Flip This Wholesaler

Learning how to negotiate effectively is a critical skill for real estate investing success.  It can be the difference between getting a contract or losing it, or making $2K vs. $5K on a wholesale deal you’re working on. When you think about it, we’re negotiating all the time even when we don’t realize it, so learning effective negotiation has far reaching implications for our lives – way beyond real estate investing.

It’s for these reasons that we wanted to read and discuss an oldie but goodie on negotiation — Getting To Yes: Negotiating Agreement Without Giving In by Roger Fisher and Will Ury .

The authors advocate a technique called principled negotiation which focuses on understanding the other side’s underlying interests and finding mutually beneficial solutions.  You may be thinking “Well, isn’t that how most people negotiate?” but the answer is no.

There are two commonly used methods of negotiation — soft negotiation (you end up losing out on a satisfying outcome because you simply want to avoid confrontation and please the other party) and then hard negotiation (you end up in a battle of wills that is exhausting and might give you a reasonable outcome, but harms relationships)

I can’t cover all the points in the book, but thought I’d discuss the 4 steps of principled negotiation and how they can help us as real estate investors.

Separate the people from the problem

An easy to forget fact about negotiation is that you are dealing with human beings who have emotions, deeply held values, and different viewpoints (and egos!).  We tend to focus on our own viewpoints and perspectives without consideration for others and that is just asking for disastrous interactions rather than cooperative ones.   The authors recommend:

1. Understand the other persons point of view so that you can potentially reduce areas of conflict
2. Allow the other side to let off steam and don’t react to emotional outbursts
3. Listen actively. Acknowledge what is being said (repeat it back to the person).

Focus on interests, not positions

A key to principled negotiations is to explore the true interests underlying the positions of each side, rather than just focusing on superficial positions. I think this is where many people miss the boat when negotiating with private sellers.

For example, a seller may tell you “I won’t take less than $85,000 for my house” and you may be thinking “I won’t buy it for more than $60,000!”  Those are superficial positions.  What you really want to know from the seller is how he came up with that dollar amount and what he is seeking to accomplish.  By asking questions to explore interests and being wiling to talk about your own interests, you’ll be able to come up with possible solutions that will meet both of your objectives.

Invent options for mutual gain

Often times in a negotiation, there is little time (if any) spent on inventing creative options.  Rather, it’s more “my way or the highway”. The authors suggest that in order to invent creative options you will have to:

(1) avoid making any judgments when brainstorming on possible solutions,
(2) broaden your options rather than looking for just one single answer by breaking the issue down or even changing the scope of an agreement,
(3) search for mutual gains by identifying shared interests and preferences, and
(4) invent ways of making the other person’s decisions easy such as drafting a few possible agreements to help discussions

An Example From A 30-Year Real Estate Investing Veteran

Extraordinary success with private sellers often lies in our ability to find creative solutions.  A local veteran investor shared with me that there have been instances when the thing that closed a deal for him was the fact that he offered to take care of selling a bunch of the seller’s unwanted personal property in the house and split the profits from it.  If he didn’t take the time to understand underlying interests and break the issues down while brainstorming with the seller, he would’ve lost that contract and the nice profit he received from wholesaling it.

Insist on using objective criteria

Before making a final agreement, the authors suggest that there should be agreement on standards of objective criteria that should be applied to the decision making.  The reason this is powerful is because each standard that the other side proposes can then be used to persuade them.  If you present a solution that is presented in terms of their criteria, it makes it difficult for that person to ignore that criteria. For real estate investors that criteria might be something like fair market value and comparable sales in the area.

Getting To Yes has a chapter towards the end that answers questions like “But what if they are more powerful?”, “What if they won’t play?”, and “What if they use dirty tricks?”  There are really great insights in there which I won’t go into here.  If you haven’t read this book, I definitely recommend it.  It’s less than 200 pages and pretty easy to get through.

Since Steph started the Flip This Book Club back in November of 2009 (yes, it’s been awhile!) we’ve read and discussed quite a few books in the personal development niche — Million Dollar Habits, The Five Major Pieces to the Life Puzzle, No B.S. Time Management for Entrepreneurs, Think and Grow Rich, The Power of Focus, and HARD Goals.

