Preparing for a New Year with Zero-Based Thinking

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:

  1. Knowing what you know now, would you make the decisions of the past year again?
  2. 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:

  1. Do I have everyone I need to run my business?
  2. Where is each person on a scale of 1 to 10? Why?
  3. How could I change or augment this relationship to get this team member up to a 9 or 10?
  4. 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:

  1. Interest
  2. Insurance
  3. Taxes

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.

Interest

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.

Insurance

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.

Taxes

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!


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.

Leveraging Time – Going from Lone Wolf to Wolf Pack

A healthy, growing business requires help. If you’re a lone wolf real estate investor, accepting you need help is hard. Finding the right help can be even harder.

To make the transition from lone wolf to wolf pack easier for you, we’ve invited guest Robert Nickell to tell us about the process of finding the right folks to help grow his own business.

He’ll explain how to identify needs and set up processes to hire the right people so you can increase efficiency and offload busywork.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your running-with-the-wolves host, Robert Helms
  • His wolfish co-host, Russell Gray
  • Real estate broker, investor, and consultant Robert Nickell

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Recruiting help: Rob’s story of trial and error

How can busy real estate professionals get the help they need? Robert Nickell has faced this problem … and conquered it.

Rob got his start in real estate working with a general contractor in high school. But his fire for real estate didn’t really get lit until one of his older siblings brought home a copy of Rich Dad, Poor Dad by Richard Kiyosaki.

The idea of passive income and cash flow became a passion … but Rob didn’t have any starter cash. So in 2008, he started rehabbing and flipping houses with a friend.

“The market was primed for us to get in and get into it,” he says. The problem? Business was booming so much that he was running out of time.

Alongside managing contractors, projects, and materials for his rehabbing business, Rob started wholesaling. This required managing buyer lists and staying in touch with sellers.

But he didn’t want to hire someone. “To be honest, I didn’t want the responsibility of providing for someone else,” Rob says. But he knew he needed help. So, he started looking for part-time folks to fill in.

His first attempt didn’t go well. “I spent all of my time training and recruiting people. I was waking up miserable every day,” Rob says. “It was hard enough to run my own task list, much less give someone else a task list.”

Rob decided to visit his broker, who was crushing it with a small office but didn’t seem very stressed out. Rob, on the other hand, was working 60-70 hours a week and starting to hate his work. The broker’s secret? Virtual assistants.

The broker was leveraging low-cost trained labor from the Philippines to do the majority of the day-to-day work for his office … virtually anything that required a phone or a computer.

Rob decided to give it a shot. But his second attempt at offloading some of his work didn’t go well either.

His first hires were low-quality and required more work to train and oversee than it would take to just do the task himself. Rob had to learn how to develop a good process for hiring people from overseas.

From virtual pain to legitimate virtual assistant

The process for hiring virtual assistants isn’t much different than the process for hiring an in-office employee. For new hires, Rob now requires background checks, resumes, personality and job-specific tests, and sometimes, evidence of related experience. For example, anyone doing phone work has to do a phone analysis.

This process cuts down on time training people … and makes sure hires end up in places where they fit best and will be happiest.

Still, Rob says many people have misperceptions about virtual assistants. They think because overseas virtual assistants are inexpensive, they don’t require extensive training.

Rob takes a completely different tack by training his hire extensively to do what real estate investors do. “I’m looking for a rock star to complete specific jobs that will provide efficiencies for me,” he says.

Rob has some advice for real estate investors going through the same thing he did. “We’re all in different stages of stuck,” he says. Every business has inefficiencies they can eliminate.

The first step forward is to understand where you want to go with your business. Next, entrepreneurs need to create a structure based on their business plan for specific jobs that need to be created and filled.

For Rob, the formula for success looks like a combination of the right skill set, in the right seat, working under smart systems, with some accountability and structure in place.

Where can investors start? “The great thing about real estate is we can structure our businesses however we see fit,” Rob says. Every person does things a bit differently, but there are some basics that leaders can easily offload, like phone work to speak to marketing leads and property analysis.

Should the same person be doing both phone work and property analysis? Probably not. Personality tests and other evaluation can help you evaluate which job position a prospective hire will fit best.

Training and real-world experience are also key indicators. “When you couple experience with personality you can understand where people will really be successful,” Rob notes.

Helping other businesses succeed

Rob figured out the process of recruiting help for his own business. But he didn’t stop there. He now helps other real estate investors implement similar processes so they can run at maximum efficiency.

He starts by mapping out each business he works with, asking a few essential questions:

  1. What are you doing right now?
  2. What does your current team look like?
  3. What tasks do they complete?
  4. What are your business goals?

From there, he crafts a success map alongside his clients that details a structure for recruiting, hiring, training, and placing assistants throughout the business. This provides leaders with carefully crafted job descriptions and gives them some accountability throughout the process.

