To begin, ask yourself these questions... If this snapshot were taken from a Real Estate Investor's playbook:
- Who are you?
- Who is the opposing Team?
- What do the boundaries represent?
- What are the rules?
- What is the Ball, and how does it move?
- Are there rules that can be used to your advantage?
- Who enforces the Rules?
- Who are the people watching in the stands, and why are they important?
- What is your team's ranking?
- How do you win the game?
This is one of my all time favorite analogies.
In this game, you are the Quarterback. You make decisions, you delegate tasks, and you use resources, tools, and strategies to achieve your goal. Every circle on your team is an asset. It could be a Hard Money Lender, a General Contractor, an Escrow Company, a Wholesaler, a Partner, etc. These are all people who have an interest in seeing you get to the goal line to put points on the board.
The opposition here, represented by X's on the field could be Sellers, other investors, or things like zoning and building restrictions. Unlike the actual game, these entities are not necessarily deliberately acting against you. However, the opposition isn't stationary. The environment and relationship between you and the opposition does change, it is fluid, and you must be able to react appropriately.
So, we have your team, and another team out there fighting to get the ball to their goal line. Do you think before we step onto this field that we should know the rules to the game? Things like how a Real Estate Transaction even takes place? How about learning about the different strategies used to get our ball to the goal line? What will get a flag thrown on your play?
What is the ball? The ball is YOUR GOALS AND YOUR OPERATION! The ball is what drives your movement on the field. Note that the ball can move up and down the field depending on the plays that both sides make. So even if you have the ball, can it go backwards away from your goal line? Absolutely. How many people do you know that have bought a property to flip, and uncover a major problem that wasn't shown in the inspection? Those people get sacked, and lose yardage. It doesn't mean they lose the game, but it does mean they've got some ground to make up!
So, we've got all of these rules about how the game is supposed to be played. Are we the only players on the field that understand the rules? No. The other side knows the rules too, so we have to go back and look at the rules to find ways that we can use the rules to our advantage. I think Mortgage Acceleration is a great example. Can I use a Tool (a Simple Interest Line of Credit) to pay off the mortgage in a 1/3rd of the time, keeping WAY more money in my pocket instead of giving it to the bank? Yes I can. Can I show people how to self-direct their 401K into an LLC that buys Real Estate Investments so I can grow a fund large enough to finance real estate investing? Yes I can. Although we're constantly looking for weaknesses in the other team, we're also looking at the playbook to see if there are any creative ways we can use the game to our advantage.
Who are the refs on the field? This one is simple, but important. Refs would be federal, state, and local law enforcement, specifically building/zoning departments, and departments like the IRS. Because saving money on mortgage interest is only 1 of 2 of the biggest expenses you'll have in your life, Taxes is the second. This goes back to the rules of the game, but understanding Tax and Legal Strategies is how we use the refs to our advantage. As long as we don't violate the rules, no flags are thrown.
Who are the people watching in the stands? It's a mixed crowd, but make no mistake, people are watching what you're doing. They're tracking stats, they're watching how you move up and down the field. They are looking for proficiency in offence as well as defense. Do you think someone in the stands could be looking for someone to partner up with to park their money on investments? Could it be other contractors, lenders, investors that want to get on the field with you and help get to the end zone? Absolutely. You may not always see them, because you're focused on your game, but they are always watching you, and them seeing the success in your strategy could mean they decide to reach out and add their resources to yours.
All football teams are ranked on everything they do. This is the one part of this analogy I don't like. When you compare a football team against a football team, that makes sense. Stats and numbers are critical to determine who is or will be the best of the best. How fast can the team run, how far can they throw, how many wins vs. losses.... I get it. But in our game, your team may not be comparable to the NFL team that's doing 200 flips a year. You may be talking about comparing apples and oranges. So I'd encourage you to stay away from trying to compare yourself to other teams. There's nothing wrong with looking and learning, but the fact is everyone has a different background, each team has a different set of resources, motivations and goals. I love the question, "What do you want Real Estate to do for you"? I've heard things like, "I want to build wealth and have a lot of money in the bank", or "I want to build up $10,000 a month in passive income.", or "I want to control hundreds of properties". The point is, everyone is in this game for a different reason, and we all have our own ideas on what the "endzone" represents. So when you ask what your team's rank is, look at where you were a year ago vs. where you are at now. Don't say, "Well, I failed this year because I didn't flip 200 houses like that other guy".
Then, the big question. How do YOU win? Just like in Football, you win by having the most points on the board. You get the most points on the board by leveraging your tools, resources, and strategies to get the ball into the endzone. It all started with education. If you had no idea how to play football, and just placed yourself on the 50 yard line, you likely will not succeed. Football players immerse themselves in the game to ensure they're maximizing their potential on the field. They are constantly learning, and constantly practicing. The same applies here. People ask me all the time why I spend time analyzing 1 deal a day, everyday. The answer is simple. I want to be so efficient at analyzing deals that I can do it quickly, and correctly every single time. I may not pursue 95% of the deals I analyze, but when I analyze a winner it can be put into the pipeline immediately. I want to know that the play I pulled from the playbook will allow me to throw the ball in a way that moves me forward, but can also be caught by someone on my team. Have a toolbox! I don't always pass the ball, sometimes I see a window and I run the ball as far as I can as fast as I can.
Hopefully this analogy helped you. It keeps me in the game, and keeps my mindset towards always looking for how to move the ball forward, not getting caught in a situation where my blockers just got pummeled and I'm next. If you're going to play the game of Real Estate Investing, think carefully about how you and the rest of the players fit into the game. Constantly having this picture in the back of your mind will help keep you sharp!
Thank you for reading, I know this was long! Please comment below with your thoughts!
