Successful real estate investors all have this pivotal moment where their thinking makes the critical shift from average homeowner to investor. You see, mastering an investor mindset is an overlooked yet critical piece of the puzzle when it comes to investing in real estate. Because we often think of investing as something we do “on the side” and not as a highly skilled job, we don’t often think of ourselves as truly in need of any training or in need of a fundamental shift in thinking to succeed.
We think that if we get the basic idea, armed with a few books and gurus, we can make this thing work for us.
Capturing the investor mindset, though, is at the very core of your success. Here are some of the essential elements of the successful real estate investor's mindset.
How the Investor Mindset Puts You Ahead of the Pack
You Learn What Details Really Matter
The difference between a homeowner and an investor, in many ways, comes down to what they pay attention to. An inexperienced investor gets caught up on many of the same things a would-be homeowner does. Aesthetics, would I want to live here, so on and so forth. Rather than getting into the mind of their target demographic for a potential tenant, they tend to still shop for themselves. This is a mistake.
As an investor, the actual investment property is largely a secondary detail. You want it to be safe, well-renovated, and passing all inspections, but what it actually looks like and how it fits into your tastes ultimately doesn’t matter. You want to know if it will generate income and how its numbers work out in your portfolio. Does it ultimately fit into your strategy and vision?
This is not to say buy investment properties sight unseen—only that the superficial aesthetics don’t ultimately matter. They can change. They can be renovated. What matters is location and quality, and your preferences for certain things as a homeowner should be kept separate from your goals as an investor. This can be a tough switch to flip in the beginning, as our natural inclination is to get particular and attached when spending a lot of money on something.
However, understanding that the details that matter are things like the location, the local economy and population growth, the neighborhood, and the quality of the renovation (versus the look of the renovation), is the first step towards the right investment mindset.
You Have Forward Momentum
Investors have momentum. They want to move forward and they want to succeed at what they’re doing, period. While many of us want success, because investing is often seen as passive or as a side project, we don’t often give it the attention and push it truly deserves.
For real estate investors to achieve their full potential, they have to lean into that momentum and be very intentional about their portfolio growth. That means intentionally saving for their next property acquisition and having clearly defined goals and plans for the future. Homeowners are used to buying property once every 10, 20, 30 years. Some people want to buy two homes their entire lives, if that.
The investor doesn’t think this way. They want to make calculated moves to achieve their goals in a reasonable time frame. Whether it’s a property a year, two, or more. We want investors to aim for at least five properties: knowing that this is where they really begin to reap the benefits of their streams of passive income. This also means strategizing where you keep that passive income: in a separate account so that you can not only handle repairs and expenses without dipping into your own money but so you can cleanly and efficiently save for new acquisitions.
You Move with Purpose
Part of what stands in an investor’s way, ultimately causing them to lose steam, is a lack of purpose. Successful investors move with purpose. This means that every acquisition has meaning. They don’t buy properties just to expand their portfolio, though this is valuable. They may have short-term goals in mind, like supporting a child’s college education, or building up streams of cash flow to create their financial independence.
Regardless, there is an intentionality in each choice. This not only means there is a purpose in the "why" of their purchasing habits but in the where, too. While the individual property is largely inconsequential, they recognize that their markets matter. Diversification is a priority, as is being involved and aware of the individual markets in which they invest.
Purpose is not confined to their own motivations for buying, but in the decision-making process along the way.
You Rely on the Right People
Every successful real estate investor relies on someone to help them get the job done. While some investors try to do it alone, everyone has their limits, and no one can truly find wealth and success through this method. We all have financial and portfolio advisers, property managers, renovation experts, contractors, and even our tenants, who make it all possible.
Relying on the right people is a critical part of the equation. Too many investors have the instinctive desire to micromanage their investments...to control every aspect of the process. Not only does this ultimately lead to burnout, but you can’t possibly do everything to the highest standard on your own.
Instead, relying on people who have experience, and years of it, can give you a distinct advantage in the industry and help you avoid devastating mistakes.
You Value Every Experience
No one likes to make mistakes. One of the things that we pride ourselves in at Memphis Invest is experience. With 15 years in this business, we have seen and done it all, and that includes our fair share of mistakes early on. One thing that we believe is that great investors value their mistakes. They value every experience, good and bad, and allow those experiences to shape them into the best version of themselves.
When you allow your experiences to speak to you, stripping away your emotional reaction and viewing them through an objective lens, you begin to see how mistakes were made, what you can take from them, how to avoid them, and where you can become better. This is what sets great investors apart: not just taking lessons from their triumphs, but from their failures, too.
Want to learn how to excel as a passive real estate investor? It all starts with the Turnkey Revolution.