Dave Meyer:
Most people think successful real estate investors have some secret strategy, a special lender, a market no one else knows about, insider access to off-market deals. They don’t. What they do have though is habits. Boring, repeatable habits that they do over and over, deal after deal, year after year. Following a process, getting better and better at this process while everyone else is chasing the next shiny strategy they heard about on social media. And this is good news because habits are things anyone can implement. It doesn’t matter how much experience you have, how much cash you have, what market you’re in. If you can develop the habits of the best investors, you can succeed in this business and achieve your financial goals. Today, I’m giving you the nine most important habits of successful investors and you should steal every single one.
Hey everyone. Welcome back to the BiggerPockets Podcast. I’m Dave Meyer. I have been investing for 16 years now. I’ve talked to hundreds of investors on this show. And at this point, I think I have a good grasp on what separates the best investors from the okay ones or from the people who never actually get started. And what differentiates these people is probably not what you think. The investors who actually win long-term don’t have wildly different strategies from everyone else. They don’t live in some perfect market and they definitely aren’t even necessarily the smartest people. They just have the best habits. The things you do repeatedly in your business, in my opinion, are more important than any one deal or resource. Habits are in your control. They can scale with you and they’re accessible to every single person in the BiggerPockets community. So today we’re breaking down the nine habits of successful mom and pop real estate investors.
The actual behaviors we’re talking about, not just the mindset fluff you hear about. We’re talking actual behaviors that separate the people who build real wealth from the people who stay on the sidelines or the people who buy one property and quit or those who wind up getting themselves in trouble. Some of these habits may feel obvious. Some of them might sting a little bit because sometimes we need a little taste of bitter medicine. But if you can build even three or four of these habits into how you invest, you’re going to be ahead of most people in this space. Let’s get into it. Habit number one of successful real estate investors is patience. This might be the single biggest differentiator between investors who build wealth in real estate and investors who flame out because the reality of this industry is that real estate is not a get rich quick scheme.
It is very difficult to get rich quick in real estate. The way you should think about it is get rich for sure. The wealth that comes from real estate comes from being in the market a long time, not being perfectly timed in the market, not taking huge swings and trying to get everything all in one deal. What really allows people to build that wealth is staying power, staying power, being in the market a long time. And patience is absolutely key to that. I want to be clear about patience because patience can sound kind of passive, but today in the show we are talking about habits. And so I want to talk about how patience can actually be a behavior. So what patience looks like as an actual habit for real estate investors are number one, not stretching and buying deals that are too thin. This to me, number one red flag in real estate investing.
It’s very hard to lose if you only buy deals that are sure things, but only finding sure things takes time. So this is what I mean by patience as a practice. Learn to say no to a lot of deals. Learn to go back to the seller one more time and push for that extra concession. That’s what patience actually looks like as a practice because it is easy to get excited when you see a deal. It’s easy to get excited when you catch the bug with real estate and you want to go out and buy that next deal or that first deal. I get it. I feel the same thing. That’s why it has to become a habit. Take time and develop the skill of taking a deep breath, running your numbers the second time, running it a third time. Call your investor friend to make sure that your underwriting criteria were correct.
Not selling something out of a panic. Patience is actually a skill that you can build and it is one that is perfectly suited for real estate investing. You can’t sell a property quickly, you can’t buy a property that quickly. We’re talking about weeks or months. It’s not like opening Robinhood and selling something. Patience is your best friend as a real estate investor. And don’t mistake patience with a lack of ambition. I’m not saying you shouldn’t go out and buy as many good deals as you can. What I’m saying is wait for the good deals, then go buy as many as you can, but be willing to wait until the absolute right deal comes to you because it will come. Real estate takes time. You are not going to be at a disadvantage if you wait two to three months to buy that next deal instead of two to three weeks.
