Everyone has heard at least once in their life the old saying, “Don’t reinvent the wheel” (or some variation thereof). Its meaning is possibly one of the most followed truisms in the modern world—and it especially applies to real estate investing. There are a plethora of people, websites, and podcasts, all touting that their “system” or methods are paramount to success. However, I disagree with many of these statements. I believe that people get too caught up in trying to emulate successful real estate moguls, often failing because they are trying to become something they are not. One must understand that success is often built upon failure. And as I have heard on BiggerPockets multiple times, it is often built upon the failure of others. However, do not be afraid to fail. Just try to minimize that failure. Winston Churchill was quoted as saying, “Success consists of going from failure to failure without losing enthusiasm.” There are several explanations of what this quote means, but the one I like the best is found on the Quotivee website. “It’s the idea of being able to get up after falling down and continuing to move forward, rather than wasting time counting all the setbacks you’ve had. If you are able to learn from your mistakes and continue to strive enthusiastically, you will begin to embody the concept and idea of success. Being afraid of failure will not get you far in life. You will spend your time boxed in a comfort zone, significantly hindering your ability to succeed. Those who risk rejection have a higher chance at surpassing goals and turning dreams to reality.” Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free In my opinion, the single biggest appeal of investing in real estate lies in its diversity. Essentially, while it may not be a good idea to completely reinvent the wheel, so to speak, you can definitely “tweak” it to roll how you want it to. After all, the wheel is essentially a tool. Additionally, often one finds what works the best through trial and error—or in other words, failure. My brother and I now have five duplex properties and are currently dealing on others, as well as a commercial business. These potential projects may come to fruition, or they may fall apart. Either way, we have taught ourselves to follow the plan we laid out when we started, albeit with the occasional “tweak.” Related: 60-Day Newbie Challenge: 6 Action Steps to Land Your First Deal in 2 Months or Less I am not promoting failure as a required component of success. I am simply saying that if you fail, learn from that failure, and don’t fear it. Failure, or fear of failure, is why many people take so long to get started investing. There are mountains of information out there about how to invest in real estate, where to invest, what to invest in, and how to finance it all. Everyone I know—down to my cousins, uncles, and even pet hamster—has an opinion about what I should do or how I should do it with regard to real estate. The unfortunate thing is that with all of this information, it is difficult for the new and/or small real estate investor to choose a “wheel,” let alone reinvent one! Therefore, I want to offer several simple steps for weeding through this information and settling on a “real estate investing wheel.” What Works for One Will Not Work for All If you have been on BiggerPockets for more than about five minutes, you have heard of the BRRRR method that Brandon Turner is credited with creating. Buy, rehab, rent, refinance, repeat (aka BRRRR) is a technique where an investor finds an undervalued property in need of upgrades or repairs and executes the rehab, which in turn creates more equity in the property. (At least that is the bare bones of the plan.) What this article discusses is my version of the BRRRR method (sorry, I couldn’t come up with a cool acronym like Brandon!) and how it applies to other aspects of real estate investing. What I want you to remember is that what is right for one person does not mean it is right for the next person. Figure out what your best-suited strategy is, and exploit it. As anyone who has read my articles before knows, my day job is in law enforcement. One thing I frequently remind myself and teach new law enforcement officers is that “rank does not make you right.” Just because I am a supervisor with a rank of sergeant does not make all of my decisions correct. Remember this when reviewing the steps below. While Brandon Turner and David Greene are often correct, do not automatically believe that everything they say applies to your situation (even if it is the right information). Developing the Best Real Estate Investing Strategy for You 1. Get Educated I cannot stress this enough. It has been a key component of a couple of my other articles, so why change now?! Education—no matter what you do in life—is important. In fact, it is likely the most important factor in success. And whether it is “street smarts” or “book smarts,” education is paramount to one’s level of success in real estate investing. BiggerPockets has hours and hours of videos, blogs, and podcasts about anything and everything involving real estate. I’m serious, virtually EVERYTHING. Start here, stay here, and learn. The real estate investing information on BiggerPockets is some of the best and most diverse available on any of the real estate websites. Learn what worked, what didn’t, and what may work for others. Take notes, re-read, and have an open mind. The purpose of this phase is to allow you to “test” different methods or techniques, discover your comfort level, and figure out what type of real estate you believe will work in your situation. Take your education seriously. Because as with anything, preparation is key to success. 