A version of this article previously appeared on BiggerPockets.
Any way you approach the real estate game — there’s an entrepreneurial angle to it. Whether you’re a seasoned real estate developer with years and years of experience or you’re taking on your very first project, we’re all entrepreneurs here.
Why is that?
Simple: we take something that needs improvement (a vacant parcel of land, adusty old apartment property, etc.) and inject value into it. We transform our physical world. How is that not entrepreneurial…and exciting!?
We marvel at successful entrepreneurs because, against all odds, they’ve built, created, and transformed industries. However, few pry into the inner workings of their growth to tease out exactly how they took on such ambitious endeavors.
4 Ways to Think Like an Entrepreneur
There’s a wealth of knowledge one can learn from studying how entrepreneurs operate. Many of their techniques and modes of operation translate into the real estate realm. Here are a few ways to start adopting entrepreneurial hallmarks in your real estate investing, developing, selling, brokering, and acquiring:
Iteration – minimum viable product. The idea behind this is to develop what’s minimally acceptable in the market and then iterate from there. Too many times people, companies, and organizations stress over perfecting their product or idea to the Nth degree.
There’s a problem with perfecting for the sake of perfecting: when focusing so much on perfection, one can oftentimes have blinders on to competition, market trends, and demand. To avoid this, don’t focus so much on perfection. Get your real estate deal functional and operational with a minimally viable product mentality. Then grow and iterate from there.
Want a good example? Look at the first iPod:
Now look at the latest iteration:
Had Steve Jobs and Co. attempted the latest iteration first, they’d still be developing (and losing out on the market)!
Where does this most impact my world?! Pro formas and conceptual design! These essentials of the development world take time. They’ve got many moving parts and unknowns. Yet they can’t be perfected in one pass. My hunch is that your business can’t be perfected on the first iteration either. In order to properly do one’s due diligence and build a successful project, one must iterate…not perfect on the first try.
Paranoia—startups are paranoid about the status quo. They’re edgy, uneasy, and constantly seeking change. As real estate professionals, our world is constantly changing. Taking on a “paranoid” perspective keeps one on their toes and adapted to the ever changing market.
For example: are you “uneasy” about hedge funds flooding your local rental market? Many are! That “paranoia” is healthy because it keeps one nimble and attuned to newly forming market opportunities.
Resourcefulness—entrepreneurs, mainly the successful ones, are notorious for doing more with less. Adam Lowry, CEO of Method Products, once said a business mantra of his is to ask: what would MacGyver do?
Never before has there been so much available to us as real estate pros. We have a wealth of knowledge and resources at our finger tips (many of which is free). So on your next deal ask: what would MacGyver do? It may help you look at it in a new way.
Failure—yes I said failure! Entrepreneurs push the limits of what’s typically acceptable in the business world. With this, one’s bound to fail once or twice (or many times). For example, it’s been said that James Dyson failed over 150 times before finalizing his very first vacuum—150 times! It’s well documented that the Wright Brothers took five sets of parts out during a single test flight knowing they’d fail.
The point of the exercise, if failure comes your way, is to learn what went wrong and grow as a real estate pro.
So there you have it with four ways to inject an entrepreneurial mindset into your projects and deals. Many of us are here because we love what we are doing. We wouldn’t have it any other way. If that’s the case for you, the points above likely aren’t foreign to you. You’re likely nodding your head and thinking there’s nothing revolutionary about iteration, paranoia, resourcefulness, and failure in real estate. This stuff is second nature to many because it comes with the love of the real estate craft. However, if not, rest assured that you can easily adopt the points above into your business as well.