I’ve been a real estate agent and investor for the last 6 years. This puts me in a unique position to see the struggles of both roles. They’re more similar than you would think. In the end, both are under the umbrella of entrepreneurship.
Entrepreneurship is a roller coaster. Your life can get hard fast. Here are 3 tips to make things easier.
1. Quit trying to sell people
They don’t want to be sold.
If I could summarize my sales philosophy, it would be with this metaphor:
“I want to hop in your canoe and paddle with you. Let’s see if we can reach a destination we both like.”
Trying to sell people things or ideas takes a lot of work. I’m not very good at it. I like to just put myself and my business out there and let people make their own decisions. If what I have to offer is a good fit for them, I’ll jump in the canoe.
I know this is very counter-cultural for the real estate world. I’m supposed to be cold-calling and closing.
My version works for me. It also prevents the constant rejection that wears down many salespeople.
I’ve found creating content can do a lot of the heavy lifting for sales relationship building. Those relationships help on the brokerage side and the investing side.
2. Look for low volatility first and foremost in your business
Analyze investments on the basis of how many headaches and surprises you’re likely to encounter. You want less of both.
In a prior life I traded millions of dollars of stocks with 10x-20x leverage. The only way to survive using that much leverage is to shrink volatility as much as possible.
If you can minimize volatility, then you can then leverage significantly and safely.
If you combine low volatility and significant leverage over time. You’ll create incredible risk-adjusted returns and investors will beat down the door to be involved with you.
How do you create low volatility?
Buy the best quality assets you can. Work with the most reliable tenants you can.
Diversify a little bit, but not so much that you don’t intimately know what’s going on with your properties.
Master a strategy.
Who you chose to work with matters. It can massively lower volatility.
3. Work with the best vendors if at all possible
There’s a delicate balance in real estate. You have to work with people you can absolutely trust.
The problem is that trustworthy people don’t work cheaply.
So, If you’re always looking for rock-bottom pricing from vendors, you may find yourself exposed to a lot of volatility (violating tip #2 above).
If vendors have been in business for a while, they have their pick of when, where, and with whom they want to work.
I’ve found it to be a good strategy to pay more for vendors who will perform as promised, with minimal oversight. (After they prove themselves!)
If you get the right person for a job, the price won’t matter that much. They’ll perform well and you’ll perform well. You minimize headaches and provide a product or service that sells itself.
This is all just a matter of personality of course. I know successful real estate entrepreneurs who would disagree with every point I made. But maybe your personality matches up with mine? Maybe we should go canoeing?
