“Wealth acquired through an insecure lifestyle that is marred by uncertainty, instability, and excessive efforts is no wealth at all.” – Tom Seeley
We started our day with a eulogy. Actually, it was more like 100 eulogies.
I’m at Steve Cook’s Flipping Homes Bootcamp in Baltimore. Yesterday, Steve opened this five-day training event by asking attendees to write their own eulogies: “What would you like people to say about you when you’ve shuffled off this mortal coil? Is that how you’re living your life now? If not, you need to make a change.”
Steve Cook made a change in his professional life nearly 10 years ago. That’s when he put a failed restaurant business behind him and began to wholesale houses. He chose wholesaling because he had no money and his credit was shot. And with wholesaling, you can get properties under contract with virtually no money out of pocket – and sell them before you even have to close.
Steve started out as a “birddog” – finding deals for other, established investors. He did 80 deals in his first two years and acquired more experience in that time than most investors acquire in a lifetime. But, for all that activity, he didn’t make a great deal of money. He averaged just a couple of thousand dollars per deal. Not bad… but these days he works less and makes a great deal more.
Steve now averages a couple of deals a month, but at the rate of $20,000 to $50,000 for each property he “flips.” And he has built up his own network of birddogs and ready buyers, so he gets those results by putting in just 20 to 25 hours of work a week.
Weekends are for his family and church. He works Mondays, Tuesdays, Thursdays, and Fridays from 9:00 or 10:00 a.m. to 3:00. Wednesdays, he reserves for his wife. And every weekday, he makes sure he’s home by the time his daughter gets back from school.
Overall, Steve has bought and sold more than 350 houses in the last nine years. At the Bootcamp this week, he is trying to help attendees avoid the mistakes he made in his early years and achieve success with a balanced life that includes time for family and personal pursuits.
Steve insists that the key to achieving this golden combination – work you love and a lifestyle that’s not all work – is to begin with the right planning.
Steve took attendees through a goal-setting program specifically designed for real estate investors. But first he explained that making progress with any goal-setting program usually requires you to give up some bad habits – and he pointed out that it’s much easier to replace a bad habit with another habit than to just “give it up.”
When you aim to give up a time-wasting (and perhaps personally destructive) habit your best chance for succeeding is to substitute a habit that will improve your life in some way. So, Steve said, instead of watching TV, make it a habit to read the books you wanted to read, do the exercises you wanted to do, take the home-study courses you wanted to take, walk the dogs like you promised you would. Instead of indulging in too much junk food or drinking in your off hours, get high on planning and building your new business, volunteering for organizations you always thought were worthwhile, spending more time with family and friends.
It’s a simple idea, but a good way to make sure you don’t create a void when you give up a habit that will only be filled by another counter-productive habit.
Another important idea that Steve introduced attendees to is that a good way to make your goal planning truly productive is to have someone who will keep you accountable. Once you set out your goals and your plan of action to attain those goals, you need someone who understands and respects what you are trying to accomplish – whether a fellow investor or a friend – to hold your feet to the fire.
You may say, “This week I’m going to place X number of advertisements, attend such and such network meetings, present a business plan to at least two lenders, and make at least five offers.” All fine and good.
But if you have someone who knows your plan… and asks you about it at the end of each and every week… chances are much greater that you’re actually going to check off the important items on your agenda. Chances are better that you’ll actually be working your plan and regularly making progress toward your goals (and not just planning ad infinitum).
Finally, Steve took the group through an effective business plan that will set them apart from the competition when they make contact with lenders and other investors.
First, he made the distinction that your business is not you! It needs to have its own goals – goals that don’t conflict with yours. The idea is to master your business through planning… because if you don’t master your business, it can master you.
An effective business plan identifies your priorities and allows you to define – and refine on an ongoing basis – the actions that will speed you toward your goals. It includes the following elements:
- Company information
- Marketing strategy
- Implementation plan
- Profit and loss projections
- Financial plan
- Management survey
Usually, the shorter the plan is, the better it will be. A half-page for each of the above elements, plus a cover letter, should suffice.
At the end of Day One of Steve Cook’s Flipping Homes Bootcamp, attendees had defined clear goals and plans of action, personally and for their real estate businesses. They had begun to assemble business plans. And they were focused and ready to begin mastering the specific techniques of flipping homes for profit.
Today, Steve will get into those specifics by revealing why his real estate business really began to take off only after he began acting as a “full-service wholesaler.” Tomorrow, I’ll tell you what that means.