Winning the Race

I'm well aware it may appear that I am toeing the line of the overly cliche and predictable with the writing of this blog post. However, I feel called to shamelessly touch on a topic that is front and center on the minds of Kentuckians and many Americans as we embark upon the 144th running of the Kentucky Derby: racing.

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Known as the fastest two minutes in sports, the champion is immediately is cemented into the history books as a legend of the sport. Owners, partners, trainers, jockeys, and those lucky gamblers rejoice in the glory of financial success of association with the winning horse. The "Run for the Roses" kicks of the Triple Crown of Horse Racing and the winner is rewarded additionally with millions in prize purse. Let's not forget that it's host, Churchill Downs, rakes in hundreds of millions on the Derby alone - now that's an attractive real estate investment. But what creates a winner in horse racing may or may not correlate to what creates a winner in business, real estate and in life. 

In my opinion, the quickest to the finish line does not necessarily create a winner outside of horse racing. Many might even say to you, there is no finish line in business and in life - we should be constantly raising the bar to test our limits. Others may remind you to celebrate the wins you define for yourself and to recognize your own achievements along the way. Regardless, I believe there are two main ways to "win the race" in your life and business. 

#1 - Don't Compete, Create

I believe the best of the best realize that we're only racing against ourselves. I read recently that elite performers don't compete, they create. What does this mean? For entrepreneurs it may mean that they create products or services that are not offered in the marketplace. This allows them to create demand and perhaps a new market in which they don't need to differentiate on price or quality. They create demand through innovation and creativity (see what I did there?). High level professionals focus on re-creating themselves daily and sharpening their skills through personal development, experience, and research rather than studying the competition intensely. They are certainly aware of what would normally be considered their "competition" and deeply understand the market in which they operate, however, these individuals focus on creating what may not be readily apparent to others. 

#2 - Focus on Consistency

Consistency is the key to finishing, surpassing and rising to new heights. If you're not moving forward, you're moving backwards. Each day, the best of the best focus on what they can control to further their interests. They don't attempt to move a mountain in one day, but chip away at one component of an overall big idea or goal daily. Winners realize that moving .001% forward consistently on a daily basis compounds to a tremendous amount of progress over time. They focus on maintaining consistent energy and effort over the long term by going slow and steady.

What other components do you believe are vital ingredients to winning in real estate, business and life? I invite you to engage with this post in the comments below and to connect with me further. Let's win together!

Without this, nothing else matters...

You can be a world class negotiator, analyst, property manager, broker, general contractor, attorney, banker, accountant or all around investor, but if you don't master this one skill, you will 100% fail in real estate. None of these otherwise highly valuable skills or disciplines matter if you cannot truly and genuinely build and develop deep, trusting and meaningful relationships. 

People want to know that you truly care about them and the challenges they are facing. They want to trust and feel that you will do the right thing to serve their best interest and help them reach their goals. It's also a two way street - once trust has been granted it's your job to deliver and verify their trustworthiness with action towards helping them achieve their goals. The approach that I have found to be useful for guiding my clients in selling or buying income producing real estate is discover their intentions, build a process or strategy, and execute in their best interest in an effort to create a relationship for life. The missing and most critical piece in this is to build a deep and meaningful relationship beyond the numbers, bricks and sticks. Without this, nothing else matters.

I want to share a quick story with you that made me pull the emergency brake in my tracks and reconsider completely how I am handling relationships in my life. I recently was at a property inspection with all parties in attendance; buyer, seller and various contracting professionals. As we inspected the properties I proceeded on a usually tried and true failing technique otherwise known as multi-tasking - checking e-mail, voicemails, calendar, responding to messages all the while coordinating and ensuring our access was granted and objections were overcome with integrity for each component of the property. If you're a broker, you know what I mean. We're constantly juggling several responsibilities at once and it can be a challenge to focus. However, it's common knowledge now days that if you're attempting a multi-task, you're not effectively accomplishing anything. 

As we continued through the inspection I noticed the genuine quality of the questions the seller asked the buyer and vice-versa. They seemed to truly have interest to get to know each other as a person and about their families, without any other underlying agenda. The buyer asked the seller about his children, where he was from, what it was like where he grew up and what his family is like today. I suddenly realized, after working with both of these gentlemen for years, that I learned more about each of them in those 5 minutes than I had ever come to realize in several years and many real estate transactions together. I became truly disappointed in myself at how much I didn't know about both of these men! I realized the topics of our discussion over a long period of time related solely to investment real estate.

Never along the way did I actually get to know these men, and it really caused me to take a look in the mirror. Why didn't I slow down and take an extra 5 minutes to take an interest in the personal lives of these men? Was I really so busy that I couldn't spend any time to understand who they are as people and what makes them tick? When I actually write these questions here I realize how ridiculous it is to not take the time to know these men, their families, and their goals and life aspirations. I also realize how much I've been missing out on by not genuinely building these friendships! 

To conclude, not only is life richer and more rewarding when you have genuine connections, but business is also better. After all, we're all in this thing called life together and we're all connected in some way. Undoubtedly, it's easier to negotiate a mutually beneficial deal when you truly understand the parties involved and their perspectives. I'm challenging myself to take an extra five minutes and get to know the people in my life and I'd be interested to learn ways you're applying this to your life as well!

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Take the Stairs

Greetings and welcome back! I've missed you, and I am excited to discuss a seemingly obvious, yet valuable, discovery that I've recently made. To state my intention, my overall goal on this blog is to share my experience and perspective so you can draw your own conclusions and perhaps take direction from the things I am learning. I want to help you get better at what you're doing and live the life you are imagining, or perhaps one that you haven't imagined yet. Whether that's through real estate investments, brokerage, or personal development. Join me on this journey and let's take our lives to the next level.

Before I start, I have to mention recently I was in Las Vegas attending the 10X Growth Conference. The shift that occurred for me during those three days is something I cannot explain, but hope you experience it one day. I've been pondering a long list of topics I could share with you from this game changing experience, and I will be coming out with various posts on this over the next several weeks/months. If you'd like to discuss with me personally, reach out and we can set up a one-on-one meeting or call. Plus, I'd love to connect with you!

