Do You Have the Mindset For Rehabbing?

Many private rehab loan customers ask us to wish them good luck on their rehab investment, but real estate investment isn’t about luck. It’s about well-thought out decisions based on good research. It’s about markets and timing. However, all of that aside, it’s mostly about YOU. As a football coach would tell their team during half time, “You gotta get your head in the game!,” to make successful decisions, you have to have the right mindset. What is the right mindset you ask?

Set goals.

It all begins with having goals and writing them down. Most people think they have goals because the goals are in their head. A goal in your head is not a goal, it’s a thought. Thoughts are replaced by other thoughts instantly, so true goals never form. But once a goal is written down, it becomes something fixed in reality. It must be dealt with in some fashion. Now there is a much better chance that the goal will be completed.

Make sure your goal is concrete. “To become rich in real estate” is not a goal. It’s a dream. It does not require you to do anything except kick back and continue dreaming. Successfully flipping one property is a goal because to achieve it, you need to stop being a dreamer and start being a doer.

Split Your Goals into Manageable Tasks

If your goal is to “successfully flip one investment property in a year,” you must figure out what exactly needs to happen to achieve this goal. Think about it as your own version of management by objectives. Management by objectives was first introduced over half a century ago by Peter Drucker, a management consultant whose writings contributed to the philosophical and practical foundations of modern management theory. It is a strategic approach to increase company performance by setting specific objections to be achieved in the future and then managing the employee performance against them. Since you have already set your goal (i.e., “one successful flip”), now you need to develop a management plan that contains all the tasks and objectives you need to hit before you can do it.

For example, one of your overarching objectives might be to identify and purchase a property within the next six months. To better manage and monitor your progress, you can split it into smaller objectives, such as seeing three distressed properties a week to identify an investment opportunity. Fulfilling such objections will, in turn, require completing a series of tasks, such as selecting the right agent, monitoring online actions, and attending networking events.

Build the network.

You can start improving your chances of success by building the right network. Remember that “who” you know is often more important than “what” you know. Get to know some people who can help you make the right decisions. Get to know some people who can help you put those decisions into action. For example, we at New Funding Resources would be glad to help you evaluate a potential investment opportunity and identify any red flags associated with a transaction. Your real estate agent should be able to suggest the best local real estate markets for your budget and investment goals. A good contractor should be able to give you a solid understanding of your rehab budget, timeline to completion and any issues that might delay your renovation project. Whether or not you have begun real estate investing, you can start by building a network that can help you achieve maximum returns on your future investments.

Be flexible.

Each step you take in this process will get more interesting than the last. With this being the case, you will need to adopt a position of flexibility. In your negotiations, there will need to be give and take. When it comes to dates and times, you will need to be flexible with your scheduling. Your timetables will need to be flexible to accommodate delays. Sometimes, the easiest process can be slowed by the lack of one small signature. This means that you have to be flexible enough to drive by the notary’s office after work before it closes. You have to be flexible. Think of it as “Rehab Yoga.”

Learn to set the right expectations.

What some may describe as a million-dollar return on investment may be much less when you calculate fees, taxes, insurance, etc. You don’t want to borrow too much but you also don’t want to borrow too little. But don’t start spending the money in your head before the deal has gone through. There are no perfect deals but there are fantastic deals when they are based on more wisdom than hope.

Last, but most important, you have to want it.

The money is out there. As private rehab loan professionals, we KNOW the profit is out there. We have seen it. But it doesn’t come easy, and there are a lot of people out there who want it. The serious players recognize this. This is why so many of them say that you’ve got to want success the same way you want oxygen. If you are willing to stay motivated and focused you can do well in this industry. Not only that, but you got help from us!

New Funding Resources LLC is a private lender that provides private rehab loan financing to real estate investors in the Maryland, Washington, DC and Virginia area. For more information about us, visit www.newfundingresources.com or call 240.436.2340.