Right Path Real Estate Radio with Jason Bible talking about being consistent in real estate! Get the answer to your question that’s keeping you from taking action at succeeding today!
Listen to podcast here:
Consistency Wins The Race
The theme of the show is consistency, being consistent. It’s probably one of the most underrated attributes of successful people. How to be successful? One part, consistency. Consistency in what? Consistency in stuff that actually works. A friend of mine on Facebook said, “You’ve been going on some Bitcoin rants lately.” I said, “Because I can see what’s about to happen here.”I watched a video from Carl Icahn who I consider to be the greatest investor of all time. Everybody thinks it’s Warren Buffet. When both of these men pass on, at the end of the day, Carl Icahn will come out to be the greatest investor that’s ever graced this planet. He has said some absolutely hilarious stuff. He’s what they call an activist investor. When he goes in to invest into a company, he gets very active with the board and the management team. Whereas Buffet may be a little bit more hands off, Carl Icahn gets dirty. He gets in there and he wants things to work. He wants to make the most money he can. When he invested in Netflix, he had told whoever he was meeting with on the management team, “If you make me a billion dollars, I won’t punch you in the face.” I was watching a video on Carl Icahn where he’s talking about Bitcoin and all that other stuff, and he just said, “I don’t understand some of this stuff. I don’t get it.”
When one of the richest, most successful men on the planet doesn’t get it, don’t do it. What do successful people do? When you look at where most millionaires are made, at least from middle America here, it’s not from trading on the newest whatever. I’ll tell you what it is. It’s consistent action and stuff that works. What do we know works? Real estate works. Real estate absolutely works. Eight out of ten millionaires invest in real estate. Why is that? Because it works. It’s not as sexy as being into the newest, coolest thing. Tom alluded to the basic needs that every human must have. One of those is shelter. Real estate will always be a sound investment, as long as you don’t pay too much for it. That’s the only caveat. However, when you look at a lot of things that go on in the capital markets, how much can you lose? You can literally lose everything. If you’re all in cash on a single family house in a really nice suburban neighborhood in Houston, it is really difficult to lose a lot of money.
If you’re using a bunch of leverage, if you’re going into an area of town that’s undergoing gentrification and you’re making a big bet, that’s completely different. In single family real estate, it is hard. It’s really challenging to lose a whole bunch of money on a piece of rental property. I have a number of buddies of mine in real estate that buy a house with the intention of flipping it. For whatever reason, the deal doesn’t end up working out. They’re not going to make any money. That rehab went too long, the rehab was too extensive, they ended up doing more work than they anticipated holding on to it longer. Maybe the price at the time when they bought it that they could sell it for declined. What do you do then? They ended up renting it out. Hold onto it for a couple of years, wait until the market recovers, and then once that tenant moves out, do make ready on the house and then liquidate the asset. You’ve got some real options on a single family piece of real estate that you may not have in other investments.
If you are consistent in your activities, if you are consistent in building a portfolio in single family real estate, if you’re consistent in making offers, in networking, in working with real estate agents and wholesalers, you will buy a house. Then you’ll buy two houses. Then you’ll buy three, then you’ll buy four, then you’ll buy five, and eventually end up with 100 of these things. We are what we repeatedly do. Excellence is not an act but a habit. Excellence is a habit. I was meeting with a lender a year ago. I went down to his office downtown, we had lunch and we were chatting. He said, “Jason, I can tell you’ve got a process for everything.” I said, “Yes, you are actually in step two of my process right now.” He laughed and I said, “Everything really can be systematized and brought down to a process.”Some things get outside that process every now and then, but at the end of the day, everything’s a process. Jim Rohn says, “Success leaves clues, so we know that if we do certain things, it will be successful.”What’s fascinating is he said, “Business, and ultimately, profit, is a discipline.”Profit is a discipline. Habit and a discipline are those things that you’re doing over and over again. Habit is the implementation of that discipline, and what discipline is, it’s saying no. What’s it saying no to? Other stuff that could get you out of the habit of doing what you need to do in order to be successful.
