The Biggest Lie In Real Estate
The biggest lie in real estate is not actually one that most would think it is. It is not about the big players lying to the little guys. It is much bigger than that. Real estate investors need to prioritize their honesty on every level and most importantly they need to be honest with themselves. People can get themselves in trouble when they are not conscious of their own tendencies attempting to influence numbers on a deal that are in fact false. Some people have blinders on that they are born with. They lie to themselves about a possible income and find disaster at the end of the project because they didn't look at a deal logically without biased. An example would be an investor that is looking to flip a property and they really really want to buy it. They want to buy it so bad that they convince themselves that they will be able to get the property sold for above market price. This is mistake one because they are bringing on a lot of risk instead of staying within the boundaries of the market. The next problem usually shows up in the construction budget. If someone is trying to get top dollar for a property and basing their numbers on that, they have to put the same end product on the market. Frequently I see people convincing themselves that they can shave a lot of money off projects and get the same result. Somewhere deep down inside they are not being honest with the deal and need to be able to pass on the transaction if the numbers don't work. Ultimately this problem is amplified when investors have a small pipeline and not a lot of deals to choose from. They end up trying to squeeze blood from a stone and increase their risk tremendously. Reduce risk, be honest with yourself and pass on transactions that are not deals.
Ian Walsh215.839.3271
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