This month’s book was a monster of a personal development book – The Success Principles: How To Get from Where You Are to Where You Want to Be by Jack Canfield.

Holy smokes!

When I picked up the book at the library I was shocked to see that it was over 400 pages long and I began to wonder what I was getting into.

In a nutshell, The Success Principles is like an encyclopedia of nearly any success trait and habit that you’ve ever read or heard about. Canfield covers 64 principles in the book and gives you a plan for how you can take what you’ve learned and put it into action a bit at a time.

There’s no way to cover all 64 principles, so I thought what I’d do is kick off our discussion by sharing four of the principles that resonated with me primarily because I haven’t heard them repeatedly in other books in this niche.

Become An Inverse Paranoid

I think “inverse paranoid” is a great term.  What this basically means is that instead of believing that the world is plotting to do you harm, chose to believe that the world is plotting to do you good. Always expect that there are people who are eager to help you and be partners with you in your vision.  Expect that even when you’re faced with challenge or significant obstacles, be encouraged that it is an opportunity to stretch, grow, and change.

Acknowledge Your Positive Past

Our brains more readily remember events that are accompanied by strong emotions which unfortunately means that we all tend to underestimate and underappreciate our successes relative to our failures (which tend to lead to much more intense emotion).  In order to combat this, we have to recognize that we have WAY more successes than we have failures in life and consciously celebrate our successes.  Here are a couple of the exercises that Canfield suggested that we do:

• List 100 Successes - the purpose of this exercise is to really convince yourself that you’re indeed a successful person already
• Create a victory log – this can be a scrapbook or simply a notebook that keeps a running list of anything you do that is a success, whether it be small or large.  Then whenever you’re facing a challenge or lacking self-confidence you can go back to that log and remember your victories.

Clean Up Your Messes and Your Incompletes

The Cycle of Completion is like this…

Basically what happens is we get through the finishing stage but leave just one last thing undone. Canfield emphasizes that 20 things completed have more power than 50 things half completed, so we have to delveop a completion consciousness and see things through.

We’re not just talking about business or things related to your goals….we’re talking about the smaller, more annoying things too: unpaid debts or financial commitments, closets overflowing with clothes that no longer fit or were never worn, “junk drawers” full of unusable items, half cleaned bathroom/bedroom/kitchen, filing left undone.  You get the point.

Canfield suggests completing one major incomplete every 3 months and even being willing to schedule “completion weekends” to handle a much larger number of items.

Practice Uncommon Appreciation

Have you ever heard of someone feeling overappreciated? I haven’t.  Most people feel underappreciated and if we take the time to appreciate people even in the smallest of ways, it makes a huge difference.  One of the things Canfield talks about is how you have to learn how people who are special to you want to be appreciated. You have to speak their appreciation language:

• Auditory: People who need to hear it out loud that you appreciate them
• Visual: People who need to receive something they can see – letters, cards, flowers, gifts, etc.
• Kinesthetic: People who need to fit it – a hug, a handshake, a pat on the back

Becoming a pro at appreciation is a secret of success and since you always get more of what you focus on, the more appreciating you do, the more you will receive things to be grateful for.

So What Did You Think?

For those of you who also read The Success Principles, I’m curious to know your thoughts on the book and what – if anything – really stuck out for you.

I thought I’d close with a couple quotes from The Success Principles that have made it to my list of favorite quotes:

Things may come to those who wait, but only the things left by those who hustle.
~Abraham Lincoln

The secret to my success is that I bit off more than I could chew and chewed as fast as I could.
~Paul Hogan (actor from Crocodile Dundee)

P.S.
Next month’s Book Club choice will be Getting to Yes by Roger Fisher and William Ury.  We’ll meet back here same time next month to discuss!  :)

Hola Folks!

It’s time for another Flip This Book Club review by my pal Shae Bynes….

This month’s book was HARD Goals by Mark Murphy. Hope you all enjoyed it!

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I really wasn’t looking to read yet another goal setting book.  I’ve likely read about 10 books on this topic from some of the most respected personal development experts out there. However, my friend Julie Broad suggested that I pick up HARD Goals and check out Mark Murphy’s approach to goal setting and achievement because she found it to be unique and refreshing.

