For 40 years my wife and I have owned rental property. For 35 years I have been a San Diego apartment broker. I learned a lot, too much the hard way. Some of my learning is summarized below.
No one can know enough about many of the things we need to do to lead a happy and full life. So, we need experts. I’m an expert in investment property. I’m a client to physicians, lenders, lawyers, landscapers, a dance instructor, CPAs, contractors, three coaches, etc.
Choose experts with the right expertise
Experts come in many specialties. Your challenge is to choose a true expert in the fields where you need help.
Investigate the credentials of anyone you’re considering to give you professional advice. Formal credentials include degrees, professional designations, and board certifications. Informal credentials include performance comparisons with other experts, industry awards, publications, and professional reputation.
Client recommendations can tell you a lot about how effective a guide is and what he or she is like to work with. Raving fans and other repeat clients are a strong indication of expertise.
Prudent people review expertise before hiring a specialist. Due diligence and an interview can help determine which one is great for you. Purely as an example of the process see my 2019 blog post “6 Qualities of a Great Broker” which aims to help you assess apartment brokers.
You must believe that an expert has your best interests at heart
Once you start working with an expert, you should know, at a gut level, that he or she has your best interest at heart. Too many supposed professionals put self above service.
Experts should ask you questions as they work with you. It’s their job to understand your goals and aspirations. The only way that can happen is if they ask you about them. It is vital for an advisor to understand you. He or she should respect you enough to recognize that you have agency; you make your choices.
The coach should tell you the truth. The truth may not be pleasant. It may not be what you want to hear. Your guide needs to warn you about risks and explain opportunities. When you don’t understand something, ask for detail or clarification. You need to know enough about their specialty to make a wise choice in your situation.
Whether they agree with you is immaterial.
You must be responsible for your actions
An expert’s job is to give you his or her professional advice, but the client always has the final say. You’re responsible for deciding.
Once you’ve chosen, you’re also responsible for acting on your decision. In apartment investing, that means pursuing an opportunity or not. My experience is that great investors pounce. They know that every investment decision carries some risk.
In my experience, most investors move through three stages of confidence. First, there is “inkling.” They think an opportunity looks pretty good and they should investigate. Then comes “clarity.” The investor thinks the option looks good and he or she should act on it. They know that if the investment turns out not to be what they imagine, they can drop it and move on.
The final stage is “certainty.” The investor thinks nothing could be better. That sounds wonderful, but there’s a catch. The best investors don’t wait for certainty.
In the San Diego apartment arena, folks who insist on certainty move too slowly to close. Other investors put the asset into escrow with adequate, but incomplete, information.
Principals learn, often the hard way, how much time and information their unseen competitors allow before an opportunity is taken by another investor. People who obtain great results move forward, pull the trigger, make the commitment, gain control of opportunity and begin due diligence. If the due diligence turns out well, they close.
It is unfortunate to be at the wedding and realize that the bride, your ex-girlfriend, is the perfect woman in the world for you, but someone else proposed while you were debating about it.
The client is also responsible for maintaining the relationship. Talk with your advisor about your goals and aspirations. Ask questions that help you understand their advice. If you choose not to take a particular piece of advice, be prepared to explain why. It is not about justifying yourself, but increasing the experts’ understanding of what matters to you.
My best relationships, as both an expert and a client, have lasted a long time. During that time, we built trust and understanding of each other. We got better at working together.
What about you? What’s your experience of working with or as an expert?
What can you add to or edit my summary?
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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.”