Do you feel like you’re doing all the right things to start or grow your real estate business, but you’re still a few moves away from getting traction? Maybe this is in the form of income, the size of your business, the number of units you own, or the amount of passive income you’re bringing in.
All of those factors fuel your growing desire to quit your life-sucking day job. Or maybe you want to get your spouse home from working 80 hours a week to spend more time with your children. Or heck, maybe you just want to get your first flip deal or rental property after months of spending time learning but not really getting into the game. These moments create massive frustration, but also set the conditions to move beyond the rut you are in.
There are a bajillion (yes, bajillion) articles, books, and podcasts on how easy real estate investing is. That’s great—but what about you, right!? What is it about your personal situation that you’re not achieving this same success? And how can you change that? It’s time to take a different approach.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Find Clarity in Your Dream
I spend at least four times a year at a real estate mastermind full of extremely successful real estate investors. One of the things I’ve found to be true with nearly all of the group is that their path to success is extremely clear. I’m not talking “get rich” or “I’m going to do a bunch of deals this year.” Those statements don’t paint a crystal clear picture. As a group, we collectively talk about these goals in high detail, not in gross generalizations. We ask questions and push each other to make the proper adjustments to have those outcomes. We also ask hard questions and help each other work through difficult problems.
Instead of having a very broad and unspecific goal, start tactically stating your monthly, quarterly, yearly goal, such as, “My target for Q2 in 2018 is to increase the number of deals we buy to flip to retail MLS by five and reduce our number of days under construction by five days. In 2018, we will complete 100 flips, have an average return on investment of 18%, and achieve a net profit margin after all expenses of 12%.” If you are just starting, that goal may be more like, “I want to buy my first rental this year and plan how I’ll have the funds and financing to lock down and close on two rental next year. My target price per deal is $125k, and my cap rate is around 7%.”
Then, attach a “why” to it: “In 5 years, I want to have 50 paid-off rentals, passive income equal to five times the cost of my lifestyle so I can do what I want, when I want, and travel 6-8 weeks a year with my family.” The big “why” can’t be “I want to get rich in real estate and do a lot of deals. I’m going to hustle and have lots of money.”
Do you see the difference? One seems like it might as well be creating a rocket ship to Mars in your backyard, built out of Legos. Who knows what “hustle” really means, anyway? The other has a clearly defined activity, result, and purpose behind it. The clarity in the “why” is what makes it so compelling to execute, because you understand what the target is. You’ll be motivated and driven by this goal and obsess over it every moment until you finally see it come to be.
Related: The 7-Step Motivated Newbie’s Guide to Finding a High-Quality Mentor
I also personally spend most days with my journal, reviewing these goals and what I need to do to make sure they become reality. It’s not just about writing your goals out. You have to live with them. Dream on them. Pour over them. Keep them fresh in your mind, and ensure your actions align with them.
Track What Matters
To be fully transparent, I am personally pretty terrible at little details and tracking; I am a big picture person. So, it may seem hypocritical for me to talk about all this tracking when I’m not very good at it. However, I have learned to work with and trust people who are awesome at this. I have come to understand the need for this level of detail and how to bring these details back to a high-level view and execution.
I’ve also learned the importance of listening to and understanding the position of these detail-oriented people. If you are a big picture person, there is zero room for excuses here. Find people who are good at it. Ask them to help you. Empower those people you trust to help hold you and your team accountable for the results.
Our business now has pretty sophisticated metrics. These metrics are tied with spending by the job, timelines for production, for sales, average cost of sale, cost of construction, etc. This kind of data didn’t happen overnight.
We relentlessly review all our numbers by week, by month, and by quarter, all across our organization. We then review the data back to our original weekly, monthly, and quarterly goals to compare where we are relative to our target. We then assess what adjustments we need to make.
So, so you have this dream, you have your “why,” and you think you are doing all the right things, but the end result doesn’t equal what you were expecting. Now what? Are you going to quit? Make excuses? Blame it on your team or your contractor?
Or are you going to take account of what really happened and ask hard questions like:
- What can we do better next time from a high level?
- How can we provide more context and clarity for our desired outcome?
- Did our team understand what the goal was?
- How can we better communicate to our team during the process?
- Were we leading our team to the desired outcome, and if not, how do we lead our team better?
- If we have to pick one place to dive into and focus attention, where would it be?
Our specific metrics and tracking came out of extreme frustration from making assumptions. We were tired of not having the outcome we were dreaming about. The hardest part of this entire process is that it takes time. It takes tweaking and unbelievable patience. Always aim to gain clarity on the desired outcome beyond what is rolling around in your head.
If you have stayed with this blog post this long, you are no doubt at some place in the journey where you are asking these same questions. Keep in mind, it doesn’t matter if you are on your first few deals or trying to scale to 50 or 100+ deals in a year. The activity is the same, although the questions and problems may differ.
Related: 7 New Self-Development Books That Might Just Change Your Life
Review your goals. Make sure they are in line with what you are actually thinking about. Review your metrics. If you don’t have any, start with a few key points. Not sure how to do that? Ask someone great at it for help. Hold yourself and your numbers accountable. Don’t be afraid when you fail. Grow as a leader and investor, and enjoy moments of learning.
Grow your why. What about your family? What about the vacations? Where to, for how long? What kind of home do you want to live in? Where do your kids want to go to college? The more clear you are on this, the more tangible connection you have to it, and the more driven you will be to see it become real.
What roadblocks have you run into starting or growing your real estate business?
Weigh in below!