Anyway, onto today's topic. This morning, as I exited the gym after finishing my daily morning workout, I bumped into a girl whom I've observed has recently been attending sessions with one of the personal trainers at my gym. With admittedly entirely limited information, my perspective tells me that fitness is a new undertaking for her and something that has not been a consistent life choice. Nonetheless, I am always inspired by seeing people make changes and course correcting for the betterment of their life. After all, it's never too late to make that shift in your own life whether it's fitness, health, personal finance, career and personal development, relationships, mindfulness, or anything else. Back to the story: as I walked out of the gym she was exiting the elevator, we both said 'good morning' cordially with a smile and went on about our day. Then it dawned on me - she took an elevator to skip one flight of stairs on the way into her personal training session...am I the only person this is ironically bizarre to?!

This immediately sparked an internal dialogue within myself. How many things am I doing that are simply checking off the boxes to say it's been done? Am I changing myself internally or going through the motions? This caused me to realize many times in my life in which I have cut corners which inevitably spilled over into other parts of my life. In Charles Duhigg's book "The Power of Habit" he calls this concept 'keystone habits' which relates to the domino effect certain choices have on others. For example, when you exercise, notice that you generally eat healthier, have more confidence and naturally focus on putting in hard work in the other areas of your life and business. It's how we're wired as humans. The 'keystone habit' principle can be expanded upon immensely, but I will go ahead and recommend that you pick up his book to learn more and how you can really choose your habits. After all, your habits are what your life is ultimately made of.  

A quote that I believe is so relevant to this is what I came across in a book I am currently reading by the legendary basketball coach Phil Jackson called "Eleven Rings." How crazy that this quote presented itself to me the same day I run into this apparent parallel in the gym.

"The way you do anything is the way you do everything." - Tom Waits

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I am using this experience to genuinely look in the mirror and audit my actions. The question I'm asking myself is "What am I doing today that is spilling over into less than excellent work or results?" I am challenging myself to make sure I'm not taking the easy way out on personal life choices as well as real estate related items such as market and financial analysis, negotiation, due diligence management, client relations, property prospecting,  asset management,  and of course many more. Perhaps there are several areas I can identify that by making small course corrections on I can take my real estate business and life to the next level. 

When you cut corners on one thing, everything else suffers. It's just the way we're wired as humans! Drop me a comment and let me know what you've noticed you're "taking the elevator" on in your life, business or real estate investments.  What ways can you "take the stairs" and do the right things that will spill over to other good habits? Don't be ashamed - course correction is the key to a successful life! Let's create a community that's open and honest with each other that can have each other's back and watch each other grow for the better. I look forward to hearing from you and connecting soon.

Staying Power

I strongly admire men and women who have proven longevity in their careers despite the roadblocks and challenges that they faced throughout their time. We all have challenges, but some people prove to rise above them time and time again, over an extremely long period of time. Specifically, in commercial real estate brokerage and investing, those who can outlast the inevitable and continuous transitional nature of market cycles are generally those who succeed. After all, success isn't success unless it's lasting, in my opinion. Being in year five of my #CRE journey, I wouldn't say I have yet achieved "Staying Power" by this definition, but it is an intention and objective for me nonetheless.

The question is, how do professionals stick around and have success in the long haul? I believe the following traits are some essential parts of the tool kit to achieve success in real estate investing, brokerage, and life in general.

Consistency

In my opinion, daily consistent actions in every moment is one of the most over looked or unrecognized traits in highly successful people. To achieve lasting success, I firmly believe you must consistently make the right small and minute decisions and take the right actions in our continuous moments of decision. Our society trains us to believe massive success stories are created overnight by huge, sudden breakthroughs. I believe those with true staying power have developed consistency in their practice and in their life over a long period of time. 

Personal Development

Those who achieve staying power focus a tremendous amount of time and effort in developing themselves. They "sharpen the ax" far and away with greater effort and time than they do in "swinging at the tree," as the saying goes. They seek guidance through books, trade publications, mentors, digital sources such as podcasts/video training/social media, conferences, seminars, and of course through raw experiences. The ones who last take what they learn and apply it to their lives immediately, while receiving feedback, making continual adjustments and constantly growing.

Philosophy

I believe people who stick around and rise above the competition for the long haul have a philosophy or principles for each decision they make. They have a guiding direction which helps them make quick decisions based on their own research, experience or collective wisdom. These philosophies are developed over time and are intentionally formed. Those who lack such guiding principles make inconsistent decisions and experience inconsistent results. 

Authenticity

People with staying power discover and embody who they really are at all times. They don't change their beliefs, opinions or expressions thereof based on who they are around or what may seem popular at the time. In fact, I believe those with staying power influence others to their line of thinking, at least for the short term, but perhaps I'm digressing. They are comfortable in being transparent because their beliefs and actions have a strong rooted philosophy of why they are such. They know they will never be able to please everyone, so it's much more efficient, effective and generally satisfying to just be themselves.

Healthy Habits

To build anything substantial, it must be originated in consistent healthy habits. Those with staying power know the power of their subconscious mind and know how to manipulate it to consistently do the small things essential for success. They don't think about and expend valuable willpower energy on working out, eating well, protecting & feeding their mind. They just do these things habitually. The energy saved with this type of life on autopilot creates continuous momentum and a compound effect with huge results.

R&R

Those who are impactful over many decades realize that this game is not a sprint, but a marathon. High performers realize that if they are not mindful, they could risk burnout and the detrimental effects of this. Rest and recovery is a consistent element of lives of those with staying power. They systematically schedule activities that feed their creativity, energy and emotional well-being. They take time to enjoy the moment every day and additionally focus on implementing systems and processes that allow them to step away from the day to day on a regular basis, even if it is a short time. 

In real estate investing, it is a very long and sometimes arduous game. It is not a get-rich-quick scheme and it's not a cryptocurrency frenzy, lottery, or luck of the draw rags-to-riches concept. To achieve the great life benefits that real estate can provide, I believe you need to embody these traits to achieve the staying power that ultimately will deliver the highest rewards. My approach is to embody these personal traits to ensure my "staying power" is achieved and I hope you will join me. 

