Real Estate Investors: Who Moved Your Cheese?
First and foremost… Happy New Year! I hope that 2012 will be one of great prosperity for you and your family.
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As we get started in the brand new year, there are very few things that we can count on. Of those things, the most prominent is that we will continue to see changes in the real estate market as it struggles to reach some level of equilibrium. And one thing that we should have learned over these past 5 years, is that the greater the swings in our market, the greater the opportunities for profit.
Wouldn’t you agree?
Well, you would if have developed the needed skills to adapt to the ups and downs and every new turn presented to our businesses almost weekly.
Of course, if you have been struggling to find your profits these past several years, perhaps you have found yourself asking. . .
WHO MOVED MY CHEESE?
In fact, if you are struggling because you are hanging on to old notions or approaches then you need to read the book titled, Who Moved My Cheese. Spencer Johnson was right on when he wrote this book in 1998. The premise as provided by Amazon is this…
“Change can be a blessing or a curse, depending on your perspective. The message of Who Moved My Cheese? is that all can come to see it as a blessing, if they understand the nature of cheese and the role it plays in their lives. Who Moved My Cheese? is a parable that takes place in a maze. Four beings live in that maze: Sniff and Scurry are mice–nonanalytical and nonjudgmental, they just want cheese and are willing to do whatever it takes to get it. Hem and Haw are “littlepeople,” mouse-size humans who have an entirely different relationship with cheese. It’s not just sustenance to them; it’s their self-image. Their lives and belief systems are built around the cheese they’ve found. Most of us reading the story will see the cheese as something related to our livelihoods–our jobs, our career paths, the industries we work in–although it can stand for anything, from health to relationships. The point of the story is that we have to be alert to changes in the cheese, and be prepared to go running off in search of new sources of cheese when the cheese we have runs out.”
Are you still with me? Great!
Since you have gotten this far I am sure, as a real estate investor, you have experienced your cheese being moved… moved right out from underneath you. One minute you are literally fat, dumb and happy… and the next minute your real estate business and by extension your entire life is turned upside down.
If you were active as an investor during the run-up, I am sure you knew investors who thought they were geniuses, and then the floor fell out of the market and they took a beating. And in the words of Spencer Johnson, many of these investors, and maybe even you, found yourself asking: Who Moved My Cheese?
What about those of us who thrived during the run-up, survived the downturn, and are profiting in this ever changing market. Why have we survived? How have we managed to go from “we could do nothing wrong” to “almost any move could kill us” to “finding consistent profits” and SURVIVING?
Like many of us who have found themselves in the same situation and survived… I think the short answer is that we adapted.
We adapted to the fact that our cheese was moved and has not stopped moving since late 2005, and that for us to survive and thrive we needed to perfect our ability to adapt.
Take for instance a recent situation where a major lender in our market decided to suspend all investor financing — an action directed by banking regulators. This local bank was a mainstay in the investor community, so much so that perhaps their success caught up with them. One day everything was fine and the next this bank moved the cheese in a big way for many investors in our market — and virtually overnight, investors were scrambling, many unsuccessfully, to find funds.
What would you do in this situation? How would you respond if perhaps your only source of cheese was moved. Would you act like Hem and Haw, or would you react like Sniff and Scurry?
I can tell you what successful investors would do. They would be turning over every rock seeking out lenders who would support their business plan, and if they were really smart, they would create relationships with several lenders so that if anyone of them moved the cheese, as they most certainly will, it would be of no consequence.
The bottom line is this: those investors that survive and thrive; those investors who know that everyday is going to present another challenge to be overcome; those investors who wake up every morning and welcome the challenges that come their way; those investors willing to recognize the changes around them and quickly adapt; are the investors who are going to survive and succeed, regardless of what is happening with the cheese!