We are obviously big fans of single family real estate here as a means to generate income and wealth, and we do that every single day. Just in Houston House Buyers, this month we bought right at ten, and we bought two in Dallas. For all my Dallas, Fort Worth people that keep telling me that you can’t buy houses in Dallas because the market’s too competitive, that’s not true. We bought two this month in Dallas. In our other real estate company, we bought four or five, if I’m not mistaken. Not bad, sixteen for the month. Our goal this year is between 125 and 150. Fort is always just incredibly good for us. If we bought 25 houses, it really wouldn’t be a shock to me. We’ll see what we end up here. I have noticed one thing. We’ve got two habits getting to go along with the theme of the show. We’re being consistent in certain neighborhoods in Houston, and we’re seeing it when we’re buying multiple houses in one neighborhood. We’re also testing out a new system right now.
I’ve gotten a number of our clients that have called me and said, “How do we do a short sale? How does the foreclosure process work?” I’ll ask them, “Why do you ask?”“We’re getting phone calls from homeowners that don’t have flood insurance. I did have flood insurance but FEMA is not going to write me any more check. They’re upside down in their house, and the house needs $80,000 of work. They owe $120,000 and the house is worth $150,000. How do we start the process of negotiating a short sale on behalf of our seller with the bank?” The pain train is coming to Houston real estate in certain sub-markets. It’s sad and it’s unfortunate, but it’s the reality of these things. The only one that’s going to rebuild these neighborhoods are real estate investors.
Homeowners will certainly do their part, but homeowners are not going to rebuild their neighbor’s house, and they’re not going to rebuild the neighbor’s, neighbor’s house. They’re only going to work on their houses. They may help their neighbors out, but it’s the real estate investors that have the means to go out there and rebuild these neighborhoods. As investors, we have to do it quickly. Those of you who are real estate investors out there, we need to get in, buy these things and turn them around. If we don’t get in there quick enough, fast enough, what is ultimately going to happen is you’re going to see a reduction in the value of the homes in those neighborhoods, not just the houses that are flooded, but the other houses that were not impacted by the flood.
One of the pillars of success is you got to be consistent. The best analogy I can come up with that makes a lot sense to people are those folks that played high school sports. In high school football, especially here in Texas, did you practice just on a random Tuesday once a month? No, it was every day. In fact, we used to have these things called two-a-days, but they don’t do those anymore because that’s considered child abuse or something, but you’ve got to be consistent to be successful. I run into real estate investors all the time in real estate networking events. “Bob, good to meet you.” “Jason, I’ve always wanted to meet you, I listen to your radio show.” “Great.” “Jason, this market is really tough.” I’ll say, “Why do you say that?” “I haven’t bought any houses.” “How many offers you make this month? It’s December. How many offers did you make in November?” “Zero.” “How many did you make in October?” “Four.”“How about the month before September?” “Six.” “The month before that?” “Zero.”
You got to be consistent. We can figure out if a market is becoming more competitive. However, what really happens in a lot of these real estate markets is not that it gets more competitive. What really happens is those who are not consistent cannot continue to grow their business. That lack of consistency is a challenge for those that are not running it like a business. That’s the hard part in running any business, it is consistency. “Today, I’m going to do the exact same thing I did yesterday. What am going to do? I’m going to market for deals, I’m going to go look at some deals, I’m going to go put some deals on a contract, I’m going to close those, manage the rehab, I’m going to list that property for sale or for rent, and then I’m going to sell it or rent it and then we’ll do the next one all at the same time.” It’s an assembly line.
We have a joke in our office about boring businesses. The businesses that are most successful are those that are really boring. The only reason that this business sounds fun is because there’s a rehab. Take this ugly house, usually it’s the ugliest house in the neighborhood, and you fix it up and make it beautiful. We actually can make it great again, and it goes from ugly house to really pretty house. There’s a lot of emotion tied up in buying a new house, moving into a house. It’s not that same emotion if you’re selling accounting services. If you’re a machine shop making parts, making two or three different parts and oil and gas. If you’re a retail shop or if you’re a transportation company, it’s fun for the owners, they enjoy it, but they’re not going to make a whole lot of TV shows about it. But it’s those boring little businesses that are just consistent, they just do the same thing over and over. Don’t get me wrong, they innovate their products, but when you really get down to businesses, you really start to drill down to successful businesses and what you find is they’re incredibly consistent.
