Today Theo and Travis will be sharing the four steps you can take to achieve success in anything you’d like to pursue.
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We also have a Syndication School series about the “How To’s” of apartment syndications and be sure to download your FREE document by visiting SyndicationSchool.com. Thank you for listening and I will talk to you tomorrow.
Theo Hicks: Hello, listeners and welcome to the best real estate investing advice ever show. I’m Theo Hicks and we’re back for another Actively Passive Investing episode with Travis Watts.
Travis, how are you doing today?
Travis Watts: Theo, doing great as always, man, thrilled to be here.
Theo Hicks: Perfect. Well, we’ve got another great episode for you today. We’re going to go over another one of Travis’s blog posts. Today, we’re going to talk specifically about the four steps for achieving success in real estate and in life. So this advice we’re going to go over today can apply to your real estate business, active or passive. And it’s going to apply to your personal life, whether that be relationships, whether that be any sort of personal goals you have, whether that be really anything. You can apply this to really any aspect of your life, which is what’s really great about these steps.
So I’m going to let Travis kind of quickly go over the four steps, then we’ll go dive into more detail. But I guess first, I forgot, we need to go over why Travis wrote this blog post. So Travis, let’s start with that. And then we’ll go into the details. I don’t know why I always forget that. I always say that and you’re like, “Well, let’s take a step back first, and….” I did it myself this time.
Travis Watts: No worries. No worries. Yeah, I just like to paint a little color to it. So it’s just been on my mind. This actually isn’t my latest blog. This was one I wrote, I don’t know, maybe six months ago or something like that, but—
Theo Hicks: It’s 12 months ago.
Travis Watts: Oh, was it? Okay, yeah. Like you said, it’s important, whether you’re active, whether you’re passive, whether you’re just getting started, whether you’re underway and have been for a long time… This is kind of the core underlying fundamentals of being an investor, setting goals, mindset, a lot of things that we talk about on this show… And you know, me, I just kind of like to take these huge abstract concepts and just try to simplify them; here’s four things to think about, here’s five ways to look at it, here’s the 10 questions to ask a GP. I like writing stuff like that.
So that’s kind of what this one is. I was thinking about—my wife and I, we recently did a Tony Robbins event. And of course, that’s a lot about mindset and limiting beliefs and things like that… And it just reminded me of the things I did very, very wrong when I was trying to first get started, and even before I dove into real estate and realized that was the thing that was really going to hook me and I was going to move forward with.
So it’s really just four things that can help anybody and everybody, and it’s something to think about. Hopefully, our listeners can get some value out of these. So first, I’m just going to give the four steps. I’m not going to go into detail about what they are, we’ll do that next. But I just want to lay them out so that you know what we’re talking about today.
So the first step is to know why you want your goal. And then number two is take massive action. Number three is expand your knowledge. And then number four is, be adaptable to change and fine-tune what you’re doing to ultimately get the result that you’re looking for. Those are the four steps, and before I go on my long rant, do you have any thoughts, Theo?
Theo Hicks: Yeah, obviously, I do a lot of interviews, I talk to a lot of investors, passive investors, active investors, other real estate professionals, business professionals… And I remember, for the longest time, before I started doing the interviews, I’d be like, “Well, why are they giving their secrets away?” Kind of their secret sauce of what made them successful to other people who could potentially be their competitors, right? And then I kind of came to realize, not really on my own, but I’ve heard at least one person that I’ve interviewed who said this is… It’s that “Look, the reason why I talk about what I do to potential competitors, is that most people aren’t even going to take action on it”, right? I mean, the first step is actually doing something. And most people listening to this, he says, probably aren’t going to do, so it’s not really going to be my competition anyways.
So when I think of that reminds me of these types of conversations that we have, these types of four-step processes, 10 things you should do, and how they’re very simple, first of all. It’s not rocket science, right? There’s just four very basic sentences that are pretty self-explanatory, and it’s something that really anyone who’s successful is doing. But just because it’s simple, just because it might be the secret to success, it doesn’t mean that every single person is going to do it.
