Real estate burnout is a real problem in this industry. It’s a part of the real estate mindset problem many of us investors face.
I want to tell you a story about Bob, the Superhero real estate investor.
Bob’s Story
Bob found the perfect home to fix and flip . Good location. Large margin. He worked on every detail of the home himself: project management, raising capital, repairs, selling, etc… After six months, Bob sold the home for $40,000 — a little over $6k per month for six months isn’t a bad living.
Unfortunately, Bob had a problem. While he worked on the home, he didn’t work on his next deals.
He wasn’t focused on marketing or sales. He had nothing in the pipeline during or after the deal. It took Bob two more months to close his next deal and another six before he got paid. Eight months without making money is a long time.
During this time, because money was tight, Bob did all aspects of the business himself. While working on the house, he had to file his taxes. But before that, he had to put his books together. Bob didn’t want to make the same lack of marketing mistake twice so he put together a marketing plan. Since money was tight, so he was the person driving by neighborhoods, putting out flyers and cards in parking lots, answering calls, taking customer visits.
By the time Bob got his third deal, he decided it was his last deal. Real estate burnout from doing everything was too much and he decided to just get a job in Corp. America again.
Being The Technician In Your Business
When you’re just starting out with your business, this is normal. Eventually, though, you need to grow your real estate investment business.
This concept leads me to the book that transformed my real estate business years ago: The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It, by Michael E. Gerber.
If you are like Bob, working day in and day out on every part of your real estate investment business, you need to hear this:
“If your business depends on you, you don’t own a business — you have a job.” – Michael E. Gerber
And eventually, the job gets old and you get tired of it – even if you’re the owner!
The Superhero Real Estate Burnout
One of the most common mistakes I see is that a first-time business owner does everything.
Like the story with Bob, the newbie investor does everything. They do sales, marketing, project management, bookkeeping, manage the properties, and everything in between. They are too ‘technical’.
What does this mean? It means they are in the business doing the work, instead of building processes or designing the future of the business. They work on one deal at a time and fall behind.
No one can do this forever. You can’t be the superhero working 80, 90, 100 hours a week for years on end without burning out. It’s not sustainable, not scalable, and will eventually lead to burnout. Here’s a short video where I talk about business owners who burnout.
Just like our quote from Gerber’s book, when you do everything in your business, you won’t have a business, you’ll only have a job. You can’t scale a job.
When I read Gerber’s book years ago, it changed how I thought about my real estate investment business. Here’s what I learned from Gerber and the past few years that made me a real estate investment all-star.
4 Lessons on How to Transform Your Business
These four lessons have allowed me to grow my real estate investment business beyond myself. I get to be the brains of the business, focused on the long-term health and prosperity of the business. These four lessons are especially important for the Bobs of the investment world, anyone stuck in the day-to-day of the business.
- Outsource
- Build systems that scale
- Create a business, not a job for yourself
- Make strong partnerships
Outsource – Leverage Other People’s Skills
As real estate investors, we understand the concept of leveraging other people’s money to maximize returns. Why do we have a tough time leveraging other people’s knowledge or skill set? To grow, you need to leverage other people’s skills. This outsourcing will allow you to free up your time so you can focus on what you are good at: growing the business. Successful business owners outsource nearly everything — and so should you.
Build systems that scale
When you’re just starting out, you won’t have any systems in place. Two suggestions.
1) Write down every step of your first few deals. Capture all of the details and work out what did or didn’t work.
2) Use the information you gathered to build systems. An example of a system would be a selling process. Later, you’ll teach other people to use these systems, allowing you to scale your business.
Make a business, not a job for yourself
You are the brains of the business. You need to get out of doing the technical work. As a business owner, your focus is on creating scalable systems that you can grow. Don’t get stuck in the day-to-day work.
Make strong partnerships
Who you work with is just as important as how you work. You’ll need the right team to make a successful business. This includes hiring the right employees, finding the right contractors, and attracting the best business partners. Partnerships let you expand your abilities and to access opportunities otherwise unavailable to you.
How REI Consulting Can Help You Avoid Real Estate Burnout
If you’ve talked to me or read my blog, you’ll know I’m a big advocate for working with others. Especially if you are new to real estate investing. The best thing you can do for yourself and your business, besides following the four lessons I mentioned above, is to work with local pros who can help you.
Here at REI Consulting, we offer several services, but here are three ways to help you avoid real estate burnout in your business.
Coaching is a great way to avoid many of the mistakes that beginners make. You’ll have a trusted adviser you can speak with about any problem or idea that may come up.
Joint venturing will allow you to learn how to create a scalable business. We teach new investors how to develop and record business processes for use when they begin to grow. In a joint venture, you’ll learn the ins and outs of running a successful real estate investment business.
A partnership is important when you need to bring in outside expertise. This helps you expand your abilities, to work on deals that you might not be able to close successfully.
It’s important to join a community of professionals who can help you transform your real estate investment business. We can help. I’ve created a network of professionals that can help you develop the tools and techniques you need to create a scalable business. We will also connect you with affiliates and other companies you that can outsource parts of your business too.
While it may take some time and hard work, you can create a long-term successful business and avoid the real estate burnout that sinks so many other investors. Don’t hesitate to reach out if you have any questions!
