Excuses, excuses, excuses! (Part 1)

Is success a bit more elusive than you expected? Are you blowing by your goals stunningly or blowing them off as you once again missed that last batch?

If your goals are getting bigger and your successes piling onto each other, read no further. This is not for you. If not, read on. You and I need to chat.

First, let’s start with a simple exercise: Think of at least 3 times in the last week when you planned to do something that needed to be done, but when the time came to do it, it was inconvenient to do it at that time. Write them down. Don’t read any further until you’ve made your list.

Do you have at least 3? Good. If not, stop and finish your list. Your integrity matters to your success.

(More in next post….)

Confused…or Clueless?

I listened to an amazing example of confusing the cause and the effect. A woman called into a talk radio show to obtain their support for a campaign she was waging. She had written letters to editors, congress members, state commissions, et cetera, but was not getting any support. Her cause? She wanted to have them move the deer crossing signs off freeways and highways to pedestrian crossings and lesser traveled roads so the deer would cross at some place safer. She was serious. She sounded educated and was quite articulate…but totally clueless, even as the hosts queried her.

This would be funny, if not so sad. And maybe scary. She probably votes.

But anytime I run into something like this, I try to catch myself and use it as a mirror on myself. In this case I might ask: What don’t I know that I don’t know? Where am I clueless? Where am I confused?

I obviously cannot always answer something like that, but sometimes I can and do raise such questions in conversation with those who know me. I also make sure folks with whom I am in relationship know that it is okay to confront me about such things. I want to make the hurdle as low as possible for someone who sees my cluelessness to tell me about it, for example. Other times it could be words I misuse or mispronounce, unrecognized bias, self-defeating words or attitudes, or any number of other things that could come up.

Read up on the Johari Window model in psychology. It relates to the four combinations of things you do and do not know about yourself with things others do and do not know about you. My point is not to send you off on that tangent, but to help sensitize you to WANTING to know more about yourself and to be more transparent with those around you. Transparency breeds trust. Trust breeds success.

What can you do today to learn more about yourself or to help others know more about you?

But it’s such a TINY thing

Commas. Punctuation. They are good examples of why details matter if you want to be successful as a real estate investor or entrepreneur.

Take this phrase, for instance: “Eats shoots and leaves.” That sounds like a panda, deer or elk, right? How about this: “Eats, shoots, and leaves.” Throw in a couple carefully placed commas–such TINY things–and now you are describing some sort of human maniac.

Or this one: “A woman without her man is nothing.” Sounds pretty sexist, right? Throw in a little punctuation and the meaning reverses: “A woman: without her, man is nothing.”

In real estate or in business the little things often matter a LOT. When doing your due diligence, check taxes, assessments, liens, zoning, hazards, crime statistics, etc. Do the inspections (roof, wood-destroying pests, chimney, etc.) and check that obvious remodeling was done with the proper permits. When signing contracts, read the fine print. I could go on and on, but you already know all of these.

How about the details when it comes to building relationships with potential buyers, lenders, sellers, and current clients? Do you write hand-written thank you notes immediately? Do you check back with them periodically and regularly? Do you keep them informed as the transaction progresses, so they know what is going on? Did you capture a date for a birthday, anniversary or other special event in a conversation…and then recognize it later? How about the gift when they move into their new home? Anyone can do the big stuff. It’s taking care of the details that sets the winners apart, whether it is in sports, business, or relationships.

What additional attention to detail could you implement today as part of your standard practices in building relationships with current and future clients? Be creative! And keep looking for new ones.

An apple a day for physical health, an offer a day for business health!

To be serious in investing, you need to assume you will make 10-20 offers for each one you get. Many make their goal to generate that many per week or per month, depending on how much effort they put into finding leads. The faster you can get to that kind of offer number, the sooner you will see deal flow. As they like to say in business, “You have to kiss a lot of frogs [in our case, make a lot of offers] before you find your prince [in our case, get a deal under contract].” Think volume! Find lots of leads, make lots of offers, and you will achieve success!

Make your offer make sense for at least 2 exit strategies. That gives you flexibility on what to do with the property. Wholesale some to increase your capital. Rehab some, lease some. Choose the strategy that best fits the property. One guru told me, “If you spend any time analyzing or viewing a property, make a bid! Figure out what it is worth TO YOU, and bid that, even if it is only a fraction of the list price.” That is a good piece of advice. It forces you to make value determination a habit when looking at properties. It will then become second nature. It is a worthy habit to foster.

What opportunity are you looking at right now? What would you be willing to pay for it and not lose sleep if you got it or if you did not get it? Make that offer! Making the first one is the toughest.

Beyond that, how fast can you get to your first 10-20 offers total? Next, how fast can you get to that level every quarter? every month? every week? Decide the level of success you want or need, set your goals accordingly, and THEN GO DO IT!

