I listen to a lot of business podcasts on my commute to work and the one that I have been listening to lately is Startups for the Rest of Us by Rob Walling and Mike Taber. Even though they have a software developers background, they still provide great small business information that can be carried over to real estate investing.
They mention the concept of the flywheel effect in several episodes. This concept, coined by Jim Collins who authored Good to Great, can be imagined as a large wheel that is very difficult to move without a great amount of strength. However, once it begins to move at a sufficient speed, very little energy is required to keep the wheel in motion.
Relating this concept to real estate investing, most people start their real estate business with a combination of low investing capital, poor credit, few real estate related connections and/or little knowledge. I’m sure a lot of people feel like they are doing this alone as their family and friends think that they are crazy. For most people this will be the hardest point in their business.
I remember this time period well. I had the firm belief early on that my business would help me reach my goals, financial and otherwise. This is what it takes to succeed when trying to get that fly wheel started: a strong and educated belief in your actions and a willingness to persist despite obstacles that WILL come up.
If you listen to the BiggerPockets Podcast, Brandon likes to ask each person he interviews:
What separates the successful investors from the ones who aren’t successful?
Time and time again, their answer is related to my previous statement about beliefs and persistence.
This is the step we’re currently at. Our flywheel is moving fairly well …read more