Secrets of Real Estate Investing Success : The Missing Link (part 2)
Read this first if you haven’t already, Secrets of Real Estate Investing Success : The Missing Link (part 1).
In part 1 of this series, we identified that profit is the #1 reason why you are in business and discussed the four key focus areas of your real estate investing business’s profitability (marketing, your negotiating / communicating skill set, converting your real estate investing actions into cash, and leveraging through systems).
But, knowing all of that isn’t enough, there’s still a missing link that separates the mediocre majority and the successful real estate investors who are where they want to be!
The missing link is understanding and effectively applying the Pareto Principle, also known as the 80/20 rule, in the key focus areas in your real estate investing business.
The Pareto Principle states that 80% of the effects (results) come from 20% of the causes (actions). This can be applied across the board to almost anything. If you want to learn more about that, just google it.
Alright, you know the #1 reason why you’re in business is for profit, you know the key focus areas to maximize your real estate investing business’s profitability, and that the missing link is applying the 80/20 rule to it.
Not what?
Applying the Pareto Principle to Your Real Estate Investing Business
First, you want to determine where you are as an investor. What are your strengths and weaknesses that apply most to your being a successful investor? Have you bought your first deal yet? Are you struggling to get past your fears of the unknown? Have you been getting the same mediocre results for years and can’t figure out why?
A beginner and an intermediate investor would apply the missing link in very different ways based on their circumstances.
Second, you must gain a full understanding of how your time is spent. This is done by writing down everything, and I mean everything, that you do on a day to day basis during your working hours. Until you can take an educated view of how you spend your time, chances are, you’ll stay stuck at your current investing level. You’ll continue to get the same results you’ve gotten month after month, year after year.
If you think you know how you spend your time, prepared to be blown away. You most likely spend the majority of your time doing unimportant things in a very haphazard way. Not what we advocate if you really want to be successful as a creative real estate investor! (in our creative real estate investing mentoring program, we take each student through a thorough time analysis applied to the key focus areas of profitability in their real estate investing business)
Now that you know where you are as an investor and have a baseline for how you spend your time, you’re ready to apply the 80/20 rule!
Remember, 20% of your current actions are producing 80% of your results. Ask yourself, “How could I change the way that I use my time to produce far greater results? What key focus areas of profitability do I need to focus on based on where I’m at?
The ball is in your court now! What you do is solely up to you. Are you going to be proactive with this information?
Most people will continue to fall into their habitual reactive mode and respond to everything during their day that “happens.” They will work on the things that aren’t important and procrastinate on the things that make THE difference between being a highly successful real estate investor and those stuck in low levels of performance.
The choice is yours!
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Patrick Riddle:
Dusty Keefe:
I think this is so profound. Thank you for the wonderful words of wisdom!
Thanks for the kind words Audrey! I just hope people take this information and put it into action. It’s some pretty powerful stuff.