Although vaguely, I do still remember the feeling confusion when I first started in real estate. I like to describe what this felt like with an image.
Imagine yourself standing in the middle of a corn field. The corn is tall, and you can barely see over the top. As far as the eye can see, it’s all corn. Suddenly, you hear church bells. You spin side to side trying to find the church that the sound of the bells could be coming from, but you see not a thing — just corn.
You had just gone to the doctor for a checkup, so you are quite certain that there is not a thing wrong with either your eyesight or your hearing. And yet, try as you might to find that church, there’s nothing but the damn corn everywhere!
That state of tension and frustration accompanied me at the outset of this journey. And I have to believe, considering your questions, that many of you newbies experience the same thing.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
This is the dream right? Going from zero to 10+ rental properties, providing stable cash flow and long-term wealth for you and your family, and building a scalable business model to boot! Learn how this investor did just that, in this exclusive story featured on BiggerPockets!
What Comes First — the Deal or the Funding?
This is one of the most often asked questions. And for good reason — it’s important. Unfortunately, most commentary is debonairly quick to pronounce the “simple” answer — it’s stupid to look for deals unless you have a way of financing them.
As with so many aspects of our business, while it may be hard to tell truths apart from half-truths, the answers we are looking for reside in precisely this — our ability to tell truths from half-truths, our ability to read between the lines.
Let’s Think This Through
Looking at this logically and with intellectual honesty, while it’s true that finding a deal and not having the money is a bit pointless, so is having a bunch of money and no deals. Truly, it’s the yin and yang that add up to a whole. You need both, and you need them at the same time!
The notion one is more important than important than the other is kind of silly. You need both! That’s the truth. But the reality of having both is daunting. Looking for one thing is challenging, but searching for multiple at once is intimidating, and therein lies the problem.
The 10/4 Rule
My wife Patrisha (she is a member so look her up) is a licensed agent in Arizona with Keller Williams. We are all familiar with the work of Gary Keller. His The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results book, which is a must-read, aims to break down the complex nature of searching for and synthesizing numerous elements into a cohesive solution. If you haven’t read The One Thing, do it!
At the brokerage that bears his name, one of the very interesting methodologies is the 10/4 rule. This is so ingrained into the culture that agents greet each other by saying, “How’s your 10/4 doing today?”
What is 10/4?
The 10/4 rule is simply understood as your ability to isolate 4 things that are most important to the perpetuation and growth of your business and doing on a daily basis 10 activities to feed each one of those 4 most important things.
For example, one of the most important things for me personally is to be better looking than either Brandon Turner and Darren Sager. Fortunately for me, God was kind, and to achieve this objective, I don’t have to do a damn thing. 😉
So, if you are an agent, the 4 most important things may be to know the available inventory, to gain a buyers list, to gain listings, and, of course, to close deals. Thus, you might spend your day this way:
- Walk 10 properties.
- Talk to 10 potential sellers.
- Talk to 10 potential buyers or someone who can refer you.
- Do the 10 things most likely to result in the fastest closing.
At the end of the day, this is all about pipeline building. And,the more automation and outsourcing you can introduce into this process, the better.
So, What About You?
You need deals, and you need money to close those deals. Dear newbie, if you are not speaking to 10 potential sellers every day and 10 potential sources of capital, you are just kidding yourself about wanting to close deals. The action steps are clear.
What does your 10/4 exercise look like?
Let me know your thoughts with a comment.