I've been meaning to write this article for quite some time and those who have heard me speak in the last couple of years have already gotten an earful of this. This topic isn't about a neat investing technique or new idea, but about a mindset. It's my mindset and one that I believe will make many other people successful.
Back in 1998 when I took my first step into real estate investing, I was strongly influenced by others around me who believed you had to be a dominant force in your market to make real money. They stressed doing as many deals as possible and beating out the competition. The world around me was saying that the person who does the most wins. More deals lead to more profits which ultimately leads to greater success – all going hand-in-hand.
As a newbie, I took the teaching to heart and did over 100 deals in my first two years. I was proud of my accomplishments and knew many around me were impressed with my successes. However, when stopped to look at the big picture, I was doing a lot of deals and making more money than ever before, but I had little control elsewhere. My time wasn't my own and the deals truly controlled me. In short, I wasn't living a life that felt fulfilling.
I've talked with many investors across the country and always ask what draws them to real estate investing. The answers vary, but typically can be summed up in one sentence, “I want a better quality of life.” Over my years of investing, I have come to realize that QUANTITY does not lead to QUALITY. If you want real estate investing to provide you with a good quality of life, you need to pursue good quality deals, not a good quantity of deals.
What are quality deals? They're deals that contribute to the advancement your goals. They get you moving in the direction that you want to go. Many investors start buying homes with no idea of what they really want to accomplish with investing. As a result, they buy anything that looks like a deal and, all too often, get pulled in directions they never intended to go.
Your goals should drive your decision making. For example, a person who needs money today and buys a property to keep it as a rental is contradicting or not fulfilling the original goal. Rental properties will not reap quick, fast cash today. Let's say your goal is to free up your time so that you can do other things important to you. If you only want to work 20 hours a week and are taking on deals that require 40 hours a week, you're not doing quality deals. You're focused on quantity.
We need to make sacrifices to achieve the success that we desire, but need to be careful not to sacrifice the important things in life. If you are pursuing investing to achieve a better quality of life, focus on quality deals and not quantity.