There are so many things that high school and college never taught me about real estate investing. It wasn’t until I was already involved with investment properties and had money in deals that I got a crash course in interesting skills and lifelong lessons.
Below are five interesting, exciting, and unexpected things I’ve learned by investing in real estate.
1. Human Psychology
I’d never dealt with so many people on such an intimate basis until I became involved with real estate investing. As investors, we learn about people’s lives, help families, move around real estate, save people’s credit, and much more. Some people will lie, manipulate, and steal from you and your deals, perhaps on a regular basis.
With that, here are a few basic things I learned from being naive, ignorant, greedy, and inexperienced while dealing with the following types of people:
- Sellers.Verify all pertinent details the seller tells you about the property. Ideally, follow a previously written due-diligence checklist for each property.
- Buyers/Renters.Trust no one, and verify everyone for yourself.
- Contractors/Handymen: Verify licenses, insurance, and references. Aim to completely pay only after all work is complete and satisfactory.
- Partners: All partners should review numbers and understand all aspects of a deal involving the partners’ money, credit, and/or reputation.
(Disclaimer: The last few lines may come off sounding fairly pessimistic. However, when working with others it is prudent to protect yourself, not only with paperwork but with common sense.)
Related: 7 Life-Changing Lessons I Wish I’d Known as a Real Estate Newbie
2. Have Thicker Skin
Some people are mean. You will not please everyone all the time. It took a number of years before I stopped second-guessing myself and/or overly worrying about things. However, once I became confident in my decisions as a real estate investor, I felt a pride and energy from within myself.
In hindsight, this thicker skin definitely came with experience as an active real estate investor. Before real estate investing, I had almost zero corporate-employment/world experience. It took many deals for me to confidently and reliably understand what was right and wrong, fair and unfair, realistic and unrealistic, normal and abnormal, in my specific world of mobile-home investing.
Pro Tip:Mentally, you will not be the same person you are today after 12 months of active, daily real estate investing.
3. Lock Picking
I learned this skill after one of my first renters changed the door locks and abandoned the property before calling me from another state. This is a skill you can teach yourself with a little bit of time, a basic how-to book, and a beginner’s set of lock-picking tools found online. While the tools don’t always work (I have climbed through a variety of windows to access properties), they have been helpful on many occasions.
(Disclaimer: Possessing lock picking tools may be frowned upon in your state. Consult with your local authorities before purchasing them.)
4. Humility and Gratefulness
I became deeply involved with mobile homes shortly after I got started in real estate investing. Mobile homes are considered affordable housing, and oftentimes I deal with very down-to-earth and blue-collar buyers and sellers. Before this, I hadn’t spent any time in mobile homes. I was quickly introduced to another slice of the world. I quickly learned that most folks are honest and good people who are often appreciative and thankful for the things they have.
It is true that you eventually start becoming like the people you most surround yourself with. I’m happy that I picked up some positive traits from different mobile-home buyers and sellers I’ve worked with over the years—particularly the ability to find happiness in the little things and appreciate what I have when others in the world have much less.
Related: The Surprising Lesson a Six-Figure Salary in My 20s Taught Me About Wealth
5. Motorcycle Riding
Occasionally when dealing with sellers, you will find that everything must go. Some sellers are willing to sell almost all of their possessions to raise money and/or leave quickly. This includes cars, trucks, recreational vehicles, trampolines, home furnishings, boats, and more. As real estate investors, our job is to solve problems for sellers and buyers. If a seller is selling items that can be resold for a hefty profit, it may be beneficial to negotiate additional valuables into the price of the home.
If the items are worth less than a few thousand dollars, aim to simply take control of these items (with a bill of sale). This will be easier than the sellers having to pack or remove these items. Increase your purchase price very slowly from there. Remember, we investors should agree to take items if profitable or if it will help close the deal.
Pro Tip:Be aware of your surroundings when visiting sellers at their for-sale homes. Ask sellers if anything else is for sale around the home. This could give you a sense of the seller’s motivation and if they need to leave quickly or not.
Conclusion
When changes must be made, we real estate investors will ideally learn, grow, and adapt. In addition to changes, we can also make easy improvements to our businesses based on daily activity and what we learn from others. We are go-getters, problem solvers, and action takers. When we come across a real estate challenge, it’s an opportunity to grow and learn something new—to further our knowledge and authority in the local market.
What lessons have you learned from real estate investing?
Let me know in the comments section below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
