7 Habits of a Highly Successful Real Estate Investor

We’ve assisted thousands of real estate investors generate millions of leads online.

But we haven’t just helped our members with their online marketing strategies but joined them in their success. For years, we’ve put ourselves in the environment of high-performing real estate professionals — interviewing them (check out our podcast), going to their conferences, becoming real estate investors ourselves, and even hosting masterminds of our own (check out CarrotCamp).

Throughout our time talking with high-performing real estate investors, we’ve noticed some trends in how they run their businesses, think, and even start their mornings.

Knowing those similarities, anyone can work backward to build habits leading to a successful real estate investing business.

But before we dive into the seven habits of highly successful investors, we want to first talk about the mind. That is the one mindset difference between top performers and everyone else.

Or, you can skip down to the seven habits.

Now we know claiming that one solitary mindset shift is what makes the difference between those who succeed in real estate and those who don’t is an ambitious claim.

Could there only be one difference between the people who win and those who lose? Probably not.

After all, there are a lot of factors that determine whether a real estate business succeeds:

1. Timing
2. Market
3. Knowledge
4. External events
5. Personal discipline

Many other unforeseeable events can derail your business or turn it into a thriving money-maker. When it comes down to it – if we’re being honest – a large part of building a successful business is cold, hard luck.

Did you start at the right time? Did you launch your business in the right market? Did you have someone willing to teach you?

But that’s not what you came to hear.

You came to find out how to ensure that your business will succeed despite the unpredictable and often frightening events that can destroy a growing business. You don’t want to know what you ​can’t control but what you ​can control.

However, you can’t understand what differentiates those who succeed and those who don’t unless you first accept that you can’t control much of what goes into building a business.

But here’s the dead-simple thing you can control – and if you learn to, it practically guarantees your success, despite being lucky or unlucky.

Your mind.

Clichés aside, how you think won’t only ​impact whether you succeed; it will completely make that decision.

Of course, telling you to think differently than you do now is about as helpful as telling you to buy a new car without describing the brand or make of the vehicle.

The only mindset difference between top performers and everyone else is the belief that you will succeed before you even start.

The business can’t be an experiment, and it can’t be a we’ll-see-if-it-works undertaking. You might not know when or how it will become successful, but you must have 100% confidence that it will.

That’s what differentiates someone who builds a successful business from someone who doesn’t.

Despite uncontrollable circumstances, someone with an if-then mindset will quit when things get hard. ​Maybe it’s not possible, after all, they’ll think to themselves.

Someone who fully believes the business will succeed before starting is far more likely to push through all the difficulties of growing a new business.

In other words, believe that you’ll succeed, and you will. Believe anything less, and you’ll fail. It is that simple.

Of course, you know what ​isn’t that simple?

Believing with your whole being that you’re going to succeed. To help with that, here are three questions you can ask to convince yourself that your business will succeed – without deceiving yourself.

1. Have other people done what you’re trying to do? Remember: ​If someone has done what you’re trying to do, there’s NO reason you can’t pull it off.
   
   Sure, it might take some time. You might have to learn some lessons the hard way. You might have to make some tweaks to your investing strategy. But, in the end, the truth is the same: if someone else has done it, so can you — end of story.
   
2. Are you willing to do whatever it takes to make this business succeed?
   
   If you know that the business you’re trying to build is tried and true because of other people who’ve succeeded, then you need to promise yourself something before getting started.
   
   Repeat after me: ​I will not give up on this business, regardless of how difficult it gets. This is going to work, and I’m going to make it work. I don’t care how long it takes.
   
   I don’t care what hard lessons I must learn along the way. It’s possible, and I’m going to make it happen. Right, that down, nail it to your wall, or tattoo it on your forehead (don’t do that). The point is, promise yourself that you will succeed, and nothing will stop you.
   
   That’s the mindset of a winner.
   
3. Do you fully recognize that building a successful business will require you to change who you are at a fundamental level? It would help if you also were honest with yourself.
   
