The Rise (and Fall) of the Snowflake Investor

[Jonathan Greene]

The Snowflake Investor is a problem, mainly to himself or herself. The Snowflake Investor gets so emotionally attached to a deal that they can't see the forest for the trees. And just so BP doesn't break again, yes, we have all done this. It's not a personal slight on anyone who gets emotionally invested in a deal. I have done it WAY too many times, but it is very bad for your future profit margin. Caring about a deal is not becoming obsessed with it and we all know what happens when we obsess on a single deal. We overpay, we undercompensate, we overgive, and eventually, we lose money that we should have earned.

But the Snowflake Investor also only wants to hear yes to everything. They want continued back pats and compliments to make them feel good about their real estate decisions even though they aren't based on sound logic and correct statistical analysis. The Snowflake Investor just wants positive feedback and participation trophies, but real estate as a whole is not that kind. It will wait for a market downturn and break your 3rd place trophy over it's shrinking profit margins.

The Snowflake Investor thinks everyone can be a real estate investor, and also right now. It's just money to buy real estate. It doesn't take any skill or advanced knowledge. You just think about if you are willing to pay it and if you are, you are a real estate investor. The Snowflake Investor is not limited to new or old investors but thinks that they know better than both no matter the experience level and is never open to dialogue about the deal or business that could disprove their theory.

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I was once a Snowflake Investor. I partnered with a flipper many years ago. I was the money, they were the design and work. We would split the profits. Really, I thought they were cool and I wanted to be more like them so I just went in. Every disaster that followed was all my fault and every time someone else tried to warn me, I went off telling them I knew what I was doing and they didn't understand. They ended up using the LLC credit card to go to the spa, take their kids out to eat, etc. Instead of facing the facts that I made all the bad decisions to work with them because I wanted to do what they did, I went to a lawyer. Because I was a snowflake. I wanted to sue them for stealing, which they were, but it's because I had no process and wasn't watching. I was just going around telling everyone I was flipping like a douche.

I thought I was different and unique. I thought since I was the money in the deal I was entitled to make decisions and act like I knew everything when I did not at all. Every time there was something I didn't like or someone warned me, I reacted emotionally, trying to protect my deal that was all my decision and all my fault. Someone would say a word about the flipper or one tile and I was offended. I could not listen to anyone else.

Somehow, I escaped from the sale breaking even. That was a miracle. I was way too emotionally invested in the deal. We all become the Snowflake Investor, but we need someone in our investor circle to knock the ice off of us and wake us up. Check yourself on all those deals you won't let go of because you might just become a Snowflake Investor and it won't be a pretty exit.

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Note: Snowflake is a 2010s derogatory slang term for a person, implying that they have an inflated sense of uniqueness, an unwarranted sense of entitlement, or are overly-emotional, easily offended, and unable to deal with opposing opinions.

[Michael P.]

⚠️ WARNING ⚠️ 

Anyone who responds to this will be accused of being a snowflake