I worked in TV news for 15 years before I got into real estate. I was commonly referred to as the “cameraman”, but I liked the title “photojournalist” much better. Because I was behind the scenes the dress code wasn’t nearly as strict as it was for the on-air “talent”. Many of my colleagues chose to dress down every day, probably because it was cooler and certainly more comfortable.
One day a tape editor came in to the station wearing his pajamas. Can you think of many jobs that pay more than $8 an hour and allow you to wear a worn out T-shirt, sweat pants and flip flops? Lori Allred, his manager and a good friend of mine, admonished him on the spot. To this day I remember her telling him “dress for the job you want, not the job you have.” So what does any of this have to do with business and real estate? If you are an investor or Realtor this translates to dressing for the business you want, not the business you have.
Now I’m not talking about your wardrobe. That should be a given. What I’m referring to here is your business. Are you treating it more like a hobby? Because let’s face it, hobbies are expensive. I’m embarrassed to admit that from 2001-2006 I ran my business like a hobby. Sure, it didn’t appear that way from the outside. I had a beautiful office with dark cherry furniture, a receptionist, office manager and sales staff. I even had my logo printed on water bottles.
However, if you asked me to produce a profit and loss statement or balance sheet my eyes would glaze over. I used QuickBooks but I didn’t use it properly. To me it was really nothing more than an expensive check register. I didn’t understand basic accounting principles at the time so in my mind everything was either income or an expense. The only reason I was able to raise capital and prosper during these years was because the market was red hot. Everyone wanted to join the party.
To succeed today your financials must dress to impress. I have found that there is no better software tool out there to help you do this than QuickBooks (by the way, the folks at Intuit don’t pay me anything for this endorsement.) Mastering this software will take time. Since May I’ve invested about 12 hours to this, including a 6 hour class on QuickBooks at the Nouveau Riche College, 3 hours with my accountant and 3 hours with another investor’s bookkeeper.
The result? Since July 7th, $273,000 raised, 6 properties purchased, 3 closed, 3 currently in escrow and a 70% ROI to my investors. Not bad. Could I have done this without a P&L and balance sheet? Maybe. But why try? It’s like Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
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