Stop talking about investing or the money you will make, or the deals you will do. Real estate investing is one of the most incredible ways to build wealth for generations of families and individuals. But none of that matters if you aren’t going to take the action. I want to spend some time thinking through this question of taking action, how to learn, how to mentally prepare, and then to take action.
I know for me personally, I’ve had the opposite problem on the action taking side. I like to run before I can walk. The trial by fire method. Fortunately, or unfortunately, it’s how I am personally wired. If I am into it, I am really … really into it. And real estate was no exception.
When I bought my first investment house more than a decade ago, the same day I bought a second one (on an assumption mortgage I might add). Over the next several years investing I went on to buy a dozen or so houses. The word “investing” I will use, loosely. I made incredible mistakes with “business partners” I worked with. And banks I had relationships for lending and loans. The truth is very clearly, I had no clue what I was doing, and no mentors or coaches that I engaged for help along the way. At least in the beginning.
Although I enjoyed some short term success, and learned many things, my first venture into real estate came to a screeching halt with the downturn of the economy and the complete decimation of the real estate market in the 2008/2009/2010 range. There are three kinds of people during recessions; the ones who hang on but stay status quo, the ones who are blindsided and crash and burn, and the ones who recognize, position, and capitalize on the opportunity.
I most definitely crashed and burned, and lost everything. Nearly a million in real estate. Every dollar I had. Filed and went through bankruptcy. Eventually lost my personal home as well as the investments. The experience was demoralizing and felt catastrophic to my life at the time.
Now as I look back, I did grow both in knowledge and wisdom through the experience. I had to decide if I wanted to invest in real estate again, and if so, what would I do differently to have a different outcome. My pride and self worth had to be mended. But, I also learned how to suffer, and be in the moment.
I think back to the first few real estate deals I did, and realize what little I knew about, really, anything. Not about how contract process worked, or construction, or comps, or rental pricing, negotiation. Pretty much, I had no clue what I was doing.
I’m not for a second suggesting if you want to get into real estate, you should follow my model. However, there will be bumps and problems, and likely, huge fires and sleepless nights that come with investing in real estate. But don’t forget, these kinds of issues come with anything you do. Not just your own investments, or your own business. They come with marriage. With kids. With your friends, co-workers, and acquaintances. Problems exist everywhere.
The problem is we don’t take our learning in X (business, family, life, friends, education, college, music, fashion, dog training, etc) and apply it elsewhere! Seriously, read that again. I’ve started to allow myself the thinking time, and not just doing time. As in, not just trying to complete work for works sake, but why am I doing it, what does it connect to, and is there a better way I can accomplish it (faster, better, make more money, teach someone else to manage it, etc).
Learn from past mistakes. Be open to someone else helping or teaching. Don’t be afraid to learn how not to do something, which gives way to more opportunities to do it differently.
First, look at what the end game looks like. I want to own 100 houses. I want to make $10k a month in rental income. Put my kids through college at Harvard, and pay for their entire school. Take a vacation (every month).
Cool. You now have context, and a little fire in your belly for what you want life to look like. Don’t be afraid to write something down that seems totally crazy. I’ll tell you personally, there has never been something I’ve written down that I worked like hell at, that I haven’t achieved. Nothing.
Now, that doesn’t mean I visualized a jet on my list the first day I got into real estate (although, if that really gets you fired up, put it on there!). I’ve visualized covering my car payment. Or buying a house in my favorite neighborhood. Owning the sports car I always wanted. Spending time with my family on vacations longer than 7 days, at least every 3-4 months.
Whatever it is, visualize it. Taste it. Feed and grow it. And I think this is important … it can’t be about money. The money always comes. It has to be about people, and experiences. Otherwise, it’s an empty goal without a why. Anyone can have money, most people with money don’t seem to find happiness no matter how much they have. Don’t make it about the money. Make it about life, kids, your spouse, your time at the beach house. And go get it.
No matter what it is you want to do, the idea or business or piece of real estate is NOTHING, without the action. There is nothing, without doing.
So here is the question then. How do I personally something when I have never done it before? We live in a world with nearly limitless information, technology, and interconnectedness (at least virtually). Find someone who is doing what you have visualized, both on the work side of real estate, and on the side of how they live or the life they lead.
I’ve sought out mentors, engaged them, begged them, asked them, paid for them, and made friends, partners, and investors along the way.
Here is the truth. Investing in real estate, like anything, takes work. It’s a craft that you have to hone, dial in, and grow. Just like EVERYTHING. Investing in real estate at it’s core isn’t difficult, but it is a skill. And within real estate there is negotiation, comparable analysis for properties, understanding market cycles, construction, managing rentals, the list goes on and on.
You won’t be an expert in all of these areas at first. I’m still not. But I work every day to become better, more knowledgable. I gain experience through the deals we do, and through the experience and community of friends and colleagues around me.
Through you the doing you will also begin to learn what areas of real estate that you really get excited about. That you diver deeper into, understand more, and grow out of. The learning is compounded the more you know, the more you can recognize as opportunity. Then as opportunity presents itself, you can take the action you’ve been dreaming of and begin creating that life you really want.