"The people living on top, those who take responsibility, live a life that is in some ways uncomfortable. Successful people do what unsuccessful people are not willing to do, and that often means living outside the limits of one's comfort zone. The people on the other side are hanging with the masses, and their lives are often more comfortable during that long early stretch. But they become more uncomfortable later on. By contrast, those on the success curve end up ever more comfortable as their lives progress, because over the course of time they continue to have the finances, the health and happiness, the relationships, the success. This means changing your thinking about the comfort zone." - Jeff Olson
"Doing the right thing sometimes seems to be more 'expensive' at the time but it always ends up being cheaper than the repercussions of doing the wrong thing." - Andy Frisella
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Rent is Due

Depending on who you are, the phrase "rent is due" can either evoke an emotion of anxiety, fear, surprise, excitement (if you're the owner collecting the rent), or perhaps you're an auto-pay type of person that doesn't let bills provoke any emotions through systematization. Most likely, you have some experience with this phrase and you automatically have a feeling when you hear it. Good or bad, the phrase to me means a few things. Of course, as a real estate investor, there's no business without rental income. The real estate & operational expenses would not be covered and there would be no opportunity for profit (which is an investor non-negotiable when a business risk is assumed). Additionally, the "rent" is due every day in our lives, to achieve the various goals we are after. 

"Success is never owned. It's leased, and the rent is due every day." - JJ Watt

I believe in this philosophy wholeheartedly. There have been times in my life where I believed that I could work hard for a period of time, then slack off and reap the fruits of my labor later. While a part of this concept is generally true, I have found that the times of less effort creates a delayed period of less than desired results. Especially in my business of income producing real estate sales, if I am not constantly on top of current transactions, prospecting for new business, building client relationships, researching on and off market deals, sharpening my analysis and negotiation skills, there comes a point to which I could get so overwhelmed that nothing happens at all. In other parts of life where I strive for success such as physical and mental health, personal relationships, finances, spirituality, the rent is additionally due every day. "Paying the rent" daily also creates momentum, which allows each day to get easier and easier.

"Recreate yourself daily." - Unknown

I have made this an ongoing objective for myself - every day is a new opportunity to recreate my health, relationships, friendships, network, knowledge, finances, business and relationship with my higher power. Every day I have made it a priority to recognize the opportunity the day presents to go above and beyond in an effort to live a life that I can be proud of. Each day I can improve my client services, my real estate expertise, my systems and processes, and my efficiencies. We all have days where we're more motivated or inspired than others, but the simple realization that we must re-create what we want daily has been a great motivating force personally. 

While in each day, we are called to get after it and "pay the rent" in the various parts of our lives that are important to us, I want to leave you with one final quote that I've found powerful as well. If we are looking to achieve big things in our life, we should remember that life is completely comprised of moments. What is important is that our attitude of each moment remains consciously positive, no matter what we're going through. I believe by adopting that approach, we can build a business, strong relationships, excitement and live a life to be proud of.  

“Life is made up of moments, small pieces of glittering mica in a long stretch of gray cement. It would be wonderful if they came to us unsummoned, but particularly in lives as busy as the ones most of us lead now, that won’t happen. We have to teach ourselves how to make room for them, to love them, and to live, really live.” - Anna Quindlen

 

It's Still Ugly

Over the past few weeks I have been blessed to receive a few humbling awards for contributions in the commercial real estate brokerage industry. These moments have been beautiful, shiny, clean, tremendously appreciated and quite frankly, unexpected. The plaque for achieving the CCIM designation, "Rookie" Kentucky Real Estate Exchangor of the Year for 2017, and Kentucky Commercial Real Estate Alliance Multi-Family Broker of the Year for 2017 are now nicely displayed on my bookshelf. The beauty of these recognitions caused me to remember that the process has been anything but beautiful.

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I have to admit it's been really ugly getting to this point and it continues to be ugly on a daily basis. My commitments, ever-growing responsibilities, daily tasks, packed schedule and the overall work-in-progress nature of my business seem unsightly to me.

Being in year five of this business, it's been a hell of an up hill battle. The many hats worn by a commercial real estate broker (that's also an aspiring real estate investor) are sometimes seemingly insurmountable. Each transaction has a tremendous amount of minutia to work through, with a laundry list of impacted parties and challenges around every corner. It is not rare to overcome a long list of challenges yet to meet a ultimatum that critically kills the deal in the 11th hour. Remembering that no deal is better than a bad deal in those circumstances is hard, to say the least. At the same time, we're contending in a very competitive space where deals are extremely timely and pressure filled. Additionally, there is a business to keep organized, with many personalities involved from top to bottom. All the while, we are challenged to remain focused on goals, open minded to set new ones along with action plans and accept or reject certain opportunities that may or may not fit our objectives. Not to mention the requirements to be experts in local market knowledge and somewhat practicing economists with a focus on how global markets impact every move. I have a friend writing a book on the challenges, dreams and prayers of a commercial real estate broker. I will leave it to him to describe in eloquent detail all of the simultaneous stresses of our business. 

During times of challenge, when it seems nothing is going right, I find myself working overtime swimming upstream to get back to a point of momentum. I have found that momentum is tremendously important in this business - I am not sure if it is due to the fact that your energy is transferred or felt or if you simply just operate better from a mindset of winning. Now that I have momentum on my side, I refuse to give it up. I will continue to sludge through the ugliness of this daily practice to make sure it is beautiful for my clients, partners, prospects, friends and family.

The sacrifices are worth it and I am eternally grateful for the opportunities this beautiful business has created for me. I am proud of the person I am becoming from the mold of these pressures because it gives me an opportunity to provide opportunities for others. As long as we stay committed to doing the dirty work, the people that need us will continue to have beautiful results, which is unique to everyone who involved. My purpose remains to provide those opportunities, and I will relentlessly chase them with a persistent and resilient approach. So, I'll be up again tomorrow morning starting at 5am, rinsing and repeating with this purpose top of mind. 

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Wishing you and your family a Merry Christmas, Happy Hanukkah, Happy Holidays and a Happy 2018!

