5 things effective investors do to succeed

What differentiates an effective investor from an inefective one? What does an investor do that a "newbie" or a "begginner" can't get over?


1. Effective investors move past their circumstances. One of the most common mistakes people make when they want to start investing in real estate is they fail to start. Common excuses include "I don't have enough money", "I don't have enough experience", "I can't talk like that", "I am shy", and a score of others.  You don't need money to invest. You need to lock-in a deal and you need to know why it is a deal. If you don't have the money to consume the deal, you sell it to another investor. That is how most of us started!

2.They have an exit strategy. I NEVER, EVER buy anything if I do not have an exit strategy that will make me money. That means, whatever I buy, I need to be able to sell tomorrow and make money on it (after costs). This is the simple most important rule of investing. Violate this one, and you put yourself in a situation where your first investment might be your last.

3. They are always learning, researching and prospecting. I check a local MLS three times a day - if not for deals, then for comparables in my neighborhood. I am always looking for deals. When I drive home, I scan the neighborhoods on both sides of the streets for signs of distress. I stop by "FSBO" homes, just to make a conversation and find out about the deal and the sellers, even if it is not a good one. I look at every deal twice and attempt to find another angle to look at. I pass the deals that I am not interested in to friends and people in my network. You never know, one person's trash is another persons treasure.

4. They have laser sharp focus in a small area. If you try to be an expert in every area of your town, you are going to be mediocre at best in your results. Instead of doing a lot of deals with a little profit, it is much better to do few deals with a lot of profit. The only way that you know whether something is a deal or not is by knowing and studying the neighborhood that you work in all the time. I can recite to you last 10 sales withing a mile of my house. I know exactly what my neighbor's house should sell for. If he talks to me and mentions selling it at $50K less, I can make a hefty profit very quickly. On the other hand, I might see a once-in-a-lifetime deal across town, and I will pass it right over, because I know nothing about that neighborhood. Learn to be OK with that. There is plenty money to be made within couple of miles of my house.
 
5. They ACT, ACT, ACT. I live and breathe looking for deals every day. I search 10 different sources of information twice daily for new deals in my area. I am the first one to know when something comes up for sale in my neighborhood. And what is more important, I make offers. Not a week goes by ever without me making an offer on something. If Friday comes along and I did not find something to make an offer on, I scan a list of every prospect in my file and make an offer on the most promising one. That way, every year, I made at least 50 offers.  Without action, your investing career is just a pipe dream.

What do you do consistently to make you a better investor every day?