Wednesday, January 01, 2020

2019 Goal Review: Business Quadrant

Last year I focused on ONE Thing, a problem to solve. And I really enjoyed the simplicity and focus. My goal, my problem to solve, was to make Furlo Family Homes a true business, one that I could leave for a year or more and return to find it running better than when I left it.

I didn't anticipate fully making the transition, but I wanted to have a plan for doing it. This involved a lot of learning, experimenting, and ultimately buying a couple more properties.

I read eight fantastic business books this year in addition to Rich Dad's Cashflow Quadrant. If you like reading, these are all worth checking out. If not... skip ahead.

SPRINT: Solve Big Problems and Test New Ideas In Just Five Days
My biggest lesson was to start with the "surface of an idea". Like in a movie, create something that looks like it and works just enough to fake it. Get feedback, then if people like it, build the real thing. For example, if you're making an app, create pictures and link them together in PowerPoint. Give people a guided tour. We did this with Majordomo, quickly refined it based on feedback, and now have something brokers love.

Raising Private Capital: Building Your Real Estate Empire Using Other People's Money
My path was boring: work, save, buy a rental every other year. If I wanted to grow faster, I would need to raise private capital. It turned out I had enough of my own money to complete both purchases this year, but this book gave me the confidence to start conversations with private investors. I do not anticipate purchasing another investment this year... but for the right deal, I now know how I could get additional funding.

Grit: The Power of Passion and Perseverance
I love this book. It's a perfect blend of psychology and practical tips. One thing I learned, of many, is that you have to do deliberate practice to improve. Improvement comes from resistance. This is true of your muscles, your mind, and your emotions. You need to view problems and setbacks as challenges and opportunities to improve. But you don't have to do that for everything, find the thing(s) your passionate about, and be unapologetic about trying, failing, and pursuing mastery.

Never Split the Difference: Negotiating As If Your Life Depended On It
I love this book too! Not only was it entertaining, but I used what I learned right away to buy my second deal. Normally I would have given in more on the price and terms, but I used what I learned to negotiate more confidently and it worked! I think this is required reading for investors, along with a landlord and deal analysis book. In fact, I recommend this book to everyone because the tools he teaches work in all situations, including with kids!

Indistractable: How to Control Your Attention and Choose Your Life
I listened to this one while painting a rental. Like a lot of people, I can go down rabbit holes on Youtube and get sucked into other non-productive behaviors. One lesson was to commit to fighting the distraction for 10 minutes, set a timer if you want. If I still wanted to do that thing (watch Youtube) after 10 minutes, fine, do it. What you should find is that after 10 minutes, the initial trigger that queued the desire dissipates, and you can get back to what you should be doing. And it's a virtuous circle: the trigger now has a little bit less control and will be slightly less strong next time.

Shape Up: Stop Running in Circles and Ship Work that Matters
I'm finding I enjoy managing projects. I think it's partly because I like organizing things. But I found myself struggling with a bigger team. This book was great in giving practical tips for leading a team. Perhaps the biggest change I've made is focusing on unknowns instead of timelines. I no longer ask, "how long will it take you to do that?" I now ask, "What do you still have to figure out how to do?" Only after all the unknows are figured out, can anyone make a reasonable estimate of time. Meetings are more meaningful and it feels less "me vs the timeline vs them", and more collaborative because you're allowed to learn and don't have to "know everything" right away.

Chop Wood Carry Water: How To Fall In Love With the Process of Becoming Great
Another audiobook, which is a collection of sayings and one-liners, pulled into a single narrative. It's short but memorable. My guess is that you've already heard a quarter of the book from other sources, but the reminders are good. My favorite quote, which the book quotes, comes from Will Smith: "The separation of talent and skill is one of the greatest misunderstood concepts for people who are trying to excel, who have dreams, who want to do things. Talent you have naturally. Skill is only developed by hours and hours and hours of beating on your craft." I love the visual of beating on your craft.

Extreme Ownership: How US Navy Seals Lead and Win
I tried something different on this book: I listened to the audiobook while following along on the Kindle while running on a treadmill. What a great experience! There are a lot of great leadership principles, but one I use all the time: look to myself first when something doesn't go as planned. How could I have been clearer? How could I have followed up? I will now say, and mean it, "It's my fault, I didn't do XYZ". And the reactions I get now are much healthier. It's not defensive, but more collaborative and willing to move forward.

I didn't intend for it to be a year of reading, but I'm glad it was. I had to do a lot of growing to feel confident to take the next step.

Make Furlo Family Homes a true business, one that I could leave for a year or more and return to find it running better than when I left it.

I'll be honest, I could not leave for a year, but I could easily leave for a month, and I could probably get away with 2 months.

And I identified two options to make it a true business:

Option #1: Hire a full-time property management company. That would remove me from the day-to-day operations.

Option #2: Expand the responsibilities of my assistant to include tenant screening and hiring contractors to do maintenance. Services like Home Advisor, Thumbtack and Porch have made it easier to find contractors. Plus, I'd need to hire someone local to handle local activities, such as tenant showings, handing off keys, letting contractors in, and taking pictures/documenting. Ideally, this person would be handy themselves so they could tackle small issues.

I'm currently headed down option #2, with myself as that local person. Given that I was able to quit my job, I don't have a problem handling most of the maintenance for now. But eventually, I can see myself buying one or two more rentals so I can switch to option #1 and be fully hands-off. And since I won't be able to get a loan for a while, being able to raise private capital will become important.

I also made some progress down the path:
  1. I've gotten better about thinking of FFH as a separate entity.
  2. I did a better job of outlining, standardizing tasks that need to be done. Another change was to use Notion for the repository of all tasks, templates, and reference data.
  3. FFH grew! This summer FFH purchased a 5-plex in Sweet Home and a 70-unit storage facility, with one house in Lebanon. FFH also now has a sub-brand: J & J Mini-Storage.

I would definitely call this year a success. I took steps to turn FFH into a business and identified all the unknowns to finish the transition. I've also come to terms with hiring a property management company, but don't expect that transition to happen for a while (unless Majordomo takes off, then who knows?!)

I also liked having a focused year on a single problem. It helped give clarity each day.

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