Maybe the rich are often successful because they have been taught not to neglect the basics. Many people , for instance, might assume that successful people are simply very, very lucky or that they have been born with an innate knowledge about investing.
This just isn't the case.
What the rich do differently from other people, and what all successful property investors do, is prepare. The successful property investor does his or her homework.
“The ABCs of Property Investing” author Ken McElroy tells an anecdote regarding one of his clients, who became a client of his only after making a complete mess of his investment . McElroy and his company are in the business of property management. Ideally, an investor hires a property management firm at the outset, as opposed to taking a stab at managing his property from a distance. That is what this investor did, and he quickly found out that the time required to manage his own property was unreasonable.
This was not his only mistake. In addition, he had not even taken the time to visit his investment property prior to buying it, so he had no idea it was full of criminals and deadbeats. He had neglected to engage a group of experts who would have been quick to tell him not to invest in that area, due to its high crime rate. It was a bad neighborhood, and he should've known to avoid it. In fact, he could've avoided it very easily if had he just done his homework.
It is easy to imagine the enormous amount of money he spent rehabilitating the building—an expense he could have spared himself just by budgeting for the experts he needed. It would've been impossible to fix the problem of the property's location, therefore the property would never pull in much rent.
In nearly every case, the wise businessman can't afford to NOT hire the experts.
Wealthy Minnesota real estate investors are also possessed of a staggering amount of focus. That's the reason that they're rich. They pick their target and narrow their scope till they are looking at one piece of property. They've already decided what type of property they're interested in. In fact, they might specialize in hotels or apartment complexes or what have you. They constantly are aware of the areas that they're interested in and the age of buildings they're willing to look at.
If their 1st choice of location doesn't yield any leads, they try their second choice, and on and on, but they always keep in mind exactly what they're looking for.
One key lesson people learn from being rich is that money talks. Savvy real estate investors understand that you do not have to wait until a piece of property is for sale to purchase. If an interested party surprises the current owner of a property with an offer, it's often possible to get a good price on a property that isn't actually up for sale. Best of all, there aren't any competitors to drive up the price.
The rich do appear to reside in a different world. For them, funds are always plentiful. They won't worry in the event that a deal doesn't go through, since they know that there will always be others. A person seeking to increase his wealth substantially through investing might worry that he let one get away.
Ken McElroy suggests that the best approach is to remain aloof, and to assume every negotiation will result in the buyer walking away from the deal. Most deals simply aren't deals, he said. The savvy property investor understands that it's essential to become too committed to the idea of closing the deal.
Successful investors know all of this, not because they were born with this knowledge, but because they have been educated on the subject, or else taken the time to learn. Anyone can potentially learn how to invest as the wealthy do; it simply requires research and practice.