So my point is that really the overarching thing to success is actually doing something and actually taking action on what people are talking about. You can listen to these shows, you can listen to these step by step processes, you can hear the secrets from all the people we interview, and it’s not going to be fruitful unless we actually go out there and take action. And as Travis says, he likes to take these really abstract things and then break them down into digestible chunks. And I was talking before how this can apply to anything. You can apply this to any type of real estate investing, whether it’s passive or active, and be successful. Someone has done that. So the goal is just to do something.
So if I could give this one piece of overarching advice, it’s just to take action on something that you hear from one of these shows. It can be starting with what we talk about today. So Travis, go on your rant, as you said.
Travis Watts: That’s a great point, Theo. I should make that a rule now. When I read a book or I’m listening to Audible or something like that, this is my rule to myself. I must take some kind of action that pertained to the knowledge that I gained from that book. Because what happens is I’ve found out if I just read a book passively, put it down, go on with my life, I forget (statistically, we all forget) 90% of what was even in the book. And then later, I think back of how much time I had spent doing that and it feels like a complete waste of time, right? I might as well have just turned on Netflix and zoned out, right? So that’s what gives me kind of that momentum and that drive and that confidence to move forward. So that was a great point. Thanks for bringing that up.
All right, so let’s dive into the first one. I’ll use a quick story here, I guess on each of them, something like that. So I said “Know why you want your goal.” So a lot of people talk about goal setting, and there’s retreats you can go to and there’s books on it, and it’s great just to set goals… But how many people, to your point earlier, actually take action and follow up on any of this? It’s great that we all make new year’s resolution, whatever, “I’m going to lose 20 pounds this year”, but then by March, statistically everyone’s kind of failed on that, going to the gym five days a week or whatever it may be.
So here’s something I picked up – and I forget who it was that taught me this… But if you ask why three times, and you can confidently answer why three times to one of your goals, it’s likely a good goal to have. So I’ll walk through that in a practical sense. If somebody says, “I want financial freedom.” Okay, noble goal. A lot of people want that. So why? “So I can quit my job.” Okay, why? “Well, so I can be home with my family more.” Okay, why? “Well, because I really want to spend more time with my kids as much as possible. And I had parents that were gone all the time on work trips and I just don’t want to end up being that parent. It’s very important that I’m present as much as possible.” That’s probably a pretty good goal to have, right? Because you could answer why three times to it.
But here’s what I hear all the time as being director of investor relations, and just on a personal note too, networking with tons and tons of investors. When I ask people about their goals, what I hear more often than not are numbers. “Why are you in real estate, or what’s this multifamily stuff all about for you? What are your goals?” “Oh, to have $10,000 per month.” Why? “Well, that’d be some good money, you know. I’d like to have that amount of cash on hand.”
So I would say dig a little deeper, because what’ll happen with those types of goals is the first roadblock you hit where you lose money or a shift of economy or whatever happens, you’re probably going to give up and say, “Well, this stuff, I thought it was good, but I guess it’s not. So I’ll figure out something else to do with my time.”
And to your point, most people don’t take action in the first place. If they do, they end up in a rut like that. So that kind of covers number one. Don’t just set goals, but know why you want your goal. Do you have any thoughts on that before I move on?
Theo Hicks: Yeah, one thing based on what you said, and one thing based on what’s in this blog post… This is more of a comment, but this kind of strategy of the three “why’s or the five “why’s” or whatever. A lot of corporations will do that as well for their quarterly goals, for their monthly goals. This is something that multi-billion dollar companies are doing to accomplish their goals. They’re ‘why’s’ are a little bit different than what ours are going to be, but the concept still applies.
And then secondly, I’ll come across a lot of people that I interview who are also doing their business with their significant other, their wife or their husband. And you mentioned that in your blog post, you said, “I found an amazing wife that shares the same passion, and that significantly amplified the action I was taking.” So you can kind of relate to that.
