“Reading, after a certain age, diverts the mind too much from the creative pursuits. Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.” – Albert Einstein
A lot of people are asking, “Wait a minute…what do you mean by “low-information diet? I thought the whole purpose for reading this website and the other websites, books, CDs, DVDs, boot camps, radio shows and other research/educational outlets was to get more information so that I can become a successful real estate investor.” I asked the same similar question whenever I first read about the concept in The 4-Hour Workweek by Timothy Ferriss.
Information Overload
My thinking was that if I studied everything that I could on real estate investing then I’ll be a successful real estate investor. Read about finding properties, section 8, HUD homes, REOs, wholesaling, flipping, tax sales, short sales, landlording, 1031 exchanges, setting up your LLC, what happens when that one in million event happens and someone decides to sue you because pit-bull from the adjacent neighborhood bites my tenant’s cat and feels they’re entitled to a few million big ones…on and on and on. You name it I wanted to know about it. Read, read, read! It was a never ending cycle that prevented me from buying a property for the first three years. I thought that if just had that one more piece of information then I can safely start buying properties.
We get so much information coming at us from every which direction and we feel compelled to take in everything in fear that we may end up doing something wrong. Now it is true that you need to be knowledgeable in what you are doing but you don’t need to know everything. In fact you really only need to know what you’re next two or three steps are and then execute them…now.
Thinking Too Far Ahead
As a real estate investment mentor here in Dallas/Fort Worth I get a whole gambit of questions. Questions like, “What do I do whenever I get my 10th investment property? How am I going to convert my portfolio of single family houses into an 80 unit apartment complex? Etc.” These are all great questions. The question that I always follow up with whenever a member asks me these questions is “How many properties do you own right now?” More often then not they’re on their first property. My job is to bring them back to the present moment and based off their particular situation, do the next right thing. You know…steps A, B, and C. We’ll worry about M, N, O, and P when it’s time.
Now depending on where you’re at financially and experience level will determine you’re A, B, and C. No matter what your present circumstance is there’re steps that you can start taking action on right now. If you have no money and no credit then you have certain steps to take. When you don’t have money and credit and don’t have very much experience in finance, property management and/or real estate then I wouldn’t worry too much about acquiring your first 300 unit apartment complex. Its just information you’ll have to relearn further on down the road. But if you’re blessed with a few dollars in the bank, a little experience, and a few other things then you’re going to take different steps.
Again, the questions that I get from the members are very good questions. I like what Ferriss said about “cultivating selective ignorance”. He says,”Just as modern man consumes both too many calories and too many calories of no nutritional value, information workers eat data both in excess and from the wrong sources.” Just as I mentioned earlier, I like to know everything. Yes…I’ve been accused of being a Mr. Know-it-all. And having all the knowledge in the world is useless unless it can be applied. It’s a character defect that I have to work on from time to time. In short, most of the information that I was acquiring didn’t pertain to my current situation and was just consuming time. I was just doing work for work’s sake.
If you’re a B personality and you’re honest with yourself then you definitely know what I’m talking about. More information is not always better and I’ve found it to be true in most of the cases. Remember “selective ignorance”. Swallowing input like a sponge with little to no output. To be more effective I had to select the information that I could put to work immediately.
Get Started Now
Now here are a few things that I challenge you to apply right now in your real estate investing. Let’s make sure you’re not only being efficient but more importantly doing what is effective
1) Goals
If you haven’t set-up your short term goals (6 months to one year) and your long term goals (no more than two to five years) then get to work on it. And make yourself do it now! Here’s a link to obtain Steve Davis’ Goal Setting Workshop.
2) Next Few Weeks
Okay, you’ve got your long-term goals (the 10,000ft view to know where you ultimately want to be) and you’ve also got your short term goals (current actionable goals). Take those short term goals and figure out what you have to do within the next few weeks or days and seek that knowledge.
If you’re new to investing then get yourself plugged into a real estate investing group with like-minded people who where you want to be relative to real estate. If you’re a new LUI member and you’re going the single family route then that means you need to attend Del’s 2-Day, cultivate your 20 real estate agents, and get pre-approved. When you’ve done that and you’re reached a road block then it’s a good time to contact your mentor and go over what your next steps.
That brings us to a very important point about mentors. A mentor is someone that has been there and done that. A mentor will help to eliminate the costly trial and error method. I use mentors all the time in every aspect of my life and especially real estate. Whenever I have a question about my next move, I contact one of the mentors and I get the piece of information that I need to act upon now.
3) Refocus
Whenever you find yourself aimlessly sifting through videos, websites, news, etc ask yourself, “Will I definitely use this information for something immediate and important?” If the answer is “no” then refocus and get back to pertinent and actionable data. Information that is consumed is useless if it’s not acted upon almost immediately. You’ll end up forgetting and you’ll have to relearn again whenever it comes time to actually use it ever. Just think about high school trigonometry for most people. I wonder how quickly that flew out your brain after taking your exams!
