We’ve all seen it. It’s something that is almost a certainty you’ll see in any real estate guru’s video or website. The image of a person relaxing on the beach with a cocktail in hand watching the sun set on some foreign island. The context of the image is “buy the course and our strategy will have you at the beach while you are still making money.”
Real estate investing can definitely produce this sort of outcome; however, if you think buying some course is your ticket to paradise, make sure you put on your “disappointed underwear”, as I have little doubt you will be disappointed.
I should note, that at the time of me writing this article, I am NOT one of those that fall into the “lay on beach while business still makes money for me” categories. While I do have an ever growing stream of passive income from the owner financing properties in my company’s portfolio, my business still “needs” me in it. (My goal is if you are reading this 5 years from now, I will be in Hawaii sipping a fancy drink while my business is still fully operating)
On that note, for all you of you who can do whatever you want, but your business still runs, please comment and let me and the readers know how much you agree or disagree
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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The Overall Concept
In order to get yourself at the beach, you need to “pull yourself out of the business”. This doesn’t mean you sell your business, this just means you are able to go to the beach and everything runs itself. This may not sound like much, but stop for a second and think about all you do as a single person, or even has one half of a partnership:
- Ideas and concepts
- Researching the ideas and concepts (are they cost effective – both in time and money)
- Implementing the ideas and concepts
- Monitoring them after they are implemented
“Ideas and concepts” is pretty broad. That was done intentionally. Marketing, deal analysis, buying, selling, managing, raising funds, and the list goes on and on. Point being, the amount of work a start-up entrepreneur does is quite mind boggling.
Learning to Love the Checklist for your Real Estate Investing Business
For me, this has been hard. I fully believe in the concept, particularly since it was pounded into me as I worked on my engineering degree in college, but that still doesn’t make it the most exciting thing in the world.
In the world of engineering, you need to figure out ‘how’ to do something, document it, and then make it repeatable time and time again (create a system). The same is true for any business, including real estate. After figuring out ‘how’, you need to document. The best way in my mind to do this is with the checklist.
The checklist is one of those things that can be extremely annoying in the short run, but in the long run, the amount of time it saves you is priceless.
Why Bother with a Checklist?
I’ve already hinted that this, but in order to create a system, you need it to be repeatable. Here’s the tricky part though. Not only repeatable for “you”, but for Bob, Sue, Bill or Sally!
If you/I ever want to get to the beach, we will need to train people in the jobs we are currently doing. I have done a little of this before, so from experience, training is MUCH EASIER to do when you have a checklist in front of you rather then scratching your head thinking, “Now what did I do next?”
In your mind, it may “make sense” and odds are, you are probably using quite a bit of intuition, but remember, that person is NOT in your mind, so it could very well sound like Chinese to them. Training someone in Chinese when they only speak English is not going to be too productive.
With a checklist though, you can both speak English since you’ll be able to say, “First you do this. Second you do this. Third you do this. If you get Result A, do this. If you get Result B, do this.” Not only will it help you as you train, but if Bob, Sue, Bill or Sally has it in front of them while you’re not there, your phone won’t be ringing off the hook as you try and sip your cocktail.
How to Create a Checklist for your Real Estate Investing Business
First off, there isn’t really a right or wrong way to do it. The point of it is to document what you are doing. The only facet I would stand firm on is there needs to be some sort of sequential order. Whether that is numbers or letters or Morris code, it doesn’t matter.
Second off, there is nothing to big, small or obscure that a checklist can’t be made for. Case in point, below you will see my checklist for Website Implementation. (click image to make bigger/clearer)
After looking at the image, hopefully you realize this is something anyone can do. It’s simply doing an activity that works (no need to map out an inefficient process), and then writing down the steps. You may think that creating a website is just “find URL, hire web guy or do it yourself, click the “live” button”, but when you stop and go through all the steps, there is a lot more to it then that.
How detailed do you want to get? That all depends. If you want someone else to be able to take a process from Step A to Step Z, the more details the better. Below is Step #12 from above, “Launch Site”. You may think, this step needs even more detail? Before I built my first website, I would have had the same thought. After going through a few websites though, there is definitely “more-to-the-story” within just this one step. (click image to make bigger/clearer)
The 3 Big Benefits of Checklists
I’m sure there are more then three, but to me these are the three that really stick out.
- Think Big – If your dream truly is to have a business that runs on its own, you gotta have big goals! If you do a simple task such as creating a checklist, what you are really telling yourself is this: My business will grow someday to the point where my only choice will be to hire others so I can focus on the “big decisions” of the business.
- Audit Your Efficiency – Think you’re doing things the best way possible? I know I did the first time through. Then, the second time through using my checklist I find myself thinking, “This makes no sense. What a waste of time!” Having these moments is immediately followed by a revision of the checklist that adds/subtracts portions to make the process that much quicker and time effective.
- Train in English – I already touched on this, but when the time does come for you to begin to phase yourself out of certain areas of your business, make sure you are able to train the person in English. With a checklist in hand, your communication will be that much clearer and won’t come across as a foreign language.
In summary, if you have the ambitions of laying on the beach while your real estate investment business runs without you, then start working on checklists. Even if you are perfectly happy with your business being a one or two person show, I’d still advise using them so you can self audit your processes.
Let’s hear your feedback. Do you use checklists? What ways do you find helpful to document what ‘works’ for you? I (along with others I’m sure) am interested in learning what you do within your business to prepare yourself for expansion. Comment below!
Photo: Giorgio Montersino