Great apartment investors differ from other investors. For a generation, I’ve served 200+ successful investors and 2000+ others who never closed any investment escrow. These five major differences set great apartment investors apart from the pack.
Great Investors Know What’s Important to Them
The best investors know what’s important to them. They’ve done the work to clarify their values and develop an aligned investment strategy.
Great Investors Review
The world changes every day. Babies are born and people die. Illnesses strike. The political climate and regulations change. Great investors review the market, their strategy, their capacity, circumstances, and their holdings. They change their strategy when appropriate.
Great Investors have a Bias for Action
Tom Peters and Bob Waterman coined the term, “a bias for action” to describe excellent companies. It describes excellent investors, too. When they determine it’s time to act, they act.
Great Investors Close
Nearly 3,000 millionaires who did not yet own apartments have told me they planned to buy in San Diego. After reviewing the ownership records, only about 10% of them did. If you desire to be among the minority who build legacy wealth, you must close. All the apartments you don’t buy won’t build your wealth.
You were probably nervous buying your first home. There were many reasons for anxiety: interest rates, prices, economics, etc. If you never bought your first home, you never bought any.
Great Investors Improve their Properties
The road to legacy wealth runs through improving the value of an asset. “Buy and hold” is safe. But the power tool of improvements turbo charges your equity.
Great investors make improvements that increase cash flow and thus the market value of their assets. Then they sell the bigger income stream for 8 -20 times the rents. Adding value and then selling the larger income stream for a multiple is like the difference between second and fourth gear.
Great Investors Put It All Together with Discipline
This is simple stuff and it may seem easy, but it’s not. There are three reasons: Doing only one or two of the five things will bring only acceptable results. Spectacular results come from using all five practices together. Then they are a system where each practice reinforces the others.
Mastering these habits takes discipline. Figuring out your values and strategy is hard work. It’s more hard work to periodically review, ensuring your making the wisest choices that fit your situation. It takes courage to pull the trigger and commit to an investment. Smart renovations take work, too. So does being a good landlord. Great investors have the discipline to do it all, even when they don’t feel like it.
You don’t do all these things once, dust off your hands and declare it done. As long as you invest in apartments you must do them again and again and again. The payoff can be outrageous. Remember the road to success is always under construction. What shows your commitment to becoming and remaining a great investor?
For more than a generation, Terry Moore, CCIM has helped investors make important investment choices. You can reach him at 619-889-1031 or [email protected] or SanDiegoApartmentBroker.com. He is a principal of ACI Apartments, San Diego County’s most active income property brokerage ﬁrm. His book Building Legacy Wealth while leading a life worth imitating has been endorsed by international, national and state professional investment real estate organizations. He received the inaugural Commercial Broker of the Year award from San Diego Realtors.