When I first started out in real estate investing, 20 years ago, I was really naïve. I don't think that Crayola has a color that adequately describes how green I was. I needed to learn everything. The trouble is that I bore easily. So, I would get into a new strategy, try it out on a few buildings, learn how it works, and just about the time I would start to really take off, I would get bored and then go on to a new strategy.
For example, I started off by doing about a dozen flips, then I bought two houses side-by-side with the intention to flip, but then ended up moving those homes offsite, subdividing the 2 lots into 4, and then building 4 new homes. Then I did some land development and built some more houses. That led to me doing a bunch of BRRRR's (Buy / Reno / Re-rent / Refinance / Repeat) with apartment buildings and also doing some condo conversions. I changed the use of buildings from one thing to another on 3 different properties. While still doing real estate investing full time, from 2009 to 2015, I was also instrumental in getting a new horse track and casino out of creditor protection, financed, and built.
When life has given me a choice it seems that I have picked, not the road less traveled, but the path with the chance for the best story. 92 properties and 240 units later I have a ton of experience in all of the different strategies and a ton of cool stories, but I have no doubt, I would be significantly better off if I had of focused more on one strategy.
We talked in last week's blog about 'Having your Strategy Fit your Personality'. I learned that lesson and the Focus lesson later in my investing career.
Focusing allows you to build momentum, what you learn on one project can carry on to the next. You and your team get better, you learn from your mistakes and correct them. you gain efficiencies and cost savings as a result. By switching strategies, earlier in my career, I was always in learning mode. That doesn't put you right back at square one each time, but it does slow your growth.
If you are just starting out in real estate investing, or are having trouble finding a groove, I would recommend you do some work on making sure you pick the right strategy and then focus on that. Even within a particular strategy, new construction for example, if you build the same property over and over you will find yourself doing better. A lot of time success in business comes from finding a system that works for you and repeating it over and over.
I do have a lot of great stories though. Let me tell you about the time...
For more tips like these or advice on which strategy might suit you best, please read my book on "Comparing Real Estate Strategies" It will give you an objective look at each of the major strategies and the pros and cons of each.
For more advice on how to increase cash flow with your real estate investments, check out my book on "Cash Management in Real Estate Investment"
Or you can always contact me directly or "Book a Chat"
I look forward to hearing from you.