Mortgages & Creative Financing

“4DX” for Real Estate Investing: a Simple Plan to Execute Your Strategic Vision!

Expertise: Real Estate News & Commentary, Business Management, Personal Development, Mortgages & Creative Financing
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“Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world.”   Joel Barker

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Imagine this: your  alarm goes off at 6am and you scurry to shower and get ready.  You rush out the door.  You join the hypnotized masses as they wind their way to work. Your thoughts drift to the problem. The problem is you been reading some provocative books.  

Books like Rich Dad, Poor Dad.  Books that make it painfully clear you’re either getting wealthy or making someone else wealthy.  Yet you seem to be unable to work your way through the fog of opportunities. You arrive at work and began to crank out an avalanche of TPS reports (think Office Space.)  You arrive home watch a little TV. Eat dinner and read  BiggerPockets for a while. Just before you lay your head down at night you think “someday I’ll invest in real estate”.

A solution to the pervasive gap between the problem and reality can be found in the book 4DX or the 4 Disciplines of Execution by Sean Covey, Chris McChesney, and Jim Huling. (from the same organization that brought us 7 Habits Of Highly Effective People)

The Four Disciplines are as Follows:

  • Focus on wildly important goals
  • Act on lead measures
  • Scoreboard your results versus you goals
  • Accountability:  create a culture of accountability in your world

The attractive feature of the system is to simplify execution and remove distraction.  The human brain can only process 7 bits (plus or minus 2) at any one time.   This system cuts through all the background noise and elevates what is key.
4dx mindma

1.) Focus on wildly important goals (WIG’s).

The keys to selection of WIG’s:

  • Narrow it down to two or three WIG’s.  4DX  asserts almost impossible to execute more than that to a level of excellence.
  • 4DX is meant to cut through the whirlwind of daily activity
  • Multitasking is your archenemy.
  • There will always be too many good ideas
  • 80/20 rule:  a few things are responsible for the majority of your outcomes (For more on this point read The 4 Hour Workweek by Tim Ferriss)

2.) Act on lead measures:

  • Focus on inputs versus outputs.
  • A lead measure is the input or work effort
  • A Lag measure is the output or result
  • Example:  The number of properties you purchase is a function of the number of offers you make offers you make. The number you of offers you make is a function of the number of leaves you generate.
  • Example: Net wealth is a function of assets minus liabilities. Which is a function of net cash flow over time.

3.) Scoreboard your results versus you goals

  • Keep it simple
  • make it visually compelling
  • Does it Show both lead and lag measures?
  • can I telling glance if I’m winning or losing?
  • Excel spreadsheets are perfect tool for this.

4.) Accountability:  create a culture of accountability in your world

  • Adding an accountability partner is key
  • Report your results as: “the last time I committed to X result. I am at Y outcome so far.”
  • Utilize the scoreboard as a central focus of the accountability meeting or session.
  • Focus on corrective actions to remove obstacles.

A Real Estate Investing Example

For example, lets assume your objective is to wholesale your first single family home.  Lets break down how 4DX will fast track your plan to a successful conclusion.

FOCUS on your wildly important goals

  • WIG: Generate 100 leads per month

ACT on LEAD measures

  • How will you market??
    • Number of direct mail pieces sent out?
    • Number of bandit signs placed?
    • Number of drive for dollars houses that I called on?

Keep a compelling scoreboard:  Use Spreadsheet to track goal versus results

Find and accountability partner and report results:

  • Test operate test exit
  • Refine on your way
  • Success is the child of persistence

Overall the 4DX model is useful in almost any context.  Weight loss anyone? Have a savings goal?  If you are at all like me implementation is the bridge to success across the river of distraction.The 4DX implementation model provides an excellent tool to break through the whirlwind of day to day. Life has a way of getting in the way.  When we focus all of our efforts on one or two important things it greatly enhances the chances they will be accomplished.

Resources for further study:

http://www.4dxbook.com/blog/category/the-4dx-book/

Books

Rich Dad, Poor Dad by Robert Kiyosaki
The  4 Disciplines of Execution by Sean Covey, Chris McChesney, and Jim Huling
The 7 habits of Highly Effective People by Stephen R. Covey
The 4 Hour Work Week by Tim Ferriss

Photo: Peter Guthrie

Douglas Dowell J.D. is a commercial and multifamily investor. His blog will focus on legally raising private money, risk mitigation with due diligence and management science. He is also an avid stu...
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    Matthew Riley
    Replied over 6 years ago
    Interesting article. For those that don’t do real estate investing, the concept can seem fairly straight forward and almost easy to get into. Those having real estate knowledge know it can be very difficult to get started. It’s like breaking through a brick wall. You keep hitting it and hitting it until you finally break through. After that the wall is down and it’s easier to get through going forward. Your article does a good job of providing focus points. I believe of the 4DX, the most important is the focusing on wildly important goals and accountability. It’s easy to get distracted and easy to not hold yourself accountable when you don’t delivery results. I really like the idea of an accountability partner, someone that can ensure you’re working on your goals.
    Douglas Dowell from Olathe, Kansas
    Replied over 6 years ago
    I agree Matt. I seems to me the central problem with real estate is that there are 100 major ways to make money. The bright shinny object syndrome has been my arch enemy. Have a narrow focus and execution has made a world of difference. I agree accountability partners are nearly priceless as you mentioned as well.
    Sharon Vornholt
    Replied over 6 years ago
    This is definitely a book I will pick up. Thanks Douglas. Sharon
    Douglas Dowell from Olathe, Kansas
    Replied over 6 years ago
    I think you will love it Sharon….its a gem of a find. Its also universal in application for any goal for any area. btw love your blog! It has been extremely informative on direct mail campaigns.
    Sharon Vornholt
    Replied over 6 years ago
    Thanks for the kind words and for reading Douglas Sharon.
    Nick
    Replied over 6 years ago
    Doug….Yet again a great article! I can’t wait to see more of the helpful info you put out!
    Damien Rance from Worcester, MA
    Replied 4 months ago
    Hi Douglas, Thanks for the great article. I am currently reading my way through "The 4 Disciplines of Execution" and am up to installing discipline 1. I see you've generated you're WIGs based on being a wholesaler. I am trying to buy my first multi-family investment property through an FHA and am having trouble coming up with a WIG. I want to purchase my first investment by March 3rd which is a little under 90 days. Do you have any tips on generating WIGs, or lead measures based on my situation? A lead measure I thought of is "analyzing 10 deals a week", but am having trouble with clarity of the WIGs. Thanks again for the great read.
    Douglas Dowell from Olathe, Kansas
    Replied 4 months ago
    Hello Damien, I would say you are on the right track with analyzing 10 deals per week. I would also add # of agents that you speak with. To meet that strick of a deadline it would be wise to add them to your source of deals. Off-market is great but to if speed is your primary objective I would add agents with small multifamily listings to your deal sourcing. The other question is what is your marketing campaign? Direct mail or cold calling owners direct? Some numbers The Fha Fourplex loan is a great option but I would imagine it will be a challenging market to find something that cashflows during the house hack.