In this episode of the Nick Huber Show, I’m going to talk about what you need to understand in real estate that so many beginner investors and others don’t get. This concept has a large relationship between my Sweaty Startup philosophy and why I love real estate:
Most people that find their way into investing in real estate start out doing something sweaty, boring, and non-revolutionary; they do something common uncommonly well.
Many of these real estate investors begin gaining their original investment capital in a business that already exists. They find a way to do something a little bit better and they carve out a piece of the pie. Their startup isn’t glamorous, sexy, or life-changing to society. They don’t let themselves get emotionally attached to their business idea and, generally, they aren’t jumping into an industry that takes a lot of initial risk. They go out, sell themselves, and provide a product or service to an already existing market.
Sweaty Startup investors realize that business has more to do with pressing through the ‘Messy Middle’ and maintaining momentum ; it’s a ten-year game. Most often their business starts small and grows a little bit at a time. Five years later, when they begin to reap from that original momentum, they THEN take the opportunity to build a business that has serious enterprise value. They have cash on hand and THEN start to invest in real estate. Most real estate entrepreneurs have that same story:
They got their initial capital from a small sweaty startup.
In my opinion, too many entrepreneurs (brilliant people who could have very long, successful entrepreneurial careers) get stuck in the ‘entrepreneurship culture’ and never succeed because they don’t account for the risk-adjusted return of what they’re doing. They shoot for the moon, start a new idea, and develop a new product. They over-innovate, try to change too many things, and end up losing momentum. Inevitably, they give up. They are looking so high that they miss the lessons they should be gaining from their original venture.
The majority of what I learned back in my original small business startup is what I implement in my real estate investing today. I grew from doing something in a small, sweaty, and low-risk way; I built my success from the ground up. The most valuable part of small business, to me, was what it taught me about operations. Just like doing a small business, you build your real estate portfolio with one building…and that one building can end up changing your life.
There are many ways to do real estate: there are low-risk ways and high-risk ways. From my experience, leaning toward a low-risk method in real estate provides the greatest probability of success. Build up your initial investment capital in a small, sweaty and even potentially boring startup. After you gain momentum, invest this capital into real estate using the same principles. It’s not about scaling, it’s not about big business. It’s not about taking a lot of risks. It’s about finding a way to carve out your piece of the pie, doing it in a risk-adjusted manner, and building your success on the back of one investment at a time.
You can start your journey in building your real estate portfolio by taking our online real estate course.
Three Key Takeaways:
- Most People that find their way investing in real estate start out doing something sweaty, boring, and non-revolutionary
- The majority of what you learn in your original small business startup is what you should implement in your real estate investing
- Your success is not about taking a lot of risks. It’s about finding a way to carve out your piece of the pie, doing it in a risk-adjusted manner, and building your success on the back of one investment at a time.
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