Bring the strategy to the table, but adapt to problems with solutions.
Applying what we learned….
Hopefully you looked through our strategy and took something away from it. There are always tribulations that come up with every venture, and we always have to be ready to adapt. This page is going to highlight how we use our approach to keep a level head and adapt to the deal at hand. It’s always important to learn how to pivot. Nothing is guaranteed and adapting to the environment will give you experience and refine your own unique approach for every deal in the future.
“The best investment on earth, is earth.”
— Louis Glickman
Problems & Solutions
Getting in over your head.
Unfortunately I have found myself in situations that are tough to navigate, and no obvious answer where to go. Most of the time this is my own doing. As an anxiety filled parent at the best of times I find that it’s important to solve your way out of a problem, so you can look forward with clarity. Before I get into any project I always evaluate my way out before I get into it. I take the time to see what leaving the project would cost me and what I would sacrifice to give up. It’s worth your time to know the risks of what you are getting yourself into. I do this because it gives me perspective on the project at hand. If you know there is a lifeline out, or a way to shed the problem away then you are far more likely to keep calm throughout the process. I have never had to execute the plan, but I would be lying to myself if I pretended to always go into every situation with all the answers and pretending like no matter what project I take on I can’t fail. It’s better to know the full scope of the project including the bail out points, then to get into something, get in over your head, and then figure out what to do about it. This helps me insulate the investment from becoming that “worst life decision” people always talk about.
You can’t please everyone.
It’s tough to see something you have spent so much effort on come up short in peoples eyes. It’s going to happen. Years in the service industry prepared me for understanding that fundamentally a lot of us are just different. The way you perceive something can be drastically different from others. I almost always go out of my way to not inconvenience people and if I can handle it myself I do. If I’m staying at a short term rental and something goes wrong even if it is something the host should have anticipated I typically just tell myself it could happen to anyone, or maybe it was the cleaning crew made a mistake, or who knows how many things could have led to the issue. It’s a tough business to be in and it would take something absolutely egregious for me to really call anyone out. I have had guests call out a hair left on the sheets to a bed in a personal message, and yes they provided a photo and yes I mean one hair. As a human with a head of hair myself I find it quite difficult to anticipate when a hair will fall out, or where it will end up when it does, but I surely don’t assume my cleaning crew is that good either. It’s something very minor and totally understandable and yet I had a guest point it out. People come in all different packages, and trying to cater to every single one perfectly is just impossible. I roll with the punches, improve where I can, and don’t sweat the small stuff.
Something critical pops up mid project and demands immediate diversion to the plan at hand.
This problem is all too common and how we have handled it varies due to the situation. Let’s start with an easier one. You find a foundational crack that wasn’t assessed during inspection. The gut reaction is to stress out, but the appropriate response is getting opinions as quick as possible. at this point if you own the property and it somehow slipped through the cracks, just be honest when the contractors come out to evaluate and get honest opinions. Ask if your building is going to collapse tomorrow or is it something that is a concern, but can be shelved until more capital is available or something that can be sured up and fixed properly in the future. knowledge is the strategy here. Very seldom are the situations so catastrophic that the potential for collapse is eminent. Evaluate then get yourself back on course.
The second answer is you call everyone else involved in the project and place a hold on it. This is not preferred but it will give you time to wrap your head around the situation. This also leads into why it is so important to have access to working capital during these investment projects. Take a second to recalibrate. So you start with keeping everyone in the loop, but you open up some time so you can get the answers you need. I have had to put a project on hold for many reasons and its not a failure in management, its knowing the limits of the situation and mitigating the headache.
Running out of funding!
Look, it happens. In the real world if you are an investor and you have your money spread out and run low on cash on hand, or your a new time investor and you underestimated the scope of what you needed to complete the project. First and foremost take some time to evaluate. There have been times I've seen the investment ripe for the picking, but knew I would not have enough money on hand to roll forward and complete it as soon as the property was closed on. Sometimes that’s ok. What I look at is whether I can close the deal, float the payments, and accrue the money later while maybe investing smaller chunks into the project along the way. Counter point, if I can’t do that then you simply need to wave goodbye, and look back in the future at the opportunity missed. Knowing how far you can stretch yourself is pivotal in the world of investing. Detach yourself from what you want and evaluate what is practical. The only other solution I have taped into is vigorously going for a money grab anywhere I can. If it’s just something you can’t pass up and you believe in the project with 100% conviction, then put your head to the grindstone and try, try, try to scrape together what you can. I’m always surprised sometimes at all the outlets there are to get funding. Just know that the more desperate you get typically the more interest you will pay. So take that into consideration when securing the funding and evaluating how long you will have to hold that debt.
Saying yes to the professionals.
I consider myself to be quite the handyman, and I can tackle many things myself. What I have come to implement more and more the older I get is always just reach out and see what it will cost. Plenty of times I have assumed “I’ll just get to that myself when I have time”, but then I ask a professional what they would charge. You take the cost of materials, the time it would take, and the potential loss of quality in the inexperience you may have. Evaluating all these things together has led me to just budget for the pros to take care of it. More often than not it’s not that I couldn’t complete it myself its that my time is better vested elsewhere in the project. It wasn’t until I started investing in properties so far away from me that I couldn’t physically do the work myself. That I realized if you do your homework up front and make sure you budget everything well you end up with a better executed plan in the end.