The Information Paradox that’s Sabotaging Your REI Business

The Information Paradox that's Sabotaging Your REI Business

I get it, information can be overwhelming.

By now, we all know that the more choices someone is given in the first place, the less likely they are to make a decision. This grows even more when we look at each of these choices with a massive financial obligation (like the purchase of a property) attached to it.

It’s no wonder one of the biggest concerns on this site is analysis paralysis.

It would be eternally simple if there was one path that everyone could take. Simple, but boring. If this were the case then there would be no barriers to entry for starting your own business and everyone would be doing it.

It’s these barriers to entry that keep it exciting. You know that if you’re doing the same thing as someone else in the same area, then chances are you’re not going to do so well. This is the case regardless of what type of business you have, unless you can provide something that an established business can’t then you’re going to have a bad time.

It’s because of all this that we develop different tactics and niches, but is it too much? It brings us back to my first line, a paradox of sorts, information can be overwhelming.

Death by Tactics

There are two types of people who read content like what is here on BiggerPockets. Although they don’t want to admit it, there are those who will never become real estate investors and those who will. Those who will never invest in real estate are simply doing this for entertainment, they don’t know they are, but it’s what’s happening. Even though they have the best intentions, they will never buy a property as an investment. It’s the other type of person, the one who will most likely invest in a property at some point in their life, is who we’re going to be talking about today.

In an ideal world, everyone would have the content that they need and only what they need right in front of them at whatever stage of life they happened to be in. Unfortunately, this is impossible. We can’t all have someone following us around, telling us what we need to do next, maybe that’s why the urge to have a mentor is so huge.

What we do have though, is a ton of content that has no focus whatsoever, so when we combine that with a newbie investor who also has no focus, we run into the problem of information overload.

It’s easy to get caught up in all of this, I completely understand why it’s happening; tactics are juicy and exciting, people want information that they think they can use, but are we using this content as a vehicle for growth, or as a form of entertainment like the people who will never be investors?

I’ve said it before; learn what you need to know when you need to know it. Most people are either caught up in the past or the future; it takes effort to live in the present. Make that effort.

We Give People What They Want

People want to learn things that are new and interesting, especially if it builds on a belief that they’ve had in the past. They don’t want to learn about old, dry, and boring subjects that have been covered a million times in the past, even if those subjects are what really keeps the money coming in.

Think of it like a pyramid, without building one area of yourself or your business enough, it won’t be able to support anything else.

Mindset: The base of your pyramid. Your mindset is a difficult thing to describe, but included in it is your confidence, motivation, and commitment. There are a lot of people who think that they are in the right mindset after they get fed up with working for someone else and try to move on out of spite. The motivation is there, but without the commitment and confidence, it will falter almost immediately. This is known as burnout.

Business Fundamentals: The next level up. Business fundamentals is also a supporting part of a person’s business that isn’t paid much attention. Think of this as your market strategy, accounting, and financials. With all of the immensely important parts involved in your fundamentals, it’s amazing that people don’t pay more attention to this side of things. This most attention I usually see with this is marketing, which is important, but it’s not going to get you anywhere if you’re in the wrong market or you’re pricing your deals incorrectly, which I see all the time.

Tactics: We’re finally getting into the upper end of the pyramid. This is where things start to get fun, but, and I cannot stress this enough, you need to start with the base of the pyramid. Tactics are things like financing strategy, negotiation skills, and niche. I’m not saying that these things aren’t important, they are absolutely integral to your business, but there is no way that a business can survive on tactics alone.

Miscellaneous: The top of the pyramid. This is the one that really gets my blood going, I could write a whole post on this, but let me just cover some of the basics. The top of the pyramid includes things like business card design, color of paper to send marketing letters on, website design, and logo. Business owners spend hours upon hours on minutiae like this and it gets you almost nowhere. You might think that the success or failure of your business depends on the color scheme of your website, or the type of font on your business card, sorry to tell you, but you’re wrong. These are the things to play with after you’re established and are trying to squeeze the most out of your business as possible (a point that ost people never achieve).

Most people have this pyramid turned upside down. They focus on the minutiae and expect everything else to fall into place. I see it happen all the time: someone learns about a topic, decides they are going to do it, spends a month building a website, and promptly quits. Do yourself a favor, build the base of the pyramid first, so you’re not coming back to it later.

What are your thoughts? Have you experienced something like this in your business, or someone that you knew well?