406: Investors Biggest Mistakes #3 – Not Allowing REI to Run Your Life

SHOW NOTES FOR EPISODE 406: INVESTORS BIGGEST MISTAKES #3 – NOT ALLOWING REI TO RUN YOUR LIFE

Do you ever feel like your real estate investing business is running your life and time?  In today’s podcast, Bill explores this major investor mistake and how you can take the reins of your business and re-engineer it to run without you so that you can enjoy the financial independence that attracted you to REI in the first place.

Intro

We all get so wrapped up in the thrill of real estate investing (once you start buying, selling and cashing those big rent checks you will know what I’m talking about), that begins to become all-encompassing.  We all have cell phones that are glued to our hands.  When the phone rings, we are right on it – whether at the dinner table, on the road or taking a job – because it could be the Next Big Deal!

We take calls from contractors, property managers and suppliers at all hours of the night and weekends.  We allow tenants to have us at our beck-and-call because we fear if we don’t say “how high” when they say “jump” they might move out.

Before we know it, our lives are consumed with nothing else.  We left our jobs so that we could stop working for THE MAN and be our own boss.  Now we’ve come to realize that we are working for a much worse boss, a tyrant.  That tyrant is our selves!

How does this gappen?  It happens because we don’t effectively plan our businesses.  I talk about planning a lot on this podcast.  Near the end of each year, I start encouraging everyone to put together their Strategic Plan for the New Year. One of the benefits you will achieve in planning is you are able to create systems and checklists to control your real estate investing business.

Once these systems and checklists are in place, you will know what needs to be done in any situation.  You will look at the checklists daily to review what has been accomplished, what you are in the middle of and what you still needs to be done.

You should have checklists for every aspect of your business.  I recommend that you create a Strategic Plan AND an OPERATIONS MANUAL.  The operations manual is like the materials you would receive if, for example, you bought a franchise.  The ideal of the operations manual is that you can use it to delegate responsibilities once you can hire help and, later on, to hand off to someone else (maybe on of your children or a trusted employee) to run the business for you.

Here are some key checklists you should have in your Operations Manual:

• Property Evaluations: Buying right, market analysis, property analysis
• Property Inspections: Estimating repairs, formula worksheets, room-by-room analysis
• Contractor Management: Bid process, contracts, timelines and agreements
• Renovation Management: Cash flow, required activities, scheduling and contractor management
• Tenant Management: Application process, tenant screening, move-in process, leases and contracts

These are just a few of the many checklists and systems that you’ll need to create and use on a day-to-day basis.  Then you’ll be running your business and your business won’t be running you!

One of the benefits of systems and checklists is that, as you grow your business and hire people to work for you, you’ll train them by teaching them to use the systems and checklists.  You will supervise them by revising the systems and checklists that they are working on.

This is the fastest way to grow your business!

To get help on systematizing your business, read Michael G. Gerber’s book The E-Myth.  It’s a great book that will teach you how to not work in your business but how to work on your business!

If you don’t want to create all those checklists and systems yourself, find someone who already has a successful real estate business and find out what they are using.  The sooner you systematize, the sooner you will be free to make choices based on what you want to do instead of what your business needs you to do.

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com