Before I started in real estate investing, I had a bad case of analysis paralysis. I knew there was money to be made for those with guts, but just couldn’t get myself to take that leap of faith. I’m willing to bet you’re probably like me. You’ve been listening to real estate podcasts and reading books for two years but haven’t taken action. You have all manner of excuses: no money, no time, don’t know where to start. I get it. That was me — until a flight to New Zealand spurred me to get off my rear end and face my fears.
On the ridiculously long fight around the world, I chatted up the slightly older couple next to me. My trip was to last a mere five days, while the couple planned to spend two months exploring everything the North and South islands had to offer.
Two months? Who the heck can take a trip to New Zealand for two months?
“We’re real estate investors.” The husband smiled.
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Learning About the Power of Cash Flow
Over the next two hours, I picked every corner of his brain. I learned that he and his partner buy low-cost single family houses in affordable towns and rent them out. The cash flow allowed him to travel the world and eat fancy meals in Queenstown, New Zealand, while his property management companies were depositing rent checks in his bank account. I was sold. I knew that I was put on this flight for a reason.
I threw all manner of excuses at the guy. I’d gone through a foreclosure recently. My credit was bad. I didn’t know how to find properties. I didn’t know where to find a good contractor. He just smiled and said something that changed my life.
“The only way to learn it is to do it.”
Hadn’t I heard that before? Oh, right! Yoda told me that in Empire Strikes Back. “There is no try, only do.” Why hadn’t I listened?
I know you’re thinking that it’s easy for some guy on an international flight to just tell you to take action, that he probably has all the resources in the world. All the connections.
The Importance of Making Mistakes
The truth is that he’s made a boat load of mistakes. He explained that it took some trial and error to nail down his favorite markets, his favorite types of houses, his favorite contractors, his favorite tenants, his favorite property management companies.
I teach my three and five-year-old kids to push through failure as an expected part of the journey. Recently, we started them in ski lessons. My son was frustrated by his repeated falls down the mountain.
“I hope you fall 100 times today,” I told him as I picked him back up.
“Why, daddy?” he asked with a puzzled look on his face.
“Because every time you fall, the better you get.”
It’s probably my high watermark of enlightened fatherhood. A close second is making sure my kids don’t know the Star Wars prequels exist. They don’t. The words “Jar Jar Binks” have never been spoken in my house.
Fatherhood bragging aside, we need to have reasonable expectations about taking on a new endeavor. Once I returned from New Zealand, I booked a flight to the same towns in which my flight companion was buying houses.
I didn’t know what I was doing. I bought two short sale houses through a real estate agent. Now I buy them off market with my own ninja methods. I found a good contractor but over-rehabbed the homes for the area. Now I spend what I need to spend to provide a great home to a tenant that’s consistent with the neighborhood. I also underestimated a sidewalk repair that the city planned to charge me for. Yep, I made a few mistakes.
Without a doubt, you are going to make mistakes. It’s part of every meaningful process in our lives from relationships to driving. You’re going to make mistakes in real estate investing. Get used to it, love it, embrace it, and ultimately learn from it.
Investors: What drove YOU to finally stop talking and start taking real action? Or if you haven’t taken the leap yet, what’s holding you back?
Be sure to leave a comment below!