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Real estate investing is one of the final frontiers that gives the average person a realistic opportunity of reaching millionaire status. However, regardless of the abundance of opportunity that may exist, becoming a millionaire real estate investor will forever exceed one’s grasp unless they give up ten specific things.

Before I get to those ten things, according to Gary Keller’s book The Millionaire Real Estate Investor, the road to becoming a millionaire real estate investor progresses through four specific stages.

Stage 1 – Think a Million – A shift from a “consumer” mindset to that of a “producer” mindset must occur in order to even embark on this road. Surprisingly to most new real estate investors, the thinking of a real estate investor is very different than what they’ve been used to. This shift in thinking doesn’t happen overnight, either. You’ve likely had a lifetime of conditioned thinking and it may take a while for things to really “click.” Be patient. Stay in action and it will it happen.

Stage 2 – Buy a Million – Obviously, if one is to become a millionaire real estate investor, one must eventually buy a million dollars worth of real estate.

Stage 3 – Own a Million – There’s a difference between being on title for real estate valued at a million dollars than actually owning a million dollars of real estate. You want a million dollars of equity, and it’s in this stage where you make that happen.

Stage 4 – Receive a Million – Receiving a million dollars a year of passive income from your real estate is the final stage. Typically, it begins with one income property spinning off as little as $200 a month, and then gradually adding another, and another, and another. The commonly undervalued concept of cash flow keeps most investors from ever holding onto that first property long enough to add another to it and tragically they never reach this stage.

Whether you’re conscious of these four stages or not, every millionaire real estate investor will experience them. Sometimes in perfect sequence, and sometimes not. The number of detours and obstacles within real estate investing that can throw the savviest of investors off track have yet to be determined. In other words, the number of distractions are countless. I’ve experienced more than I can count, that’s for sure.

As I’ve been making the journey of the millionaire real estate investor over the last four to five years, I’ve made the most progress in just this last year. Looking back, I can clearly see my progress picked up significant pace once I decided to give up ten specific things that had been holding me back. And now that I’m conscious of these “success stealers,” I can confidently see myself reaching the 4th and final stage of the millionaire real estate investor in less than two years, maybe less than one. I’m certainly going for it.

I tried to put these things you must give up in a logical order, but if you’ve been investing in real estate for any length of time, you’ve probably come to recognize that the numerous aspects of real estate can be extremely illogical as much as they can be logical. So, in no particular order, here are the ten things you must give up to become a millionaire real estate investor.

1. Give Up “Getting Ready to Get Ready” – Stop it. No one is ever “ready.” You’ll never know it all. The conditions will never be perfect. Just get started. Travel as far as you can see and I promise once you get there, you’ll see further. It’s infinitely easier to steer your way to success while you’re moving than it is by sitting still at the starting line waiting for the gun to go off. Ready. Fire! Aim. Just do it.

2. Give Up Following the Crowd – If you do what the crowd does, you’ll get what the crowd’s got. If you want something above and beyond what the masses have, you’ll have to do something above and beyond what the masses are doing. Analyze your own personal resources (time, money & knowledge) and the market you can most easily work in. Take that information and match it up to a strategy that best suits you. For example, if your cash means are limited, don’t try to break into buying foreclosures at the courthouse steps because it seems to be what everybody else is currently doing. “Seems,” being the operative word. You’ll find that the crowd isn’t always doing what they say that they’re doing, by the way. There are a lot of “talkers” in real estate and many less “walkers.” Be very cautious of the “crowd.”

3. Give Up Timing the Market – Nobody has a crystal ball, and for those that do, they’re not sharing what they know. I suppose that depends on how much of a conspiracist theorist you are, but if someone has insider information as to what the housing market is actually going to do, it’s just that… insider information. So, for all intents and purposes, let’s just say that nobody knows what’s going to happen, nor do they know when it will happen. Besides, timing the market is gambling, and gamblers don’t become millionaire real estate investors. Don’t wait to buy real estate, buy real estate for its cash flow and wait. The law of supply (land) and demand (people) is so far in your favor that this advice can’t fail. If it does fail, the world will have much bigger fish to fry than salvaging real estate portfolios.

4. Give Up Searching for the Silver Bullet – There are three world events I hope to see before I die. The first, the discovery of Big Foot. The second, the discovery of life in outer space. And the third, the discovery of the silver bullet of real estate investing. As much as I hope to witness these events before I die, I’m not holding my breath. There is no silver bullet. Investing in real estate is hard work, and it takes an inordinate amount of drive, determination and persistence. With that said, it’s actually a very simple business.