I must say that I’m glad that I read it because his perspective definitely provided clarity on why some of the goals I set for the past couple years just didn’t feel quite right…and now I know how to fix them.

Murphy believes that implementing a goal gets a lot easier when your goal is HARD.  Like me, you’re probably thinking that Murphy means HARD as in difficult….well, yes and no. It’s more than that.  HARD is actually an acronym:

H – Heartfelt - You need to have a deep emotional attachment to your goal

A – Animated – You need to have lively and robust images of your goals dancing through your mind

R – Required – You must feel lke your survival depends on achieving your goals…that you mist achieve them or your world will end

D – Difficult – Your goals must not be small and easy — they should require you to enter unchartered territory

Murphy argues that if you only feel ho-hum about your goals…or even if you subscribed to the theory of SMART (specific, measurable, achievable, realistic, time-limited) goals, all the daily rituals and discipline in the world won’t help you succeed and you’ll waste time trying to trick yourself into implementing mediocre goals.

Key Insights From HARD Goals

Below are some of my favorite insights from HARD Goals. I really encourage you to read the book if you haven’t already so that you can understand the science behind his methodology and learn all of the “how to” details to help develop your own HARD goals.

• You need to understand your Shoves and Tugs.  Shoves are those issues that demotivate you, drain your energy, and stop you from giving 100%.  Tugs are the issues that motivate and fulfill you, that you inherently love, that make you want to give 100% no matter what.   Once you understand these things, you can choose goals that are more suited to your intrinsic drives (Shoves).

• The biggest impediment to any goal is lack of visual stimulation. Don’t fall for the “illusion of specificity” — thinking that if you just pick a numerical goal, that’s all you will need.  If you don’t first start with a picture, your numbers will provide a false sense of specificity.  Here’s the real test of specificity: If a 6 year old child can draw a picture of your goal, it’s specific.

• When you’re truly starting at ground zero, when you have absolutely no idea how to do what you’re trying to do, a performance goal can backfire.  In these cases you will likely want to start with a learning goal.

• If you can breeze through a goal without learning, it’s just not difficult enough. You should have two to four major new learning experiences from each of your goals.  If it’s not going to generate that level of learning and growth, make it about 30% more difficult.

• Another “difficulty test” is to ask yourself to what extent is the goal within your comfort zone?

1. Totally within my comfort zone (”I can do this with my eyes closed.”)
2. Pretty much within my comfort zone (”I’m awake, but hardly in a state of excitement.”)
3. A little outside of my comfort zone (”I feel a little twinge of excitement or nervousness.”)
4. Outside my comfort zone (”I’m on pins and needles, totally bug-eyed alert.”)
5. So far outside of my comfort zone I’m too dumbfounded to even respond

This is a subjective test, but Murphy suggests that if your goal is sufficiently difficult, choice 4 is right on the money (1 and 2 are too easy, 3 is at least getting close, and 5 is way too hard).

Did any of you read HARD Goals?  If so, what were your takeaways from it?  If you haven’t checked it out, a highly recommend it if (1) you are yet to develop any goals or (2) you aren’t very enthusiastic and driven for one or more of the goals you’ve set for yourself.

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Thanks for another great review, Shae!

Next month’s book will be The Success Principles, by Jack Canfield. We’ll meet back here in 30 days to discuss.

Have a great weekend, y’all!

Greetings everybody!

It’s time for another Flip This Book Club review by my pal Shae Bynes.  This month’s book was The Dip, by Seth Godin.  For those of you who read it, I hope you enjoyed it!

Take it away, Shae….

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I’m convinced that everyone (whether you have a business or a job)
needs a little Seth Godin in his or her life. His style reminds me of a firecracker…it’s hard-hitting and powerful in a very short period of time (76 pages!). As with every other Godin book I’ve read, I really enjoyed and got a lot from this month’s Flip This Book Club selection,  The Dip – A Little Book That Teaches You When To Quit (And When To Stick).

