3 lessons from your full-time career that will help your part-time real estate investing

by | Oct 31, 2015 | Article, Topics

3 lessons from your full-time career that will help your part-time real estate investing blog by Kevin GuzYour part-time real estate investing is a business. It’s not a hobby or a fad, it’s a business. You have to treat it like a business and run it like a business in order for it to be successful.

So many of the things I learned, the experiences I gained and the knowledge I accumulated in my full-time business career when I was a full-time corporate employee and a part-time real estate investor, have been key to my success as a part-time real estate investor.

Regardless of what your full-time career might be, whether it is directly involved in day-to-day business of some form, or maybe you are in a medical field – whatever the field may be – I venture to say there are aspects of your full-time job and your full-time training you can apply directly to your real estate business. And you will find it will help bring you success.

Let me share a few of the learnings I brought from my full-time corporate career to my part-time real estate investing business which is now my full-time real estate investing business. These things have all been critical in my evolution from a part-time investor to a full-time investor. They may be the key for you if your goal is to go from part-time to full-time investing.

No. 1 – Doing more with less

The whole concept of doing more with less. If you have a full-time career and you are working for a corporation -regardless of its size – you probably have many days you drive home and mumble under your breath that you are continually being forced to do more with less in your job.

Maybe with less people, less time or less of a budget. In the world of business we call this efficiency. The measure of your ability to minimize the time, effort and resources it takes to perform a given task.

This is so critical to you as a part-time investor. I do not need to lecture part-time investors that they do not have much time. They have a full-time career but they are running a part-time real estate investment business. Their time, resources and energy are very limited. They have to be incredibly efficient and willing and able to do more with less. They have to focus on the profitable tasks and activities.

In looking at those activities, you need to make some critical decisions as a part-time investor. You really need to ask yourself, “What are the things I am doing in my part-time real estate investing business I can eliminate because they are just not productive?”

3 lessons from your full-time career that will help your part-time real estate investing

Kevin asks investors to evaluate how they can best spend their time on their business.

An example of this might be a rental property you own in your part-time business and you decide every Saturday morning to go and mow the lawn.

Well, couldn’t you eliminate that task?

Couldn’t somebody else do that for you?

Even though it might cost you a little money, isn’t your time more valuable than the cost you would incur in someone else doing it?

You may also look at the tasks that perhaps you cannot eliminate, but that you could facilitate them. Meaning, improve on how long it takes to do it and the time and energy you devote to it.

One thing that applies to me, for instance, is that you can easily find yourself spending what you think will be minutes and it turns into hours in front of your laptop searching for your next investment property. Whether it is on MLS, a wholesale website or wherever it may be. Over time I have found an improvement in that process by taking advantage of all the different auto-email search functions you can design. You can wake up every morning and have every property that hit the market in the last 24 hours that fits your criteria right there in your email inbox. That is a way to facilitate vs. eliminate a task.

Finally, there are always those tasks you can delegate. There are so many things you can do that will allow you to better spend your time.

3 lessons from your full-time career that will help your part-time real estate investing

Could you delegate your time spent searching the MLS for houses to a real estate agent instead?

For instance, in that theme of searching for properties there are plenty of real estate agents out there who would love to set up automated searches in MLS for you and drop those properties into your email inbox every morning.

Delegate that MLS search to your favorite real estate agent – those professionals have the technology, ability and incentive. You are going to call them when you find the one you want. So that is an example of a task you can delegate.

The key here is that under the theme of doing more with less, or being more efficient, you are running a small business. Chances are, you are the small business. You are the only employee. If you have an unproductive day in your business, you have an unproductive day for your whole business. It may not be like where you are today if one of 100 employees at your workplace happens to have a bad day, moves slowly and does not get much done, there is a good chance the other 99 employees are going to compensate. Not in the case of your part-time real estate investing business, however. It is all about you. And ultimately you’ve got to be efficient in everything you do in order to be profitable.

In contrast to efficiency, let’s look at No. 2 and another key learning I have brought with me from my full-time career into my real estate investment business.

No. 2 – Process is key

In the business world this is often referred to or measured as productivity. In contrast to efficiency, productivity is the rate at which you can accomplish activities and reduce waste. How much can you get done and can you get it done quickly, efficiently and effectively?