You will be better off for it actually. So that is the number one habit of being a real estate investor, being patient. The second habit of successful real estate investors is knowing your why and always thinking about that. This is a skill that is difficult and it actually gets harder the more you get into building your real estate career. It is easy at the beginning to know why you’re doing something. Maybe you have a bill that you need to pay. Maybe you’re feeling insecure in your retirement plan. Maybe your family needs some extra capital to do something. It’s easy at the beginning, but something happens as you start building wealth in real estate, as you start to have a little bit of success. You kind of lose sight of why you got into it in the first place. It’s happened to me. It’s happened to pretty much every real estate investor I know.
You wind up getting shiny object syndrome or FOMO because you listen to this podcast maybe and hear all the exciting cool stuff that real estate investors are doing. But the habit you need to develop before you buy any deal, before you make any decision as a real estate investor is to orient it all to that original goal and your goal can change. It doesn’t have to stay the same. I’ve been pretty open on the show talking about how my goals have absolutely changed over the 16 years, but I always update my goals and know why I’m doing this. What is my next deal for? Is it for cash flow? Is it to increase the risk in my portfolio to take more swings? Is it to get me over the line to my retirement where I can stop working and quit my job? All of these things should be going through your head with every single decision that you make because the reality about real estate is there’s a million different ways to do it.
There’s no right answer. Should you sell? Should you refinance? Should you invest into a property? The answer’s going to be different for each of us, even if we have the same property. There is no right answer, which is why you need to force yourself as a habit every time you make a big decision in investing, why are you doing this? Is this decision in line with my long-term strategy? If you can do that, if you can build this habit and make this the number one framework for how you make decisions, you are going to be successful in real estate. The way I see most people lose their way in this industry and make bad decisions is not because they’re bad investors, it’s because they get away from what they’re good at and what they want to be doing. So many times I’ve heard people start flipping just because they know flippers who make a lot of money, but they don’t really want to be a flipper.
They don’t have time to be a flipper. They don’t have the skill to be a flipper and that’s how they get in trouble. It’s not because they’re a bad investor, they’re probably a great rental property investor, but it’s because they did something that wasn’t really aligned with who they are and what they wanted to do. So practice this habit. Next time you’re making a decision about whether to renovate a unit or to sell a property, think back to your long-term goals and orient your entire decision making process around that goal. And I promise you, not only will the decision become easier to make, you will make the right decisions much more frequently. So that’s habit number two. Habit number three, this is a big one. Network relentlessly, but intentionally. Networking, so important as a real estate investor. It’s why BiggerPockets exists in the first place.
Go on biggerpockets.com. You can network with people all the time, but be deliberate about networking. I mean, so many people at meetups are like, “I’m just trying to build my network.” Who are you trying to build your network with? Because personally, I love networking, but I’m not just trying to get more connections on LinkedIn or stacks of business cards next time I go to a meetup. There are specific people that I want to meet and there are specific people that I think I can help. And that is exactly the kind of crossover you should be looking for in your networking. Who can help me and who can I help? It is a mutualistic relationship. You cannot just go out and try and quote unquote network by telling people your name and what you’re after. It’s not going to work. The way you network is by giving, not by asking, by offering to help people.
There’s a great concept called a thank you economy. It’s all about this, how giving and being productive and helpful to other people help you build your network faster and that eventually when you need something, you’ll have all the goodwill and all the connections that you ever need. So get good at this. Finding the networking is easy, right? You could do local meetups, go on biggerpockets.com, come to BPCon, come to all of our BiggerPockets events. It’s the best place you can possibly network. It’s just thousands of people just like you who you can help and who can help you. But the habit that you need to work on, the behavior is finding mutual benefit. That is where the value of networking really, really exists. Can you help an agent? Can you help a contractor? Can you help a wholesaler? Can you make introductions for them? Can you give them business?
Those are the things that you can give. And then when you need something, those people are very likely to offer that in return. So don’t just network for the sake of it. It is not a numbers game where you have to go out and say, “I’m going to network with a hundred people.” Find five or 10 great connections that will be way more valuable than giving out your business card to 200 people, guaranteed. So work on this behavior, work on this as a habit, finding mutual benefit, find ways to give to your network so that when you need something, you’ve already created that mutual benefit and goodwill, and you’ll find that your career and your portfolio will grow faster than ever based on that network. All right, those are our first three habits just to recap. Number one is patience, big on patience, especially in this kind of market.
