In my first post I discussed the parallel between the most important rule in scuba diving and real estate. The most important rule is to breathe continuously and never stop breathing. In real estate, cash flow is like oxygen – it is what keeps us going.
In this article I will explore another parallel between scuba diving and real estate investing. In either endeavor, planning is crucial.
Before venturing down to depth, divers will plan out their intended dive to determine the depth(s) of their dive and the time spent at various depths. Whether using a dive table or a modern dive computer, it is important that a diver understand the dive plan before getting in the water.
Having a dive plan makes each dive more effective since divers see more of they want to see, spend more time at depth, and reduce their risk of decompression illness. Likewise, having a plan in real estate will help you produce the results you want to see, spend less time generating those results, and reduce your risk of loss in the process. When the results are known to be significantly better with a plan, why would you dive or invest without one?
Having a plan always sounds like a logical idea but where do you start? Well, here are a few questions you may ask:
- What are my objectives?
- What strategy best meets these objectives?
- Which geographic area and property type best meet my objectives?
- How will I fund my transactions?
- How much leverage am I comfortable with?
- Who will you include as part of your real estate investment team?
- What type of deals will you be making for your next deal, next 5, next 10?
By considering these questions you’ll have put some thought behind what you want to do in real estate and how you’re going to do it. Take the answers to these questions and others along these lines and combine them into a plan.
When you get clear on what you want and how you plan to get it, execution becomes much easier and you can take a more direct route to success. Leave the scenic route for your scuba diving.
photo credit: Adriaan’s Angles