What comes to mind when you hear the word, “dummy?” I tend to think of a ventriloquist’s doll or a replica of a person that isn’t really a live person? One definition I looked up said a “counterfeit or sham.” With all the hucksters and self-proclaimed guru’s on stage, on-line and even on television pitching get rich quick schemes with real estate you’d think that there actually is such a thing as real estate investing for dummies. You know, “it’s so easy a caveman could do it!” At least the cave man was a living adaptable being…the dummy, well …not so much.
While I hate to be the bearer of bad news, anyone who buys into this get rich quick baloney is the dummy. Remember, a dummy lives in a trunk and doesn’t do anything until the puppeteer pulls their string or the ventriloquist puts words in their mouth.
Real estate investing is a great business for those people willing to exercise what I like to call the TEA Principle. TEA is an acronym I have used in my teaching for many years and I plan to continue its use for many more. The reason…IT WORKS!
Most people will tell you, “Take Action” and that is fairly good counsel however, what action? This is where TEA comes in handy. The philosophy here is to take effective action. Actions that move you nearer to your goals or bring your goals nearer to you are what make the difference between success and everything else.
This approach ensures a high probability of success. While you might think this is rather elementary, let me ask you this, how on target are you in achieving your goals? Have you achieved everything you set out to do 10 years ago? 5 years ago? Did you hit all of your goals for last year?
Here is a simple way to begin using this principle. First, set a goal or objective. Begin with something relatively simple and short term. Next write it down…yes write it down. Now think about what you need to do to achieve the result. Write it down in linear steps if necessary. Now it is time to schedule time to achieve the result you want. When and how will you execute the actions necessary to achieve your desired out come? The TEA Principle works best when you learn the discipline of time blocking.
Let’s assume my goal is to buy an investment property in order to produce passive income and tax benefits. I shouldn’t be looking for rehabs because they could require a lengthy vacancy period while they are being renovated. Vacancy is the enemy of passive income. Additionally, it would likely tie up my cash resources which could be better used to produce leverage (smaller amounts of cash to control larger amounts of equity and/or cash flow).
Next, I’d have to identify what skills and tools I’d need to achieve this goal. I’d have to answer questions like; how will I generate leads or find prospects? What buying criteria will ensure that the property will cash flow? Am I better off using the Multiple Listing Service to find the right deal or is there too much competition there? Once I locate a prospect, how will I pre-screen them and then negotiate either a price or terms that will increase my likelihood of success?
Once successfully negotiated, how will we document the transaction? Will I buy the property? If so, will I pay all cash (mine or a private lender’s)? Will I seek seller financing or use the existing financing (Buying Subject To) or another technique? Will I lease the property to control it and buy it at a later date (using a lease option)?
As you can see there are many questions to consider but by considering them up front, I can invest my time, energy and efforts in a very focused way. The TEA Principle allows me to take laser-like focus on my objective and as this becomes a habit, it grows easier and more natural to use for any goal I want to achieve. Every question I answer helps my actions become more effective. When I waste fewer actions on unproductive entanglements, my success rate increases and I free up time that would otherwise have been lost. Its sort of like what happens when I’m on Facebook or YouTube.
Buying or controlling the property is just the first half of the task, remember the goal is to create passive income and that comes when you start receiving those monthly checks so there are a few more questions to answer. Do I understand the rental market, how to prescreen tenants and manage property? What paperwork is requires, what is a 3-day notice? How would I do an eviction if necessary?
I’m not saying you need every answer before you begin because we are always learning and growing. We continue to get better over time as long as we keep asking more questions, seeking more answers and increasing the effectiveness of everything we do.
So why not get out there and Take Effective Action today! Simply taking one effective action every day will have a compound effect, which over the course of the next week, month or year can have a profound impact on your life and your business!
Please take a moment and let me know what Effective Action you took today?
To your success…