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Hey there,
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Deal with “what is”…not with “what isn’t.”
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There will be a time in all of our real estate investment journey’s where something will go wrong…the proverbial sh*t has hit the fan...
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And for each of us, our definition of that can be very different.
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Inside the Trenches
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There is a saying, “the worst thing that has happened to you, is the worst thing that has happened to you.”
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What does this mean?
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It means for some of us, losing $10,000 on a deal, or going over budget can be mentally catastrophic. Whereas for others, this is just a Monday morning, and it mentally doesn’t even register.
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No matter the size of the problem that comes up though, we still must deal with it…and trust me…there will always be a new problem that comes up.
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I sometimes joke that I am a “martyr for house flippers” and that every problem a house flipper can face, I have gone through…at least it seems that way sometimes. Despite this, each problem has made my business stronger, and we have learned to deal with problems faster.
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Here is a “small” list of end-of-the-world problems that have happened to me in this business:
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Over budget on a rehab by more than 50%
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Been red tagged by the city due to getting caught with no permit
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Three-year audit by department of Labor and Industries, Washington state
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Projects shut down by Washington Labor and Industries
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A 6-month project turned into a 18 month project that I lost money on in the end
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Lost $86,000 on a simple cosmetic flip
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Contractor skipped town with a $45k deposit
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Project Manager stole from the company by having contractors mark up the bids, then pay him the mark up directly after our company paid the contractor
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Had more than one failed 1031 exchange
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Fully finished a basement, then have it flood while property is on the market…more than once
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Had a house burn down completely
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Many projects broken into and had appliances stolen
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Contractor didn’t pay his people and then his people took it out on my house by breaking all the windows and knocking out my other contractor on site
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Lawsuits…
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Lost $150k on two deals in 2022
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Entire ceiling collapsed on a house due to water and flood entire house when it was almost finished
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And the list can go on…and on…and on…
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Despite the fact that each one of these problems ended up making my business stronger, these “problems” can still take a mental and even emotional toll. They can hurt the morale of your team, disrupt your home life, and even age you if you let it.
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So how do I handle something potentially catastrophic in my business today?
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Well recently I had the pleasure of testing my mental and emotional strength again when my events company was frauded multiple six figures through an elaborate hack (maybe one day I’ll make a video about this in detail).
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This significant loss of money would destroy most businesses, yet when this happened, I was able set that worry aside and begin to deal with “what is” right away.
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With that, I want to present you my process for dealing with the sh*t when it hits the fan:
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Immediately accept the situation (or as fast as possible, accept the situation), and recognize the problem for what it is and not what I wish it would be.
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Take full responsibility. Extreme ownership, it’s not just a book.
Contractor steal from you, who hired them? Your team member hired them…who hired the team member…or who didn’t train them well enough? Losing money on a house…who bought the house?
Accepting full responsibility gives me the power to fix the situation (or prevent it from happening again).
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Stop the bleeding. If it’s an active crisis, handle it and focus on the solution and not the problem.
I can analyze “why” and “how” it happened later, in the meantime, stop the bleeding and handle the crisis.
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Go through a list of the worst-case scenarios, and the likelihood of them happening.
For me, I begin to accept the possibilities of the more likely worst-case scenarios and determine if I can “live with it” and most of the time, I can.
Also, most of the time, the scenarios usually never play out. My favorite quote is “my life has been full of terrible misfortune, most of which have never happened.” We are our own worst enemies.
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Mitigate damage as best as I can, and once I’ve done all that I can, accept it and move on.
The damage is done. I don’t let it damage other parts of my life and my business by carrying it with me everywhere I go.
This is one of the most important steps of the process…and the one most of us skip.
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Problems, big and small, will always happen in this business. We can learn from them, or we can let them poison us and those around us.
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All of this is not easy to do.
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However, dealing with problems and working on solutions is the cornerstone of all entrepreneurship.
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If you cannot handle problems, you will not survive long in this business. It’s why we are the owners of the business, and not an employee of it. Employees want the safety of a paycheck and a for sure thing, if you wanted that, then why start a business?
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Get better at solving bigger problems, and you will make bigger money…it’s all part of the game and it’s what we all signed up for whether we knew it or not.
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Announcements
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My events team and I just wrapped up our last meeting for Limitless 2024! See you next week in Dallas!
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If you aren’t joining us in person, there’s still time to grab a virtual interactive ticket (and of course I have a discount for you! Click the link and it’s already applied — thank you for being a subscriber to my newsletter!).
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Problems? Not a problem for this team.
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Talk soon,
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Tarl
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Ps. Got an end-of-the-world problem you’re dealing with right now? I have a couple spots left in my coaching schedule. If you’re interested, make sure you go apply.
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