David Page, Strategies Towson Moderator

One of my favorite books is The 7 Habits of Highly Effective People by Stephen R. Covey. The Franklin/ Covey daily planners have always been helpful, too.

Covey’s list includes 3 private habits, 3 public habits, and 1 renewal habit. I’ve observed a similar set of habits in successful investors. See if you recognize any of them.

The private habits: personal strengths.

1. Know your business. At the last Strategies Meeting, we discussed how to price rehabs. Can you walk through a house and know within a few grand what the rehab will cost? If not, how will you make smart, fast offers?

You also need to know your ARV. Specifically, what you’ll net from the sale, after the typical discount, seller subsidy, realtor fee, and closing costs. Plus, are you taking the market trend into account, such as falling prices?

Corollary: Beware of what you think you know. As investor Ken Fisher puts it, “What do you believe that is actually false?” Think rehabbing is a bad strategy in this market? One local rehabber is selling a house every week .

2. Know your exits. Yes, exits, plural. If you can’t retail a property, will you be able to rent it and cover your expenses, including any debt service? Especially in this market, you need a plan B.

Corollary: Know your career exit, too. Perhaps you want to retire with plenty of passive income. At another Strategies Meeting, an investor said her goal is 100 rentals generating $500 a month each. Nice exit. What’s yours?

3. Know yourself. What motivates you to take action? Something positive like a lifelong dream? Something negative like hating your job? Hold that thought, then set a routine you will follow every day to achieve success. (Every day? Well, at least 5 or 6 days a week. That’s why they call it a habit .)

Corollary. Do One Thing Different. That’s actually the title of another good book. If you’re in a rut, try changing just one thing. Disable your snooze alarm. Listen to real estate CDs while you’re walking or driving.

The public habits: interpersonal strengths.

4. Play to win. Covey (and everybody else) says “win/win,” but in real estate, you can assume the other person is looking out for his or her own interest. It’s challenging enough to look out for your own.

Sometimes I hear newbies worry that an offer isn’t good enough to present. If you’re accurate with your numbers in this market, you can bet your offer will not be what the other person was hoping to hear.

Never be embarrassed by your own offer. Or go ahead and be embarrassed. Just don’t fudge the numbers to

improve the offer for the other guy. If you like being charitable, do it after you make your money.

Corollary: Don’t take advantage of little old ladies. Negotiating with another investor is one thing. When

you work with a homeowner—elderly or not—make sure they understand the deal. No hiding behind jargon or fine print.

5. Team up. You can’t do this business alone—and not just because you need professionals such as lawyers and plumbers. You need other investors to vet your ideas and to share ideas you’d never think of. A regular lunch or dinner with a few colleagues can help this happen.

Corollary: Be careful who you team up with. For example, hiring the wrong contractor can be a disaster. On the flip side, I’ve seen houses where a contractor got stiffed and had to rip out fixtures to recoup some of his money. Or how about the investor who was just days from closing, and his hard money lender ran dry? Ouch.

6. Share your smarts. When I first started rehabbing, one of the leaders of Baltimore REIA was kind enough to visit a property with me and offer advice that saved me $15,000—half of what I made on the deal.

Since then, I’ve shared my modest knowledge with others. What expertise can you offer? Even if you’re a real estate newbie, you may have knowledge in some other area, such as marketing or business development.

Corollary: Accept help when it’s offered. I’ve heard seasoned investors offer to show newbies the ropes, but the newbies don’t take advantage of it. Go ahead and accept help, then have an attitude of gratitude.

The renewal habit: staying strong

7. Never stop learning. Read books, attend REIA meetings, and do whatever it takes to keep up with this changing market. Have you noticed the senior investors who keep showing up to learn more? Maybe there’s a reason.

Corollary: Have fun! The journey to success may be a long one. Do one fun thing every day. It’ll keep you going.

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