Communicate or else!

Communicate or else!

​Do you know what causes lawsuits, divorce and even wars? The main cause is NO Communication. When people cut off communication with each other the only remedy becomes fighting. 

I think if two people communicate long enough, eventually they will find some points of agreement on reality and when they do, they will start to build affinity for each other. More communication is always a better solution in comparison to less or no communication. 

Just don’t wait too long, because once a lawsuit is filed and attorneys are in motion, no direct communication should take place, otherwise it could complicate matters. 

​As a personal policy, I have never cut off communication with anyone. But I have had my fair share of people who get either scared or their big ego gets in the way of their better judgment and so, they shut down when something goes wrong. Instead of communicating more openly and respectfully so we could brainstorm some solutions to the issues at hand, and find a reasonable compromise, they become too sensitive and withdraw, then out of fear they go complaining to a lawyer. 

​As the saying goes, “never ask a barber if you need a hair cut”. The lawyer usually verifies if there is “merit” to the case and usually finds one and persuades his/her new client to go on a retainer plus a percentage of the settlement to start the process of litigation. (This seems to be most prevalent way to pay attorneys in today’s market).  And that’s when things go from bad to worse.

​I have always tried to take responsibility for the problems I get involved in. I usually quickly apologize instead of argue and offer to make amends or I find a reasonable settlement based on what I think is fair and just between the parties. If the other side becomes an opponent and postures as if they want to fight, I quickly shift my position and turn the heat way up high. I go all the way and tie up the matter in court for as long as legally possible to drain their energy, bank account and frustrate their very existence. 

​This process itself should be looked at as if it was a game. Just like any other game, the sooner you know the rules and conditions, the better off you will be so you could play by the rules and win. The goal is to keep a certain distance though, so as to not get too engulfed or overwhelmed by the process.

​The highest form of the game of business is cooperation. It is having a team that communicates and works well together for a common purpose that contributes to the greater good.

​The lowest form of the game of business is competition. It is having a form of a business war where even if one side wins, they end up weaker. You can almost always trace such behavior back to bad or no communication between the parties.

You always have a choice, especially in the beginning of any conflict:
a) You can communicate more and find some points of agreements to play the game at the highest level where everyone wins.

Like in the real estate investing game, where you can structure business models for everyone to come out ahead and business growth becomes synergistic between the parties and eventually society in general.


 b) You can shut off communication and play the game at its lowest level where everyone loses. ​​​​​​​​

Like in the litigation game, where there are only degrees of losses. And over time, the demise of those involved becomes assured as no substantive recovery could make up for the time, money or effort spent on fighting.

In conclusion: Every now and then, you may achieve harmony through conflict. But yet again, when that happens, it is because the parties decided to communicate directly, openly and respectfully. Otherwise, it becomes a game of self destruction even if you think you won. Communication is the ultimate panacea, so you must make every effort to communicate better, more often and with everyone’s interest in mind. I hope you believe when I say: “Communicate or else”!

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Two Basic Ways to Make Money in Real Estate and a Dozen Ways to Lose it All

Make money in RE:
1) Buy and sell
a) Buy and sell as is
b) Buy, fix and sell

2) Buy and hold:
a) Buy and hold based on per unit price
b) Buy and hold based on a per sq ft price

Sooner or later you will mature enough to:
1) Buy and hold instead of keep buying and selling
2) Buy and hold the type of properties that require the least amount of marketing, management and finance.

Lose money in flipping RE:
1) Buying at a high price
2) Buying at the wrong time/market
3) Buying in the wrong place
4) Buying the wrong property with physical obsolescence
5) Fixing at too high a price
6) Fixing too much – too little or the wrong things
7) Under marketing property
8) Selling at too low a price
9) Having no cash reserves
10) Having wrong people involved (partners, investors, contractors, brokers, bankers, appraisers etc.)

Lose money in holding RE:
All of the above plus:
1) Renting to the wrong tenant
2) Bad lease, price and terms
3) Not maintaining the property
4) Not resolving matters with finality
Obviously this is a very short list. Please give me feedback and let’s add to the list of how and why some people lose money in real estate.