The Truth about Real Estate Investment

The journey of growing and scaling a real estate portfolio. Now this entails obviously way more than buying just assets. And a lot of people don’t understand that there are distinct separate parts in this journey where you need to think very differently about how you are buying, building the business. Because remember there’s 2 sides. You have the actual buying of the assets.

Okay? We talk a lot about this on self storage income. But there is also then the business part of real estate investing, right? That’s growing the firm. There’s a transformation that you have to go through.

And we don’t talk a lot about this big picture of the resources and things you need at every single point in the journey. But through my group, we developed kind of a mapping to look at these different stages so you can understand where am I at which point in the journey, and what do I need? Alright. So we’re gonna go through the real estate journey. Now this is something we talk a lot about, and it’s really important to not only understand where you are in the journey, but also where you wanna be at the trailhead.

This is a really important time when you’re trying to understand the overall landscape of investment opportunities, both that are currently existing, but also how they relate to you. So what are the resources that you currently have? What are you taking with you on this journey? And then what are the different paths and what are the different methods to get up the mountain that maybe you can utilize? This may be a lot of things.

Some people are looking at multifamily. Some people are looking at storage. Other are looking at industrial. Some people may have a knack for development. There’s just a lot of things that people can use.

You’ve got it all in front of you. You have your map, and you’re putting all of this knowledge together before you go and walk down. This is really important that you’re prepared. You want to have a clear idea of the risks, the rewards, and what the journey looks like all the way through it. You don’t want to start out in something that you don’t wanna end up in.

The forest. This is more on the understanding and applying. First of all, if you’re going through the forest and you’re really trying to designate which way is best for you, I see a lot of people doing this differently. Now, some people may just simply do it through studying. Right?

Other people may actually go out and work with those that are currently doing. There’s a lot of ways that they can dive deep into a path before actually making the move. Right? Before they’re actually putting capital, before they’re buying that asset. This part in the forest of deciding where you’re gonna jump is really important, and I don’t think that you can really generally understand this from simply reading.

Lots of this comes down to networking, being with surrounded by other people that are doing, and understanding the ins and outs of each path and what that makes before you make a buying decision. Another way that I see a lot of people doing it is they’ll invest small amounts maybe with syndicators. So they get exposure. Right? Now once you’re going up and you’re headed to base camp, so after you leave the forest, this is when you take the leap into ownership.

What opportunities do you have and what suits you best and you’re gonna go on buying. When I bought my first storage facility, when we ended up having 2, 3, even 4, I still didn’t even fully know if that was it. Right? I didn’t know if I was gonna summit with this asset class or if it was gonna be a different business or if it was gonna be, you know, industrial. I was We’re doing, we’re learning, but we are not 100% sold yet.

We’re trying to go down that path, but there’s still so much that we don’t know. You kinda wonder how you could be fully in or sold to it. The most important thing about base camp is this. And a lot of people shortcut and actually go straight to base camp. Meaning, they already know what they want.

They decided. They have tools, resources, opportunity. They’re joining groups. Base camp is a big decision making time. You’re gonna put a lot of effort.

You’re gonna put a lot of resources into this. You have made a real decision. And at this point, you can see the peak, you understand that path a lot better. This is why lots of people go and join specialty groups for getting access to deals, knowledge, experience, getting exposure, even when they own. They’re trying to learn more.

They’re trying to perfect their skills, but they’ve made that decision. This is what I’m doing. Now they can see clearly the strategy before them. Once you move past base camp though, it is no longer an individualized game. This has become a team sport.

What you need to get to the summit, so what you need to go through this, is not the same that got you to base camp. Now base camp in itself is an achievement. You are owning. You are participating, right, at that level. That’s huge.

You’ve already taken that step forward. But to go to the summit, you are going to need very skilled teams. Most of the time when we’re looking at the summit, this is not a passive event. You’re talking attorneys, CPAs. You’re talking individual experts.

You need everything from operations, property management. There’s a lot that goes into this journey, and you can’t do it alone. Now it’s important to remember, the summit is not the destination. Right? It’s a process.

Meaning that when you’re at the summit, you are in the process of doing it. I define this as the business of real estate that you’ve started can be done without you. That means you can acquire, you can fund, you can operate, you can manage, and you can scale whether you’re directly involved in the business or not. It’s at the peak. Their sky is the limit from that point.

It doesn’t mean it stopped. It means that it’s going, and it can continue to go, and it’s not reliant solely on you. That’s different than passive income. When you get to base camp, then you have income that is coming to you not produced from your work. Right?

The asset’s producing that income. That’s great, but that’s not the summit. The summit is a real estate business that is growing and producing more income and more equity, which is scaling through the acquisition of real estate without you being directly involved. That’s the key to the summit. Okay, so when you’re starting out on your journey, especially down here when you’re at the trailhead, most people are excited, right?

You’re listening to bigger pockets. You’re on all the podcasts. You’re reading the books. You have this trail, and you can see that summit in the distance. And it seems like it’s just right there, and you’re gonna go.

You’re gonna join. You’re gonna do Now, most people then when they get in the forest, they’re confused. There seems to be paths everywhere, and now you can’t see the summit anymore. You’re actually walking. You’re trying to do the thing.

And you end up buying real estate, but lots of times you may actually seem more confused. You now know more than you did before, yet it’s not as clear as it was. Once you get to base camp is kind of the point of no return. Now you’re an owner. Now you actually have experience in that thing.

But you can see the summit up at the top, and you know that although it’s clear and the path is clear how to get there, it’s gonna be hard. It’s gonna be difficult, and you can’t do it alone. After you get to the top, once you get to the summit, from there you can see all the peaks, and you know exactly how you got there. You have your team, you have the tools, and now you have the experience. It feels like you can conquer any summit and you have the ability to do so.

Okay. So as you can see, there are different parts in the journey where you need different things. Now, it’s really important to be aware of your place in the journey, and not to get overwhelmed. I think that’s the number one problem, is people are hearing from all parts of the journey, different stages, and people saying you need this, you need to do this. And it just gets overwhelming.

And because they get overwhelmed, they shut down. So I want you guys to bring it down, identify your point in the journey, exactly what you need to move to the next step. Be aware of the whole process, but make sure you’re making actionable moves on what you need at that point to move forward.