5 Key Leadership Behaviors for Real Estate Investors

As I have been learning about real estate investing, I’ve absorbed hundreds of great articles and podcast episodes focused on the business of real estate and on motivation. The real estate business experts have taught me the critical fundamentals such as how to find properties, evaluate a deal, set up property management, deal with issues and more. The motivational experts talk about mindset and staying focused and “10x your plan” and goal setting. All of this knowledge is amazing and has changed my view of real estate investing. It has taught me “what” to do in real estate investing.

But, I think there is something missing. To be really successful at real estate investing, it takes more than knowing what to do to reach a goal — you need consider “how” you get things done. If you accomplish a goal, but cause problems and or lie or cheat or are considered difficult to work with in the process, you’ll lose in the long term.

In my corporate life, I am an executive who drives leadership development and talent management (executive coaching, succession planning, leadership programs, etc.). In this world we talk about the “how” you get things done in terms of the behaviors that will help you be most successful — we call this a leadership competency model.

Real Estate investors are leaders. Some of you have formal real estate businesses with full-time staff or virtual assistants. Others work solo, but you are still a leader who drives your investing or business and influences other people.

I’ve built many competency models over the years for many different organizations. While there are some similarities between all of the models, there are also some unique features. The purpose of a leadership model is to define the behaviors that can help you be successful or work against you. Here are five critical leadership competencies for real estate investors.

Five Critical Leadership Behaviors for Effective Real Estate Investing

Relationship Building — This one, relationship building, should not be a surprise to anyone. Most real estate investors acknowledge that this is a relationship business. Deals are made through personal networks, financing often comes from private lenders, soliciting investors requires a personal relationship, mentors are crucial for learning, etc. Relationship building is about getting to know each other and about having integrity and doing what you say you will do. Some people do this really well and it gives them an an edge — they help others and then can get help in return when needed. A great example of this is Joe Fairless from the “Best Real Estate Investing Advice Ever” podcast. Joe and I got connected a few years ago regarding an apartment deal. I did not end up investing in that deal, but Joe and I have stayed connected. This week, I got a signed copy of his newest book in the mail. He is investing in a relationship that will benefit both of us in the future.

Communication — Communication is a key part of everything you do. This applies to everything from writing direct mail to talking to sellers, buyers, bankers, title companies, agents and more. It also involves more informal communication like emails and social media. Everything you say or write creates an impression of you — you should be in control of the message. In a local real estate Facebook group, I see this issue play out almost every day. I see postings with convoluted sentences that I don’t even understand or phrases like “yo, where all my west side buyers be at?”. Real estate investing is a business that involves money and trust. I’m not going to partner with or give money to someone who considers that to be effective communication in a public group.

Delegation and accountability — As your business grows, you will need to create systems and bring other people in to help you. For some this means hiring full-time staff and for others it means using VAs or other contractors. There is a lot of good information available about how to set up effective systems using project management tools like Podio, or CRM software or process maps. To enhance those systems, you need to ensure that you are delegating the right tasks, communicating expectations effectively and holding your team accountable for accurate and timely completion. Some leaders struggle to delegate at all because they are accustomed to doing everything themselves or don’t trust others to do it properly. This behavior limits the growth of your business. Other leaders try to delegate without enough clear instruction about exactly what to do. I’ve heard some investors who successfully deal with this by video-capturing a specific step-by-step task and using that to train a virtual assistant. Finally, you need to hold your team accountable. That means you have to keep track of who is doing what and when it is due. If things don’t get done right, you need to be direct in addressing the issue and getting it back on track. Those can be tough conversations — which is why good leadership behaviors are so critical!

Financial acumen — In addition to being a relationship business, real estate investing is a financial business. At first glance, REI might seem more focused on bricks and mortar and rehabs and design. That is what is highlighted on all of the HGTV and home shows. But the reality is that finance is a key component. That involves running numbers to determine if a deal is good or not, understanding budgets, finding financing, leveraging debt and more. A REI who does not understand finance will be limited in growth and/ or run into trouble on deals and/ or lose everything if housing prices decline significantly. As an investor gets started, learning to use the calculators on Bigger Pockets will provide helpful information and guide decisions. Over time, a leader who wants to grow the business should go deeper into the calculators and understand how the formulas work, what numbers impact other numbers and what levers to pull in order to get a certain outcome.

Diversity & Inclusion — This one might surprise you a bit. I almost never see Diversity and Inclusion discussed in real estate settings, but it is critical to this business. Think about the broad spectrum of people that you interact with for a typical deal. For example, one deal could involve a bankrupt homeowner, a millionaire funder, a newbie buyer, a section 8 renter, a young title company person and a hard-charging wholesaler. Working with each of those people takes a different approach and a different sensitivity. Learning to work effectively and respectfully with a variety of people can be a game changer. As a woman in real estate investing, I’m not overly concerned about the male-oriented culture, because I have met a lot more great people than difficult people. But I had a recent experience that crossed a line. I was listening to a well-regarded real estate podcast (which I will not name) and the host made an unnecessary and offensive joke about women to explain a point. I emailed him — and to his credit — he edited the joke out of the podcast. But I no longer subscribe to that podcast and that inappropriate joke made the world an uglier place. Think about how you interact with different people and how it impacts your business.

We all display these five critical leadership behaviors — some have mastered them and others are still practicing. Developing these behaviors does not require spending money on gurus or getting an MBA or even formal studying. Once you identify a behavior that you need to improve, you can find activities and tasks that you can practice while doing your regular business and learn on the job. A few elements — like financial acumen — might require some formal reading but most can happen more informally. If you embrace these leadership behaviors, you can take your real estate investing to the next level.

Is this helpful to you as a leader and a real estate investor? Would you be interested in developmental activities that can help you grow in these five leadership competencies?