Smart real estate investing isn't just an investment strategy, it's a way of life. At one of the recent conferences we attended we had the opportunity to hear Eben Pagan speak.
You won't find much information on him but he's built a 20 Million Dollar a year business from the ground up - with no employees on site. Now that's smart investing.
He's done this by himself and uses a team of virtual employees to run the day-to-day activities.
Kind of like the model Timothy Ferriss talks about in the Four Hour Work Week (a great read if you haven't checked it out yet - highly recommended, will help you with smart real estate investing).
He was speaking about how to start a successful multi-million dollar business from the ground up.
And as real estate investors, that's what many of us are doing. Whether you realize it or not, as a real estate investor you are starting an active business.
A smart real estate investing business requires the following...
(Before we continue let's have a little aside: Many investors get into real estate investing and don't fully understand that they are going to have to take a hands-on approach to growing and maintaining their investments. No matter how "hands off" you were told an investment was - all real estate investing is "hands on" in one way or another - ALL of it. I think the word "investment" makes many believe that after they buy a property you can sit back and relax - kinda like the majority does with equity investments traded on the different stock exchanges. Plain old wrong ... more on that another time.)
Back to the story...
As he was speaking he spent a huge amount of time discussing his most critical point. This took up, at least, half of his presentation. And I think his critical point was a surprise to most people in attendance.
Many wanted to hear about the next big thing. And because much of Eben's business was built on "Internet marketing" a lot of people wanted to hear about the cool new website tools, or funky new web forum strategies, or nifty email tricks, or how to get their site to the top of Google fast etc.
But instead of focusing on the "tactic" of the day he made a big point to explain what he thought everyone's biggest problem was in any business. Whether it was an online web store or a smart real estate investing empire.
You know what he said?
The biggest problem is...
You are the problem.
You are blocking your own way to smart real estate investing.
Instead of focusing on the strategy you must answer this question:
Who do you have to become to run a 20 Million Dollar a year business? A smart real estate investing business perhaps?
Your business is built on you and not the tactics you learn.
For real estate investors think of tactics as: "condo conversions", or "flips", or "lease/options", or "multi-unit apartments", or "self-storage"....the list goes on forever. There are many smart real estate investing strategies.
Now admittedly it's a scary thing to even consider that your #1 problem is you.
But no technique or tactic of the day will work long term until you fix you.
We used to get so pumped when we learned a new real estate investing strategy. Or when we got our hands on a new "clause to put in the offer" that was going to make us huge money.
Or when we figured out how to negotiate for thousands off the price of a home based on the home inspection report. (That's smart real estate investing :))
Those things are tactics. Long term success is not built on the foundation of your properties, it's built on you.
We didn't really start getting good at investing until we mastered boring things like our habits. Mastering our habits was smart real estate investing.
Only when we had the discipline to follow-up and follow-through with critical activities (like analyzing properties and writing offers and placing advertising and calling people back!) did results begin to materialize. "Knowing" about a cool new investing strategy doesn't make you any money.
Having the guts to follow through on your decisions is where the money is.
On with the story...
He went on to explain some key points which I'll summarize here:
1. According to some of the biggest business performance coaches, like Tony Schwartz and Peter Drucker, the human mind's greatest power is to focus on 1 single task at a time.
2. The biggest fight we are all face in today's marketplace is distraction and interruption. Email, cell phones, text messages, video. (Another aside: we have said this before ... you must focus your attention and unsubscribe from things that don't move you towards your goals. If that means unsubscribing from this email then do that too! Yes, we're serious!)
3. Focus your time in uninterrupted blocks on your most critical activities. Any and all emergencies can wait 90 minutes until you complete an important task.
4. Use rituals to your advantage. We are creatures of habit. You must ritualize your time and activities.
5. A recent study by the British Institute of Psychiatry (referenced by Timothy Ferris - read that here) states that multitasking lowers your IQ more than smoking pot.
6. Your body has a natural rhythm that requires short rest periods between periods of focused work. Use that rhythm to your advantage. He uses nap timers to set 90-minute work periods and then rests in between so the body can recover energy. That will help you be smart real estate investing. That will help you be smart all the time! Not just in real estate investing!
(I've noticed myself that after working on something I feel tired but after a short 15-minute walk or 10-minute break I'm ready to tackle the next project on my list).
7. Your most important ritual is your first one. His morning routine consists of no email, no text, no voice mail.
Exercise, fresh water, and a balanced meal every morning.
8. To build a strong business you must make yourself strong first.
So the question becomes what are you doing to work on yourself? How can you be smart with real estate investing?
What routines and "no interruption times" do you have set in place that will allow you to grow your real estate business.
Here's one that we've been guilty of recently...
We are now moving into some commercial real estate investing to compliment the residential investing. We've established great contacts with CMHC and commercial underwriters.
Deals are starting to flow by our desks.
But because this is a new initiative we don't have the "ritual" set in our weekly routines to analyze commercial deals on a consistent basis.
And consistency is required to achieve anything.
We're now changing our routines to incorporate dedicated time for commercial analysis. After a few weeks, like everything else, it will become a habit and form part of our "success routine".
But we need to work on ourselves to make that happen.
And the more I think about this the more I realize we're constantly working on ourselves. It's a never ending process. Self-maintenance is actually a requirement of smart real estate investing!
So, now that you know all this...
What are you working on today?
Are you fumbling around from YouTube video to email to text messaging?
Or are you focused on an activity that will produce results?
Why not take time right now to write out the 3 things you know you should be doing to move you towards your goals. And then ... do them!
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