Almost all the real estate investors I know have a common complaint: They don’t have enough time.

I could remind you that we all have same amount of time, but I know you’ve heard that one already. But it’s true…and we all possess an equal share of this resource. But what is not shared equally is the skill to utilize that time to the fullest.

So what is the biggest difference maker? How are some people able to be extremely productive, while others work hard but just don’t seems to get anything accomplished?

There is a ton of training stuff, techniques, all out boot camps, and you name it on the subject of time management. In fact, if you do a google search for the term “time management”, google returned 880,000,000 search results for me.

But I believe there are two keys to getting the absolute most out of your time.

1) The ability to focus on priorities. Everyone reading this is almost certainly familiar with the 80-20 rule. You’ve probably been told more than once that you should focus on that 20%. But are you doing it? Have you actually created a list of those items that are the biggest difference makers in your business. And, do you keep that list in mind when you are creating a plan for your day?

2) Consistency. I’ve lost count of the number of times I’ve started some new “program” or “technique”, only to give up after some period of rime. I’ve done the same thing with many different planning systems. I’ve used the Franklin Covey planner, Tony Robbins “Rapid Planning” system, etc.

Something happened along the way with each one of these that resulted in me either moving to another system, or just stop worrying about daily planning. Sometimes it was because the system was too complicated. Sometimes I just got distracted.

The bottom line is that I didn’t consistently use a planning system day-in and day out.

You won’t get consistent results if you don’t consistently adhere to a daily planning system. It might sound boring, but consistency is boring. Consistency may be boring, but addiction to excitement can lead to inconsistency.

I’ve always been something of a health nut.

I recently recommitted myself to my exercise program. For me, that consists of a short “wake up” set of exercises in the morning.

I also commit to jogging at least 4 times each week at a bare minimum.

I had been cruising along well with this program earlier in the year, but them I hit a patch that broke up that routine. After a few weeks off, my routine wasn’t quite a routine anymore. Now I’m back trying to pick up the pieces again…

I’m back to trying to get back to the habit of physical exercise. But I’m fighting a little voice the whole way. I’ll lay there in bed, and that little voice is urging me to stay in bed – to get just 10 more minutes of sleep rather than do my exercise routine.

I have to fight that little voice telling me “I don’t have enough time to get the jogging in today”. To do it later. But deep down, I know if I don’t get it done right then and there, it’s not going to get done.

What it’s taken is what Chet Holmes calls “pigheaded discipline and determination” in his book “The Ultimate Sales Machine”. It’s taken pigheaded discipline and determination to ignore that part of my mind that is fighting me all the way. That little voice that keeps trying to derail my progress.

What has made the most difference to me is just getting started. If I can’t get started, I can finish. I’ll get get dressed and started on my run. What I tell the little voice is that I’ll just get started, and I can decide whether or not to go my usual distance or cut it short. Once I get started, I’ll almost always go the distance. The trick is to get myself started.

I’ve been trying to apply that same pigheaded discipline and determination to my real estate business goals. I’m not talking about old hat…I’m talking about new projects and initiatives. It takes lots of energy and commitment to start something new in business, whether that’s a new avenue in marketing, or some new project. It requires consistent focus and determination over time.

What’s happened with me in the past when I’ve tried to get new projects off the ground is that most times I’ve failed miserably. Many times, I’d set something as a priority, but never actually done anything. Or, something I’d do something for a few weeks (or less), but then stop. Just give up and never look back.

But according to Chet’s philosophy of pigheaded discipline and determination, this is where your pigheaded determination needs to kick in. Pigheaded discipline and determination is all about taking action in spite of what the little voice is saying.

Your pigheaded discipline and determination needs to help you get moving, get started, regardless of what your little voice is judging the plan or your actions.

It needs to help you ignore that little voice that’s telling you things aren’t working out, so you may as well just give up. It needs to keep you going when things get tough.

Just like what I discovered from my exercise routine, the secret is to just get started with the first step so you begin to develop some momentum. Once you’ve gotten started, it will be easier to keep yourself going. The other secret is to remain committed and consistent in your efforts. It may take you weeks or months before you start getting the results that you are expecting. But if you keep after it, it’s going to happen for you.

Bigger Pockets (www.biggerpockets.com) has one of the best forums on the internet for real estate investors. According to their figures, they currently have almost 50,000 members.

One of the recent threads, “The Top Five Landlord Mistakes”, generated a lively discussion (http://www.biggerpockets.com/forums/52/topics/23212-the-top-5-landlord-mistakes?page=1).

There are some really good “top mistakes” listed in these posts. But I also found a great many of what I’d consider myths listed among the mistakes.

