Say it as a kid, you get some soap shoved into your mouth. Say it multiple times in a script, you get a ‘R’ rating slapped onto your movie. Say it on a normal basis in your day-to-day conversations, people question your vocabulary.
Similar to “that” ‘F-word’, the ‘F-word’ for real estate is one that is also dangerously used way too often. While the intentions may be meant well, the fact remains that the ‘F-word’ is a bit too broad of a term for many real estate investors. The Guru types love (and I mean absolutely love) the ‘F-word’…
Whether your thinking of buying a Guru course, flipping a house, wholesaling a house or anything else you can do in the vast market of real estate, “fast” needs to be used and understood correctly.
Let’s take a look at some of these ways…
The Guru World
Guru: “Get Profits Rolling in Fast and Watch your Bank Account Expand”
Reality: There is nothing “fast” about profits in real estate. Unless of course you consider “research, networking, education, planning, scouting, and analyzing” something that is “fast”.
Guru: “The Fast Way to Get the Leads Coming your Way”
Reality: Leads don’t appear magically. If you are concerned with quality leads, you better not just rush out there and throw up bandit signs on just any old telephone pole. Where do you want properties? Where are the solid areas? Is you’re phone number easy to remember? This is the main one I see most often. People are trying to move too fast and they end up with a phone number that maybe 10% of people will be able to remember after seeing it for the few seconds as the drive by.
Guru: “The Fast Way to Grow your Business so you Can Head to the Beach”
Reality: Anyone who has ever started up a business knows how phony this is. There is nothing “fast” about starting up a business to the point where it runs without you there. Time, effort and persistence are only a few of the ways to get there, and none of them are “fast”.
The Real Estate Investor Flipping World
This is where the ‘F-word’ enters into a bit of gray area. Do flippers need things done fast? Absolutely. However, I still don’t like the word.
To me it comes with the connotation of “get it done at all costs.” Meaning, if I need to cut some corners here or there for the sake of getting it done “fast”, then that’s what I’ll do. If you find yourself thinking, “what’s wrong with cutting corners?” then you should probably reevaluate your business model.
There are many risks to cutting corners in order to get done “fast”, but the one risk that really sticks out to me is the inspection risk. Envision this…
You fix a house ‘fast’, hand it over to your real estate sales agent and tell them to market it as “fully renovated”. An offer comes in, the buyers order and inspection and then BAM! Prepare yourself for maximum embarrassment. The inspection report comes back with some glaring issues. Whoops…
(Note: I understand that no one is perfect, and inspectors are paid to “find stuff”, but I’m referring to the things that should have easily been noticed and addressed, but due to the fact of going too “fast” they were either ignored or overlooked.)
The Real Estate Investor Wholesaling World
Once again, we’re in gray territory.
As a wholesaler you certainly want to get marketing out to your buyers as soon as you have a property under contract with time being of the essence. You hear it all the time, you need to be “fast”, “fast” and more “fast” as a wholesaler to succeed. And while I agree, don’t take the word/concept too literal.
Let’s take a look at the marketing risk you open yourself up to by moving “fast”. Envision this…
You take a lead, check out the house, do some negotiating and get the property under contract. Yes! You speed home, and get it out to your buyer’s list, post it on Craigslist, and whatever other means you use. I see it all the time with wholesalers who I presume fall into this category. Their marketing, quite frankly, is terrible. There is a picture of the house, some ARV value and the price they are asking for it.
Where is evidence to support ARV? What kind of shape is house in? Realistic repair cost? Heck, I’ve even seen some marketing where they don’t tell me the number of bedrooms, baths and square feet. Silly mistakes for sure, but it just goes to show the details that can be missed when doing things for the sake of being “fast”.
The Real Estate Investor Landlord World
This area is a bit different. For the most part, it seems everyone “understands” that a quality tenant is the key to long term survival in this sector of real estate business. Where flipping and wholesaling have the overall stereotype of “needing to be fast”, in my opinion at least, with landlording, the overall stereotype is “needing to get quality tenants”.
This brings up the question, “If that is indeed the general stereotype, why all the horror stories?” I believe it is because people lose patience and once again, just want to get someone in their property “fast”. I personally can’t think of any other reasons. There is a wealth of knowledge here at BiggerPockets about screening and tools you can use, so for many, they get ensnared in the “I don’t want my vacancy rate too high, I need to get it filled fast” trap.
The risk here is pretty obvious. Fast leads to cutting corners, cutting corners leads to not properly screening (or lowering standards), and this leads to trips down to the courthouse and/or a poorly taken care of rental property.
The ‘E-word’ for Real Estate Investors
Maybe it is the engineer inside of me, but I am in love with the ‘E-word’. It’s sorta fun to say, somewhat fun to spell, but the definition of the word is a thing of beauty.
The definition: performing or functioning in the best possible manner with the least waste of time and effort; having and using requisite knowledge, skill, and industry; competent; capable
Whether you are flipping, wholesaling, renting, etc., don’t be “fast”… be “efficient”! If you are efficient with your strategies, this will in and of itself lead to being “fast” (the good ‘type’). Not only will it lead to being “fast”, it will ensure you are working “fast” while not cutting corners and saving yourself the embarrassment of an inspection report or a marketing piece that is missing key/basic information.
I’ve been listening to the Podcast that Josh and Brandon have been doing (if you haven’t, you are missing out!) and of the ones I’ve listened to so far, there is one common thread. None of the guests were ever worried about being “fast”, they were worried about setting up the proper systems and strategies of their business which leads to efficiency. Due to the efficiency in their business systems, they’ve been able to scale upwards and expand to points where they are doing quite well for themselves.
Remember, if I catch you using the ‘F-word’ instead of the ‘E-word’, I will personally come shove some soap into your mouth 🙂
What about you? Are you guilty of using the “F-word” instead of the “E-Word?” Let me know your thoughts in the comments below.