I’m sure many of you have heard the cliche’ saying, practice makes perfect.
It’s a great saying, but sorry to say, is 100% wrong. I don’t remember where or how long ago, but I remember someone telling me that which caused the “huh?!?!” type expression on my face.
This person then said, perfect practice makes perfect.
After soaking it in, things finally clicked, “Ahhhhhh! That makes sense.” What benefit is the practice if you aren’t doing it properly or are focusing on the wrong aspects??? Sounds like a total waste of time and a great way to dig a hole for yourself.
This same principle is extremely applicable to your real estate investing career. We all are at different levels/stages in our investing, but we are also all experiencing opportunities to learn and grow. Motivation and initiative are essential tools to have in your toolbox; however, motivation towards the wrong activity can be very dangerous.
I’ve learned to ask myself a simple, yet powerful, question that does a very efficient job of acting as a “reality filter”. The question…
Does my motivation lead to the health of my company?
When you are first getting started, the biggest pitfall is the ‘motivation’ to get your first deal (whether it be for wholesaling or flipping). You’ve read a book or gone through a course, and the adrenaline is flowing to get your career underway! “Warning, Waring” – this is misplaced motivation! Being motivated to get a deal can lead to a bad deal. Does a bad deal help with the health of your company/career? Obviously, no.
What if your motivation is towards creating the best possible deal analyzer spreadsheets and obtaining the most realistic numbers to enter into these spreadsheets? If THIS is your motivation, it is going to lead to you finding a profitable deal, and profitable deals lead to an increase in health of your company/career.
When you are looking to add contractors to your rehab team, is your motivation to find the guy that gives you the best bid? This is the recipe for many headaches, loss of time, and loss of money. Do any of the three previous results lead to the health of your company?
If you are motivated to check 3rd party referrals, request license/insurance information, and see how fast/slow they respond to phone calls/emails, what do you think this leads to? In my experience, it leads to finding quality individuals who, while may not be the absolute cheapest, are dependable and do solid work. Does having these types of people apart of your rehab team lead to the health of your company?
It’s a great characteristic to have if you are running over to a rental at 9 pm in order to get the “For Rent” sign in the yard because you just found out of an upcoming vacancy. Nothing wrong with that in the least in terms of motivation. But what is your ultimate motivation?
Are you motivated to get the property filled as soon as possible? Although I am not personally a landlord, from all the research I’ve done, this motivation seems like an open invitation to a court date later down the road. Does a court date and all the added cost/loss of time lead to the health of your company?
On the other hand, if after you put the sign in the yard at 9 pm you let yourself know that your motivation is NOT filling the property, but instead, SCREENING for the property, your mind is in the right place. Once again, putting our question to the test, does a motivation to thoroughly screen tenants lead to quality tenants? The majority of the time, yes! Does having quality tenants in place who will take care of your asset and pay on time lead to the health of your company?
If you are unsure where the proper motivation should be, the best test that I’ve found is this: is the task boring and labor intensive? If you are answering “yes”, then odds are, it is a motivation you should have.
I’ll be the first to admit, staring at spreadsheets or trying to figure out if a contractor is legit or not isn’t the most exciting thing in the world. For those of you who are rental landlords, I’m sure calling past landlords, running credit, etc. isn’t what your ideal afternoon would be.
Although extremely boring in the short-run, at the end of the day, having motivation towards these types of activities leads to an exponentially greater amount of NON-boredom and headaches in the long run.
Photo: Alex E. Proimos