There are three disciplines that are distinctly important and lead to success or failure in real estate investing. It’s like a three-legged stool. You need to have all three, and people tend to be good at one or two of these, but rarely at three. The first is opportunity. The second is capital. And the third is team. Let me break them down. Once you are familiar enough with each, you should be able to pinpoint which “leg of the stool” is the weakest and needs the bulk of your attention.
Opportunities Are The Intersection Of Confidence And Knowledge
When you take on a large building, you must have the courage to go through with doing your research and making a decisive game plan. But opportunity also encompasses the skillsets you’ve already acquired and have ready at the helm. These are the four or five things you are really good at fixing. This can include knowing which kind of paint will reform the entire ambiance of a large room, the effects landscaping and resealing a parking lot have on the exterior aesthetics, and not neglecting roofs or HVAC systems. Having the confidence to know where the boundaries of your knowledge lie, being able to solve problems that arise and accurately assessing the correct solution are strategic game-changers. It’s divide and conquer, reallocate and take action, being in the know and making a decisive choice.
Capital Is More Than Just Money
A lot of people I see in real estate start from the perspective of capital being the end all be all. “I’ve got money, or I need to get money, and then I’ll figure out what to do with it.” True, you can’t do anything without money, but finding deals is often harder than finding capital and finding great deals. Exceptional deals lead to being able to raise capital. There are two aspects of capital in a property: debt and equity. And on the debt side, that includes working with lenders and banks and maintaining strategic relationships. On the equity side, that is your investor pool, the group of investors you work with. While it can be beneficial to work with people you enjoy on a personal level, ultimately, you should keep focused on continuing to make good investments.
You can divide the investing world also into two different types: transactional and true investor. The transactionals are the people who are just focused on churning capital and garnering a fee for the work they do. The true investor is fixated on making great investments, gaining expertise along the way and playing the long game rather than shooting for quick wins.
There Are No I’s In ‘Team’ Or ‘Real Estate’
I love the efficiency, speed and joy that come with having an awesome team. I often think of a great real estate investment team as like a Navy SEAL platoon. There’s that level of trust where someone’s got the flank, someone’s managing the rear, and someone’s lying down to suppress enemy fire, all while charging ahead. It’s the owner’s job to command that platoon, to have that vision, to stand in front, to say the buck stops with us. But it’s also their job to give the team the freedom to do their highest-caliber work and to share that joy. Honesty, integrity, excellence and execution are crucial, and they are best when prioritized in that order. There’s also an acronym from the Entrepreneurial Operating System called GWC, which stands for, “gets it, wants it and has the capacity.” When it comes to our firm’s team, we maintain our core values through not only evaluating our team but also looking inward on ourselves and our work ethic.
Respectful disagreement is a healthy way to build a successful path forward. Without it, ubiquitous agreement leads to unwanted complacency, which hinders an investment team from the inside.