Tag Archive for 'Real Estate Investing'

Jan262009

The Great Derby

Over the holidays of 2008 and for the past three weeks of 2009, I consulted my crystal ball (hey, give me a break, my magic 8 ball is in the shop).   Guess what it came back and told me?“Now is the time to BUY.”

crystal ball

“Buy what?” I replied?

“BUY” the crystal ball spelled out again.

I guess I would have to figure out what it meant all on my own.  Thus I began a three week intellectual odyssey: “what did the crystal ball mean?”

For days and weeks on end, as I made my merry way purchasing bargain real estate and common stocks, my mind would dance around the word ‘buy.’

“What more could I do?” I wondered to myself.  “What am I missing here?”

One morning, while re-reading a portion of one of my favorite investing books of all time (Security Analysis by Graham & Dodd), something dawned on me: I wasn’t fully committed enough to ‘buying’ my favorite undervalued asset classes.  Although I had written about it and attempted to put it to work in my daily business of investing, I realized that I was still only dipping a portion of my leg in the water - I had not yet ‘jumped in.’

This may seem like a matter of semantics, but it really is not.  It’s a matter of night and day.

As I have mentioned in previous posts, back in one of my former lives, I was a competitive weightlifter.  Psychology is one of the biggest factors in lifting big weights.  Our coach used to teach us: “commit fully to the weight - or your dead!”  While this wasn’t exactly the most comforting thought in the world, neither was the thought of 350+ pounds crashing onto your bones!  In fact, taking his counsel to heart in this matter bore a lot of fruit (= less injuries).  I had seen many lifters move huge weights in preparation for a big lift, only to see them fail because they had not ‘committed themselves to the weight’ when attempting a lift on the platform.  Weightlifting is an “all or nothing” sport.

Snatch

 (no, this is not a picture of me)

Sort of like a lot of other things I know.

You see, as an investor and entrepreneur, you are constantly swimming upstream.  The negative media attention on the economy and business right now as well as the naysayers can pick apart your psyche.  These things can wreak havoc on you quickly or, they can be insidious - slowly growing in the back of your mind.  If you aren’t fully committed, both in thought and in action to your investing and business objectives, the insidious creep of doubt will work against you.

What I realized upon my crystal ball reflection was that I still did not have the absolute full strength of my convictions behind me.  I realized that I had to put to bed questions like: “what if the market continues to go down.”  I simply put the full faith of my judgment behind my decisions - becoming more confident that my framework was solid.  I started to think less and less about things like “what would Warren Buffett do? (WWWD)” and realized that he never had a perfect map for success either.  He was/is guided by a basic framework that is effective and he sticks to it, through thick and thin.

A great calm came over me as I felt better and better about relying on the strength of my own convictions and faithfully ignoring the rampant pessimism.  I realized better what some of the classic investors, like Graham, Heine, Munger and Klarman talk about when they continually emphasize that the psychological aspect of the investors mind is the most important.

Saying  that you are ingnoring the crowd and actually ignoring the crowd are two completely different things.  I think that I made it past a fork in the road in the begining of our year 2009 and look forward to pushing ahead.

———————-

Speaking of real estate investing, the upcoming Real Estate Investors Association of Macomb (REIA of Macomb) meeting is going to be great.  It is the 2 year anniversary of one of the best networking and education focused groups that you may have the pleasure of attending.  This Thursday, January 29th and 6:00 Pm at the Royalty House in Warren, MI will be a great event.  If you are in the Southeast Michigan area this week, please check it out!

———————-

P.S. I really don’t have a crystal ball.

P.P.S.  My Magic 8 ball really is getting fixed (by a gnome somewhere, I think)

Published
by
Adam Davis
on January 26, 2009
in Finance and Investing
. 7 Comments
May132008

Tuesday Top 5: 5 Reasons to Embrace Criticism

In recent months, I have experienced more outside criticism than at any other point in my life. While I have always known, in the back of my mind, that people will always ’say what they will say’, it has been brought to the forefront of my attention recently as I have been made acutely aware of my critics through a variety of means.

I admit that it has taken some getting used to. Our natural reaction to criticism is to defend ourselves, our positions and our opinions. We want to try to convince other to see the merits in our cases. However, the successful persons reaction to criticism must be non-reaction. It has been told to me by several successful people whom I hold in high regard that: “successful people are immune to criticism.”

Well, in order to build up an immunity you must first have exposure. Therefore, this week I wanted to throw out 5 reasons why one should embrace criticism.

thumbs up

1. It means you are taking risks and putting yourself out there

You won’t have much personal growth if you aren’t taking risks. Risk taking, whether small or large, forces us outside our comfort zones (which are often outside the comfort zones of most other people, too). When you step out and do things that other people are too scared or too lazy to do, it makes them want to tear at you. I take comfort in the fact that I do things in business and in life that most other people are either too scared, too lazy or too risk averse to do.

The more things you do that others won’t, the more things you will have that others don’t.

2.It means other people are thinking about you when you aren’t around

For me, it is pretty flattering when someone is thinking about me when I am not around them. For someone to criticize you, it means that they are thinking about you in their spare time. You see, they have to come up with their words at some point in time and most of them don’t say the same things to your face that they write anonymously on the internet.