   Building the business of your dreams will change you in massive ways – ways you never expected. You will have to change your routine. You will have to change how you communicate. You will have to become someone better than you are right now.
   
   And that’s a necessary part of the process.
   
   You don’t want to fight these changes if they’re for the better, but accept them as they come and be willing to change as needed. Anything worth doing will change you fundamentally as a person. But that’s the point. Accept that for what it is and dive in, prepared to adapt to your changing environment.
   
   Ultimately, there’s only one difference between those who succeed and those who settle for less: ​the belief that they will succeed… ​or will “see what happens.” Those who don’t believe in themselves will never get where they want. For those who do, nothing will be able to stop them.

Now, on with the seven habits of highly successful investors.

7 Habits of Highly Successful Real Estate Investors

1. Consistent Lead Follow-Up

Consistent lead follow-up is a cornerstone habit for real estate investors, and here are seven compelling reasons why it is essential for their success:

Maximizing Conversions: Lead follow-up increases the chances of converting potential leads into actual clients. Many real estate transactions require multiple touchpoints and interactions before a lead is ready to decide. Consistent follow-up ensures investors stay engaged with leads during this decision-making process, increasing the likelihood of conversion.

Building Trust: Consistent follow-up helps build trust and credibility. It shows that the investor is committed to understanding the lead’s needs and providing valuable information. Over time, this trust can turn a hesitant lead into a confident and loyal client.

Staying Top of Mind: The real estate market can be highly competitive. Consistent follow-up ensures that the investor remains top of mind when leads are ready to move. When leads think of selling, they are likelier to contact the investor who has consistently maintained contact.

Qualifying Leads: Not all leads are equally valuable. Consistent follow-up allows investors to qualify leads by understanding their motivations, preferences, and readiness to buy or sell. This enables investors to focus their efforts on leads that are more likely to result in successful transactions.

Timing is Critical: Real estate transactions often hinge on timing. Consistent follow-up helps investors identify when leads are ready to take action. It ensures that investors are in the right place at the right time to seize opportunities.

Effective Communication: Effective communication is vital in real estate. Consistent follow-up ensures that communication channels remain open, questions are answered promptly, and concerns are addressed. This paves the way for smoother transactions and satisfied clients.

Repeat Business and Referrals: Consistent follow-up is about closing the current deal and nurturing relationships for future business. Satisfied clients who have experienced excellent follow-up are more likely to return for additional transactions and refer the investor to their network. This leads to a self-sustaining and expanding client base.

Consistent lead follow-up is an essential habit for real estate investors because it maximizes conversions, builds trust, keeps the investor in mind, helps qualify leads, capitalizes on timing, ensures effective communication, and leads to repeat business and referrals.

This habit contributes significantly to an investor’s success in a competitive real estate market.

2. Continuous Learning

Successful investors are committed to ongoing education. They stay informed about market trends, changes in real estate laws, financing options, and investment strategies. This dedication to learning keeps them ahead of the curve and able to adapt to shifting market conditions.

Here’s an elaboration on why it’s so vital and how it manifests in their daily lives:

Market Knowledge: Successful investors understand that the real estate market is dynamic. They stay informed about local, national, and global real estate trends. This includes monitoring property values, rental rates, mortgage interest rates, and economic indicators. They frequently analyze market data to spot opportunities and make informed investment decisions.

Legal and Regulatory Changes: Real estate laws and regulations can change frequently. Highly successful investors closely monitor these changes to ensure they remain compliant and adapt their strategies accordingly.

Staying aware of tax laws, zoning regulations, and landlord-tenant laws is crucial for avoiding legal issues.

Investment Strategies: The world of real estate investing offers a wide range of strategies, from flipping properties to long-term rentals, commercial real estate, and real estate syndications.

Successful investors always explore new strategies and assess their applicability in market conditions. They also learn from experts and mentors to refine their techniques.

Financial Wisdom: Successful investors have strong financial literacy. They understand the intricacies of real estate financing, including mortgages, refinancing, and various loan products. They stay informed about financial markets and interest rate trends, which can significantly impact their investment decisions.

