The one thing that changes everything.
We recently taught about the strategy of using rehab to increase the value of a property in order to do a cash-out refi. We touched on one of the critical parts of rehab: change is constant, especially in covid times. Eisenhower said that plans are useless, but planning is everything — that’s never been more true, with the disruptions in the supply chain and labor shortages we’ve seen since the start of the pandemic.
The trick to overcoming those obstacles is accepting that change is constant. Sure, change is challenging, especially if you’re a planner (and you should be a planner!) — but there’s no point in fighting change and being miserable. Instead, we encourage you to lean into change and outperform the competition. Easier said than done, we know.
Darwin said that it’s the species most responsive to change that prevails, that tends to dominate, and that’s exactly how it is in the rehab world. We try to be very nimble and opportunistic in everything we do. We plan and plan and plan, knowing those plans will change everyday, and thanks to our mindset, and the systems and processes we have in place, we’re prepared for that. We welcome change — we might even dare to say we love change!
You’re probably thinking it’s a little strange to be so enthusiastic about the uncertainty of change…but let us tell you a little story about a theory that’s very close to our hearts, the reason behind why we chose the name Black Swan.
What is a Black Swan?
Aside from the obvious (a big, black, water bird, of course) a Black Swan is also an unexpected event. Nassim Nicholas Taleb, creator of Black Swan Theory, defines a Black Swan as an event that is rare, extremely impactful, and retrospectively predictable. The idea literally comes from the black swan — people used to believe all swans were white, it was just a universal understanding. When the first black swan was discovered, it was a shock, and then it seemed so…obvious. Of course there could be black swans, other birds and animals come in different colors. This anecdote shows just how limited human thinking truly can be. All it takes is one little event or observation to invalidate years of information. All it takes is one change to completely alter what we thought we knew.
We can do so much more, go so much further, when we focus on things we do not know. Ten years ago, we didn’t know a thing about buying or managing multi-family homes. Now, we’ve got a portfolio of apartment buildings exceeding $200 M accompanied by numerous success stories. That’s why we embrace the uncertainty of change. That’s why we expect the unexpected.
Black Swans are disruptors — always unexpected, and they dramatically change the world of those who are not prepared for them. So, we prepare for them. We turn obstacles into opportunity. We get in the right mindset with a positive attitude and a servant leadership approach, we surround ourselves with high-energy, creative problem solvers, and we curate our systems and processes that equip us to respond to change and keep us on track.
The Black Swan Way
Yes, change can be challenging, but we not only perform well under stress, we actually improve. This applies to all aspects of investing — embracing change during renovation is just the first step. Creating and growing a business that can weather change is the hundredth step. Maybe the thousandth.
By practicing “The one thing that changes everything” — the Black Swan Way — we come out ahead as a strong, capable business that enjoys and rides the waves of change rather than fighting it and drowning. This isn’t just a business principle, applying this to all of life is a key not only to success, but happiness.
Head over to the Real Estate at Scale Facebook group and share your story, tell us about how an obstacle became a blessing in your life. Be an example of what is possible for so many others!