Number two, knowing your why and framing your decision making around your long-term goals. Number three is networking relentlessly, but with intention. We’ve got six more killer habits that you should be using, but we got to take a quick break. We’ll be right back.
Welcome back to the BiggerPockets Podcast. I’m Dave Meyer. Today we’re going through nine habits of successful real estate investors. We’re onto habit number four, which is treating your tenants like customers and team like employees. In other words, be a good person to work with. This should be self-evident, but I see so many real estate investors do this poorly. Your tenants are your customers. Treat them like that. Treat them as the valuable, important part of your business that they are. Your agent, technically they work for you, but there’s a reason we call it a BiggerPockets, your team, not your service providers. They are on your team. Be a good person to work with. Put yourself in their shoes. If you are a tenant, would you want to rent from you? Think about that in a hard way, right? I think for a lot of real estate investors, the answer is probably no.
If you were renting from you, you’d probably not like you as a landlord. That stinks. That’s not a good way to run a business. You should make your business something that is mutually beneficial for everyone. That is how great investors succeed. This is a habit that I see across all great investors. They are the ones who build goodwill with their tenants, who want to stay, who take care of their property. They have great relationships with agents who want to give them deals because they know it’s going to go well. Property managers who want to do the best for you because you treat them right, you treat them with respect. This is so easy to do. It’s just a habit that you have to develop. It is a mindset that you need to adapt. So next time you interact with your tenants, think about how to make that as great an experience for both of you as possible.
Next time you talk to your agent, ask them what you can do to help them. Don’t just treat it like a one-way relationship. If you are hiring an employee at a corporate job or any job, part of your responsibility as that person’s manager is to help them develop their career. Think of it the same way. How do you help your property manager build their career? How do you help your agent build your career? If you do that, I promise you, you’re going to get better deals. Now you don’t have to do it expecting to get something out of it, but if you do it in a way that is genuine and authentic and you actually want to help, you’re going to grow. You’re going to hit your goals faster. So number four habit, be a good person to work with. Treat your tenants like customers and treat your team like employees.
Habit number five, this one I love, this is a little bit controversial, reinvest before lifestyle inflation. Now, if you’ve heard this concept of lifestyle creep or lifestyle inflation, people have strong opinions on it. I personally actually believe that a little bit of lifestyle creep and lifestyle inflation is okay, but it can’t be right away. That’s why the habit here is reinvesting first. Think about your financial goals, your portfolio goals and feed that first. So if you start making a little bit of cash flow, if you do a burr or a flip and you build a little bit of equity, before you buy yourself something nice to celebrate a deal, which I think is totally fine, figure out what number you need to do that next deal. So just as an example, maybe you do a flip, you make 30 grand, that’s awesome. And you want to go take your family on vacation to celebrate.
Good. I know some people will disagree with that, but I think you should. But before you do that, what’s the next deal you’re going to do? How much money do you need for that next deal? If the answer is 30 grand, you may delay that vacation a little bit. If the answer is 25 grand, go take a vacation. It doesn’t need to be a $5,000 vacation. Don’t just spend it because you have it, but go take the vacation and reinvest the rest. You don’t have to do this after every deal. In fact, I don’t recommend you do it after every deal, but I think there are certain points in your life, if you hit a milestone, if you haven’t taken a vacation in a while, if you need a new car, you could inflate your lifestyle a little bit. I’ve gone on the record on the show many times saying, not only do I think lifestyle inflation is okay, I think it’s kind of the point of real estate investing.