Technology and Tools: The real estate industry continually introduces new technologies and tools, from property management software to online real estate marketplaces. Successful investors embrace these tools to streamline their processes, enhance efficiency, and stay competitive.

Analytical Skills: Real estate investors must be analytical in assessing potential deals. They continually hone their skills in evaluating properties, conducting market research, and performing financial analysis. This analytical ability helps them make data-driven decisions.

Books, Seminars, and Courses: Many successful investors invest in books, seminars, and courses that offer insights from experts in the field. These resources provide fresh perspectives and advanced knowledge, helping investors refine their strategies.

Mindset and Motivation: Continuous learning isn’t just about acquiring new knowledge; it’s also about maintaining a positive and motivated mindset. Successful investors often read personal development and motivation books to stay inspired and resilient, especially during challenging times.

Continuous learning in real estate investing is a commitment to staying updated, improving skills, and adapting to an ever-evolving industry. Highly successful investors make learning a daily practice, ensuring they remain at the forefront of their field and continue to achieve their financial and investment goals.

3. Goal Setting and Planning

Goal setting and planning are fundamental for highly successful real estate investors. It involves defining clear objectives and creating a structured plan to achieve those objectives. Here’s a more detailed exploration of this crucial habit:

Defining Clear Objectives: Successful real estate investors are precise about their goals. They don’t just aim to “make money” or “invest in real estate.” Instead, they establish specific, measurable, achievable, relevant, and time-bound (SMART) goals. For instance, they might set a goal to acquire five rental properties within the next two years, each generating a minimum of 10% annual return on investment.

Long-Term Vision: While they set short-term goals, successful investors maintain long-term vision. They envision what they want their real estate portfolio to look like in five, ten, or twenty years. This long-term perspective guides their decision-making and helps them focus on the big picture.

Financial Objectives: Real estate investing is often financially driven. Investors set financial targets such as a specific amount of rental income, a certain rate of return on investment, or a target net worth. These financial objectives provide a clear direction for investment strategies.

Property Acquisition Goals: Successful investors often set targets for the number of properties they wish to acquire. These goals may be based on property type (e.g., single-family homes, multi-family units, commercial properties) or geographic location (e.g., within a specific city or region).

Risk Tolerance and Diversification: Goals also encompass risk management. Investors consider their risk tolerance and may set objectives related to diversification. For instance, they might aim to invest in a mix of property types to spread risk or establish a target loan-to-value (LTV) ratio to maintain financial stability.

Portfolio Growth: Investors may have goals related to portfolio growth. This can include increasing the value of their real estate holdings or expanding into new markets or property types.

Exit Strategies: Goal setting includes planning for exit strategies. Successful investors set objectives for selling properties at specific price points or timelines, especially if they are engaged in property flipping or value-added investments.

Measuring Success: Part of goal setting is defining how success will be measured. Investors establish key performance indicators (KPIs) to track progress. KPIs could include metrics like cash flow, return on investment, property appreciation, or tenant retention rates.

Creating Action Plans: Setting goals is only the first step. Successful investors create detailed action plans outlining the steps needed to achieve each goal. These plans break down objectives into manageable tasks and provide a roadmap for execution.

Monitoring and Adaptation: Investors regularly monitor their progress and adapt their plans as needed. They review their goals, KPIs, and action plans to ensure they are on track. They adjust their goals and plans accordingly if circumstances change or new opportunities arise.

Accountability: Many investors share their goals with mentors, advisors, or accountability partners. This external accountability helps them stay focused and committed to achieving their objectives.

Goal setting and planning is a methodical and strategic approach to real estate investing. Highly successful investors are adept at setting clear, measurable goals and developing well-thought-out plans to attain them.

4. Rigorous Market Research

Highly successful investors are diligent researchers. They thoroughly analyze potential investment areas, studying factors such as property values, rental demand, job growth, and local economies. This research helps them identify lucrative opportunities and mitigate risks.

