This is the second in a series of blog posts about the traits of successful real estate investors. I discovered these traits when I was in the process of fixing the problems in the early stages of my real estate investing business.

When I was a kid, one of the things I really loved to do was cook. That stemmed partly from the fact that I also loved to eat (I still struggle with my weight , but partly from the fact that I just enjoyed doing it.

The first thing you must do is start with the end in mind. Decide what you’d like to make, based upon what ingredients you have on hand. If you intend to make chocolate brownies, so be it.

Once you’ve decided upon what you want, you must combine the ingredients in the specific way described in the instructions. Then you cook it as instructed.

If you have followed the instructions, you will get the same result every single time. If you didn’t, chances are you’ll end up with a flop.

Sometimes even when you think you’ve followed the instructions, you end up with a flop. These are the chocolate brownies she tried to make yesterday. We’re still trying to figure out what to do with them

Real estate investing is very, VERY similar.

For starters, you take a look at your goals and your ingredients. Let’s say for instance that your goal is to create passive income with real estate. You need to look then look at the key ingredients for that recipe:

1. Financing lined up to purchase your target property.
2. An abundance of houses you can buy and finance in such a way that your tenant pays for the property.
3. A system for managing the properties from getting them ready to rent, doing the leasing, collections, maintenance, etc.

If you combine those ingredients in the right way, and you’ll get a successful cash flow property every single time.
The key to making this work every single time is to know your ingredients extremely well. That means gathering lots of intel on the neighborhoods in your city. You’ve got to know your pricing so you can tell a great deal from a situation where you’re going to get fleeced.

You’ve got to know the construction of the houses you are buying well so that you know in advance what upgrades you’ll need to make when you are doing your rehab.

Finally, you’ll need to know what your customers are looking for. How many bedrooms? Do they want central heat and air, or does that really matter to them?

Once you know your market really well, you’ll know what will work well, and what will flop.