Apple’s a great example, a product innovator. They have a release schedule, and they have to hit certain targets in their releases. They have to get those products manufactured, get them brought here in the United States. Some are actually built here in the United States. There’s a facility out of Austin that builds some Apple products, so they do consistently. When you go to the Apple store, your experience at the Apple store in the downtown gallery is going to be the same in Chicago as it is in California and Florida. One of the things that always amazes me when you go to the apple store is how fast they can run your credit card. They give you the product, they’d run it, you’re out the door in two minutes. It’s incredible how fast money changes hands there. If you look at Apple, they’ve got consistent processes. Amazon right now is required to be very consistent, especially during the holiday season.
We’re getting a ton of stuff from Amazon and all over the place. The joke I’ve had for years that our household is starting, from Thanksgiving until the New Year, every day we’re getting a handful of packages. I swear it’s every day. It doesn’t matter what time of year it is, every day, every other day we got packages coming and going. It’s amazing the amount of stuff that comes in. We almost have to have a process for Amazon packages coming to our house. They come into the front door and then typically when I get home, there’s a pile of them sitting right next to the front door, then there’s another pile from the day before, so we have to have a whole process. Think about that from Amazon’s perspective. How much business they do just consistently sending these things out.
You’ve got to do the same thing in your business, whether it’s wholesaling.
Remember there’s four core ways to make money in real estate. Whether you’re a wholesaler, whether you’re lending on a deal, whether you’re a landlord, or you’re flipping the house, you all have to be consistent. This is one of the hardest things for people to understand when we mention this. You cannot be successful in this business if you concentrate on more than one of those four ways to make money in real estate. You just don’t have the consistency. You need to go out there and say, “I’m going to be a landlord,” and you’re going to start buying houses and rental properties. It’s not, “I’m going to be a landlord, but I need to wholesale some deals, I need to flip some deals. That’s not how this works. You’re either going to be a landlord and you’re going to buy rental properties, or you’re going to be a flipper and you’re going to flip houses. Are you going to be in wholesale and wholesale houses, or you’re going to lend your money on real estate, in other words, be the bank? If you deviate from those four core ways of making money in real estate and you don’t focus on one, you’re going to have this hodgepodge portfolio. I know no one who has been successful in real estate or in any business venture by focusing on a million different things.
In fact, the reality is you can’t focus. You’re doing so many different things, you cannot focus. Discipline requires focus and habit. When you are disciplined, in order to maintain focus and ensure your habit is not broken, you’ve got to say no to a lot of stuff. “I want to go hang out with the buddies tonight. I want to hang out with my boys.” No you can’t. You got to make offers on real estate. You got to work on your real estate license. You got to work on your marketing plan. You’ve got to catch up on emails from your lender. You really don’t have time to do a lot of those things. If you’re a casual real estate investor and want to buy two or three houses a year, maybe you can. You could avoid being that focused or being that disciplined. However, if you’re in this business to buy two or three houses a year, what’s the point? I’ve never really understood that, where someone says, “I just want to buy two or three rentals.”“Would you like 30?” “I’d love to have 30.”“Let’s talk about what your goal is. What are you trying to get?”“I’d really like to retire in the next five years.”“Two or three rent houses a year is not going to do it. Five years, it’s fifteen rental properties. You want to retire in fifteen rental properties, casually acouple of hundred bucks a month? Why not spend that next five years in very focused ways? Let’s get disciplined about building a rental portfolio. What do you think about buying ten houses a year?”“I like that play much better.”Then you retire with 50 of these things. That makes a lot more sense.
What happens to most real estate investors is they do a little bit of flipping and they do a little bit of wholesaling and then they might lend their IRA on a couple of deals, and then they buy a couple of rental properties. They do that over five, ten, fifteen, or twenty years. Then I run into him at a networking event, let’s say at the Redneck Country Club, and I ask him, “What does your portfolio look like?” He’ll say, “Jason, I’ve been in real estate twenty years.” I’m like, “How many rental properties do you have?”“Twelve.”“How many owner finance notes do you have?”“Six.”“How many flips do you do a year?”“Maybe one.”“How many wholesale deals do you do?”“Three or four.” The sad thing is they’ve wasted twenty years of their life. They’ve wasted twenty years in unfocused and undisciplined behavior. Whether they’ll ever admit it to me, I know at some point they’ll realize how much time they wasted and it’s just absolutely depressing. You’ve got to run real estate like a business. It’s just like a restaurant. Nobody goes to Papa John’s and orders barbecue. I’m sure Papa can put together a barbecue restaurant, but he makes a lot of money selling pizza.
