How to Become a More Efficient Real Estate Investor
John Larson and the Real Estate Cowboys talk passive income real estate investing.
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Keith Weinhold: Hey, this is Keith Weinhold from the Get Rich Education podcast. You are listening to my friend John Larson and the Real Estate Cowboys. Don’t quit your daydream.
Robert Helms: Hey everybody, it’s Robert Helms, host of the Real Estate Guys radio show, and you are listening to the Real Estate Cowboys.
Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red hot Texas market. John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John.
John Larson: Hello everyone. Welcome back to another edition of the Real Estate Cowboys. This week we are going to be discussing how to be a more efficient real estate investor. If you’ve been listening to the show, we talk a lot about time and your value of time and basically, time is money. So today I wanted to talk about how to be more efficient and give some helpful tips that I personally use and have used to be a more efficient real estate investor myself.
As you know, and if you are somebody that hangs around successful people and I know many of my listeners out there are successful yourself. Honestly, successful people really understand that time is money and successful real estate investors believe that especially. I’m a firm, firm believer in that and I always try and look to maximize my time every day and work on things too, in my life and work on just my schedule and my tendencies and things like that in order to free up more time, because it just seems like once you start having kids and work and then you’re doing investments maybe on the side, and maybe you’re an active hands on real estate investor, you just see that these hours in the day just shrink and shrink and shrink and you just look up at the clock and you’re like, “Oh man, it’s already 5:00 PM.”
That’s how I feel anyway, it’s just, I get into working and dealing with our sales team, our investment coordinators. I’m going out and looking at projects constantly. I’m always traveling, recording the podcast, preparing for the podcast, answering emails, and then you just look up at the clock and you’re just like, “Where did the time go? I got to go pick up my daughter.”
So I try and find ways to really maximize my time, and one of the things I would say is just like getting an early start, starting early. The earlier the better. I really tried to train myself to, really only need about five hours of sleep each night, so then that way I can start my day earlier and get more done. So I think when people think about real estate investors, they think about me or any other of these gurus that are on these podcasts and doing these events and whatever, and they look like they’re so successful, right?
I think when the average person looks at a real estate investor, they envision a man or a woman leisurely sitting on a yacht sipping champagne, right? And talking about how easy life is. But of course, the reality is that the professional real estate investors out there, some are the busiest people in the world. And so I can attest to that for sure. Active real estate investors are always buying or selling and managing rehabs, working leads, all while on the lookout for more opportunities to make more deals.
And I’m telling you today in today’s market it’s harder and harder to find these good deals. The amount of time that myself and my team put into just finding good real estate opportunities is a lot of time going into it and it’s very stressful, and it’s very stressful going out and checking on projects or opportunities, looking at opportunities and you drive all the way out there and you find out it’s not what you thought it was going to be, and it’s a lot of time, a lot of time on the road, a lot of time wasted, just looking at deals that aren’t going to even make sense, right?
I think that that’s more true today in today’s market than it ever has been because with today’s market, especially in a market like Dallas, DFW, the opportunities, they’re few and far between. So you’re now looking at 50 different opportunities to find one. Right? Whereas coming out of the recession or five years ago, for every 10 deals you’d go look at you’d find one, it’s now becoming a situation where because of the rising prices, because of the cap rates being so compressed, the margin for error on these deals is very, very small, very limited. So finding these home run deals is just, it’s really, really hard to find.
So, you’re looking at a lot of deals, you’re looking at a lot of emails, you’re looking at a lot of spreadsheets and then you’re doing a lot of driving to go actually check on these opportunities. Coordinating inspectors and construction guys and GCs to meet you at the properties to do inspections and get a look at everything to determine, “Hey, does the foundation need to be fixed? Does the roof need to be replaced? How are these mechanicals? Is the HVAC intact or does that need to be replaced.” Because that’s all big fixed stuff that can really, really swallow any type of profits in any deal.
And just so with that being said, it’s just been a situation with me where that’s why I’ve been looking for other investment opportunities as well. With the capabilities of raising money, we can pretty much put a lien on anything, a business, a piece of equipment, obviously, real estate is what we’ve been known for, but it’s been easier to kind of track down these deals in the CBD space, because there’s such a huge, huge opportunity in the CBD space today and so many people that need lending for equipment, extraction equipment especially, because it’s a pretty high cost piece of equipment.
But the reason I love it so much for my investors is because once that equipment is purchased and it’s set up, it spins off such a high amount of cash flow that I know my investors are going to be able to be paid back quickly and easily. The margin for error on something like that piece of equipment is not as great as some of these real estate deals that are out there today. Right? And worst case scenario, that borrower does not pay that loan back and some doomsday scenario that causes them not to be able to pay the loan back. The investors now hold lien on a piece of equipment that can spin off millions and millions of dollars, because I do believe, once again, we’re coming up on the harvest now since the farm bill was passed last year, last December, taking hemp off the banned substance list, Every farmer out there has been growing hemp, and we believe there’s going to be a large, large amount of hemp biomass on the market, and everybody is going to be clamoring for extraction services.
