There is no question about it—everyone in this industry needs a mentor. I can truly say that if I didn’t have the mentor that I do, I wouldn’t have made it this far—if not just for his teachings, but for his moral support during my freak outs. I’d say the latter has been the most important, but all the while, there is no reason to reinvent the wheel either. If someone has already done what I’m trying to do, why would I not listen to that person and save myself the time (and headache) of making the same mistakes?
When I started thinking of some of the best things I’ve learned from my mentor, a couple things come to mind. If you’ve read any of my previous articles, you’ve probably seen a couple of these things already. Even if you have seen them before, read them again. They are just that big of game-changers! They were for me at least.
I hope these 4 life-changing lessons I learned from my mentor help you in your real estate investing career as much as they have mine.
4 Life-Changing Lessons My Real Estate Mentor Taught Me
Don’t take advice from someone you wouldn’t trade shoes with.
This is my favorite quote in life. My mentor didn’t teach me this quote, but instead, he demonstrated it. The reason my mentor is my mentor is because when I first met him, I wanted his life. He was working his own schedule, we met at his rooftop pool deck overlooking downtown LA, he didn’t have a briefcase or a notepad or anything formal or fancy, and he was wearing flip flops!
After we met about a real estate contract I had been going over, I paused and asked him how I could have his life. Because I wanted his life, I was very willing to take everything he said seriously. I took advice from someone I would trade shoes with (or in this case, flip flops). It’s funny to me how many people want to force their advice on me and yet they aren’t living any kind of life I want to live, so why would I take them seriously? Another example involves a mentor of mine that I’ve never actually met—Robert Kiyosaki. People can knock him left and right, but I would trade shoes with him all day long, so I pay attention to what he writes in his books (and it’s worked for me!). So the point is, find people who are living the kind of life you want to be living and take their advice seriously. Be leery about advice you receive from anyone else.
Don’t ask “if” you can do something—ask “how” to do it.
This was huge piece of advice for me from my mentor. He said this exact phrase to me a few times. He was right, too. So often you may ask if you can do something, and people are very likely to say no. Why would they say that? Either because they couldn’t do it themselves, they weren’t willing to look for creative solutions, or maybe they simply weren’t too excited about you succeeding.
If you know deeply that you want to do something, don’t ask whether you can or can’t do it. Start asking how you can do it. You can ask people that directly, but you can also make that your intention—to figure out how to do whatever it is you want to do. Now, a caveat. Just as I talked about reinventing the wheel before, use some judgment on this. If one or more experts in a field are telling you something that goes against what you want to do, take a moment to assess and think about whether they might actually know what they are talking about. This is not to kill your dreams, but to make sure your dreams aren’t going completely against reality. Going against the crowds and making things happen how you want them to is one thing (and a cool thing!), but trying to force something completely unrealistic will be frustrating and potentially time-wasting.
Now, the trick is—how do you decide if something is a good thing to be pursuing despite any naysayers or if it’s actually completely unrealistic? I’m not sure the answer to that other than to say, be as educated as possible. With education, you can know whether something is doable or not, even if it may require some creativity! Also assess who is naysaying the idea. Are they educated? How well are they doing things or doing things around what you want to be involved in? What’s their credibility? Use your judgment. Either way, if you know something can work, spend your time figuring out how to make that happen.
This advice started out being strictly about the investment-buying realm but it eventually trickled into other things as well. I’ll get to those in a minute. As far as investing, though, my mentor doesn’t buy for appreciation, nor does he support it. I will say, however, that I do believe buying for appreciation can work in a lot of ways, so I’m not going to tell you I’m completely against speculating. I believe there are educated, smart ways of doing it. But there’s the key—educated and smart.
You can’t just run around buying properties assuming appreciation is coming your way. There are market fundamentals involved, timing strategies, and most importantly, contingency plans. If you are buying for speculation, don’t buy something you can’t afford if it doesn’t appreciate. If you can’t afford it without appreciation, go for it, and then if the appreciation happens as planned, excellent. But if you really can’t afford the operating costs of a property while you wait for appreciation, you are putting yourself at a lot of risk, assuming said appreciation is guaranteed to happen and within some guaranteed timeframe. If you don’t believe me, ask investors how well 2009 treated them. The option instead of speculating is buying real estate based on solid fundamentals. Numbers, market factors, known exit strategies, and with known risk mitigation. Now for the second version of speculating that I learned not to do.
Life works better and is less stressful when we constructively work together.
Guess what causes people to “jump off the ledge and go bananas”? Emotions. Guess what most often leads to emotions? Speculating. Speculating on someone’s intentions and speculating on what is really going on when you don’t actually know. This is true for life, but it’s especially true in real estate investing. The fact is, real estate investing has nothing to do with emotions. It’s about facts and numbers, period.
There are two things I recommend for keeping sneaky emotions from creeping in when it comes to your properties: First, don’t speculate on numbers or facts about the property. Instead, get as much fact as possible. It doesn’t matter a seller’s intention—it matters about the property itself. It either passes the due diligence test or it doesn’t. If you do full due diligence (cough, cough—be educated and actually know how to do it!) and something goes wrong after that, none of it’s personal, it’s just a thing. No room for emotions there.
Second, if something does go wrong, give everyone involved a chance to speak.