Well, between a busy schedule and a couple of very short vacations, it's been quite a while since I had the opportunity to make a blog post. One idea did cross my mind while dealing with a prospective customer who had made some bad investments.

What makes a successful real estate investor? I mean investors come and go, get rich in real estate programs come and go, but only a small percentage stay the course in the real estate investment world. Now I can only speak from my experience, and there are several qualities of good investors, so I will tackle one or two at a time in various blog posts.

In my opinion, the most important quality for a successful real estate investor to have is plain old common sense.  And no, common sense isn't so common. If common sense is so "common" why are there so many television infomercials? And why are they so successful? Because they employ what is known in the sales world as the "irresistable offer"; an offer so good you can't resist. If you register on my web site NOW as a client, I will provide you with FREE market updates. BUT WAIT THAT'S NOT ALL! I will throw in a FREE market analysis on your current investment properties. WHAT'S THAT? THERE'S MORE? Yes, register within the next 10 minutes and you will receive a free, limited edition picture of Black Beauty! Only 500 have been printed and no more will ever be printed! ....Do you get the picture?

Why do they require you to act within 10 minutes? No not because, as Mr. Slap Chop says, we can't do this all day. It's because if you stop and think, your common sense might, just maybe, kick in and you will say, this is stupid (and also fear of loss, the greatest sales technique in the world).

Now stop and think for a minute. Have you noticed in the last 5 years there have been real estate investment groups everywhere? Have you noticed there are real estate investment magazines with ads from all these young and upwardly mobile success stories who are selling you their secrets? Have you noticed there are real estate investment seminars everywhere? Where were they 15 years ago? Real estate has been around since mankind first moved out of caves. Why is it only now a "get rich quick" investment? Well, think  back 15 years ago to when the stock market was the "get rich quick" place to be. The market had been on quite a tear for a couple years and what did we see everywhere? Stock market investment groups, stock market investment magazines with ads from all these young and upwardly mobile success stories who were selling you their secrets, and stock market investment seminars.

Where are those stock market investment groups and magazines now...the same place all the real estate investment groups are heading. How many people are buying new homes now to flip for a tidy profit when they are complete? How many condominium conversions are happening right now? How many homes have seven buyers lined up waiting to see them now?

For sure some people pocketed some fast cash during this period, but just as many were left in huge debt when the inevitable correction happened. And no, those that profited were not investment gurus, they were nothing more than in the right place at the right time. They took some gambles and guessed right (or were on vacation) when the inevitable correction happened. Corrections ALWAYS happen swiftly and unexpectedly and not getting caught with your pants down is 2/3 luck for the speculative investor (read Gambler). Where were all the large real estate investment firms during all this? They sat it out, or they were selling. Who do you think is buying now? That's right, all the large real estate investment firms, who happen to have enough experience to employ managers with, you guessed it, common sense.

I've mentioned these books before but check out "Extraordinary Popular Delusions and the Madness of Crowds" (written in the 1800s) and "Devil Take The Hindmost" a more recent book, and you will see just how uncommon common sense is. Next I will talk about how to employ common sense in real estate investing.