With more than 20 years of commercial real estate investing experience all across North America and after mentoring thousands of people, I've learned some powerful real estate life lessons. Unfortunately, many investors learn these lessons too late and end up failing to reach their investment goals. Discover the 3 most critical real estate life lessons that people learn too late, so that you can avoid them yourself!
My dad was a sergeant in the Army for 30 years, so as you can imagine, my life was about discipline and obedience to Sergeant Harris. He was a great man. He was also the sage of the neighborhood. I can recall young people coming to our house and talking with my dad for hours. As a child, I had no clue what they were talking about, but as I grew, I began to understand and respect my dad more and more. He imparted to me three life lessons that I'll never forget.
- Be kind to people.
- Work hard and play hard.
- Good things never come easily.
These are as true today as they were then. I too have learned a lot of real estate life lessons during my over 20 years of investing and mentoring thousands of people through my books, videos, and webinars. And just as my dad imparted these words of wisdom from his life experience that helped me, I’m going to help you by sharing 3 real estate life lessons that unfortunately many investors learn too late.
Real Estate Life Lesson #1: Not Starting as Soon as Possible
Many investors wait too long to get started in commercial real estate. Some are waiting for the right time to jump in. Well, guess what? The right time will never come and waiting just means missing opportunity after opportunity.
Some are waiting for the good old days. When I first started twenty years ago, I could find eight cap, nine cap, ten caps deals almost anywhere, including California. Guess what? Those days are never coming back. And it's not because we're not going to see a crash. It's because of inflation, the cost of things is so much higher now. So don't expect the good old days. They're not coming back.
Other are waiting to have all of their ducks in a row. Again, this just results in missed opportunities. Here‘s the bottom line: good assets will not get cheaper. So that means you need to get started as soon as possible.
The Time is Now
My dad used to say, "Amateurs sit and wait for inspiration. The rest of us get up and go to work." I love that. Get up and go to work and bust your butt! If you are older, then you need to start now. However, you can't afford to make a mistake because you don’t have time to recover. You need to measure twice and cut once and in order to do that you need to get expert help.
Real Estate Life Lesson #2: Being Cheap is Expensive
I want you to invest in yourself. It's going to cost money, but it will be well worth it. You need to be frugal on your personal expenses but be aggressive with your business expenses, always keeping the end goal in mind. That means don't buy a boat or fancy car, and don't do the addition on the house when you're trying to get into real estate investing. Put the money into real estate and use your real estate to buy those things.
Top Down Goal Setting:
An example of how this works is the top down goal setting strategy I use myself and with my student investors. Every year we put our goal at the top and ask what is it going to take to achieve this goal. There are building blocks at the bottom to build first in order to reach the top goal. This strategy works great because it keeps the end goal in mind and you can see all these blocks building up to the top. These goal-reaching building blocks are what we provide through our Protege Program at Commercial Property Advisors.
Be Aggressive with Your Goal-Reaching Building Blocks
Hire the Best Tax Advisor: Don‘t hire your cousin who works for one of the chain tax companies for three months out of the year. That's being cheap and it can cost you a lot of money. When I first started, I used a neighborhood accountant to do the few properties that I had. But after a while I knew I needed someone more professional. I ended up spending four times the amount of money hiring a professional company, but it saved me hundreds of thousands of dollars. Not tens of thousands, hundreds of thousands of dollars! So it was definitely worth the money. One of my videos highlights the many tax benefits of commercial real estate investing. It's a must watch for anyone considering buying commercial real estate or who is already in the business.
Hire the Best Real Estate Advisor: I have another video called The Ugly Side of Commercial Real Estate Investing. It tells the story of an investor who wanted our help, but he was too cheap. So he took the advice of someone else and it didn't end well for him. The lesson here is, in the end, hiring the best advisors will save you money. And again, if you're older you don't have a time to make a mistake and recover.
Spend Money Marketing Yourself: You need to market yourself. It will cost money and needs to be perpetual. You should never stop marketing. In fact, to stop marketing is like stopping your watch to save time. It doesn‘t make sense. And then in our Protege Program, we teach our students how to go direct to the property owners to get off market deals.
Real Estate Life Lesson #3: Letting Pride Get in the Way of Success
We’ve all met those investors who are arrogant, that know so much that they don't need your help. They know exactly what to do all the time because they're smarter than you. This ancient scripture is so true as it relates to those who are arrogant. And it may help you as it has helped me. It says,
“When pride comes, then comes disgrace, but with the humble is wisdom.”
What that means is, when you're full of arrogance and you're not open to help, oftentimes your endeavors are going to fail. In contrast, in a person who's humble and teachable, there is wisdom, which leads to success.
Sometimes arrogance can be disguise as fear. My dad once told me, "Peter, fear is wetting your pants, but courage is doing what you're supposed to be doing with wet pants." I want you to be okay with not knowing what to do, and then ask for help. And it is absolutely okay to take a shortcut to your success by hiring someone smarter than you. Don’t be like the arrogant, trying to figure it out themselves. We know what's going to happen with them; most likely nothing or something not good. So, the real estate life lesson here is not to let your pride get in the way of success and ask for help. Where can you find the help? At Commercial Property Advisors we are here to help those that are humble and teachable.