What Is Your Why?
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Why do people invest in real estate?
Passive income, financial and time freedom, networking and relationships, building a business, etc., are just some of the numerous reasons why people get into real estate investing.
On the other hand, the reasons people don’t get started in real estate investing can be boiled down to two things: apathy and fear.
With apathy, it’s always easier not to sacrifice and work hard towards worthwhile pursuits. No matter how great the potential reward, the ease of instant gratification often trumps a person’s desire to achieve. Blame it on a lack of time, focus, resources, or opportunity – these excuses justify our apathy.
Fear - specifically the fear of failure – is the other impediment to worthwhile pursuit. We fear we’re not smart enough, skilled enough, or determined enough to ever accomplish anything noteworthy. While many others around us are blazing the trail of entrepreneurial success, we allow our fear to convince us we could never succeed like them.
Many people actually fear success. When success is unknown it’s intimidating. We fear that if we reach success it won’t fulfill us as we had hoped. We fear that success will cause the people in our lives to judge us or treat us negatively. We fear that if we attain success we’ll end up losing it and be worse off than when we started. The fear of hearing “I told you so,” from doubting friends and family paralyzes us into a state of inactivity. Success is unfamiliar change, and change – even for the better – is scary. So instead we settle for familiar mediocrity.
This idea of what motivates and deters our pursuits is crucial when deciding whether to embark on a new challenge, especially the challenge of real estate investing. Good intentioned people spend months absorbing every real estate investing book, article, and podcast they can find. They shell out hundreds – even thousands– of dollars for start-up seminars and guru guarantees. They leave local meet ups with a handful of business cards from people they’ll never call. Don’t get me wrong – education and networking are vital to getting started in this endeavor. But why do so many wannabe investors look back after years of learning and planning only to realize they still haven’t closed their first deal?
Perhaps it’s because they never stopped to ask themselves the question, “What is my Why?”
While they may’ve written down a list of SMART goals, they never really identified their true motivebehind their goals. That is the Why.
Why is your Why important?
Your Why is crucial to your real estate investing journey for two main reasons:
Your Why is the inspiration for your goals
Your Why is your motivation to persevere when the journey gets hard
It’s not enough to say I’m getting started in real estate investing to make more money. There’s nothing wrong with desiring more money, but you owe it to yourself to identify why you desire more money, what goals are going to help you achieve more money, and even what you’d do with more money. For example:
Why #1: I’m getting into real estate investing to make more money (vague)
Why #2: I want to invest in real estate to earn $4,700 of passive monthly income so my wife and I can quit our day jobs; so we can pay off our debt and achieve financial freedom; so we can have more time for our marriage and family; so we can travel more; so we can give money to charity, etc.
You see the difference?
Why #1 is vague and purposeless. Why #2 is specific and purposeful. Why #2 allows you to examine your motives and visualize your future. By identifying your ultimate goal of a passive monthly income of $4,700 you can now work backwards to identify the specific things you need to do to achieve this goal. You can determine how many doors you’ll need to own (roughly 24 doors at $200/door). You can set about establishing your real estate team: a realtor, financer, property manager, and contractor (if you plan on rehabbing properties). You can decide if you’d like to build a steady portfolio of single -family homes, or scale more quickly with multi-family properties. There is so much to figure out, and starting with your Why will help you focus on only what will help you reach your dream.
Additionally, if you have a spouse or partner, explaining your Why will allow them to see and embrace your vision. Rather than telling your spouse you’re now investing in real estate, humbly approach them and explain why you feel real estate investing is an exciting and viable way to achieve bothof your dreams. Inspire them and offer clarity by answering any questions they have. Remember, without understanding your Why, you won’t have much of an answer to give people when they ask you “Why?”
Your Why will also help you answer this question: When this journey inevitably gets difficult, and I’m tempted to throw in the towel, what is going to motivate me to persevere? Your Why will give you the strength and vitality to maintain your disciplines and focus on your goals. Your Why will get you up at 5am every morning to analyze properties. Your Why will motivate you to attend meet ups and forge relationships with people who can help you reach your goals. Your Why will fuel you to stay up ‘til 2am painting a kitchen for a move-in deadline. When you remind yourself that you are striving after this dream in order to quit your 9-5, get out of debt, and have more time for your family, these sacrifices will pale in comparison to the end rewards.
Your Why will keep you from getting distracted by all the easier, less sacrificial things you could be doing that will ultimately keep you from the freedom you desire. But without your Why, your What is very easy to give up on when you face obstacles and set backs. Without your Why, the How will seem insurmountable, and the When will feel like never.
Maybe you are deliberating whether or not to get started in real estate investing, or you have gotten started, but difficult circumstances are tempting you to give up. I implore you to start with your Why? Why do you want this? There are many other ways to make money or start a business. There are countless endeavors that don’t require as much work or energy or sacrifice as real estate investing. But there are few opportunities that offer the potential rewards of real estate investing. Reflect inwardly, and write honestly about why you believe you can achieve your dreams through investing in real estate. Share your why with your spouse, partner, or a friend. Answer their questions and don’t get defensive. You don’t need to have all the answers right now. Just start with Why.