Think like a billionaire
When starting a business it's very common that we try to be the person that does everything, as it relates to real estate investing this means getting the prospecting list, calling the prospects, marketing, evaluating the deals, going on the walkthroughs, finding the lenders, doing the due diligence, managing the property, raising the capital etc.
What I have noticed now through 7+ years of coaching students 1 on 1 is that some people, a very very small percentage of entrepreneurs are actually capable of doing all of this and excel. They work the traditional model of doing everything until you can outsource it and get it off your plate the soonest you can. This usually means as soon as the business is producing enough money to hire people to do each of these.
However, for a good portion of you, I've noticed now coaching over 1,000+ people that this may not be the best strategy for you. If you are struggling having been the one to do all of this and still are not getting anywhere or for many of you who struggle with time as I know many are working a full-time job and simply cannot do it all, you may consider an alternative option.
See we all have our focus on having to be the person to do it all, what if we shifted our focus to simply find and recruit the best talent for the things we are not good at or do not have the time to do? I spent a year studying billionaires in 2018 and noticed one common prominent characteristic amongst them, one billionaire said it best “The day I am the smartest person in the room is the day my business is in trouble” Meaning surround yourself with people who are better and smarter than you in each of the major categories of your business. Your strategy, your job then becomes to simply focus on identifying the seats that need to be filled and putting world-class people in each of those seats. Then you focus on innovating, leading and directing. Consider reshaping how you look at real estate investing and put yourself in the billionaire's shoes. If Jeff Bezos (Founder of Amazon) wanted to start a real estate investment company tomorrow do you think he will be the one prospecting for deals? Raising the capital? Underwriting the deals? No, he is going to go task someone with finding world-class people to get it done.
What I am saying to you is if you do not have the time, shift your focus away from doing it yourself and find people to do it for you. What I am saying to you is if you have been trying and struggling finding deals or underwriting property then you may consider finding a world-class person that can compliment you here. The keyword there is world-class. Not someone you have to teach or train but people that have more experience then you and you are hiring for people that can drop in and start adding value immediately. Do not hire or bring in people who cannot ad value day one.
So I get it, Dylan this all sounds great how do I recruit and place world-class talent with a $0 Budget?
First and foremost world-class people are attracted to opportunity and growth, second, they are attracted to good company culture. As entrepreneurs starting out we have very little to none, sometimes negative capital! So you have to think creatively, here are some options to consider when it comes to compensating these people with $0 budget
Consider bringing on a partner and sharing the equity in the company
Consider giving them a piece of each deal that closes
If you have it consider giving them a mix of small base salary plus a portion of each deal
Consider giving them a percentage of net profits in the company until say, they hit their salary cap. For example, pay them 30% of all net profits up to their salary of say $100k.
I will caution you to be very protective of the equity in your company and by making anyone a partner. It's better to give them something along the lines of #2,#3 and #4. Partners should only be used when you two absolutely “jive” together and are going to be in it for the long run. Partners shouldn't be used just to avoid paying someone a salary or profits. A wise mentor always told me “Dylan protect your equity” There are many creative ways to structure compensation without making someone a partner.
For those looking to start or grow a long term successful real estate investing business, consider joining me in The Ultimate Real Estate Investing Course (™) & Coaching. It starts with a free case study and strategy call at vsl.theuric.com