There is a lot of insight right up front in the book where Godin says that Vince Lombardi’s quote “Quitters never win and winners never quit.” is bad advice and makes the point that

Winners quit all the time. They just quit the right stuff at the right time. Most people quit. They just don’t quit successfully. They quit when it’s painful and stick when they can’t be bothered to quit.

He goes on to explain how if you want to experience extraordinary benefits and be the best in the world, you need to quit the wrong stuff, stick with the right stuff, and have the guts to do one of the other.

As real estate entrepreneurs, there’s much to be gained from Godin’s insights. Some of you may be in the exciting early stages right now, learning how to wholesale real estate.  Others of you have done your first deal or two, but now are experiencing a lull in activity and feeling a little (or a lot) frustrated.  Perhaps some of you are very experienced with real estate wholesaling now and have had some success and now you’re just working on going from a good business to an extraordinary business. Regardless, pay close attention.

The Dip (When to Stick)

So this is The Dip that Seth Godin shows us:

He explains that almost everything in life worth doing is controlled by this curve called the Dip.  When you first start it, it’s fun and interesting and for several days and weeks you are highly engaged because you’re learning something new.  But then the Dip happens.

Godin defines The Dip as the long slog between starting and mastery, the long stretch between beginner’s luck and real accomplishment, the set of artificial screens set up to keep people like you out.

It’s the bureaucracy, the busywork, the longer hours, the need to learn new skills, the challenges. But while it’s a long slog, it’s actually still a shortcut because  it gets you to go faster than any other path.

It’s best to make a decision up front whether you’re going to be willing to go through the Dip.  If you’re not willing, it’s best to save your time, quit now, and do something else before the Dip hits.  On the other hand, if you are willing to go through the Dip because the rewards for sticking it out are worth it to you, then stick with it.  Considering that the majority of people quit during the Dip, sticking it out will lead to extraordinary benefits for you.

I loved this advice from Godin about going through the Dip:

Successful people don’t just ride out the Dip. They don’t just buckle down and survive it. No, they lean into the Dip. They push harder, changing the rules as they go. Just because you know you’re in the Dip doesn’t mean you have to life happily with it. Dips don’t last quite as long when you whittle at them.

Godin’s bottom line: If you can’t make it through The Dip, don’t start.

The Cul-de-Sac and The Cliff (When to Quit)

Godin described a couple other curves…the ones you should quit immediately.

The Cul-de-Sac (french for “Dead end”): This happens when you work and work and work and nothing changes (for the worse or for the better).  When you realize you’re in a dead end, time to get off. You’re wasting time when you could be doing something else.

The Cliff: This is a situation where the pain of quitting gets bigger and bigger over time and you can’t quit until you fall off and the entire thing falls apart.  Godin says this curve is rare, but certainly scary when it happens…he used smoking cigarettes as an example (it’s very pleasurable until you suffer from emphysema!)

He makes an important point that when you’re quitting, remember that it’s not as though you are quitting the bigger picture or vision….you’re simply quitting tactics that aren’t working.  A specific job is a tactic, a product feature is a tactic, a marketing method is a tactic. You can quit the tactics that are not working, spend time on another tactic that presents the Dip, get through that Dip, and achieve the larger picture.

But Before You Quit….

So in summary, when should you quit?

• If you’re on a dead-end path
• If you’re facing a Cliff
• If what you’re working on has a Dip that isn’t worth the reward at the end

Godin also gives us some pointers on what to ask ourselves before we quit.

• “Am I panicking?” It’s dangerous to quit when you’re in panic mode. Wait until you’re done panicking before you make such a critical decision.
• “Who am I trying to influence?” If you’re trying to influence just one person, and you haven’t made progress after the first few times, maybe it is time to quit and move on… If you’re trying to influence a market of people, understand that a few rejections shouldn’t necessarily stop the show.
• “What sort of measurable progress am I making?” There should always be some forward movement. The choice to stick with something in the absence of forward progress is a waste of time.

Godin urges all of us to use all of resources to get through the biggest possible Dip…to use our energy to assault the Dip  that matters and quit everything else that isn’t going to make a dent in this world.

