Today’s REI Classroom Lesson
J Massey explains how important to know how to fix a deal with it goes wrong. In this industry, things are going to happen that make a deal harder to close. Proper communication, as J Massey tells us, is key in working through the deal to get the best solution.
REI Classroom Summary
When a deal goes wrong, it’s critical to remember that the other party involved is probably going through a mix of emotions and it’s your job to be understanding and to be communicating with them regularly.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
J.: Hey everybody. My name is J. Massey, CEO of Cashflow Diary and host of The Cashflow Diary podcast. For this session in the REI Classroom, what I’d love to do is to tell you something that most people, well, they don’t want to.
Mike: This REI Classroom real estate lesson is sponsored by TheInvestorMachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
J.: What is that? What happens when a deal goes wrong? You’re like, “Yeah, J., that’s exactly what I want to know. That’s exactly what’s in the way of me moving forward is I’m afraid of what happens when a deal goes wrong.” Well, again, I totally understand that, but here’s the first thing I want to tell you. Deals will go wrong and it’s okay. That’s part of the business, is learning how to fix things once they’re broken or when they don’t go as you expected.
And that’s one of the first things that I want to tell you, is redefine what it means when something goes as not the way you expected. It doesn’t mean you were bad. It doesn’t mean the deal was bad. It doesn’t mean real estate is bad. It just means things did not go as expected.
Summarily, I’ll say it a different way. Real estate would be easy if it didn’t involve people. Well, you know like I know, real estate involves a ton of people and, therefore, people don’t always do what we expect them to do. And, unfortunately, when that happens, you have to be able to respond. An entrepreneur, one of the best skills he or she can manage to develop is being able to respond in ways that still produce a profit despite the ever-changing landscape in front of us.
So what does that mean? Some of the things that you must do is you must definitely stay in contact with all of your investors. Stay in close contact with your team. Make sure everyone is informed and properly communicated to continually through the process. Oftentimes, people will understand that, well, things happen. However, they won’t forgive poor communication. Ask me how I know that. Here’s my point. With proper communication, you can eventually work your way to a solution. You’re not going to have it the day you find out. It’s not going to be there. But over time, listening to advisors, seeking advice, talking to mentors and going one day at a time is a way that you make it through problems.
Secondly, sometimes people won’t like the fact that, hey, something has gone wrong. Maybe they have other commitments based upon yours, or maybe they had plans for that income at a certain time. And, fundamentally, we all must remember that real estate is an illiquid investment. This is when that can become a challenge for them and for you.
One of the most important things that I’ve learned to remember is that they are feeling lots of emotions too. Your job, in that point, is to be compassionate and help them understand, and more importantly, you need to understand them more than you seek to be understood. So go at it with the understanding that this is stressful for them. Help them to understand the process that you are going through, but also sympathize with the fact that you could be the very epicenter of the reason that they’re experiencing this distress.
Third and finally, when it comes down to dealing with deals that, well, don’t go as expected, what I want you to do is to look for the lesson. Inside the error, the mistake, the foible you just made is something that is a seed for you to build from. Understand this: when you learn to fail fast, fail forward and fail frequently then and only then do you find yourself in a position being able to make it to success. It’s been fun talking to you guys today. I look forward to talking to you soon. Until next time.
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