So I think that we’ve positioned ourselves on a great opportunity by purchasing this equipment and using private lending from our lenders out there, our clients to purchase this equipment. And I also know that we’re for sure going to be able to pay that loan off, hopefully early, hopefully a little bit early for our investors. And then look for opportunities to possibly reinvest maybe in the CBD space.
So, like I said, I’m not just going to jump at any real estate opportunity. It’s got to be a good deal. It’s got to be as much of a home run as possible, at least a triple, in order for me to jump at it. But I don’t want to have the pressure of trying to constantly find deals in real estate for my investors to invest in. So I look for other alternative investment options as well that can still get you a double digit returns and still protect you in the form of collateralizing that loan, whether it be with a deed of trust or a UCC-1 or whatever it may be.
That’s kind of taken and relieved some stress from me and it’s also freed up some time and it’s made me more efficient. So instead of looking for 50 different real estate deals to try and find one that works, I’ve been going out, vetting out qualified borrowers in the CBD space. Us we’ve raised money for our own equipment, but we’ve also done a raise where we raised money for my attorney up in Kansas, and he’s about to have four of the same machines that we purchased, four extractors that are going to be coming online. His first one just came online that he bought out of pocket, and the three others that we raised funds for will be arriving here soon, probably within the next 30 to 45 days, and he’ll have those online as well.
That’s kind of freed up some of my time and it has made me a more efficient investor, which I’m always looking to do. It just really is exhausting work and if you don’t know how to be efficient with your time, everything can take five times longer to do it, right?
So here’s some tips that I’d like to give in terms of how to be more efficient in managing your time and becoming a more successful investor through managing your time and just working more efficiently. And so the first thing I would say is to outsource tasks when possible. So as a real estate investor, you wear a lot of different hats throughout the day. One minute you’re cold calling leads or following up on leads, the next minute you’re stuffing marketing envelopes, the next minute you’re running numbers on potential new investments.
Many of these tasks that real estate investors do don’t actually require a lot of experience or technical knowhow and those tasks should really be outsourced, right? When menial tasks are outsourced, that gives us as investors free time to do the hard work that only we know how to do. Okay. And that’s, following up with contractors, going and checking on jobs, making sure things in that space of real estate investing are being done efficiently as well, and really those important things I think are where you as the investor and you as the experienced investor need to keep your finger on the pulse so to speak, to make sure that these flips or whatever it may be or these projects are getting done in a timely, efficient manner.
And really I’ve learned, if you keep your eye off it for too long, things start to slow up. All of a sudden rehab budgets start to become higher, the timeframe to get the job done becomes longer because you’re not there to watch it. And eventually people, it’s just human nature to maybe get a little lazy or see if you could sneak by an extra bill, right? So you really, really want to keep your eye on things like that. The acquisition, rehab and disposition of any project, you as the professional investor need to be keeping your eye on that frequently and seeing that through.
Cold calling, stuffing envelopes, putting door hangers on properties, things of that nature, that really is stuff that you need to outsource in my opinion. Okay. And outsourcing improves time and efficiency and productivity levels greatly, okay.
Another thing I would say is to keep fit. I try and make it to the gym at least five times a week. Waking up early and getting to the gym, getting the blood flowing, getting your mind working I think is really, really important. It’s also an efficient way to manage your time when you just get to the gym early. Because if you kind of wait throughout the day to be active, and it’s not just the gym, yoga, meditation, lots of different things, if you just wait to get to that, you know how our days, especially as investors can just start to go kind of crazy, you start to get pulled in so many different directions and then all of a sudden you’re like, “Oh, I just didn’t even make it to the gym today.”
So it’s another way that I try and be efficient with my time is to just get that knocked out right and early in the morning. And then you feel good, you feel energized, you feel sharper going into your day. So, and then you can just answer emails, while you’re on the elliptical or whatever it may be, you can still be on the phone and answering emails and starting to get some of those early morning emails out of the way and kind of setting the table for your day. I think that that’s really important. And I think that the busy life that a real estate investor leads requires physical stamina and mental focus. And if you can start your day off with a sharp mental focus and feeling good about yourself, really you’ll see the results will greatly increase in terms of your productivity. And you’re not going to be running a marathon every day, but you’ll probably work long hours and need to make careful calculations before you invest in a new project. And you know that kind of work doesn’t go well with poor nutrition or lack of physical fitness. You need to feel energized enough to face each day. In that case, you want to make exercise a priority.