Prepared for Anything

It's been a bit since I last posted and it's been a hectic period of time in my life. Last week my plan was to write about my trip to Toronto and completing the CCIM designation, describe what that meant to me personally and professionally, and outline its importance of enhancing the value of my real estate practice from an investment and advisory perspective. However, my body had a different plan as I took a trip to the ER which resulted in an emergency surgery to remove my "angry" appendix (angry was the adjective so eloquently coined by the doctor). I've been told to always be ready to improvise and be nimble in life, and this was a great example of such a lesson. 

When I was told I needed to undergo an emergency surgery before the appendix potentially ruptured, my first thought was "I have a lot of appointments today and I need to get so-and-so task done - can't do it today." My second thought was, how long could it be before I am back to taking care of business? How long is this going to knock me out? Additionally, I wondered, how bad is this going to hurt and what's the likelihood it does not go as planned? The pain was to a point where there was not much of a choice for me to make but rather to face the inevitable road in front of me. It caused me to think of the many other life circumstances where we have limited choices but to proceed through potentially painful circumstances whether literally or figuratively.

I immediately notified all parties of which I was currently transacting that I would be out of commission for at least the next 24-48 hours. Support was offered through many different avenues from my family, colleagues, vendors, partners, friends and even current negotiating adversaries. This outpouring of support was overwhelmingly appreciated at the time at which I felt useless and helpless. 

This experience reminded me that unexpected events in life, business and real estate should be expected. There's a great quote that says "life is what happens to you when you're busy making other plans." It's always smart to have a plan and a method as to how you are going to achieve your goals personally, professionally and financially. This experience re-iterated the fact that even though we have plans and intentions we need to be ready to implement contingency plans at any moment. Let's face adversity with the perspective that we expected it and we will have the capacity to handle it at our best. My hope is that whatever life throws at you over the closing months of 2017, you will be ready to face the unexpected and turn those challenges into opportunities. 

 

Systematic Cash Flow

I've learned this mantra the hard way through many challenging lessons: don't attempt recreate the wheel. Be innovative, yes, but there are many processes and procedures that have been perfected for many years prior to your inception. Today I'd like to discuss systems, the infrastructure that allows real estate investors and operators to succeed, which are absolutely essential to building a cash-flowing, scalable real estate portfolio/machine. It is a must that you seek and implement proven successful systems into your business. 

In real estate operation, look for efficiencies in every corner. Management practices have been perfected by many established firms, investors and employees for years. Follow these valuable examples and adapt them to your scenario. For example, when a tenant has a maintenance issue, instruct employees to follow steps 1-10. When collecting rent or paying bills, make sure a certain code is associated with each line item on the books and it is recorded appropriately, per the systematic procedures adopted by your group. These are two (of many) arbitrary systems to utilize for a complex management operation. I encourage my clients to implement efficient, yet flexible systems for each part of their management process. It is important to note that flexibility is key as nearly every situation is unique in it's own way. 

When disposing or acquiring income producing real estate for my clients or partners, I follow a system for ensuring their goals are met and maximum value is delivered. I have adopted and adapted many tried and true principles to my practice to ensure consistency and efficiency. Many have been passed down from mentors, colleagues, books, seminars, and the like. The ingredients that I add are passion, persistence, deal navigation, personal influence, analysis presentation, interest matching, market understanding, adaptability and much much more. These essential ingredients mixed with a systematized approach equals tremendous success. By matching these systems with flexibility and other intangibles, we're poised for huge success.

If you are reading this blog, I assume you are focused on improving your financial standing through real estate investment. You probably have a set of very unique desires, needs, and wants when it comes to your life which you believe can be obtained through real estate. Implement proven systems and you will be a giant leap closer to those goals. If I can be of assistance, don't hesitate to contact me. 

 

 

The Long Game

I love this thought of playing "the long game." It is really my philosophy on life, business and relationships in general. If you do things the right way, add enough real value, treat people right, take ownership of your failures and mistakes, things are going to work out in the long run.

Whenever I am working with a new or existing client, I make it a point to communicate that I am interested in a long-term business and personal relationship. I don't see a new client as one quick deal or paycheck, as many brokers and agents do (or business people in general). I see my clients as people who I am committed to plugging in the necessary pieces towards creating success in their real estate investments - focused on their unique goals. When I commit to serving them as an advisor, negotiator, consultant and closer for my clients, I am thinking forward about 30+ years of results oriented achievements that will set my clients up to live the life they are aspiring to live. Any astute business person knows that existing customers are less expensive, require less time & effort to acquire than new customers. The intelligent business person also knows that creating genuine transactions in the best interest of the customer creates lasting loyalty and referrals are a natural result. Further, this smart approach creates the biggest growth opportunities for any business. When I come across a deal that does not fit my clients objectives, I will gladly advise them to pass. My mantra is "no deal is better than a bad deal." I want my clients coming back to me eager to reach for more after the success they have already had in deals that made the right kind of sense. With all of this in mind, it is astounding at the level of deception and short sighted business practices that I observe on a daily basis. To many, the one sale achieved through trickery or cutting corners creates today's financial gain and closes the door on any future opportunities that could be ten-fold. News flash - people eventually realize when they've been taken advantage of.

As a real estate investor, the long game mentality is absolutely essential for success. Investing in real estate is not at all a "get rich quick" scheme. Anyone who has achieved outstanding results in building a real estate portfolio will tell you it takes many years, countless failures, a thriving and dynamic network, credibility, investments additional to monetary in time/energy/talent/knowledge, and massive action. There are going to be times along the journey that your asset values decrease due to market conditions. There will be times where you have setbacks due to management, tenants, political conditions, and many other factors. However, I believe if you have the long game in mind, and realize big picture where these challenges are taking you, it makes it all worth it. The level of wealth you can achieve through real estate, and most importantly the impact you can have on the world, is nothing short of astounding. However, it does not happen overnight. Ask any person who's built a substantial and lasting business and they will tell you their "overnight success" story was about 20 years in the making before it took off. 

If you are setting out to do something substantial through real estate or any other business, I implore you to take the long-game approach. The world is so transparent these days that if you take a different approach, you may succeed in the short run, but you will eventually be exposed. If you are looking to impact others, think about how you can add significant value to them first before you think of what a payoff to you could be. Be generous in your time, talents and attention. We all have special talents and callings in this life. Use yours genuinely and intentional to create excellent results and chances are the right things will happen to you and your family in the long run. Go the extra mile and do it the right way with the long game in mind.

