kukmuntor.info

I had a frustrated student talk to me on the phone the other day and he was complaining about how he was so busy that he did not have the time to do the things he loved.  He thought being a full time real estate investor would be the answer to his dreams; he would make lots of money and travel the world.  He said he loved the income; he was making more money than he ever had in his life.  His challenge was that he had not spare time because he was a one man show.  He did everything.  He did the marketing.  He answered the calls.  He met with homeowners. He negotiated with the bank.  He did the bookkeeping.  He did repairs on houses he bought.  He did it all.  I remember chuckling to myself and saying “no wonder you have no free time”.  You doing all the work and not having any fun.  I told him you need to outsource.

Take Comfort in Systems

A Real Estate Guru once told me: “The Less I Do, the More I Make”.  And Caesar’s question gets right to the heart of the matter.  So, at a high level, here’s what any investor has to do to make money:

·         Find the Deals

·         Evaluate whether the opportunity is profitable

·         Negotiate price and terms with the property holder

·         Find a new buyer or tenant

·         Close the transaction and collect a check

Systematize, Automate, Outsource

Let’s start with finding the deals.  And let’s talk about the easiest deals to find: homeowners facing foreclosure.  You can either go out and get the info, or wait for information providers to send it to you.

Actively getting the information means using signs or hiring someone to go down to the courthouse to look up foreclosures.  Passively, means subscribing to lists of homeowners in default.

You then need to contact the owners and find out the information you need to see if you have a deal.  This too, can be systematized and outsourced.

Essentially each aspect of the business can be outsourced so that Paul could have the time and freedom he wants.

But, you know what was really interesting?  Time was not really his biggest enemy.  Can you guess what it was?  It was FEAR.  False Evidence Appearing Real.  Paul was afraid of giving up control to someone else.  He was falling into the trap of what I call “What If It is.”

* What if they don’t ask the homeowner the right questions?”
* What if they miss a call
* What if my mail does not go out on the right day
* What if I miss a call from the bank
* What if, what if, what if…

Paul did not believe that anyone else could do the work as great and as fast and as efficiently as he could.

And you know what?  Paul is probably right.  But by Paul being right he was left with having to do everything and he did not have anyone he could rely on.

What’s more important having all the money and having to do all of the work or having 60% – 70% of the money and only doing 30% of the work?  I am pretty sure I know which answer you chose.  Yet, it amazes me how many people fall into this trap.

I want to keep you out of this trap and keep you moving towards less work and more money.

In the next issue, I’m going to discuss evaluating and negotiating deals.