DIY vs. Team Sport
Home Depot has a new slogan: “How Doers Get More Done”, which replaced “More saving. More doing.” Before that one, it was “You can do it. We can help.” The largest home improvement retailer in the United States encourages and promotes the Do It Yourself (DIY) philosophy. By the way, check out the great opportunities they offer ICOR members.
While we can DIY many things, it is important to realize that some things are better to have a professional do them. For example, I observed that I could purchase a medical sterile disposable scalpel from Amazon for as low $18.33. Right next to it was a book titled “Brian Surgery for Beginners and Other Major Operations for Minors.” One may want to think twice about doing brain surgery on their child.
There are some things just too important to do yourself. Would you prefer to rely on someone who is a professional? Someone who has earned credentials through study and experience. Someone experienced in the field and practiced in the procedures. Do you really want someone to operate on your child when it is their very first time?
It is not just an expertise issue. The big question is should you, as a real estate professional, do everything yourself? One of the most complicated and difficult areas of the real estate trade or business is tax planning. Your tax planning should be evidenced based. Yes. You should have written directions telling you what to do, how to do it, when to do it, and why. The why is the most important. It is the difference between success and failure if questioned by the taxing authority.
Is studying tax law and researching it the best use of your time? I think not. If it was, why did you not become a tax advisor in the first place? You have a passion for some elements of real estate. You get satisfaction from fixing real estate problems and bringing good shelter to those in need.
Is the DIY model good for a real estate professional? I think not.
Real estate investing is really a trade and business in which you must develop systems and processes to achieve success. It is a team sport. You want to select players for the right slots on your team. Different teams will have unique needs. You will want to build an advisory board. Some common members on an advisory board are legal advisors, tax advisors, banking advisors and management consultants.
Other team members will be integral to your business operation itself. You may need builders, carpenters, realtors, plumbers, electricians, landscapers, roofers, and other professionals. It is true that you could do all these things yourself. But that strategy is very limiting. You are fully dedicated to one project and unable to leverage your time and abilities.
As in any team sport, you must carefully evaluate your players and do your due diligence. You must carefully organize your team and be clear on your agreements. Stronger agreements lead to higher performance.
Build your team and select your players. Field the right people and find the way to leverage your time to achieve your goals.
At Stone Wealth Strategies, we understand that you need to build your team or DIY. We recommend that you fill the tax advisor spot with someone who does not just prepare taxes but has their own process and system to provide you with tax guidance. It should be an intentional approach which begins with the tax planning process and is evidenced based. Your advisor should not be a one off, but should be someone experienced in real estate tax advising. For a Discovery Session with us, email firstname.lastname@example.org to learn more about tax planning.