Powerful lessons from a simple saying …

It may sound like a medical condition, but an aphorism is actually a concise, memorable expression of a general principle or truth. 

We learned one of our favorites from a carpenter … (no, not THAT carpenter, though He had some good ones too) who advised … 

“Measure twice, cut once.”

That’s a LOT of wisdom in four tiny words. 

But even if you can’t tell the blade from the handle on your saw, there’s still much to be gleaned from considering this simple saying. 

The perhaps obvious message is it’s better to double check your plan BEFORE taking an action with permanent and potentially expensive consequences.

After all, measuring is fairly quick and inexpensive compared to rendering a valuable resource useless due to an incorrect irreversible action.

Of course, the flip side of double-checking everything is it takes twice as long to get things done.  That’s expensive too.  Time is money as they say.

So while we were sitting outside enjoying a frosty IPA and contemplating cloud formations and the meaning of life … 

… we wondered if there’s a way to measure right the first time so you can take quick and accurate action.

Because no matter what kind of market you’re in … the BEST deals go fast.  

And while you’re busy double-checking your math … someone else who’s faster and more skilled is writing the contract.

Measure twice and miss out.  Ouch … that’s no fun either.  Missing out on a great deal is a double hit … wasted time and missed profit.

So whether you’re a carpenter, tailor, flooring installer, or an ambitious real estate investor, it’s probably a REALLY smart investment to learn how to move faster with precision.

It comes down to education and experience. 

When you know what you’re doing and you’ve reinforced accurate actions through real world practice, you’ll make good decisions and take effective action faster. 

That’s a huge advantage in any market … especially hot ones.

Of course, this begs the question … how to gain the right education and experience?  And here again, we look at the trades. 

Craftsmen learn by doing.

Yes, there’s some classroom training to get familiar with concepts and terms.

But the REAL learning happens as they work as an apprentice under the watchful eye of an experienced mentor or “master” … and then as a fully qualified journeyman honing his craft through practice on a daily basis.

Some journeymen take on an apprentice and further develop their craft by mentoring as a master.  They learn by teaching in the real world.

Business and investing are much the same way … or should be.

So you can and should , listen to , and attend .  Ingesting good ideas is a great start. 

Sadly, this is where it ends for many people. 

They learn enough to get excited … maybe even take some action … and quickly get overwhelmed with information … or in over their heads in difficult deals.

Without experienced advisors and mentors to turn to at this pivotal stage … it’s easy to back away for fear of making an expensive mistake … or to press forward on sheer enthusiasm, only to hit a wall and lose both money and hope.

So here’s a tip …

When you consume content in the privacy of your own mind, consider that the primary purpose might not be to simply memorize answers or even stimulate ideas … although both are important.

Content is most useful for helping you recognize when you need some help in the real world, discovering who you can call, how to ask great questions, and for better understanding the answers your mentors and advisors give you. 

That’s why the mentor / apprentice model is arguably far more effective for developing mastery than the teacher / student model. 

Of course, finding the right mentor is a challenge.  Not all masters love to teach and not all mentors are masters.  

And in today’s complex world, you may need more than one … which is an even taller order.

The key is to focus on building good relationships with a network of masters and peers … people who have mastered or are mastering the same skills and activities you aspire to master.

And while you may need to invest money into some of the relationships you’ll need, it’s also possible to find good relationships in groups you join or .

We think content is a great tool to bring the right people together and give you things to connect on and talk about.   

And don’t be surprised if you end up doing some business together.  Although we’ve found if you make transactions the focal point, you’ll dilute the learning.

Our suggestion for your interaction with mentors, apprentices, mastermind groups, and even investment clubs … is to focus on learning, sharing, encouraging, and edifying each other. 

We think you’ll find any deals which happen based on this mutually edifying relationship will often be much better than deal speed-dating.

Of course, like most things valuable, it’s hard work to build a great network and endear yourself to a group of high-performers.  It can be a little intimidating.

But when you push through, you’ll have a powerful support network that helps each other find opportunities, navigate obstacles, and solve the most pressing challenges … faster.

And because it’s so hard, most people won’t do it.  So once YOU do, you’ve got an extremely rare and valuable asset.

Some investors do deals.  Others build a portfolio.  Some build a business.  

Those that build a tribe create something more valuable because it accelerates the development of all those things … and more.

Until next time … good investing!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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Real estate just got a BIG boost …

Something BIG is happening for real estate … and while it’s not a surprise, it’s a development every real estate investor should be aware of.

Here’s some context …

First, remember real estate investing is essentially a business of managing debt, equity, and cashflow.  

That’s YOUR job.  You can get your property managers and team to handle most everything else.

Equity (the difference between the value and the debt) comes from savings (down payment), the market (value increase), or amortization (pay down of loan).

Cashflow is a function of rental income, operating expenses, debt service, and taxes.

Debt is like the air in a jump house.  When it’s flowing in, it props everything up.  When it stops, everything deflates pretty fast.

That’s why real estate investors (should) pay close attention to debt markets.

The 2008 financial crisis devastated the supply chain of debt into real estate. Mortgage companies failed in droves. We know. We owned one.

