We’re in that time of year when people have long since made their new year’s resolutions—maybe while having one glass too many of champagne—and by now, most or all of those resolutions are in serious trouble. One study found that 80 percent of new year’s resolutions are toast by the second week in February.
I’m not here to talk about general goals, because my main focus is multi-family investing. So if you have goals for 2021 relating to collecting butterflies or something else, then I may not be your subject-matter expert. However, if you’re looking to make better real estate investing goals, and also get out of the rat race—whether it’s in-person or remote—then listen up.
The problem with most new year’s resolutions
One school of thought says that you should go for “BHAG”. That stands for Big, Hairy Audacious Goals. Look it up. I wonder if that very concept is the cause of lots of people giving up a few weeks after they set their goals.
I’m accustomed to talking about big numbers, because I’m in real estate. It’s possible for one single multi-family deal to be big enough for you to retire. That’s pretty big.
But the problem is that big numbers can also be intimidating. In fact, they can set you up to fail, as you’ll see as you read on.
Big numbers can be great as eventual goals, and they may even motivate you. But it’s easy to sit on the couch and dream big. The real trick is how to make those dreams a reality.
Fortunately, I have a recipe for you that can turn dreams into results. It consists of three ingredients.
First Ingredient for effective real estate investing goals: Net Motivation
You’ve heard of motivation, but what’s this net-motivation stuff? It’s the positive drivers, reduced by negative boat anchors.
The positive drivers are pretty straightforward, though many people miss a key aspect. It’s good to have a big benefit in mind, like doing a multi-family deal that nets you five figures per month. The missing piece that’s also important is to think about what you’ll do with the benefit. I’m a student of an area in psychology called Neuro-Linguistic Programming. One of the concepts is future pacing, where you envision the end state you’re going after. So what will you first do with that monthly income? Visualize it. Taste it. Cut out images from magazines or find them online, so you can see what you’ll do with that money.
Of course, your goal may not be monetary, and this still works. If you want to lose 25 pounds, then great, but also visualize in depth what that lighter you will be able to do.
That’s the positive-driver part of motivation. Now for the boat anchors. You need to insulate yourself from demotivators. In my experience the most powerful demotivators are usually the people closest to you, or authority figures, because you listen to them more than you listen to strangers.
A gigantic, life-changing demotivator could be a teacher who says: “You’re no good at math. That’s OK; many people are no good at it.” Or it could be the looks and snickers your friends made when you got up to sing at an audition. These single events can alter the course of lives if they happen to people early enough, before they have the emotional shields to not take it to heart.
All it takes is a brief comment. In my case, my dad told me in no uncertain terms that I should quit my silly idea to get involved in real estate. He said “If you try that, Dave, you’ll be going downnnnn.” He coupled the warning with a thumbs-down sign. Then, every time I would mention something later about real estate, all he had to do was make the thumbs-down sign to reinforce his message. I love my dad, and fortunately I was old enough to separate my feelings for him from his advice.
This same type of demotivator can take so many different forms, with people saying any or all of the following:
- “I tried that and it didn’t work.”
- “You’ll never amount to anything.”
- “Don’t try it; I’m only saying it because I love you.”
- “You’re going about it all wrong.”
- “Oh, is this the latest kick that you’re on? Remember how the last one ended?”
- “That may work somewhere else, but it won’t work where we live.”
- “Maybe that stuff worked 20 years ago, but it won’t work in our economy and especially with all the COVID stuff going on.”
- “You know you don’t have the (fill in the blank: education, experience, brains, willpower, etc.) to pull it off.”
- “Bless your heart. You try so hard with your little dreams.”
Demotivators can also be very subtle things, like a look you get, or someone saying “Uh huh” in a disbelieving tone, or “yeah right”, or even just silence when you wanted a little encouragement.
The solution? Don’t cut off those people. (Well, probably don’t; it depends!) Instead, just nod but don’t engage, and do not take the demotivator to heart.
Here’s a simple rule: Take advice from people who have been successful at the thing you’re trying to do. If you want to become a doctor, then take advice from a real doctor. Don’t take advice from someone who washed out of medical school, or who never even tried but knows a guy who knows a guy.
After you insulate yourself from negative advice, then think about loading yourself up even more with positive energy. They say we will be the average of the people we hang around the most. Do you hang out with successful people? If so, great! But if you can’t think of many, then this should be one of your goals for the year.
If you don’t know a lot of successful people, the good news is you can kind of rent them!
In the old days the easiest way to do that was to attend an event where you could get steeped in tons of positive vibes from the presenters and the audience.
Those days will come back at some point, but they’re not practical at the moment. Even so, it’s still possible to surround yourself virtually, by attending webinars where there are breakout rooms of like-minded people. You may also be able to engage with positive people through a chat box that runs during a webinar.
Another great way is to become part of the right kind of social-media group like a specialized facebook group. The right people in certain groups will help each other, and it’s great! It’s not like just hearing from some guru who was successful but no one else seems to be.
Just be careful to get in the right group that gives off supportive vibes.It’s awfully easy to burn up your day on facebook, Twitter, etc, and also to pay too much attention to people who are short on proven expertise and very long on advice.
