When people think of Toyota cars, they think of innovation and reliability. Toyota can regularly point to owners with 3,000, 45,000 or even 500,000 miles on their cars. So, what makes their cars run so well?
They have a very well-designed production system. All parts of their production are integrated into a choreographed dance that hums along beautifully.
Most successful business owners will also tell you that the key to success is having great systems and processes in place. Real estate is no different.
The question is – how can we leverage the ideas of all those brilliant people at Toyota to improve our real estate investing businesses?
Well, it’s actually not that hard to do. Toyota is very open about showing other people their Toyota Production System (TPS). Many books have been written about it, and Toyota invites other businesses (even their competitors) into their facility to show them how to do it.
One aspect of TPS that lots of businesses adopt is the Kanban system. Kanban means ‘card’ in Japanese. Kanban is a system of cards that Toyota can use to schedule their production from workstation to workstation.
There are two central ideas underlying the Kanban production system:
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Visualize your work.
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Limit your work in process.
The first idea means that you should make it really obvious what you should be working on. Don’t muddy the waters with all sorts of tasks swirling around in your head. Multitasking is not only so early 2000s, but it has been shown to actually decrease productivity. Make things simple. Have a small list of tasks right in front of you, so your mind doesn’t wander all over the place.
Not only should you have your list of tasks very visual and right in front of you, but that list should be small. You should try to limit the number of tasks you have going on at the same time.
Toyota calls this work in progress.
Toyota Is Ginormous – I’m Just a Small Fry
Yeah, yeah, real estate investing is not a big factory that needs complicated scheduling. That doesn’t mean we can’t adopt the same principles, tweak them a little, and make them useful for real estate investing. Some clever people did just that.
A software developer named Dmitry Ivanov has put together some free software to enable individuals to use this unique Kanban system in their own small business. He calls it appropriately the Personal Kanban.
The Personal Kanban software makes an electronic version of a Kanban board like this one:
On a traditional Kanban board, people separate their To-Do Lists into different categories.
In the picture above, they have tasks waiting to be done (in priorities of ‘Cool,’ ‘Warm’ and ‘Hot’), tasks the person is working on, and tasks that are complete. The tasks are written on ‘Post-It’ Notes so they can easily be moved from one category to another. If there is a repetitive task it may go into done when complete, and they right back into ‘ready’ for the next time it needs to be done.
Notice there are very few tasks in the ‘Doing’ column. This is the ‘Work in Progress’ category that Toyota says you should limit in their Kanban system.
Ivanov took these low-tech boards, and made them digital:
He also added some nice features like a clock (see upper left of picture) to keep track of how long it takes to do a task, and the ability to change the category names of each column. You can also change the colors of the electronic ‘post its’ to group them by a specific project or other similarity.
The software also has the ability to operate across many different devices, so you can collaborate with others and delegate certain tasks.
There are books and websites dedicated to implementing the Kanban system in your personal life. They would make good companions to the software that runs the system.
Driving the Waste Out of Your Real Estate Business
The Personal Kanban system can improve many aspects of both your professional and personal life. It allows you to focus on what is important, and drop out the waste.
Let’s concentrate on real estate here…
As tasks come in, you can put them in the ‘Ready’ categories. Then as they need to get done you move them over to ‘Doing.’ Upon completion, they can be moved to ‘Done.’
Let’s take flipping a house for example. There are many tasks involved:
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Arranging financing
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Negotiating the deal
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Buying material
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Arranging contractors
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Planning out the rehab
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Dealing with contingencies that pop up
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Setting the house up for sale
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Staging the property
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Closing and cashing your check
These are high-level, general tasks. Obviously there would be many more detailed tasks. You can map out the tasks needed, and move them into the ‘Doing’ category every day or week. Then just concentrate on getting them done.
Once you have moved all your tasks to the ‘Completed’ category, you have a great project-planning template to use on other rehabs and flips.
The Bottom Line: The Personal Kanban tool can also be used for wholesaling or running rental properties. Overall it can be a very useful tool for project planning and management.
Give Us a Shout
Have you implemented the Personal Kanban tool into your business? Tell us about it in the comments section below.
Learn Project Management – No matter what you do in real estate, other than passively investing in someone else, you become a project manager. It will pay lots of dividends to become proficient as a project manager.
Stay Organized – In order to be successful in REI you need to stay on top of everything. Develop an organization system before you get too far into real estate and stick to it!
Apply Project Management to Your Home or Job – If real estate is still a side gig for you, see how tools like Personal Kanban can free up more time for you to work on real estate. Getting projects done quicker means you will have more time to grow your wealth!
JP Moses
is a real estate investor in Memphis, TN, with experience ranging from land lording to note buying, rehabbing, and wholesaling. However, wholesaling is the area that he enjoys most and where he bring the most experience and expertise to his students.