective as a communicator. When you can effectively communicate your business, you will be seen as more convincing because part of effective communication is making sure the other party knows and understands what you are talking about.

Ability to Eyeball Properties

What I call ‘eyeballing properties’ is something of a two-headed skill set for the real estate investor. Part one of the skill is to be able to see potential where others may not. Have you ever driven past a property and found yourself making a judgment about whether it was occupied, or had income potential? This premature judgment of a property’s potential has likely cost hundreds of investors the chance to secure a great deal, and usually without them ever realizing it. Look at everything as having potential. This may seem pretty basic but it is a skill because most investors have to train themselves to look at properties this liberally. Trust me, do what you have to do, don’t prejudge, and you’ll enjoy more opportunities.

Part two of this skill set is to be able to quickly evaluate the condition of a particular property. Many new investors will downplay their ability to assess a property’s flaws (and necessary improvements) and this is not as hard as you might think. First, you should have a contractor on your team who can back you up during your due diligence period. Second, it’s not hard to take a trip to the hardware store and price out different things that you may need to do to renovate properties. Between these two things, you can quickly develop the skill to estimate repairs (even if it’s only a crude estimate) and this skill will give tremendous confidence.

Creativity in real estate is one of those unsung skills that can easily and effectively set you apart from your competition. Note that I’m not referring to creativity in the artistic or ‘left brain vs. right brain’ sense. Creativity in real estate means being willing, able, and committed to out of the box thinking, and bringing that philosophy to every aspect of your business. There are several primary areas of your business where this will benefit you.

First, you have marketing. Marketing is one of the easiest arenas in which you can express yourself creatively and it doesn’t just mean having the most unique appearance to your marketing message or media. It just means having a nice diversified approach to marketing your business and, by doing so, going the extra mile that your competition will not. Second, you have the actual approach to working with clients. Creativity here may mean nothing more than just being a good person and presenting yourself in a way your clients will not be accustomed to. Anything that sets you apart from other investors can be a form of creative expression, and such things will benefit you.

You want to have command of the fundamentals of real estate investing so you objectively are seen as competent. Beyond the basics, a creative or otherwise unique approach to your business will help to demonstrate that you aren’t afraid to march to the beat of your own drum and be comfortable doing so. Peers and clients alike will respect what makes you unique.

Ability to Negotiate

Negotiation is another one of the fundamental skills that all successful real estate investors possess. Why is it so important? The better question might be to ask why would it not be important? Negotiation is involved in establishing a professional team, interacting with clients, and getting your deals tied up and completed. It is an essential part of the business and, whether you educate yourself or get trained in it, or simply learn by getting out there and working deals, this is definitely something you need to work on because none of us are born negotiators.

My important fundamentals of negotiation that you should strive to command are:

• Educate yourself as to what all parties are trying to achieve.
• Ask good questions.
• Listen to what the other party has to say.
• Understand the needs of the other party.
• Have the courage to ask for what you want.
• Don’t always accept no for an answer.
• Be prepared to deal with opposition or objections to what you present.
• Learn to ask the same thing in different ways, multiple times.
• Be able to confidently justify your requests.
• Don’t make decisions based on desperation, impatience, or emotion.
• Be prepared to give if you receive, and vice versa.
• Have the wisdom to know when to walk away.

Focusing on these key areas does not have to be a monumental task. Just be committed to the fundamentals outlined above and remember that most anything is negotiable. Never just take things for granted and presume you have no opportunity to negotiate because few things are truly like that, either in life or in business. A mentor of mine said it best, “what comes out of your mouth goes into your bank account.” The worst thing that people can say to a request you make is no, and if that happens simply ask for something else, or ask it in a different way.

If you take away anything from this

article on negotiation let it be this,

you will never get what you don’t ask for.

Your commitment to being a good negotiator will be apparent to your clients and to your peers. Your goal is not necessarily to be seen as shrewd, but rather as someone who is always open to discussion and willing to find that ideal outcome that benefits everyone involved. This commitment becomes a part of your business philosophy.

It’s no surprise that certain skills will benefit you as an investor. That said, it does beg the question, ‘What are the skills necessary to be a successful real estate investor?’ You may have your own ideas on this and I have mine as well. Some of what I present will seem logical and some of it might also surprise you. The idea here is to both confirm some things you may already be aware of as well as enlighten you to additional skills to help you succeed.

For starters, let’s list what I see as the most common skills a real estate investor would need to have to be most successful. I’ll then elaborate on each in time so you see exactly where I’m coming from and why I think these things are important to your accomplishments. Investor skills include (in no particular order of importance):

• Ability to make decisions quickly (take action)
• Creativity
• Ability to negotiate
• Ability to explain complex processes in a clear and understandable fashion
• Ability to eyeball the physical characteristics of a property and use that to determine improvement costs
• Ability to analyze the potential for a particular real estate deal
• Ability to understand exit strategies
• Ability to keep one’s emotions out of a business decision
• Ability to minimize personal risk
• Ability to always do business with integrity (add paragraph about this)

Before I get into the details of these specific skills, I want to point out (as you may have already noticed from the list above) that I did not include things like detailed market knowledge or being handy as essential investor skills. Many investors falsely presume they need to have such skills to be successful in this business and I just don’t agree with that. The skills I just mentioned are useful but also those that can be delegated to your professional team and thus not critical for your success. With that said, let’s look more closely at the skills I do see as more important.

Ability to Make Decisions Quickly

Quick decision-making and the ability to take action is one of the hallmark skills of a successful real estate investor. Note I’m not suggesting in any way that decisions be rash or careless. What I’m referring to instead is the efficiency and timeliness in which decisions get made. The more knowledgeable you are, coupled with ever increasing levels of experience, the easier it will become to make quick decisions. There are several reasons why this is such a valuable skill.

First, quick decision making puts you in line to capitalize on those great deals that you are exposed to in the course of running your business. Slow decisions and too much analysis lead to great deals being lost and I don’t want to see this happen to you. Too many real estate investors, especially beginners get what is called “paralysis of analysis.” They get stuck analyzing the numbers over and over, and the neighborhood, and the situation, etc only to find out that they’ve analyzed themselves right out of the deal usually before they’ve even made an offer or gotten a property under contract. This is not the way successful investors do business. If this sounds like you then break this habit immediately. Get a property under contract and then do your due diligence, not the other way around.

Then after you’ve done all your due diligence ask yourself, “What’s the worst that can happen?” If you can correct the worst from happening before you close on a property then do it. If you can’t, but still want to proceed, just make sure that your decision won’t keep you awake at night. If it won’t then you should probably do the deal. If it will, then you should probably walk away. Keep in mind that the goal of this discussion is about being efficient with your decisions. It will only happen a couple of times before you really start seeing the value of this skill. Remember, I’m primarily talking about making offers here. You can make a quick decision and still have time for due diligence so don’t think of this as opening you up to greater risk because that isn’t the case.

Second, quick decisions give you valuable experience in thinking on the fly and getting into the habit of acting and responding as if your income depended on it. This will not only benefit your business, but also give you valuable confidence that you can keep up with the pros out there and that you are more than just a newbie. Most people get a feeling about something and then analyze this feeling and then act. I’ve trained my mind to do the opposite. I prefer to make a decision and then deal with the feelings and repercussions of my actions after the fact. Have I made mistakes based on this method of thinking? Absolutely. However my successes have always greatly outweighed my mistakes, and therefore I have no doubt that this learned skill has greatly attributed to the achievements of my business.

Lastly, one of the greatest benefits of quick decision-making is the boost it will give to your authority. Clients and peers alike will respect your ability to think and act quickly and will establish you as a force to be reckoned with.