While most of the real estate investment world is out there inefficiently thrashing around trying to make as many offers as possible, or make as many offers as possible, we Thoughtful Real Estate Entrepreneurs embody a different philosophy: “Slow is Smooth, and Smooth is Fast.” In this episode, Jeff explains why TREEs go more slowly—both in each individual seller conversation, and in our businesses as a whole—in order to be more smooth…and how being more smooth ultimately helps us grow our portfolios much faster.
When we get a new seller lead, it is pretty exciting and, in our excitement, sometimes we feel like we want to move fast because we’re so fired up and we want to capture the opportunity we want to put the deal in contract we want to close on the purchase. But sometimes the best way to speed up and go fast is to slow down. And in this episode, we’re gonna talk about why as thoughtful real estate entrepreneurs, we tend to err on the side of going slowly because slow is smooth and smooth is fast. Let’s cue up theme song we’re gonna jump right in to discussing this topic.
Welcome to Racking Up Rentals, a show about how regular people those of us without huge war chest of capital or insider connections can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to you see, we are people-oriented dealmakers we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media. This show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.
Thanks for joining me for another episode of Racking Up Rentals. This here episode is number 68. Which means show notes for today’s episode are at www.thoughtfulre.com/e68. Hey, please do us a big favor by hitting the subscribe button and your podcast app. It really helps fellow thoughtful real estate entrepreneurs to find the show on the platforms. All right onward with today’s episode.
There is a quote that I first came across in a movie a while back. As I recall that, I then heard more recently on a podcast. Now I don’t know the original source or origin of this particular quote, but I’ll tell you what it is because I think it’s very, very relevant for what we do as thoughtful real estate entrepreneurs. And the quote is this: “Slow is smooth and smooth is fast.” When I first met my wife, we were in college. And in high school, she had been on the swim team at her high school. And so the very first time, I remember, that we went to a swimming pool and we were goofing around, of course, we were going to get in to a race, because here I am this masculine guy and I you know want to show her how athletic I am. But she on the other hand, while not being as big or as strong as me, had studied swimming. Right, she had learned to swim in a more proper way. So we get to the end of the pool. And we say go and we set off. And of course if you looked at me, there is just water flying everywhere. Because I’m like a Tasmanian devil in the water. And I’m bigger and I’m stronger. And I’m kind of like, you know, forcing it, I’m getting it out. I’m going fairly fast. But I look over and there is my wife, and she’s ahead of me. And you know why she’s ahead of me? Not out of sheer force and brute strength, but because she had technique. Because when you looked at her, there was not water flying everywhere, there was a nice little splash because she was so much more efficient. And in that, I noticed the idea the principle that slow is smooth, but smooth is fast. The stroke of her arm and her kick cut into the water far more efficiently. And so while it might have looked like she was going slower and she wasn’t exerting as much energy, what she was doing was smoother and smoother meant she was going faster overall. And I think this concept is so interesting in the way that it applies to us as thoughtful real estate entrepreneurs, we tend to err on the side of moving slowly. But getting more done, getting building a portfolio faster building our value and our net worth and our cash flow faster, because we are actually moving more slowly. So I think there are two related but two different contexts in which this lesson shows up in our world as thoughtful real estate entrepreneurs. So I want to take a moment to talk about how this idea of slow, smooth and smooth is fast applies in these two different contexts of our business.
The first context is the way we operate within a specific deal or a specific relationship with the seller. And then the second one is the way we operate more generally, in terms of our whole business and our whole portfolio. So within a particular deal or within a particular seller relationship in conversation, we tend to really intentionally take that process very, very slowly. We even talk about, you know, my coaching clients and I, for instance, talk about ways to slow down the conversation when the seller is trying to make it go faster than we really want to, you know, when the phone first rings from your marketing, and the sellers on the other line, we actually are almost playing a game, we’re playing a game, to see how long we can actually not talk about the property itself.
Now, of course, when the phone rings, we have to acknowledge that they’re calling us because we sent them a letter about the property. But we tried to play a game to see that says how long can we avoid asking questions about how old the roof is, or what their tenants are paying in rent, or what the existing loan balance on the mortgage is, or any of that kind of stuff, in favor of talking more about the person, the seller, understanding their relationship to the property, understanding their context, we want to take it slow, because slow, gives us time to develop a relationship. And when we develop a relationship, that makes the whole thing the whole experience the whole conversation between us far, far smoother. And when a conversation in a relationship is smoother with the seller, you get more yeses. I like to call this the yes rate. Our yes rate is higher. In other words, the percentage of proposals we deliver that get approved with a yes is higher, when we take the time to be smooth by developing that relationship. You know, we really take a lot of time before we give a proposal.