Now, my question for you is what if someone has kind of the opposite? What if someone is — taking it from the passive investor’s lens, right? They are working as a doctor or whatever and they’re investing in the 401K, and they come across the show, and they want to start passively investingm and their significant other wants nothing to do with it. They think it’s a horrible idea, they think “No, we need to keep investing in the 401k. It’s what my dad did, it’s what grandpa did, it’s what everyone says we’re supposed to do. This real estate thing is not going to work.”
So what are some things, whether from your kind of experience talking with people, or interactions you’ve had with your wife, that we can get our significant other on board with our real estate investing? Or I guess this applies to anything new, but specifically real estate investing.
Travis Watts: That’s a great point. And I am very fortunate and grateful that my wife just genuinely has an interest in some of the same things I do, one of which is investing in real estate, which is incredible. But to that point, a lot of significant others and spouses are not. So I do have some first-hand experience with this in my own family, so I’ll take that example of – in this example, it’s the husband who’s very interested into the real estate and the cash flow and the passive investing and all that, and the spouse saying, “Hey, this is foreign language to me, I don’t get it, it seems risky. I don’t want to take part, let’s not do it. Let’s just keep our money in the bank.” That kind of stuff.
So here’s the approach that was taken that was pretty much as effective as it can be. So it was having a conversation around “Okay, so what are your goals then? What are your desires? What are your long term objectives then? Despite investing and all that, what would be some fun things you’d like to do in life, or whatever?”
What it ended up for the wife was being able to take people on trips they could otherwise not afford to do so and spending time with them. And so being that person who could provide the trip. So where that meshed together was the understanding that, okay, so if we take our money out of the bank where it’s earning nothing, we put it into just a few of these real estate deals that cash-flow, we could then save that cash flow that comes back to us, use that to pay for these trips. And there you go. What are we really doing? We’re investing for experiences, which are trips with family and friends, and it was trying to find the common denominator. They both love travel and trips and things like that.
So again, move away from the numbers, the analytical side of this, especially if you have a spouse that’s not interested or they don’t do the math or the numbers. It’s going to be too hard to keep pushing at that, and say “1% here, versus five here, versus nine here, versus an IRR of this…” You’re not going to get anywhere. So just try to figure out what that could actually achieve for you in life that does matter to the other person. That’s the best thing I could come up with based on my own family’s experience.
Theo Hicks: Another thing to add to that, that I think might possibly work is to convince them through action, which I guess is kind of a natural segue into the next step. If they are uncertain about the future prospects of this strategy, well if you actually do it for six months to a year or do a deal, and show them that it’s not that big of a deal, then that will probably work better than showing them just a spreadsheet and saying, “Oh, well, you know, if you invest your 401k, in 20 years, it’ll be this number. And if we invest in real estate, throwing in these arbitrary numbers, it’ll be this much more.” But if you actually show them based off a deal you did, I think that could also be helpful.
Travis Watts: And more so if the risk tolerance is very conservative. So what helped me a lot when I decided to go full-time passive in these apartment syndications was I sought out some mentors, meaning people who were 10/15/20 years beyond where I was just starting out, and they gave me kind of the inside scoop. In some cases, they would show me first-hand on paper, like, “These are real deals that I’ve invested in. I invested this amount at this date, here’s what it’s returned etc.” And that gave me kind of that proof of concept. I was no longer reading a book and talking theory. I was talking to an individual that was really doing this first-hand. And it gave me a lot of comfort to not just find one person who is successful, but several out of these real estate groups. And that can help too, is having group meetings, conversations, attending maybe a conference or a real estate meetup with your significant other, so that you can immerse them a little more into this environment. Good point, though.
Alright, so number two is take massive action. So I know we’ve talked on this show before about my 2015 year where I read 52 books and I kind of went crazy with that, which again, I don’t fully recommend that people do that. That was a little intense. And that was maybe massive action, two levels of it.
