Success is as much about passing on deals as on taking them.

I am not a gambler, and I sucked at stock trading, but I learned that success is as much about "folding" or "passing" or "cutting losses" as it is about the winning parts. In Real Estate investing, this translates into, "looking at many deals, taking only a few."

Cherry picking - the act of accepting and moving forward on only the very BEST and most nearly "perfect" deals is the key to success. Yes, it is frustrating and time-consuming and applying the discipline of standing by your analysis and passing on all deals which fail to meet all of your requirements can seem to be an "impossible" lesson in futility. But, then you nail one. The deal makes it thru all of your analysis gauntlets, and the drive by, and the site visit and the contract negotiation, and the appraisal, and the loan approval and...voila! You own a GREAT rental property with "nearly" no chance of it being a loser. All because you stayed the course and would not settle for half-baked deals and compromise on your analysis or criteria.

String a long chain of these cycles and outcomes together, over a career, and it is unlikely you will not be a Millionaire. And if you avoided a lot of failures and expensive, though avoidable lessons along the way, the quicker and more bountiful will be your success.

So, the investor's mindset should be one of extreme discrimination. Being picky, not about the property condition per se, but about the DEAL. It is far better to pass on, miss/lose out on, or let go a bad or even marginal deal than to capture it and live to regret it.

Here are a few of the guiding principles of business (and life too), which keep me grounded and on track.

• "Missed money is better than lost money."

• "Investing and wealth building is a marathon, not a sprint."

• "Tortoise and the Hare story."

• "Going down with the ship, is, stupid."

• "Do what others are unwilling to do, and you will get paid well for it."

• "Never fall in love with a deal."

Those are just off the top of my head. And each is so ingrained into my psyche and personality that they are automatic filters and thought processes for me in my daily life. There are MANY others learned over the years from many wise teachers and my personal experiences. They define me and my business approach.

In law, we discuss legislation and statutes as being "under-inclusive" or "over-exclusive" with respect to their application in reality, in public policy. Drafted too broadly, for example, too many citizens will be caught in the net, and deemed violators. Drafted too narrowly, a law will permit loopholes and let bad actors slip by undeterred. It is a balancing act, with tradeoffs and competing goals and outcomes. The same thing applies to being a practicing real estate investor. We often fail to reconcile the two extremes, and either buy any and every deal we come across, or, alternatively, experience "analysis paralysis" and never get off the bench or sideline, always waiting for the "perfect" deal to come along.

Newbies often lament and complain that "If I apply your (in their opinion overly-conservative) analysis, I will NEVER find a deal that qualifies for me to acquire." My thoughts/responses are typically as follows. First of all, GOOD! That means they will NOT lose any money. Second, it means they fundamentally do not understand the business. If it were easy, then there would be no opportunity for any of us. Those of us who have the tenacity, discipline, and fortitude to keep going, keep searching and analyzing more deals without quitting, WILL find them eventually.

A useful parable illustrating this attitude and reality follows. IF I presented you with a 50-gallon barrel of live oysters and told you that in ONE of the thousands of oysters in that barrel, was a Pearl worth $10,000, how many oysters would you be willing to shuck and find empty of a pearl before you quit? Amazingly, faced with this actual question/challenge, most people would actually, give up at some point before getting through the whole barrel, or not even start at all. If it took you 10 hours to shuck every single oyster in the barrel, as miserable a task as that would be, but you did so, and as a result, found the pearl, what would your rate of pay be? $1,000 per hour! Who would rationally reject the chance to make $1,000 an hour for such a task? Nobody, IF they BELIEVED with a sense of certainty that there was, in fact, a valuable pearl in the barrel somewhere.

The belief that real estate investing can and does work, for informed and disciplined players, is a key component to becoming a successful one yourself. Study case studies, make acquaintances in person and online with those who have and are succeeding at it. Most, like myself, are more than willing to share the dream and our stories and experience and expertise with those who ask us respectfully. I am in no way paid for writing this blog post, for example. It is an act of contribution.

Armed with the BELIEF that real estate investing works, then it is simply a matter of educating oneself on the "how to" and then ACTING on that knowledge in a disciplined manner, consistently, over a period of time. This is why I often say that RE investing as I do it (Rentals) is a "get rich slow, but for sure, game."

Having realistic and grounded expectations of what RE investing actually involves is what will enable you to develop the belief, ambition, and discipline to do what is necessary to succeed at it. It can be "get rich quick" but usually not. It is more a business than an investment process, in my experience. Yes, many of my rentals turn out to be amazing investments too, even speculatively speaking, but I did not count on them being so when I acquired them. Appreciation is beyond our control and either occurs or not, over time. When you catch that wave, it is amazing, but to me, it is considered a bonus, not a goal.

One thing is for sure. Those who are not willing to shuck the oysters and endure the disappointments and risks will NEVER find a pearl.