At the beginning of a new year, we invite you to take a look at where you’ve been, where you’re at now, and where you’re going.
Whether you’ve never bought a property or you have a full portfolio, NOW is the time to reflect and make sure you’re on the right path with your goals and your business.
After all, “If you don’t change anything, nothing changes.”
In this show, we’ll walk you through how to apply success strategist Brian Tracy’s concept of zero-based thinking to the real estate business, starting with two important questions:
- Knowing what you know now, would you make the decisions of the past year again?
- Why or why not?
Perhaps you just need to do some fine-tuning … or perhaps you need a major course correction! Either way, we want to help YOU make better decisions going forward.
In this episode of The Real Estate Guys™ show you’ll hear from:
- Your host, team player Robert Helms
- His doesn’t-always-play-well-with-others co-host, Russell Gray
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Evaluate yourself … and your team
Your evaluation should start with yourself. Begin the process by applying the question, “Knowing what I know now, would I make that decision again?” to the properties in your portfolio.
Then, ask yourself why you would or would not make that decision again. You can divide your answer into three categories … the property, the people involved, and the marketplace.
Answering this question about your decisions will help you avoid making the same mistakes going forward and make more targeted decisions.
After your self-evaluation, look at your team.
Every real estate investor has a team. As an investor, you’re a borrower, a buyer, a client, and a customer … and on the other side of these relationships sit your team members.
As you evaluate your team, start by asking some essential questions:
- Do I have everyone I need to run my business?
- Where is each person on a scale of 1 to 10? Why?
- How could I change or augment this relationship to get this team member up to a 9 or 10?
- Ultimately, ask yourself, can I salvage this relationship or do I need to start over?
You can’t always change the people on your team, but you can change your relationship with them. So, figure out what you can do to get to where you want … or whether you need to replace a low performer entirely.
Also ask yourself, “What makes a good team member for ME?” Figure out why your high performers are 8s, 9s, and 10s, then look to them to coach other members of your team and offer referrals.
You want the people on your team to be better, smarter, harder-working, and more committed than most people out there … even if it means they’re better than you.
Your TEAM has helped you get to where you are … so build them up. Serve your team members, and put them in a position to win, so YOU can win too.
And, if you’re looking for more feedback on yourself, ask your team to evaluate how YOU can become a better client. This will strengthen the relationship on both ends.
Review and fine-tune your financial situation
As an investor, you should have a basic idea of where you’re at and where you want to go … in other words, your personal investment philosophy.
If you haven’t yet fleshed out your personal investment philosophy, we highly encourage you to take that step before digging deeper.
Got your investment philosophy written out, revised, and ready to go? Now is a GREAT time of year to take a look at your financial situation … and evaluate where you can minimize spending.
There are three major expenses that can be leveraged against your equity to free up some investable money:
Guess what all three have in common? They’re an expense everyone pays for, but no one wants to.
You could brown-bag it every day to save money … OR you could work on minimizing the costs you really don’t want to be spending money on in the first place.
Your responsibility as an investor is to manage debt, equity, and cash flow. It’s key that you have a strategy to manage your money so you can accelerate equity growth.
Your first step in making a financial change is to seek out experts on your team who can help you get to where you want to go. Your second step is to ask yourself what’s missing in your own portfolio of knowledge … and then seek out education and training to address gaps.
Below are tools for evaluating each of these three major areas of expense.
The basic question you want to ask when it comes to interest is, “Are there places I can change my loan so it makes more sense?”
As with any financial decision, step carefully and rely upon knowledgeable team members.
Look at the big picture to see where you might make changes. You want to manage your mortgage for maximum net worth.
Check to see whether your lender will bundle properties to free up your borrowing power. Look at your current interest rates and loan terms.
Consider refinancing, but realize that refinancing means kicking a big can down the road. So, consider the long run, and not just your monthly cash flow.
For each insurance policy you hold, evaluate the policy itself as well as the carrier.
Make sure your policies will actually pay the risks you’re exposed to.
We recommend meeting with your insurance company to evaluate the company and your policy and find ways to optimize your premium.
There’s a steep learning curve here, so make sure you have a knowledgeable team member by your side or available for questions.
No one wants to pay taxes. Ideally, we would all pay as little as legally possible.
To do so, you need to know the tax law and, most importantly, have a good tax team … your financial advisor and your accountant.
We recommend meeting with your tax advisor to reassess cost segregation, property tax mitigation, your depreciation schedules, cost acceleration, expensing business costs, and structuring your business.
Real estate is one of the best assets when it comes to tax benefits, so invest some time to educate yourself.
And be proactive … come to your CPA with ideas and questions. Ask, “How can I do this?” instead of “Is this possible?”
Assess how you spend your time
Time is also an asset … perhaps your most valuable one.
By choice, we spend less time on real estate investing now because our priorities have changed. That doesn’t mean our profits have suffered, however.
Look at your calendar, relationships, health, and satisfaction level and ask yourself, “Do I own this business, or does it own me?”
To make a change, start by keeping a detailed calendar of how you spend your time.
Look at easily delegated tasks first and find ways to offload them.
Then look at the critical tasks on your list and figure out what the key performance indicators are for each task. Set up processes so you can delegate these tasks as well.
Refashion yourself … from a one-band man, to a well-oiled team.
We encourage you to find clarity about the things that absolutely require your time and effort, and the things that can be delegated and even done better by others.
The shift from self-employed to team manager requires a lot of fortitude, devotion, and skill, but it’s absolutely worth it.
Ultimately, your business should be fashioned in a way that it could be a model for 1,000 more just like it … a smooth-functioning machine.
Ask yourself, “If I didn’t own this business, would I buy it?” Because you are buying it with your blood, sweat, and tears on a daily basis.
Check your mission, vision, and values
You don’t want to spend your whole life trying to get from Point A to Point B if Point B isn’t really where you want to be.
Don’t get so caught up in the doing that you forget your destination.
All your strength as a real estate investor will come from your mission, vision, and values … so make sure you sit down and really fine-tune those three core beliefs.
Interested in having us coach you through the process of finding your mission, vision, and values? Check our Create Your Future Goals Retreat and get on the advanced waiting list now.
At the beginning of a new year, take stock. Congratulate yourself for what you’ve achieved … and get excited about where real estate can take you. There really are no limits!
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