As I look back at the successes and “expensive lessons”, I don’t believe in failures… just very expensive lessons… and I have had more than my share of those lessons. Anyways as I look back at these successes and lessons as a real estate investor, I have been able to identify 10 categories, I’ll call them “steps” which I believe have been instrumental in my accomplishing the goals I set out to accomplish when I started investing in real estate.
What are these 10 steps that any real estate investor can perform? I call them the “10 Easy Steps to Wealth Creation and Freedom”. Pretty clever, wouldn’t you agree? It has occurred to me that everyone who is in the business of helping real estate investors has their own 3,or 5 or 8 step program that will absolutely assure success. So it seemed only appropriate that I develop a multi-step process to keep up with this crowd. I will tell you that there are ten steps, and about 100 sub-steps and that some of them are easy, and most of them will be a challenge to you, as they were to me, and that if you work through each step and repeat step 10 often, you will create real wealth and achieve more freedom in your life than you will be able to handle!
OK, OK, here they are… all ten of them.
1. Condition Your Mind. How many of you believe you are prepared for the success you say you want? How many times have you found yourself getting involved in any endeavor where you thought you would end up in a better place then where you started from… and then were disappointed because you really didn’t get that far? I think if we were brutally honest with ourselves, we would discover that on more than one occasion we got in our own way. We sabotaged our efforts, most likely due to some fear we created, and never allowed ourselves to discover our true potential. This is what I mean by conditioning! It is the most important step in this entire process. You can execute each of the following steps flawlessly and I assure you, if you don’t master this first step, you will not reach your full potential and achieve the wealth and freedom as a real estate investor you are seeking.
2. Develop An Achievable Roadmap. Most of us have used Mapquest or have our favorite version of a Garmin to help us to determine how to get from one place to another. As a matter of fact, these tools have become vital parts of our everyday lives. So, answer me this question, why would we focus so strongly on developing a plan to travel from point A to point B, yet we seem so willing to rush into new ventures without hardly a thought being given towards developing a plan. As Dilbert so eloquently puts it… If you don’t know where you are going… how will you know when you get there? Great question! Where’s your roadmap? Does it address how you are going to get from a full-time JOB to full-time real estate investor? Does it address what knowledge and skills you need prior to starting out? How about this… does it take into account your local economy, housing market, interest rates and how you are going to adjust as these things change? Well, if you don’t have a roadmap, you better get one, and it better consider, at a minimum some of the things I mentioned above.
3. Select Right The Formula(S). I have been asked so many times what area of investing should I get into… Bird-dogging, wholesaling, rehabbing, land lording. Should I focus on Subject 2s, pre-foreclosures, foreclosures, etc. My short answer is why are you asking me that question… if you have started to develop your roadmap you would know which “formula” best suites your current situation. So, selecting the right “formula” is really a matter of having an honest understanding of your current circumstances. By this I mean your knowledge and skill levels, your financial status, your overall business skills, and your ability to understand and mitigate risks. This list is not inclusive, just an illustration of some of the things I deem important. I firmly believe that many real estate investors fail, and fail big, because they do not select one formula and stick with it until they are experts. So, as a what is your formula, and how does it support the achievement of your roadmap?
4. Start Your Business. That sounds so simple, doesn’t it? Just start your business. Well, actually it is very simple to start a business. I recently created one for the new venture I rolled out in January. Got the name, tax ID number, the business paperwork completed and the bank accounts set up. All of this took about 4 hours total. It really is that easy. Yet starting a business means so much more. I have read so many posts from people just starting out who say they’ve completed all of the paperwork for the business, got it incorporated, opened the bank account, etc., and then ask the question… what “formula” should I pursue? Or worse, they tell me they did all of this over 6 months ago and are still working to find their first deal. Are you kidding me! I hope none of you reading this fit into these categories! Have you noticed how far down this list “starting your business” is. It is important to create your legal entity, yet it is so much more important to have a firm and complete understanding of how you are going to generate profits from that business.
5. Market To Find The Deals. Have you ever stated that there are no motivated sellers where you live? I would bet that if you made that claim, you proved yourself correct. What do you think? Are there motivated sellers in your market? You won’t know unless your marketing is well thought out, fresh, when possible targeted and above all consistent and disciplined in its follow-up. In a recent wholesale I took down, I have been working on it for over 4 months. We have been working that deal since May. Where other real estate investors may have moved on, I did not and I got paid! Without properties to purchase, we really can’t accomplish much as real estate investors. For our businesses to succeed we must find motivated sellers and we must make offers. So, how would you rate your marketing? If its not supporting your goals then you need to ACT now to correct this situation. But wait you say. I get so busy working the renovations I have, or managing my tenants, or working my full-time job that I don’t have time to market. I’ll let you in on a little secret… I don’t believe you! You are only using that as an excuse… which means you probably haven’t completely conditioned yourself for the success you say you want. So what’s it going to be… a well thought out marketing plan, properly executed, or just a bunch of excuses? The great thing about this is that you and only you get to decide. Good Luck!
6. Finance Your Machine. Money… won’t it be wonderful if all of the funds we needed as real estate investors to finance our deals were available whenever we needed them? What if I told that, that is the only way you will be ever be able to build your wealth and achieve true freedom and control over your life. I made it the most important part of our business strategy to ensure that we had funds for our deals. Those funds came from hard money, banks, and private investors. Yet very little of it came from our pockets. I have spent an inordinate amount of time learning how lenders worked, what their criteria were, how to present my business and my deals to them to remove most of the risk as they might have seen it. In short, I learned how keep the money flowing toward my deals all of the time! How about you? Do you have next to unlimited funds available for your deals? Or are you constantly chasing money to fund deals, or just to survive? Regardless of your situation if you want to achieve your business and personal goals you had better learn how to get lenders begging to give your money!
7. Renovate For Fun And Profit. This seems to be the one area where most real estate investors want to start. Well, this step and becoming a wholesaler, which means you had better be executing a kick-ass marketing plan. Being a successful rehabber is a great way to enjoy consistent and large paydays. For many of us, the proceeds of one rehab may mean more cash in our hands then we’ve ever had at one time. Are you conditioned to receive that much cash? Any successful rehabber will tell you that this part of real estate investing can be a challenge. The biggest difficulties usually involve our lack of knowledge regarding repairs needed to a property and finding and managing our beloved contractors. Did you know most lenders see the contractor piece of our business as the single biggest risk to you and therefore to them. If you don’t have an understanding regarding repairs needed or haven’t or don’t have the processes and procedures in place to effectively manage contractors your life is going to be pure Hell! So, you know what to do… right? Increase your knowledge in these areas and manage, manage, manage the process. hill house condo