September 2, 2015
For me, August of 2015 was "Gary Keller Month." It was a month well spent. I feel like I made a new friend. It will probably have changed my life.
I have the impression that with maturity, Keller has become a sweetheart of a man. His books are disguised love letters. The subtitle to The Millionaire Real Estate Agent is, "It's not about the money" and in both it and this one, he shows both how, and why.
I am certainly grateful to him for being so generous with his knowledge. As far as I can tell he's successful in all ways: healthy, wealthy, and wise. In his books, he shares how and why he became that way.
His work has captured my attention since May of this year when a real estate broker asked me to visit her office to help her agents be more successful. I had a few hunches how I might do that; but recognizing how she represents the tip of a very large iceberg, I wanted to do not just a good job, but a great job - leveraging the work I'd do helping her and her team to help many others like them as well.
To prepare, I researched best tools and practices and the state of the art in real estate. (My findings and developments are listed here in the right margin.) That's how, and why, I noticed Gary and his work.
As you can see from the Book Reviews page, the three books I read were The One Thing, The Millionaire Real Estate Agent, and The Millionaire Real Estate Investor. Below, I'm going to discuss firstly what all three books share in common; next, what's unique about this one; and finally, how it inspired me to develop a state of the art, cloud-hosted, scaleable, mobile-friendly database solution for real estate investors that meets all of the book's specifications and applies all of its principles.
- Help for Real Estate Brokers & Agents
- Help for Real Estate Investors
- Book Review, The Millionaire Real Estate Agent
- Book Review, The One Thing
- HWD App page
- HWD App for Real Estate Professionals
- HWD App for Real Estate Investors
- Project Management
- Contact Management
- Lifetime Savings Plan
- Marketing Plan
1) What This Book Shares in Common With the Others
- Focus and obsession. Don't apologize for being obsessive. The key is to manage obsession profitably. In our Attention Deficit Disorder, Multitasking-dominant culture, it's a strength that many lack and wish they had.
- Time Management. "The most valuable asset anyone has is their time." Block time to work leads. He had a lot to say about the importance of time management and of protecting your time so you can focus on your Critical Few fruitful activities. I was so compelled by this point that I built Time Management into the app. When you consider the amazing, vast wealth and income handled by everyone involved in the making of this book, and how carefully one would want to manage and account for all of that with bookkeeping systems, locks, containers, and so on, it's very sobering to consider how they value their time even more than all the money or property they might ever possess, and how recklessly most of us squander ours. That is why I developed a simple technique for working with time just as though it were money that I'm now building into most versions of the HWD App.
- Pareto: the importance of the Critical Few.
- What most people do. They don't take their financial education seriously. They don't value their time and squander it in a chronic state of distraction. They disregard the relationship between quantity and quality, so they don't tool up properly with a good database solution or "funnel" to handle the quantity necessary to discover quality. They figure that through personal charisma, cleverness, adrenaline, luck, Divine Favoritism, magic, or miracles, they can shortcut the process. They're impulsive, doing things backward ("Ready, fire, aim") and if they learn anything at all, by neglecting education, they confine themselves to learning only from their own mistakes. (This error is called "Solipsism", the belief that the only experiences that matter, or that are true or real, are one's own. One millionaire in the book, Elmer Diaz from Houston on page 370, learned this the hard way, and recovered handsomely.) They don't plan or budget. They don't distinguish between needs and wants. They live beyond their means and fall into dissipating consumer debt. They live in denial. They're scared, and they let fear rule them.
- Lead Generation, Prospecting vs. Marketing: Prospecting is you working your leads. Marketing is leverage because it works when you're not working. Both are necessary. Prospecting is something you DO. Marketing is something you UNLEASH.
- The Quality is in the Quantity. Build a database & work it. At the time (2005), the majority used Outlook, Top Producer, & Act (202). Since then things have changed a lot.
- Surmounting Emotional Obstacles
- The primacy of thinking. Thinking is thinking. It takes just as much time to think small as it takes to think big. Before you have a million, you must first think it. Thoughts create things. With respect to Pareto, I have always believed that life is 80% theory and 20% practice. The heavy lifting is in the thinking, in the working out of your theory. When you get that right, practice falls fairly easily into place. With his emphasis on models, criteria, and standards, Gary affirmed this.
- The importance of planning and of thinking big: People who'd rather not set themselves up for disappointment are the very ones destined for disappointment.
- Talent. Find TALENT & leverage it. Replace unacceptable help. Top-grade. When people don't do what they said they'd do or don't care, move on. Replace them. Talent is high-level, creative, fiduciary, deeply engaged and engaging, and rare.
- Four stages: Think a Million, Buy a Million (assets), Own a Million (equity), Receive a Million (annual income).
