IC Elesson: You Only See What You Expect to See…

Do you ever get confused by how one self-proclaimed expert can swear up and down that the best, or even ONLY, way to do a certain strategy is to [fill in opinion here], while another guru, who seems just as successful and passionate, says that the truth is just the opposite?

I did, too, back when I was just getting started and thought that there must be an exact right way to do any given thing in real estate.

But as it turns out, with wisdom and experience comes the realization that they’re all right, and all wrong.

Because the TRUTH is, we often become convinced that certain things work and don’t work because we already believed that it would or wouldn’t work, and that becomes a limiting thought that actually predicts the outcome.

In other words, the guy who swears up and down that his experience is that you MUST tell sellers that you can do ‘X’, or they won’t accept your offer is telling the absolute truth. HIS EXPERIENCE is that sellers won’t accept an offer without ‘X’ because he believes that they won’t, and thus they never do.

Now I’m about as far from woo-woo as anyone you’re ever going to meet. I don’t believe that I manifest deals, or partners, or success into my life by vibrating in time with the universe. But I can prove this particular phenomenon with example after example after example.

For instance, back in the days when I was first learning about wholesaling, I was taught something that never made sense to me: that I should assign my contract for a small deposit, then trust the buyer to go ahead and close (despite having little “skin in the game”) and to pay me when he did.

I decided that this was silly: why should I give up 100% of the asset I had (the contract itself) for 10% of the money I was owed, and trust the buyer to pay me? Why should he pay me what he owed me, and trust ME to return the money should the seller be unable to deliver title? No other business does business like this, why should wholesalers?

So I immediately started charging my wholesale fees up front. And even though I was the only one doing it, very few buyers—as in, I can count the number on one hand, even after 20 years—balked at paying up front. And we’re talking about hundreds and hundreds of deals here

Yet, when I talk to my biggest local competitor about this, he invariably says, “I don’t know how you get buyers to do that. My buyers would NEVER do that.”

Dude, we’re in the same market. We sell to the same buyers. You can’t “get” your buyers to do it because you believe that they won’t. You probably don’t believe it would be smart for them to do that. You probably believe that YOU would never do it. Therefore, if you ever tried to get your wholesale fee up front, your buyers would laugh in your face, because something about what you believe would telegraph to them, and they’d also think it was a bad idea.

Similarly, an agent challenged me with this statement a few weeks ago: “No seller is going to let you tie up their property with no earnest money: they just won’t take you seriously”. Interesting. Given literally hundreds have in just the past few years. I don’t think it’s a big deal, and therefore neither do they. I don’t mention it, and neither do they.

But I bet this agent is going to find just the opposite to be true. Why? Because she believes that sellers should get earnest money, because if she were representing a seller she’d demand it, and because she’s so used to deal with other agents who believe the same that if she ever TRIED to get a contract without risking earnest money, her contempt for her own offer would drip off of her in big, invisible globs that the seller would sense and back away from.

The week before last, I was talking to one of my partners, a 20+ year vet of the real estate business, about lease/options. I asked him what he was getting as an option fee on his typical property. His answer: “None of these people have any money. If I can get $2,000-$3,000 down on a $120,000 house, I’m lucky.”

Then last week, I spoke to another investor in Cincinnati, and asked him the same question. He said, “I decided about 4 years ago that I was only going to work with good citizens with savings, and I get $5,000-$6,000 down, or I don’t sell.” And guess what: he does.

So what’s the difference between my partner and this other guy? Simple: they get from the real estate market exactly what they expect to get.

This isn’t the only time I’ve directly experienced this, either: in a single evening a few years back, I had one student say, “I’ve asked a lot of people, and no one wants to give me a private loan because I don’t have the track record”, then watched another student AT THE SAME MEETING ON THE SAME NIGHT raise $60,000 for her very first deal.

I’ve send hundreds of people out looking for deals in every market in the U.S., only to have a handful come back to me and say, “It doesn’t work here—every seller wants too much for their property, and no one will negotiate” while others in their market are buying deal after deal. I’ve seen students drop a wholesale deal because “No one wants to buy in that neighborhood, then watched someone else pick up the SAME deal and sell it for MORE than the frustrated wholesaler was asking, in a matter of days.

It’s tempting to say that the folks who are getting the deals, getting the money, and getting the higher prices have “something” that the others don’t—maybe more experience, or a better way of presenting things, or whatever.

But my experience after all these years watching people succeed and fail is that the people who get what they want get it because they’re pretty certain it’s out there, and those who don’t don’t because they’re absolutely convinced that it’s not.

So if you’re not seeing what you want to see in the real estate market, how do you take your own blinders off? Easy—talk to the folks who ARE seeing (and getting) what you want, and ask how they’re getting it. Don’t do what you’ll be tempted to do, which is explain away their success by saying “Well, of COURSE he’s getting $6,000 up front—it’s tax refund season!” or “Sure, SHE’S able to put properties under contract ever week without a dime of earnest money—she’s the real estate goddess!”. Or, “This one says that X is impossible, and that one says he does it every day, and one of them MUST be lying.”

Assume, instead, that people who are getting what you want are doing it because they have a mindset that says, “Yes, this will work” instead of, “No, no one in their right mind would do this thing with me” and go about trying to get that mindset.

It takes a wise person to really internalize that, in most questions of technique and strategy, there’s no one “right” way—and until you do, you’re going to continue to be confused by how apparently successful practitioners can claim to be having great success with opposing opinions on how it’s done.

Try, instead, to accept the fact that investors JUST LIKE YOU are getting just what you want to get—because they’re sure that with enough time and effort, they WILL get it. And so will you, when that’s what you expect.

2 Comments on “IC Elesson: You Only See What You Expect to See…

  1. Probably one of the sanest articles I read.

    I agree completely but I do think being the “RE Goddess”, or any other guru transcends boundaries that others incur. Why? Because there is instant credibility and most people are fighting that.

    So that’s a good reason to be a guru, right? 🙂

  2. One addition:

    This article mirrors Henry Ford’s quote:

    “Whether you think you can or can’t — you’re right”

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