If the thought of delegation feels overwhelming to you … like it did at first for Rob … figure out the easiest things to delegate. Letting go of the tasks YOU don’t need to do can be the key to building a bigger and better business.

There is some art to this process, but it’s mostly a science, says Rob. When there’s not enough time, what projects fall by the wayside? Start there.

“Anyone can do this on their own,” Rob says, but working with a consultant may be the quickest solution. (Why figure something out on your own when there’s already a good solution out there?)

If you want to give hiring a virtual assistant a shot on your own, start with these steps:

  1. Map out your business goals and current structure.
  2. Develop a plan for specific tasks you need filled.
  3. Start recruiting. Look for a rock star who will fit the role perfectly.
  4. Get that person set up with a schedule, onboarding process, and any necessary training. Treat them like an employee, even though you will probably hire them as an independent contractor.

Try to create win-wins … for yourself and those you hire. Virtual assistants allow you to hire help at a low cost to fill certain needs … so you can spend your time doing the $1,000/hour tasks. And they receive benefits from steady pay and the opportunity to do work they’re good at and enjoy.

Reaching the next level

If you want to get to the next level, you’ve got to find a way to get help. Rob’s pioneered one solution. There are many others out there.

It’s easy to find a solution. It may not be so easy to recognize there’s a problem in the first place. But it’s essential. Because whether you want to grow your business or just be more efficient, you can’t do it alone.


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.

Preparing to Prosper with Social Capital

The people you spend time with influence what you think … and where you’ll end up. Building your social network gives you power and safety in an unstable economic environment.

Real estate is a relationship business. The most successful real estate investors have built a network of quality connections so they can exchange value when the time is right.

In this episode of The Real Estate Guys™ show, we’ll hear from Chris Martenson, co-author of the book Prosper! He’ll explain the eight types of capital … and take a deep dive into how and why building social capital is important.

Listen in! You’ll hear from:

  • Your socially adept host, Robert Helms
  • His socially awkward co-host, Russell Gray
  • Author and futurist Chris Martenson

Listen



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Broadcasting since 1997 with over 300 episodes on iTunes!

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Chris Martenson’s eight forms of capital

If you listen to the show, you’ve heard us talk about the book Chris Martenson and Adam Taggart wrote. It’s called Prosper!, and we think it should be required reading for everyone … especially real estate investors.

Chris has a PhD in science, but today he works as an economic researcher and futurist. He says he is not a forecaster or a visionary, instead approaching his predictions through the lens of his scientific background.

Prosper! is a book about preparing for the future … but preparing doesn’t mean prepping a bunker. It means not taking for granted the energy and natural resources we rely on … and taking steps to make your life better today AND in the future.

“We can’t have a future based on the past,” Chris says. As technology, fuel sources, and the economy change, so will the way we prosper.

What can we do to prepare for the future? Build up capital, says Chris. He gave us a rundown of the eight essential types of capital important to a happy, healthy, and prosperous life.

  1. Financial capital. “Grow it and take care of it,” says Chris. (Don’t worry, the book goes into way more detail.)
  2. Living capital. Not only do we need to monitor the health of our bodies, but we should take stock of the health of the ecosystem around us, including soil, water, plants, and animals.
  3. Material capital. Don’t just own “stuff.” Think about whether your belongings are valuable and long-lasting. What properties do you own, and how are they fueled? How about your vehicles? Chris recommends buying high-durability basics that are simple to fix instead of cheap plastic tools that waste both money and resources over time.
  4. Knowledge capital. This is the sum or your book learning and actual experience.
  5. Social capital. Your social capital is built not just on how many people you know, but also on how well you know them and whether you can depend on them.
  6. Emotional capital. If you fall apart at the first sign of trouble, it doesn’t matter whether you’ve built up the other seven types of capital. Be able to rebound from insults and setbacks. Know yourself well enough that you can respond with a clear head when times are tight.
  7. Cultural capital. You either have this or you don’t, says Chris. The key is to take stock of where you’re at and where you want to be.
  8. Time capital. “Time is our most important asset,” says Chris. It’s important we be able to prioritize. In Chris’s words, “You get to waste one life … so don’t waste it!”

How and why to build your social capital

Rich social capital equals a happier, healthier person, says Chris, a person with a greater sense of reward and purpose. We derive meaning from the people we spend time with.

Chris measures his social capital by the number of people he could call to watch his kids if there were an emergency. (Take a second to take stock. How many people in your address book could you depend on to help with a last-minute crisis?)

Social capital is incredibly important … for both personal well-being and success as a businessperson. So how do we build it?

It’s simple, says Chris … spend time doing stuff with people.

For example, Chris hosts a monthly neighborhood potluck with anyone who’ll come. And he makes and effort to have real conversations with people … instead of just small talk.

The key to social capital? “You have to be the one to take the risk,” Chris says. Be real. Be vulnerable. And get down to the deep questions, instead of staying at surface level.

