The real estate industry is unique, in that it is what you make of it. Investors from every background have found their individual place within the housing market. There really is no “norm” preventing anyone from pursuing a career in real estate investing. Seemingly contrasting exit strategies have served to create lucrative portfolios for those that are willing to learn. Essentially, the manner in which you invest in real estate is entirely up to you. There is, however, one resounding commonality that each successful investor exhibits: a working knowledge of their entire industry. There is no greater tool to an investor than a proper real estate education.
The real estate industry is ever changing, and so is the information that coincides with it. As a real estate investor, it is up to you to keep up with trends and relevant information. In other words, you need to further your education every chance you get. While some of that education is mandated, there are just some things that a real estate class or book can’t teach you. Pertinent information is made available on a daily basis. You just need to know where to look and how it presents itself.
As a real estate investor, you are tasked with knowing certain things. At the very least, it is safe to assume you know all of the steps involves in a standard wholesale or rehab. There is a good chance you are even familiar with current market conditions. However, there is so much more that could benefit your image and position your business ahead of the competition. Expand your education beyond the realm of real estate. In fact, investors are advised to become “experts” in the following areas:
The Economy
Some may argue that the economy is directly correlated to the real estate industry – and I would agree wholeheartedly. However, the economy is a complex notion, and far too many investors fail to understand its complexities. It is one thing to know where interest rates are at, and entirely something different to know why they are there. While interest rates are incredibly important, you need to be able to converse (intelligently) about the factors that contributed to their current position. Understanding the intricacies of the economy will help you further understand your own business.
Consider this: Major real estate syndications, The National Association of Realtors (NAR) included, actually employ economists. Why do you suppose that is? The answer is simple: housing prices are directly correlated to the economy. It is important to know how changes in the gross domestic product (GDP), unemployment, new construction starts and interest rates can impact home values.
In addition to knowing this information, you will be able to carry your own in a conversation. Should the topic come up at an investor club meeting or even during a transaction, you will be heralded as a competent individual. Local investors will assuredly be more drawn to your business acumen. You are essentially gaining an edge on the competition while growing your network.
The Community
Gaining a familiarity with the local community is not only smart, it is one of the most important things you can do. As an investor, there is a good chance you are up to date on what is happening in your particular housing market. However, there is more to a community than just homes. A community is a living, breathing organism, and it is up to you to understand everything it has to offer. In addition to the actual housing market, consider educating yourself on everything from zoning laws to water usage. Even the littlest things can impact your real estate business. Be proactive and learn everything you can about an area. Individual markets are extremely localized and being able to provide an overview of everything that is happening can be helpful to potential buyers.
In becoming better acquainted with the community, local news sources should be able to point you in the right direction. More than likely, the topics they cover will be the most relevant. Subsequently, there is a good chance that those same topics are the ones your clients are seeing. That said, you would be able to better serve those in your community if you actually know what is going on.
Industry
The real estate market is a large piece of an even larger industry. The same thing that draws investors into it is the same reason so many become confused: diversity. There are seemingly endless ways to invest and make money. However, with such diversity comes a wealth of information. Understanding the ins-and-outs of the entire real estate industry is not only daunting, but also incredibly difficult. Having said that, it is worth it. The more you know about the real estate industry, the better.
To better serve you, we have broken the industry down into three individual levels: the local, statewide and national. Your business is impacted at each level, and it is important that you know exactly why.
Technology
With the advent of 21st century technology, the real estate industry has been changed forever. As much as people say real estate is a people business, it is unequivocally ruled by technology. Yes – it is a people business, but know that technology plays a larger role now than it ever has. People that embrace it will position themselves ahead of the competition.
Perhaps even more importantly, however, is the alternative: not embracing technology. According to Moore’s Law, the processing power of computers will double every two years. Essentially, technology will continue to improve, and the real estate industry will not be immune. Technology will get better and your competition will persist to use it. With that in mind, you are only hurting yourself if you neglect it.
