How to Find and Exploit Your “Unfair Advantage”
Last week I had the opportunity to sit down with Josh and Brandon and talk about a variety of topics related to real estate in the BP Podcast 045: Finding Your Unfair Advantage, Rural Investing, and Getting Started with Tom Sylvester.
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As the title mentions, we spent some time talking about unfair advantages and how I have used them to create not 1 but 2 successful businesses. Afterwards, I received quite a few emails and private messages from people wanting to know more about how I found my unfair advantage and some tips for them to find and exploit their own unfair advantage.
What is an “Unfair Advantage”?
I define an unfair advantage is a skill, knowledge or situation that you have that most others do not. It is your competitive advantage, one of the things that makes you unique and gives you a leg up compared to others who want to do the same thing. It is often the case that people decide they want to do something, be it a new job, business or niche without first identifying what their unfair advantage is and determining how to use it to their advantage.
How I have used my “Unfair Advantage”
The unfair advantage that we discussed on the show is one that a lot of people are jealous of, which is my father actually having 30 years of experience in construction. He worked for the carpenter's union, was a contractor on the side and built 3 of his own houses. One of the common topics that comes up in real estate is "how do I find a good contractor"? Given my father's background, between his constructions knowledge and the fact that he knows almost of of the contractors in the rrrrrrrural town (in Brandon’s voice), this is a pretty big unfair advantage for us.
When we first started, we did all of the work ourselves. We were able to do this because my father knew how to do it all and taught me as we remodeled our properties. As time went on we realized that in order to grow our business we had to do less ourselves and hire out more of the actual work. Because of the two reasons mentioned above, we are generally able to find and keep good contractors without a lot of effort.
That is just one example. Below are several other unfair advantages that I have had in my lifetime that I exploited.
- Having a Computer – I was ~10 when my parents first bought a computer. I didn’t know how to use it, but was very intrigued. When I caught mononucleosis in junior high, I ended up being out of school sick for a good portion of the school year. I used this time to teach myself how to write code and eventually became a software developer.
- Getting my Master’s Degree (For Free!) – I work a full-time job and previous wrote about the benefits of having a job and investing in real estate. One of the benefits was free education. The company that I work for employs ~12,000 employees, each of who are eligible for $6,500/year in tuition reimbursement. The vast majority of employees do not take advantage of this, but I sure did. I was able to go to school at nights and get a Master’s degree in Management with no cash out of my pocket. Not only did this benefit my day job career, but it provided me many of the important business skills that I needed for my real estate business.
- Opening a Liquor Store – One of my latest entrepreneurial ventures was to open a wine/liquor store, which I did about a year ago. If you listened to the podcast, you would have learned that my father also owns a wine/liquor store that I worked in during my college years. I was able to learn the ins and outs of the business by talking to him and working in his store. With this knowledge that most people don’t have, I was able to find a market that would be advantageous to open a wine/liquor store in. We used our real estate knowledge to purchase a 4-plex and I used the store’s business knowledge to open a wine/liquor store of my own.
How You Can Find and Exploit Your Unfair Advantage
I share the previous examples to show a few different ways that I have been able to exploit unfair advantages that I have had in my life. The truth is, we all have unfair advantages, but not all of us know how to identify them and subsequently take steps to exploit them for our advantage. Below are some recommendations for how to do this.
Find Your Unfair Advantages
Your Skills/Experience – We all have different backgrounds. Our parents have has different jobs/careers. Look at what things you know that others may not. Although probably not popular, Miley Cyrus is in the news constantly nowadays. Is she more talented that other artists? That could be argued either way. But Miley’s father is Billy Ray Cyrus, who was a country singer which provided her inside knowledge of what it took to become famous. She also had connections in the industry that most other people do not have, which leads to the next point.
Who You Know – We all have networks, which are now even more apparent and accessible thanks to social media. If you have 300 connections, and each of your connections have 300 connections, that is a pretty large network. Determine what skills or areas of expertise people in your network have. You have direct access to people in your network with expertise, and indirect access to their network.
Exploit Your Unfair Advantages
Determine How to Exploit the Advantage – Once you identify some of your advantages, determine how you can exploit them. Do you know someone with lots of cash? Maybe they can become a private investor. Do you know someone who has a construction background? Maybe you can partner with them on flips. Do you know someone who works in marketing? Maybe they can help or take over the marketing aspects of your business. Is your mother’s friend’s daughter an interior designer? Maybe she can help you stage your property.
Turn Struggles into Success Stories – We all love success stories that overcome the odds. Lance Armstrong winning the Tour de France 7 times (before they were stripped) after his battle with cancer. Michael Jordan becoming one of the greatest basketball players after not making his high school team. We all have struggles in our life. Draft your story (or shortened story for an elevator pitch) to explain your struggles and how you were able to work past them to find success.
We all have unfair advantages in our lives. One major difference between successful people and the rest is that successful people understand how to identify their unfair advantages and exploit them for success.
What is your unfair advantage? Do you have an example of how you were able to exploit it?
Photo Credit: Jhong Dizon | Photography