Many real estate investors out there are losing hope. Maybe they fear their tenants will sustain a “rent strike” regardless of whether they have money to pay. Maybe they wonder if their state’s “nonessential worker” designa- tions will continue to stall their flips and even their new construction and development past the end of summer. Maybe they disbelieve indications that housing prices might withstand this economic meltdown. You must remain hopeful and, even more importantly, start acting with determination and purpose to keep your real estate investing businesses profitable and productive during and beyond this catastrophic pandemic. Remember, real estate is the ultimate wealth-gener- ator. It is the ultimate “build-your-own-life” tool. This is not the end for real estate. Of course, things are going to be different. That is where the benefits of being flexible and creative come into play. As the pandemic continues and crisis- response changes, think about these three important moves that could help keep your real estate businesses profitable:
CONSTANTLYEXPLORE NEW IMPACT SCENARIOS & REVISEYOUR OUTLOOKS. Many investors resist changing their pro- tocols and processes because they feel it
makes them appear unpredictable and unreliable. In a time when one of the nation’s most prominent economists is reduced to describing the economy as “off the rails,” it is going to be okay to constantly revisit and revise invest- ment strategies in light of new and emerging trends and data as long as you communicate those changes. More now than ever, investors cannot afford to have only one “exit” strategy for taking an investment back into its liquid position. Furthermore, no investor can afford to have only one investment strategy per asset. This means a multifamily development should come with multiple scenarios for reacting to various economic shifts. It means the long-term rental strategy must include op- tions for generating cashflow in the event tenants are not able or willing to pay. Lesson Learned: Today, there are no best- and worst-case scenarios, only working and nonfunctional ones. Be prepared for everything and, as before, communicate that.
COMMUNICATION STRATEGIES ARE CONSTANTLYCHANGING. COMMUNICATEYOUR CHANGES. Once, a face-to-face meeting would have been the only way to handle high-dollar business
negotiations, but today’s reality necessitates profession- als in every arena learn to wheel and deal remotely. This can be good for your business and even decrease your overhead, but it does change things from a practical perspective: • Cybersecurity is a bigger issue. • Accountability is harder to maintain and enforce. • “Standing out” professionally might be difficult if you rely heavily on your personality or in-person networking skills. Adapt your business practices to today’s reality in a way that makes you stand out professionally. Tell clients, customers, and investors about these changes even if you do not expect them to be particularly interested. Good Success went so far as to send certain clients hard-copy letters as well as digital correspondence to make sure our communications stood out in the immediate wake of many states’ lock-down mandates. Lesson Learned: Communicating well and regularly will help a business stand out as reliable, agile, and professional.
IDENTIFYOPPORTUNITIESAND DEFINE PLANS OFACTION. Not every opportunity is a good one just be- cause it is a new one. Be willing to examine every opportunity, but be willing to leave that
opportunity if there is not a viable plan of action.
Lesson Learned: Opportunities are out there, but you must be willing to take them and to leave them! Real estate investors who are willing to be realists without being defeatists and remain practical and pro- ductive do not have to give up their goals, dreams, and prosperity to this pandemic.
TomOlson is the founder and president of The Olson Group of real es- tate companies and the Good Success Mastermind. You can access the latest edition of his book, Contingency Planning for Your Small Business During COVID-19, and learn more about the Good Success Master- mind and 30-Day Good Success Journey at www.GoodSuccess.com.
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