Entrepreneur and author Ed Mylett just bought an island. He’ll develop the 100-acre property in Maine as a legacy for his family. It’ll have a golf course, a grocery store, multiple homes, and more. Mylett believes it will be the greatest property in the world. It’s the kind of asset that most people can only dream about. But fortunately, he isn’t shy about disclosing to hopefuls the guiding principles that led to his success.
As a guest on the BiggerPockets podcast, Mylett explains why 2022 is the perfect time for new and smaller investors to snag lucrative real estate deals and highlights the attitudes and behaviors necessary for investors to reach their goals. Mylett himself made some of his best deals in the kind of recessionary market that most people think is ahead of us, and with the right mindset, he believes others can mirror his success.
Hacking Your Reticular Activating System
According to Mylett, the thought that your goals are far out of reach is a lie and one that people tend to perpetuate with their behavior. The reality is, he says, that “You’re one decision, one new deal, one relationship, one encounter, one meeting, one podcast, one book, one thought, one new emotion from completely changing your freakin’ life.”
So how do you realize your goals are closer than you think? It’s all about your intention and what that does to your reticular activating system.
The reticular activating system (RAS) is a bundle of nerves that brings to our attention the things that are relevant to us while filtering out what doesn’t matter. It’s why Mylett says he started seeing Teslas everywhere once he bought one of his own, and it’s the system that lets you hear your name in a loud crowd.
The strategy for success involves setting an intention to find specific deals or reach certain goals, which gets the RAS to focus on the information that will help you fulfill your objective. It requires you to cast away self-doubt and maintain a laser focus on positive results.
As the RAS protects the brain from having to process too much information, it also leads to a phenomenon known as confirmation bias, the idea that when we believe something is true, we’ll find evidence to support that belief and miss evidence to the contrary. If the culture begins to believe the market’s in a tank, buyers will find deals that confirm that idea. But Mylett says if you believe there are deals to be had and that you can make great money in this market, you’ll find deals that support that.
Using Collective Psychology to Your Advantage
Following the crowd won’t get you anywhere in real estate. “There’s a collective psychology that drives all these markets, and that’s why people collectively lose money in them,” says Mylett. Part of avoiding becoming wrapped up in the crowd is setting intentions to reorient your RAS. Mylett says to ask yourself, “What would I need to believe about this market that’s true that would serve me?” That’ll open you up to recognizing opportunities.
For Mylett, the best current opportunities he’s seeing are triple net deals with quality tenants. He recently purchased two Walgreens stores. Rather than looking at the merits of the deal’s price, he’s focused on the merits of the security within the deal—cash flow rather than price. The quality of the tenant is driving his decisions because he knows he can ride out price fluctuations if he has good tenants. Second-home residential properties are also a focus since he says they will be the last to get kicked in this market and the first to come back.
Mylett says it’s also essential for investors to be calm in a market that causes homeowners anxiety. Calmness under duress allows you to find opportunities while others are motivated by fear. “I’m not telling you that I love when the market turns, but I kind of love when the market turns,” says Mylett. “Because when the market turns like this, believe it or not, it allows the little guy to play at a very similar level to the big guy because of their creativity and flexibility.”
Approaching Deals Creatively and Confidently
A lot of Mylett’s early success was driven by creativity. “When the market’s hot and rolling, fewer people want to get creative because they don’t have to. They can get clean deals done in their own mind. So as a young person in markets like this when I didn’t have a lot of capital, I was able to really navigate some very creative deals.” Those included seller carrybacks, lease options, and trades.
Being creative can also mean finding sellers who overcorrect in reaction to the market because people tend to flinch when interest rates go up, or there’s a fear of war, for example.
In any market, being successful means overcoming your personal fears. “Equanimity is that calmness under duress, but it is also your willingness to step into environments and spaces that you don’t believe you’re prepared for. If you’re going to wait around until you’re completely prepared to do something, you are going to be waiting the rest of your life, and you are going to miss opportunities,” Mylett says.
Recognizing the Power of One More
When Mylett wrote his new book, The Power of One More, he said he wanted to write the definitive book on the thoughts and actions that congruently produce results. “I put in a book everything I know about becoming happy and successful, and it’s heavy,” he says.
His philosophy is, in part, inspired by his father, who suffered from alcoholism and his inability to change. Mylett says his father must have tried 100 times to get sober—then he tried one more time. When Mylett asked if he would stay sober for the rest of his life, his father responded, “I don’t know. But I know I will stay sober for one more day.”
With everything Mylett does, he always strives to do one more, whether that’s one more repetition of an exercise or one more call to a realtor. “If you want to become superhuman, the standard is, I do what I say I’m going to do, and I do one more,” he says. It’s not as if that last attempt will make the difference every time—but adopting the attitude of always doing one more in every aspect of your life leads to greater opportunities.
Final Advice
You’ll make mistakes every now and then, and that’s okay. Don’t let it define you. “When you attach your identity to something external, you’re really risking it,” he says. “I don’t tie my identity up in one deal or in the collective psychology of the market.” Instead, set standards for yourself based on the things you can control, because you can’t control the market or the interest rates.
Mylett sets his clothes out in the morning and drinks a gallon of water each day—small habits he can commit to that build self-confidence. “Once you build this reputation with yourself with the small things, you can point your mind like a weapon at the big things and actually believe you can do them.”
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