24 Nov 3 Characteristics of a Savvy Investor
1. Clear Goals
A savvy investor will have very clear goals for their investments.
A savvy investor has run the numbers and they have a time frame for how long they are going to hold a property based on the next two goals.
They will have a realistic approach to future appreciation and those expectations will typically be based off of logic and data. They are not trying to hit a home run each time they step to the plate. Instead, their plan includes a lot of times at the plate and a continuous flow of base hits.
Ask a great investor what type of performance they are looking for and they will tell you EXACTLY what works for them. They have this down to a science, because if the performance works, the expectations work and their time frame for owning or flipping is met.
2. Logic Based
Savvy investors are logic based and unattached
The Property Fits the Plan, Not Vice Versa
Experienced investors create a plan that is profitable and then find a property that will fit the plan. Novice investors put a plan together that is based more on the type of property they think they want and they try to create a solid investment plan for a bad investment property.
Know Good Investment Was Bought Right
They understand that holding a bad investment does not make it a good investment. If a property is good at the beginning, it will perform well and be profitable when it’s sold. A property purchased wrong will always be wrong.
3. Old School
A Savvy Investor Uses Old School Investor Requirements
Make Decisions on THE NOW vs THE POTENTIAL
In past markets, investors lost site of the current performance and made decisions to buy based on the potential for future appreciation. For a period of time it worked.
Plans for the DOWN vs. hoping for the UP
Now, a buyer/investor buys a property that makes sense today, plans for and is ok if there is a downturn in value, cash flow, etc. in the future and does not include potential appreciations in their strategies. If it happens, it’s simply a BONUS.
Has Exit Strategy B and C for Flips
When FLIPPING properties a novice buys, improves, and tries to sell. If any of the variables that are typically out of the buyer’s hands change, the flip doesn’t happen and there is a significant risk to the buyer in owning that property. Savvy investors will buy properties to flip with a 2nd and 3rd exit strategy if the flip doesn’t work.