I have a quick story about how I entered real estate investing and the main lesson I learned through the process. This lesson has carried into every other aspect of my life since.
A few years ago I took a real estate investment course/program in New York City. Having wanted to invest in real estate for years I thought this was the perfect course to improve my investing knowledge and get me ready for the big leap. After a two day course that taught all of the investment basics, I was assigned to subsequently meet with a mentor five times.
My mentor, Steve, a currently very successful real estate investor, sat me down and we focused on a location that I’d want an investment property. After setting the location, price parameters and profit objectives, Steve narrowed the search down to about 15 properties. What he did next scared the sh*t out of me. Steve- “Ok Eric, this property looks like it meets everything you are looking for, let’s see if we can place an offer”. Steve picks up the phone and dials the listing agent. After a long insightful conversation with the agent he turns over to me and says, while on the phone, “looks like the seller is motivated, what amount do you want to offer?”. After an embarrassing waving of hands signaling I’m not ready for this investment, Steve got the idea and hung up on the agent. I left Steve’s office that day thinking that he was insane; we are talking about $100s of thousands of dollars here! What maniac would spend that on a whim?
Fortunately for me, I was wrong about Steve on that day. I have since bought a cash-positive multifamily property and I attribute this accomplishment to that day with Steve. Prior to meeting Steve I spent a lot of time doing what I considered to be real estate investing which included: A LOT of google searching, organizing all real estate data in fancy excel worksheet, sifting through online tax records, etc. The one thing I wasn’t doing?- calling the listing agent… I realized that during the five minute call with Steve and the agent, I learned more about that random property than I did any property on my 200 row excel spreadsheet. I also learned that placing an offer does not necessarily mean you’re locked into buying that property, rather it actually puts you in the running in a very time-sensitive industry. It’s the way guys like Steve operate- they focus their energies on deliberate types of actions.
There are two types of actions to complete a task, project or goal in life. There are direct actions and indirect actions. Direct actions are those bare essential steps necessary to move a project or goal forward. Indirect actions are those related tasks that feel like that are meaningful but are MUCH LESS effective. Indirect actions are like creating an excel sheet to track properties; this does not move the project forward, although it feel like it does. Direct actions are uncomfortable and usually require you to pick up the phone or meet someone new.
I will touch on this more in my next post on the book REWORK by the founders of 37signals.