Get Theory or Just Do It

Posted on May 24, 2013 by

Recently, I spoke with a real estate investor who’s having a tough time moving up to the next level of investing.  She’s very smart – she has a college degree and is working on her masters.  She isn’t the least bit afraid of hard work.  She and her husband have already done a couple of deals.

Here’s the thing: She feels she needs to know everything about real estate investing before doing her next deal.  I think this has a lot to do with her level of education.  For years, she’s been taught that to succeed, you must first go to school and learn lots of stuff before stepping out into the real world. 

This just isn’t so.  I’m not anti-education – far from it!  Each year, Kim and I invest 5% of our net income into our education.  At the same time, we’ve never let a lack of education keep us from meeting with sellers.  Never forget, meeting face-to-face with sellers and asking Pete Fortunato’s famous question, “Why are you selling such a nice house like this?” is the Alpha and Omega of real estate investing.  Never find a reason to NOT meet with sellers – even if you don’t know what you’re doing!

Let’s say there are two people who want to learn how to swim.  For six months, the first person sits in a classroom every day.  Teachers instruct her on the mechanics of a good stroke.  She watches lots of video of people swimming.  At night she reads many books about what it feels like to swim.

Our other prospective swimmer jumps into the pool on day one.  It’s not pretty.  Water splashes everywhere as our would-be swimmer makes her first attempt at “swimming.” She doesn’t know anything about the mechanics of a stroke.  If it weren’t for being in the shallow end, she’d drown.

Let’s fast-forward six months. Who is the better swimmer – the girl who sat in class and knows everything about swim theory, or the girl who jumped in the water and did laps every day? The lap-swimming girl, right?  Education doesn’t take the place of getting out there and doing it!  (Did you know that Lincoln only had one year of schooling?)

Believe it or not, a new investor’s greatest fear is not a seller saying no.  Rather, it’s a seller saying yes.  After all, if a seller says yes, what is the new investor supposed to do next?  Here’s an idea: How about running the “opportunity” (remember, opportunities are found and then structured into deals) by an experienced investor and getting his opinion? 

This is what Kim and I did when we were starting out.  After a seller signed a Sale Contract, we’d take it to several been-there-and-done-that investors we knew.  In some cases, we sold our contract (it was assignable) to another investor.  In other cases, an experienced investor would partner with us on the deal.

So how do you get good at sitting down and talking with sellers and creatively structuring deals?  The best way is the same way you learn how to swim.  Just do it!

Bill & Kim CookBill & Kim Cook are a husband and wife real estate investing team. They live in Adairsville, Georgia and have been investing in real estate since 1995. They specialize in buying single-family homes, mobile homes and mobile home parks. They also run North Georgia REIA and teach folks how to successfully invest in real estate.

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