What about cash flow?

The name of the success game is to acquire assets that generate cash flow. Cash flow is king. With a mix of strategies that generate cash for investing or acquire assets for cash flow, you can make steady progress toward financial independence.

I work all my top-of-my-head cash flow numbers assuming 40% for expenses. That includes taxes, insurance, repairs reserve, and property management, but not any debt service. For instance, to achieve a target of $1500 cash flow per month, that means I need gross rent of at least $2500 per month. If I have to pay the utilities and am not charging the tenants to cover them, my expenses will be higher. My 40% number is just a quick way to analyze a deal in a minute or two. It is a first-level filter. If the deal’s numbers do not work for that, I move on. Then I think about debt service. If the net cash flow will also cover the debt service, then I get serious.

Pick your number for quick analysis. Would you use more than 5% as your reserve for repairs? Do you know there will be a major repair in a few years and you need to start setting aside more money to cover it? Do you have HOA dues? What do you have to figure for debt service? Know your numbers and be ready to apply them quickly, so you can look at more opportunities.

 

There is no time like the present to get started! Do it now!

My father was a successful businessman, a great dad, and generally a wise man. One of his favorite comments when a task was discussed and a question of timing (often procrastination) came up: “There is no time like the present!”

Beginning investors are often so scared that they will mess up that they never get off Square One. That is like being so scared of the bicycle that you never learn to ride it, although admittedly, investing involves considerably more risk than a skinned elbow or knee. Those of us who learned to ride bikes generally enjoy riding and never forget how. Investing can be like that, too, if you give it a chance.

The key is to be ready enough, but not PERFECTLY ready, because you will never get there. Do you have buyers or know how you will find them? Do you have funding sources or strategies that do not require your cash? Do you know how to find leads? Do you know how to minimize your risk? If none of the above, find a partner or a mentor. But get going!

What can you do TODAY that will move you forward and closer to an actual deal than you were yesterday? Do that now. As Dad would say, “There is no time like the present!”

Victim or Victor? Create Your Own Reality

Each day each one of us is faced with choices about how to deal with events in our lives. Sometimes bad things come our way. Some days our plans are derailed by external circumstances. How we respond to those things can make the difference between success and failure.

Since 1991 Sharyn Abbott has helped more than 2,000 people become successful entrepreneurs. At the time of this interview in 2007, more than 90% of them were still in business, which is an amazing success rate considering that 90% of companies fail by their 2nd anniversary. She attributes her clients’ success to the educational environment and relationship building techniques she teaches. Author of ten books and a frequent keynote speaker, she has appeared on the Oprah Winfrey Show, where she was featured for her innovative concepts on positive communication techniques.

“Create Your Own Reality – Living Your Life on Purpose”
Recorded live

A 60-minute teleseminar interview with Sharyn Abbott, founder of Elite Leads, a business development organization dedicated to helping people find success in their own passionate work.
To listen to this informative interview, click here.

Real Estate Market Timing

I attended a presentation a couple evenings ago about market timing. The speaker was Robert M. Campbell. His book Timing the Real Estate Market discusses key metrics one can use to select the appropriate investing strategy for your target markets at any given time. The book is available on Amazon and Campbell’s website, realestatetiming.com. Various members of the audience spoke about how his predictions in 2005 saved their portfolio before the market tanked.

I thought I’d pass along a few random points he shared. For more information you can go to his website and/or subscribe to his newsletter.

  • Historically, real estate has appreciated 0.5% more than the rate of inflation.
  • Prices are rising in many markets. The recovery there is real, although it’s not clear how long it will last, given the state of the US and global economies.
  • When looking at any metrics for anything, always compare year over year.
  • Zillow reports that in 75% of all US cities it is cheaper to buy a house than pay rent. Rents in major cities are rising very rapidly and interest rates are at historic lows. For instance, San Francisco rents have gone up 14.7% since last year. Oakland rents rose 11.2%.
  • Government action is driving this market, but the underlying fundamentals are sick. Make the most of it while it lasts, because what comes next will probably be pretty ugly.
  • Since the government is giving the banks a pass on their REO inventory, he does not expect the banks to dump them and depress the market. They can hang on and trickle them out to keep prices up.
  • 28% of all homes in the US are under water. In San Francisco, that number is 31%, Sacramento is at 51%, and Las Vegas is at 71%. This does not include second mortgages or HELOCs. Yet only 10% are not current on their payments.
  • The average size of homes is trending downward. It will probably continue that direction in the long term.
  • To get through the next 5-10 years will be difficult. If you have a job, do it well so you can keep it. Investors should be assuring sufficient cash flow to cover living expenses.
  • Like data. Study data. Know the data for your market. Let data trends drive your strategies, not what everyone else seems to be doing.