Second Ingredient for effective real estate investing goals: Regular, Small, Effective Actions
We just talked about how plenty of people have opinions, and many of those opinions are not helpful. It’s also true that plenty of people have experience because they’ve bought multi-family real estate. Obviously every property in your town and state is owned by someone. But a lot of people who are owners have no interest in teaching. They just own properties and are totally fine if the fewer people who know about multi-family real estate, the better.
I’m different. I have a mentality of abundance, and not of scarcity. Scarcity-thinking says that if I train you to buy apartments, that’s somehow going to cut into the potential profit I can make.That’s just silly. We live in an ocean of many trillions of dollars, and that’s just in the US! If I go to the beach and dip a spoon in the water, does it lower the water level for you? If I back a tanker truck and fill it to the brim, does it lower the water level for you? Nope. And if you buy an apartment complex, or 10 of them, it doesn’t cut into my profit potential. So find a teacher who’s experienced at what you want to learn, and who has the abundance mindset of sharing.
The next requirement is the teacher has to be good at teaching. Having experience is great, and being willing to share it is also great, but the shared information has to be clear and easy to follow.
I’m sure there are other good teachers for multi-family real estate investing, and more power to them. But I’m known for being a fanatic about systematizing the process. Why? Because I hate inefficiency and preventable mistakes. Creating systems is what’s allowed me to do many hundreds of deals around the U.S.
So wherever you decide to get your real estate investing information, make sure the actions are laid out systematically, step by step, by a real pro.
The next requirement is that the actions must be broken down into small steps. I know from personal experience how daunting and depressing a big, general action can be. Let’s look at different action statements:
“I need to do something like real estate investing.” (Too vague. What is “do”, anyway?)
“I want to learn real estate investing.” (Still vague. What type? When will you know you’ve “learned” it?)
“I want to get unstuck and moving with multi-family real estate.” (Too vague. How are you stuck? When will you know you’re unstuck?)
“I want to learn enough about multi-family real estate investing, so I can determine if it fits my circumstances.” (OK, now that’s a more-doable objective.)
Let’s say you feel like multi-family real estate is worth pursuing, so you’re past that stage. Here are other types of action statements:
You may say: “OK, what bothers me the most is finding the money to do my deals. I seem to find enough properties but it’s the money that stops me.” (That’s almost a good statement, but it could still use some refinement. Is your objective to find the money for a series of big deals, or one deal, or what? Because there are many techniques for getting funded.)
“I want to learn how to find the money to do my first multi-family real estate deal because I don’t have the down payment.”
Now we’re talking. It’s specific and clear. Now you can use that statement as a type of yardstick to compare against whatever multi-family real estate materials you come across: do they address your specific action statement, or not?
The Third Ingredient
There’s one other key element you need in order to advance toward your goals. You need to be patient.
I’m about the worst example of this, so I know what I’m talking about!
When I was in my 20s, I wanted what I wanted, and I wanted it IMMEDIATELY. If you’re in a rock band and you set your sights low enough, then you can kind of pull that off. But I got supremely tired of being broke and—long story short—my high motivation, coupled with a tough mentor who insisted on patience and following his action steps, meant that I stuck with it until I saw some benefits.
It’s so hard to do! You go to the gym for the first time in a long while, and put in a good workout. The next day it hurts to brush your teeth, never mind go about your daily tasks. That’s what I get for working out? I can now work out with MORE pain than before?
And even after several workouts, it’s hard to see a difference in the mirror. Nobody’s made any comments, other than “Hey, you didn’t wipe up all your sweat.” Why am I doing this? Maybe I’ll take a break and come back to it later, when I have more time, or I can find a training buddy, or the price is lower, or the gym is emptier, or the gym is fuller…
Thus dies a perfectly good intention to get in shape.
The same happens with multi-family real estate investing. You may have a hard time finding a suitable property, or if you do find one, you put in an offer and it falls through. Maybe you put in three offers on different properties and they go nowhere. Is it time to say that “real estate investing doesn’t work”? No, not any more than “gold mining doesn’t work because I looked for gold today and didn’t find it.”
Most worthy goals require patience to weather the ups and downs. It’s easier to find that patience when you’re in the kind of supportive group I mentioned earlier, and you’re taking proven small steps from someone who’s been there and done that, over and over.
New Year’s Resolutions 2.0
It’s time to create resolutions that involve the better approach I’ve outlined above.
Build your NET motivation by loading up on what inspires and drives you, and insulating yourself from what messes with your head.
Whatever you’re pursuing, make sure you look for a set of regular, effective actions. No pie-in-the-sky here, but actions that have been tested, refined, and proven to work.
Find a set of steps that are small enough that no one step seems too daunting, and also so you have regular positive feedback when you accomplish each one.
Then start to take those steps regularly.
Know that there will be setbacks, so just put your head down and keep on patiently plugging. If you choose actions that have been proven to work for others, you can have the confidence that they’ll work for you eventually, too.
Sure, I’d love for you to use the systems we’ve developed for multi-family real estate—but you don’t have to. You can apply these concepts to materials you get from someone else, or to goals that have nothing to do with real estate.
Because I do like to hang around successful people, I look forward to your writing me and describing how you’ve made progress toward your new-and-improved resolutions!