When I first began my studies of real estate in 2013, I adopted a very narrow mindset in the suitable path to wealth creation. I believed that all investors followed the same obvious strategies and that one’s success was dependent upon that individuals own resources. Along the way, I learned that, aside from the dozens of niches and multiple strategies to growing wealth in real estate, one can really separate investing into two general approaches. Having an understanding and appreciation for these different approaches and mindsets allows for more definition and clarity for the end goal and setting the appropriate path.
I have shared the early part my journey here and on multiple podcasts, and I believe that it is not unique. It involved the following:- As a young working professional, I sought methods to create true wealth.- I came across the subject of real estate investing and found the Bigger Pockets forums and Podcast and began to regularly engage the subject to learn and grow.-In spite of the many great interviews that I listened to, I still believed that real estate investing was primarily and individual sport.
What do I mean by individual sport?
I believed that I needed to use my own resources to get started. Maybe that’s why it took me years to buy that first rental. I believed that I needed MUCH more cash. Check out Real Estate Investing and the Cash Question where we visit this subject in detail. Finally, I believed that I had to do it all myself (finding deals, property management, etc.)
Here is the short story.
Although many investors and beginning investors operate this way, real estate investing does not have to be an individual sport. If your goal is to simply generate sufficient cash flow for your needs through the means of buy and hold single-family investing, and buying a house once every few years using your own resources will get you to that goal, having a less-team oriented mindset is sufficient. However, please keep in mind, that as an individual investor, you still, to a degree, benefit from having a team.
Let’s discuss the team sport approach.
This is not one that I have adequately mastered. Naturally, I like control. Actually, what that is what attracted me to real estate as an asset class in the first place. I knew that as a stock investor with only a fraction of a fraction of a publicly traded company – a company with their own majority investors, board and management team – that I was at the mercies of their decision-making and simply along for the ride. After having decided to invest in real estate, I must have applied that same desire for control in what I believe was an improper individual sport mindset.
Now, after having decided to transition from single family investments into multi-families and apartments, I recognize a very key power in scaling your business. First, I will share the quote that did it for me:“Any piece of real estate can be acquired with the right number of investors” – Real Estate AppraisalOnce I read this, it clicked for me. I need a team. From the very beginning, my investment goals were to scale to a multi-family portfolio consisting of many units. I knew that this was the end goal, but did not initially follow the appropriate mindset to arrive at that destination.
How to Adopt a Team Approach
Investing with a team sport mindset involves joining networking groups and masterminds, obtaining an informal or formal mentor or coach, building a team (investors, property managers brokers, etc’s), building an internal team (assistant, partners, etc.). It is prudent to first sit and evaluate your goals and determine which approach makes the most sense for your investment plans. Please do keep in mind that whether you intend to buy and hold a few rentals or scale to a large portfolio, it is invariably beneficial to be team oriented to some extent. A good starting point to feeding the team orientation for any new investor is to join a meetup and network with other investors. You can also join our newsletter and subscribe to our content, where we help investors grow and naturally adopt a team-oriented mindset.
Passive Investor Startup Guide
To find out more about what it looks like to invest as a passive investor in multifamily real estate, download our free Passive Investor Startup Guide here!
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Rodney Robinson II