But the point is this – I wrote down these stats the other day, which I still find astounding… But as of March 2020, we’re at 7.8 billion people in the world, approximately, to our best knowledge. And here’s what was fascinating to me about that – it took 2 million years to get to 1 billion as a population. It took another 200 years to reach 7 billion. So here’s the point. It’s crowded. It’s competitive. Just get out there online and look around. Since COVID’s hit, I’ve gotten on YouTube, and Instagram and Facebook, and you look at these 18-year-olds and 20-year-olds that are getting millions of views… I would say to anybody out there, go try that, because it is competitive. It’s fierce. I’ve tried all these different segues and video topics and cool looking thumbnails and great hashtags and I’ve watched all these videos on how to get the most clicks and followers and views, and I’ll tell you, it’s tough. It’s tough to get even 5000 views, much less 5 million.
So you have to stand out from the crowd. This is where massive action really matters, because most people don’t take action as you pointed out, Theo. Definitely, most people don’t take massive action; we’re talking about 1%, maybe up to 3% of people in any given niche that we’re talking about that are taking massive action. Well, that’s what’s going to get you to a level to be competitive, to actually have a chance to become successful. If you’re just procrastinating and putting things off and reading one book a year and kind of half-ass thinking about maybe you should maybe you shouldn’t, and talk to one or two people here and there, you’re not going to get anywhere. This is not to the point of this topic, which is achieving success in real estate and/or in life in general. So any thoughts on massive action?
Theo Hicks: Not really. I think this one’s pretty self-explanatory. You said there’s people that are taking no action, some action or massive action. So kind of the goal is to push yourself towards taking massive action that is smartly directed. I don’t want to go on too far off of a tangent, but I remember when I first got into real estate, I remember I went to the auditor site and I started manually logging all these properties that I wanted to mail to, set up a direct mailing campaign and I’m talking hours and hours and hours, like 10, 20, 30, 40 plus hours of just sitting there, doing the same thing over and over again. Very dumb, because I could have just very easily paid to get a free list or even for this particular service, I could have just very quickly emailed them and say, “Hey, can you send me this list?” and they’d send it to you. So that is smart, massive action, not just any massive action. So it’s not just sitting in front of your computer for 12 hours watching real estate YouTube videos, and then that’s it, and saying, “I took massive action today.” It’s smart, massive action.
Travis Watts: Yep, and again, that’s why setting your goals, defining them, knowing your why would come first, right? You’ve got to set your path ahead, know why you want that and then take directed massive action. I’m sure, I forget who it was, what book or author this came from, but 10,000 hours is considered perhaps mastery in a particular subject.
Theo Hicks: Yeah. Malcolm Gladwell’s book.
Travis Watts: There you go. Thank you. But that’s focused and applied to one specific thing. It’s not just, like you said, 10,000 hours of watching YouTube. That doesn’t make you a master in something.
Theo Hicks: You’re a master watcher of YouTube. There you go.
Travis Watts: Yeah, exactly.
Theo Hicks: You know all the algorithms and everything.
Travis Watts: Right. Alright, so number three – we’ve got two left here – is expand your knowledge. This plays into the other two, but I mentioned mentors, coaches, real estate meetup groups, podcasts like this… You’ve got to continue your knowledge base around a subject. You can’t just set a goal and say, “Whatever, I want to be a billionaire” and then not understand anything surrounding what it takes to get there. Because you’re going to ultimately fail. You’ve got to keep increasing your knowledge how. You’ve got to study billionaires. You’ve got to read biographies of billionaires. You’ve got to look at what exactly happened in all of these cases and continue building that knowledge base around it.
And just to point out again, the one thing above all action I’ve ever taken, I would even argue including taking my own personal hands-on action to something, has been mentors. It has been an actual person who’s successful in what it is I wanted to do, where I could actually ask a real question directly and say, “If you were me, in this circumstance, what would you have done or what would you do, given all of these dynamics?” That is powerful stuff, and it’s impossible to find that in a book, unless that book paints your specific scenario exactly. But seeing is believing. I don’t know, there’s all kinds of cliches and phrases around this stuff.
But yeah, find a mentor, find a coach, just keep expanding your knowledge. I would probably put, oh, God, I don’t know, five, six hours minimum per week as a passive investor into just studying up on the industry itself, what’s happening, looking at other people’s deals, just knowing what the Fed is doing, knowing what the government action’s doing. Minimum, 5-6 hours, which is the irony behind, as we’ve talked about, the actively passive show. Nobody’s completely passive, and you may not be completely active. So it’s kind of a hybrid. So that’s number three.
