So, when I started this article we were a week out from the end of year and now we are already more than a week into the new year and I am somehow just finishing up my thoughts. Honestly, where does the time go?
It’s so cliché, but so true that the years go by faster and faster it seems. Equally cliché, I can’t help but want to review the past year and see what was accomplished, what was a “fail” (as my kids would say), and what was learned that I can carry forward into the new year to make the year more productive and enjoyable.
I started my review of the year by taking a look back at the lessons learned from the previous year that I had summarized in my 2017 year end blog (http://physicianrei.com/2017-the-year-in-review-and-looking-ahead/) – the lessons in short form being:
1. Don’t be afraid to reach out and connect with people you are interested in having in your network.
2. It is almost always better to try to resolve an issue with a calm, direct, and personal approach instead of seeking a forceful solution with ultimatums.
3. Partnership can be found when you least expect it and it can be totally AWESOME.
4. Putting a timeline on your goals is highly effective.
5. I have so much to learn!
6. Take charge of your own life, including your health, relationships, careers, investments, etc.
And yes, I can still say all of those things have applied equally well in 2018! Probably my favorite from that list has been #4 – giving yourself a timeline by which you plan to accomplish certain goals. I did this with multiple things in 2018 after realizing it was quite effective in 2017 and have continued to find it quite powerful. Not only has it made me more likely to accomplish said goal AT ALL but typically in a much shorter time frame than I likely otherwise would have. Try it!
So what where some of the real-estate related highlights from 2018:
- Physician REI collaborated on a total of 7 real estate syndications this past year
- Got to know lots of new investors through connections made via Physician REI, attending real estate conferences, and through social media groups
- Developed some significant relationships with other real estate investors doing a variety of things in different niches of real estate that I either have already or can potentially partner with in the future
- Said “NO” to 2 real estate deals once already in escrow and realized during due diligence that the property was not going to be a good fit for my goals
- Developed a template for a new service venture for a niche group of real estate owners that an investing partner and I plan to trial in 2019
- Sold a property from my personal portfolio to allow me to pivot into some other opportunities that are more consistent with my goals and focus in 2019
In looking back at the highlights, probably more important than what was accomplished is what lessons were learned from the year. Without new life lessons, are we really growing? A few of those lessons:
1. Just because you started something, doesn’t mean you have to finish it.
If you are like me, you probably have mostly lived by the motto that you should finish what you started, right? Well, I’m realizing more and more that this is probably not always sound advice. Sure, you don’t want to give up on pursuit of goals just because something becomes difficult or challenging or you meet some unexpected obstacles along the way. BUT, there is a difference between that and coming to the conclusion that you are moving in the wrong direction or that something truly isn’t right for you or aligned with your priorities and overarching goals. The important thing is distinguishing the difference.
If you do realize you are pursuing something that truly isn’t moving you in a direction toward your goals, by all means you should reverse course, quit, just say no! In real estate, if that means you realize during due diligence that it is not a property you want to be tied to long-term or is too risky for you, get out. If you want to say yes to some investment but it just doesn’t feel “right” to you, just pass. Who cares if you will disappoint someone or you feel like you can’t back out because others have already gone through the process along with you to help you to where you are. If you are honest and act with integrity you should absolutely change course if you feel it is the best decision for you. Be true to yourself, your goals, your priorities and don’t think twice about doing so; others will respect you for it in the long run.
2. Real estate, and life in general, is not a one-man band
Without exception, everything I accomplished in real estate in 2018 had at least some part of it hinging on the assistance or input of others:
• With the syndications I have worked on, it has definitely been a team approach from everything related to identifying sponsors and projects to work on to sharing resources, ideas and knowledge to support investors through the process.
• In my own personal portfolio, I had the assistance from multiple real estate professionals, in particular my own local real estate broker, who went above and beyond this year in helping me through a couple of transactions. Sure, they are in the business to assist clients, but it’s pretty easy to spot exceptional people within an industry and I had the pleasure of working with several this past year.
• Within my investments with an investing partner, there is absolutely no way I could pull that off without her. We have learned so much through the process of owning/managing rental property together and have mostly had a good time doing so, but it has certainly been a team mentality to pull it off. We are still fine-tuning our approach to make the most of each of our skills, but I can say without a doubt I am happy to have that partnership.
