Throughout the years I have been asked many times something along the lines of, “what attributes do our most successful investors possess?” Well, that is a very difficult question with a lot of different answers, all of which would be correct. So, let’s restate the question to, “which attribute is consistent among AZREIA’s most successful of the successful?” In other words, the best of the best. That is much easier to answer.
The answer is innovation. Think about it. Innovation separates the best of the best in every industry, not just real estate investing. People and companies stay ahead of the competition through innovation. They make it difficult for others to keep up. In the process, they are able to be first to market and realize the results of their innovation through higher margins and greater market share. People and companies who innovate tend to always be innovative. It is part of their culture. Their customers expect it.
A primary example is Apple. Now, while I’m an Android guy, let’s focus our example on Apple. Apple is known for their innovation. It is their innovation that actually saved the company from going out of business not once, but twice. From the iPod to the iPhone and in between they are constantly innovating. Their customers seem to happily pay a very high price and have pretty much grown into a cult type following. In their industry they have set the bar and others have followed.
Notice that I said they have set the bar. Others in their industry have pushed the envelope and, in some areas, taken the innovation mantle away from Apple. This helps make the point that innovation needs to be constant.
How does any of this relate to real estate investing? We have been in the fastest period of change in my lifetime. We have seen iBuyers; companies acquiring a portfolio of thousands of single-family rental properties across the country; and new developments made up entirely of small detached rental properties. These are not small innovations. These are huge market disrupters. One of the newest innovations is investing in real estate through crowdfunding. All of this and much more has transpired in less than a decade!
Your competition has changed. Your margins have changed. The speed of the market has changed. Your business model has changed. So, you need to innovate, too.
I have seen lots of innovation by AZREIA members like investing in markets in other states; unique partnerships; expanding into or transitioning into the notes world; improving the quality of their rehabs; managing rental property; and adopting new technology to improve margins and increase their speed in finding leads, communicating with customers and team members. You have improved your marketing and your sourcing of materials. You have expanded your investing strategies to participate in multiple market segments utilizing your developed skills across a broader spectrum.
One of your major improvements has been in tenant screening thereby increasing your margins and reducing cost. Let the uninformed and uneducated rent to unqualified tenants and suffer the cost of doing so.
I do not see a change in the rate and pace of change in our industry. You will need to stay focused on your business and continue to respond to market innovation by innovating yourself. I plan on continuing to innovate AZREIA to be responsive to market changes. AZREIA has constantly innovated in the REIA world and has been recognized for that leadership on many occasions! We are making major investments in our offerings and structure to continuing to lead. Exciting times!