While wholesaling can be a really lucrative and rewarding business, it can be quite challenging for those who are just starting out. Ideally, it would be great to have someone you can learn valuable lessons and profound wisdom from so you’ll save yourself from a lot of pain and heartaches. In this episode, you’ll get just that!
Chris Arnold is one of the most successful wholesalers and real estate investors in the industry. He’s also the coach of REI Radio, an advanced online training that provides expert guidance on how you can use radio to find motivated sellers.
In this episode, Chris shared some of the most important lessons, essential truths, and wisdom he has learned over the years—the things he wished he knew earlier, the things that might just save you from a lot of pain, and the things that can accelerate your success!
If you’re new to wholesaling and would like to learn essential truths and success secrets from one of the industry’s best, this episode is for you!
Principles – The Essential Truths You Need to Know Before You Start Wholesaling Real Estate
Introduction To Principles
This is a solo episode. I know we do a lot of interviews, but when I have something of value, something that’s more personal to me, I love to jump on and share it with you. A couple of years ago, I read a book that you might have heard of called Principles by Ray Dalio. I highly recommend you pick it up if you haven’t. What Ray did was, over time, the different experiences he had, failures and moments of pain. He always took time to go underneath that and pull out the lesson and the principle that he needed to take with him. He needed to remember when this thing happened again so he would know how to deal with it.
The value of doing that was his ability to pass these principles down to his team, so they didn’t have to go through the same experiences he did without being prepped, without having a tool of a method, knowledge and a principle about how to deal with that particular challenging experience. This hit me because Ray said that this was the most important thing he felt like he ever took time to do in all of his years.
I read a lot of books and not often do I close a book and go, “I’m going to execute on this at a deep level,” so I spent time. It took me probably about a week to write out all of my principles. I had kept everything I’ve read, all my highlights, notes, even all the way back to school, so it was easy for me to go through all the material I read and start to write out the principles.
I created an eight-page document with all of the different principles that I had picked up in my life. It was profound to see all of those lessons together in one place. It is something now that I can share. I know people ask me a lot of times, “Chris, if you could go back, what would you do differently?” Here is what you are going to get in this episode. I have picked a handful of principles, ones that I wish someone had told me in the beginning.
When I was first getting into real estate or even within those first couple of years, I wish I had known about this sooner because it would have saved me a lot of pain and heartache. More importantly, when that challenge came down the pipe, I had something in my toolbelt to be able to deal with it. I have handpicked some that I want to share with all of you and particularly if you are newer to the game, you’re going to go, “That is valuable. I’m glad to have that and be looking out for it.”
Embracing Volatility & Chaos
I write out my principles by having a catchphrase and then from that, I have a description. A couple of sentences that elaborate on what that principle is. That is how I’m going to communicate them to you. The first principle is this, embrace volatility and chaos. Understand that a system needs volatility and chaos because it destroys the fragile parts of the business or your system and strengthens the surviving parts.
If chaos and volatility are removed from the system or your business, your business will stop improving over time. You have got to come to terms, both you and myself, with the fact that our business is fueled by volatility and we got to utilize that to our advantage. Let me tell you why this is so relevant. We were in 2020 and we have definitely experienced a lot of volatility. You have to begin to understand that if we don’t have volatility and chaos, if the market doesn’t get challenged like it did in 2008 and other times, then what will happen over time is it will become weak.
I want you to think of your business or the economy like your physical body. What would happen over time if you quit lifting weights, exercising, putting stress and pressure on your body? It would begin to deteriorate and the same is true with your business. In a time like 2020, what’s so valuable is it is causing you to get rid of the weakest parts of your business and focus on the strengths and build those stronger.
Here’s what it does. It helps you look at the other side of the coin because in the beginning, when I would experience chaos and volatility because of the economy or different things, I would get frustrated. I would want this to never happen again and to be removed. That was ignorance because I didn’t understand that the thing I wanted to remove was the thing that my business needed to get better.
