Proactive vs Reactive Real Estate Investing and How to Make More Money
Being proactive versus reactive in real estate and in everything in life is the best way to go. That’s actually something I have been living with for at least 15 years. I just realized that I have so many more options when I am being proactive instead of reactive.
The difference between proactive and reactive is when you’re reactive, you may have only one option. That’s not very good because you’re reacting to something just after the event happens, and you’re just panicking.
When you are proactive, you actually have many options because you are planning ahead of time and are organized. I love having many options.
I like having many options to choose from and decide what is best for me, whichever choice is the best for my family and everybody else involved. So being proactive, as opposed to being reactive, is the best way to go.
Be Proactive When Investing
When you are investing, you want to be proactive. Being proactive is where you have many options in sudden troubles like finding out, your property manager just left you, or they said they would not manage your properties anymore.
It’s all good if you’re proactive. I always have a backup plan because I am always proactive.
I invest in real estate rental properties. As I invest in rental properties, I make sure that I'm proactive in buying houses the right way, making sure I have plenty of options.
This way, I am not reactive and and possibly losing money. My family buys rental properties and make $250 a month in passive income.
As we buy each property, if we have an organized thinking pattern, we realize that we have options and can make better decisions.
Different Ways to Be Proactive
I teach many different ways to be proactive and I want to share how to be proactive in general life.
#1: Take Responsibility
The first thing you need to do when you are proactive is to take responsibility for your actions. The only person you can control is yourself.
When you are reactive, you might be thinking you are a victim, get down on yourself or get mad at other people.
What you need to do is start taking responsibility for yourself, your decisions and everything you’re going to be doing.
The only person I can control is myself. I can’t control my wife or my kids. I find humor in that my kids are just breaking everything, so I just try to do my best to discipline the kids.
But as I say, in the end, I can only control myself and you can only control yourself. So taking responsibility for yourself is the first step if you’re going to be proactive.
You need to know that it’s up to you to shape your future. It is up to you to make the right decision and to buy the right investments; it’s all up to you.
#2: Hold Yourself Accountable
The second thing you need to do is you need to hold yourself accountable for your own decisions. Be accountable for your decision for whatever it might be.
You should be accountable for your decision to buy that investment property, accountable for your decision to go to the movies, instead of saving that money to invest.
Whatever it might be, hold yourself accountable. It’s nobody else’s decision, unless they literally forced you or twisted your arm and literally grabbed you to make you do something.
If you’re making your own conscious effort and decision in something, you need to take responsibility for that.
Once I invested in real estate rental properties that made me $250+ in passive income every single month, I knew that if I spent money outside of buying the next property, there would be much less money in my pocket to buy the next property.
So, we stopped going on vacation for around five years as a family. I knew if I went to Disneyland and spent $2,000, that’s $2,000 not spent on a property.
I knew it would give me the ability to quit my job and stop working for that just over broke job, that J.O.B. Therefore, what I did was took responsibility.
I told myself I was going to forego this potentially good thing for something better in the future. I encourage people to take responsibility for their actions at all times.
#3: Set Your Goals For Your Future
The third thing you need to do is to set your goals for your future. For example, your goal may be to be able to quit your job in five years.
Look at it this way, if you’re going to quit your job in five years, you have to work your way backwards to figure out what it’s going to be that you’re going to hold into.
Another example, if you need $3,000 a month in passive income where you don’t work, and still make money, then you work your way backwards. In passive income every single month, if you have 12 properties, you have your $3,000.
So if you want to get $3,000 in passive income in three years or five years, you need to get to 12 properties in that many years.
Set your goals, see where you want to be, and then work your way backwards. That’s the way to be proactive because you're seeing and doing what it actually takes to achieve it because you're moving forward towards it.
#4: Create Your Own Opportunities
You must create your own opportunities and not wait and be reactive to things. Here is an example:
If you’re an investor, you need to be looking for properties. Or if you’re going to take an opportunity to get a really expensive car to buy for yourself, you need to be looking for opportunities and deals, right?
You should be going around figuring out where the best deals are.
Here is another example. If you get my free real estate investing course and you go to masterpassiveincome.com/freecourse you will learn how to find properties, how to get money for the properties, and how to build the business.
You will also learn to do it right, how to be successful, and to have an automatic business and make $250 a month.
