Recently I had the opportunity to coach one of my success stories. A young man in his mid 20’s who attended a wholesaling seminar I put on in California, bought my home study course and then went out and earned $250,000 his first year in business. While I was flattered that he attributed his start in real estate to me, I felt compelled on our first coaching session to tell him that real estate had ruined him forever (hopefully not forever but I was trying to get his attention).
After a long and silent (awkward) pause, I told him he was in for a rude awakening (when someone pays you thousands of dollars for personal mentoring, they expect you to “tell it how it is”). You see, as rare as it is, I’ve seen it enough to recognize it immediately.
I tried to explain to him that as a wholesaler he cheated every rule about making money and building a business. His immediate success shortcut time-tested, universal principles about sacrifice and learning from mistakes and failures.
He didn’t learn about leadership or how to motivate, inspire or build a team. He lacked patience and saw others around him as inferior. Worst of all, he figured whatever new business he tried would work out the same way his wholesaling business did (only better).
He was bored wholesaling and ready for the next business venture and $250,000/yr just wasn’t enough money.
During our coaching sessions I continually questioned his motives, purpose and what he was striving to accomplish in life and business. The only thing he was certain about was “making more money.”
While I’m all for making more money, you can never truly build something lasting let alone remotely impactful, if the only objective is to make more money. There had to be a stronger “why.”
He was intent on starting another “cheat business.” A business that would instantly make a lot of money without putting in the time, energy or effort to provide real value or fill a real need in the market place.
Here’s the problem I tried to explain to him.
A cheat business is not sustainable.
The universe will correct the situation and it won’t last.
Competition, regulation, technology and dozens of other factors will force you to build a business the right way or else you’ll go out of business (click here to learn how to avoid becoming obsolete in business). It’s just the way it is.
I’ve seen it before especially in real estate. A new investor makes $75,000 on his very first fix and flip deal, thinks he’s a genius, ignores all the rules to successfully flipping houses and loses money on his next 3 flips. Hopefully, humility sets in and he realizes it wasn’t as easy as he thought and he’s got a lot to learn still.
Even though I’ve flipped hundreds of deals over the past 10 years, whenever I do a deal in a new market, I fully anticipate that it may take 2-3 deals to get through the learning curve before I start to make money. My intention is to hit a home run on the very first deal but I’m realistic about what it takes to be successful. That’s the kind of commitment I make when doing deals in a new market. You just can’t shortcut learning a new real estate market (learning the customer, finding the right contractors, agents, etc). Continual success is never a flash in the pan.
I asked this young man,
“What is something you love to do, you are passionate about and you would be willing to work on for 10 years relentlessly, if you had to, in order to be really successful?”
Not that it has to take 10 years but you have that kind of commitment to building a real business.
He couldn’t answer. This phenomenon is all too common. Most people want the over-night success and aren’t willing to pay the price to do it right and of course the overnight success is sensationalized in the media, propelling the masses even more the to think its attainable.
I firmly believe real estate investing is the ultimate cheat business. I’ve never seen another industry where someone can make as much money, as quickly and with the least amount of expertise as real estate, which explains why it’s so attractive. There’s absolutely nothing wrong with getting into the business for that reason (I did) but make no mistake, there is no short cut to sustainable success even in real estate.
Until Next time, Jerry Norton
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