Here’s a more detailed exploration of this habit:

Local Market Analysis: Successful investors understand real estate is a hyper-local market. They meticulously research the specific geographic areas where they plan to invest. This analysis includes assessing factors such as property values, rental demand, supply and demand dynamics, neighborhood characteristics, and local economic conditions.

The location of a property also impacts successful real estate investment from a liquidity perspective. Some areas have fast-moving markets that allow for speedy transactions and the possibility for property flipping, while others are slower-paced and better suited to those looking for long term strategies. As such, thorough analysis is critical.

Property Valuation: Market research includes methods for valuing properties accurately. Investors use various valuation techniques, including comparative market analysis (CMA), income approach, and cost approach, to determine a property’s fair market value.

Rent Analysis: Comprehensive rent analysis is essential for investors focused on rental properties. They evaluate market rents, vacancy rates, and rent growth trends to determine potential rental income and make informed pricing decisions.

Demographics and Population Trends: Understanding the demographics of an area is crucial. Successful investors research population trends, demographics, and socio-economic factors to identify potential tenant profiles and assess the demand for their properties.

Job and Economic Growth: A growing job market and a healthy economy often drive real estate demand. Investors monitor employment and economic growth data to gauge the overall health of a region’s real estate market.

Market Trends: They stay updated on current market trends. This includes monitoring trends in property types (e.g., single-family homes, multi-family units, commercial real estate) and emerging real estate niches like short-term rentals or student housing.

Market Cycles: Investors understand market cycles, including phases like expansion, peak, contraction, and trough. Recognizing where a local market stands in these cycles informs their investment strategies and risk management decisions.

Competitive Analysis: Rigorous research includes assessing the competition. Investors analyze other properties on the market, assess the quality and pricing of competing rentals or listings, and identify opportunities to stand out in a crowded market.

Legislative and Zoning Changes: Real estate laws and zoning regulations can significantly impact investment opportunities. Investors track legislative changes and zoning regulations to understand how they may affect their investments.

Networking and Local Contacts: Successful investors often build relationships with local real estate professionals, including real estate agents, property managers, and local government officials. These contacts provide valuable insights into local market conditions and potential investment opportunities.

Historical Data: Examining historical data helps investors understand long-term market trends and cycles. They review historical property prices, rental rates, and economic conditions to inform their future investment decisions.

Emerging Markets: Investors are always looking for emerging markets with growth potential. They explore up-and-coming neighborhoods or regions that might offer early investment opportunities.

Risk Assessment: Rigorous market research includes risk assessment. Investors evaluate potential risks associated with the market, such as economic downturns, natural disasters, or environmental factors.

Due Diligence: Due diligence is a crucial part of market research. Investors thoroughly inspect properties, review title records, and check for any liens or encumbrances before making investment decisions.

Market research is a foundational habit of successful real estate investors. They leave no stone unturned when it comes to understanding their investment environment. This analysis informs their strategies, helps them identify lucrative opportunities, and mitigates risks, ultimately contributing to their success.

5. Risk Management

They are skilled at managing risks. Successful investors understand that real estate investing involves certain risks and take steps to minimize them. This may include diversifying their portfolio, conducting thorough due diligence, and having financial safety nets in place.

Highly successful real estate investors excel at risk management in the following ways:

Comprehensive Due Diligence: Successful investors conduct extensive due diligence before acquiring a property. They thoroughly investigate the property’s physical condition, legal status, and financial history. This includes property inspections, title searches, and a review of any liens, encumbrances, or legal issues that might affect the investment.

Market Risk Assessment: Investors evaluate the market’s overall stability and potential risks. They analyze factors like job growth, economic stability, population trends, and market cycles. Understanding where a market stands within its cycle helps investors decide when to buy, hold, or sell.

Financial Risk Mitigation: Successful investors carefully consider their financial situation and assess their ability to withstand financial setbacks. They maintain a financial buffer or reserve to cover unexpected expenses, such as property repairs, vacancies, or market downturns. This buffer helps them weather financial storms without compromising their long-term investment goals.

