Business Management

The Four Word Business Plan to Build Your Real Estate Empire.

Expertise: Real Estate News & Commentary, Business Management, Personal Development, Mortgages & Creative Financing
30 Articles Written
build your real estate empire

“Empires won by conquest have always fallen either by revolt within or by defeat by a rival.”
Colonel John Boyd

General Colin Powell and Norman Schwarzkopf exemplified world-class leadership during the first gulf war. However, as I later discovered the brilliant plan executed by those tremendous leaders was, in fact, crafted by a little known retired Air Force Colonel John Boyd.

Col. Boyd was in fact also responsible for the Top Gun schools operated by the Navy and Air force. He was in fact a true maverick.

What does that have to do with real estate? As much as you want it too.

The core tenet of this brilliant maverick is that to win any conflict you must collapse the opponent on themselves. The four steps to Col. Boyd’s dynamic strategy system are 1) Observe 2) Orient 3) Decide 4) Act. (OODA). This process contemplates continuously cycling through the steps based on changing information.

Can all agree investing is in ways conflict versus your competitors and yourself?

Therefore, consider the OODA loop in your business. To give a great example lets assume you are a fix and flip investor.

Step 1: Observe

Over the last few months you have been noticing great deals starting to decline. The margin has to be sufficient to justify all the effort. If not perhaps sipping a Mai-Thai on a sandy beach is a better use of time yes?

Step 2: Orient

You also can see because your margins are thinner that by definition your housing market will support spec build single family homes.

Step 3: Decide

This step just requires us to pull the trigger. Do we take advantage of the changed conditions? Keep seeing margins dwindle or head to Cancun?

Step 4: Act

This is the key ingredient of all success. We have to put aside doubt and any resistance and be willing to make errors. That is the only way to truly advance in life. Col. Boyd would surely agree with me that a decision even if a bad one is infinitely better than no decision at all.

“Tiger, one day you will come to a fork in the road and you’re going to have to make a decision about which direction you want to go. If you go that way you can be somebody. You will have to make compromises and you will have to turn your back on your friends. But you will be a member of the club and you will get promoted and you will get good assignments. Or you can go that way and you can do something — something for your country and for your Air Force and for yourself. If you decide you want to do something, you may not get promoted and you may not get the good assignments and you certainly will not be a favorite of your superiors. But you won’t have to compromise yourself. You will be true to your friends and to yourself. And your work might make a difference. To be somebody or to do something. In life there is often a roll call. That’s when you will have to make a decision. To be or to do? Which way will you go?”
– Col. John Boyd

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Photo Credit: paul bica

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 student of success principles with a focus on modeling success factors.

    Karen Margrave
    Replied almost 6 years ago
    Great article Douglas! For us, we moved to southern California from an area where we had worked for our entire careers. At first thought we figured the market would be fix/flips. However; we soon realized there was a feeding frenzy in that arena, and decided instead to stick with what we’ve always done, spec new construction. and it’s working for us!
    Douglas Dowell
    Replied almost 6 years ago
    Double kudo’s Karen…I think thats a part of your story I really found inspiring. #1. The geograhpic move takes some chutzpah #2. Have your years on market experience to know what strategy is maximum benefit for you Your firm is a case study for what staying flexible can do for you. Thanks for the comment !
    Dennis
    Replied almost 6 years ago
    All empires fall for one reason, maintaining an empire requires a very expensive military, which must be used often. No politician or general will inform you of this fact. An REI empire is much more capital efficient, one that should be self supporting, not taxpayer supported as is our American Empire.
    Jaz Cook
    Replied almost 6 years ago
    So very true. The fear of failure, being unwilling to take the decisive risk is often what keeps people from achieving success. Making the wrong choice can be devastating, but making no choice or always making the “safe” choice can be just as devastating.
    Douglas Dowell
    Replied almost 6 years ago
    Thanks for that Jaz, I have to agree the lack of lazer like focus on whats right and staying dynamic have been very troublesome for me as entreprenuer. NOT anymore.
    Bryan
    Replied almost 6 years ago
    Fortune favors the bold! Well said sir -Bryan
    Douglas Dowell
    Replied almost 6 years ago
    Thank you Bryan…my favorite quote ever is “Attack Life…its going to kill you anyway.”
    Brian Gibbons
    Replied almost 6 years ago
    One of the wisest REIs told me 20 years ago, “What is the best use of this seller?” Many flippers look for equity. “Thin deals” with little equity can bought sub2, wrapped, lease optioned, and exited with a straight rental, lease option or flipped. “What is the best use of this lead?” is my credo. Love ur articles, D.
    Douglas Dowell
    Replied almost 6 years ago
    Thank you for the support Brian, I think your the master of flexibility in the single family space. I think your approach of focusing on the needs of the seller is the purist form of high integrity selling. Creating a true win for your seller is a great way to ensure a sustainable business.
    Brian Gibbons
    Replied almost 6 years ago
    Doug, that was so nice of you to say. A book every agent should read is Shift by Gary Keller et al. http://www.amazon.com/gp/offer-listing/0071605266/ref=sr_1_1_olp?ie=UTF8&qid=1390144265&sr=8-1&keywords=shift+keller&condition=used Chapter 10 talks about Creative Financing for the Seller, These include: Seller Contributions, Seller Funded Permanent Buydown, Seller Funded Temporary Buydown, Owner Financing, Contract for Deed, Seller Second, Lease Option and Lease Purchase, and Wraparound – Assumable Mortgage. With Dodd Frank et al in the mix for buyers getting financing, Sellers need to know all their creative options to sell.