Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
I attended a Real Estate Mastermind in Phoenix recently with a dozen other investors from all around the country. It was the first one that I have attended in years.
When it was done, I spent a lot of time kicking myself for not having done it sooner.
The reason? I came away with at least a half dozen new ideas to implement in my business. And they weren’t small things. They were of forehead-slapping significance. A couple of them were major ideas that I had never even thought of that could be ground breaking in my market.
And I gave as good as I got. I shared a bunch of things that I’m doing that helped the rest of the folks in the room just as much. And I came away with a couple of new JV partners as well.
Tool 1: The Mastermind
So the first tool that I want to highly, highly recommend is a Mastermind.
The principle of a mastermind group was first popularized by Napoleon Hill in his book Think and Grow Rich. I’m pretty sure that you’ve read it. If you haven’t, you need to. Like this week.
Hill described a mastermind as:
"The coordination of knowledge and effort of two or more people, who work toward a definite purpose, in the spirit of harmony."
And that’s just a fancy way of saying that it’s a bunch of people in the same business sitting around the table sharing what works for them.
What I realized in the one I attended is that even though I consider myself an “entrepreneur,” I still get all caught up in what I’m doing. And because I’m achieving some measure of success, I get complacent about it and don’t look for ways to optimize.
That leads to tunnel vision - and missing out on a lot of opportunities… and sometimes not making simple adjustments in what I’m doing, both of which could provide huge dividends.
And it doesn’t have to be something formal with a bunch of people in the room either. I found that just talking through the issues and challenges I face with someone not in real estate can have a similar impact.
One example – my oldest daughter is a junior in college. She’s the only one of my kids who’s interested in real estate right now, and she loves talking about what I’m doing.
Before she went back to school at the end of her Christmas break, we went out for coffee to chat since it would be a couple of months until we’d see each other again. We got to talking about what’s working for me and what’s not. And the crazy thing is, when I told her about one issue I was trying to resolve – that I’m not getting any response from a particular area I’m mailing to – she suggested two really simple changes that were huge.
And by huge I mean I’m now getting a healthy response to my letters from that area, and I’ve already closed one deal. (And she earned a nice $500 check from that deal, too, for her suggestion!)
I’m sold on the mastermind principle, and you should be too. Find a couple of folks to sit down with and compare notes, issues and challenges. I know you’ll be very happy with the results.
Tool 2: The Process Decomp
The second tool I want to highly recommend is the Process Decomposition.
It’s something I’ve been using in my day job for at least the past 15 years, and I apply it at least once per year in my real estate business. Usually during November and December - when the real estate market here goes dormant. But you can use it any time you like if you’re looking to optimize your business.
It sounds complicated, but it’s actually quite simple. You can do it in a couple of steps, but it takes some time to do it right. So if you’re going to start it, then follow it through to the end.
At a high level, a process decomp is simply a way to break down what you’re doing into each step that you take. For example, I use direct mail pretty heavily, and use two different sources of leads…
Step 1. So from the first step of logging in to the last step of dropping the letters in the mail, one of my sources takes 45 steps, and the other takes 66 steps. What I did to start was sit down and walk through my processes and write down each step. So at the end I had two lists of steps.
Step 2. The second step is to go through the list step by step and estimate the time it takes to accomplish each of them.
Step 3. The third step is the most important. It involves looking at each step on its own as a stand-alone action. And researching it to find out if there’s a better or faster way to do it. This is the part that takes the time, and it’s worth it.
When I did mine last fall, the changes I identified reduced my overall processing time for my mailings by 7 hours – per week. Which was not insignificant since I still have a day job.
Some of the changes are simple – like saving 10 seconds by saving my login username and password in my browser. And a couple of them were really significant.
I mail roughly 2,200 letters per month, and I process all of them myself because I haven’t found an outsourcer that will do what I need to have done. So one of my longest-duration tasks is simply printing out a big volume of letters and envelopes each week. So I bought a high-speed inkjet printer for less than $400, and that took two full hours off of my processing time.
Another really long duration task was folding the letters and stuffing and sealing the envelopes. When I dug into that task, I realized that there were desktop machines that would do that for me. So I bought one. It was a bit more expensive than the printer, but using it now saves me another several hours per week.
I think you get the picture.
My point is, I never would have come up with these solutions (and several others) unless I had taken the time to do a process decomp.
Give it a try. Give a mastermind or brainstorming session a try. They will make a difference.
Something to Share?
Have you great mastermind meetings? I wanna hear about it in the comments section below.