If there is a point I would make about all of the above, it would be that real estate investing is either a hobby you dabble at and sometimes make some money. Or it is a serious business at which you work hard. Working hard includes knowing your metrics, tracking your efforts and results, knowing what works and doesn’t, revising your strategies based on market trends, studying, reading, learning, etc. So, are you ready to work hard? Your success depends on it.

I’m Committed! (Now what?)

This is where the hard work begins. You are committed! Excellent! Keep that commitment alive through the hard work it will take to start, and success will come!

Do you remember learning to ride a bike? Drive a manual transmission? Skateboard? Ski? Swim? Ice skate? Shoot a basket? Throw a perfect spiral pass? Whatever else you started and got good at? It did not just happen with the flip of a switch. You had to do the drills, the practice, the mistakes and retries, maybe even the falling down. Maybe even getting hurt. But you kept at it! Persistence! That is what got you to where it came almost naturally and you got good! Persistence is the next ingredient for success.

Whether you are starting a new business or rejuvenating an existing one, it will now take persistence to change the old habits and thought patterns into your new ones. If you have never done real estate investing, for instance, do not expect to make millions your first year. If you are diligent, persistent, hard-working and creative, you just might pull it off. Most of us did not and it is likely you will not.

However, it has been said many times, “If you keep doing what you’ve been doing, you’ll keep getting what you’ve been getting.” You know you have to do things differently. You know you must develop new habits. You know you have to make changes. Make the changes intelligently and intentionally to decrease the amount of time it takes.

Do you want a formula for failure in your new change program? Take on too many changes at once and make them too big.

Do you want a formula for successful change? Do the opposite: Start with one or at most two small changes that you know you need to make, because you’ve planned this out.

Work on making that one thing a habit by doing it every time instead of the habit you no longer want. No cheating. No passes. No exceptions. After 30 days or so, it should come naturally. Then it’s time to start working on the next one.

A good one to start with is daily planning. Plan every day the night before. Start each week with a weekly plan of what you want to get done. (We’ll talk later about where the weekly plans come from.) Make the daily plans build to achieve the weekly goal by end of day Friday. Make daily planning a habit. That will make it easier to change other habits that you make part of your plan for each next day. Your goal is to stick to your plan and keep working on your plan-to-actual achievement until you get as close to 100% as you can make it. Track it. Reward yourself for improvement. Celebrate when you meet your goal.

Make up your mind to search the web and bookstores for ideas about successful habits…and then make the changes. Persist in improving. Stay committed to your future success. Never give up.

Okay, so now: What new proven action for success are you willing to start today and do until it is your new habit? If you cannot name it, you have some research to do. Go find something! Could I tell you some more things? Yup, but that would be giving you a fish, not teaching you to fish! Take the initiative. Prove to us both that you have enough initiative to be a successful entrepreneur!

Go for it! You can do it! We both know you can do it!

 

Am I Cut Out for This?

It is easy to get sucked into a sales pitch from the stage or a webinar. It is not as easy to be successful doing whatever it was they sold you. Selling from the stage or from a webinar is a skill that is taught. It is psychologically engineered to lower your resistance and encourage you to buy. Watch for the pattern. You’ll see it regularly.

But that’s history. The money is spent, your enthusiasm has lost its glow, and hard reality is starting to set in. What can you do about it?

First, you can ask yourself if this is something you are COMMITTED to doing UNTIL YOU ARE SUCCESSFUL. “Committed” means you will do whatever it takes. It is not the same as “want to” or “would like to” or “going to try it.” It means you are willing to do the hard work, get up early, go to bed late, do things you hate, WHATEVER, for as long as it takes!

So, ask yourself, “Am I committed to being successful at this?”There is no half way on this. Either you are and you know it…or you aren’t. If you waffled or came in at anything less than 100% committed to success, it’s a good bet you will not succeed at anything like the level you are dreaming about…if at all. You need to decide: Am I willing to throw more good money after bad? Am I willing to throw more of my time and energy after something that won’t work anyway? If you are not committed, you may want to just count the money as tuition for the lesson you learned and quit before you spend any more.

Now note: I did not ask if you are brilliant at it, or capable of teaching it, or even if you think you can learn it. It starts with COMMITMENT. If you are committed, you WILL be successful! It’s that simple. You may need some help. You may need to do things you don’t like to do. You may struggle. You may fail at first. Or you may be successful right away. There are lots of other factors that affect that. But without commitment, it is going to be hard.

What would it take for you to become committed? That is an option you need to consider, too.

If you are committed, then congratulations on your new venture! I toast your ultimate success! Hire a coach or mentor if you decide you need one. Take more training, read more books, attend more workshops and webinars, whatever you have to do to get the help you need for your success. Just know that if you persist and work hard, success can be yours!