Why Moving at a STEADY Pace is the Secret to Success

In a conversation with Kevin Amolsch, who is a highly creative real estate investor, I learned about the importance of moving at a steady pace, and the resulting consequences of not heeding this advice.

Kevin’s best real estate advice is to move at a steady pace. Let’s unpack this advice and address the two important points: move and steady pace.

Kevin believes move is the most important word in this statement. He finds that many newer investors get caught up in the education trap. They read book after book, blog after blog, and attend seminar after seminar, but they never actually take any real action. While education is essential for an investor’s foundation of knowledge, you don’t need to know everything before you start moving and doing deals. Instead of waiting until you know everything (which is never going to happen anyways), attempt to implement what you learn along the way. No matter how much education you get, you are going to make mistakes regardless, so as mistakes occur, simply correct them, learn from them, and then keep on moving forward.

Now the question is, how fast or slow should I be moving?

The second part Kevin’s advice is to make sure that you are moving at a steady pace. When 2007 rolled around, Kevin had mastered the move portion of advice; however, instead of moving at a steady pace, he was struck with the “Ready, Fire, Aim Syndrome.” “Ready, Fire, Aim Syndrome” is essentially when you just go after it, guns a blazing, at an extremely quick pace. While this is great if you are an Olympic sprinter trying to shatter the 100 meter world record, it is not so great for a real estate investor that is in it for the long haul. Since Kevin was moving at such a quick pace, this really hurt him.

Kevin had quickly amassed a portfolio of 35 properties because his goal was to create a huge real estate empire. The goals and milestones he set for himself were how many homes he was going to purchase in a month or a year and how many of those houses was he going to keep and how many was he going to sell. This may be the way you are setting your real estate goals as well, so you may not see it as a problem. However, Kevin soon learned how ridiculous and dangerous these types of goals are.

If your goals are based strictly on the number of transactions you make, you will ultimately end up doing bad deals in order to get to your goal.

And if the market were to take a tumble, like it did in 2007, and you are stuck with a bunch of bad properties that are highly leveraged, you are going to be in trouble. This is the exact situation that Kevin faced. He ended up with all these properties that were not that great and were purchased with no money down loans. Once interest rates started creeping up and rents started going down, which is the signal to sell and start unloading properties, he couldn’t because he was so over-leveraged. As a result, he ended up losing a couple properties and had a really stressful couple of years.

The main lesson Kevin learned from this situation is to avoid the “Ready, Aim, Fire Syndrome” by moving slowly, instead of full speed ahead, in order to mitigate the chance of getting in over your head, and potentially losing everything you’ve taken the time, effort and money to build.