Thanksgiving planning is a lot like real estate investing
While preparing to orchestrate our Thanksgiving feast tomorrow, it occurred to me that in many ways (while the analogy is not perfect) this week has been much like my last year (on a much smaller scale). As per my recent post, my husband and I purchased, rehabbed, rented, and refinanced a 4-plex this past year. I've had several e-mails asking me for advice (weird! I'm still new at this!) and I think the cooking analogy is a great way to express that.
My mother-in-law (who has admitted herself that she is not a great cook) once looked at me in bewilderment and asked how I made all of the dishes in a meal come out at the same time. I kind of laughed and told her "It's not magic, it's just preparation." And in this respect, real estate investing and meal preparation are similar - to someone who doesn't know how to do it, it looks daunting, bewildering, and magical.
I'm a lists kind of person. I have lists for everything (even for my lists!). And as I made my Thanksgiving meal list the process felt very familiar to all the planning over the last year to make our first deal come together, keep the rehab going, and get in and manage tenants.
Phase one: research. What kind of dishes will you serve? What are the dietary needs of your guests? What is your budget? Boy are these all directly relatable! What kind of properties are you looking for? What are your goals? What is your budget (hey didn't even have to change this one!)? Identify what you know, what you need to know, and what you may never know (and who to hire that knows it!).
Phase two: pre-planning. Where will you get your groceries? How will you send invitations? What dishes can be made ahead? Pre-planning helps you figure out how to set up things so you can put your next step (tactical planning) into action. It identifies any areas you need to define further, tools you need to prepare, etc.
Phase three: tactical planning. What time does the turkey go in? What time do I need to start the mashed potatoes? I could go on. But you get the idea. Tactical planning is taking everything you've learned and prepared and listing step-by-step how you're going to do everything (note: something I don't really do for meal planning that I did here was also list backup plans for any areas where things may go awry, though maybe that's not a bad idea for meal planning too!)
Phase four: go! Prepare your meal, enjoy your meal! Or....go buy that property, do your rehab, etc.
Phase five: cleanup. A great time was had by all and now it's time to....do the dishes. Scrape the cranberries off the wall that my toddler decided he didn't like. Deal with any family spat aftermath. Or in terms of our deal....manage tenants. Haha. :) Point being that even when you're done, you're not done. So be prepared for that phase too and don't blow all of your resources (time, money, energy) before this step. Save some, because you're going to need it!
Okay, that's enough of the analogy, but you get the picture. A great Thanksgiving meal starts with a lot of planning. And the more you do, the smoother they go. Though there's always something that throws a wrench in there somewhere, but hopefully its a successful experience just the same. And if it's not, well, there's always next time!
Happy Thanksgiving, everyone!