We felt swindled. We’d spent nearly $20,000 on several instructional programs, on a mentor for our real estate investments, and to incorporate. Despite all of that, my husband and I found ourselves in court trying to defend fire code violation charges for a six-unit property we’d purchased.
We blamed the property manager who had turned our property into a drug distribution center. And we absolutely blamed the Canadian postal system for not delivering the first violation notice. Mostly, we were angry with the people behind the programs we’d put time and money into.
Eventually, we came to accept the ugly truth. The mistake that was nearly fatal to our finances and our real estate investing business had been 100 percent preventable… and it was nobody’s fault but our own.
If you’re getting started as a real estate investor… or if you’re beginning virtually ANY new venture… pay careful attention to what we did wrong and how you can prevent it from happening to you.
It all boils down to Michael Masterson’s “Ready, Fire, Aim” philosophy – one that my husband and I subscribe to wholeheartedly. We firmly believe that you need to get going on your dreams. Without taking action, there’s no chance that they will come true.
But we were so anxious to “Fire” – to get going on the moneymaking venture we were so excited about – that we forgot about a critical part of the process…
Now let me assure you, the programs we’d invested in delivered on their promises. They gave us the tools and techniques we needed to take action. With what we learned from them – and our mentor – we flipped a house and purchased three others for a total of 12 units in only a few months. And we did it with very little money down.
Educating ourselves was smart.
So where did we go wrong?
Looking back, we realize that although there was nothing wrong with the programs we took, we had not determined WHY we wanted to take them, WHAT we wanted to learn, and HOW we would apply what we learned. Essentially, we had completely skipped the “Ready” step! And taking action without getting ready doesn’t work.
To learn from our mistake, consider the following before you sign up for any program:
1. What are your goals?
I follow the template Michael Masterson laid out in his book Automatic Wealth. Set your lifetime goals, your medium-term (5- to 10-year) goals, and then plan the next year.
When my husband and I signed up for our first real estate investing program, we’d already successfully purchased two rental properties. We had decided that we wanted to get rich as quickly as possible, and real estate seemed like the best way to do that without much effort. We’d even set a “goal” of earning $2,000 per month in positive cash flow from real estate within a year.
However, just because you have a measurable outcome and a deadline for achieving it doesn’t mean your goal is feasible. As Michael said in his article “Are You Goal Setting… or Still Dreaming?“ any goal you set MUST be realistic.
You have to consider the time, money, and skills you have to invest in that outcome, and determine where the gaps are. Then, you fill those gaps. That is a critical step in getting Ready.
Had we done that, we would have set a different short-term goal for ourselves. Plus, we would have been clear and specific on what we needed to get out of that first program.
What we really needed to learn was how to buy properties that require minimal time and effort to manage. Instead, we chased our loosely defined goal of $2,000 per month of positive cash flow. And we started buying any property we could without regard for whether it was going to take us closer to or further away from our long-term goal to become real estate millionaires.
2. Who is teaching what you need to learn?
Find a program or a mentor that can help you achieve your goal for the next year. If you’ve identified a skills gap that needs filling, find a program that can fill it. If you aren’t sure the program will deliver on your objectives, write the program coordinators and ask. If you don’t like the response you get (or get no response at all!), don’t sign up.
3. What are your specific goals for that program?
This is slightly different than your goal for the year. The right program will move you closer to your goal for the year, but you should also have a specific goal for the program.
For example, I recently went to a one-day real estate investing seminar in Vancouver. Before I went, I wrote down two goals that I would focus on that day. The first goal was to gather information that would help us develop our own real estate investing program. The second goal was to come up with three blog posts or topics for articles I could write based on discussions at the seminar.
I got more out of that day because I was focused on specific goals that would take me closer to the main goal I am working on for the year.
4. What actions should you take?
A good program will get you excited to get started. All you will be thinking about is “Firing”! Taking action is critical to your success, but first take the time to make a plan.
This is the second half of getting ready. You have to know WHAT you want to achieve, but you also need to figure out HOW you will use what you’ve learned to achieve it. Then, take action!
When we took our first real estate investing program years ago, we skipped right through to taking action. We didn’t carefully consider our long-range objectives. So we didn’t have any real idea of what we should be getting out of the program. We just knew that we wanted to be rich real estate investors. The sooner the better!
Had we taken a few hours to set realistic, specific goals for ourselves, we could have saved tens of thousands of dollars on repairs and fines for the kind of buildings we shouldn’t have bought, and three years of headaches with terrible tenants. And we could have achieved our goal of becoming millionaire real estate investors that much faster.
Taking good programs and learning from mentors is an excellent way to acquire the tools you need to take action and realize your dreams. But save yourself money and pain by getting “Ready” before you “Fire.” Then – later – the “Aiming” part comes really easy.