Perhaps the rich are often so successful because they’ve learned not to neglect the basics. Many people, for example, might make the assumption that successful people are just very, very lucky or that they’ve been blessed with some innate talent for dealing with money.
That just isn’t the case.
What the rich do differently from other people, and, indeed, what each and every successful property investor does, is prepare. Good investors make sure to do their homework.
‘The ABCs of Property investing’ author Ken McElroy relates a story about a client of his that became a client of McElroy’s after making an utter disaster of his investment . Ken McElroy and his company manage properties for the owners. Ideally, an investor hires a property management firm immediately, as opposed to making an attempt to manage the property from a distance. That is what this investor tried to do. He soon learned that the time required to do such a thing was too much for him to handle.
That was not his only mistake. In addition, he had neglected even to make a visit to the property prior to buying it, and as a result he had no idea it was full of criminals. He had neglected to engage a group of real estate experts who would have gladly told him not to buy property in that neighbourhood, due to its high crime rate. It was not a good place, and he should’ve avoided it. In fact, he could have avoided it very easily if he had simply done his research.
It is easy to imagine how much money he spent the rehabilitation of the building’an expense he could have spared himself simply by hiring the experts he so badly needed. There was no way to fix the neighborhood in which the building was located, therefore the building would never pull in top-dollar rent.
In nearly every case, the savvy investor can’t afford NOT to employ experts.
Wealthy investors are also possessed of an amazing degree of focus. That is the reason they are rich. They decide on a target and they hone in on it till they are zooming in on one property. They already know what kind of property they are interested in. As a matter of fact, they might concentrate on hotels or apartment complexes or what have you. They constantly keep in mind what neighborhoods interest them and the age range of buildings they’re willing to consider.
If their 1st choice of location does not yield any interesting leads, they move on to their 2nd choice, and on and on, but they never lose track of the acceptable parameters.
One key thing being rich teaches people is that money talks. Savvy property investors know you do not need to wait till a For Sale sign goes up in order to purchase. If an interested party can take the current owner by surprise, it’s often possible to get a good deal on a property that’s not actually up for sale. And there aren’t any competitors to drive up the price.
The wealthy do seem to inhabit another world. For them, funds aren’t scarce. They will not break a sweat in the event that a deal does not go through, as they know there will always be others. Someone hoping to increase his wealth significantly by investing might worry that he let one get away.
Ken McElroy suggests that the best approach is to remain aloof, and to assume each and every negotiation will end with the buyer walking away from the deal. Most deals just aren’t deals, McElroy said. The smart investor understands that it’s dangerous to get attached to the concept of closing the deal.
The rich are aware of all of this, not because they were born with this knowledge, but because they’ve been taught, or else they’ve taken the time to learn. Anybody can potentially learn how to invest as the rich do. It simply requires research and practice.