I love when I come home from a long day at work and see that my lawn has been freshly manicured. When I used to do the mowing, I would have to mentally schedule time after work or on the weekends. Of course, I would also have to watch the weather forecast and adjust my lawn care duties accordingly.
Each week, I had to ask, “How am I going to get this done?” My sons did take over this responsibility for a while when they were old enough, but after they left for college, I asked a different question: “Who can mow the lawn for me now?”
My wife and I decided to hire a lawn and landscaping service, and we never looked back. Even though it took less than two hours a week of my time, I felt that hiring that company has been a great “investment”.
In addition to supporting a local business, I have more time to go for a run, hang out with my family, play tennis, read, and even write blogs. In other words, I have more time freedom!
Ask a better question
While reading the book Who Not How by Dan Sullivan and Benjamin Hardy, I realized I had been applying this “who not how” principle to many aspects of my personal and professional life.
For example, as a physician, I depend on my front-office staff to make appointments and to straighten out insurance issues, and I rely on my back-office staff do the initial part of the patient workups and to help me with charting in the medical records. I could never see as many patients as I do in the finite time that I have in each day if it were not for my excellent staff. They are my Whos who help me accomplish my How more efficiently every workday.
It dawned upon me that “who not how” is also a great rule to follow if you are a real estate investor, especially if you want to be a passive investor.
The basic premise of this book is to use other people’s education, experiences, and talent to “gain freedom of time, money, relationships, and purpose”. Instead of asking “How can I achieve this?”, the authors convince you to ask “Who can help me accomplish this?”
Real estate investors understand the concept of leverage as it relates to financing a property. This notion of “who not how” utilizes leverage as it relates to time and human capital.
“Unlearn the bad habit of How, and lean into the good habit of Who.”
– Who Not How
Spoiler Alert: Dan Sullivan, the originator of this idea, did not write a single word of this book. Benjamin Hardy approached Dan after hearing his presentation on this “Who Not How” concept. Ben wanted to write this book because he loved the principle. He eventually got Dan’s blessing, and the rest, as they say, is history! Talk about putting your money where your mouth is!
How do active real estate entrepreneurs use (or don’t use) “Who Not How”
Many real estate investors start their journey as wholesalers – those who find houses (usually unwanted) and quick-turn them to house flippers for a moderate profit. They hustle around town to stick “WE BUY UGLY HOUSES” bandit signs into the grassy area next to busy intersections or staple them to telephone poles.
Although most wholesalers do it by themselves or with their partner, some of the more successful wholesalers employ the “who not how” principle and hire others to do the work for them so that they can work on their business and not in their business. However, this still requires their time to double check that signs have been strategically placed and to follow up on leads.
The House Flipper
Early on, most flippers tend to swing hammers and become experts with the paint roller. If their acquisitions increase, they start running out of hands and time and tend to find Whos to do their How. But even with the best systems in place, flippers still have to manage their teams to make sure they show up to their respective job sites to finish up the work in a timely fashion.
The Buy-And-Hold Investor
This type of investor must deal with many moving parts. They also have many Whos in their business such as wholesalers, realtors, inspectors, lenders, title companies, attorneys, insurance agents, and property managers. Even with so-called turnkey operations, this “passive” investor still must deal directly with many of these Whos. And if property managers quit on you, you may no longer be a passive participant. For one of my “turnkey” single-family homes, I ended up having five property managers in the eight years that I owned it!
The Private Lender
As I transitioned out of my small residential portfolio, I did some private lending to some local house flippers. Even though the returns were solid, I still felt that this was not truly passive. I was the one who had to make sure the legal paperwork was filled out correctly and filed, and many times, I had to go to the title agency for the closings. I never did figure out how to use a Who for my How in my lending business!
“Who Not How” is essential for the passive syndication investor
The main issue with active investing is that you end up diluting your energy and focus. There are only so many hours in a day to get your work done. Even with a great team, you still have to manage the day-to-day activities.
Passive investors do not ask themselves, “How can I do this by myself to achieve my financial goals?” Instead, they intuitively ask “Who can help me with my goals?” Remember that your Whos are an “investment” that will save you time and flatten your learning curve.
