The Most Valuable Call You Can Ever Receive

[Drago Stanimirovic]

One of the most valuable conversations an investor can have happens before there's really a deal. Before the offer. Before the earnest money. Before you've spent money on inspections.

And, most importantly, before you've fallen in love with the idea.

Because before you commit, you can still ask someone: “Does this make sense?” After you've committed, the question quietly changes to: “How do we make this work?” 

Those are not the same question. Once you've signed something, spent money and told everybody what you're doing, sunk-cost thinking starts almost immediately. You don't really want your lender, contractor, attorney or accountant to evaluate the deal anymore. You want them to help you save it.

That's why bad news is incredibly valuable when it arrives early. Bad news is cheapest before the deal is yours. 

And this is where I think we've developed a strange habit. Instead of calling somebody, we Google it. We ask ChatGPT.

I use both. They're remarkable tools. But they're very specific tools with very serious limitations. Google doesn't necessarily tell you what experienced people know. It tells you what people published. And who's publishing? Often the most vocal people. People selling something. People doing SEO. People repeating something they read somewhere else.

At its worst, you get something resembling the “dead internet” problem: every article seems to exist because somebody wants you to click, subscribe, buy, call or convert. Twenty search results saying the same thing don't necessarily mean twenty experienced people independently reached the same conclusion. (One hundred horses do not run faster than one horse.) Sometimes nineteen websites copied the twentieth.

ChatGPT has a different problem. It can give you an extraordinarily convincing explanation. Everything fits together. Everything sounds reasonable. Everything is written confidently and neatly. That's precisely why you have to be careful. A wrong answer that sounds ridiculous is harmless. A wrong answer that sounds completely reasonable is dangerous. 

The professional may see the problem immediately because he's walked the walk. "No, you can't assume that." "That's not how they do it in this county." "That contractor number is impossible." "Your insurance assumption is wrong." "That financing structure won't work for this property." Someone without that experience may read exactly the same answer and think: "Makes perfect sense." 

That's the uncomfortable limitation of AI: you often need to understand the subject to recognize which parts of the answer you shouldn't trust. And ChatGPT isn't necessarily going to tap you on the shoulder every time it gets something wrong and say: "By the way, that last paragraph sounded great, but I made a mistake." It can continue to sound credible as all get out.

So use Google. Use ChatGPT. Use spreadsheets, calculators, forums and every other tool available. They're fantastic for learning, organizing your thoughts and figuring out which questions you should be asking.

But then ask those questions to somebody who actually does this. Call the lender before assuming the financing works. Call the contractor before deciding the rehab costs $40,000. Call the insurance agent before plugging a number into your spreadsheet. Call the attorney when the legal detail actually matters.

And stop trying to do everything alone. I know. You don't want to call anybody. Neither do I half the time. It's faster to search. It's easier to type a question into a box. Nobody puts you on hold. Nobody says they'll call back Tuesday. You don't own anyone anything, you're not influenced by someone's personality or worldview. 

But business is still conducted by people who know things that aren't written down anywhere. Stop being a loner. Talk to people. You don't have to like it. But you do have to do it.

Because sometimes the most valuable call you'll ever make is the one where somebody tells you, before you've spent a dollar: “Don't do this.”

The best time to discover that your deal doesn't work is still before it's your deal.

[Stacy Raskin]

Quote from @Ken M.:

Quote from @Stacy Raskin:

I agree. Chatgpt is very useful but it can also be very convincing in saying something inaccurate until you tell it's wrong and then it agrees with you again. AI is a useful tool but if the user isn't experienced in the subject knowing which information is accurate and which is not, is impossible. I have clients tell me it gave them options that didn't exist or didn't fit their situation. Working with an experienced professional can help give solutions that fit what the investor needs that have been tested in the actual real estate market. 

Good Observation: "Chatgpt is very useful but it can also be very convincing in saying something inaccurate until you tell it's wrong and then it agrees with you again."

At the bottom of my usage of ChatGPT is the disclaimer

"ChatGPT is AI and can make mistakes"

I've seen ChatGPT prove that again and again 

Yes, I have seen it firsthand on how it makes mistakes. Chatgpt is amazing at what it can do but it has real limitations.