3. If identifying your goals is good, and putting a goal timeline on each goal is better, then doing that PLUS telling others about your goals is even better!
As I mentioned, writing down my goals along with a goal date by which I plan to accomplish the goal has been highly effective for me. I have done this not only at the start of a year, but anytime throughout the year that I feel like I need to revisit my goals and either redirect my priorities or add new goals for the future. It has always seemed intimidating to verbalize those goals to others as I don’t want to look like I “failed” if I don’t follow through with what I said I wanted to. My inclination has always been that I’d prefer to talk about goals accomplished AFTER the fact with the convenience of leaving out what goals were unaccomplished. I guess that would be my pride getting in the way, huh? Well, at the risk of feeling like a “failure” I have decided to push past that and start verbalizing my goals to those around me. I’m hoping this technique will be equally transformative as setting goal timelines has been. I’ll keep you posted!
4. Even the best relationships/partnerships can have bumps in the road – learn to roll with it and focus on the positives.
Partnerships of any kind can have their ups and downs and I’m sure we all have a variety of tales of when a partnership weathered a storm or didn’t. Usually, if you work through the bumps in the road the partnership can go on and be that much stronger. I had that experience this year: what seemed like an insurmountable difference of opinion on how to handle responsibilities/reward on a particular property turned into an opportunity to get clear on our goals and priorities and make the partnership even stronger. Once we were clear on those things the path forward actually seemed quite evident. In fact, I actually now appreciate it as an opportunity to fine tune the direction we were heading. Never underestimate the power of open conversations and a willingness to focus on the positives of a situation.
5. Forge your OWN path.
This point has become a focus for me toward the end of 2018 and one I am working on improving in the year ahead. On one hand, following and modeling the success of others – in real estate or any other pursuit – can be an efficient and productive way to meet our goals. After all, why recreate the wheel when you could just follow someone else’s footsteps, right? True, but are those footsteps leading to the exact same place you want to end up? If so, great, you might have success with simply modeling what someone else successful in your space has done. However, if you see there is a difference in where that person/company has arrived at and where you see yourself wanting to end up then select carefully the things about their business or life that you want to model. Spending a lot of time and effort getting somewhere you don’t want to be is pretty disappointing; I might have done that a time or two and can confirm that!
That is kind of a metaphor for life, but the same applies in real estate investing too. You might see someone who has been super successful at flipping houses and think THAT is surely the right way to be successful in real estate. Great for them, but that is really irrelevant if you don’t have the time, skill, or interest in renovating houses. This is why I always recommend, especially to new real estate investors, to get clear on the goals you have for yourself and take an inventory of your unique interests, skills and advantages in order to choose how you want to invest. You can find more about getting started in this previous article: http://physicianrei.com/getting-started-in-real-estate-investing/
6. Managing rental property from a distance can be tricky!
Don’t let anyone convince you otherwise…..managing rental property from a distance is NOT as easy as owning/managing rental property in your own local area. In theory, it can all work pretty smoothly once you have a reliable network in place in the distant location that you can rely on in your absence, but remember that will take some effort (and likely some trial and error) on your part to establish. And even if you are able to establish that network, that is all AFTER the fact that you will need to spend at least a minimum of time traveling to the location once or more in order to find, purchase, and put into service the property. There will inevitably be decisions or points along the way that require your presence as well. Then there are the nuances of managing tenants based on a different landlord-tenant law than you might be otherwise familiar with from your local investing.
I’m not saying DON’T invest out of your area, I’m just saying to go into it with your eyes wide open with the expectation that you WILL have to personally be there on occasion or have someone else to go on your behalf. Possible ways to handle this challenge are to either have an investing partner that can take on the responsibilities that arise at a distant location or leave your out-of-state investing for larger, passive investments you make that have the benefit of investing out of your own geographic area but have the oversight of an active management team that manages the investment on behalf of the passive investors (i.e. syndication).
So, those are some highlights from my experience of 2018. What about you? What were lessons you learned – in or out of real estate – in 2018? I'd love to hear any life lessons you picked up on in 2018 that we can all benefit from in 2019. Meanwhile, wishing you all peace, prosperity, and good health in 2019! Cheers!