Becoming a real estate investor is a really great thing to do. I know, I’m a bit biased here, but real estate investing is a wonderful wealth building tool. It can give you your time and life back. It also can open up so many doors and present so many opportunities that it can lead you down paths you might never even have seen or considered before.
How? By becoming a real estate investor, you begin to leave the 9 to 5, clock in/clock out, paycheck world behind and enter into the entrepreneurial world. Entering this entrepreneurial world can be a very exciting and sometimes mind-blowing thing. It is like your eyes have suddenly been opened, and you see the world in a completely different light. You have caught the entrepreneur’s bug.
The thing that makes entrepreneurs different from others is that they have learned to take risks. They have learned to find areas where a potential profit can be made, to put a deal together, and then to work like hell to make sure everything comes out alright. If everything works out well, the feeling can be exhilarating. You cannot wait to get back out there and wash, rinse, and repeat. As you progress in your entrepreneurial career, you tweak, improve, refine, and grow what you do — and start putting money in the bank. The entrepreneurial bug has made you successful.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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Do What Works (Don’t Second Guess It!)
If you were smart, you would probably stay on this tried and true path. Why? It works! It has made you successful! Sure, it might need a bit of fine tuning now and then, but why veer away from something that works?
Because the entrepreneurial bug also comes with a sort of curse in that success in one area often makes you think that you can be successful in many other areas. Because you are seeing the world differently now, you really do begin to see opportunities — or what appear to be opportunities. That entrepreneurial bug you caught can really get your mind turning and thinking.
Success in business can thus be a double edged sword. Your mind may trick you or blind you into thinking that if you can be successful at one thing, you can be successful at many things. Perhaps you begin to think that a Christmas tree farm will be a good idea. Or perhaps it is a used car lot, a snow cone stand, or even a roofing or contracting company (these are all true stories, by the way). While those all may be very good entrepreneurial ideas and very valid businesses, I would suggest to you that perhaps it is not the best thing for you to do.
For one thing, what do you know about growing Christmas trees or selling snow cones? Did you study up on those ventures like you did with real estate? Do you have a model or plan to follow? Do you have a mentor to show you the ropes? If so, go ahead. If not and you still think it is a good idea, please reconsider.
Secondly, these other tasks may just end up being distractions. They will distract you from your core business. They channel your energy away from what was making you good money and from what was making you successful.
Put Your Time, Money & Resources Into What You Know
Look at it this way. Perhaps that new business or venture you started will end up making a bit of money. But it took most of your time and resources to get it going. You had to shift money, time, and personnel toward your Christmas tree farm. Meanwhile your real estate business, the one that was making the most money, the one that got you to this position in the first place, suffered and did not perform as well as it could have. Sure, you made a little bit of money (hopefully), but how much did you lose because you were not focused on your core business that brought you success in the first place? What was the cost of these lost opportunities? I am going to bet that it was a lot more that you made in the other business.
Look, I am not saying that you should not look for opportunity and try new ventures. After all, there is something to be said for diversification. But I have met more than one real estate investor who got involved in a roofing company, or a restaurant, or even a cotton gin who was not happy again until they got out of it. These ventures just sucked away too much time and too many resources. And when you add in the lost opportunity costs from their core real estate business, the loss was even greater.
It can be very tempting once you have caught the entrepreneurial bug to dive into a variety of ventures. Should you attempt them? Perhaps. Know thyself and know what you are getting into. Be careful and think long and hard before you divert your time and resources away from what gave you the success that you are now enjoying. Sometime staying on the tried and true path reaps the most rewards.
Entrepreneurs: Have you ever put time and money into a venture that eventually failed? What did you learn?
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