Real estate went from too-easy-to-finance to nearly impossible.  Lack of lending crashed real estate prices and created a big mess.  The air came out.

It’s why we became such outspoken advocates for syndication.  There was (and still is) a huge need and opportunity to aggregate capital for real estate.

Banks and Wall Street had been the primary channels for capital aggregation and distribution.  But they were broken.  Main Street needed to be empowered.

The government agreed.

So in 2012, the JOBS Act passed. And since September 2013, regulations are in place which make raising private capital MUCH easier.  We like it.

But while the JOBS Act helps investors raise EQUITY …

… earlier legislation (the Dodd-Frank Wall Street Reform and Consumer Protection Act) actually impedes lending … especially at the local level.

But now that’s changing … and it’s an EXCITING development!

You may have seen this headline …

Trump signs bipartisan bill rolling back some Dodd-Frank bank regulations – Los Angeles Times, 5/24/18

“ … with the key support of some Senate Democrats, the legislation focuses relief on small and medium-sized banks …

 “‘This is a great day for Main Street in rural America, and a big testament to what’s possible when members of Congress put partisanship aside and work together to help our communities grow and thrive,’ [Sen. Heidi Heitkamp (D-N.D.)] said in a statement after the signing.” 

Community banks, which enjoy broad support among Republicans and Democrats, will be freed from Dodd-Frank’s mortgage rules if they make fewer than 500 mortgages a year.”

Even in today’s highly charged political environment, this bipartisan effort shows Main Street real estate is very important to politicians.

The Dodd-Frank rollback aims to improve the flow of money into real estate, which is awesome for real estate investors.

Of course, just because politicians aim at something, doesn’t mean they hit it.  Politicians are notoriously bad shots.

So what do LENDERS think of the Dodd-Frank rollback?

Local bankers say reforms to Dodd-Frank are welcome – Herald-Whig, 6/5/18

“Mark Field, president and chairman of Liberty Bank, said most of the benefits from the recent reforms … involve mortgages.”

“… allows banks to give automatic qualified mortgage status to customers they know if the banks are using their own money for loans.”

“‘Character and knowing people counts for something again,’ Field said.”

This is GREAT news … and although time will tell (after all, this is very recent) … we think it will open up capital flows into real estate.

Of course, as we’ve said before, we think more money will be finding its way into real estate lending.  It’s both inevitable and reassuring.

For individual investors and syndicators alike, this new playing field promises to open up new sources of lending … and terms.

Because even though lending has loosened since the depths of the recession …

… it’s remained tight for borrowers and projects that didn’t fit into the tightly-regulated box created by Dodd-Frank.

Not to get too far in the weeds, but the 2008 credit crisis had its roots in Wall Street’s casino mentality.

In its zeal to create more poker chips, Wall Street cast aside sound lending practices because they could bury the risk in complex securities and sell them to unsuspecting investors.

Wall Street didn’t really care if loans went bad … because they wouldn’t be holding them when it happened.

So Dodd-Frank created strict rules attempting to prevent the bad behavior of Wall Street and big banks.  (Good luck with that.)

We could go on … but the point is that Dodd-Frank took professional judgment out of lending … from EVERYONE … including community banks, credit unions, and other portfolio lenders (those who hold loans instead of flip them).

Even though the financial crisis had its roots in Wall Street, not Main Street … Dodd-Frank took many Main Street lenders off-line.

The Dodd-Frank rollback intends to take the shackles off local lenders.

There’s a HUGE difference dealing with a local lender on a PERSONAL basis … one who’s going to hold the loan … and can consider the many factors which don’t fit into some bureaucratic one-size-fits-all checklist.

And while we need to do more research, a side-benefit for syndicators may be that setting up lending funds might get easier too.

In any case, now that local lending laws are loosening, let’s take a look at moves you can make to take advantage of the changes …

Build relationships with community bankers.  If you’ve only been investing since 2008, this is a funding source you’ve probably ignored.  It’s time to fix that.

Open accounts with community banks in markets where you invest. Establish a personal relationship with the bankers.  It’s a VERY different experience than doing business with a too-big-to-jail bank.  You’ll like it.

Use professional selling skills to find out what the banker’s goals and objectives are.  What makes the relationship a win for the banker?

Present yourself as the IDEAL client for the banker.  Do some deals … even if you don’t really need the money.  SHOW the banker you’re a person of character and capability.  Build TRUST.

It’s even BETTER if you’re a syndicator because you can bring bigger deposits, bigger loans, more transaction volume, and maybe even more referrals.

In fact, one of the secrets of successful syndication is having your individual investors make deposits in the community bank you’re borrowing from.

Go with the flow …

When the rules change, so does the flow of money.  Sometimes it works against you.  Sometimes it works FOR you.

And while there are certainly some long term economic trends every investor … real estate or otherwise … should be concerned about …

… this is a development which should have real estate investors smiling.

We think these updates to Dodd-Frank will work FOR real estate investors … at least those careful to pay attention and take effective action.

Of course, you’ve read all the way to the bottom, so you’re already ahead of the game.

Until next time … good investing!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.