2. Evaluate Yourself Education may take weeks or months. But once you have done that (or at least have a firm grasp on it), then you are ready for the second step: Evaluate what you’ve learned. What interested you? What did not? What are you financially prepared for? What risk level do you feel comfortable with? Should you self-manage or hire a property manager? Are you a people person who likes sales, or do you prefer to go it alone and minimize your contact with people? What are your strengths and weaknesses? Knowing what you aren’t good at is just as important as knowing what you are good at. I am not patient, but I am good with details. I am not really a people person and am not particularly outgoing. (My wife is the EXACT opposite—go figure.) By acknowledging these traits, I know what I should or should not do involving our real estate business. The key is to be honest with yourself. And if you have a partner or partners, make sure you are honest with each other, as well. Knowing what you are capable of—or more importantly, incapable of—is going to have a large impact on how well you do in your business. I am almost 50 years old. I work with guys 20 years younger, who are more fit, have faster reactions, and possess waaaaay more energy than I do! However, I am also much stronger than the average guy. When we do “no knock” warrants, we normally set up in a four- or five-man entry team. The guy with the ram (who knocks the door in if it is locked) is the last guy in. He hits the door, steps to the side, lets the others in, and then is basically rear guard. You want someone strong enough to open the door with one or two blows. Incidentally, the ram weighs about 50 to 60 pounds. I used to be the first guy in. Now, because I know my limitations, I am the guy on the ram and the last one in the door. Don’t be afraid of what you know you can’t do. Instead, be afraid of what you don’t know you can’t do. 3. Refine Your Education OK, you spent months reading and watching everything and anything about real estate. (OK, maybe not everything but a lot.) You did a hardcore self-evaluation, thought through your partners (if any), figured out your risk tolerance, and nailed down your situation as a whole. Now what? More education. Yep, you read that right. Education is also the third step in this plan. Let me explain. This is the step where you refine your education. In step one, you educated yourself about real estate and (hopefully) a variety of options involving real estate investing. In step three, your going to educate yourself even more, focusing on no more than two or three options that appear to fit with your capabilities, financials, and all other aspects. The purpose of this phase is to broaden your knowledge and dig deeper into the details. For example, when we first started, our initial education caused my brother and me to focus on three types of investments: residential rentals, commercial rentals, and flipping residential property. While my brother is a very successful contractor, we learned from experience and our third phase education that in our area, flipping had too narrow of margins for us to feel comfortable. Furthermore, our financial situation was not where we felt we could focus on commercial rentals, as we learned they sometimes sit for months or have to be "built out" before being rented. Residential rentals seemed to offer the most direct path to what we wanted: retirement income. In addition, during this phase of education, we determined that multifamily instead of single family homes would work best for us. We were able to sort all of this out by furthering and refining our education. 4. Establish a Plan Finally, it’s time to build a plan. The first step of this phase (for us) was to develop a business plan centered around multifamily rentals. Your plan will likely be different. What the plan is does not matter; having a plan is what matters. There are many articles on BiggerPockets about developing business plans, and there are multiple free business plan templates on the internet. Most are similar in design, so don’t get caught up on the template. As long as it is detailed and has the time-tested criteria—who, what, why, where, when, how—it should work. Who is going to be involved? What are you going to focus on? Why are you going to focus on “X?” Where (local or out of state or both) are you going to purchase your real estate investments? When (or in what timeframe) are you going to purchase investments? We actually have a timeline of how many properties and when we will purchase them. DISCLAIMER: This timeline is just a guide to help keep us moving forward and does not mean we will buy something that does not make sense in order to fulfill our business plan. Nor would we pass up a viable property because we already met our quota for the year. Last but not least, how are we going to do all of the above? Remember to be realistic, and also remember that details matter. When doing reports at work, I always tell new hires that you will never get in trouble for putting in too much detail in a report. However, you may get in trouble for not putting in enough. A business plan is the same way. But at the same time, don’t try to detail every scenario that could happen. This is not what I mean. Detail the structure and the focus, but keep in mind step six below, which is updating this plan as you go. 5. Take Action Once you have established your plan, make sure you act upon it. Education without action is a detriment to your confidence and long-term goals. Remember that without action, your education is like planting a garden, carefully tending to it all summer, and then never harvesting. It’s a lot of work with nothing to show for it. If you have educated yourself and planned your strategy well, inaction should not be an issue. Related: 7 Steps to Move Past “What If” and Into Your First Purchase 6. Update as Necessary After every property evaluation or purchase, review your plan. Tweak it if need be. Focus on what worked, what didn’t, and what you learned. This may cause you to adjust your plan. My brother and I do this continually. We have explored options that at first glance seem to be attractive options, but after closer examination, we found they do not fit into what we want our portfolio to be. If something works, do it again. It is as simple as that. This goes back to what I believe is the true meaning of not reinventing the wheel. It does not mean that you need to do what everyone else is doing just because it is working for them. The reality is there are different levels of success that people doing the same things realize. Find what works for you, in your situation, in your area, and with your risk tolerance. You may fail a time or two. But when you find what works for YOU, repeat! If it needs tweaked, don’t be afraid to make adjustments. However, don’t “reinvent the wheel” at this stage. Just like the BRRRR method, this is not a one and done process. Instead, it should be followed with every purchase—whether your first or 100th. The Bottom Line Much of the above I have touched upon in previous articles; some I have not. The most important thing you should take away is that what others do should act as a guide for what you do. Their experiences are simply a tool to be used to your benefit. Some other successful investor’s method should not be the only tool in your belt—and it might not be the best tool either. Once you understand this, your real estate investing outlook will undoubtedly improve. After all, a wheel is ultimately just a tool. Questions? Comments? Let’s chat in the comment section below.