Most people are here because they want to improve their lifestyle. That doesn’t necessarily mean for everyone spending a ton of money. Maybe it means taking a little bit of time off. Maybe it means putting more money into your kids’ college fund. You don’t have to be frivolous with it, but using some of your money and not reinvesting 100% I think is okay. But if you are on a plan and have a long-term goal, feed that first before you inflate your lifestyle because then you can have both. It’s not one or the other. You don’t have to decide between growing your portfolio and incrementally improving your lifestyle. If you feed your investment in your next deal first, then you don’t have questions or qualms about inflating your lifestyle a little bit because you’ve already hit the goal part and that other marginal part that you’re investing into your lifestyle is something you’ve earned and that you should enjoy and be proud of.
So this is the habit. This is a real skill that you can do. This takes a couple hours after every deal. After every deal, say, “What am I thinking about doing next? How much of my profit do I need to set aside for that next deal and to be on track with my long-term goals and what can I realistically plow back into my lifestyle?” There have been times in my life where the answer is 100% reinvestment. That’s for a lot of people how it works at the beginning. But once you start to scale, you can sort of fiddle with it a little bit. Go on vacation, trade in your old car to something that you want. I don’t know what people want to spend their money on, but it’s okay as long as you’re still on track for that long-term goal. For me personally, I am okay for my long-term goals taking a year or two longer so that I can enjoy the 10 years I’m going to spend building it.
That’s just me. Some people might say, “I want to reinvest 100% to retire as soon as possible,” in which case reinvest. But if you’re like me and you want to enjoy some of the benefits now, this is the way to have both, to grow and to enjoy your life right now. So habit five, reinvest before you lifestyle inflate. Habit number six. Ooh, this is a hard one. This is one people struggle with, but it’s so important. Habit number six is investing consistently, or in other words, don’t try to time the market. Successful investors continue to operate despite the hype, despite the noise, despite everything that’s going on, even when it’s not that great of a market. If you’re familiar with the concept of dollar cost averaging, I’ve talked about it many times in the show, but it’s a principle from stock investing where people basically, they say, “I’m going to invest $100 a month into the S&P 500 or $1,000 a month.” And no matter what, you do that no matter what’s going on in the market.
And by doing that, you’re sort of being humble and admitting, “I don’t know. I can’t time the market. It’s not possible. And so what I’m going to do instead is tie my performance as an investor to the long-term performance of the stock market.” And the same thing goes with real estate investing. If you buy at consistent intervals over a long period of time, you’re essentially saying that I want to do at least as well as the long-term performance of the US housing market, which is a pretty good track record. That is a humble, proven approach to investing in real estate, investing in anything really, being consistent and not trying to time the market. I do this all day. I look at the housing market as much as anyone in the world, I would say, and I can’t time the market. I can’t. I have ideas.
I have hypotheses. I have theses that I use to guide my own investing, but more than anything, I just try and be consistent, to invest in any kind of climate, be patient, right? This is a balancing act. You have to be patient and invest consistently. So when I say invest consistently, I’m like, “I’m going to keep investing once a year.” Now, if I go 15 months because I can’t find a deal right at that year mark, that’s okay. But what I want to do is have my buy box, have my criteria, and as reasonably consistent as I can be, keep investing. That’s the way long-term investors went. This is a proven habit in every asset class, and it’s one I highly encourage you to develop. Be consistent. Do not try and time the market. Just be disciplined about what you buy, be patient and invest at consistent intervals.
I know that one’s hard. I really do. It’s hard for everyone. It’s hard for me too, but it is a proven one that really does work. All right, we’re through habit number six, and just a reminder of the three we just did. We did habit four, which is treating tenants like customers and your team like your employee. Habit five is reinvesting before lifestyle inflation, and number six is not trying to time the market and investing consistently using the principles of dollar cost averaging. Those are six great habits you should try and master yourself, but we have three more that we’re going to get to right after this quick break.