I hope you take this principle with you, particularly now that you embrace volatility and chaos and view it as a good thing, just like you view exercise and stress on your body as a good thing. It will change your perception around struggle. The second one that I would like to share with you and this one comes from Ray Dalio. The one that hit me hard is called first-time encounters. New and first-time encounters in struggles look big and dramatic. They are painfully surprising at first.
Understand that a system needs volatility and chaos because it destroys the fragile parts of the business.
Realize that the reason that a first-time encounter is hard is simply because you haven’t learned and built the principles to deal with them yet. When you look back on your first-time struggles, you will realize that they were not as threatening and life-ending as you thought them to be. Isn’t that so true about not just business, but our life?
The first time you experienced a big failure, the first time you experienced death in your life, maybe by someone that you love, the first time in your business that you lose that deal that you were waiting to get, all of these things in our life that happened. We have experiences that repeat themselves and then we get these new experiences.
What I’m going to tell you, particularly being a new investor, is that you are going to get a ton of first encounters over the first year or two. You are going to lose a deal for the first time. You are going to have a seller ghost you for the first time and disappear. You might have somebody as an investor that you trust to come in and steal a deal.
These things are so big the first time around because you don’t have the principles to deal with them yet, but what will happen is you will learn from these experiences. You will pull out the principle and the next time that that thing occurs, it’s like, “I’ve been there, done that.” I’m going to use an example. For some of you reading, this is the first time you’ve been through a correction in the economy. For those of us that dealt with that back in 2008, that was the first time I experienced it. That was life-threatening. I thought my business was going to end.
It was so big because it didn’t have the principles. This time around in 2020, it was a lot less dramatic for me personally because I went right back into the toolbelt and pulled out those principles I knew. I knew I needed to get in, get lean and start cutting expenses. I knew things like, you don’t touch your marketing. You continue to market, maybe even double down a little bit more.
You heard all of these things. You were listening to podcasts and people talking about these things and what they were giving you is the principles. Where did they get those from? They got them from the first time they encountered it. The big thing I can tell you is to understand that first-time encounters are tough but realize that they are tough simply because it’s the first time. When this happens, when it seems big and seems dramatic, you will be able to step back and go, “It’s not as big and dramatic emotionally and psychologically as I feel like it is. It seems that way because it’s the first time that I’ve dealt with it.”
The Majority Is Wrong
The next one I’d love to share with you is this. The third principle is the majority is wrong. Do not feel the peer pressure to imitate the actions of your peers. Duplication can only take you so far. At some point, you must begin innovating. To produce results that are wildly outside the average and are extraordinary, you cannot afford to think like average people think. You can’t act like average people act. You cannot be an average person, which is normal.
To be a successful entrepreneur, you have to be an independent thinker and learn to bet against the consensus and be right. You’re new right now, coming in and doing a lot of duplication, which is right. In the beginning, you want to copy-paste, but what I’m going to tell you is the challenge is a lot of times, the things you’re duplicating are the majority. The reality is that the majority of the people out doing real estate, honestly, are just following each other. A lot of times, that is wrong.
What I want to tell you are two things. Begin to look for the contrarian things. Begin to look for the person that’s doing something that no one else is doing and for some reason, you are like, “They stand out from the crowd,” and the reason that they are is because they are contrarian. At some point, as you get down the road, I can tell you one of the mistakes that I felt like I made is I stayed in duplication too long. I put off innovating. I kept copying because I got into that pattern.
Copying and duplication are good, but I will tell you to be open early in your career to open yourself up to innovation, try, and do something that everyone else isn’t doing. Everyone is doing RBM, text blasting and direct mail. That is an example of that. For me, it was radio. That was the contrarian thing that I did and it paid off for me. The big thing I want you to take away from this is to be open to the contrarian stuff and understand that primarily, the majority of people are wrong. Go after the few.
Do not feel peer pressure to imitate the actions of your peers.