Build rapport and get to know people. It takes time, but results in a deep knowledge of others’ strengths and weaknesses.

As a real estate investor, your business is built on relationships. You don’t want those relationships to be simply transactional. By building rapport and depth, you’ll get better deals … and be more satisfied with your relationships.

Social capital is incredibly important. So sit down and make a strategic decision to make an effort to build on your current relationships … and make new ones.

Chris notes that most Americans are living in a state of anxiety and fear … but not taking any steps to make their situation better. In a happy and successful life, there’s no room for stress and strife, he says.

How can you step away from anxiety? “It’s all about the doing,” says Chris.

Chris’s business, Peak Prosperity, wants to give his community of readers knowledge about what’s happening now so they can take a big-picture view. But more importantly, he aims to help people take steps to change the way they live and prosper.

Envisioning the future

Interested in building your social capital? Come to our Create Your Future Goals Retreat in January! We aim to help you figure out your values, motivations, and goals … so you can find people who share similar values.

We enjoy talking to Chris and learning from him because he really pays attention to what the future might look like.

It’s a guarantee that the future will look different. Artificial intelligence, communication, and technology are all poised to shift radically in the next few decades. And big changes are coming to the economy, social stratosphere, and environment.

Yet despite not knowing what the future holds, we have to make major, long-term investment decisions every day.

That’s one reason social capital is so important. Having social capital means having a community of people you can trade ideas with. Social connections empower you to question yourself and learn new ideas … enabling you to prepare for the future with confidence.

Now go out and build some social capital! May we suggest a potluck?


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.

The Biggest Scam Ever Could Be Your Biggest Opportunity!

No, we aren’t advocating becoming the next Bernie Madoff.  We just read Robert Kiyosaki’s article on Yahoo Finance called The Biggest Scam Ever.   It’s about 401k plans and he’s commenting on the cover story Time Magazine recently published on the subject.

Time says their sources estimate that 44 percent of Americans (a chunk of which are baby boomers) are in danger of going broke in their retirement years.  That’s bad news.  But it’s great for real estate entrepreneurs!

Once again, as we watch the horizon, we see waves of opportunity forming.  Do YOU see them?

Think about it.  Tens of millions of people in danger of going broke in their retirement years.  These will be seniors with social security checks.  It isn’t much income, but it’s consistent.  At least that’s the promise from Uncle Sam.

So their lifestyle will be taking a substantial dip.  Some are sitting in homes that are paid for.  Some are sitting on big fat mortgages.  Some are renting in nice areas.  All will need to do something to decrease expenses and increase their income.

Can you help them?

A few weeks back we did a radio show on reverse mortgages.  This is one of the few remaining tools available to reposition idle equity and put it to work.   The cash flow arbitrage is easy because there’s no payment required.  Better yet, there’s no danger of foreclosure.  Seniors with equity could make great investment partners to acquire cash flow real estate, which, conveniently, is readily available into today’s low price, low interest rate market – an attractive, but historically rare combination!

(By the way, we’re writing a free report on reverse mortgages, so if you haven’t already requested it, just go the feedback page and send us your request.)

We also recently blogged about the notion of buying homes via short sale from homeowners who are facing foreclosure because they can’t afford to make the high payments.  If you missed it, look it up.  Couldn’t similar strategies be employed with seniors?  We think so.  When you can help someone stay in their home for a lower payment, that’s a good thing!

Now hold on because our brains are flying around at light speed.  And rather than write a manual on how to do all this, we’ll just ask some questions to guide your thought processes.

If you think that several million seniors will be looking to cash out of their homes and rent, what areas and neighborhoods would they be interested in?   Think about weather, taxes, and proximity to medical care and airports (so they can easily go back home to visit friends and family).  What major population centers will they be moving from?  What are their options for more affordable areas nearby?

What about property types?  Think about floor plans.  Do they need lots of bedrooms or just a couple?  Do they need storage for all the stuff they’ve collected over their lifetimes?  What about stairs?

Here’s our recurring theme: Problems are opportunities when you look at them in light of available resources.   Most people get brain lock when facing problems, even though there are all kinds of resources available to turn problems into profits.  Don’t let this happen to you!   You won’t want to look back on this time in history and say, “I missed it.  If I only knew then what I know now!”   Trust us, you don’t want to “shoulda” all over yourself!  It stinks.

Lastly, we don’t understand why so many people cap on Kiyosaki when he posts his articles.  We’re betting these people have never spent any time with the guy.  Or they work for the people he rips.  In any case, if you haven’t figured it out already, we think he’s brilliant more often than not.  We look for every opportunity to spend time with him and the people he surrounds himself with.  You don’t have to agree with everything, but it will sure stimulate your thinking!  Which is the same reason we do our radio shows and post these blogs.

The key to turning this economy around is for people to be informed, think, make good decisions and take bold action.  The people who do it first will win the biggest. Why not you?

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