Working in this new CRM. We hit some goals right in the eleventh hour last night, and it is fun to see them all pop here on the screen. We are experiencing some incredible growth. When you’re trying to build an organization as big as ours, it takes a couple of years to really get it going. If you want to invest in real estate, buy five, six, seven, or ten houses a year, buy 30 to 40 rental properties, you’ve got to have some systems and processes in place. It really takes three to six months to get all that stuff going. The sad thing is that they never got started. It takes three to six months to really get this thing going, three to six months of consistent action to really get it moving. Three to six months of setting your business up, getting the LLC together, getting your tax stuff right, getting your lenders lined up, start making offers, and marketing. It takes three to six months to really get the train moving in.
I blame the real estate education industry as a whole, because they failed to explain this, in part, because most real estate educators are not actually in real estate. They teach real estate, but they’re not in the real estate business. It takes three to six months to really get your business established and get your pipeline filled with enough offers to where you’re starting to buy deals. Now don’t get me wrong, we’ve had folks buy houses a week after they went to our weekend retreat, but it’s a three to six-month process, really getting the thing warmed up, getting it going. Most new investors don’t even make it through the third month. They sign up for some real estate education somewhere, not ours, and they sign up for some coaching program, spend a ridiculous amount of money in a coaching program that does a little more than educate them, but doesn’t show them how to do real estate. They try some little postcard marketing, they call a bunch of realtors and make offers to realtors that never call them back. They work with some wholesalers and then get frustrated because the wholesaler’s numbers don’t work. Then they think, “If I just go to a bunch of networking events, I’ll eventually get a deal.” It doesn’t work out that way. You have to build a strategy. You’ve got to build a template of what your business should look like in order to meet your goals.
For example, in our office right now, we are re-tooling some of the things we’re doing in Houston House Buyers. We want to move to buy more rental properties. This year for us is going to be the year of the rental. We now have some long-term financing available to us that we did not have when we first started five years ago. That’s also available to those folks that are inside our base camp group. We don’t share it with anybody else, because the banker that we work with only want to work with Right Path folks because they’re trained in how to do real estate. Our group is not big. People ask me, Jason, do you got 5,000 to 10,000 members? No, I don’t. We’re looking for a handful of people. Our weekend retreat is our most popular training method. We’ll have 60 to 100 people there. You can go to Right Path Real Estate. You can sign up there. There are a lot of people that want to learn real estate, and they’re all going to get in the first of the year.
It’s just like the gym. You go to the gym that first full week of January and you’re like, “Is the whole city of Houston here?” The little more committed will stay through spring break in March, and then after that, your gym’s going to be a ghost town again. The real estate markets the exact same way. You’ll see a lot of investors jump in January. February, they start going on appointments, maybe they do one deal. They get in the middle of that one deal and they disappear. They stop marketing and sales because they hired the wrong contractor, they got the wrong education, so they’re spending all their time at the project. They’re not doing marketing and sales for their next deal, they don’t have the right lender, so they run through a bunch of their personal capital. I can go down a laundry list of how to lose $50,000 on a $200,000 house. It doesn’t take but a handful of mistakes. A handful of mistakes, you’re losing $50,000 on a $200,000 house.
You’re like, “Jason, how do I lose that much money?” It’s simple. You don’t buy it right, you use your own cash, you don’t get the right rehabber in, you got to rehab it more than once, you hold onto it longer than you should. When you go to sell it, you don’t use a good real estate agent, so you negotiate the absolute lowest bottom dollar to get it done. There’s a million ways to lose $50,000on a single family house, and I’m not talking about million-dollar homes either. On a little $200,000 house, you can lose $50,000 so fast. I’ve seen it. Folks outside our group will approach me. “Jason, I saw you at this networking event. Can I ask you a couple of questions?” I’m like, “Sure.”“Should I do this or this?”
