My son recently crossed over as a boy scout, and these boy scouts LOVE to go camping — a LOT. As I was sitting in front of the campfire, the wild thought occurred to me that the process of properly building a fire can also teach us to properly build our real estate investing career.
Here are the 5 lessons the boy scouts taught me about building a campfire that we can directly apply to real estate investing.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Lesson #1: You Need Something to Start the Fire
Without a match, lighter or other way to produce a flame, you can’t light any fire at all.
Similarly in real estate, you need something that ignites your real estate dreams. That “spark” is taking action — because without taking action, your dreams simply stay dreams and never turn into reality.
I’ve heard it said that “direction, not intention, determines your destination.” In other words, it doesn’t matter what we WANT, it matters what we DO. And in order to DO, we must first DECIDE. This is a step that we often skip, and it’s at the root of why we can’t seem to take action to change in our lives.
Before you can take action, you must first DECIDE. That’s the spark that ignites the fire.
Related: Why We Fail To Take Action (And What To Do About It)
Lesson #2: Start With Something That Burns Quickly
To get the fire going, you’ll need some kind of fire starter that burns quickly and easily, like dry grass, leaves, or twigs. You want to quickly produce a large flame so that the kindling can burn.
Similarly in real estate, focus on something that can make your fire burn brightly and quickly, something that increases your knowledge, boosts your confidence, and sets you up for success later.
That something can be a boot camp, coach, or mastermind group.
For example, you might want to go to a boot camp, where you can acquire knowledge and network with other investors. Form a mastermind with the people you’ve met to keep each other accountable and moving forward. All of this builds confidence and sets you up to do more.
Now, with your fire burning brightly, you’re ready for the next step: the kindling.
Lesson #3: Follow Up With Kindling, Not Logs
What happens to a fire that doesn’t have kindling and branches? After burning brightly, it quickly goes out. You need to have twigs on top of your fire starter that begin to burn to keep the fire going. On the other hand, if you skip the kindling and throw logs on top of your fire-starting material, those logs never catch fire because they’re too big, and the fire goes out.
The lesson? Start small at first. You can’t go from your boot camp into a 150-unit apartment building deal. It’s not realistic. Chances are, it will end in lots of frustration and possibly significant capital loss.
Shoot for the stars, but start by building the rocket ship first. If your coach teaches you how to buy apartment buildings, start looking for a 20-unit building. This is both a realistic goal for your first apartment building deal, and it’s also meaningful. What I mean by “meaningful” is that it sets you up for the “real” deals you want to do, the larger deals that will let you quit your job or retire early.
The danger of skipping the kindling is that you never get the fire to burn, and you give up in disappointment. The “kindling” is the next (possibly interim) goal that you should set for yourself that gets you closer to the much larger fire you want to achieve.
Lesson #4: Build the Fire With Logs
You now have the fire burning with kindling, but what happens if you don’t add the wood that you split earlier that day? Again, the fire goes out. But by this point you have a nice little fire that will cause the larger logs to catch fire and burn.
Now, you COULD continue keeping the fire burning with kindling. There’s nothing inherently wrong with that. Kindling is easier to find than wood that needs to be split. And it burns brighter, at least at first. But you need to keep feeding it, or it will burn out quickly.
You can continue doing small deals. Instead of hunting for that 25-unit apartment building, you could build your portfolio one at a time with single family houses.
There’s nothing wrong with that. It’s just not the most direct path to the fire you really want.
With kindling, you might need two dozen branches to keep the fire going for a while. But what you want is a fire that burns for a long time and will little maintenance. You want to add a handful of large logs, position them just so, and let it burn while you relax and enjoy the flames.
So if your goal is a rental portfolio big enough to quit your job, what would be the most direct route to get there? Buying 100 single family houses or buying one 25-unit apartment building as your first deal and then one 75-unit building?
Lesson #5: Sometimes You Need to Wait Until the Fire Catches
You do everything right: Your kindling is burning well, and the logs are positioned just right, but the wood’s a little moist and it’s not catching. You’re concerned that the kindling will burn out before the wet wood will catch, and the fire will go out. But you’re patient. You’re confident in the process you followed to start the fire properly. You set it up for success. It has to work. And suddenly, the fire explodes in flames.
What happened? The wet wood was being dried by the kindling, and when it became dry enough, it ignited and became the fire you wanted.
Do you think it’s easier to buy a single family house as a rental than a 25-unit apartment building? Sure it is… much easier. But if you decided that a 25-unit apartment building should be your first deal, then it might take you a while to get it.
Sometimes we have to be patient and persistent. Especially if we decided to build our fire with logs instead of just kindling. But it’s worth it because once that fire catches, it’s hard to stop. You can throw HUGE logs on that hot fire and it will burn, making the fire bigger and bigger. And the more large logs you have on the fire, the less work it is to keep going.
Build your real estate investing career like a campfire by following these 5 lessons:
- Start with a spark and decide to take action.
- Set yourself up with kindling by attending a boot camp, signing up with a coach or joining a mastermind group.
- Follow up with a good layer of kindling to get the fire burning. Set your sights on an initial goal that is both achievable AND gets you closer to your ultimate goal.
- Graduate from kindling to logs to create a large fire you can build on with little effort. Go after bigger deals sooner.
- Wait until the fire catches. Be patient and persistent. All you need is that first deal. Once you get it, your fire will explode and it’s easier to add other, even much larger, deals.
If you follow these steps, you will have a solid real estate investing platform that you can just enjoy or add to as you wish.
Do the above lessons ring true to your investing career?
Leave me a comment below!