Everyone, welcome back to the BiggerPockets Podcast. I’m Dave Meyer going through the nine habits of successful investors. We’re up to habit number seven, which is running the numbers consistently. I can’t tell you how many times people tell me they found a deal and I ask them what the numbers are, what the cash on cash return is, what the cash flow is, what the ROI is. They say, “I don’t know.” You haven’t found a deal if you don’t know the answers to that question. The first thing, this is why it’s a habit, it’s a behavior. The first thing you should do if someone sends you a listing or you go look at a property, the first thing is underwrite the deal. You don’t have to do it super detailed right away, but get on the BiggerPockets calculator. Go to biggerpockets.com/calculator and do an analysis. It takes five or 10 minutes.
Get really good at this. Make this a habit. I can’t tell you how many times a week I do this. Someone tells me a listing, I put in the calculator and it tells me if I should have a conversation about it. I don’t care if it’s on the best street, in the best neighborhood, at a price that I haven’t seen in five years. I’m still putting it through the calculator. Why wouldn’t you? Why are you just doing things based on gut feel? It is crazy to me. This is such an easy habit. There are tools like the calculator that can do the math for you. This should be so quick. It’s like a reflex. See a listing, run the numbers. See a listing, run the numbers. I’ve done a million shows on how to do that. You could check out other podcasts we’ve done on this, on how to do this.
It is not difficult. Man, if you don’t have this habit, you should not be investing yet. If you do not run the numbers consistently and do it well, you can’t be an investor. This is skill habit number one. I think there are other things that really help over the long term, like patience and treating your team well. Those things are going to benefit you so much over the lifetime of your investing career, but you can’t get started until you have this habit. You got to run the numbers well. That’s habit number seven. Habit number eight, it’s kind of similar to habits number one and number two, but I wanted to make it its own thing because it is a behavior and it’s an important skill to get good at. Habit number eight is saying no more than saying yes. And this is similar to patience, right?
You have to be patient. It is similar to knowing your why, because you have to say no to deals all the time. You have to say no to partnerships all the time. You have to say no to contractors all the time. You have to say no to tenants all the time. Walking away from things that do not align with your goals, that are not part of your strategy, that are not tactics that you are familiar with is so valuable. I think learning to say no is one of the hardest things. It sounds so easy, but there’s so much exciting stuff about real estate. There’s so many good salespeople in real estate who have stuff to pitch you, contractors who want to convince you they’re your best friend, wholesalers who’ve convinced you that they have the best deal since sliced bread, and they’re not bad people.
But what your job is, is to make sure these things are aligned with your goal and to say no when it’s not right. There’s a saying you hear in all sorts of spheres. If it’s not a hell yes, it’s a hell no. And I think that really applies to real estate. If you’re not super excited about a contractor or a property or a strategy or a software that you’re going to use or a bank or a lender or an app, say no. The way you get in trouble as a real estate investor is saying yes too much. There are very few times you get in trouble by saying no. Sure, there are absolutely deals I wish I had bought that I said no to, but in retrospect, I can live with that. I can live with myself saying, “You know what? That wasn’t right for me at that time.
In retrospect, it probably would’ve done great, but what I knew at the time, it wasn’t right for me. What I can’t live with is taking a swing on something that I shouldn’t have when I knew better.” That is a harder thing to live with. That’s a bigger risk to your real estate portfolio. So practice this. That’s why it’s a habit. Practice saying no. When you have that gut feeling, you’re getting excited, you’re like, “I should invest in this thing,” say no. I did just this the other day. It was really hard for me. I was really excited about this deal and it just wasn’t right. The timing wasn’t right for me and my stage of life. It’s not something I could pull off. If it was next year, two years from now, maybe I could do it, but right now doesn’t work. So I said no.
It was hard. I had to practice. It was me practicing it. You should keep practicing it. Learn to have this discipline. Take pride in that discipline. It is okay to say no. In fact, you should be saying no. It is better to walk away from something and have some regret about some lost opportunity than to say yes to something you’re not sure of. There’s always going to be another deal. There’s so many of them. There’s always more deals, so only take the ones that are good for you. This is a skill to practice with patients. It’s a skill to practice with habit number two, which is knowing your goal. Put these three things together. These are three habits that work well together. Be patient, orient your decisions about your long-term goal, and learn to say no to the things that aren’t right for you. That is habit number eight.
