Finding Your Superpower
I swaggered into the world of real estate in 2010 thinking I was the most experienced beginner ever. I had tech skills, sales experience, and connections.
How long do you think that confidence lasted? About a month.
My first property closed and I drove to it to introduce myself. My “fully” occupied triplex had one completely empty unit and one with a tenant who wanted to sue the owner. My trial by fire was to talk him down, figure out how to find tenants, write a lease, and do full unit turns – by myself.
Unexpected setbacks are the best learning opportunities, but if you survive them you have skills you didn’t have before.
The most common conversations I have are how to get started in real estate investing. The main point of the question is, I don’t have thousands of dollars to be able to go out and buy a property but I still want to get started. The fact that they’re asking the question, though, is a hugely positive step. Most people don’t even get past the part about not having enough money to invest.
If you’re asking the question, you can find an answer, an answer that depends on you, your skills, and your goals. It starts with what are you good at, and what do you like doing. You’ll hear it referred to as your superpower but that’s too much hyperbole. We all have special skills, even if we just finished high school or college.
Have you ever been asked “What do you want to do with your life”? I never knew how to answer that, still don’t, and presumably it’s a very important question. I’ve had more important things to think about.
But being asked “What are you good at?” is worth thinking about. You should become familiar with all of the tasks required to successfully be a real estate investor. That will help you determine what you’re good at, what you can bring to a real estate deal.
A lot of times it’s money, but just as often it is another skill that is difficult to find at the high quality level needed for real estate investing. What skills could they be?
Before we answer that, it is absolutely critical to understand that there are core minimum qualities a successful real estate investor needs to have. They are integrity of character, creativity, ingenuity, work ethic, and listening. Others, to be sure, but if you don’t have these, don’t even bother.
Underwriting a deal is a great skill, especially because most people don’t have this skill. Many say they do but their spreadsheets are amateur. Others are completely fine letting others do this task. If you are technically or financially inclined, get good at this. Take a class in it. Download several underwriting models as they’re easy to find on the internet. Make your own. Call brokers, get deals sent, and plug their financials into your spreadsheet. Then you have something of value to talk about.
Investor relations is overlooked and is not something that just anybody can do. What do you report? When? What does not need to be reported? How do you keep your investors feeling like their money was invested well? Do you know how to make charts in spreadsheets, use an email campaign tool, are you on the calls with the property manager, taking good notes? This task takes time. Messaging and communications make the difference whether that investor will invest with your team again. More so than returns.
Bookkeeping – do you have any skills here? Even better, do you know how to find people with specific skills? Have you hired a virtual assistant, a temp, or a freelancer? Working as the bookkeeper’s liaison for the team is a very important role. Your numbers need to be accurate every month, and you can’t have your CPA try to reconstruct your whole business at the beginning of the year when you need them to do your taxes.
Sourcing deals – calling the brokers. Yuck, who wants to be making cold calls. You do. It’s easy, and even though you have no idea what to say, and they’re going to discover you’re a newbie amateur, it’s something you will get good at very quickly. Learn how to find brokers and talk to them. Get them to send you deals. Use them to learn about the market. And get to know them, because when they get to know and like you, they will send you deals that they won’t send others.
Raising capital – you don’t have deep pockets yourself but you have family, friends, coworkers who would appreciate someone talking to them about real estate investing options. You’re not selling them, you’re offering them an opportunity. Get over that hesitation and have those conversations.
Social media – most people wanting to get started in real estate are relatively young, and have that special quality that they are social media junkies. I’ll never be as good as they are, and have come to respect their skills. If that’s you, don’t discount it. In fact, get better at it. If you post pictures on Instagram, do you post videos? Do you know how to edit a video, add captions, remove pauses? Do you know when Instagram and LinkedIn decide to push your posts out to bigger audiences? Learn it, because most of us don’t know this.
There are probably 5-10 more roles that you could fill in a real estate general partnership, without bringing capital to the deal. Don’t shortchange yourself. You have value and it’s your job to determine what that is, then leverage it.