Would love to hear your thoughts on The Dip! Also, I’ll look forward to reviewing and discussing our May Flip This Book Club selection, HARD Goals by Mark Murphy (thanks for the recommendation Julie!).

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Thanks for another great review, Shae!  We’ll meet back here on May 19th to discuss next month’s book!

Hi Everybody!

It’s time for another Flip This Book Club book review by my pal Shae Bynes!  (Sorry it’s a little bit late. I’m a slacker, what can I say).

Anywho, this month’s book was Outliers, by Malcolm Gladwell.

I hope you all enjoyed it!

Take it away, Shae…

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Outliers: The Story of Success by Malcolm Gladwell….if I was asked to sum up this book in a word, I’d say “thought-provoking.”  This was the first book I’ve read from Gladwell, and it received several hundreds of 5-star reviews on Amazon.com along with his other bestsellers The Tipping Point and Blink.

The premise of Outliers is that the stories that are told about extraordinarily successful people are incomplete because they focus solely on ambition and intelligence, when there are several other factors that play a critical role. In fact, some of those factors are actually surprising….such as birthdate, birthplace, family dynamics, and just plain lucky breaks or opportunities.

Here’s how Gladwell puts it:

People don’t rise from nothing. [Successful] people are invariably the beneficiaries of hidden advantages and extraordinary opportunities and cultural legacies that allow them to learn and work hard and make sense of the world in ways others cannot.”

Gladwell believes that it takes 10,000 hours to achieve true mastery in a given skill, and the fact is that it’s very difficult to do that alone…you need to help or an opportunity that affords you the ability to get those 10,000 completed. Extraordinary achievement is less about talent than it is about opportunity.

Here’s an example from the book:

Bill Gates – Founder of Microsoft and clearly a brilliant man, but Gladwell suggests that perhaps we’d have many more mega-successful techno-geniuses (my words, not his) if more people were afforded similar opportunities to what Gates received.  Here are just a few of the incredibly fortunate occurrences in Bill Gates life that led to his waaaay more than 10,000 hours to success.

• His private high school had a computer club in 1968 (most colleges didn’t even have them) and his school had advanced systems (a time-sharing terminal) for him to learn on
• He lived close to the University of Washington where he had access to free computing time between 3-6 am daily
• He received opportunities to write code for 3 different companies…all while still in high school!

Similar stories were shared about The Beatles and Bill Joy (another techno-genius).  Gladwell is careful not to suggest that it’s just about circumstance and opportunity because it’s also about doing the hard work and getting practice it takes to become extraordinary.

Gladwell also drew some very interesting correlations between cultural backgrounds and success.  For example, he presented what he called the Ethnic Theory of Plane Crashes and tied the catastrophes at Korean Airlines to cultural factors that impacted piloting skills, particularly during emergency flight situations. (Note: That chapter was pretty creepy and it didn’t help that I was reading it as I was on an airplane!) He also credits excellence among Asian students in mathematics to a cultural heritage of long hard days (requiring high levels of patience) working in rice paddies.

These are just a few instances…there’s so much more, so if you’re curious about all of this, you’ll have to pick up the book.

All in all, Outliers was an interesting read, but if you’re the type of person who wants to close the book and apply what you’ve read to your life or business in a practical way, you might be disappointed.  I’ll try to help you out though.  Two things you can take away from Outliers is:

1.) If you’re not naturally brilliant, it’s ok. 10,000 hours of practice can bridge the gap. Better get to work!

2.) When opportunities are presented to you, it’s up to you to seize them and use them to your benefit…if you repeatedly choose not to take advantage of fortunate circumstances, lucky breaks, family dynamics, etc. then you’re standing in your own way to success.

Have any of you read Outliers or even Gladwell’s other bestsellers The Tipping Point or Blink? Would love to hear your thoughts!  Should I be reading and reviewing any other Malcolm Gladwell books for the Flip This Book Club later on this year?

For next month, we’re reading The Dip: A Little Book That Teaches You When to Quit (and When to Stick) by Seth Godin. It’s only 96 pages, so there’s no reason why you can’t read it in a month!

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Thanks for another great review, Shae!

We’ll all meet back here on April 14th (ish) to discuss The Dip.