• Generate leads.
• Evaluate deals.
• Submit offers.
• Close the deal.
• Manage your exit strategy

Simple. Not easy, but simple. And worth it.

Oh, and you have to talk to a lot of people. Never forget that this is a people business. Every piece of real estate you buy or sell will be from or to another person. The majority of the “silver bullet scams” out there revolve around trying to eliminate the “person” from the transaction. That’s not happening. It’s a people business. So, if you really insist on discovering the silver bullet… look within, and work on, your people skills more than any other.

5. Give Up Emotional Decisions – Successful real estate investing is founded on facts, numbers, performance and management. Give up your personal preferences and regard to what others will think about your investing when making your investing decisions. Either it will make money, or it won’t. As long as nobody is getting hurt in the process, that’s all you should be concerned with. You are an investor, and that’s what an investor’s job is… to make money. Buy low and sell high. Emotions can cause you to buy higher and sell lower, or cause you to do no deals at all. And remember this quote, “When emotions rise, intelligence falls.”

6. Give Up Believing that Debt is Bad – Unless you are already independently wealthy, you will have to take on debt to build your real estate portfolio and become a millionaire real estate investor. I’ll give you this, consumer debt is bad. Give up charging the shopping sprees, vacations and fancy dinners on the credit card. Suze Orman and David Ramsey get it right every once in a while. Business debt, however, is good. It’s good as long as the money you’ve borrowed is earning a higher return than the rate at which you are borrowing. You will need to leverage people’s money if you expect to become a millionaire real estate investor while you’re still young enough to enjoy your millions. Leverage is one of the key reasons real estate has created more millionaires than any other industry or investment vehicle. Embrace leverage and learn how to use it frequently and responsibly. And speaking of leveraging other people’s money, that leads us to number seven on our list of the ten things you must give up to become a millionaire real estate investor.

7. Give Up Doing Everything Yourself – In addition to leveraging money, you will need to leverage other people’s wisdom, time and effort to reach you millionaire real estate investor status. For every successful real estate investor there is a power team of professionals behind them that make everything happen. There simply aren’t enough hours in the day for you to build your real estate empire on your own, so stop trying to. Give it up!

8. Give Up Immediate Gratification – For most investors, the first time they flip a property will be the first time they’ve earned a significant amount of money in one lump sum. It can be very exciting when it happens for the first time. Actually, it’s pretty damn exciting every time it happens, and with this excitement comes temptation. At the end of a successful transaction it can be very tempting to celebrate and reward yourself with toys and trips that you couldn’t previously afford. Don’t do it. Not yet, at least. Inside of real estate investing, money is a tool. You must think of it as such. It’s a tool to execute your next deal, and the next, and the next until you reach your “cash flow” goal. With disciplined spending and re-investing of your profits, your journey to receiving a million will be swifter, and there will be plenty of time for your toys, trips and other temptations soon enough.

9. Give Up Swinging for the Fences – Taking down that REO tape of 500 properties, resurrecting the dilapidated twenty-story building down the street and developing that 1,000 acres of swamp land has its glamorous allure and can make for great stories and pay days. It’s not uncommon to think of becoming a real estate millionaire with just a swing or two of this nature. Over time you’ll find these deals rarely pan out for the investor working their way to millionaire status. In fact, the ONLY people I know who hit home runs like these are those who have already made their million, and for them it’s not even a home run. It’s just another day at the office. So, save yourself the time and frustration. Work within your own office parameters to create your million by doing deals that generate four and five-figure profits. If you do that, you’ll stumble upon a baby “home run” every once in while just by the nature of the business, and before you know you will have arrived. Then! I see nothing wrong with swinging big. Your existence doesn’t depend on it and you’ve collected enough experience to where you just might pull it off.

10. Give Up Being Right – There’s a saying I borrowed from somewhere years ago. I can’t remember from originally where, but I borrowed it and then modified it a bit adopting it as my own little mantra, “I can be right, or I can make money.” As a real estate investor you will encounter a number of different personalities, perspectives and agendas. These differences invariably lead to multiple events of miscommunication, disagreements and sometimes flat-out hostile arguments and disputes. The more heated they get, the more likely your are to end up in front of a judge. We live in a litigious society, and real estate is a litigious industry. Nobody wins in court. Even if you win, you lose. After the attorney fees, your time, opportunity costs and stress, it’s never as profitable if you had taken the high road up front, avoided court altogether and moved on to your next deal. Being right creates enemies, slows you down, and it’s expensive. Give it up!

