We are half way through the 6 keys to successful investing while working full time. As a quick recap we have secured commitment from your significant other, you have done the required homework in your market and you have established and written down your buying criteria.
With this foundation we are ready to adopt a concept preached in management books and MBA programs across the country. Key #4 works for Fortune 500 Companies and it will work for your real estate business.
To start I suggest you take a review of your skill sets and figure out what is “Core” to your business and outsource everything else called “Context”.
As a full time employee you have limited time and you need to make sure you spend your sliver of available time on the most valuable part of your business. Once you figure out what is “Core” to your business you need to look for team members that can handle the non core or context items.
Some investors have a real hard time with this. They feel they have to do everything and they sweat every detail. Having seen this many times I would tell you that this is a horrible idea, very short sided and you will eventually burn yourself out.
By outsourcing items to team members that are “Context” you can focus your energy where it is most valuable and insure your business is getting the maximum return from your effort.
Your job is to quickly find team members that can tackle particular task quickly and efficiently. These team members just need to do the job they say they are going to do. Don’t get yourself wrapped up in stress sweating the small details.
You pay the team members to do certain tasks and if the job gets done pay them and move on. Don’t get distracted by the idea you could do a better job. Remind yourself it is not “Core” and move on.
I know it is hard and as a very Type “A” person myself I had real issues with giving up this control. But it was the absolute best thing for my business in the long run.
This simple idea of outsourcing “Context” and focusing on “Core” aloud our business to focus on Finding Deals and Securing Investor Passive/Private Investor Capital.
By focusing on the “Core” of our business we were able to adopt an investor model that leveraged our relationships, history in the central valley and the unique ability to find or create profitable deals while paying 10% interest rates to private investors.
Our model allows for continued recycling of capital through the use of passive investors and the ability to pay double digit returns while maintaining a healthy margin of safety for both parties.
One last caveat about Core and Context — please make sure your core is not too large. If your core is too large you will know it; your business will not make steady progress because you become the bottleneck.
If you find yourself becoming the bottleneck to your business success I suggest reevaluating the “Core” and outsourcing more tasks by finding more help.
Key #5 coming Next week.
Photo: Alan Cleaver