Let's talk more about these lessons, yeah?
1. Partner With The Right People & Understand Your Potential Partners
When growing and scaling a real estate business, it can become necessary to make quick decisions about potential business partners based solely on a resume and recommendation from a trusted source. Unfortunately, the chances of this person being the wrong partner are high. I suggest spending the time to truly understand the motivations, life goals, and background prior to on-boarding an prospective business partner that you'll trust with your business operations and industry secrets.
When choosing different partners, keep in mind you will be with them for the long haul. Real estate transactions (especially major flips and new construction/development) are not quick. If you’re thinking, “well, wholesale transactions are pretty quick” you’re right. However, the reputation you build with the people you are partnering with lasts a lifetime, or as long as you’re in the industry. Don’t ruin it. You are a reflection of those that you do business with.
Even if your reputation is squeaky clean if you involve yourself with people whose aren't, this will reflect on you poorly. Keep this in mind, especially when you're new in the industry. It's easy to feel like you want to find that partner immediately and get going, but if your goals don't align, or their morals aren't the same as yours you will end up regretting it.
2. It's OK To Make Mistakes, Anything Worth Doing Requires Persistence
Mistakes and delays are bound to happen. Accept that right now. When I first got started in real estate I made plenty of my own mistakes. In fact, I still make mistakes and projects still get delayed! I like to think they are fewer and far between but quite frankly, who really knows. The point is, everyone makes mistakes and that’s how it should be. We learn our most valuable lessons during these times. Which takes me to the second part of this takeaway: stick with it.
These mistakes can be costly, emotionally draining, and as a result, you might feel down on your luck. If you really feel like you have found the right industry for you, stay the course because, believe me, it will pay off. But remember, you must learn from your mistakes. If something isn’t working, find out why and then find a workaround. Reach out to experts and influencers in the industry who have been where you want to go and emulate them. Go to conferences, listen to podcasts (e.g. Real Estate Deal Talk on iTunes), and read books. There is a wealth of knowledge available to you if you stick with your goals long enough to find it.
3. Fail Forward & Have The Courage To Keep Going
When I look back on my real estate journey, I can see how important the failures were. The one thing that didn't change despite these failures was my drive to keep going. My setbacks made me stronger and if I was afraid of continuing on I wouldn’t be where I am today. Getting to give advice, share ideas, and distribute raw, unedited (as much as possible) content that helps people learn from my various “failures” is so fun for me.
The way I see it, you get a choice everyday: to find the silver lining in a situation or to focus on the failure. Choose to fail forward and you will be surprised the doors that open.
4. Mitigate Problems During Construction As Swiftly As Possible
Most people don’t realize how important it is to take control of a situation when they are first starting out investing in real estate. I was there myself and I'm always learning new ways of getting better with this. If you’ve read my bio, you know about the flood in the basement of my first single family rental (SFR) property. At first, I was scared. I had no idea what to do when water was coming up to my knees, I froze. However, years of experience later I realized that the best thing I could have done in that situation was act quickly and take control. Back then, I wouldn’t have thought about having someone on call for emergency situations, now I know better.
The same goes for mistakes you make within the business. If something is wrong with your numbers or the foundation of the house, or whatever the case may be, don't delay and get on top of the issue immediately. Be a person who is a strong communicator if something goes wrong. This is how you build trust with contractors, builders, lenders, and business partners.
5. Focus On What Actually Matters
This might sound obvious, but the reality is most people have a "shiny object" syndrome. You know what you’re really good at, but that new idea/opportunity/investment/business sounds really fun!
The reality is: you need to be focusing on your strengths and how to build and leverage them. Like I’ve talked about before, knowing your real estate investment personality, local market, and investing strategy are keys to your success. If you are a great flipper you should keep flipping. Just because you can make a little side cash wholesaling, doesn’t mean you should. The point is to focus on what is going to bring you closer to your goals and aligns with your strategy. That is where your profits are.
Quick tip: It doesn't hurt to diversify if you're a flipper! Grab a few rental properties for cash flow!
2018 is right around the corner. What do you want to accomplish? What are you looking to do next year? Use these 5 lessons to get where you want to go.
Remember, partners are there for the long haul so choose wisely. Mistakes are there to be made, fail forward and have the courage to continue on your pursuit. Take ownership for problems that you cause and don't hesitate to take action. Finally, focus on what matters. At the end of the day (or year) you will kick yourself for following the rainbow. They are tried and true.
What You Will Learn
- Why You Should Partner With The Right People & Understand Your Potential Partners
- Why It's OK To Make Mistakes
- Why Failing Forward Is Key To Success
- Why You Should Mitigate Problems ASAP
- The Importance Of Focusing On What Actually Matters
- Let's Wrap It Up