Habit number nine is to treat your investing like a business, not like a hobby. I invest part-time. I am not a full-time real estate investor, but since the first day I started as an investor, this is one thing I have done right. I made a lot of mistakes, but this is one thing I’ve done right, is I have always treated it like a business. I had an operating agreement built right away. I had separate bank accounts for all of my different properties. I kept my security deposit separately. I had a bookkeeper and a CPA. I had the proper entities set up. I track my expenses. Real estate is forgiving. It can be done on the side, but it is not a hobby. This is serious stuff. This is real money that you’re spending. There are other people whose lives you are impacting, your tenants, your property manager, your agent.
You owe it to yourself and to all of them to take it seriously. It’s not that hard. I’ve told you all, I spend less than 10 hours a month on my real estate portfolio, but I treat it like a business. I am very serious about it. I have fun with it. I enjoy doing it, but I do not skip over the things that feel like minutia, that feel boring, that feel frivolous, especially when you just have one property, right? Oh, I don’t need an LLC. I don’t need a bookkeeper. Maybe you don’t. Maybe you don’t need to pay someone to do it, but you have to have a system for doing it because two things happen if you don’t treat it like a business. Number one is it can get really overwhelming, and then you might not want to scale. If your bank accounts get all confusing and your tax prep every year is really overwhelming, you might choose not to buy that next property.
Because you’re bogged down in your own inefficiency. I’ve been there. I’ve always treated it like a business, but there are times I haven’t done it well. And I’ve had to take a step back and said, “No, I need to sort this out and figure out a better system for doing this.” But if you do it like that from the beginning, it’s going to help you scale your portfolio faster. The second thing is, as you scale, you’re going to have more opportunities to work with partners to evaluate new deals. And if you are not presenting yourself professionally, those deals aren’t going to come to you. I see this all the time. People come to me, ask to partner on a deal or to borrow money, and they don’t have a business set up. They’re just a person who doesn’t even treat their own endeavors as a business.
So why would I treat that like a business? Think about how you present yourself to other peoples in this industry, because we’ve talked about how important networking is. And if you’re treating it like a hobby, no one’s going to want to work with you, to be honest. If you treat it like a business and you are serious about it, even if you do it part-time, it’s going to open up so many different doors to you. And so treat it like a business from day one. And I promise, even though it’s more work upfront, it’ll save you a ton of work down the line and it will help you scale faster. This is a habit. It is a behavior. It is something you should think about. Every time you buy a new deal, meet a new person, how do you treat it professionally? What would a sophisticated business do in this scenario?
That’s what should be going through your head. That is the habit that you should be developing. So that’s habit number nine, treat it like a business, not like a hobby. Those are our nine habits. These might sound fluffy and like they don’t matter, but I really do think after talking to hundreds of investors, this is the stuff that matters maybe more than anything else. As a reminder, our habits are being patient. Number two was knowing your why and sticking to those long-term goals. Networking relentlessly, but intentionally, treating tenants like customers and team like employees, reinvesting in your portfolio before you lifestyle inflate, being consistent and not trying to time the market, running the numbers on every single deal, saying no more than you say yes, and treat it like a business and not like a hobby. And I want to be pragmatic here. I know you’re not going to listen to this and go out and say, “I’m going to do all nine of these and I’m going to get great at them.” This is not realistic.
Pick one or two and spend the rest of this year getting good at it. Take the rest of 2026, say, “I’m going to get great at these two habits.” Then next year, pick two or three more and get great at those. You don’t need to be great at all this all at once. These are things that you can progress towards. They’re aspirational. Habits are things that you practice. So start practicing every day. Do a little bit. It’s really not that hard. Five minutes a day, 10 minutes a day. Invest into these habits and they will pay dividends for you for your entire investing career. That’s our show for today. I’m Dave Meyer and I’ll see you next time.