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90 Days to Thanksgiving

It recently dawned upon me that we are about 90 days out from Thanksgiving. If you're like me that fact makes you double check your calendar and try to figure out where the hell this year has gone. I frequently like to stay on top of how quick time passes, because it gives me an opportunity to check myself and make sure I am staying on top of my short term and long term goals. Every day we need to be checking ourselves to make sure we are disciplined in doing the small things to reach our big goals. This helps us become the person we need to become to expand into the big future we expect for ourselves. In the mean time, we need to be grateful for all that we do have, which is what I would like to discuss today.

I was discussing with some friends last night the feeling of tension I've noticed that I constantly have. The tension is rooted in the fact that I know I could always improve in some way, whether that is through an improved process, increased knowledge, or improved action. Some days this tension eats at me and causes me to stress myself out. Over time, I have come to understand that achievement starts with this tension and I embrace that feeling that constantly exists. Never being complacent allows me to find and capitalize on opportunities for my clients, which is my number one goal in business. Further, tension gives me the opportunity to have a desire and take action for a better future in general - whether that is an improved client experience, enhanced real estate assets through renovation, improved negotiation techniques, or more laser focus on vendor relationships and financial modeling. The list could go on and on.

While tension is a very important driver for me, I realize the only way to enjoy the journey and life is to be grateful for all I have an all I have accomplished. I am grateful for the opportunities my clients give me to serve them. I am grateful for my colleagues for the assistance and expertise they provide to me on numerous deals and projects. I am grateful for friends and family that give me the opportunity to enjoy life and build memorable experiences. I am grateful for simple things like a roof over my head, shoes on my feet and to live in a free country. While I have plenty of tension and things I want to accomplish ahead of me, I am reminded 90 days away from Thanksgiving 2017 how many things I have worked so hard for that are already in my life. I challenge you to think of one thing each day until Thanksgiving that you are also thankful for. The attitude this practice could create could make all the difference for you too!

 

In a perfect world...

In a perfect world, what we present about ourselves, our family, our business and professional lives on social media and other places online would be an accurate match of our reality. Many times people pretend that by living this perfect life that somehow it will actually come true. But guess what - we live in a flawed world! We are flawed people. Picture perfect is rarely what our lives are, so who are we kidding? The purpose of today's message is to challenge you to be authentic and face the reality of your failures. At the time I am saying this, I am challenging myself to do the same. I believe this small act can have a significant impact on our hyper-connected world.

I'll just speak for myself, offer some vulnerability and openly admit that I fail every day in some way. Some mistakes are more costly and detrimental than others, of course. I'll share some examples. I have times where I don't deliver the results my clients are expecting, because of many different reasons. Separately, I have personally invested in deal or opportunities that have had rough patches that could have been avoided. I have lost out on opportunities because of laziness, lack of preparedness, or lack of hustle. There have been big and small goals that I don't attain because of a lack of grit, focus, dedication or for a whole host of other reasons. I have failed in many relationships with a lack of understanding, care, perspective or appreciation. Sometimes I fail simply because I don't have the practical knowledge to put together the pieces that are needed to succeed. The moral of the story is, I fail quite frequently in many ways.

Over the past year (and throughout my life) I've had countless failures. The more things I have attempted to achieve, however, the number and intensity of those failures have sharply increased. What these failures have caused me to do is to take an inventory of the things that I must improve on - whether it is pure lack of specialized knowledge, absence of drive or persistence. I am on a road that I hope ends up in success, but I continuously encounter downs and ups, ups and downs. I've been told those that attain success have failed much more than those who don't.

What I have learned is this journey is not anywhere close to a straight and narrow path. This has caused me to realize that in the long run the failures are what will really make me who I intentionally want to become. Failures I have experienced result in a "sting" and impact me deeply to a point where I have no choice but to change directions. What these lessons have taught me is that I must improve and eventually make me realize they are blessings in disguise. I must seek and offer mutual value to mentors for specific purposes. I must voraciously read books on strategies, mindsets, philosophies, and various improvement topics to arm myself with the appropriate knowledge to avoid making the same mistakes twice. As I apply different practices to my learning to help reduce the chance for future failure, I must remind myself that future failures are irrelevant but the goal is to eliminate one failure from reoccurring. Failure in itself is no fun, but the resulted growth experienced from the pressure it creates is beautiful. 

I challenge you to be transparent and do not have fear for the inevitable failures that await you on your own path. Whether you're investing in income producing real estate, building a business or a family, or growing in your career - the failures will be inevitable. Focus on correcting those mistakes through intentional action and you will be lightyears ahead of those who never even tried. While you're at it, don't be afraid to be yourself along the way!

 

Peaks and Valleys

In this blog, I typically write about a combination of my perspectives on life, relationships, success, the real estate business and current events. These are typically the over-arching topics on my mind, so its been a great avenue to share with the world. Today, I want to talk about a hobby that I have been enjoying this summer that has parallels to all of these topics I usually ponder. I just returned from a great mini-vacation to the great state of Colorado, where I was blessed to enjoy many experiences in Denver and in Breckinridge up in the Rocky Mountains. Of course I took care of some business on this trip, but it was the visceral experience I had hiking in the mountains that I believe is worth sharing. 

To give some context, I fell in love with hiking when I lived in Maui, Hawaii seven years ago. Before this period of my life, I never really gave this activity a second thought, let alone put it into practice. To me, hiking sounded like glorified walking, and there were many other things I could spend my time doing that would be more productive or satisfying. However, it was implored by Hawaiian locals and experts that the beauty of the islands could not be fully experienced without exploring them on foot. I took the heed of this advice and strapped on some shoes and packed a camel back full of water, trail mix, and sunscreen. I figured, at the least, I would be able to capture some incredible views that would otherwise be unavailable. After all, I was an island dude now with nothing but time on my hands. 

