Unless you are living under a rock, you may have heard that the NCAA basketball tournament is currently under way. You may have even tried your luck and filled out a bracket (or three) to show just how much you know about the sport. If you are like most people, you have suffered some loses along the way, but still may have a shot at the big prize. There is some luck that goes into picking a successful bracket, but there is also a lot of work to be done. The same is the case with your real estate investing business. The basketball tournament and your bracket have much more in common with real estate investing than you may think.
Everything you do is important: One moment in one play can often have a direct impact on whether or not your team advances. You may win your next three games, but unless you make a play early in the tournament nobody may ever notice. As an investor, you need to do the right work early on. Put in your time. If you do a poor job calculating numbers or inspecting a property, you will feel it at the end of the deal. Everyone you meet could be someone that changes your business. That meeting that you may not want to attend could produce a great contact. Before you get to the championship, you need to win your first game.
Make the right projections: The odds of filling out a perfect bracket are somewhere between slim and none. Someone that watches every basketball game has the same chance at bracket success as someone who hasn’t watched a minute. The bracket is all about projections. The same can be said about investors. You are making projections every day, and every deal. Your numbers need to be in line with reality. If your projections are too low, you will not net as much on a deal as you thought. If your projections are too high, you may offer more than a property is worth. Picking a bracket has a fair amount of luck involved, but there are also some clues that can help you. For instance, a number 1 seed has never lost to a 16 seed before. Can it happen? Sure, but the odds are that it won’t. Can the property you bought sell for 25% more than the purchase price? It’s possible, but the chances are slim. Remember that projections are important.
You need a series of events to go right: Closing a successful real estate deal requires many things to go your way. After you find a property you like, you need the seller, realtors and attorneys to all be on the same page. If one of them doesn’t do their job, you could have a problem. In the tournament, you hope for upsets. If you look at the big picture, it may seem pretty impossible at times. But if you break them down one game, or task, at a time, it doesn’t seem so difficult. In the real estate business there will be times when you have ten things you need to get done. Instead of trying to do them all at once, start with the most important one and go from there. If you pick the national champion, the chances are that you will rank pretty high among your competition. By starting with the most important thing, everything else will fall into place.
Control what you can control: One of the biggest reasons investors get frustrated with the business is that they try to do everything themselves. Instead of watching everything your realtor or contractor does, give them some space to work. You can only do so much. Once you complete your bracket, there is nothing else you can do. You can cheer on your teams, but the results are out of your hands. If you worry about what everybody is doing or if your teams win, you will get frustrated. This doesn’t mean that you can’t work hard, but you should do the right work. Spend as much time on your business as possible, but accept that you can’t control everything.
Celebrate wisely: In a few weeks we will see if your basketball expertise pays off. For a large majority of people, it won’t – and you will rip your bracket up long before the championship game. There will be a select few that will be victorious. Regardless if you won bragging rights or some money, how you celebrate is important. The same goes for after you complete a successful real estate transaction. It is a great feeling to get a check at closing. If you want to make your money grow, how you spend is what is important. It is also important how you carry yourself at this point. If you celebrate too loud, the people around you will not want to work with you in the future. People in your office may not have a choice, but they will remember. Nobody likes a sore loser or a loud winner.
One of the things that make the basketball tournament so great is that everyone has a chance. This is the same case with every potential deal in your area. Once a property is on the market, you have as much chance to get it as anyone else. If you work hard and get a little lucky at times you can get your offer accepted. The same formula applies with your bracket. Winning may be difficult, but far from not impossible.