Never Test The Depth Of The River With Both Feet
The next principle I want to share with you and is important, particularly if you’re newer, is never test the depth of the river with both feet. You’ve got to investigate before you initiate and be sure that if you fail, you fail fast and cheap. I see a lot of people come across an idea, a new way of doing things and when you’re new, you get excited about it.
The thing that’s wrong to do is to jump in the river without understanding what’s in there. Learn to step back, dip your toe, be patient and do your due diligence. Don’t get impatient and make decisions based on other people are telling you that it was a great thing to do. You’ve always got to stop and go, “I have got to investigate before I initiate into this new concept and this new idea.” That is important for those that you are new to understand that.
Marry The Mission, Date The Model
The next principle I would tell you is, marry the mission, date the model. The mission never changes, but the tactics for reaching that mission are subject to change. One of the major missions I hear is for you to get out of your day-to-day job. You want to quit the 9:00 to 5:00 and get that freedom so you can focus on the things you love. That is the driver. That mission is not going to change. The mission for freedom will always be there, but you might be utilizing the method, the model of wholesaling.
If we go underneath wholesaling, you might utilize the model of texting or cold calling or whatever. It doesn’t matter what it is. I’m going to tell you to be cautious about not marrying methods and models, even wholesaling in general, because years from now, the wholesale game could completely change.
Here is what I find. Businesses that die are ones that get too stuck on a way of doing things. They marry the actual model and don’t realize the model is subject to change. The way things are done is not going to be done. This happens all the time. I don’t care if it’s the taxi industry and we’re talking about Uber. Those models get disrupted.
You’ve got to stay on your feet. Hold to the mission that you have that is in your heart. When it comes to the model, you have to be quick to analyze things and pivot because the natural instinct is always to persevere. Sometimes, the most important thing is to pivot, not to persevere. In 2020, there has been a lot of pivoting going on as well.
Get Better Before Bigger
The next one that I would like to share with you is to get better before bigger. If you focus your company on getting better, your customers will demand that you get bigger. If you are new, you are going to walk into masterminds and communities and you’re going to get pulled into the hype of bigger. It is a slippery slope because bigger is not necessarily always ways better. I wish I understood this in the beginning because, for me, it was like adding on one new idea at the other.
I got caught up in that frenzy because of the number of projects that I would be executing on in the name of getting bigger and doing more deals. I began to understand that long-term, you will definitely lean toward the fact that you will value better over bigger. Sometimes, you will sacrifice getting bigger because you’d rather be better.
People always talk about growth and goals, but what you will do I need to learn to do is begin to understand growth limits, where you intentionally come in and you set limits on what you’re building. There are different reasons. If you want a better lifestyle and you’re building what we would call a lifestyle business so that you can focus on your family, at some point, you’re going to stop scaling. Scaling is not always the answer.
Sometimes, it is valuable to be a little giant. Everyone is going out and wanting to be the next Gary Vaynerchuk and all those things. It is appealing, but understand that that might not be you. Just don’t scale to scale. Always step back and understand, “I need to get better first. If I do want to scale, I would definitely focus on getting my systems better, my business better because when I do that, then I earn the right to get bigger.”
Leadership is not always about getting things done. Leadership is about getting things done through other people.
Don’t Just Do It Yourself
The next one I would share with you as a principle is don’t just do it yourself. There is some truth to the adage, “If you want it done right, do it yourself.” Sometimes I get it. It is easier and less time-consuming to do things yourself than to train someone else to do it. Leadership is not always about getting things done right. Leadership is about getting things done through other people. When I heard it, it resonated with me. Your job is to lead it, not do it.
I find a lot of people get stuck in the potential of where they can go in their business and what their business can look like because they get so frustrated that people can’t do things to the level that they do. I will use Maxwell’s language. If somebody can do it, 80% as good as you, then delegate it. If you don’t learn to give up control, I see this at the highest levels, this is a lot of times why you see the person and maybe you admire the level of business they have. They’re doing a lot of transactions, but you’re like, “They don’t have a life. They’re working 24/7. They’re married to their phone and their social media.”