With a small business with limited time and resources, you realize at the end of the day when you get home from work you don’t have much time to devote to your part-time real estate business. You cannot afford to re-create the wheel every evening or every weekend when you are working on your business. You’ve got to have processes that are repeatable that you can execute quickly and efficiently time and time again. If you are starting over from scratch every time you want to go buy a property, that can be a very painstaking activity and not very productive.

3 lessons from your full-time career that will help your part-time real estate investing

There is a good chance you may need to hire some help and train them as your business grows.

The second aspect here is that as you grow your part-time investment business into a full-time business there is a good chance you are going to hire some help.

What is going to be critical for that help to be effective, is your ability to train them and enable them to be productive.

They will need to do tasks and processes that you used to do. You will have to have those processes in place so you can train, communicate and delegate to them.

You have no time to waste as a part-time real estate investor. You are busy enough. You have to move quickly and efficiently every day in order to maximize the success of your part-time investing. An example that I have found in my business – and I have taken this from my full-time career – is that everything we do in our business at HomeVestors involves documented processes or standard operating procedures. Every time we buy a house, we have a checklist.

We don’t have to spend time spinning our wheels thinking about, “Did we get the contracts over to the title company? Have we gotten everything over to our lender? Have we prepared the rehab plan?”

We don’t have to run the risk of forgetting something. We have standard operating procedures. And the same goes for every time we sell a house. “Have we put the sign in the yard? Have we put the lockbox on the front door? Have we turned on the utilities?”

Every step is documented and enables us to run our business quickly, efficiently and productively.

No. 3 – Profitability

Let’s talk about that old word profitability or appreciation for the profit and loss statement. If you are running your investment business like a business, your profit and loss statement is going to be your report card at the end of the day.

3 lessons from your full-time career that will help your part-time real estate investing

Your profit and loss statement is your report card at the end of the day.

Your ability to be profitable is the key within that report card. That is your letter grade. You have to be able to keep your focus on profitable decisions and activities and constantly ask yourself, “Is what I am doing right now generating profit and improving and growing my business?”

In the real estate investing world, you may see yourself drifting into emotional decision making vs. financial decision making. It is inherent in our business. Here is what I mean. As an investor you are going to come across those months where maybe you have not found the right property to buy but you have a goal to buy a property that month.

As the month wears on and the weeks roll on, you may become increasingly desperate. You can very easily find yourself making an emotional investment decision vs. a financial decision. What I mean, and I speak from experience, is that you may come across a house and go, “Hey, that house is in the neighborhood I grew up in. I want that house. I know that neighborhood. I like that house. I have great memories of that neighborhood. I am going to buy that house.” That is very emotionally based.

Or it may be the final week of the month and you have not met your goal of buying a house that month and you may just buy the first thing that comes along as the month draws to a close. Once again, a very emotional decision that can be very devastating to your business.

You have to make decisions and focus on activities that are going to drive your top line – your revenues – and control your expenses. Those have to be financially based decisions. For example, what we do in our business is that we run financial analytics on every house prior to our purchase to avoid mistakes and validate that it is a good financial decision. Then, we review our profit and loss statements every month to make sure we are doing the right things for the business.

The 3 lessons in summary:

  • Stay focused on productivity
  • Stay focused on profit
  • Stay focused on process

The irony is that those three things that may drive you crazy in your full-time career today may actually be the three things that catapult your part-time investing business into success.

Listen to Kevin’s podcast here:

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  • Kevin Guz

    Kevin Guz is a Dallas, Texas-based residential real estate investor with more than 10 years of investing experience. He owns a HomeVestors (or “We Buy Ugly Houses”) franchise as well as the Clear Key companies, which focus on residential real estate wholesaling, rental property management and self-storage leasing. He also is a licensed real estate agent in the state of Texas. He enjoys sharing his ongoing personal experiences, perspectives and learnings from his start as a part-time or “weekend investor” and full-time corporate professional through his ultimate transition to a full-time real estate investor and business owner. You can listen to his podcasts at http://www.blogtalkradio.com/kevinguz.

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