I’ll say, “Don’t do either one of those. Instead, I would do it this way.””Are you sure?”“We’ve only bought a couple hundreds of these things, I’m pretty sure. I’m fairly certain that the advice I’m giving you has been tested in the hundreds of houses we’ve bought.”“I don’t know, my guru told me to do it this way instead.”“Does your guru buy a hundred plus houses a year? You might want to ask him that, because I’m telling you, if you do it this way, if you’re doing it the way they’re recommending, you’re taking on a lot of risk. I can tell you right now you’re going to lose some money.” Fast forward a couple of months, I’ll see him again at that next networking event. “John, how did that house go? Did you implement the advice that I gave you?”“No, I went with the advice that my guru told me, and we ended up losing $30,000 on the deal.”
Ignorance is expensive. I have a guy at the last weekend retreat. Good dude, sharp, he’s a young guy. He grabs me at the end of the weekend retreat and he goes, “I got a story for you.” I said, “Okay.” He said, “My grandma is in Oak Forest, so the neighbor next door to my grandma, they were moving out and they were about to lose the house to foreclosure.”He said, “I had just got into real estate. I wasn’t sure what I was doing, and I ended up passing on the house. They were going to give it to them for what they owed on the mortgage. I saw the house go to foreclosure and eventually got rehabbed and put back on the market.”He said, “If I had bought it at the price that they were willing to sell it to me, I would have made $150,000 on that deal.”He’s smiling the whole time, that’s heartbreaking. I don’t care who you are, $150,000, even if you make $10 million a year, is real money. That’s a chunk of change. He said, “My ignorance costs me $150,000.”
That’s one deal. Imagine if you got that deal and he put a sign up in the yard with his little company and he talked to all the other neighbors around that house while he was doing the rehab? Can you imagine if he had bought two more houses in that same neighborhood? Maybe you didn’t make $150,000 on each one, he may be made $50,000. That’s a quarter million dollars. What a lot of people miss is that it’s not the cost of the education, it’s the cost of not getting educated. The cost of not is incredibly expensive. If you are in this industry long enough, it’s almost impossible to spend too much money on education.
Tom and I, when we first got into this business, we went to every single seminar. Before we figured out all these, we went to every single seminar that blew in the town. They always have these out of town gurus that fly in.
You hear the commercials on the radio, “We’re only in town this week. Come see us.”We used to go to all those things. Most of those guys don’t do real estate. The thought Tom and I had is if we can save $500 on 100 houses a year, that’s $50,000. I don’t care how much money you’re making,$50,000is real money. We’re not talking about a couple thousand bucks here, $50,000 is real money. If we could save or make $500 over a hundred deals, that’s $50,000. Over 200 deals, that’s a $100,000.We started going to all these different real estate events around town, and that’s when we realized most of these guys don’t do real estate. I’ll never forget, there was this guy who blew into town. He’s sitting there on stage and he introduced to the crowd, “Here’s my right hand man that buys five to seven houses a month.”I looked at Tom and I said, “There is no way we could take our sales manager to an out-of-town trip for three to four days, and then be in another city three days from now for three to four days.”We already bought 50 houses at that point, I know what that business looks like. I know this guy doesn’t do it. In order to be disciplined, you’ve got to build that habit over time, and you’ve got to say no. Focus and habit is how you build that discipline. It’s how you develop consistency and excellence.
For those of you looking to build income and wealth in real estate, you need to be at our weekend retreat. We call it the Pathway to Income and Wealth Workshop. We are getting paid by the word on that one. You got to RightPathRealEstate.com. You can sign up for it there. We’re going to cover a number of things as it relates to building income and wealth in real estate. There are four core ways we make money in real estate. We flip houses, we wholesale houses, we act as the bank, and we lend our money to people doing these things in real estate, or we’re a landlord and we rent our properties out. There’s only four ways to make money in real estate. I don’t care what blog, podcast, wherever you go to that says there’s 900 ways to buy and sell houses. There’s not. There’s four ways to make money in real estate. Everything else is a derivative thereof. We teach all this at our weekend retreat. If you want to get a dose of what our weekend retreat is like, just go to RightPathRealEstate.Com, click on the calendar there, it will tell you when our next free event is, our next introductory event, our Pathway to Income and Wealth workshop. I love to have you out there. Thanks.