- Accountability. Tight bookkeeping & regular reviews. Be accountable, and hold others accountable. The person to whom you're accountable does not have to be better than you are at what you do. They help you define goals and stay on track. Being accountable is imperative while you're developing, and being able to hold others accountable is imperative during the fourth stage when you're building an organization and shifting your job description from lead generation to working with the leaders who replace you. (That is another reason why I built robust time accountability into the app.)
- Toward philanthropy: to give a million, you must first have received it.
2) What's Unique About It
- Pareto. One way Pareto applies to real estate investing is in the subtitle of the book: "ANYONE CAN DO IT . . . not everyone will. Will you?" Aside from the way peas grew in his own garden, Pareto's original observation was how most land in Italy was owned by a few people. That's the way it was, that's the way it is, and that's probably the way it will always be . . . and it isn't because of some grand conspiracy to oppress anyone necessitating "Occupy" protests about the 99% and the 1%. It's because people vary and most of them don't look beyond the ends of their noses. It's because wisdom is a valuable, scarce commodity, and cultivating it takes a lot of hard work and brutal self-examination that most people aren't willing to do.
- Another way Pareto applies to real estate investing is that the investor's key 20% activities that produce 80% results are CTN: Criteria, Terms, and Network. Serious investors should block four hours daily to develop those three things, and protect that time fiercely (27, 301).
- Criteria, criteria, criteria. Necessary to sort prospects from suspects. Generally you need to view thirty opportunities to find one deal, so you had better enjoy the process. Be a shopper, not a buyer.
- For investors, Leads are properties and the people associated with them.
- Debt - Like Robert Kiyosaki, Keller disagrees vehemently with the likes of Dave Ramsey. He believes in Good Debt and quotes the greatest landlord of all time, Trammel Crow, who says bluntly, "The way to wealth is debt" (100). Similarly, Millionaire #14, Carlos Herbon (page 382) who immigrated from Argentina with $120 in his pocket said, "When we left Argentina, you had to pay cash for properties. There were no loans. But here it's easy. You can control a lot of money by leveraging into properties.”
- How the Quality Is In the Quantity. The Opportunity : Deal ratio is 30 : 1. To find one deal, you must examine thirty opportunities. That's a lot of driving around looking at real estate and talking to people, so you had better enjoy the process.
- The most valuable thing his financial adviser did for him was encourage him to track his Net Worth, monitor its change, and constantly ask himself what he could do to grow it. The second most valuable thing he encouraged him to do was develop a personal budget.
- Three things needed for investment are Ability, Time, & Money. They magnify each other and if you're short on one, you can compensate with the others. If you have all three you're golden, unstoppable.
- Money lives on the other side of fear. All high-achieving investors involved in the making of the book had, at one time or another, to confront fear or doubt that proved to be unfounded. In many cases they got involved in investing while reacting to crises like economic downturns, unemployment, medical emergencies, dislocation, divorce, or death.
- Value (KNOW), Opportunity (FIND), Deals (MAKE): to get a clear sense of value, spend a lot of time looking at a lot of real estate - so much that you'll need a database to help remember it all. You must enjoy the process. What makes an Opportunity a Deal are FAVORABLE TERMS.
- "Every house has a surprise."
- Stage Three, Own a Million, presented seventeen issues.
- Good negotiation requires empathy: putting yourself others' shoes, learning their motives & priorities, then working with them to craft a mutually rewarding deal. (Narcissists need not apply.)
- Investor 34. I loved the story of Investor 34 on page 322, how he began with his wife from their kitchen table and how he didn't use a cell phone. His motive was to spend more time with his family. Most of the 21 investors in the back of the book are similarly motivated.
- 21 Millionaire stories in the back: I was really struck by Elmer Diaz' story (#8). He gained and lost a lot because he did everything backwards. He didn't put proper systems in place first so when he got busy, it all came crashing down. He had to spend three years paying off debts, during which time he couldn't afford to help his father in law buy a $3,000 car, until an unexpected check from an old lawsuit settlement came in the mail.
- I also liked Ron Garber's story (#11) because he only acquired 20 properties - 5 at a time, 4 times. That was plenty for him.
3) The Database Solution
(Click to enlarge)
(Click to enlarge)
Simple Home Page
For planning your work. Notice how they relate to Work Orders, and that Activities show how they're being carried out.
These Tasks become elements in a Gantt style timeline report for project management and planning.
Properties & Leads
Notice all the expandable sections.
This is the most intricate of all records in the app, including Criteria that can be extensively filtered in reports that glean Prospects from Suspects, and Deals from Prospects.
For storing photos of properties, contracts, worksheets, checklists, and so forth.
Activities & effortless time tracking
Protect your time, be accountable, and when you reach the 7th level of business development, be prepared to hold others accountable.
For planning and scheduling repairs identified in the
Cost of Repair Worksheet.
Notice how orders are scheduled as Tasks, and related to them.
The Work Network
Built according to the book's specifications.
Respectfully prepared & offered,
Kris Freeberg, Economist
Making End$ Meet
Kris Freeberg, Economist
Making End$ Meet