Now, you if you’ve listened this podcast at all before, you’ve heard me speak ad nauseum about the difference between a proposal and an offer. An offer says, “Here’s what works for me, will you take it or leave it?” A proposal says “I’ve been asking questions, and I’ve been listening to you, Ms. Seller, and I think I understand what you’re trying to accomplish. Here is my proposal on how we can get you there via my buying your property.” When we take time to deliver that proposal, we have several conversations with the seller before we even consider delivering a proposal, then everything is so different. We do not even give a proposal until we more or less know that the seller is very likely to say yes to it, because we already have uncovered all of the insights and the information, we need to know exactly what would work for them. And that’s exactly what they would say yes to. So you see how we’re moving very slowly. But moving slowly creates a smoothness to our negotiation with the seller. Most of the “negotiation” doesn’t even feel like negotiation to them. It just feels like relationship development. So when our yes rate goes up, that means that our no rate goes down, right, obviously, which means that we’re not finding ourselves starting over with new people all the time. When our yes rate goes up, that means we don’t have to churn through so many sellers to get the results that we want. In our case as thoughtful real estate entrepreneurs. We want to get a deal closed, but we will take a smooth and slow approach. That means we take five leads slowly and smoothly to get a yes rather than 50 leads fast and you know, inefficiently not smoothly.
To get a yes, smooth gets sellers, comfortable with us. Comfortable sellers are amenable to our ideas and our proposals. Slow opens all the doors of possibility within a particular negotiation. Slow gives us the time and the space to think and to listen and to explore options that might be possible with this relationship in this deal structure that you simply could not even conceive of if you were moving too fast, moving fast kind of reduces the whole negotiation down to price. It reduces you into a place where you’re just thinking about buying low and selling high but slowing down creates a small rudeness, that creates all sorts of open doors, around seller financing terms, creative deal structure, and adjusting the million little dials that comprise the board, have all the details that ultimately go into a purchase agreement and go into a promissory note. So that’s how the idea of going slowly to go smooth and going smooth to go fast, applies within the context of a specific deal. But if we kind of zoom out, you know, if we, if we zoom out from looking at a particular transaction, and look more broadly at what we do, these things are related, but I think it’s a little bit different. In our business as a whole, when we zoom out, going slowly means less focus on volume. It’s a higher focus on quality, its quality properties, quality sellers, quality deals, slow also allows us on the greater level of our whole business to put ourselves in positions where we don’t have tons and tons of competition, because we are willing to take the time to develop the right type of relationship with the right type of people.
We’re not in any type of a bidding war with other investors, which is one of the biggest challenges of being a real estate investor, especially in today’s time when markets are, are fairly tight competition is pretty high. If we can avoid that by going slowly and going smoothly. That gets us a lot further, a lot faster as well. You know, many real estate investors ask questions like, how many deals do you do? Well, we don’t focus on how many deals we do. Because we’re not focused on churning and burning through volume, we are focused on going slowly, doing excellent deals that each one gets us much further down the road. Because it is it’s got more juice in every squeeze of every deal that we do, because we are moving slowly. And when we’re moving slowly, we’re moving smoothly. And when we’re moving smoothly, our portfolio is growing faster. So we might say that we are much happier buying five great deals in a year, rather than somebody in a different type of approach, like say a wholesaler or a flipper who might do 20 marginal deals per year, we’re focused on doing five great deals per year, because we’re moving slowly and slow creates smoothness, and the smoothness creates more progress, it creates more speed overall for us.
When we go slow, we have the time and the space to very strategically manage our portfolio. Now I don’t just mean manage like fielding tenant maintenance requests. I mean, looking at the big picture of our portfolio, seeing where the opportunity lives, seeing where more leverage might make sense seeing where less leverage might make sense, seeing where a strong retail market might be to our advantage to offload this or that property. Because we know we could sell it for a premium right now maybe it’s got a flaw like it’s on a busier Street. And we want to take advantage of the market now. But we don’t have those thoughts. If we’re moving too fast, so we move slowly, to be smooth. And we know that smooth means that we move faster. Strategic portfolio management might mean moves within the portfolio, selling something or buying something, refinancing something restructuring the debt on the portfolio, or the properties that make it up. moving slowly, is moving smoothly and smoothly allows us to grow our net worth overall. And when we have a higher net worth, we then have the ability to create cash flow at will. But we focus on growing our net worth by going slowly to go smoothly. So with that, I want to sum this up by giving you the quote one more time. Slow is smooth, and smooth is fast. And as I translate this for thoughtful real estate entrepreneurs, I realized that slow is smooth and smooth, is thoughtful and thoughtful is fast growth overall, with far greater efficiency and less flailing around in the pool. Trying to make fast progress out of brute force like I tried to do unsuccessfully racing my wife in the pool when we first met.
So that’s it for today’s episode of Racking Up Rentals. Again, show notes We are going to be at www.thoughtfulre.com/e68. Please do us a massive favor by hitting the subscribe button in the podcast app you are using and take a second to rate and review the show.
Hey, did you know also that we have a Facebook group for thoughtful real estate entrepreneurs, it is called Rental Portfolio Wealth Builders. We’d love to have you over there. Just go to group.thoughtfulre.com and it will redirect you right to the homepage for the group within Facebook. If you liked this episode, please take a screenshot of it. post that screenshot to Instagram and just tag us @thoughtfulrealestate. I will see you in the next episode. Until then, this is Jeff from the Thoughtful real estate entrepreneur slowly and smoothly signing off.
Thanks for listening to Racking Up Rentals where we build long term wealth by being a win-win deal makers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.
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