And like I said, consider a mental and emotional health regimen such as yoga and meditation, I just bought this meditation basically pillow that’s called Wave and it’s actually, my cousin’s husband designed it. It’s really, really cool and very unique, because I’m not the most like, I’m not really into meditation as much as maybe I should be because it’s really good to calm the mind periodically, but it’s like a music, which I’m a big fan of music, but it comes with headphones, and the music, the pillow pulses to the beat of the music and you’re listening to like soothing sounds as well. It’s a really great way to meditate and I recommend that, but it’s really, really important to I believe stay physically in shape to keep your mind sharp, keep your stamina up and then also to find some time to do some meditation or yoga each day to really relax the mind, because as a real estate investor, like I said, you’re pulled in so many different directions.
There’s a lot of problems that pop up with being a real estate investor and it can become very, very stressful, and a great way to relieve your stress is through yoga and meditation, so consider that as well.
Another thing I would say is to consider more passive investments. Maybe not be so active, especially if you have a job and a family already, jumping in and doing active investments as well, it’s just going to drive you crazy, and it just gets back to time management. How much time do you have in a day if you’re working a 40 hour a week job, and you have a family that you need to be there for and kids need to be picked up from school and taken to soccer practice and whatever it may be, and need help with their homework, so on and so forth?
You want to be able to give your children enough of your time as well, that’s important. They need your time and then if you start taking away from your time with your family to go do active investments, active investments just bring more stress onto you as well. Trust me, I do it every day, so I would maybe consider some more passive investments. So look at filling your portfolio with maybe turnkey rentals, so you’re not actually going out and actually finding the rentals and doing the rehab and managing the rehab and doing the property management, look for a turnkey company to do that for you.
Also, the private money lending options I think are the most passive options available to investors right now who are looking for double digit fixed returns. Find a sponsor, find a group like us that has good opportunities. Like I said, I don’t think there’s a ton of home run real estate investment opportunities to go around right now, which is why we’ve looked for alternative investment options. Find a good group, find a sponsor and somebody that’s proved out for you and then hold onto them for dear life because they will be able to consistently roll those funds into your new projects and keep your money working for you. And hey, everybody’s looking for double digit returns right now and fixed ones. So private lending is a great way to do that, and then that just frees up a bunch of time for you.
Your money is constantly working for you in a super passive manner. So if you haven’t looked into private money lending yet, I would definitely recommend it. Eventually you’re going to have to have a fully passive income portfolio that would see you through retirement, right? So why not start working on that now? It’s not a bad idea to build up a rental portfolio, leverage a turnkey provider to do so, but then also get your money working for you in a private lending opportunity or a few different private lending opportunities and find a sponsor that’s going to be able to continue to bring you deal flow, so you can continue to make that money work for you. I think that that’s very important.
Another thing I would say is to use scripts. So if you’re the type of real estate investor who makes a lot of cold calls, you should be using scripts to make your calls more efficient. Cold calling is already challenging enough not to have answers on hand for every nuance in the conversation. You can buy pre-written scripts for just about every scenario that you’d be running as a real estate investor or you can write your own scripts, which I recommend, which you can customize to your personal style and needs. Whether you decide to buy stocks, scripts or write them yourself, using scripts is a good way to increase your efficiency.
I really believe that, we’ve always kind of used scripts here, especially when we bring onboard a new investment coordinator, you start with scripts and then you kind of let them tweak it and make it their own. My people have been working with me for so long at this point that I feel like there is no use for scripts any longer.
Our investors, I feel like are starting to know us, they’re starting to know me, they listen to the podcast, they see the video content that we put out, and so I feel like a lot of our investors come to us and that first initial call, they kind of already feel like they know us and they know the type of deals that we’re doing, and we try and get a lot of the questions out of the way through the podcast and through the video content that we put out, and also the blog, so on and so forth.
Another thing is use apps. We all have a smart phone now. There’s a lot of different applications out there that help real estate investors run calculations on prospective properties, manage properties and estimate rehab costs. They’re obviously not going to do the hammering for you, but they can automate a lot of the common tasks that real estate investors need to do.
You can do a search in Google Play Store for real estate to see if there’s any relevant apps or iTunes or type in real estate investing applications. There’s many out there, a lot of them that help you calculate good deals and things like that, so you can make quick decisions. So that will help you also be more efficient, right? You don’t have to run to a computer and do a spreadsheet and start plugging in numbers, you can actually be out at the property plugin purchase price, what you believe the rehab should be. And as you become a more seasoned investor, you should be able to walk a property and you start to know what things cost, right? And that’s really important when calculating any deal, right? And any profit, in any deal, in any deal that you deem as something that’s going to work well for your portfolio.