Property Type Diversification: Diversification is a key risk management strategy. Investors spread risk by diversifying their portfolios across different property types, such as residential, commercial, or industrial real estate. This minimizes the impact of a downturn in a single sector.

Location Diversification: Geographical diversification is another risk mitigation strategy. Investors acquire properties in different locations, reducing their exposure to the risks associated with a single market or region.

Insurance Coverage: Successful investors understand the importance of insurance. They secure appropriate insurance coverage for their properties, including property insurance, liability insurance, and, for landlords, landlord insurance. These policies protect them from unforeseen events like property damage, lawsuits, or rental income loss.

Proper Financing: Investors carefully choose financing options and terms that align with their risk tolerance. They may opt for fixed-rate mortgages to shield themselves from interest rate fluctuations or adjustable-rate mortgages to capitalize on lower initial rates. Their choice depends on their specific financial goals and risk appetite.

Property Management: Many investors hire professional property management companies to reduce the operational risks of owning and leasing real estate. A property manager can handle tenant-related issues, maintenance, and rent collection, mitigating the stress and risks of direct landlord involvement.

Legal and Regulatory Compliance: Compliance with real estate laws and regulations is crucial to risk management. Investors stay informed about changes in local, state, and federal laws that affect their investments. This includes understanding landlord-tenant laws, property maintenance requirements, and tax laws.

Emergency Fund: Investors establish an emergency fund or reserve fund to cover unexpected expenses, ensuring they have the financial means to address issues like sudden repairs or periods of vacancy without affecting their overall financial stability.

Exit Strategies: Successful investors plan for various exit strategies. Having contingency plans for selling, refinancing, or transitioning their investments helps them adapt to changing market conditions.

Risk management is a fundamental habit of highly successful real estate investors. They employ a combination of strategies to minimize potential risks, protect their investments, and ensure long-term financial success.

6. Network Building

Building a strong network is crucial. Successful investors surround themselves with a team of real estate professionals, including real estate agents, contractors, property managers, and lenders. These relationships provide valuable insights, resources, and support.

Network building is a critical element of success for real estate investors. It involves creating and maintaining relationships with diverse professionals, peers, mentors, and experts within the real estate industry. Here’s a more detailed exploration of why network building is essential and how it manifests in the lives of highly successful real estate investors:

Access to Market Knowledge: Successful investors recognize that networking is an invaluable source of market knowledge. They connect with local real estate agents, brokers, and property managers who provide insights into market trends, property values, and emerging opportunities. This information can be instrumental in making informed investment decisions.

Deal Flow: Networking allows investors to tap into a broader pool of potential investment opportunities. Through relationships with fellow investors and industry professionals, they gain access to off-market deals, distressed properties, and exclusive listings that might not be available to the general public.

Mentorship and Guidance: Many successful investors credit their mentors for their success. They seek out experienced individuals who can provide guidance, share wisdom, and offer insights into the nuances of real estate investing. Mentorship helps new investors navigate challenges and make more informed decisions.

Professional Relationships: Investors build relationships with professionals who offer complementary services, such as attorneys, accountants, appraisers, contractors, and property inspectors. These connections ensure they have a reliable team to support their investments and address various needs.

Local Expertise: Networking with individuals with in-depth knowledge of specific local markets is invaluable. These local experts can provide insights into neighborhood dynamics, zoning regulations, school districts, and other factors influencing property values and rental demand.

Access to Funding: Successful investors often have access to a network of lenders, private investors, or equity partners who can fund their projects. These relationships help secure financing on favorable terms and expand their investment capacity.

Resource Sharing: Networking is a two-way street. Investors share their insights, resources, and connections with their network. They collaborate with other investors on joint ventures, share information about trusted service providers, and offer advice to those who seek it. This reciprocity strengthens relationships and builds trust.

Market Validation: Engaging with a network of professionals and peers validates investment strategies and decisions. When multiple experienced individuals support a particular investment approach, it adds confidence to investors’ choices.

Learning and Education: Networking often involves participating in real estate investment clubs, associations, seminars, and workshops. These events offer opportunities to learn from experts, gain exposure to different investment strategies, and stay updated on industry trends.