Atop Haleakala Crater in Summer 2010

Atop Haleakala Crater in Summer 2010

What I didn't expect was to gain experiences that were so applicable and teachable to the rest of my life. When you set off for a hike, especially in unfamiliar terrain, you rarely completely know what to expect - it is the beginning of an adventure. Perhaps you've researched the length of the hike or the time expected on a certain trail, but you don't fully know the level of difficulty or the obstacles that will be in your way. It is also impossible to know what parts of the hike will be challenging and which parts will give you a moment of recovery. Which moments are uphill, and which are downhill - it is all a mystery in the beginning. 

The only way to discover these things in hiking, as in life/business/real estate, is to face them head on and take action. You must be prepared to battle the challenges and the ups and the downs with persistence and fortitude. You must have reserves to replenish your expended energy and a contingency plan for when things go as unexpected. It is essential to be prepared to innovate, improvise, and look for various solutions to many potential scenarios. When the altitude is high and the oxygen levels are low, as it was in Breckinridge this weekend, you must be ready to power through that challenge and keep your eyes on the prize. When the incline steepens, you must be ready to push forward through painful times and be focused on the end result. When the trail provides some relief, take full advantage. 

Life, business, relationships and real estate investments all have peaks and valleys. We must take the lessons provided from an experience like hiking to know that we can and will reach the desired destination. No matter what comes our way on the path, it is so important to remember that we have what it takes to overcome. No matter how difficult the trail may become, enjoy the view and remain focused on your ultimate goal. 

Herman Gulch Trail Breckenridge, CO in Summer 2017

Herman Gulch Trail Breckenridge, CO in Summer 2017

 

 

 

 

Global Pressure, Local Compression

You've seen it on the news, read about it in various media and social media outlets, observed its merits debated in political arenas. Whether or not you realize it, we live a life heavily impacted by globalization. Whether you believe it is positive, negative or neutral, you must recognize it as reality.

No, this is not "fake news," it is the reality of our modern world. You may be reading my blog clear on the other side of the world on your computer, your iPad, iPhone or Android. Maybe you're in a coffee shop in San Francisco, at the mall in Dubai, in your office in Indianapolis or perhaps you're walking your dog on Bardstown Road in the Highlands. There's a good chance you recently purchased something on this very same device and received it within 24 hours at your front door. Yes, you probably tapped your thumb once or twice on the app that's putting retail conglomerates out of commission left and right and who now has a larger market cap than the one time king Wal-Mart (do I even need to mention the company name?). This same device just facilitated a ride to your next appointment, across town or to the airport cheaper and faster than you would've ever imagined just a couple years ago.

You get the gist. What it boils down to is that exponential technological advances have created a global economy that cannot be ignored. Real estate is experiencing the shift of these forces as well. Of course, retail and industrial real estate are changing drastically before our eyes. Successful retail owners and operators appear to be adapting to these forces by creating more experiential based services, rather than commodity products. Industrial real estate has become distribution centric for e-commerce outlets. Office spaces are becoming more shared-oriented or redeveloped into mixed or different uses since employment is being redefined. We're scratching surfaces only here, but I think you're following. 

In the real estate investment world, global players are accessing local data and making many diverse acquisition or disposition decisions in markets where they otherwise could not in previous years. Tools and technologies make it easier to access demographics/psychographics/traffic/financial information, select sites, communicate and sign documents from anywhere in the world. Of course, the gateway and primary markets receive the bulk of the global attention, due to many factors. As you may imagine, this creates a domino effect to secondary and tertiary markets. With the laws supply and demand, investors looking for yield tend to look in markets where it exists. Local players in turn become national players. Other local players must become either hyperlocal or cease to exist. Whatever the individual strategy, these factors can create higher demand, which in turn creates lower cap rates and higher prices everywhere. We're certainly seeing this impact on my local market.

When will this reach a tipping point? That is the million dollar question. In the mean time, I suggest you continue to stay grounded in the fundamentals of evaluating your opportunities. Take advantage of the resources technology provides to scale your business. Focus on your goals and leverage the global economy to help you live the life you want to live. Align yourself with partners who understand and can help you capitalize on this new world. Don't allow the hysteria of these changes cause you to act against your investing principles. Think big, double your effort, and put your plan into action today.

Standing In My Clients' Shoes

In a career such as real estate brokerage, it is essential to serve the clients' best interest at all times. This is so important in an industry that is built on service, trust and relationships. Many times, brokers and agents are presented with opportunities to cut corners and to do things the easy way and potentially still reap nearly the full reward. Personally, I strive to live by the philosophy of the golden rule - "do unto others as you would have them do unto you." In my opinion, this should be the same in business and personal relationships.

One way I am able to operate within this approach is to ask myself the following: if I was the buyer/investor, seller/exchangor, landlord or tenant, what would my expectations be? For example, if I am the owner of an apartment building or other commercial property for sale, I expect my broker to exhaust all marketing avenues to create the highest possible demand, creatively and strategically. I would expect my broker to provide research and background in detail as to why we are offering a certain pricing strategy, and why that is in my best interest. Further, I would expect my broker to negotiate with passion, to communicate with precision, follow up with persistence, and tirelessly overcome objections to ultimately achieve a beneficial sale according to my goals. If I am an investor working with a broker to locate a new retail strip center opportunity for acquisition, I would expect peak performance as well. Since this would be such an important piece of my investment strategy, I would expect my broker to analyze opportunities with precise detail, inquire deeply to learn all the hidden information, and effectively negotiate with passion and principle.

These examples illustrate the dire need to have responsibility for the actions we, as practitioners, must embody to enjoy a long and fruitful career. Treat your client like you would treat yourself. If the deal was your own, would your effort match that of what you are providing to your clients? I strive to always answer this question with a resounding yes. Not only because it is the right thing to do, but in so doing, current clients become clients for life.

Analysis Paralysis

To be successful in real estate investing, you must effectively analyze the cash flow and cost projections of that potential new project. It is essential to understand the potential pitfalls and possible upside that would cause you to have interest in investing your valuable time and treasure. Without this practice, you can never understand what opportunities are worth pursuing. However, be aware of the hole could potentially find yourself falling into when drowning in numbers, spreadsheets and considering all the different scenarios. This creates "paralysis by analysis."