The reality is that person has truly never learned to empower people, build a team, leverage and delegate. For me, the further I go along, the skill that I try to sharpen is to delegate more. To use Liz Wiseman’s language, my desire over time and I learned this the hard way, was not to be the genius but to be the genius maker. The genius, everything is built around you and that is a dangerous position for your business to be in because when you collapse, your business collapses.
If you’re a genius maker, if you put people around you that can run your business without you, in my opinion, that’s the true value of a business. It was Robert Kiyosaki that said, “The way to measure your business is how long it would run if you stopped working in it now.” That is powerful. I love that. If you remove yourself from the equation, will your business last a week? Will it last 6 months, 5 years, or 10 years? That is the way to truly measure the success of the business. Don’t just do it yourself. Take the time to learn to build a team and empower other people.
Diluted Focus = Diluted Bank AccountThe next principle is a diluted focus equals a diluted bank account. You’re probably laughing because you recognize this as you are reading this. This is something I dealt with in the beginning. The focus will make you rich. Shiny objects will make you go blind. Learn to say no to good ideas every day. The ability to focus on the few necessary things is the hallmark of great leadership. A leader knows and does the best things on a regular basis. You can do many things, but you have to narrow it down to the one thing you must do.
As Howard Hendricks said, “The secret of concentration is elimination.” I deal with students in REI Radio and so forth. I constantly see the head on a swivel and losing focus. The further you grow your business, you will move further away from complexity and more to simplicity. You will begin to narrow down to 1 to 2 things that you do. Right now, maybe in your business, you are saying yes to a lot of things, but the place that you’ll get to, the real place in leadership, is when you begin to say no to primarily everything and you learn to say yes to only the best things.
Choose To Cheat
The last one I want to share with you is definitely a little more on the family, personal side, and relationship side of running a business. This is Andy Stanley’s principle and I love this. Choose to cheat. There will never be enough time in the day to get everything done. Something or someone has to get cheated. Cheat your business before you ever cheat your family or your key relationships.
You’re sitting here and you’re looking at time management and all these things that are going on. You’re trying to juggle all these things in your life. Come to terms that you’re never going to get it all done. You’re never going to get everything done off the checklist. It’s not a normal way of life. Life has too many things to throw at us.
The real question that you need to be asking yourself is not, “How do I get everything done?” The question you have to ask yourself is, “Who or what am I going to cheat?” If you can get down to the ender part of your life, I’m not there yet, but I’m smart enough to listen to those men and those women that are in their 60’s and 70’s. Even my father would say, “Chris, I have heard a lot of people, particularly businessmen on their death beds going, ‘I wish I would have spent more time with my family.’ I’ve never heard someone say, ‘I wish I would’ve spent more time in my business.’”
When we heard that, that was a great adage and a great proverb. You’re going to have to start making a choice to cheat. Don’t cheat someone. Always focus on cheating something because, at the end of the day, relationships matter most. It’s heartfelt. I wanted to share some of these principles, things that I learned painfully over time, even via coaching, reading and all those things. This is why we always tell you the value of leaders or readers and pay for the right voice in your life. These things matter because they save time. I hope you put some of these in your toolbelt and I hope that some of these begin to challenge you and maybe to reevaluate how you’re thinking. Life is all about perspective and it’s all about reframing the way that we look at things. That’s how we grow.
As always, I love leading REI Radio. At this point, it’s become more than just teaching radio. We’ve created a great alumni program for students that have gotten in and gotten a lot of value. I love teaching radio, but my real heart is raising up leaders and talking about wisdom and principles. The older I get, the less I care about methods and the more I care about the things that truly matter, the principles in life, the things that I’m going to pass down.
If you’re interested in radio and you want to learn more about that, you guys have heard and the rumor is out that radio is an incredible channel, particularly in 2020. Go to WholesalingInc.com/ReiRadio and book a call and see if your market is open. Investigate before you initiate. Get in, ask questions and make sure it’s a great fit for you. Until next time. I look forward to connecting with you guys and adding more value. Talk to you soon.
About Chris Arnold
Chris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!