I am often asked for the recipe for success in real estate.  While my quick response is always “buy right,” that only scratches the surface.  What do you do when you close escrow to maximize your investment?  This is a different answer.

The secret is to LISTEN.  While it is easy to simply think, “of course I already do that” but then you wouldn’t be listening to me.  My entire career has been built on what has come through my ears and I’ll explain through my story.

My father told me while I was in high school that investing in houses had been very profitable for him.  I asked him to tell me why and I learned a valuable lesson: most people will share their knowledge if asked (even if they are not your Dad).  He gave me many ideas to think about and a seed was planted which would later germinate.

After college, I decided I wanted to find a way to make some extra money and enhance a future retirement so I thought back about the conversation with my Dad.  I then signed up for a seminar given by a person who had been very successful in purchasing distressed homes.  At this seminar, I listened intently and asked many questions (and followed up by calling with even more questions).

I bought some houses and was enjoying some success in my new part time venture.  While hanging out with one of my childhood friends, his father (who had never discussed business with me in the past) asked about the investing he heard about from his son.  After sharing, he told me that I should look at buying apartments and explained the lower cost per door and economy of scale.  I listened to him describe the “right deals” for him and how he had made a lot of money buying multi-family properties.

While under contract for my first apartment purchase (a 7 unit foreclosure), I hired some professionals (plumber, roofer, electrician and contractor) to assist me in inspecting the property.  I listened intently as they shared likely problems I was going to have as well as issues that had to be dealt with right away.  In some cases, I have opted to not buy properties which I thought were going to be smart investments based on listening to those who know far more than I do about these different trades. For this initial apartment purchase, their reports assisted in my getting a price reduction from the bank.

When I am at an apartment complex, either one which we own, manage or are considering buying, I ask, “how do you like living here?”  The answers I’ve received are often astonishing and have lead to further investigations which have caused management changes, tenant evictions, police intervention, my not buying a deal or my completing a purchase.  What better local expert than someone who lives at the property and in that submarket?

Further on that thought, who better on your team than the on-site manager to share the problems at the property and more importantly how to fix them.  The danger that we all face after attaining success is that we can fall into the trap of thinking we have all of the answers and dismiss other opinions too quickly.

At different industry events, I’ve met people who have given me fantastic advice and also leads on some great purchases.

My wife who is a traveling occupational therapist was treating a client in their residence which was an apartment in a 51 unit building.  They mentioned that I should buy this building since the owners died and nothing was happening.  I listened intently and did not discount that many leads do not pan out as you just never know.  It turns out that we were able to buy the property through probate at a deep discount.

While I could attribute my success in the apartment business to many different factors, none are more important than the ability and discipline to LISTEN intently.  Besides, the easiest way to convey respect to another person is to simply listen.

And the fringe benefit of listening: “Better to remain silent and be thought a fool than to speak out and remove all doubt.”– Abraham Lincoln

Listen up!  An amazing education awaits…