Investor IQ Test

An intelligent investor is very strategic in who they broadcast that they are an investor to. Although an expert investor may want to let everyone know he/she invests in real estate for networking and lead generation purposes, for beginners, it is crucial to be selective in who is told. One reason is that if the people around you have never considered you a successful entrepreneur or business person, they may be tempted to put you down for trying to be an investor. Interestingly enough, when a group of crabs are placed in a box that they can climb out of, if one tries to get out of the box, the other crabs will try to claw the escapee back into the box. Many of the broke people that are around a person trying to become a successful real estate investor may try to pull the person away from real estate investing because, like the crabs, they want the person to stay broke like them. Plus, oftentimes, when embarking on a new endeavor, it can be difficult to continue to maintain enthusiasm and motivation when the people around you are ridiculing you and telling you not to do it. Real estate investing has enough challenges of its own, nevermind trying to compete with the negative influences in your life. On the other hand, if you tell no one and keep it a complete secret, you could miss opportunities closest to you and risk not getting help from the positive supporters that may be of great value. The best course of action for a beginner is to be selective in who they tell.

Most people give up after less than 3 months of trying anything new, whether it be a new health program, a new business or real estate investing. Successful people never give up. You should never give up on your dreams and if you want to be a successful investor, you should not give up on real estate.
Another common mistake is to have a positive mental attitude and to blindly plow forward without assessing the results you are getting from your actions. Rather than simply thinking positive, it is far more productive to recognize the problems you are having and take the time to think of alternatives ways to go about the business and then make adjustments to your approach. In addition, being discouraged is not all bad either. You can use those negative emotions to drive you to succeed. You could accept the fact that discouragement is not a pleasant feeling (as opposed to ignoring it with positive thinking) and then resolve to avoid having to go through that feeling again by continuing to take action, assess the results and then make changes to future actions if necessary.

Quitting your day job before your real estate investing endeavors can at least replace your current income is rarely a good move. I did it before I knew any better. In hindsight, that was not a smart decision. Keep your day job. It may be frustrating to feel like you don't have enough time to be both an investor and to work at your current job but it's even more difficult when you don't have any money coming in.
Some small business owners solve their problems by waking up earlier and going to bed later. They create more time per week by sleeping less. This usually isn't sustainable and these fledgling entrepreneurs that cut out important sleep time usually end up burning out at some point. If you are getting too much sleep, however, ironically, that can make you feel more tired in a day. So feel free to test out different amounts of sleep to see which amount is optimal for you. But if you do decide to wake up earlier or go to bed later, use that time to enjoy life. Spend that time with loved ones, etc.
The best way to attack the problem of not feeling like you have enough time for investing is to use your brain to come up with ways to get the work done more efficiently. That may mean hiring a virtual assistant or using technology to automate certain tasks. It may also mean that you create a stop doing list and get rid of the tasks that aren't producing any results. The 80-20 rule states that 20% of you actions produce 80% of your results. Therefore, to get more time, do more of the 20% and less of the 80% that isn't producing much of your results.
For an interesting case study on this concept, watch the movie "The Pursuit of Happiness". Chris Gardner, the main character, has a huge disadvantage over the other stock broker trainees. He has to drop his child off at day care and then pick him up, which chops out about 3 hours that his fellow trainees use to be on the phone. The trainee that sells the most stocks will get the job. In cold calling stock broker world, usually the person on the phone the most gets the most sales. For Chris, him making the most sales is the difference between him getting the position of a lifetime or not. While the other trainees dial the cold call lists starting with the lowest people at the company (as they were instructed), since Chris didn't have time to go through a bunch of gatekeepers, he would start at the top and call the CEOs first. One of the CEOs he talked to ended up connecting him to a gigantic volume of prospects. Chris ended up beating all the other trainees and selling the most; even though he had 3 hours less time per day than his competitors to be on the phone.

Family comes first. Period. There are times when bringing the family along can be very helpful, but that should be scheduled in advance. When you commit to spend the day with your family, do it. When I watched my grandfather breath his last few breaths, it was his family at his bedside, not his business partners, customers or vendors. The Millionaire Mind by Thomas J. Stanley shows that a common trait amongst a great multitude of millionaires is their ability to maintain a balance between work and family. Don't be a workaholic, even if you love what you do. Have the discipline to remain balanced.

Reinvest some of your deal earnings back into your real estate business. It will keep the business growing and help to ensure you have more profits coming in. But also take some of the money and reward yourself (or a loved one). Doing so will remind your brain why you are doing what you are doing. You don't have to do anything extravagant, but do something. Oftentimes, our students will take their family to a very nice dinner, or on a small vacation. Do something special to celebrate your deal closings. But make sure you reinvest some of the profits back into your business.

When a buyer is getting a loan to purchase a property, if the seller wants to credit money back to the buyer, either for closing or repairs, or whatever, the amount must be on the closing statement. Since most mortgage companies will not approve a repair credit on the HUD, some buyers and sellers take matters into their own hands and work out a side deal. That is considered fraud from the mortgage company's perspective. As an investor, always do the right thing, always operate morally, ethically and legally and avoid being in the gray areas. No matter how bad you need the money, it is better to be poor and honest than rich and dishonest.

Intelligent investors at local investing clubs do far more listening than talking. Further, they are strategic in who they spend their time with. Most of the people at a "REIA" meeting, as they are called, are not active investors, but instead, sit on the sidelines, read books, go to seminars and talk about investing but never actually invest. These people can sometimes even sound intelligent. But in fact, the smartest people in those rooms are usually the ones that are the most quiet. Also, you can network with excellent vendors such as closing companies and funding sources at REIA meetings. But beware of the majority of attendees that may be nice people, but will take up your time and not be of great value to your investing pursuits. (Alternatively, if you just want people to hang out with and talk to, you can certainly just chit-chat with everyone. There is nothing wrong with that, but it isn't the behavior of an intelligent investor at a REIA meeting.)

Surprisingly, one of the biggest business killers is not too little opportunity, but too much. Investors chase dead end opportunities far too often. Particularly with large deals. I have seen investors spend months working on one huge deal that is way outside of their plan, only to discover that they had no clue what they were doing and it cost them months of time. Avoid being lured into deals because of how big the profits maybe. Stick to your knitting. Stick to your plan.
This plagues all sorts of businesses too. Successful entrepreneurs that have wonderful businesses get bored with what's working and go do something else (a few real estate investing gurus come to mind).
Stick with what works. It takes discipline and you may feel like not jumping on a wacky, off-the-wall opportunity could cost you, but the reality is that sticking to your plan, sticking to what you know will pay off far more in the long run.

This one was an easy multiple choice question because I made the answer so obvious. Tut the truth is, most people either give up or ignore reality when a deal starts to fall apart. Some people want to attend their own self pity party night after night. Others want to remain in the clouds and hope for a miracle. When, in fact, the only way to close the deal is to focus on removing the obstacles. Plus, you can actually make more money sometimes AFTER you think a deal has fallen apart. Usually, there are hidden opportunities if you face the problem head on and focus on solutions. When real estate deals get de-railed, you don't have to cry about it and you don't have to shove your head in the sand. Instead, face it head on and turn the problems into more profits for you!

Borrowing money is a powerful tool. Like any power, it can be used for good or for bad. Not borrowing money at all is not wise. Used responsibly, debt can be one of your best friends in real estate. However, blindly buying real estate simply because you can is a trap as well. Just ask the many speculative investors whose properties went to foreclosure after the real estate bubble burst. Borrow money strategically and it can help you develop more wealth, faster.