Superbowl XLIX is history, and hats off to the New England Patriots. A pretty good game overall, one the Seahawks seemed to have wrapped up. Why Seattle would elect to run a pass play for the lead on second down mere feet from the end zone with 20 seconds left will be discussed and debated around water coolers, in break rooms and just about everywhere else today. We will all become Monday Morning Quarterbacks. We all love to analyze what could have happened if Seattle had just run the ball or if pass interference perhaps should have been called. It’s fun to play the role of the Monday Morning Quarterback.
Hindsight is, of course, 20/20. It is always easier to examine something, be it a football game or our own real estate career, after the passage of time. Looking back is not just fun, is in fact something that I think should be done. We have to look back and reflect upon what should have been done, or what would have happened if we had only done A instead of B. It is how we learn. It is how we process information so we can make better decisions going forward. So looking back on my own real estate career, what are some of the things I wish I had done differently?
Well, there are lots of things actually, but here is a short list I jotted down to perhaps save you the trouble I had.
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8 Things I Would’ve Done Differently in Real Estate
I Should Have Bought That Property
There have been several properties in the the past that were available, and for whatever reason I did not acquire. Today I drive by some of those properties and kick myself for not buying them. What was I thinking at the time? Did I not see what a great deal that was or the income potential? Did I not have my funding in place? Was my head wrapped around some other project? Likely, it was a bit of all of the above. I should have been more focused on my business and had my ducks in a row for when deals came along.
I Should Have Expanded My Horizons
When I started out, I was very focused on being a landlord. I bought properties to hold in certain areas and that was all I did. How much income did I pass up because a particular property did not fit these criteria? My field of vision was too narrow to see opportunities. Today, even if a property does not meet my particular criteria, I might try to do a wholesale deal or a retail flip. Those things are no longer something that I do not do.
I Should Not Have Borrowed As Much
Don’t get me wrong. I am a firm believer of using other people’s money. But I also think Dave Ramsey makes some sense, too. I would certainly love to have more properties completely paid for. It is just gives me peace of mind to know a property is truly all mine.
I Should Have Kept More Reserves
Reserves also give you peace of mind. It is comforting to know that there is a chunk of money sitting there in case I need it. And there have been times I have needed it. Things happen. Sewer lines collapse, air conditioners give out, roofs leak, fires break out, property taxes come due and it seems like it all hits at once. If you want to survive in this business, you will need reserves. How much? Whatever you are thinking, you should double it.
I Should’ve Developed Better Systems
Effective systems are one of the keys to any successful business. It took us a while to realize this. For the first few years, we kind of flew by the seats of our pants. And honestly, it worked for the most part. But I wonder how much better things would have been if we had some systems in place. How much money flew out the window because we did not? Plenty, I imagine. There is no process that is too small or insignificant to have a system. Plus, if you really want to extricate yourself from the day to day operations in the future, systems are the way to go. This is something we still work on to this day.
I Thought I Could Do It All
I used to think I could do it all. I could handle all the repairs and maintenance. I could do the paperwork. I could do the taxes. Plus, I thought I was saving money by not paying other people to do these things. But I was not saving money. I was losing money because I did not have the time to develop my business (see “I Should Have Bought That Property”). You will make more money by spending money to hire others to help you. That was a hard one for me personally to learn.
I Shouldn’t Have Lowered My Standards
Every time I did, it always turned out badly. Whenever I had an apartment sitting on the market for a while and lowered my standards to get it rented, I wished I had not. The apartment always ended up trashed or occupied by a non-paying tenant and ended up costing much more in the end. Whenever I went with the cheapest guy, again I wished I had not, as the job often had to done over again the right way. Don’t lower your standards.
I Should Have Started Sooner
This is one that really gets me. I really wish I had started in real estate sooner. Where would I be today if I had started 10 or even 5 years earlier? Why did my younger self not listen to people? I have no answer. I guess I just have to blame it on youth.
So what about you? What does your Monday morning quarterback mindset say about your business? What would you have done differently?
Please share with your comments.