The U.S. housing market has been on a steady tear for the past century. While there have been blips on the radar, especially recently with the Great Recession, real estate remains one of the best performing investment vehicles in the world. For entrepreneurs who understand the mechanics of how to successfully profit from a real estate transaction, the sky is quite literally the limit.
However, it’s not always sunshine and rainbows. People do lose their proverbial shirts in real estate, just as they do in all other forms of business. Nonetheless, it offers up one of the most future-proof mediums for earning a substantial amount of money. The truth is that people will always need a place to live and businesses will always need a place to work. For that reason, real estate won’t decline, but rather, continue its slow and steady climb.
Of course, the recent housing bubble stings just a little bit. If you’re one of the unlucky people who bought near the peak and were forced to sell, or even let your home go in the bloodbath that ensued the 2007 market crash, then you’ve likely built some aversions towards investing in any form of property. Yet, for those that know how to weather the storm, even the recent downturn isn’t a powerful enough deterrent when you weigh the risks versus rewards in real estate investing.
How to succeed in real estate.
Market ups and downs are to be expected in any indusry. For real estate, the waves come every few years. However, the contrarians know that the best time to invest is when everyone else is selling and the best time to sell is when everyone else is buying. And no matter what the market climate, anyone can succeed in real estate as long as they harbor a few tried-and-true lessons that can only come from the in-the-trenches battle for fiscal survival.
For Justin Colby, a wildly successful real estate investor from California who’s flipped well over $100 million in real estate, success didn’t come easy. In fact, when Colby first decided to enter into the real estate industry in 2007, he had just lost his home to a foreclosure, his car was repossessed and he was living on a friend’s couch in San Francisco. He was a victim to the market frenzy and bubbling valuations that had him in way above his head and he simply let it all go.
If that kind of failure doesn’t stop a person, then nothing ever could. In fact, Colby, while living on his friend’s couch, was so determined to enter into real estate that even though he had no money and no credit, he committed to one simple thing that helped him eventually succeed. He decided to call 100 real estate agents every single day and tell them who he was, what he wanted to do and why they should work with him.
Naturally, Colby got a lot of hang ups. But he persisted. Out of the 100 agents he would call every single day, on average, 90 would hang up on him. Eight would have a brief exchange with him. And two would be interested enough in what he had to say that they would agree to a sit-down. Colby did this every single day for nine months. Somehow, somewhere, deep down inside, he knew he was destined for this.
He would hold those meetings at Starbucks. At the time, around the Great Recession, Starbucks had been offering free coffee refills as long the coffee was consumed in the shop. So he sat there and met with those realtors and tried to convince and sway them to work with him. Eventually, he found one that had agreed. The question was, how was he going to conduct a real estate transaction without having any money or any credit?
Colby’s first flip happened with the realtor’s help. Colby found the property and the realtor lined up a buyer. For the cash, he turned to a transactional lender, which is effectively a hard money lender but charges much higher interest rates. For a 48-hour lend, the company charged him two points in interest. But it worked. He flipped that house in 72 hours and made his first $7,000 in real estate, which he had to split with his business partner.
For the next flip, he did the same thing. Afterwards, out of sheer luck, he managed to meet an old friend from high school who showed up at a 49’ers game. That friend had just come into an inheritance and after a brief conversation, decided to invest $100,000 with Colby. That was the turning point. That’s when he put pedal to the metal and things really took off.
However, surprisingly, with that investment, Colby did something contrarian. Realizing that he needed guidance and leadership from an expert in the field, he invested in a $25,000 real estate mastermind, which, after two phone calls, helped him to hone his direction. That’s all it took. While Colby’s first year had only seen two deals push through, in his second year, he did six. These were traditional rehab flips. The next year, an astounding jump to 46 flips, then 96 the year after. Afterwards, he moved into large-scale real estate development.
