Friday, October 26, 2007

Jungle Lessons

When I was younger I used to live wildly impulsively, within a set course plan. For example… I had an idea to travel to Indonesia and live in the jungle with an untouched, un-jaded ‘tribe’. I did so for six and a half weeks. I spent these days near starving, eating grubs and trying to hunt monkeys with poison darts. I kid you not. I trekked through the wettest jungle in the world to befriend not-so-long ago headhunters. I ran for my life while nearly being gored to death by wild boar…

My hired guides and I trekked through the mud, took dug out canoes up and down the muddy, leech ridden rivers. I remember wading across a deep creek while freezing cold rain pulverized my scalp. I held up my pack, throwing it repeatedly against the slippery clay slope all the while clawing my way along, trying to get a grip. After making it out onto the bank I looked at my body, covered in what appeared to be fat, black welts that were visibly growing into gluttonous banana slugs. Leeches. I would never have had the patience to burn them off. I furiously tore them away with my bare hands…. But, I digress. I was looking for something on my journey.

Some kind of proof that a 20-year-old kid had in his mind about the way things should be, about what I wanted to find. Looking back on that adventure I learned a lot, but at the time I hated it, not because of the sheer torture of it, but because of what I was looking for I didn’t think I found. That was until later, anyways…

I realized (years later) that I DID find something on that trip and it was…

Never continue trekking when you’ve got infected feet! Don’t push the river- it flows by itself; if you’re starving and haven’t eaten for days and someone walks out of the bush and offers you a basket full of mushrooms…Be grateful, but don’t eat them all in one sitting.

Some finer points can be translated and applied to life and real estate:

Don’t climb a 40 foot Rambutan tree if you’ve never even tasted the fruit
; Watch and learn what is going on in your market and what constitutes a ‘sweet deal’. If you don’t know what one looks like, how can you find it?

Leaky canoes; canoes with holes in them don’t float well. Neither will your real estate team if it’s not put together right. You need to continually check and evaluate the performance and results of your group.

Have the right bartering chips; I traded tobacco for passage on my journey. I quickly learned the value of this commodity. Many investors throw away great deals over a little negative cash flow.

Running a $3K loss to make a $50K gain in one year is a good example. A very common and shortsighted mistake that rookies make is failing to understand what to negotiate.

Know what you’re buying
; be it price or terms and how to negotiate it.

Make sure that your guides aren’t a bunch of yahoos! Whether you buy one property or a hundred, you need an exceptional team in place to help guide and protect you along the rocky paths. Make sure that you have a map and a team that knows how to navigate.

Lastly, don’t seek adventure in your real estate! Keep your business as simple and boring as possible. Sure, you can have fun, but get your excitement in elsewhere. The last thing you want is a gut full of pinworms and a few digits missing at your next business meeting.

Todd Millar

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