Five Real Estate Investing Fundamentals By Jeff Watson, The Jeffery S. Watson Law Firm LTD, General Counsel National REIA One of my favorite movie moments is when Ernest Borgnine, portraying the legendary football coach Vince Lombardi, stood in front of the world champion Green Bay Packers at the beginning of training camp and held aloft an oblong object proclaiming, “Gentlemen, this is a football.” What Vince Lombardi taught the Green Bay Packers then applies to real estate investing today.
• What kind of investments or deals do you want to do? Are you going to do loans? Are you going to use options? Are you going to buy rentals or tax liens? Are you going to invest in commercial properties? Pick two or three (no more than that) of these things and get very good at doing them. Do them over and over again.
1. Master the basics.
• Determine what you are looking for in each of your potential investments.
Practice them over and over again. Consistently do the fundamental things that make you a successful real estate investor.
• How much capital per investment are you willing to put at risk?
2. Repeat your successes and keep repeating them.
• What is the length of time you want your capital to be out working?
The vast majority of “investors” today suffer from what I call “squirrel or shiny-object syndrome.” They have a little success in one area, but then they are suddenly distracted by something else and go to another area, and then another, and then another. The bottom line is they lose their focus and intensity, and they don’t continue to practice the same thing over and over again. Let me remind you, slow and steady wins the race!
3. Establish your parameters. In addition to becoming good at the basics, I urge real estate investors to establish their investment parameters.
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• How much time will you put into this investment?
• What is the projected rate of return you are seeking? • What is the minimum rate of return you want from your cash and/or time in each of your investments? When I say “rate of return,” I’m not just talking about an interest rate. • Do you want your investments to result in your receiving monthly income payments, either interest only or something else, so each investment is generating a monthly cash flow to you? These are just some of the parameters you need to establish for yourself. There is no one book, manual or class where
REAL ESTATE OPPORTUNITIES IN INVESTING
