When it comes to making money in your real estate investing business, I want to share how the 80 20 rule applies to you and your freedom success.
This is by far, one of the most powerful chapters in my new book “How to Win at Real Estate to Break the Freedom Barrier”:
Because We ALL Want More Money!!
I don’t know very many people who DON’T want more money.
It’s pretty safe to say the objective of investing in real estate is to make money.
There’s nothing wrong with that target — but the problem is, it’s the ONLY target for a LOT of people.
Sadly, this is an area where I find many real estate entrepreneurs are lacking. Their belief in what they are trying to achieve is usually fueled only from some sort of material gain. Their freedom is measured by how much money they will make per month.
The problem with thinking on a material level is that once a “storm” hits (and it will), many of us tend to look for other avenues to get the results we’re looking for faster. And that keeps us spinning our wheels.
The 80 20 Rule About Real Estate
I really believe we need a new approach to real estate investing. You may have heard about the 80/20 rule before, and it’s great to apply to your real estate investing business.
The Pareto Principle states that roughly 80% of your results come from 20% of your effort.
If the Dreamers and Draggers followed this rule just to get IN the game, they would be so much further ahead.
The same goes for the Eager Enthusiasts. If they used this rule to build out what works so they CAN expand later, they would not be spinning their wheels every day.
The benefit of understanding this rule is so important to grasp if you want to build a business successfully, because the Pareto Principle is a universal law, not a THEORY, that applies to almost every aspect of our lives.
To give you an example of how the 80 20 rule works in real estate, it means that basically 80% of your wealth comes from only 20% of your investments.
The other investments (whatever they are) are just okay.
Here’s another example:
When I do a live demonstration in a room full of real estate investors to prove the 80/20 rule, I’ll begin by asking the entire room to stand up.
Every time, the room is occupied with either 20% of women and 80% of men, or vice versa.
Of course, it’s not EXACT…but it’s close enough.
Try this little experiment the next time you’re at a real estate event. Take a look around the room to see the 80 20 rule in effect.
Alright, so what does this have to do with you making money in real estate?
Remember, 80% of your results are going to come from 20% of what you focus on.
This means that 80% of your greatest cash flow is going to come from 20% of your properties.
It also means that 80% of your properties will be tenanted, on average. The other 20% of your properties will be in tenant turnover, or vacant.
Keep this 80 20 rule in mind as you begin to build your business and your strategies, because if you have nothing in place to deal with vacancies, or the “other 20%”, you’re going to run into trouble really fast.
It’s great to have 100% of your properties rented…but always leave room for that 20%.
Let’s continue:
80% of your maintenance, problems and challenges — including tenant issues — will come from 20% of your properties.
It doesn’t mean the other 80% are perfect; it just means there will more than likely be about 20% of your properties that REALLY stand out.
The 80/20 Rule For the Real Estate Investor
Okay — here’s where the shit gets real.
80% of people reading this won’t do anything with the information, ideas, advice, strategies, or methods in here.
They’ll nod their head a few times, and then move on to the next book.
Or worse: they won’t even READ the entire thing.
They’ll get to Chapter 1 and never pick it up again.
But it also means that the 20% left over from those 80% are going start to take action…and I honour that!
I can’t predict who the 80% or who the 20% are, personally, I’m just hoping you’re in that 20%.
Being in the 20% has nothing to do with your experience, education, financial status, colour, race, or anything along those lines.
It has everything to do with your level of true commitment.
Here’s the next dosage of reality:
FROM those 20% of action takers, 80% of those people will STOP in their tracks as they hit the first obstacles.
That doesn’t leave many that actually move on to do something, does it?
That’s also another layer of what this book is all about: it’s about sifting through the 80% and getting this message to the 20% that are going to do something TODAY and KEEP GOING.
So there you have it 🙂 some tough love – but that’s what the book is all about.
And, it’s WHY I’m giving it away for FREE (you just pay shipping and handling).
I really want you to move from fear to your first (or next) investment property without getting stuck.
It’s the reason I decided to write a book that “coaches” you – motivates you and more importantly, calls things as they are so you’re not sitting around a year from now doing the same thing you’re doing now, with the same fears and frustrations…
Instead, you’ll be on your way to personal freedom from real estate.
Cheers!