1) The idea that you have to be totally ruthless when it comes to managing your properties. Throughout the threads, you read language like “never do a tenant a favor”, “never accept a late or partial payment”, and “evict immediately for non-payment of rent”. Do I sense a bit of a Nepolian complex here guys?

Being a landlord is not all that much different than running a hotel, a restaurant, or a plumbing business. Try being a plumber who is always rude to his customers. How much business will this plumber actually do? Will the plumber get referrals?

You get nothing out of being a total jerk to your tenants, accept perhaps a momentary ego boost. I’m not saying that you should let your tenants walk over you. However, you also need to be courteous to your tenants, even when they give you a good reason not to.

2) Doing a straight rental versus doing only lease options. A trend among some real estate gurus is to teach that one should only do lease options, and never do straight rentals.

I do lease options. And I also do straight rentals. Why? Well, the simple answer is that some houses just don’t make good lease option prospects.

I’ll give you a perfect example. I’ve got several homes in one neighborhood that easily rent for $500 to $600 per month. I have $20K to $25K invested in these properties. The market value is right around $50K for these houses. However, the people in this neighborhood just do NOT have money for down payments.

The culture of that neighborhood is to rent, and preferably have your rent paid by the government. Plain and simple. Why fight an obvious market trend.

Also, there is nothing that makes higher priced homes in nicer neighborhoods inherently a better investment. My friend Robert Elder has built his business around buying properties in low income areas, and renting to tenants who get rental assistance through the Section 8 program. At this point, he has more than 250 houses that yield more than $1,000,000 each year in rent just from the government, not to mention the rent that his tenants pay.

CNN published an article awhile back (http://money.cnn.com/galleries/2007/real_estate/0704/gallery.stocks_v_realestate.moneymag/index.html) in which they drew a direct comparison between the stock market and real estate. The article pointed to an annual average return of 13.4% for the S&P 500 from 1978 to 2004.

During that same period, they pointed to a “solid but unimpressive annualized return of 8.6%” for residential real estate. The return calculated for real estate was based upon sort of a national average for appreciation in home values during that period.

There conclusion was therefore that in the long run, the stock market easily “crushes” real estate. The article also points to a study by Robert Shiller that suggests the “real” return of real estate is really somewhere close to 3%, barely better than the rate of inflation.

The problems with this article? The article is fatally flawed for the following reasons:

1) These two types of investments are so different that drawing a direct comparison is absurd. Think about a typical stock market investment. You buy x number of shares at $y. You hold them for some period of time in which the price per share goes up (hopefully for you). At some point, you decide to sell the shares.

Most buy and hold real estate investors leverage their money when they buy the real estate instead of paying cash and never putting financing on the property. At this point, the two start to diverge. However, these properties also produce income. The two investments diverge even further.

An investor who buys multiple income properties is building a business. It is much easier to draw a comparison between a buy and hold real estate business and, for example, a service business like a plumbing company or a franchise like a Subway. Perhaps the biggest difference is that real estate has an intrinsic value apart from the business. On the other hand, service businesses have much of their value in the intangible asset of its book of business / client list.

A stock market investment is much more comparable to, for example, art, precious metals, gems, or collectibles purchased with the anticipation that they will increase in value with time.

2) The S&P/Case-Shiller U.S. Home Price index on which the “unimpressive” rate of return for real estate was calculated (8.6%) is based upon home prices. The cash flow and tax benefits from real estate are completely overlooked by this oversimplification. Shame on the author for making this misrepresentation of the numbers. Because residential real estate creates passive income where stock do not, the analysis presented in this article is not valid.

3) For the average investor who does not have the time or inclination to invest in real estate, an investment in an indexed mutual fund based on the S&P 500 may be as good a move as any. That is, if they are able to really discipline themselves to hold onto these mutual funds for the long term.

The biggest advantage a guy who decides to start investing in rental residential real estate has over the guy who buys and holds mutual funds is control. The decisions that the real estate investor makes on a day to day basis determine his financial success. He will be able to do very well regardless if real estate prices are going up, down, or sideways.

In his book “Good to Great”, Jim Collins talks about great companies having a “hedgehog concept”. His hedgehog concept comes from the story of a fox plotting time-after-time to get the hedge hog for his next meal. The fox uses one tricky plot after another to catch the hedgehog off guard, but the hedgehog always uses the same strategy, every single time. Every time the fox pursues the hedgehog, he rolls himself up in a ball. And every single time he successful in deterring the fox.

Great companies have their own hedgehog concepts because they find that one strategy that they can use over and over again to be the best in world at something. One of the examples given by Collins is when Krogers supermarkets went from dingy neighborhood stores focused on cost savings to new, clean, convenient stores focused on providing a wide number of choices. That decision cost the company huge amounts of money because they had to close down all of their existing stores and convert them to this new model of doing business. But when they did so, they slowly took more and more of their market.

