For real estate investors, the daily battles are all of the issues we must face, from sellers to contractors, to buyers, and on and on. The war we are fighting is to achieve our WHY. It’s the reason we do this day in and day out, the end goal, if you will.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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Ego’s Cost Us Millions!
Is it just me, or have all of us at one time or the other let our ego’s get in the way of a smart business decision? Those darn ego’s can cost us a boatload of money, time, and aggravation!! At least mine has! Maybe yours is much more mature 🙂 In most cases, ego’s never see the big picture. They are consumed with one small microcosm of the big picture. Yet focusing on that small microcosm can quickly become a cancer that kills the entire deal!
Case in Point
A few years back we had a house that was plagued with problems. First there were contractor issues, then inspector issues, followed by pool problems, and on and on. We finally had a decent offer which we accepted. At the inspection, the buyers decided they wanted a new roof installed. The cost to us was about $4000 for this particular roof. Almost always, we handle our own negotiations instead of hiding behind our attorney. We like the personal touch and usually that will keep ego’s out of the deal. When attorneys start writing their nasty letters, buyers ego’s get offended easily. In this market, buyers can just walk because they have 5000 other houses to consider! In this case, we did not speak directly to our buyers. Instead our attorney wrote a typical letter to them. To make a long story short, the buyers pulled from the deal. Now I am back pedaling. I did all I could do to contact them and let them know we would replace the roof. Actually, we went ahead and replaced it anyway so they could no longer have a reason to cancel. Well, you guessed it, they cancelled anyway. Contracts don’t really mean anything in our part of the country, but that is a discussion for different day.
So here we are, a house that has now sat for over 50 days because of all of the going back and forth. We have paid to have a new roof installed, and yet we must put it back on the market accumulating MORE holding costs! We finally sell the beast, but this time it is for $6000 less than the last offer, and add on 3 more months of holding time, and the new roof! What a wonderful deal … NOT!! In the end, my ego did not like these buyers. I was in a bad frame of mind and thought if I let my attorney be the bully, I could step back and save money on a new roof. Well, that decision cost us well over $10,000, plus a ton of mental energy and time I will never recoup!
If I had my crystal ball, which mine is busted by the way, I would have seen that a decision to spend $4000 would have netted me an additional $10,000 and saved me countless hours of aggravation. Now that is a good investment in anybody’s book!
Winning The Battle, Can Lose The War
If I had lost the battle by giving in on the roof, I would have won that war. I really is as simple as that! Instead, I really showed them who was boss by not giving in to their demands! (Insert your LOL here 🙂 There goes the ego costing us thousands again!! I won the battle by not giving in, but I lost the war because of all of the additional costs and aggravation. I am not suggesting to give into every demand, but take the time to get to know your buyers, or at least be in touch with their agent. See if the decision you are about to make may be a deal killer. Take the time to investigate before digging your heels in the dirt!
Is The Juice Worth The Squeeze?
I know my crystal ball is busted, and I am assume yours is as well. None of us can know exactly what will happen in each scenario. How many times in our business do we let ourselves lose the little battles so we can win the war? I think if we can humble ourselves long enough to make rational decisions, and really take the time to think it through, we will always end up more successful in the end. Lose some battles, it is worth it! In every situation, ask yourself what you can do to make this issue go away quickly. Take the time to review every possible outcome and think about the probability of each. When you have tough decisions to make, ask yourself this question: Is the juice worth the squeeze? I think this is one of my favorite questions to ask. It is so simple, yet powerful. Is what you are about to do worth the potential outcome? Who are all the key people? Talk to them to see how involved their ego’s are as well. It may be a chance for you to lead by example and show them how to get things done rationally so it is a win win.
Short and Stout?
All I could think about when writing this was how stupid we all really look when we are posturing for our position. Please indulge me by picturing the following scenario for a moment. Someone makes a demand. We don’t like it. We let our emotions take over. We feel the need to strongly justify our position. We get defensive. We stand tall and puff our chest out. Left hand in a fist on our hip, right hand pointing in the air outlining our points. Do you have that image in your mind? Take a minute to see it. At first glance, you may think you look like a strong person, fighting for what you think is right. What I see is a little teapot … complete with steam flowing out of our mouths!!
Next time you are in a heated battle, and you find yourself fighting for your position, step back and remember the teapot! Laugh at yourself. Ask yourself: If I lose this battle, can I win the war which is what I really want anyway? Utilizing this visual image of yourself works great from everything to your business, parenting, relationships, etc. It can be very helpful in so many areas of our lives.
What small battles have you chose to lose so you could win the war? Was it worth it? Did you get the teapot reference? I know it was a stretch! Can’t wait to hear your stories! Have an awesome week ahead!