There you have it, the ten things you must give up to become a millionaire real estate investor. Do with this information what you wish, but I encourage you to learn from these and others’ mistakes for you won’t be here long enough to make them all yourself.

If you learned something today, you would have our deepest gratitude if you were to share it forward to your online community via the social media icons below. Thanks!

Paola Martinsen is known as the short sale queen. She is certified as a Short Sale Genius and Negotiation Expert, which puts her in the top 1.5 % of real estate agents nationally in the short- sale arena. In 2005, Paola negotiated her first short sale and since then her team has successfully closed over 300 deals. Trained and mentored by Lee Honish, a former bank negotiator who worked with several of the nation’s top banks for over 20 years,and managed a portfolio of $50,000,000 in collateralized assets. Paola specializes in helping investors purchase short sales and bank owned property.

 Many real estate investors shy away from the ugly house business because they fear hiring contractors. We have all heard the horror stories of rehabbers who loose their shirt because a contractor took them to the cleaners.

I am here to tell you that contractors can be your worst enemy or your best friend, depending if you hire a good one or a bad one. So how can the beginning novice real estate investor make the correct choice- the hard working team player that gets the job done on time, on budget and at a high standard of quality?   The answer is by following all eight of the critical prescreening steps below.

1. Ask the contractor you are interviewing, how long they have been in the business?  I prefer at least five years of experience in the trades. I want a contractor who has seen and repaired every strange, odd, and crazy thing that could be wrong with a house. Experienced contractors know how to estimate all tough projects and experienced professionals can give an accurate price to fix any problem.

Inexperienced contractors, on the other hand, under estimate repairs to get the business, and then they try to push their mistake on the home owner by upping the price half way through construction.  The investor needs to say NO. NO is the most powerful word in the dictionary, and a rehabber needs to use this tool.  If they did not have the knowledge to make a good estimate, it is there problem not yours.

2. Ask for three references from the last three major projects that the contractor has recently completed. Once you receive the reference letters, make sure you call to verify the references and the quality of the workmanship performed. The quality of work should be satisfactory to the homeowner and should have been completed in a timely manner.

If any of the references don’t checkout, do not hire this contractor.  If they gave you false information upfront, you know they can not be trusted.  Move on to the NEXT quote.

3. Ask for a copy of the contractor’s license (if required in your state) and for a copy of their workman’s comp insurance. Once you receive a copy of their license, make sure to check that they are not suspended. Also check to see if any complaints have been filed against the contractor with the Better Business Bureau.

It is absolutely mandatory that a contractor prove that he or she has workman’s comp for all the employees that will be working on the job site, before they start renovations. Why is this so important? Well, if one of the workers has an accident, you do not want to be sued as a potential employer.

4. Make the contractor pull all necessary permits required by your local building department. The homeowner should NEVER pull the permits. The contractor should also be responsible to pass all necessary inspections required throughout the construction process so a certificate of occupancy (CO) can be obtained when construction is complete.

5. The real estate investor should make it mandatory for all contractors to buy all necessary materials to do the renovations. The investor should never waste their valuable time buying materials. If the investor buys the materials, the workers could be viewed as the home owner’s employees per the IRS guidelines.  You do not want this.

6. The real estate investor should always demand a six month to one year warranty of all parts, labor, workmanship, and materials provided by the contractor. This warranty should be in writing. WARNING: If a contractor will not provide a warranty and stand behind the quality of his or her workmanship- DO NOT hire them!

7.  Real estate investors should never agree to pay any contractor by the hour. You pay a fixed price for the complete job. Never pay the final payment in your independent contractor agreement until the project is 100% complete.

8. Ask for financial references (ex: where the contractor purchases materials). I will contact the supply houses to make sure the contractor is not behind on paying for materials because I do not want to give the contractor a check to payoff an old bill and they have no money for the materials they need to buy for my job.

The last words of advice that I can give to anyone beginning a renovation project is to make sure every agreement with a contractor is detailed in writing with an independent contractor agreement. A detailed list of materials required should be listed in comprehensive scope of work.  The documents should have work completion time frames, penalty clauses for finishing late, require all permits be pulled and inspections completed before final payments are released.