Jim Collins explains how the hedgehog concept works using the diagram below.

As you can see, these great companies have figured out how to focus on the intersection of what the company can really really be good at (its strength), what it’s people can be passionate about, and what it can make money doing.

The process of of a company discovering its hedgehog concept is certainly not an overnight process. But it is a key step in any company becoming a great company.

O.K., so the hedgehog concept works well for big business. How about small business? How about us as real estate investors?

It absolutely has application if you have an interest in being a successful real estate investor. There was a time when I tried to do “everything” really well. I was trying to do buy and hold, wholesale flips, rehab and flip, lease options, subject to, short sales, and anything else I thought would make money. That included some things even outside of real estate, such as trying trade stocks.

When I tried to do all of those things well, I had no focus. I wasn’t able to develop specific knowledge, skills, contact, etc. in any particular area.

But when I started focusing in on just buy and hold, some surprising things started to happen. The cash flow for the business improved for a number of reasons. We found ways to become much more efficient in operating the business. We were able to get better traction with financing.

Question: Scott, I am looking at a house for sale by owner and the home is assessed by the county assessor at $50,000, the owner said to me, if you qualify you can assume my payments, she owns $30,000. Does that matter to the lending institution if I assume the loan and rent the property? Or what would be the best way to go about this? The lady still lives in the home, consequently it could be rented immediately.

How would you as experienced investor go about it? Which issues do I have to be careful about? Do you have any forms or contracts that you recommend I should use?

Answer: Assuming a real estate loan is the process of taking over the existing financing when purchasing the property with the lender’s approval.

The type of loan that your seller has makes all the difference in the world. If it is an FHA or VA loan, the first question to ask is “when was the loan initiated? Any loan written prior to 1989 were assumable without qualifying, whether they were FHA, VA, or conventional. Since then, the rules have changed. If the loan was written after 1989, conventional loans are generally not assumable. However, FHA and VA loans are generally assumable if you qualify.

To determine if you can assume the loan as a landlord who does not plan on living in the property, I suggest you get a copy of the mortgage and take a look at the clause pertaining to loan assumption.

Suppose you find that you can’t qualify to assume the loan but you still want the house. You could also buy the property subject to the existing financing.

When buying a property subject to, you are not getting the lender’s permission to buy the property. You a just taking the over the payments of the existing financing. Banks aren’t crazy about people just taking over their loans, but the fact is that they rarely learn of the transaction (unless you tell them). And as long as the payment gets made, they usually could care less who’s making it.

It looks as if you have some equity in the property, so buying it subject to the existing financing might be an excellent way to buy to get this property. If I were buying the property, I would only buy it subject to. I would not pay the seller much for their equity if the figures you gave me were accurate (somewhere close to $1,000).

As for forms and contracts, the first one you’ll need is a sales and purchase agreement. You can definitely use the one you got through Wealth School. Or, you can use the State contract (the one realtor’s use).

We recently had a speaker in Oklahoma City who came to talk about how to borrow money from private lenders. That speaker shall remain nameless in this article.

He presented some excellent information on how to get private money from friends, family, and associates. And he told us how he had gotten his first private lenders by doing some limited advertising to bring together a group in which he did a presentation.

The presenter left us with the impression that we, too, could use do limited advertising within our own State to attract local private lenders as long as we let our State Security Exchange Commission know what type of advertising we intended on doing.

I was curious about these disclosures, so I contacted our Oklahoma Security Exchange Commission. The regulator I spoke to was very helpful. I described the type of mortgaged backed note that I wanted to offer. I asked him about what I needed to do in order to stay in compliance with Oklahoma Securities laws.

He referred me to Section 202 of the Oklahoma Uniform Securities Act of 2004. It states that “[a] transaction in a note, bond, debenture, or other evidence of indebtedness secured by a mortgage [is exempt from registration] if…a general solicitation or general advertisement of the transaction is not made.”

Section 202 therefore seems to indicate that if you plan to advertise in an attempt to attract private lenders in the state of Oklahoma, you must register the security with the Oklahoma SEC.

Registration is a big deal because of the cost and effort involved. In discussing this with a few securities attorneys, it appears that it would cost $20,000 to $25,000 in legal fees.

When I asked the SEC regulator about what can happen to someone who attempts to advertise an unregistered security, it didn’t sound pleasant. He suggested it would cost must more in legal fees for that person to defend themselves for such a transgression.

He said it almost always bankrupts a business when this occurs.

Clearly, one would be ill advised to pursue the advertising suggested by the presenter. Friends, family, and associates are still in play.