by Michael Blank
Many years ago, when I was learning to trade stocks and options (which I subsequently did for a couple of years but no longer do), you are taught to “paper-trade,” which means you make real trades, but you’re using “fake” money, i.e. paper money. Many trading accounts let you paper-trade. It’s a fantastic way to get experience and build a track record without losing your shirt.
We don’t have this in the real estate investing world. But we should. And we can, if we’re intentional about it.
Newbies are stuck in the endless cycle of having no experience to be taken seriously so they never get started and never the get experience to get out of the gate.
“Paper-trading” with real estate lets you overcome this catch-22.
My passion is to help people get into their first apartment building deal, so I’m going to illustrate the 3 steps to “paper-trading” real estate from this perspective.
Step #1: Visualize to Believe
Professional athletes use visualization techniques every day. They visualize themselves performing at the highest level, beating the world record, and holding the gold metal.
It should be the same for us real estate entrepreneurs: see yourself touring the apartment building, negotiating it, and signing the contract. Visualize yourself at the closing table, signing the closing documents. See yourself meeting with the property manager to discuss the previous months’ performance. Imagine the bank account grow as the rents come in. See yourself selling the building in 5 years and getting a $430,000 check at closing.
Step #2: Create a Sample Deal Package
A Sample Deal Package is a document about the kind of apartment building deal you WANT to do. Everything in it is real: the property description, photos, financials, your business plan and projected returns. The only difference is that you don’t have it under contract.
The main reason I teach people to create a Sample Deal Package is to use it as a tool to raise money from other people. (To read more about this, see my article “Psst … The # 1 Secret to Raising Money to Invest in Apartment Buildings.”)
In addition to helping you raise money, the Sample Deal Package is a tool that forces you to behave as if you had an apartment building under contract. You’ve reviewed the marketing package and the financials. You’ve made assumptions and projections. Perhaps you’ve even visited the building.
Behaving “as-if” makes it seem real.
Step #3: Start Making Offers and Don’t Be Afraid to Go Under Contract
A student of mine managed to get a 54-unit apartment building under letter of intent. He felt that the building was too big for him (he was looking for a much smaller one), but we decided to keep moving forward. We put it under contract and worked together on due diligence for nearly 3 weeks. At the end we decided to terminate the contract, but he told me that he learned SO MUCH during the process that he no longer felt a 54-unit was overwhelming. By simply going through PART of the process, his comfort zone quadrupled.
In the same way, we can “fake it before we make it” by making offers and not shying away from putting something under contract. If you construct your contracts correctly, you’ll have several weeks to perform due diligence and you can terminate the contract for ANY reason.
I’m not advocating that you do this repeatedly; otherwise, you’ll develop a bad reputation for not closing, but you don’t need to do this very often to see your comfort zone expand dramatically.
The secret to getting into your first deal (or a much larger deal) is to “fake it until you make it.” Visualize what you want to accomplish, create a Sample Deal Package, visit properties, network with professionals, and make offers. You do this long enough, and you’ll eventually get someone to accept your offer. When this happens, don’t freak out, but go with it.
Worst case scenario, you terminate the contract before the due diligence period expires. Best case, you figure it out, overcome your fears and end up with your first deal.
Even if you don’t end up closing the deal, you will have gained the experience you were looking for by “paper-trading” a real estate deal. No harm, no foul, but your comfort zone just exploded and you’re one step closer to that first deal. So don’t sit on the sidelines because you lack the experience. Get out there and “paper-trade” a bit!
Talk about a time when you got into a deal that didn’t go anywhere. What happened to your comfort zone? How did this impact what came next?
Be sure to leave a comment, and let’s talk!
Interested in Finding out More? Reach out below
Address: 1415 Main St. #823, Grandview, MO 64030
This information is intended only for the use of the intended recipient(s) and it may be privileged and confidential. Please note that any views or opinions presented in this post are solely those of the author and do not necessarily represent those of the company. This is reposted information and is not original thought of Ireland Investments or anyone associated with the business.
Popular areas we service;
Kansas city Missouri, Overland Park Kansas, Kansas city Kansas, Olathe Kansas, Independence Missouri, Shawnee Kansas, Blue Springs Missouri, Lenexa Kansas, Leavenworth, Kansas, Leawood Kansas, Liberty Missouri, Raytown Missouri, Gladstone Missouri, Grandview Missouri, Belton Missouri, Prairie Village Kansas, Gardner Kansas, Raymore Missouri, Grain Valley Missouri, Ottawa, Kansas, Lansing Kansas, Excelsior Springs Missouri, Merriam Kansas, Harrisonville Missouri, Cameron Missouri, Mission Kansas, Kearney Missouri, Smithville Missouri, Pleasant Hill Missouri, Oak Grove Missouri, Bonner Springs Kansas, Roeland Park Kansas, Parkville Missouri, De Soto Kansas, Richmond Missouri, Greenwood Missouri, Paola Kansas, Basehor Kansas, Tonganoxie Kansas, Odessa Missouri, Peculiar Missouri, Platte City, Missouri, Higginsville Missouri, Lexington Missouri, Edwardsville Kansas, North Kansas City Missouri, Osawatomie Kansas, Louisburg Kansas, Fairway Kansas, Mission Hills Kansas, Sugar Creek Missouri, Riverside Missouri, Buckner Missouri, Pleasant Valley Missouri, Lawson Missouri, Plattsburg Missouri, Lake Lotawana Missouri, Weatherby Lake Missouri, Wellsville Kansas, Edgerton Kansas, Westwood Kansas, Garden City Missouri, Gower Missouri, Claycomo Missouri, Lone Jack Missouri, Drexel Missouri, Lake Tapawingo Missouri, Glenaire Missouri, Dearborn Missouri, Avondale Missouri, Osborn Missouri, Sibley Missouri, Oaks Missouri, Unity Village Missouri, Levasy Missouri, Randolf Missouri, River Bend Missouri, Jackson County Missouri, Johnson County Kansas, Clay County Missouri, Wyandotte County Kansas, Cass County Missouri, Platte County Missouri, Leavenworth County Kansas, Miami county Kansas, Lafayette County Missouri, Ray County Missouri, Clinton County Missouri, Bates County Missouri, Linn County Kansas, Caldwell County Missouri, Crossroads Real estate, 18th and vine Real estate, Hospital Hill real estate, library district real estate, longfellow real estate, dutch hill real estate, quality hill real estate, river market real estate union hill real estate, Greater downtown KCMO real estate, East Side KCMO real estate, Midtown KCMO real estate, Westport Real estate, Hyde Park real estate, Northeast KCMO real estate, Northland real estate, Plaza Real estate, South Kansas City Real estate, Fairway Kansas real estate, Kansas city Kansas real estate, lake quivira Kansas real estate, Lenexa Kansas real estate, Mission hills Kansas real estate, overland park Kansas real estate, prairie village Kansas real estate, Shawnee Kansas real estate, weatherby lake Missouri real estate, westwood Kansas real estate