The E-Myth Revisited

I've been reading a book called the E-Myth revisited which came highly recommended to me by Virgil at our 10/10 meeting. He mentioned it would be difficult to apply to real estate, but with this in mind I find it applicable nonetheless.

Notes so far:

• The E-Myth is that everyone can start their own small business.
• There are three personalities in every small business owner:
• The technician -- a technician is a baker at a bakery or a mechanic at a car shop.
• The manager
• The entrepreneur
• There are different stages in a small business
• In the infancy stage, small business owners are on their own and the baker enjoys baking pies.
• As the business grows and more people want pies, the pie maker has to move on to the adolescent stage.
• The adolescent stage is where the pie maker manages by abdication. He does not wish to worry or know about the happenings with bookkeeping, hiring people, or other business related activities.
• The reason most small businesses fail is because too many technicians start businesses without thinking like an entrepreneur.
• Moreover, too many business owners think too much like a manager without thinking like an entrepreneur.
• You must have a vision for the future -- a direction for the company and a creative attitude to go along with it.
  

Meeting Notes -- 10/10/07

• Cashflow rich investors are preferred in deals more-so than equity rich deals.
• In residential real estate, there is much less of a margin of error than in commercial real estate.
• When starting out, become an expert in a specific market to learn how to spot deals.
• With this knowledge, make offers with purchase contracts (aka, contracts to buy).
• There are templates for these contracts, or you can benchmark pieces of other contracts.
• With a purchase contract, you can sell it to another investor or syndicate your offer by pooling capital from other investors.
• ***Has to be a desirable deal!!**
• Build valued relationships, even if there are only a few. Mentors are important in avoiding pitfalls that can cost you years.
• There are a million ways to reach a goal, and laying a step by step path is a waste of time.
• You can never predict the future, but always keep your eyes on your goals.
• Education is the MOST important part of your career. CONSTANTLY become more knowledgeable through reading book after book after book.
• Go to seminars, take classes.
• Take a 1031 Exchange course!
• Accountants are excellent sources for finding investors.
• If you are successful, investors will continue to come to you with their money.
• The three most important words in real estate are not location, location, location, but timing, timing, timing.
• If you get into real estate young, compound interest is on your side and you can invest in longer-term deals.
• When Virgil was young, he bought a piece of land for $35k and ended up exchanging it into his new home (tax free) for $900k years later.
• Take counseling courses to learn how to ask the right questions.