Do you like to play baseball, golf and tennis in the summer?
What fun would be if you played sports and did not keep score?
When you don’t keep score you tend to lose complete focus on your goal of winning! The same can be true when investing. If you don’t stay focused onto your goals, you will not achieve your goals. You have to know where you are heading and how you are performing at all times in order to win as an investor!
Imagine rehabbing a house without tracking your expenses vs. budget. How far over would you go?
Imagine collecting rent from your tenants without tracking who has paid and who is late?
Imagine trying to wholesaling houses without tracking your incoming lead sources and deal flow?
Why You Need to Keep Score When Investing in Real Estate
1. Focus: How can you focus on a game or an investment without having a clue about what the score is? How can you win if you don’t know the score?
The ability to focus transcends just being competitive in nature. When building your investment, you need to focus on the end result or you can easily get distracted. Do you have plenty of time for things like Facebook and Twitter, but no time to focus on the actual exit strategy of the house you’re buying or on building a strong team?
You see my point. Just stay focused, and keeping score will help you keep everything on track.
Focus helps against a terrible habit entrepreneurs have… The shiny object syndrome. Come on, admit it! You are in good company on this one! We see something new a shiny and we just chase it hoping it is the next big thing! Meanwhile, our core businesses lose focus and begin to suffer! Just because you see a new opportunity doesn’t mean we should chase it! Knowing how to keep focus is critical to success!
2. Bad Decisions: When I was playing sports and not keeping score, I found that I didn’t think at all about what I was doing. That resulted in some bad decisions along the way.
In your real estate investments, if you make a few too many bad decisions, you’ll find yourself in a world of hurt in a record time. You need to know the score, so you can make great decisions on your overall strategies. You also need time to think! This is why I love mastermind sessions because we work on our businesses rather then working in our business!
Write down your goals and specific strategy and regularly monitor your course along the way, and you’ll find yourself achieving your desired results.
3. Win: If you don’t keep score, you won’t know if you are heading the right direction or if you’re wining or losing.
I live in Richmond, VA. If I wanted to drive to visit my friend David Phelps in Dallas, I wouldn’t just jump in my car and head west until I finally ran into a sign that points to Dallas. That would be a bad decision and would have no focus–both wrapped into one bad strategy. It would be better to map out the course from Richmond to Dallas and plan the route.
Investing works the same way. Chart your course, starting with an intense focus on what you are working to accomplish. Map out your strategy and take the map that gets you to your end goal. If you don’t know what the end result of all your efforts is, then you never know if you’ve won or lost.
Do you know what your number one goal is?
Maybe it’s your overall net worth, or maybe it’s a monthly residual cash flow.
If you are wholesaling maybe it is the size of your buyers list.
Fix and flipping? Maybe it is your deal flow.
Working on private lenders? Maybe you track your ability to build key relationships.
Landlord? Track your rents received and rental unit growth
Do you have the scorecard in place that provides you with a snapshot of the score on a regular basis? Your scorecard could be financial reports, such as an income statement and a balance sheet or maybe a simple a spreadsheet that lists your assets and the rental income that they produce.
If winning isn’t everything, then why keep score? ~ Vince Lombardi
Be sure that you keep your focus on the end results you are working to achieve. Know the road map that will lead you and that you are focusing on the score of the most important metrics you must accomplish.