Leverage is a very common term in real estate investing, but like an iceberg, 90% of what leverage means is below the surface.
Once I realized that there were many different types of leverage, I saw the true power of how I could change the real estate investing industry for the better, and make my life more fulfilling in the process.
I’ve set out to change real estate investing for the masses, and won’t stop until I’ve changed a lot of lives for the better.
Most commonly, those using the term “Leverage” are referring to ‘Financial Leverage’. True, real estate would not be nearly the opportunity it is without the ability to use debt. If real estate investors couldn’t borrow money to do deals, very few investors would exist.
Even those that refer to themselves as “Cash Buyers” are generally borrowing the money from somewhere (i.e. using Leverage).
Financial leverage is critical for real estate investors. But to be successful as a real estate investor, it’s crucial that you use many other forms of Leverage.
Before we go much further though…let’s look at a common meaning of ‘Leverage’:
Leverage: “The use of something to magnify a desired result.”
For many years, I was a focused real estate investor. My wife and I started in 2008 with zero experience, and quickly started buying 60-70 houses per year.
Life was good.
Hectic at times, but good. Prior to that time, we were corporate folk, and while very happy to be self-employed, there was an aspect that always seemed to be missing from everyday ‘investor life’.
If you do any volume at all, you likely use technology to minimize trips to the title company, banks and anyone else you can eliminate.
From our own experience, we were busy all the time, but had little social interaction with others. While real estate investor clubs are great (and I advise everyone reading this to belong), meetings are infrequent, and participants are either newbies that don’t have a lot to ‘give’ (not knocking newbies, I was once one!), or veterans that are tight lipped about everything…as they see you as their competition.
Real Estate Investing can be a very lonely place, especially if you value relationships with others.
Leverage Your Knowledge
One day I had the idea to start inviting others to come watch us rehab houses. I coined it “Rehab Live!”, and would regularly have groups of 30-40 individuals meet to watch my team rehab houses. We’d meet at each house 3 times, which for my average project…was about weekly, and simply talk about the project, the deal, and why we made certain decisions.
This was the beginning of my realization that real estate investing could be a team sport!
To share more widely and broadly, I took my experiences online and started sharing my Rehab Live-type experiences with anyone and everyone that was interested.
Very literally, I had a videographer on staff to help me record videos at my rehab projects.
It wasn’t uncommon for us to be rehabbing 4-6+ houses at any given time, and the opportunity to share with others lit a fire in me that had been reduced to just ‘smoke’ in recent years.
I also learned that the more I would share, the more I would benefit in a number of ways. Knowledge, like money, can be leveraged to magnify your results.
At the beginning of 2014, I started the FlipNerd.com Expert Interview show, and have, as of this writing, interviewed over 260 real estate investing experts and leaders from across the country. I didn’t know what to expect when I started but felt a need to help other investors tell their stories and share their knowledge.
Now, thousands of people watch or listen to my show every single day. If you’re not already watching our 3 great shows, please check them out!
Today, unlike ever before, we have massive information and knowledge sharing about real estate investing. I’d argue that like never before, access to free, high-quality knowledge is easier and faster than ever to find. There’s a ton of great information out there for you at your fingertips (or mouse clicks), including several great podcasts, and magazines.
Leverage all the hard work of others to learn and grow.
As a real estate investor, small business owner, and heck…a human being…it’s important that you never stop learning! It’s also important that you take what you learn and share with others. Karma is alive and well.
Technology is changing at lightning speed. Much of the technology available to real estate investors was almost unthinkable just a few short years ago…and now we couldn’t live without it! Tools as simple as document signing apps or bank apps to wire money have benefitted real estate investors immensely.
I’ve bought hundreds of houses, and until just a few years ago, would still generally visit my local bank to pick up a cashier check for purchase closings and courier docs to my title company.
Now I sign docs from my iPad and wire funds from my bank app…from anywhere in the world!