Deal Negotiation: In real estate, negotiation skills are crucial. Investors who have a strong network often learn from the negotiation techniques and experiences of others, enabling them to secure better deals and terms.

Problem Solving: Real estate investing can present various challenges, from property management issues to legal matters. Successful investors lean on their network to find solutions. They consult with experts and mentors to address complex problems effectively.

Long-Term Relationships: Many successful investors prioritize the cultivation of long-term relationships. These relationships go beyond a single deal; they are built on trust and a commitment to mutual success over the years.

Network building is a mainstay of success for real estate investors. Highly successful investors leverage their networks to gain knowledge, access opportunities, and develop a support system that enables them to make informed decisions and thrive in the competitive industry.

7. Financial Discipline

Highly successful investors maintain financial discipline. They clearly understand their financial situation and invest within their means. This includes effective budgeting, controlling expenses, and ensuring they can access funds for unforeseen expenses.

Here’s a more detailed exploration of why financial discipline is crucial and how it manifests in the lives of successful investors:

Budgeting and Planning: Successful investors create and adhere to detailed budgets for each property or investment. They plan for ongoing operational expenses, such as property maintenance and management, and future capital expenditures. Budgets help them forecast cash flows and identify areas where they can reduce costs or increase income.

Reserve Funds: Investors establish reserve funds to cover unforeseen expenses. This fund is a financial safety net and can cover repairs, vacancies, or periods of lower rental income. It prevents them from dipping into personal funds or compromising the financial stability of their investment portfolio.

Conservative Financing: Financial discipline extends to the financing of investments. Successful investors carefully select financing options that align with their long-term financial goals and risk tolerance. Depending on their strategies, they may opt for fixed-rate mortgages to shield themselves from interest rate fluctuations or adjustable-rate mortgages to capitalize on lower initial rates.

Debt Management: Investors manage their debts carefully. They aim to maintain a healthy debt-to-equity ratio to avoid overleveraging. They monitor interest rates and refinance opportunities to ensure their financing aligns with their financial objectives.

Regular Financial Review: Successful investors regularly review their financial statements, including income statements and balance sheets. This review helps them track income and expenses, identify improvement areas, and clearly understand their financial health.

Long-Term Focus: Financial discipline involves a long-term perspective. Successful investors prioritize wealth accumulation and financial stability over the quick accumulation of assets. They understand that consistent and sustainable growth is more valuable than quick wins.

Return on Investment (ROI) Analysis: Investors analyze the ROI of each investment. They consider factors like cash flow, property appreciation, and tax benefits to evaluate the profitability of their investments. This ROI analysis informs their investment decisions and strategy adjustments.

Emergency Fund: Besides reserve funds for specific properties, many successful investors maintain personal emergency funds. This fund is separate from their real estate investments and is designed to cover personal financial emergencies, ensuring they are not forced to liquidate properties or disrupt their investment strategies in case of personal financial setbacks.

Tax Management: Successful investors optimize their investments for tax efficiency. They leverage tax strategies like 1031 exchanges, depreciation, and tax-deferred accounts to minimize their tax liability and maximize after-tax returns.

Lifestyle Management: Investors balance their lifestyles with their investment strategies. They maintain discipline in personal spending and financial decisions to ensure their investments remain financially viable.

Financial discipline is a core habit underpinning real estate investors’ long-term success. It encompasses budgeting, financial planning, risk assessment, and a commitment to maintaining financial stability, ensuring that their investments continue to provide consistent and sustainable returns.

Conclusion

Maybe you already own a real estate business. Or maybe you’re thinking about biting the bullet and starting one.

Whatever the case, you can use the above seven habits to reverse-engineer building a successful investing business. Your mindset, business model, and how you run your business will impact how quickly your business grows.

These habits aren’t growth hacks, exactly, but they are the habits of top-performing investors all around the nation who’ve built thriving real estate businesses.

They don’t guarantee your success, but they sure as heck give you a better chance.