So look into some of these mobile apps when going out and looking at properties. Definitely hire a tax professional. Hiring tax professionals, it’s a little like outsourcing, but even better because as a real estate investor, you’re eligible for a lot of different tax deductions. So you want to make sure that you’re taking advantage of those deductions. And so if you’re not a tax professional yourself, you definitely want to outsource that to somebody because your tax guy is going to be, your tax guy or girl are going to be your best friend if you’re a real estate investor.
You’re also liable to follow some strict tax regulations as a real estate investor. So especially if you’re doing things like a 1031 exchange or self-directing your retirement account and buying property or doing private lending, which is a very, very popular thing to do now. So hiring a tax professional will not only save you time and money on your taxes, it will also keep you on the right side of the law, which is very, very smart, right? You always want to have a good attorney and a good tax professional.
And then the final thing I would say is to just kind of like chunk items up, put items together. So studies have shown that humans don’t actually have the ability to multitask. And if you’re around me and I’m trying to answer an email and you’re trying to have a conversation with me, you’ll see that I’m not the best at multitasking. I’m trying to focus on what I’m doing at the time. We can really only focus on one thing at a time and give our full attention to one thing at a time.
And so when we try to do too many different things at once, it takes actually more time to get something done than just doing one thing at a time and moving on to something else. Think about that. If I’m trying to write an email out to a client or to a person that I work with and then I have another person that I’m trying to maybe negotiate a deal with at lunch, it’s really hard here. It’s going to turn into a very long lunch, right? If I’m just trying to answer email, after email, after email.
It’s like, “Look, put the emails aside. I know they’re not going anywhere. Handle what you have to handle now with the person that’s right in front of you, get this deal locked down, move on to the emails.” Right? Don’t try and do it all at once. That’s just one scenario that I’m using because I find myself trying to do that a lot, trying to multitask by answering emails with other people and also trying to have face to face conversations with other investors or my contractors or people that work with me, it just ends up taking more time really.
The reason that this happens is because the brain needs a few minutes to transition to a new task. So in other words, if you’re trying to quickly go from one thing to another in an effort to multitask, you’re actually losing minutes in between while your brain struggles to adjust. It’s very true. And so a more efficient way is to kind of chunk the items up, make one block of time for one whole task from start to finish, then move onto the next task from start to finish. This way you’re not losing any time between.
One thing that you don’t need any studies to prove is that the more efficient you are as a real estate investor, the more money you stand to make. Efficiency fuels productivity. So use these tips to become a more efficient and more productive real estate investor and just really to become more efficient, productive in just your everyday life. I would give everybody the advice, not only if you’re just an investor, try and wake up early before you have to be at the office and knock that workout out. Because like I said, things, if you let the day start without trying to get your workout in first or meditate or yoga or whatever it is, you’re going to find that it’s going to be more struggling to get that task done which I feel like is a very important task in all of our lives for health and just, it’s not only physical health but mental health. So just try and knock that out early.
So that’s all we have, that’s all the advice that I have this week on how to become a more efficient real estate investor. But if you like what you heard, if you’re interested in passive income opportunities, what we have available right now, go to our websites, AREIUSA.com, RealEstateCowboysDFW.com. Put in your information, a member of our team will reach out, and as I’ve said before, we have plenty of useful knowledge on our websites, blog posts, market reports, reports on how private lending works, how our single family turnkey process works, get that free information from our websites. You could also go to the RealEstateCowboysDFW.com and listen to past episodes or subscribe to us on iTunes or any of the major outlets out there for media.
You can find us on there and that’s just listening to the past podcast is a great way to just kind of learn and familiarize yourself more and more with real estate investing, how it works and what opportunities are available to you. We have a great private lending opportunity right now that we plan on closing out here within the next two to three weeks. We’ve had a ton and ton of interest on this one. I was just talking about it on Get Rich Education with Keith Weinhold. We’ve got leads pouring in for that opportunity, so if you want to become a member, one of our partners on this current opportunity that we have down in Belize with our hemp farm, which pays 15% fixed on your money for the duration of one year. So 15% annual on your money for a one year term.
Go to our websites AREIUSA.com, RealEstateCowboysDFW.com put your information in there and we can get you over the marketing package, and if you’re an accredited investor, we can get you the PPM to review. But great, exciting opportunity. 15% fixed is the most we’ve ever offered. So like I said, if you’re interested in that, go to the websites, put in your info and we will reach out. But that’s all we have for this week. This is your host, John Larson signing off. I’ll see you again next week with some great useful information, and always remember everybody, what’s your return on life? Have a great week.
Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments LLC and do not reflect the opinions of guests or sponsors. No personal or professional advice on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial tax, mortgage or real estate advisor, as the information is not guaranteed and investment strategies have the potential for profit or loss.