There are also tons of great apps to map properties (Google Maps), analyze deals, and even find deals. FlipNerd.com is the first national wholesale listing platform in America, where investors can market or find wholesale/off-market deals all across the country. As of this writing, there are nearly 1400 active off-market deals on the platform (many added every day).
It’s always blown my mind that real estate investors own 1-in-3 homes in America, many of which were purchased outside the MLS…but there’s NO national listing platform for investors to buy and sell.
Seeing a huge need for this…we just launched this on FlipNerd.com after more than a year in development. If you have wholesale deals to sell, or are looking for investor friendly deals to buy…it’s 100% free.
As a busy real estate investor, it’s critical that you leverage technology to become more efficient, and more productive. Better yet with FlipNerd…we’re working on solving one of the largest issues that all real estate investors face: finding local contractors and professional vendors!
If you’re reading this article right now, you’ve surely asked or heard many questions like “Do you know of a good, cheap, fast electrician in X part of town?”.
I’ve always, always told everyone I’ve ever mentored to only use vendors or contractors that another investor that they know has recommended. Let’s face it, not all vendors and contractors are ‘investor friendly’, and for sure, not all vendors and contractors are reliable!
Why be the guinea pig with your own wallet!?
We’ve essentially created a tool that’s kind of like Angieslist.com, but for real estate investors. To really take on a challenge, we’ve split the country into about 8,700 markets…so the vendors you see on FlipNerd are VERY local to you.
Given that we launched just a month ago…this is quite simply going to take time to build out nationally…but we’re all over it! It’s a great tool, and members can even rate vendors…so other investors can be sure they’re hiring someone that’s been validated.
BTW – if you’re reading this article and have a business to promote (Painter, General Contractor, Lender, Title Company, Pest Control, etc., etc.), you can get a free vendor account in just a few minutes. Check out our Vendor Directory Here:
Bottom line, real estate investing is a lot more fun, and you can be more productive if you utilize the cutting-edge technology that’s available today!
Personally, what we’ve developed with FlipNerd.com is very rewarding to me. We know we have a long way to go to help hundreds of thousands of real estate investors.
We also know it’s going to be a long process to help thousands of vendors (small businesses) tap into real estate investor communities across the country. But, it’s a challenge we’re facing head on…as the benefits are very high for so many.
Leverage Your Network
Everyone knows that networking as a real estate investor is important. Unfortunately, many think that the act of networking is in the ‘meeting’ of people (i.e. meeting someone at an event, shaking hands, trading business cards). Truth is, that’s just the beginning.
As an investor, it’s critical that you identify which of the people you meet that you need to focus on building a long-term relationship with. Social media has allowed us to believe that the simple act of ‘friending’ someone is a ‘relationship’, but that alone isn’t meaningful in any way.
We’ve built some incredible tools into FlipNerd for members to share each other’s digital business card, but just like a physical event, that’s just the beginning of any meaningful relationship.
I purposely set out through my show to publicly build my network, and allow my network to become part of the network for everyone else.
I always ask my guests to provide info on how others can learn more or contact them…which an important aspect of the networking platform I’ve built.
Like many successful real estate investors, for me, it’s not about the real estate. Real estate just happens to be an awesome vehicle to achieve my goals (financial, freedom and otherwise). Along the way, I’ve discovered my passions, which are helping others achieve their goals and dreams through real estate investing. For my real estate investments (rentals and rehabs), financial leverage has been key.
However, until I understood the power of sharing my knowledge and satisfying a thirst for more, embracing modern technology and building a powerful platform for others (FlipNerd.com) and massive focus on building my network (and sharing with others), I was never free.
I wish you nothing but the very best.
May your thirst for knowledge and need to make a difference in the lives of others never be quenched.
Note: I used the word “I” a lot in this article. Any of the success I’ve achieved couldn’t have happened without many others, not the least of which is my wife Lindsay (my secret weapon), who refers to herself as “the woman behind the curtain”.