Much of your success in real estate depends on timing. As a real estate investor, you should strive to find order in the cycles and patterns of the market. Should you pull the trigger on that seemingly lucrative commercial real estate deal? If you evict your messy, property-damaging tenants now, will you be able to find a suitable replacement? Striking at the right moment can often mean the difference between success and failure. But, knowing when to hunker down and be patient is equally important.
Making Sense of the Fickle Real Estate Industry
Now I’m not attempting to forecast what the real estate market will do next year or the next five years. Or even next week. I don’t know. Anyone who tells you they know is fooling themselves, and if you believe them, then they’re fooling you as well.
I will tell you what I’ve observed about real estate investors who always seem to have the best timing. You can take from it what you will, and try to improve your operation. I’m talking about the investors who, for example, actually buy in the bad neighborhoods. They then ride the market cycle to its heights and cash out. But before that, let me start with a question.
Take Note of the Ebbs and Flows of Real Estate
What if you could time the cycles and know the patterns? How much more successful do you think you’d be? We’re not just speaking of a market cycle, but also the rhythm of a deal. That means the stages of a rehab, the motivation of a contractor, and the thought pattern of a motivated seller. Everything is cyclical. To make the most of your efforts, it pays to know when to react, when to hunker down and when to run. So how do you do it?
The Real Estate Industry Changes — Constantly
First, you must trust that nothing happens by chance; nothing is random. Everything happens for a reason. From the revolution of our solar system within the galaxy to the appearance of mayflies in early spring to payday to the ups and downs of the real estate market – there’s an order to everything. Nothing stays the same; it’s always a little different each time around, but it always comes back around. We can say the same for maintaining a consistent cash flow— as long as you’re being proactive in your business.
Pay Close Attention to Tenants, Deals and Everything Else
Once you trust that it’s all cyclical and follows some kind of order, you pay attention and observe the patterns. Not just the patterns that will make you a ton of money in real estate, but everything else as well. Staying aware of potential issues down the line will save you time, money and frustration. Make it a game to just calmly, objectively observe. Don’t conclude, just watch.
Some of the most successful real estate investors I know spend hours just observing – the stars, the waves lapping a shoreline, the traffic on a busy street. Most are just naturally curious people and they like to learn, so they just watch, without judgment, and without drawing conclusions. When you become experienced in watching everything around you, you’ll find more ways to land unique, lucrative deals.
Over time, what happens is, the patterns start to reveal themselves and, over more time, you start to realize that everything has a similar rhythm. As you get in tune with that rhythm, you start to build your instincts for how and when things change. Once that happens, you’ll realize a greater sense of ease and patience in your business dealings. With that, you will get better at what you do, and greater success will come naturally.
Hire a Real Estate Attorney
Success in the real estate industry is not a short-term goal. Whether you’re planning to renovate and resell or rent the property to tenants, you need the foresight to predict future issues. With extensive experience in all aspects of real estate law, James Clark can help you identify potential issues down the line, and actively work against them. If you want advice and guidance from somebody who can help you make these decisions, contact the experienced real estate attorneys at Blodnick, Fazio & Clark.