Mind over Mechanics: Why Real Estate Investors Need More than Skill
The mechanics of multifamily real estate investment are easy to grasp.
Funding, analysis, negotiation, due diligence, property management—these are skills that anybody can learn. All you need is a couple of books, a coach/mentor, and the willingness to get your hands dirty.
But, if that’s true, then why isn’t everybody a millionaire real estate investor? Why do so many would-be investors flame out before they even get their business off the ground?
The answer to that question lies in one place: mindset.
You can learn the mechanics of this business all you want, but without a mindset that says, “I can do this,” you’ll never put those mechanics to use.
What we’re talking about is a psychology of success and the basic idea behind it is this: mechanics follow mindset. The way we think about our world determines how we interact with it. If we adopt a defeatist mentality that says we can’t, then we never will. If we assume a positive mindset that says we can, then anything is possible.
It’s just like Henry Ford said, “Whether you think you can or whether you think you can’t, you’re right.”
Here are two ways to put that psychological insight to work in your real estate business:
Seeing is Being – Visualize Your Success to Make it a Reality
When I first got into real estate, I drove an ugly old Ford Granada. I was so eager to get out of that thing that I taped a photo of a red Corvette to the driver’s side visor. Every time I got in the car, I’d look at that photo and dream about the day it’d be mine.
Guess what? It worked! Eventually, I had my red Corvette. Since then, I’ve used visualization to grow my business and build my dream home in Sarasota.
What I was doing with that photo was something called visualization. It works off of the law of attraction—a principle that says our thoughts shape our reality.
I’m not the only one to succeed this way.
In 1985, a struggling Jim Carreywrote himself a check for $10 million and dated it for Thanksgiving in 1995. Ten years later, Carrey landed his part in Dumb and Dumber.
As I’ve seen in my own life, visualization can be an incredibly powerful tool in building a successful investment business. Here are just a few examples of scenes to visualize:
- Closing on a 100-unit Class A Apartment Building
- Quitting Your Day Job
- Sitting on a Beach, Watching Passive Income hit Your Bank Account
The best way to make visualization a practical part of your life is to develop a vision board. These boards are easy to make. Just grab a collection of photos that represent your vision, post them on a corkboard, and put it where you can see it every day.
The Power of Goal Setting
There’s a Hebrew proverb that says, “Where there is no vision, the people perish.” That’s exactly right, but so is it’s complement: where there is no action, that vision fades.
You can visualize all day long, but if you don’t put your vision to work, you’re not going to actualize what you’ve seen in your mind’s eye.
This is where goal setting comes in.
The vast majority of people you meet are drifting through life. They have a sense of what they’d like to accomplish, but they’ve never taken the time to put it into writing.
If you want to succeed in real estate, you need to devote serious time and attention to your goals-setting. Think short-, medium-, and long-term. Write down what Jim Collins would call “Big Hairy Audacious Goals.” Break them down into manageable segments.
For short-term tactical goals, follow the SMART acronym:
Here’s an example of a great SMART goal for a multifamily investor:
Analyze 50 properties that meet my investment criteria in the next 50 days.
How does that goal match up with the SMART acronym?
Specific: You’ve got 50 properties to look at.
Measurable: It’s pretty easy to know whether you’ve analyzed a property or not.
Achievable: All you’ll need is an hour a day.
Relevant: Analyzing properties is a great way to uncover deals.
Time-Indexed: You’ve got 50 days.
Psychologically, the benefit to goal-setting is huge. It takes your vision out of the sky and plants it firmly on the ground. It gives you a concrete plan of attack for moving forward towards success. It also gives you something to which you can hold yourself accountable.
These are the most basic elements of building a business: get your mind right, craft a vision of success, and chart a path to get there. As basic as they are, though, very few investors will invest this kind of intentionality into their business.
Don’t be like everyone else. Tap into the psychology of success through visualization and goal-setting, and you’ll be well on your way to the real estate business of your dreams.
If you need help figuring out what that looks like, check out the Driving Force episodes on my podcast, Lifetime CashFlow through Real Estate Investing. There, I talk more about motivation, mindset, and the psychology of successful real estate investment.