If you don’t have enough going on in your own life that you have to think about someone else (and negative things at that) then you must not be in that good of a place.

3. It means you are hitting above average

If others are openly criticizing you, relax: those at the top of their profession are almost always under attack.

Think about professional athletes. They are almost always under an absolute barrage of critical media attention. They don’t get a break. Think about the executives that run major corporations: they are probably criticized on a daily basis by everyone from their peers to shareholders and especially from employees.

yell

4. It means you’ve caused someone to think

If you are doing things right and driving as much value as you can, then you should probably be thankful when someone criticizes you because you have pushed all thoughts of Dancing with the Stars, American Idol, and their upcoming weekend activities out of their head and replaced it with you.

This should be good news for anybody. After all, as a business person, you are competing for customer attention and dollars from marketers and information sources from all across the world. If you’ve managed to put your brand, your opinion or your information in front of someone in light of other competing factors then you have just won yourself a big victory.

5. It is a healthy reminder to stay focused

Focus is one of the most important elements of success. The human brain will only allow for so many inputs and outputs in its algorithm before it gets thrown off track. If you are focusing in and keying on the right areas of your business, then criticism should serve to galvanize that focus even more for you. It should confirm that you are on the right track: thinking, talking about and doing the right things.

So, there you have it: another Tuesday Top 5.

I know that neither you (or I) will be able to turn our feelings on and off like a light switch. It takes time and practice. I am willing to be that it took Michael Jordan a couple of seasons in the NBA before he got used to all of the media spotlight and negative comments that other players and the press were making about him. He simply went on to become the greatest player of his generation (at least) and revolutionized the game of professional basketball.

Embrace and become immune to criticism or get eaten up by it. The choice is yours.

Published
by
Adam Davis
on May 13, 2008
in Business, Entrepreneurship, Inspiration and acheivement
. 2 Comments
Apr162008

Pressing Upward and Onward

“Pressing upward and onward.” This phrase was repeatedly drilled into my head by my training instructors at Lackland Air Force Base during basic training. To this day, I am not sure what it really means, outside of it being a transitory phrase (which is the main reason I chose it for the title of this post).

Transition 1

You see, for several years now I have worked with entrepreneurs and business owners of varying shapes and sizes, helping them start, grow and troubleshoot their businesses. One of the clientele’s that I have focused on has been real estate investors and professionals. It might seem a little odd at the outset that this market would fall into my gunsight, but life is funny sometimes.

To digress, I must admit to availing myself to this market for over the past 2.5 years for ulterior motives; an undying interest in real estate as a wealth building vehicle. In fact, I bought my first investment property at the ripe age of 21 and several other deals followed closely behind. I sold these properties in early 2006 and looked to jump into the Metro Detroit real estate investing pool and, just when I was qued up to go off the high-dive, blood started to appear in the water.

This might not have been particularly alarming, aside from the fact that I am an almost obsessive student of economics and markets and sensed that the opportunity might not quite be where I thought it was. Property values were falling, foreclosures started to creep up and, ever so slightly, the market started to crumble. With these indicators staring me in the eye, I had little choice but to focus on consulting, press “pause” on direct real estate investment and let the real estate market in Metro Detroit begin its free fall.

Fast forward to late 2007. Foreclosures in Metro Detroit are skyrocketing. Real estate prices are 50%-65% less then late 2005/early 2006 levels. The market is completely decimated. And, it is because of this that, over the past seven months, I have jumped in with both hands and begun scooping up real estate deals that were only a dream three years ago.

I am convinced that, as an entrepreneur and investor, there is no better opportunity to buy income producing assets at substantial discounts to intrinsic value then Metro Detroit real estate.

You are probably asking: “How in the world is this relevant to his previous blog subject matter?” My answer to you is simply: “Everything.”

Undoubtedly, you must realize that every business and aspect of our economy is affected by globalization. In Metro Detroit, tremendous opportunities to invest in bargain real estate have come largely because of global economic conditions. The “Big 3″ auto companies that are based here (GM, Ford, Chrysler) have been ravaged by global competition and the weakening in these companies has directly (along with several other key factors) caused the job losses and population declines that have driven real estate prices to record lows and caused the price discrepancies that make investors giddy.

In addition, utilizing outsourcing and globalization are imperative to the long term success and viability of any scalable business; whether related to real estate or not. My bottom line is this: if you can’t think globally, you are going to get trounced. Real estate investors that don’t put this into practice will fall victim at some point in time just like other businesses.

“What’s the point of all of this?” you ask.

Here it is: future posts are going to highlight my activities in real estate investing and the techniques that I am using, leveraging global business connections combined with both cutting edge and time-tested marketing strategies and other methods and techniques to grab as many houses as I can, as well as help other real estate investors reach their income property goals.

Radical change is a MUST if you are going to be successful in your investing or business over the long term. If you can’t get next the concept of change as a constant in your life, the world is going to pass you by at warp speed. Opportunities exist where you want to see them; all you have to do is reach out your hand and grab one.

opportunity

Published
by
Adam Davis
on April 16, 2008
in Emerging Markets, Real Estate and Real Estate Investing
. 0 Comments