After flipping $100 million in real estate, Colby learned 10 very important lessons that any entrepreneur who’s interested in real estate should heed. No matter what your present stiatuion, people like Colby are a true testament to what’s possible when you’re so committed and devoted to doing something, that nothing will stand in your way. Imagine having no money, no credit and no personal network that you can lean on, and turning around and becoming a wildly successful real estate investor. That’s where true champions are formed.
1. You have to believe it before you see it.
No matter what line of work you’re in, if you can’t envision success, you won’t be able to achieve it. For Colby, even his stark present-day reality wasn’t enough to hold him back from achieving his dreams. He was able to wildly envision a future that was so different from his reality, that the power of his thoughts propelled him towards his dreams. Without that, no entrepreneur can succeed.
2. Reasons come first and answers come second.
Anyone who wants to achieve a goal needs to find a strong enough reason why they must achieve it. That will always come first. If your reason is strong enough, whatever it is, then it will help you achieve anything. Colby discovered that he had this burning desire to succeed and didn’t want to just live a life of mediocrity. That’s how you achieve greatness.
3. Progress happens when you breakthrough your fears.
We all have limiting beliefs and fears that hold us back in life. They stop us from achieving our dreams. But the biggest amount of progress can only happen when we breakthrough our fears. Marilyn Ferguson once said that “Ultimately we know deeply that the other side of every fear is freedom.” Colby learned that when a fear arose in his mind, he would immediately breakthrough it by tackling it head on.
4. Don’t suffer paralysis by analysis.
We often overthink and over analyze things in life. We wait for the cards to be just right or the stars to align. Well, that’s never going to happen. Unless you seize the opportunity, things will never be perfect. You have to go out there and simply do things and not wait around for things to come to you. They’ll never come to you unless you go out there and get them.
5. Create a massive action plan if you’re serious about getting results.
Colby discovered that he needed a massive action plan to succeed. He never changed his goals. But if his plan wasn’t working out, he would adjust his plan, but he was always planning. At the end of the day, if you’re building and carrying out your plan constantly, you’ll eventually succeed. It might take longer than you initially hoped. But you’ll get there.
Related Video: Education Versus Execution in Real Estate
6. Sometimes you learn and sometimes you earn.
Failure should be expected when you’re trying to achieve big goals. Don’t let that dissuade you. Sometimes you’ll learn some serious lessons from those failures and sometimes you’ll earn money when things go according to plan. But don’t be disheartened when things fall apart from time to time. Expect it. Power through it. And keep going.
7. Find a leader, a mentor or a coach immediately.
No matter what it takes, you have to find someone who can mentor you, a leader or a professional coach. Whatever you have to spend on this, you should make it a priority. They’ll be able to guide you in the right direction. When Colby got $100,000 as an investment from a friend, he spent 25% of that on a mastermind coach. Acknowledging the importance of this, Colby has mentored well over a 1,000 students through his coaching program, The Science of Flipping and leads three separate real estate masterminds.
8. Use widely-available resources to help you achieve your goals.
We have so many resources at our disposal to connect with others. We can use social media to message influencers in any industry. We can send emails to industry leaders or business titans. Don’t be afraid to ask for help or to tap into networking tools like meetup.com to help you find other like-minded entrepreneurs while working to achieve your goals. Steve Jobs once said, “I’ve never found anybody who didn’t want to help me when I’ve asked them for help.”
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9. Manage your time or you’ll find yourself going backwards rather than forwards.
If you’re serious about achieving any goal, you have to manage your time and do it effectively. Find a good system that works and work it. Focus on your long-term goals and cut out your distractions. Don’t spend your day on time-wasters like endlessly surfing the internet or watching television or engaging in some other mindless pursuit. Time is finite so use it wisely.
10. Never, ever, give up, no matter what.
Big goals take time. You have to persist. No matter how bad you feel, you need to get up, dress up and show up. That’s what it takes. That’s the winning mentality. If things don’t go your way, don’t take it the wrong way. Just try again. Pick yourself back up and keep moving. Blil Bradley once said that “ambition is the path to success. Persistence is the vehicle you arrive in.”