It is similar to shopping for a new car or a new television (except for the minor detail that we are talking assets, not liabilities). You are taking into account at the different property features - how many units, how many vacancies and occupied, market & current rent, square footage, mechanical ages, roof condition, crime, demand, lease terms, utilities paid by owner and tenant, maintenance actuals and projections, lawn care, asking price vs comparable sales, cap rates, cash on cash projected return and more! The list can get quite long and your brain can get tied in a knot if you're not careful.

My suggestion is to think through your strategy and focus on the benefits sought to achieve your purpose through real estate investing. Know your competition. Know your seller and the results they seek either through profit, problem solving or exchange. Know your numbers but don't get married to them so much you miss the opportunity that sits in front of you. Historical numbers may be fairly representative of the future but will not always hold. Focus on how your ownership will improve those figures. Control the controllable. Get in the game. Over-analyzing could get you in a position where you never make a move! Don't let it happen to you. 

Penny Wise and Dollar Foolish

In my real estate practice I sometimes I feel that I have seen it all. I exclusively represent real estate investors in the sale of income producing assets - whether that is apartment complexes, retail properties, mixed use properties, strip centers, industrial warehouses, or sometimes even a package of rental houses. The value in these type of assets always are evaluated by the income they produce and the present value of the future income they will produce. 

To acquire income producing properties, investors need either cash or access to various forms of financing. Cash is obviously straightforward, however financing requires the investor to show proof of income, other debt, and a story of why they are a viable candidate to receive a loan. There are times when business owners decide they want to pay less than what is required to Uncle Sam - who wouldn't prefer to pay less in tax, after all. In this scenario, the business owner reports a lower than actual net income, which thereby reduces their tax burden. This is certainly an illegal and unethical practice and it can come back to haunt prospective investors when it comes time to obtain financing (and perhaps in court as well!). Yes, they saved some tax dollars, stock piled some cash, but missed out on the ability to obtain leverage because now the lending source cannot legitimately underwrite them as someone who can generate income. The missed opportunity to obtain leverage is substantial as it is an extremely valuable tool in building wealth through real estate. Leverage gives borrowers the ability to increase the return on each of their dollars in the investment. Because of being "penny wise" with respect to saving those tax dollars, these folks suddenly realize they have been "dollar foolish" now with the vanishing ability to obtain financing. Say goodbye to that new passive income stream.

Alternatively, to dispose of income producing assets, a seller must prove the cash flow in the form of legally binding leases, IRS tax returns, and physical inspections. In the same way that was mentioned above, if the property seller does not properly report earnings to the IRS and pay the required tax bill, the value of that asset decreases exponentially. This is penny wise (maybe not so wise, really) and certainly dollar foolish. If the seller has cut corners on repairs and maintenance or other capital expenditures, they are shooting themselves in the foot at the time of sale. A buyer will penalize a seller for not properly completed repairs and the full market value may not be realized as a result in that sale. Another prime example of saving a few bucks on the front end but losing substantially more on the back end.

To be successful in real estate investing, it is imperative that you become wise with the big ticket components that have the most effect. Of course you want to pay special attention to the details, and at the same time avoid engaging in activities such as these that will come back to bite you in the end. 

Let's discuss your investment program today so you can ensure you are making the best possible decisions. Give me a call at 502-648-9523 or connect with me on Twitter at @trches01. (By the way, ANYONE can be a real estate investor, not just the rich and famous. In fact, feel comfortable discussing with me how you can become a real estate investor; it's not as outlandish as it may sound.)

How to Negotiate in the Real World

I hope you have had a successful and satisfying second week of the year filled with achievements, challenges overcome and most importantly good times! This 2017 is already kicked in full-speed ahead and it is a good checkpoint to make sure you are sticking with your new years' resolutions and focused on what progress you plan to make this year. If not, take this as a friendly accountability reminder. On to the meat and potatoes, I think you will find value in today's blog. This topic overlaps every segment of our society - it is the notion of whether or not people make decisions based on logic or emotion. SHOCKER: most people make decisions based subconsciously on emotion and a hierarchy of needs - read: politics, consumer behavior, etc. 

I am currently reading a fascinating book called "Never Split the Difference: Negotiating As If Your Life Depended On It" by Chris Voss. The author is a former FBI high-stakes negotiator with experience negotiating some of the most intense hostage situations you can ever imagine. He talks about times negotiating with terrorists holding American hostages and some examples of intense bank robberies in NYC where he negotiated directly with the criminals to save lives and bring the criminals to justice. Those stakes, with literally lives depending on the successful outcome, were much higher than business negotiations or certainly negotiations that we engage in every day in our personal lives. However, the principals should be applied to our every day dealings in business and life. 

Many students of negotiation may recall the world-renowned Harvard Negotiation Project's findings in the publication "Getting to Yes." I certainly have been a proponent and have applied these principals to my business for a long period of time. Without delving into each and every detail, the findings essentially encourage negotiators to focus on the content of the negotiation and to separate facts from emotion to achieve shared goals between counterparts. The premise of Chris Voss' argument, to the contrary, is that people act on emotion above all else. We can prepare the most impressive logical argument, structure the most comprehensive presentation on what the facts of the deal are and how potential solutions affect all parties, but if we are not paying attention to how emotionally (perhaps subconsciously) the negotiation is perceived by our counterpart, we will lose.

There are countless techniques for giving counterparts the emotional control they seek to achieve the sometime elusive and ultimate agreement. In the interest of brevity, the satisfaction of needs goes back to the theory of "Maslow's Hierarchy of Needs," which you may have studied at some point in your college psychology class. It is most important to consider how a certain negotiation and the potential outcome relates to the other party's hierarchy of needs, even in a high-impact business negotiation or a low-stakes back and forth with your children, other family members or even the clerk at your local supermarket. 

Next time you are entering into a negotiation, keep in mind that your adversary has various needs to satisfy which are essential to gain solid footing. Negotiation can be very uncertain, but if you would like to discuss further how my understanding of this complex topic can benefit your real estate investments, please don't hesitate to reach out. If you find value in my blog, please share with your friends and colleagues.

