While first getting started in real estate, the issue I had to deal with most was the pace at which I moved. Move too slow and you’ll never get any momentum behind you and lose out on credibility. Move too fast and you get overextended and end up wearing a straight-jacket in a padded room. It’s a very fine line that the beginning investor must learn to toe, along with the experienced investor learning to maintain.
There are many great resources out there for getting started in real estate and navigating the waters, but the one area that I never really learned about per-se, but definitely found myself fighting against, was the proper pace to proceed.
Before I ever put any “skin-in-the-game“, I went through and did what the majority of ‘getting-started’ in real estate education teaches:
- Define goals
- Define your specialty (wholesaling, flipping, buy and hold, etc)
- Attend your local REIA
These suggestions were helpful, no doubt, but they’re all things that are done before you take that first big step of putting a deal under contract. Your personal long term goals are will dictate how you should proceed after taking this initial big step, but you essentially have three options: walk, jog, or sprint.
I’m writing this article on the premise that you (like myself) are in the camp of wanting to create a real estate strategy that provides you with income that allows not only for the bills to be paid, but allows for free capital that you can choose to do whatever you’d like with (vacations, cars, kid’s education, other investments, etc.). With this in mind, let’s take a look at the difference paces you can choose.
After I got my first deal under contract, this is the pace I took at the start, and I was shocked at how big a mistake it was. Walking, although making you feel more comfortable, is the last thing you want to do. I backed off the networking I had been doing with people, I ended a direct mail campaign I had rolling, and I placed the majority of my attention on the rehab. Wow! Talk about killing my own momentum for the sake of “feeling comfortable”. The sad part is, I had read multiple posts and blogs on BiggerPockets about avoiding this very thing, yet I still did it! It is human nature to want to feel comfortable, but trust me (and the others encouraging it), step out of your comfort zone a bit.
Walking also had an adverse side effect that I never anticipated, a loss of credibility. Through my networking and marketing, I had begun to build some solid relationships with people in the industry, and my phone was ringing – obviously a good thing. By stepping into my comfort zone though, I lost the credibility with those among my relationships. I don’t mean credibility in terms of them thinking I was a scumbag or anything of that nature, but “lost credibility” in terms of my name and number being moved down their lists of people they would call when they had a hot deal. My want to remain comfortable created indecisiveness when the phone would ring, and this lead to people making me less of a priority, which from their perspective was totally understandable.
Wanting to walk is human nature, but if I could go back and start over, this is the one thing I wish I could correct. Bottom line, listen to the others warning about this and take their advice like I should have done!
It’s bizarre how things work, but as humans (or at least me) we seem to always struggle with finding that middle ground. After I realized how much walking was hindering my long term real estate goals, I swear, someone shot me out of a cannon. I went from a sweet old lady taking her time crossing the street to Olympic sprint champion Usain Bolt.
Not only did I get my marketing back up and running, I injected it with some steroids and it was booming. The problem was, I forgot that I didn’t have an office full of people who could answer the calls and analyze if they were worthwhile deals. This lead to gray hairs sprouting up on my head the way the grass grows after a spring rain. It was crazy! I was waking up to answer emails, return calls and then heading out to either look at properties, check in on a property rehab, or meet someone for coffee or lunch. Then of course when I would return home, I had emails and phone calls to reply to. By the end of every day, I felt like a sprinter. The only difference, instead of my lungs burning and being out of breath, my head and mind were the body parts totally exhausted.
What I learned quickly was that with a one person company, there is an inverse relationship between marketing and customer service. The ‘more’ marketing you do, the ‘less’ customer service you can provide (and vice-versa). Customer service is the name of the game in real estate. To put it bluntly, there are a boatload of slackers trying to make it in this business, and by simply returning phone calls and emails within a few hours, you can put yourself strides ahead of your competition in terms of professionalism from your customer’s perspective.
It is completely counter-intuitive, but its how things panned out. The more I sprinted and worked hard, the more of a slacker I became. It would take me a day… then a day and a half… and then in some instances two days to return an email or phone call, and that is flat out UNACCEPTABLE! Not only did sprinting cause me to lose out on some hot deals, it also put in me the slacker category of some of my customers. A place that should be avoided like the plague!
So if walking causes you to lose credibility, but sprinting causes you to become brain-dead and a slacker, what is the answer?
This was my saving pace that brought sanity and solid customer service back into my life, while at the same time allowing me to keep a good amount of momentum and deal flow. There are two components that I use to jog.
- Sprinkle out a steady stream of marketing and networking. Notice I did NOT use the word “stop” or “flood”. For anyone who has been in the business a while knows there is a vast difference with each of those terms. Keep your phones ringing and your coffee/lunch appointments flowing.
- Communicate with your network. Let people know what you’re up to. That way people know you are active (and not a tire ticker), ensuring you stay high on their list of people to call. It will also help them understand ‘why’ there is a delay in returning a phone call or email. You should also strive to be prompt; however, by letting them know you are doing business, you build up a bit of a buffer between you and being placed in the slacker category.
How can you measure the pace at which you’re going at? Always be asking yourself this question: what am I doing today, and am I running it, or is it running me?
If you answer: I’m not doing much at all so therefore I’m running it… you are walking, pick up the pace and step out of that comfort zone!
If you answer: My schedule is jam packed, and if one meeting goes over 15 minutes my whole schedule is ruined… you are sprinting, take your foot off the gas pedal!
If you answer: I will be busy today, but a portion of the “business” is me needing to run a few errands… you are jogging and not letting your schedule own you!
All situations are different. If you have a partner, your jogging pace will be different than someone like myself who started out all alone. Bottom line, it is imperative that you find that sweet spot that ensures that you have a steady stream of phone calls, but at the same time allows you to remain credible and avoid the slacker category.