This is basically just a review of a book that I re-read for the second time. Grayson (on our house flipping team) suggested this book to me, and it’s really been helping me deal with feeling overwhelmed with everything.
Sometimes you read a book at one point in your life, but don’t get all of the advice and actionable material. This book is called “Essentialism” by Greg Mckeown, and it’s just great. There are so many visual representations of how you get overwhelmed. The circle with all of the short arrows are definitely where I was at. Then, there’s another circle with a single long arrow that shows where the most essential things are, and should be going. This is where we should all be, and this is where I want to take Flip Pilot and LeadPropeller.
I’ve been spending a lot of time thinking about what’s the most essential part the business, taking time to look at the big picture, to get a clear idea of what we really should be doing. What’s most important to us so that we can get rid of those little arrows. So many of us as real estate investors can tend to feel really overwhelming. If you burn yourself out, you’re not going to be running a successful business.
One story in this book is about journalism, but can definitely be applied to other aspects. When Greg was in a journalism class, the professor said to come up with a lead for a story about faculty meetings. Every student was coming up with stories about the different departments, and the goals from those meetings, and the overall impact on the university. The lead that the students didn’t take into account was that there wouldn’t be class on this day. The important take away was thinking about the audience’s point of view. The people reading this journal were the students - they didn’t care what the meetings were going to be about. The students reading just cared about if there was going to be class or not. So, thinking about things from the audience’s point of view helped to shape the best possible story about a subject that the students would have otherwise not cared about.
Seeing the bigger picture and coming up with a strategy that’s intentional is the best thing you can do for your business. The trade off should never be a detriment to your business. If you’re giving something up to do something else, make sure that something else is worth it.
Another clear point in this book is taking time to play. That’s so true. If you’re not taking time for yourself, then you’re going to burn out and give up. If you keep running forward, you’ll die. Taking time for yourself will help you get more creative in your real estate investing business.
I take my time on Sunday to plan my week, but I always start with scheduling the fun things to do with my family. Then, when I’ve put time aside for that, I add in the work stuff. If you’re not giving yourself time to have fun, you’re not going to be running a successful real estate investing business. Do it to get recharged.
If you guys haven’t read this book, do. It’s a great game changer for running the best business possible. Knowing what’s important and what’s not is difficult, but essential (hah, get it?). It’s like cleaning out your closet. If you see a shirt and think “I don’t wear this, but I might”, you end up keeping all of the close instead of clearing things out.
If something you need to make essential isn’t a clear “yes”, then it’s a “no”. Think about it like a scale of 1 - 10. If it’s not a 10, then it has to go. Plane and simple. That will keep you on the right track that your real estate investing business needs.
You can get this book in the link below! I highly recommend it if you need help with finding out what’s essential and what’s not. And don’t forget to join the Flip Pilot group on Facebook to network with other active real estate investors who have a 30k foot view of their business!
Kyle Burnett asks:
I've been full time in the flipping business for about a year and I feel like I need to get over the hump. I've done 4 deals in the last year and am behind on my goals. My wife and I have our first kid due in December and I have to ramp this business up to support our family.
Danny Johnson replies:
I've thought about this a lot and recently gave it more thought as I moved offices. Melissa and I switched offices in our suite and I went through a lot of my old training courses and meeting notes from years ago. What struck me was how many different things I got interested in and tried to learn.
I had books on land investing. Books on real estate taxes. Books on investing in IRAs. Books on raising private money. Granted all have been helpful but I realized that the success came from when we had focus. Focus on marketing. Focus on working the hell out of just 3 or 4 lead sources. Putting out bandit signs religiously. Driving for dollars religiously. Making the effort to get the phone ringing. Making a plan and sticking to it. Not constantly thinking about new ways to get leads. Just ways to being consistent and working the sources that have worked for decades for successful investors. Investors that struggle almost always do so because they didn't master a handful of marketing strategies that the stayed consistent with.
If you can't be consistent with your marketing and focused each week and thinking about what to tweak WITHIN that same marketing channel, you've got to hire someone even if just part time to do it.
Mike is brand new in the investing world but brings a construction engineering degree, and 10+ years of construction background, knowledge and business sense. Alongside him is his beautiful wife, Sarah, and loving father, Jim, who have helped get their real estate investing company, Newbyginnings, off the ground and now full steam ahead. They have big dreams for the company and hope to help thousands of families create their new beginning. Mike is also currently a full time construction consultant and his wife is a full time cardiac ICU nurse at a local Children's hospital.
When Mike started studying real estate investing, it only took him about 6 - 8 months for him to make the decision to jump into the industry. Mike found a wholesaler and got his first deal done. With a good foundation and knowledge base, he was confident in working his first deal for his real estate investing business. Where so many people give up before they hit this point, Mike kept going and is working everyday at making his business a success.
As soon as he decided to get into real estate investing, Mike found a wholesaler posting houses on Instagram. He sent a message, got into communication with someone on this wholesaler’s team, and started communication. This group has a wide range of buyers, so they were eager to talk to Mike. They walked through a few houses, and on the third property Mike made a bid and got it. It took 2 or 3 weeks staying in communication with this wholesaler before the property was Mike’s. What a great first deal!
For more connections, Mike has been networking in the Flip Pilot group on FaceBook. Finding other wholesalers is the key to starting up a successful real estate investing business. With both Mike and his wife still working full time jobs, and being full time parents, wholesaling felt like an easy way into real estate investing. As long as the numbers make sense, there’s no reason not to jump into it.
There’s a perception that wholesale deals don’t have much meat on their bones, but that’s just not true. Mike’s rule is 70% is the golden number. In his market, that’s tough to get, but you can expect to be around 80% - 85% ARV minus repairs. BiggerPockets has an ARV calculator, but Mike made his own in a spreadsheet to keep track of his numbers. With his spreadsheet, he determines if the numbers work for his marketing and business. This is the spreadsheet Mike uses, so if you decide to use this method, be aware that your numbers need to reflect your market.
For Mike’s first deal, Mike went through 2 wholesalers. Despite them both taking their cuts, there was still meat left on the deal. The property was a little rough, though. The property was supposed to be vacant, but it wasn’t. The sellers were there for 3 or 4 days after Mike closed on the house, which they weren’t supposed to be. Mike was still working on the plan for the property, but everything went well in the end. When the sellers eventually left, they left behind much more stuff than Mike was expecting.
Despite the unforeseen difficulties with this first property, Mike’s ultimate concern in with helping people like the sellers of this property. That’s where the name of his business, Newbyginnings comes from (in addition to it being a play on his last name). “You never know where your next deal is going to come from,” Mike said.
The sister of the seller had been waiting for someone like Mike to buy her sister’s house. After seeing the amazing success with her sister’s property, she mentioned that she’s going to be selling her house next year and wants to go through Mike. She even offered to make a testimonial, and took a picture with Mike, and wrote an awesome review for him. Her property will, hopefully, be Mike’s 5th deal for his business.
When it comes to actually rehabbing your property, communication is always key. Mike’s GC had brought in someone from other projects to help with the rehab, but staying in communication was a bit of an issue. Mike would talk with his GC, and thought that word was getting passed down to the other contractors, but with the mix up it didn’t. The plan in the future is to sit down over dinner with their GC and other contractors to get to know each other better, and keep the communication channels open. Making sure you know who’s responsible for what is important for keeping a real estate investing business organized.