Should you “Just win, baby?”
America is a competitive culture. Libraries have been written about how to gain and maintain competitive advantage. How you gain competitive advantage matters. This post shares five reflections on the consequences of how you gain that advantage.
Winning with Unethical Advantage Poisons the Well
A wise mentor taught that it was better to be in a bad deal with good people, than a good deal with bad people. Our team notices which competitors and which players disregard ethics. We decline to deal with the few people known for deceit or evil. One of my clients regrets every month that he made a great deal with a greedy, ornery partner. Other reputable brokers do the same. An unethical victory is almost useless and frequently not a lasting one. You’ll do best with a broker who is known for fair dealing and putting his or her clients first.
The Drudgery of Numbers Will Make You Wealthy
A competitive edge comes from the drudgery of the grind. You gain it by doing the often-tedious due diligence and the often-boring comparative analysis. In San Diego County most apartment investors don’t close one transaction per decade. Few players close multiple escrows in a year. In other words, the bulk of the activity is done by principals who transact infrequently. Relatively active and relatively intelligent investors who relentlessly focus reap competitive advantage. In San Diego County 5% of the agents transact 62% of the business. Savvy principals obtain best results when partnering with the most effective brokers, those who perform rigorous analysis.
The Magic of the “Otherish” Giver
In his book, Give and Take: Why Helping Others Drives Our Success, Adam Grant defines an “otherish” giver. Selfless givers always put the interests of other ahead of their own. “Otherish” givers are the people who go for a “win-win” outcome. Here’s why that’s important. Grant’s research indicates that those “otherish” givers will negotiate harder for someone else than they do for themselves. You will do best if you partner with a great broker who is a “otherish” giver.
Reciprocity is Alive and Well
Psychologist Robert Cialdini tells us that reciprocity is one of our most powerful motivations. Sociologists have been unable to identify a culture that doesn’t value reciprocity. Because we’re wired to be reciprocal, we like helping those who have helped us. In contrast, studies show that people punish bad actors even when it costs the punisher. You will do better in business and life if you make it habit to do good for others. You’ll do best with a broker who has established quality relationships with investors and other brokers.
Trust Pays
Being known as trustworthy and honorable opens doors and makes things work better. As Stephen M. R. Covey write in his book, The Speed of Trust:
Trust always affects two quantifiable variables: speed and cost. Trust equals confidence. When trust goes down in a relationship or a company, speed goes down and cost goes up. When trust goes up, speed goes up and cost goes down. Trust always impacts speed and cost.
Trust builds as you work with a great broker. You’ll be able to move quickly to seize opportunities. Your broker will know you and your goals and find opportunities tailored to them. You’ll do best with a broker who builds long-term relationships with clients and other brokers.
To lead a life worth imitating I advocate playing the long and honorable game. If you’re an investor who believes that apartment investing is a learning journey, you’ll do best with a broker who has the six qualities of a great broker.
What do you think? How do my reflections compare with your experience?
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Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”