“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.” – James Harrington
Wise words, but unfortunately I didn’t follow them when I began my real estate journey.
Before I bought my first property in Sacramento, I would drive for two and a half hours to Sacramento almost every weekend for 6 months. Unfortunately, I didn’t create a system to track: the 100+ houses I previewed, what I thought of those houses, and more importantly, I didn’t create a system to track the condition of the neighborhoods I visited. This was a huge mistake, and it wasted my time, gas, and sanity.
What is a System?
A system is a set of procedures that lead to a desired result. Have you ever noticed that no matter which Starbucks your visit, the drink you order is virtually identical to any previous order? That’s the result of a healthy system. A well constructed system creates consistency, saves time, and leads to a repeatable desired result. Without these systems, you will find yourself spinning your wheels, and you won’t know how to evaluate your decisions.
Beginning your real estate journey, you need to create systems with repeatable processes to create consistent outputs, and if you intend to survive in real estate, you need these systems to track what matters — be it a system to track potential fixers, buy and hold prospects, or potential wholesale deals.
Our First System: A Housing Database
A housing database is an example of a system. Without a housing database, you have no way of knowing which houses you visited, when you visited them, what you thought of the price at that time, what you were willing to offer, and more importantly, the status of the neighborhood.
Can you remember the house you previewed 3 years ago? Yes, we can all remember that one meth house we visited or the cat lady’s house that reeked, but can we remember the less noteworthy houses? More importantly, can you remember the condition of these houses? And the condition of the surrounding area?
Memories fade, waistlines grow, hair recedes (thanks, dad), and sadly, houses that could have provided us with steady income are forgotten. Yet properly built systems can last the test of time.
Once you create your database you will have the ability to quickly plug in a house into this database to do the following:
- Prescreen houses you find from the MLS, realtors, or wholesalers.
- Save valuable time and money from visiting a house in an undesirable area.
- Begin the due diligence process on a house before seeing it in person.
- Have a record of all of the offers you have made on houses and the sellers reaction to your offer.
- Track homeowners who are considering selling their homes months from now and the last time you have checked in with them.
This allows you to put perspective in what you are purchasing. More importantly, this is one of the first system you should create as an investor to develop the systems mindset. The systems mindset builds discipline, which allows you to improve your operations, scale your business, and eventually teach a vendor or employee your system so you can focus on other projects.
Creating Your First System: A House Hunting Database
There are numerous ways you can create a house hunting database: You can use a pen and paper, a physical map, websites, or excel spreadsheets. I wanted to focus on one simple system I’ve been using, but hey, if you know of a better way of doing this, please let me know!
Now, with Google’s MyMaps you can easily create a personalized real estate map to track all of the houses you previewed:
- Create a new map titled “Real Estate.”
- Enter the address of a house you recently previewed.
- Select a pin type. I use the following types of pins:
- House Pin: The property you own.
- Red Pin: The property you previewed but decided to skip.
- Green Pin: The property you will or have made an offer on.
- Bar Graph with Arrow: Neighborhood which meets your criteria.
- In the notes section of your pin you can list:
- The condition of the house.
- Condition of the surrounding neighborhood.
- Listing price.
- Your offer.
- The date you visited the area.
This is just one of the many ways to use MyMaps to track your Real Estate prospects. Feel free to tailor this system to your individual needs.
Do you use other methods for tracking homes you preview?
If so, let me know. Happy Hunting!