3 Ways For You to Invest to Win
Have you ever wondered why some people seem to turn everything they touch into gold while others seem to struggle to create a win? I have spent a lot of time pondering this question, much of it studying the difference of investors who purchase winning investments from those who struggle to make any money in investing. Working with new investors every day a clear picture emerges in how differently the winners and losers think.
Winners Invest To Win Versus Investing and Hoping
A written strategy plan:
Sadly I see many new or wanna be-investors using hope as their real estate investing strategy. They simply plan to buy a property and hope the cash flow will come in day one and continue to come in until they sell the property years later for a large profit. Then you have those investors who know they have struck gold. They know they struck gold because they invest with purpose. They have clear and concise systems in place and they invest to win.
A purposeful investor's system:
Without question all winning investors start with a written investment plan. They know exactly the types of properties they will buy, how much their fixed expenses will be, the approximate cost of their variable expenses, how much they need to ear mark for possible repairs, etc. Knowing your numbers up front and executing your plan is paramount for the winning investors.
Have a Power Team
Having a power team in place is the difference of being proactive versus reactive. Every investor indeed will utilize the services of business professionals to make their investments run smoothly and efficiently. Just like building a winning football or softball team, assembling a winning real estate power team in advance of a purchase is essential to building the synergy between the team members.
Investors who win have discovered this early on and who know who their attorney, realtors, property managers, trades people, etc. are have the most chance of success. Everyone does their pre-game strategy huddle with you, the investor, as the head coach. All the players know the role they will play and they all understand how to carry out the play. With all the players striving for the same exact outcome, these investors have increased their chances of winning dramatically. Investors who simply buy and hope to succeed without assembling their winning team have lost this powerful edge as they tend to be always working in a reactionary role.
Have An Exit Strategy Established
Just as a good coach will lay out the plays for an intended outcome, so must the real estate investor know exactly what he or she wants for an intended outcome. It is not enough to simply plan to make a lot of money, every team member needs to know the strategy to get to the finish line. Will you buy and sell to another investor in a few years or will you hold the property and sell to a retail buyer for maximum price when the market dictates the optimum sale time? The exit strategy will dictate the plays necessary to obtain the intended outcome. Each team player has to have this perfect clarity in order to play an effective game.
As the ole saying goes, "people do not plan to fail, they simply fail to plan." Having personally invested and having worked with investors for over 35 years, the common denominator between the winners and the losers is the winners invest with purpose and a well-executed plan while the rest invest with hope and hope simply is not a winning strategy.