Making Time to Do Work that Matters

It starts with the basics of really what is the goal. People get involved in investing and you know as well as I do, people get involved in apartments or houses. And nobody really has a goal or an end destination as to what all of this real estate does for them. So, when I ask people, when people come to me and they say, “I want to start investing,” I’ll ask them, “why like what’s the reason?, because you’re a doctor, you’re an engineer, you’re whatever, it's not for the money right now so, what is it? What is that going to give you?” If you don't have a goal and you don't have a final destination, I can’t help you get there, because buying apartments, buying houses, flipping, those are not goals. That is the strategy that is going to carry you to that goal. So, I think a lot of times, our definitions are mistaken where we think owning an apartment complex is the goal, that's not the goal. That's the strategy that eventually is going to get you somewhere and so, I think that very, very rudimentary, I would say, sit down before you even buy a single door and figure out, “why am I doing this?” What is the goal in life? Is it to pass down to my children as a legacy? Is it to live off the cash flow? What is that, and identify that. And then from there, once you know the goal, then you create the strategy to get you to the goal. So, for example, if you said, “Our goal is to get to Disneyland today.” I would say, “okay. The strategy is what freeways we’re going to take to get us to Disneyland, because Disneyland is the end destination.” So, a lot of people don't do that. I was one of those people that I just got on the freeway and started driving northbound when Disneyland was westbound, I was just driving along, and I didn't know where I was going. They said, “where are you going?” I said, “I don’t know., I’ll figure it out on the road.” Well, you’re going the wrong direction, which means you’re spending a lot of time doing movement without being progressing towards the goal, again, I think thinking is more important than doing. A lot of times, people are so focused on the, “how do I do it?” They don't really think about the why, why am I doing this? I think that if people did that more, that would be the basis to even just start this whole thing off from there. It would be a very – I know it doesn't sound fun. It doesn’t sound sexy, but that's the reality of investing.

Listen to full episode: https://lifebridgecapital.com/2019/10/ws350-making-time-to-do-work-that-matters-with-steve-rozenberg/

Once you know your strategy and you know what you’re doing, then when you're looking at a deal, you can, first of all, decide, “does that deal align with my goal, and is that in lien with my strategy?” People always ask me, “well, should I do it or should I not?” I’m like, “I don't know what your goal is, if you're going westbound and your goal is northbound, then I would say don't do that.” The other thing I think a lot of times people get involved in deals, especially partnerships, and I ask them too. I go, “have you guys talked about the divorce, meaning have you had that discussion of if we have to divorce, what we do?” They say, “oh, no, this is my cousin, we’re related.” I’m like, “that’s even more of the reason that you need to have that discussion” , “this is business.” I think a lot of times, where I’m going with this is people don't realize that when they're owning a piece of real estate, they are buying a business. Now, a lot of times, they don't realize it’s a business, and that's what it fails. I say, “four walls and a roof is not going to make you successful. It's not going to get you wealthy.” It's the business running inside that four walls and a roof. If you do not feed that business correctly and you do not leverage it right and you don’t do the right things.” I don’t know if you’ve ever had this, but I have. When you have a lot of real estate and it is not going well and you have bills due and you don't know how you're going to make those bills and pay them, it’s not a very fun feeling, that’s the, “Let's figure it out as we go,” model, which I did, I tell you what, I tell people, “if you've never been in that position and you've never bled that or walk that walk, it is not a nice place to be.” So, I want to avoid people by saying, “look, think before your money goes hot, and you actually own something.” You go, “oh, my God! What did I do?” So that’s something that I think is very important when it comes to real estate.

One of the biggest things I've learned is right person, right seat. So, we have been able to scale our business. When you own a business and you have staff, which we don't sell widget, we sell services when you own real estate. We’ve understood that staffing costs could be the most expensive thing, so, understanding the roles, understanding the job duties, understanding KPI, key performance indicators, all those things help you identify the role. Once you can identify the role, then you can look and say, “okay. Who needs to do this? Does this need to be me? Can this be someone else, or could this even be a virtual assistant?” So, we’ve learned how to scale our business by using virtual assistance and in our company, we have about 60% of our business is outsourced through virtual assistants, we get them from Mexico, which is different. A lot of people get them from the Philippines, Asia, India, all those other things. Actually, we started a company that we actually placed them for people, but it really is a matter of bringing your cost structure down and having something that’s scalable that you can deliver the same level of service. So, for example, if I own an apartment complex, doesn't make sense for a tenant to call me to say, “I'm locked out of my house?” Probably not the right person they should be calling, but it still needs to be answered. So, we’ve learned how to take that, I don't want to pay someone $70,000 a year as a property manager, whatever you pay them, to answer that question, because the real question behind that that they never get to could be a potential lawsuit that’s coming or something that has to be answered. So, it's a matter of right person, right seat and getting that scalability with whether it’s virtual assistance or how you want to do it. It really is a matter of really thinking about the business model and go, “okay, is that the right person to do that role?”, if not, your expenses go up and now our profit margin goes down, so, with use of virtual assistance, I have found or we have found that we’ve been able to bring our cost structure from 59% of payroll down to 33% of payroll. So, when you're looking at the amount of revenue we’re doing, the number gets large, so, it's really a matter of what's the best use of your time and how should you be spending your day doing or thinking. I think for us and everyone, they should focus more on the thinking part and not as much the doing part, that's just my opinion, but that's how I’ve learned to be more successful.

Listen to full episode: https://lifebridgecapital.com/2019/10/ws350-making-time-to-do-work-that-matters-with-steve-rozenberg/