If you become proactive and take this masterclass about how to be successful, have an automatic business and make $250 a month in passive income from every property, you are creating and going after those opportunities.
This is a free opportunity for you to go after and take advantage of that to start implementing it into your life and buying that next property.
#5: Take Control Of Your Life
Taking control is where you are proactive, as opposed to reactive. You’re not waiting for something to happen but instead you’re going after it and saying you are in control.
You are saying that no longer is your job in control or your boss or somebody else. You can take control over yourself and you’re going to be able to figure out the good and bad things for you.
I don't care about driving a fancy car but you may love driving a fancy car, and that is fine. No judgment whatsoever!
I don't think it’s a big thing but some other people do. If you do, go after it and take charge! I just really wanted to quit my job. I quit my job at 37 years old because I took control of my life.
We gave up vacations and temporary whims that helped us save money to buy properties at 37 years old. I could quit my job because I had enough properties and passive income at that time.
At that time, I think I had 25 properties and had so much money coming in through passive income that I could quit my job. So take control of your life as I did.
#6: Put In Your Own Principles
Put in your own principles and guiding values of who you are. Like I mentioned before, rather than going after a fancy car or whatever it might be, go after what aligns with your values and principles.
Your guiding principles will teach you and show you the direction you want to go.
I believe in God, I read the Bible, and that helps me know where to go. That’s something that you can do as well, but you also internally have your own principles and your own guiding values.
Go after those values and principles so that they will help you to understand which decisions to make because being proactive will give you loads of decisions.
Invest Like the Proactive Pros
Go after whichever one is the best for you and the one that fits your principles. When you think of playing chess, playing chess is thinking one, two, three, or more moves ahead.
Most chess players maybe think two moves ahead, three at most. The outstanding chess players think like six to 10 moves ahead. That’s what you want to do as an investor or to just be being proactive in general.
You want to be thinking of all the different options. Considering and planning for different scenarios is important in being proactive.
Think about everything in your life and being proactive, like playing chess. Think two, three, or four, maybe even five or six moves ahead, and be ready to adjust, pivot and change as things come your way.
Have a Proactive Investor Mindset
A reactive investor would be listening to some real estate guru that just says to just find a property, analyze the numbers, make sure they're making money every single month, urge to buy it, and then rent it out.
That’s actually the wrong way to do it. In the case of a proactive investor, they may look but they don’t even find a property. First, they find an area of the country to invest in.
It could be whatever city like Indianapolis, Indiana; Memphis, Tennessee, or wherever it might be. I have a video that will walk you through the current 20 different places you should want to invest in right now and make a lot of money through passive income, here.
Now, what a proactive investor will do is they will build the business first and make sure they are doing it right before they even buy any properties.
In fact, when they find an area, all of those properties that they see they might want to buy, they’re more than likely not going to buy those. At this time, they won't buy because the properties may not be there by the time their business is built.
A great thing is that more properties come on the market. And when more properties come on the market, you have the ability to buy those properties because you already have your business built.
So being proactive is building the business, and reactive is just buying a house and just saying you are ready to make money. What's sad for other people, not so much me, is I buy properties off of other people who do that and make loads of money because they are fed up with it.
But they haven’t really thought two to three, maybe eight moves ahead.
They may even find hard money and signature loans. Then, they get home equity loans and so many different options to buy a property.
Finally, they can just pick and choose what they need once they find the property. So they get the financing first, then they find the property. The property may just be 1/1,000 but what if you have found two or three or four that fit what you want.
Being Proactive With Hard Money
You need to make sure that you have enough money and the ability to get that money to buy those properties.
Another way you can be a reactive investor would look to get hard money. Hard money is where you borrow from a private investor that has somewhat of a business.
When you get hard money, you have to pay a lot of money into it but it’s a short term loan, two years at most, and you have to pay it back.
A reactive investor would possibly say that they found a property and then look for a hard money lender. Once they find a hard money lender, they buy the property.
Then six months down the line, they realize that the loan needs to be called or is going to be called and they have to figure out a way to pay off the loan. Proactive investors don’t do that. They have these two things:
Find Hard Money Lenders
First, you should find private hard money lenders before finding the property.
Have Two Or Three Ways To Get Out Of A Hard Money Loan
I suggest having one, two or even three options to get out of hard money loans.
You want to make sure those are set before you actually even get the hard money loan. You absolutely want to make sure, and that is being proactive!
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