Distinguished Due Diligence

When you were growing up in school, you likely dreaded the thought of homework. You may likely have even despised the thought of doing further work outside of what was required during your school day. I know I certainly was not a fan. Fortunately, the real world does not distribute homework to you to further your professional learning. On the other hand, to be successful in most endeavors, it is wise to voluntarily do the homework to become fully aware and to give you the information necessary to act upon all the necessary components of the undertaking. Otherwise, there could be big trouble in overlooking these details.

In an investment real estate acquisition, most purchase agreements will be "as-is". This essentially means the seller is not warranting anything with regard to the real estate itself. It is up to the buyer to determine whether or not that "as-is" condition is satisfactory. After all, the buyer is going to have to deal with all the various issues that come with being the new property owner.

This is where due diligence comes in. When my clients enter into a purchase agreement to purchase cash-flowing investment real estate we have several steps to take to ensure our homework, or due-diligence, is sufficient and successful. First, we need to verify all leases associated with the property are sufficient and match the original communications reported from the seller. Then we need to match up the lease income to our pro-forma projections and the prior year or years financials reported to the IRS. Review utilities in depth, identify opportunities or challenges and obtain a list of any recent capital expenditures. Once these have been gathered and documented, it is time to physically inspect the condition of the property with qualified and professional contractors. We lean on these vendors to assist in estimating necessary improvements and utilize these figures to ensure our projections remain feasible for the expected life of the investment. During this time our financing needs to be underway where we are searching and securing the appropriate financing for the project. Further, we must seek environmental evaluations for qualifying properties and appraisals for leveraged undertakings. Negotiations, personnel placement and timeline planning continue during this process as well. Once we complete these steps we can move into coordinating with closing attorneys and title companies to ensure we are delivering a clear title from seller to buyer. 

You still with me? You worn out yet? Make sure every "i" is dotted and every "t" is crossed because missing one or two of these due diligence steps could be very costly. Each piece of this puzzle needs follow up and needs to be completed in a timely manner, with skill. This is a big part of why my clients hire, refer and do repeat business with me - it is very valuable to be hyper-focused on this piece of the transaction. Do your homework in real estate before you close and your investments will be sure to become distinguished.

Let me take a moment to wish you a Happy New Year! Looking back at 2016 I can say it was the best year yet in my business and life. A lot of hard work, challenges, learning experiences, and winning celebrations encompassed 2016. I look forward to more goals achieved, memories made and milestones crossed in 2017. As always, if there's anything I can offer to you in your business or personally, don't hesitate to reach out to me. You know I am here to be your advisor on wealth building through real estate, but I am also always happy to help in any way possible. 

 

Time for Reflection

It is nothing short of incredible how fast the year 2016 has flown by. It seems like just yesterday we were setting goals, new years' resolutions and establishing plans for how this year would go professionally and personally. Next thing we know, it is December, and time to reflect on how we performed. Time to take an inventory of the successes and shortcomings of this year and project forward how the coming years will look. Another year presents an opportunity for further improvement. Whether that is how we treat others, how dedicated we are to our health/profession/religion, new systems to implement in our business, new commitments to further our education - whatever the case may be -  the end of the year is usually a great time to have a deep look in the mirror. It is a time to embrace new changes.

I have always been a highly goal-oriented person. There's just something about envisioning a future that doesn't currently exist and actually achieving that end that is absolutely exhilarating. Putting in place a framework to overcome challenges, to adapt, and to achieve is what life is all about. To me, the month of December is a rewarding time to live with the satisfaction of the challenges that have been overcome in the prior year. There is nothing more satisfying to me than reflecting upon the tough times and how in previous years I strived to be where I am today.   

I am greatly thankful for the opportunities that have been presented to me through working with my clients this year. The amount of growth I have experienced in 2016 by working through complex real estate transactions has been nothing short of incredible. I have learned that my clients are some of the toughest, smartest, and most results oriented people I have ever had the privilege of working with. They have challenged me to become a better advisor and person. I am overwhelmingly thankful for their continued loyalty and further introductions which have been critical to my business growth. I am thankful for the opportunity to pursue my CCIM designation, which has connected me with some of the commercial real estate industry's finest professionals and introduced me to some of the most important educational opportunities in my career. I am thankful for my family and friends (old and new) who have supported me during many trials and tribulations that we encountered in 2016 - none of this is done alone! 

You know me, I always like to present a challenge. During this December, I challenge you to reflect on your own successes and challenges of 2016. My hope is that you also realize the amazing opportunity we have in this thing called life to get even better in 2017 and beyond. Embrace change. Look in the mirror. Get excited for what we can do together. 

"He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery." - Harold Wilson

Inspiration

I was fortunate enough to spend last weekend in New York City, the real estate capital of the world. The reason for my trip was to celebrate some people close to me who were running the NYC Marathon - needless to say their accomplishment has me inspired to keep going and push through the pain that comes along with achieving goals. The finishers have now recovered and now thinking about what their next big goal will be - shout out to Chelsea and Brittany and the thousands of other finishers for this accomplishment!

Now, back to the real estate side of things - which has always given me inspiration even before I broke into the industry. I've been fascinated with architecture since I was a child - playing "Sim City" and posting various American cities skyline pictures for my childhood bedroom bulletin board. I always imagined what it would be like to build my very own city. Nowadays, I sell pieces of my city to creative investors who see things that others have not yet seen.

I remember visiting Manhattan years ago being enamored with the vast cityscape and energy. Now that I practice real estate I appreciate the absolute greatness that is New York City. Over 40,000 buildings and 243 skyscrapers currently make up the Island of Manhattan, with those figures increasing daily. (Side note: it is absolutely incredible the amount of growth that has occurred in the past ten years in that city - tangible evidence of global real estate investment in the USA, considered one of the smartest investment vehicles in the world.) The complex amount of navigability, negotiation, public & private partnership, management, market/feasibility analysis and persistence required to build NYC to where it is today is beyond immense. That great city didn't just get built by luck of the draw - it has been decades of extremely hard work by professionals of all shapes and sizes. Even a transaction to change ownership of an existing piece of commercial real estate is a complex undertaking for any entity.

To me, NYC represents the American dream. It shows how much we can all achieve in this world with creativity, persistence and relentless ingenuity. So many dreams came true for millions of people building that city. So much hope in everyone who makes it run every day. I am inspired by what is possible.