Key Takeaways
What is a real estate entrepreneur?
Entrepreneur vs. investor
Real estate entrepreneur characteristics
Become a real estate entrepreneur
You may have heard the terms real estate entrepreneur and real estate investor and wondered what they mean and whether or not they mean the same thing. Although these two descriptors are similar, there are some important differences. Read on to find out more, and see which term resonates most with you.
What Is A Real Estate Entrepreneur?
A real estate entrepreneur is an individual who purchases property to build wealth. Based on the investor’s professional and personal goals, they can invest in real estate either passively or actively. An active real estate investor participates in the investing strategy, such as buying and flipping a property to make a profit. Passive real estate investors loan money to others who use it to fund their own real estate projects, and eventually see a return on the money they invest.
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Entrepreneur Vs. Investor
So how does a real estate entrepreneur differ from an ordinary investor? And what specific characteristics do they possess?
A real estate entrepreneur and an investor are essentially one and the same; they use real estate as an investment vehicle to generate income, appreciation, and tax benefits. However, a few noteworthy caveats must be taken into consideration.
A real estate entrepreneur is generally defined as ambitious, risk-tolerant and self-motivated. They possess the ability to create something out of nothing, and not only recognize opportunities, but rather seize them. It’s a mindset more than anything, as it combines vision with passion and grit.
“The Entrepreneur is the visionary in us. The dreamer. The energy behind every human activity. The imagination that sparks the fire of the future. The catalyst for change” says Michael E. Gerber in his book, The E-Myth.
The investor, on the other hand, is typically in the beginning stages of real estate. They have the desire to succeed but are primarily focused on the day-to-day tasks of getting their business up and running. While the entrepreneur envisions the bigger picture, the investor is concentrating on individual pieces when starting out.
According to Pejman Zwin, a financial market analyst at Safetradebinaryoptions, “investors want to earn a decent return on their capital; so they try to diversify the scope of investments with different types of deals. Real estate entrepreneurs pick the right opportunity and plan their journey accordingly”.
However, that’s not to say an investor is unable of becoming a real estate entrepreneur. In fact, taking the leap from employee to entrepreneur simply comes down to recognizing the attributes it takes to be successful.
Top 4 Characteristics Of A Great Real Estate Entrepreneur
Becoming a real estate entrepreneur doesn’t happen overnight. It’s a continuous process that requires daily use and attention. That said, there are several ways for investors to become a real estate entrepreneur. Here are four:
They possess an entrepreneurial mindset
They’ve committed to attaining a real estate education
They build partnerships and teams
They are consistent with positive daily habits
Entrepreneur Mindset
Far and away, the most important quality a real estate entrepreneur has is the right mindset. This intangible quality is a key building block in success, whether in real estate or business, as this mentality to never stop learning or pushing forward is vital to overcoming challenges and obstacles. A real estate mindset is the x-factor between entrepreneurs and investors.
When first starting out in real estate, you will not be an expert by any means. But with the right mindset, including the desire for continual learning and improvements, investors can better position themselves moving forward. Remember that anentrepreneurial mindset is not aninborn characteristic — it’s an individually learned behavior that gets stronger with use. As an investor, your attitude and the set of beliefs you adopt will be essential togetting your business off the ground.
Real Estate Education
Along with the mindset, the next step to becoming a real estate entrepreneur is educating yourself on the topic.A proper real estate education can provide a solid foundation for investors to build off of,including a working knowledge of the industry as well as the insight to see if they’re headed in the right direction.In addition, a real estate education can help investors mitigate risks, produce more opportunities, earn a better return on investment, and even establish a more efficient network of contacts.
Finding a good mentor within the real estate industry is also critical to your success. Although you can learn as much as you can from podcasts, books, blogs, there’s nothing like the education you can receive from an industry veteran. They can give you insight into market-specific information and strategies and connect you to important contacts. You’ll also glean soft skills from your experienced mentor just from being around them. Find your mentor by attending local networking events and interacting in relevant Facebook groups.
Partnerships and Teams
I can’t stress how important it is for a real estate entrepreneur to be self-aware. Entrepreneurs need to identify their strengths and weaknesses and begin assembling the missing pieces to form something truly worthwhile.
Starting a real estate partnership or forming a team can have untold benefits for new investors, especially those looking to take their business to the next level. Along with a wider pool of knowledge, skills, and contacts, a partnership can be advantageous for many reasons, including access to more working capital. Building a successful real estate team, on the other hand, can provide investors with expanded benefits compared to a partnership. This includes the ability to harness collaborative powers, plugging in complementary pieces to achieve a specific objective and keep the business running smoothly and as efficiently as possible.
