Let's face it. As real estate investors, we tend to be fairly busy people. Most of us have our "regular" jobs and have to find time between family, friends, and other obligations to work on our real estate investments.
While I'm not an expert on real estate investing, as a trainer and teacher for the past 17 years, the study of motivation, productivity, and getting things done is something I've studied extensively.
What I've found is this:
Being busy isn't always the same as being productive or being efficient.
I've had students and employees who are hardworking but seem to get mediocre results. On the other hand, I've also seen the opposite - those who do less but seem to get better results.
How can we explain this paradox?
Most of you are familiar with the 80/20 principle: The principle, in a nutshell, states that 80% of your results usually come from 20% of your efforts. In other words, a smaller portion of what we do (the 20%) tends to deliver outsized results (the 80%). So for example: 20% of your clients might lead to 80% of your revenue. Or 20% of your marketing efforts might lead to 80% of your sales.
According to this principle (and Tim Ferriss in The Four Hour Workweek), in order to maximize efficiency and productivity, we must identify the 20% of what we do that leads to the 80% of our success.
So, why is being too busy a good thing?
Think about this for a moment: As a real estate investor (or wannabe real estate investors), you probably have a fairly entrepreneurial mindset, right? For example, are you the type of person who goes to a restaurant and can't help but wonder how many tables are being served each hour and what type of revenue is being generated while also brainstorming ideas on how to improve efficiency? If so, welcome to the club!
I've found from my own personal experiences that having the will to work is usually not the problem. I enjoy working on real estate and problem-solving. The problem, though, is my curious mind combines with my sometimes compulsive nature and leads me to want to know about and explore everything! I sometimes fall prey to what others call, "Shiny New Object Syndrome," in that I'm attracted to any new idea I come across and want to pursue it at the expense of something I've been currently working on.
For example, while researching how to buy and hold properties I might come across wholesaling and now suddenly my focus will shift away from my original objective.
There's nothing wrong with change or shifting, of course. I've reshaped my goals many times over the past year. In fact, setting aside regular time to reassess your goals is fairly important to stay on task with any goal you set.
But what I've also come to realize is that not putting time limits on a task or project is bound to lead to too much unproductive time use.
That's why getting "too busy" can often be a chance for me to get laser-focused again.
For example, a great focusing question for me might be something like,
"If I only had one hour to devote to real estate each week, what would I focus on?"
By asking myself this question, I can hone in on my own 20% that will lead to the greatest results.
Here's an example from my own life:
There are a great many areas of real estate I want to become more familiar with: construction, finance, wholesaling, marketing, podcasting, etc. You name it, and I'm sure I've at least dabbled, if not more, in that subject. But recently, as I've gotten busier, I've forced myself to be a little more focused on achieving a specific result.
As I'm investing from abroad and I want to eventually move into the multifamily space, I've narrowed down that focus to one single task that I should be focused on:
Finding reliable operators that I can invest with in the future (an operator is someone I can trust to manage my properties, etc).
Now that I know what my focus should be, the task becomes easier: Make contact with operators, vet them and their deals, and see who could best help me achieve my personal goals.
I could start contacting everyone I come across, but then that might start to get unwieldy and inefficient. Again, time to apply the 80/20 principle to save time.
Starting with the end in mind
It's hard to know if you've succeeded at something unless you know what success looks likes. While it might be tempting to describe success in finding an operator on an outcome such as, "I have a 40-unit building that is cashflowing at 12% in an appreciating neighborhood," that goal might make me too focused on the deals being offered and not enough on the most important aspect - the trustworthiness of the operators themselves. I could fall prey to false promises being offered by incompetent (or worse) salesmen.
So, I'll start with a measurement that helps me pick the right operator to begin with. For me that person, ideally, would be:
- Recommended by a close, trustworthy friend who has similar values and investing ideas as me
- The friend has directly worked with the operator
- The friend has a track record of success to show me based on his or her investments with that operator
That's my first screen.
Why? Simply because in my business running an English institute in Korea, I've hired countless people from overseas, strictly based on emails and Skype conversations. Invariably, I've found that those being recommended by friends or past workers have had a much greater chance of working out.
Sounds simple, right? The only problem, however, is that I'm not best friends with Ken McElroy or Robert Kiyosaki! So, my friends might not be able to help me find reliable real estate operators.
Then, it's time to start applying the second screen. Ask yourself:
- Who has credibility through an online presence? (If you've spent years building this, most likely your reputation matters and you work to protect it)
- Who has lots of credible and believable references? (Obviously)
- Who has ties to a community that I'm also apart of? (If we belong to the same organization and have peers / colleagues in common, then there's more peer pressure to maintain your reputation).
- Who's willing to put "skin in the game?" (How can I make sure our incentives are aligned?)
These are some of the metrics that I've used in the past to screen people. But more than the metric itself, it's the thought process behind trying to quantify trustworthiness that I've found to be most helpful.
So next time you find yourself "getting too busy," try figuring out what your primary focus should be and how you can measure your objective and put a plan in place.
You might find that being too busy might force you to find your 20% that leads to the biggest results.
What do you think? I'd love to hear your feedback below!