The #1 Most Important Lesson in House Flipping
As I’ve probably mentioned here on this blog, we are now doing a local MeetUp for real estate investors, tradespeople, Realtors and anyone who is interested in house flipping and buy-and-hold real estate investing.
Our rationale for starting our local MeetUp wasn’t to shill educational products.
The primary goal was as follows: although through REIAs investors and people get together to network, share and learn – we felt it wasn’t enough.
As many people probably know read here on BiggerPockets, I run a house flipping business as my primary business.
But one of the most frustrating things for me when I first got into the “education” business (so to speak) was the fact that so few people took action on the things that we espoused both on posts here on this awesome platform as well as on our own site.
Although not every single piece of content I’ve ever written is Pulitzer prize-winning material, the basic message is the same over and over again:
Fortunately, my real estate investing and house flipping business is going extremely well right now and I’m very fortunate thankful (especially at this time of year) for all the good fortune I’ve had building my team and making money doing something I truly love.
But more importantly is the feeling I get when doing what I do instead of the actual moneymaking part of it all.
More important than the money we make on our house flips is the feeling I get when we improve local neighborhoods, provide clean safe beautiful living space for a new family and help others achieve their dreams as well as gain continued employment in the many industries and people who help us with our flips.
As much fuss as there is about “making money flipping houses”, it’s not my true motivation nor is it the true motivation of anyone on my team.
David Versus Goliath and the Lessons Learned
There’s a new book out called David versus Goliath by Malcolm Gladwell. Although I haven’t finished reading it yet, one of the first chapters is about the correlation between making money and happiness.
I found this chapter to be extremely interesting because Gladwell – who does exhaustive research on each and every topic he ever writes about – stated scientific evidence that there is a strong correlation between the level of a person’s happiness to how much money they actually make.…up to a certain point, then it drops off considerably.
This was absolutely fascinating to me.
He said that far more important than money to someone’s happiness is the feeling of “contribution” in what they do professionally. He states in the book that at roughly $75,000 per year, you’ve reached a peak in your happiness with regard to money providing happiness. Anything after that, there’s a downward slope of diminishing returns.
Although I don’t necessarily agree with the $75,000 per year in income (in my opinion it would be a few times that), the logic was fascinating.
The analogy he used in explaining this had to do with health and wine.
As many of us know, having one glass of wine each night has a positive impact on your overall health.
If that consumption goes up to 2 to 3 glasses per wine per night, the positive health effect starts to diminish and somewhat level off.
When you exceed 2 to 3 glasses per night and go into the four, five “kill the entire bottle”, the effect on your health is obviously negative and somewhat harmful.
He states that the same thing happens with wealth – citing the $75,000 mark as that point of diminishing returns.
Fascinating stuff in my opinion…
Intrinsic Motivation in House Flipping
What does this have to do with house flipping?
Getting back to the reason why we started our meet up …
We certainly didn’t do it for the money – although with coaching and educational products, we all know there’s an enormously rabid industry for this. We decided to do it because of our mission and what we want to do to help other people.
Even if I never make a cent from our MeetUp group, the rewards so far has been tremendous. The idea of surrounding yourself with like-minded individuals who all really want to be successful in the exact same industry you’re in is unlike any other feeling I’ve experienced.
The feeling I get when I speak with others to help them achieve their goals – whether it’s financial liberation from a job or just a few thousand extra dollars to help pay down credit card debt, it’s the feeling of helping and empowering others that really makes me feel tremendously good.
And my sense is that this is what Gladwell was talking about in a roundabout way in his book.
Push-ups and House Flipping
Having said all that, once I try to help someone though, it’s really up to then whether or not they take the bait, do something about it and take the first step on the road to success.
As someone wrote in my last blog post here on BiggerPockets:
“You can’t hire someone else to do your push-ups for you.”
– Jim Rohn
No matter how hard a coach, mentor or someone who just wants to help can push someone to do something, the coach can’t do their push-ups for them!
So what happens to you if you do read the mountains of helpful information here on BiggerPockets, cruise the Internet for how to flip houses or maybe buy a couple of Kindle ebooks on house flipping…only to do nothing?
Where does that actually get you?
It gets you nowhere. You now have all this knowledge in your head – all this stored energy – but you never actually put it to use.
It’s like having a Lamborghini sitting in your driveway and never taking the tarp off to take it out for a spin…
The Most Important Lesson in House Flipping
Why do people NOT take action? I’m not completely sure but I have an idea. It’s likely the result of just plain fear.
And excuses…man, I’ve heard them all.
Maybe it’s the fear of things not working out so you just decide not to even try at all…
But here’s something that was burned into my memory banks ever since I was a boy by my father. He was an old Italian who had no real formalized education but he definitely knew business and he knew human nature.
He told me that the REAL key to success, whether it’s in house flipping or anything that you do is this:
What happens if you try something and it doesn’t work? Try again!
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And if you try again and it doesn’t work. What do you do? Try again!
And if you try again and it doesn’t work. What do you do? Try again!
The common thread in this age-old wisdom, trying and DOING.
Notice that there is no “read hundreds of articles on BiggerPockets, go to lots of REIA meetings and then do nothing” – in this advice from the old man…
Instead it’s get out there, take action, learn what doesn’t work, take more action, learn what doesn’t work again and keep taking action until you successful.
Pivot, learn, pivot, learn, pivot, learn…
Simple advice? Probably. But not SIMPLISTIC by any stretch.
The Power of Taking ACTION
Something happens to you when you do something that you haven’t been able to do before. It’s this feeling of empowerment and accomplishment – a great feeling of having conquered something you otherwise thought was unachievable. This is the whole “success breeds more success” principle.
And when it happens to you for the first time, you’ll never forget it for as long as you live.
But the first step is to actually go out there and TAKE ACTION. And although I know that most people won’t, what do you have to lose if you do?
And if its true that the be-all end-all of making money in a year in fact does cap out at $75,000 per year, “making money” probably shouldn’t be your true motivation anyway.
It should be that irresistible feeling of accomplishment and having done something that you never thought you were capable of doing before. And THAT makes you feel tremendously successful and is its own true reward…
If you’ve made it this far, please leave a comment below. What you think, what is the key to success? If you have an opinion, please put it in the comments section below, I’d love to hear your thoughts.
Photo: Trey Ratcliff