To get started, investors should begin the following:
Self-Evaluation: The first step to assembling a dream team is understanding where your strengths and weaknesses lie. A self-evaluation will highlight your top skills, while also identifying where you can improve.
Examine Your Needs: By taking the time to evaluate yourself, investors will ultimately have a checklist of what their business needs. Whether it’s more financing or networking opportunities, once a real estate investor identifies the areas of their business that need improvement, they can begin recruiting the talent to fill the voids.
Add Key Players: The last aspect of forming a real estate team is finding the right personnel. Beginner investors should look for key players in the industry, including those with real-world experience who have been there before. Remember you are looking to scout talent, so your role will be finding complementary pieces that not only fare well in their position but within the company.
Set Goals: Last but not least, start setting some goals for your business. It’s helpful to set specific, measurable goals (SMART Goals) that you can use as action steps to help you get started. For instance, you can set a benchmark that you want to meet, and by when. When you set your goal, also write down how you intend to achieve that goal and what steps you need to take to meet it. By fleshing out a goal, you’re creating a roadmap for yourself that’s easy to follow. Check out this guide that provides great examples on how to set real estate investment-related goals.
Daily Habits
The key to being successful in anything comes down to practice. Daily habits are vital to becoming a real estate entrepreneur, as these routines and self-discipline will help to transform thebody, mind, and spirit. The following highlights three daily habits to become a successful entrepreneur:
Wake Up Early: When it comes to running a business, there will never be enough time in the day. But rising early and taking advantage of the power of mornings can provide significant benefits to investors, including setting the tone and attitude for the rest of the day. Ben Franklin said it best, “Early to bed and early to rise, makes a man healthy, wealthy and wise.”<
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Visualize Success & Talk To Yourself: The defining trait of a real estate entrepreneur is their ability to see the big picture. That said, visualizing success is a fundamental habit that investors should undertake. This mentality aims to not only set goals but envision how you intend to achieve it. Additionally, the practice of self-talk can help investors to visualize success, as this practice is used to build confidence and boost willpower.
Always Be Networking: The last daily habit for investors is networking. As an up-and-coming investor, you are going to encounter many different types of people along the way. While some may turn out to be nothing more than friends, it’s important to always be building your database of real estate contacts, which can be the most valuable part of your real estate lead generation.
In the end, the primary difference between a real estate entrepreneur and investor is their mindset to achieve success. They not only have the ability tothink“big picture”, but the passion and mentality to achieve it no matter the odds.
How To Become A Real Estate Entrepreneur
There are many advantages to becoming a real estate investor, but you should have a good understanding of how to do so in order to be prepared and have the best chance of finding success in the industry. The following steps will help guide you throughout the process.
Learn the basics of real estate investing
Develop a business plan
Build a team
Create a business strategy
Make your first investment
Learn the Basics
The first step to jumping into any career path is to learn the basics of the industry. Familiarize yourself with real estate terms and definitions, and get a solid understanding of financing processes and investment regulations. Check out educational online platforms to get free access to important real estate knowledge.
Develop A Business Plan
Once you are more familiar with the intricacies of real estate investing, it is time to develop your business plan. You should spend a significant amount of time planning your business’s goals and structure for how it will operate. This will help you stay on the path to achieving your goals.
Build A Team
Successful real estate investing businesses require various team members with specialized skill sets, so you should be strategic in building and growing your team. As your business expands, you will find that having a trustworthy and knowledgeable team of real estate agents, attorneys, finance experts, and contractors will ensure your business operates smoothly and finds greater success.
Create A Business Strategy
There is a multitude of real estate investment strategies that you can choose to participate in and each comes with their own risks and rewards. The next step to becoming a successful real estate entrepreneur is to evaluate which strategy is right for you and your investing goals. Consider if a short term investment with a smaller return or a long term investment with greater returns would be ideal for your business structure.
Make Your First Investment
Once you have successfully set up your business and done the right preparations, it’s time to make your first investment. Your path to success in the real estate industry begins with just one investment, so mind your due diligence and be sure you have fully evaluated your first deal to ensure it will be profitable. As your experience grows, your success in the industry will grow as well.
Summary
Although a real estate investor and real estate entrepreneur have many similarities, I reiterate that there are some key caveats that distinguish the two. A real estate entrepreneur is essentially an investor who has taken their investing career to the next level by developing an entrepreneurial mindset, practice positive daily habits, continue their education, and develop key relationships. Get on the path to becoming a successful real estate investor by getting educated about the real estate industry and following the right steps it takes to get started.
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