4) 80/20 Rule and Parkinson’s Law
If there are two principles that I try to practice in my real estate investing and everyday life are Pareto’s Principle (80/20 Rule) and Parkinson’s Law. These principles basically sum up what I’ve been talking about. The 80/20 Rule says that 80% of your results come from 20% and in many cases the numbers are even more lopsided…99/1. Parkinson’s Law states: the amount of time in which one has to perform a task, is the amount of time it will take to complete that said task.
Essentially, do an inventory of the activities you’re doing and figure out which 20% is producing 80% or your results. And with the 20% of the activities that are producing you 80% the results, instead of giving yourself a deadline of two months to complete that task, give yourself two days. Put yourself under the gun and get what matters done quickly. One of the tricks I use whenever I feel of track is to go through the list of all the items I “need” to do for the day and pick the two items that will produce me the most results and get them done by 11am. Can you feel the effectiveness oozing from your pores now?! If you’re a newbie then that means call about 10 realtors, and start the pre-approval process before you’ve finished you’re cup of coffee in the morning. ☺
5) Review and Adjust
Review your goals and see if you’re on track. Maybe you need to adjust your goals because you’re moving faster or slower than you thought but it keeps moving forward. You may have hit a crossroads where you can go one of many different ways and the new path you’ve encountered seems more attractive to you. i.e. You’ve gotten 10 plus properties in your portfolio and you could either keep going the single family route or cash them in and go into the multi-family arena.
6) Rinse and repeat as needed
Our goal is to make you efficient and successful investors by using an effective map to quickly get you to your goals. Don’t be shy. Let us know where you’re at and we’ll help next few steps get your momentum going or stay going. I’ll leave you with a quote from our fearless leader.
Real estate is easy. People are difficult. – Del Walmsley
{ 7 comments… read them below or add one }
Very helpful Bryan … and just like with my pastor every week it seems like you are speaking directly to me. With a new project at hand I have given myself 2 months to train, get acclimated to a new environment, and “learn the system,” but now I think a shorter time frame is more appropriate (but 2 days, really?).
Bryan, Well put. The best thing for people to do is get the big picture and quickly start taking steps. Big picture then a few more. Big picture, refocus and a few more steps. Your journey truly doesnt begin until you have taken steps.
Bryan
This reminds me of a couple of people I worked with. They were so focused on being so organized they were less productive. They were not able to be flexible in their everyday work day and schedule. This all has to do with management and managing on your feet. I know if those people read my comment, they would cringe and disagree. Sometimes it does rain and it wlll again.
I completely agree that we can easily get so wrapped up in gathering information and educating ourselves that we fail to take action when needed. In this information age, there are a lot of information junkies that need to free themselves from the 24-7 endless parade of news and information. Education is valuable, but don’t let your desire for knowledge keep you from focusing on the important tasks at hand.
As a newbie to LUI I was told to wait until the 2 day course to “pull the trigger” on anything. I have been looking for a while and have 4 realators sending me potential properties before I signed up. I have seen the info overload you spoke about and as a newbie HOW do I know where to draw the line? I have enough info to be dangerous but not enough to be effective….
@ Everyone – Thanks for the kind words and I’m glad some of my experience can help y’all on your journey. I’m an information junkie that has to constantly throttle myself down and refocus on the task at hand. You can be effecient at a number of mundane tasks i.e. email, but you must ask yourself “Am I being effective?”. If not then, you need to analyze your tasks and pick out those 20% producing you results and THEN streamline those.
@ Brad – The first thing I would if you haven’t done already is get a financial statement and cashflow statement WRITTEN DOWN ON PAPER. You need to know what you’re working with financially. This will give you a starting point as to what kind of properties you’re going to acquire and how you’re going to acquire them.
Secondly, the 2Day is definitely a must. Del does an excellent job of giving you the outline of what you should look for and what you should do. After you have the outline and you’ve decided where you want to start, then you should seek the seek out the information for the very next few steps.
Example: If after the 2Day you decide that you’re going to do single family then you need to get pre-approved and let your realtors know what you’re for with them to buy your first house or two. At this point don’t worry about multi-family or what you’re giong to do once you hit a 10 house limit. That’ll just delay you from buying your first properties and you’ll end having to relearn the info once the time comes to implement that information.
If you’re doing single family then another class to get into is the Single-Family Property Evaluation class that is taught the Tuesday after the 2Day. You can find it online as well but watching it live is the best.
I hope that was clear. Let me or your mentor know if you have any other questions. Talking with the mentors has helped me keep on track by doing the next right thing.
Bryan
I’m afraid that the Pit bull needs a special type of operator…these dogs, regardless of how ‘warm’ nevertheless have teeth, are still creatures not having moral concepts and once they DO bite, won’t allow go. As in all creatures…some have a tendency to be additional suseptable to instinctual behavior and time and time again, this breed tends to perform just that.