Flipping Houses: Strategy vs Tactic Part 3

December 16, 2014

One of the fastest ways to build a fortune in real estate is by flipping houses and once you start, the sky’s the limit! So what are you waiting for? Start flipping houses today!

People ask me as we travel non-stop, teaching across the nation, “What is the one thing that separates the successful investor from the struggling investor?” To me, one of the three main points is the one we’ll talk about now – strategy versus tactic. What I mean by that is, you have to understand your strategy before you start your tactic. That’s the number one rule of successful investing.

In the world we live in so many entrepreneurs see a tv show, or read an article, or whatever it is, and they get this “itch” to go try their hand in real estate. They’ll go to some seminar and they learn a certain tactic within real estate. It could be buy, fix, and sell, or lease options, or short sales, or multi-family. They hear about this tactic and get all excited about it; then they run out and try to be successful in real estate with a tactic.

They come across hard times, problems, something that goes wrong and they get out of real estate. Afterwards they just go back to whatever it was that they were previously doing. The struggling entrepreneur or the person who gets in and out of real estate does so because they don’t understand what they are trying to accomplish with real estate. They don’t understand their strategy.

Let’s say we are going to take a trip to the Grand Canyon. We’ll type into Mapquest, “I want to go to the Grand Canyon.” Then we press the “get directions from here” button. Mapquest then plots our route from where we stand to the Grand Canyon. That route, which is our strategy, requires a starting and an ending point.

You have to understand your strategy first. Where are you at financially? Where do you want to be financially? In this blog, where you want to be is a monthly cash flow number. That’s what you’re striving for.

My very first strategy, or destination, in real estate was to make enough money in real estate cash flow from rental properties to pay all my bills each month. At that time, I needed $4,500 per month. Once I reached that $4,500 mark, I had reached my destination. However, accomplishing my goal was much easier than I had thought it would be. Now I want $10,000 per month. Once I reached that destination it was, “How about $15,000 per month?” Strategy will change and grow as we reach our destinations.

Focus on your strategy first, which is knowing where you are and where you want to be. That’s the path that you are going to go down. Your game plan, road map and Mapquest directions of how you’re going to change your financial destination.