Theo Hicks: Yeah, and that contradicts what I just said, about the 12 hours of YouTube, but I think it was your blog post about maybe how to read 52 books in a year. You talked about some of the billionaires who would spend 5-6 hours per day reading. Obviously, it’s a balance between taking action on your business, like actually investing in deals and then taking action on your knowledge. So I think it balance, right? So it could be as extreme as someone like Warren Buffett, who reads for five hours a day, or if it’s something you set aside an hour per day, after work, or whatever, to educate yourself on this. But as Travis says, some effort needs to go towards expanding your knowledge so that you’re taking the smart action.
Travis Watts: Exactly. And it goes back to number two, taking massive action and standing out from the crowd. It’s very competitive. If you’re only doing no research or 30 minutes per week, well, then what is somebody doing that’s taking massive action, or even just taking action, right? Probably more than you, which is going to give you less of a chance to compete. So just keep that back of mind.
So number four is so relevant too today, in 2020… It’s being adaptable to change and then fine-tuning your process. A lot of our worlds were turned upside down by March and April. I had been going around in in-person events and conferences, face to face, and really not a lot online or social media. And I completely flip floped, where I launched Instagram and YouTube and everything I spoke about, doing a lot of podcasting, trying to reach people digitally.
Well, I had to be adaptable. I could have just been angry, and just said, “Well, you know, I’m going to take the next six to 12 months off and wait till conferences come back.” Or I could have kept fine-tuning the process, trying to reach people, opening up networking like I do, with my Calendly and these 15-minute calls I do with investors. And it’s like that book, Who Moved My Cheese. I remember reading that way back when, in like elementary school, or junior, I’m not sure. And it’s just such a basic concept, but it’s so true. You just have to be adaptable, especially in today’s technology world, automation, self-driving cars… How many people in the next 20-30 years are going to be out of entry-level work, just because of robots and automation? So you’ve got to always have some of the A and the B plan and just keep working at it to stay productive and stay successful. So that was kind of the recap number four, the last point.
Theo Hicks: Yep. A lot of people that I talked to on the podcast, they incorporate pivoting into their best ever advice and knowing when they need to change something specific in their business plan, or literally change their entire business plan.
And the last point on this particular step about adapting, I think in a Syndication School episode, I guess it was released a week before this episode airs… So if you’re listening to this in the future, go a week back. And I go over two or three different mindset habits. One of them I really liked was from someone I interviewed named Kris Benson, and he calls his ‘cool guy list’ or ‘cool girl list’, too. And essentially, anytime he encounters someone that impresses him, whether it be in a podcast, a book, face to face, he writes that person’s name down and then he’ll follow up with them constantly throughout the year, to see what new things they’re working on, what new opportunities they see on the horizon. That way, he always has knowledge. So rather than him stumbling around the internet, trying to find himself, he just goes to these very impressive people to find out what they discovered, what they know is coming up in the future and how they’re changing and pivoting in their business to account for that, so that he can do the same thing. So I think that was a very interesting way to know when and what to pivot into.
Travis Watts: Yep, 100%. Totally agree. So that’s really the four steps. Like you said, Theo, my advice would be the same as your advice. If anybody listening to this episode or any of our other episodes can just take one practical takeaway – this was only like 20 minutes or something – just take one thing and work on it a little bit. Like my rule to myself, when I read a book I have to at least take one action step based on new knowledge that I’ve obtained through reading.
Like Charlie Munger says, “Try to go to bed a little wiser than you were when you woke up.” And it’s that compounding effect over a lifetime that makes a significant difference. That coming from a billionaire – great advice. So that’s all I got for this blog post.
Theo Hicks: Awesome, Travis. Thanks again for joining us for The Actively Passive Investing show. Best Ever listeners, as always, thank you for listening. Have a best ever day and we will talk to you tomorrow.
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