“How requires your time and attention. Who requires someone else’s.”
– Who Not How
I spent countless hours researching sponsors, talking with them, and figuring out whether to invest with them. However, I did not have any of the right Whos to help me. I may have spoken with references hand-picked by the sponsor, but that is a slippery slope. Of course, they will say what the sponsor wants them to say because they probably did not invest in any of their deals that did not go as planned!
The Whos that are vital to accomplishing your passive investing How
Podcasters and Bloggers
Many passive investors first discover this burgeoning investment strategy after listening to podcasts or reading blogs. This is a great way to learn more about the various asset classes and to find syndicators. Many sponsors will have educational materials on their websites to help you navigate the world of passive syndication investing. Listening to a sponsor on a podcast can also give you an idea of what they are like on a personal level and to see if it is worth your time to talk with them on the phone.
Passive investors find out quickly that the sponsor is the most important part of any private syndication. These Whos have more to do with the success of a project than the deal itself or its location. They, in turn, rely on their Whos – real estate brokers, lenders, construction team, and property management – to help them run the asset efficiently and to be profitable. It is vital that you find several syndicators so that you can diversify your investments across asset classes and geography.
“You define the vision, find the Who or Whos, and let them create the result.”
– Who Not How
Accountant / Tax Advisor
As a real estate investor, this Who will enable you to minimize your taxes each year. Many people file their own taxes. This is the How mentality. Unless you are a CPA who specializes in real estate, hire a tax professional to utilize the tax law to maximize your tax savings especially when you have several syndications in your portfolio.
Other Passive Investors
These essential Whos will give you names of syndicators they know, like, and trust. They will give you confidence in sponsors because they can relate how their investments have done and tell you how their communications have been. Other passive investors will teach you the right questions to ask the syndication team, and they can teach you what they find important when vetting deals. Instead of employing the trial-and-error approach, find Whos who will save you time and money.
Left Field Investors founder Jim Pfeifer was my first passive investing Who, and I believe I was one of his first Whos. We met up for coffee one day in January of 2020 and compared notes on sponsors and deals. We both left that meeting with more confidence in what we were getting into was the right path for our respective, financial futures.
“You can survive without a community, but you can’t thrive without one.”
– Dan Sullivan
Communities like Left Field Investors provide lots of education and networking opportunities in this space to find Whos. LFI has free Monthly Meetings where the guest speaker is usually a sponsor or a veteran passive investor. After the Monthly Meetings, we have virtual networking to discuss all things in the passive investing world.
All Left Fielders can opt in each week in the Intros program to coordinate a mutual time to speak one-on-one with another Left Fielder. Our weekly Mound Visits, hosted by one of the founders, is another opportunity for Infielders to discuss deals and sponsors via the Clubhouse app. Our inaugural, live Meetup in The Left Field, held in October of 2022, was a great networking and educational event to find many like-minded Whos.
Lastly, the private, Infielders forum allows you to not only discuss deals and sponsors, but also to see who are in these discussions so you can connect with them. Many members find this to be the most valuable part of the Infield. It is a great way to find your own references for syndicators.
“That’s the power of having a Who – you instantly get access to knowledge, insights, resources, and capabilities that are not currently available to you.”
– Who Not How
You will have more time, more money, better relationships, and a greater sense of purpose when you dedicate yourself to finding Whos instead of figuring out How to do things by yourself. Allow passive investing to be a “team sport” so that you and your Whos can shorten time frames and 10X one another’s financial acumen. And don’t forget to apply the “Who Not How” principle to the rest of your life too.
Steve Suh is one of the founders of Left Field Investors. He began investing in real estate in 2005 when he bought his business’ office condo. After owning a few small residential rentals and seeing that it was not easily scalable, he transitioned to the world of passive investing in commercial real estate syndications. He enjoys learning and talking about real estate and hopes to educate more people about the merits of passive investing in the Left Field.
Nothing on this blog or website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial, and tax advisors regarding any investment.