In my conversation with Alex Franks, a real estate investor that has closed on over $15 million in single family and multifamily deals, he provided his 3 best pieces of real estate investing advice. In order to avoid making the same mistakes he did and to ensure that you create a solid, successful real estate business, Alex advises that you 1) have to create goals, 2) don’t be greedy and 3) need to create an incredible team.
Alex’s first piece of advice is that you have to set goals for your business. We have all heard of the goal-setting acronym S.M.A.R.T., which stands for specific, measurable, achievable, realistic, and time-bound, and you need to leverage it, or a similar technique, in order to create a plan and a vision for your business. If you don’t, and you are just chasing deals wildly, it will ultimately end in disappointment and failure to achieve your desired level of success. Therefore, instead of setting a pie-in-the-sky goal like I want to be financially independent and be able to do what ever I want, create a goal like I want to make (exact dollar amount) per year in passive cash flowing by (specific date), and I will do so buy purchasing (how much real estate you need to purchase to achieve specified dollar amount). Then, create a plan on exactly how you will achieve that goal!
Alex’s second piece of advice is to not be greedy. He wishes that he had followed this piece of advice when he first started investing in real estate because he has gotten greedy on multiple occasions, which has cost him a lot of business. Alex believes he has made many more mistakes than most investors and greed was the main catalyst. Therefore, adopting a non-greedy principle as one of your business values will help you avoid making many mistakes.
In tandem with not being greedy, instead of trying to perform all of the business functions on your own so that you can keep all the profits for yourself, Alex’s last piece of advice is that you need to surround yourself with the strongest team as possible. Many people like to think that they know everything that there is to know about real estate and decide to go at it alone. However, it is almost impossible to know it all, and as a result, it is almost impossible to create a real estate empire with no outside help. Therefore, you need to surround yourself with an incredible team. That way, you don’t have to know everything; you just have to know who to ask when there is a gap in your knowledge. It is okay to not be the smartest person in the room. In fact, you shouldn’t even want to be the smartest person in the room. Surrounding yourself with people that are smarter than you can be a very humbling experience. Ultimately, it can allow you to let your smarter team members run the show, while you take a back seat.
When has 1) the lack of setting a goal, 2) being greedy or 3) not having an incredible team resulted in some level of failure for your real estate business?Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.