If you want to become good at investing in Multifamily real estate, you will need to practice. If you ever read or heard of the book Outliers by Malcolm Gladwell, then you are familiar with the 10,000-hour rule. This rule states to become an expert at anything it requires about 10,000 hours of deliberate practice. Before you become an expert though, you need to be good.
So Good They Can’t Ignore You
A book I like is called So Good They Can’t Ignore You by Cal Newport. The author makes a claim against the traditional follow your passion advice that is often preached. “Do what you love and the money will follow” is the defacto model of the career-advice field.
He claims that following your passion might just be terrible advice. It can lead to a career of confusion and regret, especially if you struggle to make ends meet.
He makes a compelling case that those who are passionate about what they do first become good at what they do. Adopt a craftsman mindset and become so good they can’t ignore you. This is how Steve Martin became who he is and who the title of the book is based on.
Deliberate Practice
Anything you read on becoming good at something will ultimately lead back to practice.
We are what we repeatedly do. Excellence, then, is not an act, but a habit.
Aristotle
Getting good at something requires consistent, deliberate practice.
You will have to push past your comfort zone if you want to see any growth. Going for a short walk when you want to run a marathon will probably not put you on the path to your goal. Obviously, some days will be better than others, but the idea is that you put in max effort. Practice until you burnout, then the next time you become stronger. Keep this routine and you can see results rather quickly.
This deliberate practice is the difference between a growth mindset and a fixed mindset. This idea comes from the book Mindset by Carol Dweck. Someone with a fixed mindset views their skills and intelligence as static and unchangeable. They are likely not to seek growth or opportunities. Someone with a growth mindset on the other hand view their abilities as evolving through various efforts. A fixed mindset will never try and likely make excuses for everything. A growth mindset will practice or try until they fatigue and then try again.
Which mindset do you think will become good at something?
Multifamily Application
One of the skills required to be good at investing in Multifamily real estate is underwriting. Underwriting is basically a financial analysis of a property. It is different than single family whereby the property is evaluated based on comparable sales. Multifamily is evaluated based on the income it produces.
I have read many books on multifamily over the last several years. I understood the terms and the methods, however I did not underwrite properties regularly. This is a skill I need to become good at my current role as a loan officer with Old Capital.
While I am not an expert and have a long way to go, I started off with a growth mindset. The only way to become better at something is to do it. So, I started underwriting deal after deal.
Another takeaway I got from Cal Newport is his hour-tally routine. He needed to get up to speed at his new role and he accomplished this by tallying the hours he spent on deliberate practice. I use a hybrid approach and put marbles in a jar each time I size up a deal.
At the beginning of 2022 I started with 1 marble. It was insignificant and had no weight. By the end of January there were over 50 marbles in the jar. The skill starts to feel tangible. I can now size up a deal in about 15 minutes accurately. Each month I continue to add marbles to the jar, the heavier the jar will be. It was uncomfortable in the beginning but as I continue to stretch it becomes easier.
Conclusion
To get good at anything you need a craftsman or growth mindset. Thinking and mindset have a lot to do with your ability. Go to any bookstore and you can find thousands of examples of this. You will not find any books about how someone was born the greatest of all time. You may not be good at something you want to do now, but if you are willing to put in effort you can become good at anything. The more you are willing to push yourself the faster your results will be.
