It’s hard to let go of control. Scary, even. But every time I’ve taken a calculated risk to surrender control in exchange for more freedom, I’ve made progress toward my larger life goals.
This is because you can’t have both freedom and total control. You need to choose—in your real estate investments, in your business (if you have one), and in your personal life.
We run a Facebook group with nearly 50,000 landlords and active investors. Whenever we talk about more hands-off real estate investments, we get a lot of pushback from them. It all boils down to one objection: “I want to keep complete control over my investments.”
My days of arguing with people on social media are long behind me. But if I were to bother trying to change their minds, I’d paraphrase Ellie from Jurassic Park: “You don’t have control in the first place. That’s the illusion.”
Here’s how my own struggle with control versus freedom has played out, to get you thinking about your own choices moving forward.
Committing to Move Overseas Without Knowing Where
At the start of 2015, my fiancée approached me about moving overseas. She knew I had some wanderlust, and she was curious about living abroad herself. She signed up with a recruiting agency for international schools, and we decided to commit to doing it. We flew up to Boston for a weekend job fair in February, knowing she’d have a job by the end of the weekend.
Within 24 hours, she had offers from a half-dozen schools around the world, and we decided to take one from a school in Abu Dhabi. We figured we’d go have a two-year adventure, then move back to Baltimore and pick up where we left off.
That was nearly 10 years and three countries ago.
We spent four years in Abu Dhabi, four years in Brasilia, and going on two years in Lima, Peru. We’ve also spent a month at a time in places like Genoa, Prague, and Patagonia.
Each time we moved to a new country, we faced the same uncertainty: We had to make the leap without knowing where we’d land.
Letting Go of Control as a Real Estate Investor
When we moved to Abu Dhabi, I still owned 15 rental properties. I quickly came to realize just how much I’d been subsidizing those properties with my own labor.
Even though I had a property manager, I still coordinated with contractors and city inspectors, got phone calls from tenants, and had to make sure the accounting and bookkeeping were straight. I still had to manage the manager as well.
I had been telling myself that I’d been earning 5% to 8% per year on those rental properties. But when I calculated in the cost of my time, I was actually losing money on them.
The contrast was especially stark when I compared the rentals to my stock investments—completely passive investments, earning an average of 10% a year.
So I sold off all my rental properties. But I love real estate, and still wanted to invest in it.
Switching to Passive Real Estate Investments
I invested in a few public REITs, but I didn’t like the volatility and correlation to stock markets. I then started experimenting with real estate crowdfunding, investing through a half-dozen platforms. But I realized that public investments pay market returns by definition: You’re buying and selling at market prices, earning whatever the market allows.
Then I discovered private, passive real estate investments. That started with private notes, then private partnerships, and then syndications, equity funds, and debt funds.
Not just anyone can invest in them. In fact, most people have never heard of them, and if they have, they don’t understand them well. Read: competitive advantage.
But I didn’t like the high minimum investment, typically $50,000 to $100,000. So at SparkRental, we started experimenting with going in on these together, first with our course students, and later as an investment club that anyone could join. Today, we vet a new passive investment together every month, and any member can invest with $5,000 or more.
I don’t operate any of these properties or have direct control over them. I don’t manage tenants or putz around with contractors and inspectors and permits. We just gather our group investments together and wire money in, then sit back as the distributions or interest flow back to us. And my returns have never been higher.
Letting Go of Control as an Entrepreneur
As an employee, you ask, “How can I create so much value for my employer that they’ll pay me more to avoid losing me?”
As an entrepreneur, you reframe that question to: “How can I create so much value for my customers that they’ll keep coming back to me?”
There’s nothing wrong with that question. In the early days of any business, the founder has to perform many different jobs and wear many hats to get the business off the ground. But if you want to grow your business and help more people, you need to remove yourself as the bottleneck.
Reframe the question again: “How can I create a self-managing business that creates so much value for my customers that they’ll keep coming back to it?”
In other words, you make yourself replaceable—the exact opposite of your goal as an employee. That’s hard to wrap your head around, even when you get it conceptually.
After eight years in business, I finally started getting this lesson through my thick skull. My cofounder and I have spent this year systematizing and professionalizing SparkRental, so that it can run without us for weeks on end if need be.
That let us continue operating without a hitch when my cofounder had an unexpected surgery, and when my family and I went traipsing around Uruguay.
I have more freedom in my business now than ever before, because I’ve delegated some of the “control” to others.
Action Creates Clarity and Courage
If you wait until you have it all figured out, you’ll never act. You’ll stay stuck exactly where you are. By taking action, you can start moving in the right direction, even if you don’t know exactly where you want to go.
Sure, roadblocks will pop up along the way, and you’ll have to figure out a path forward. You may decide to take a detour or tweak your exact destination.
That’s fine. You can and should make adjustments as you go. The key word here is “go.”
Control or Freedom?
I had more control over my rental properties than I do over my current passive investments—for all the good it did me.
Today, I delegate day-to-day asset management decisions and control to other people. Among my real estate investments, that means choosing operators I trust to deliver strong returns even as unexpected challenges pop up (as they always do). In my business, that means delegating not just tasks, but entire projects and goals to employees, freelancers, and virtual assistants.
I sacrifice control—but I get freedom. That includes not just time freedom, to work when and how I like, but also location freedom. I can (and do) work from anywhere in the world.
Increasingly, it’s driving my progress toward financial freedom as well. I earn more on my passive investments than I did on my direct property investments. My business earns more as I’ve delegated work to others than it did when I tried to do everything myself.
Even people who understand that conceptually still struggle to surrender control in their own lives, though. It sure took me a long time to work up the courage to let go of control. It remains a work in progress, but by taking the first steps, I’m gaining comfort with less control and more freedom.
As you put your own life under the microscope, ask yourself where you’d like more freedom—and how you might need to surrender some control to achieve it.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
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