Month: May 2020

Have you read the Millionaire Fastlane? If you’re not familiar with it here’s a one sentence summary I found online- ‘The Millionaire Fastlane points out what’s wrong with the old get a degree, get a job, work hard, retire rich model, defines wealth in a new way, and shows you the path to retiring young.’ I first read this book in 2014 and I decided to pick it back off my bookshelf recently and read it again. I loved it back then and have to say I’m getting even more from it now. 

There is a section I was reading this week about choices and it really struck a chord with me because we are all faced with numerous choices in relation to how we work through and out of this covid induced economic situation. That’s why I felt it worth sharing this distinction from the book, and I hope it resonates with you also. 

The author, MJ Demarco, uses the analogy of a steering wheel to help describe the choices we make in life. He tells us that our steering wheel (ie choice) is the most powerful control we have in life.

WHAT IS THE BUTTERFLY EFFECT?

Can you see how it is possible to make a choice this instant that can forever alter the trajectory of your future? Well you can, and it can be the difference between poverty and wealth. 

The Butterfly Effect is a theory that in simple terms says this – minor changes (choices) can result in large differences in a later state.

To explain the concept visually, think of it like a golf club hitting a golf ball – when the clubface is straight the ball goes straight and travels towards the hole. However if the clubface is angled a fraction of a degree, the ball’s trajectory lands far off the course (sounds like one of my golf shots). 

This illustration shows us that a bad choice can set your trajectory off by only one degree today, but over the years the negative impact is magnified. It’s fair then to say that the opposite is true, we can make decisions and take actions today that create more of the future we want for ourselves. 

The message of Darren Hardy’s book The Compound Effect essentially says the same thing, that the key to success in anything in life is harnessing the power of the Compound Effect, which means the effects of small, everyday choices will compound over time, leading you to success—or disaster, depending on your choices.

So why did reading about the Butterfly Effect again resonate with me this week? 

Here’s why – Whilst everyone will have their own unique set of challenges that have come about due to covid, your knowledge, context and network will also bring a unique set of opportunities. And with that I believe we owe it to ourselves to get going with the opportunities right now, to be proactive about implementing, to be innovative in our property businesses.

Two weeks ago I wrote a post about screwing up – essentially about giving yourself permission to go take action without over worrying about making some mistakes along the way. That’s a choice we must make to get started, and keep it progressing.

Think for a moment about some of the choices you can make right now, and the positive or negative future impact.

The choice to binge 20 hours a week on netflix or to allocate that time into your personal development.

The choice to watch loads of educational webinars or to focus on and implement just one.

The choice to read a personal development book and implement what you’ve read, or just to skip onto the next book on your list.

The choice to double down on finding direct SA bookings, or to simply rely on the OTA’s.

The choice to create a healthy eating regime and exercise routine, or not.

The choice to keep up meaningful communication with family and friends. 

The choice to ask your customers what else they need right now.

The choice to get really clear about the future you want or not give that any thought.

The choice to become wealthy.

The definition that MJ Demarco gives to wealth is as follows- wealth includes 3 things: 

1. Meaningful relationships with friends and family
2. Being healthy and physically fit
3. Freedom

To get this freedom it requires the choice, and the subsequent actions, to make income independent of your time. 

So circling back to the opportunities in front of you now, what choices and actions can you make this week that will create an income stream in the future that is independent of your time?

During these lockdown conditions it can easily feel like we don’t have any big completion points to report/celebrate at the end of a week in our property businesses. For instance Chris and I have a commercial property that’s been sitting, waiting to be refurbished for an incoming tenant but there has been no progress for weeks due to the restrictions and the contractor not being able to work. 

Every now and then I like to revisit previous posts I’ve written, to see what I was writing about in the same month but a few years ago. The key message in this post jumped out as one to share again – it has served as a great reminder for me this week and I hope it does the same for many reading it now. Here’s an extract from that post 3 years ago to provide the context,

“When I sat down to write our weekly post, at first I felt deflated that we don’t have some exciting new achievement to share, then I realised that’s not reality, the journey is made up of hundreds of little steps. The reality is that whilst there have been no big milestones hit or new deals done, Chris and I have been working steadily on our business goals…we’re analysing new build development sites, in discussions about leasing blocks of apartments and continuing to manage operations of a successful SA business.”

The feeling of “we’ve got nothing big to share this week”, that I was writing about back in 2017, got me thinking that there are likely many other property investors/entrepreneurs out there feeling like their goals are distant and things aren’t happening fast enough, especially with the constraints of lockdown. So I wanted to share some helpful mental reframes that I’ve learned over the years from a business psychologist mentor. This post is a bit of a deeper dive on understanding the quirks of our mind to help on our way to wealth, freedom and sanity.

An intro to entrepreneur psychology self-diagnosis

There are four ways entrepreneurs typically trip themselves up:

1. Hesitation and self doubt – it’s the #1 form of self sabotage
2. For productive people, they can get the sense of never feeling finished or good enough
3. Getting distracted by new opportunities/what others are doing
4. Questioning your own vision/goals i.e. am I even working towards the right thing?

I’m referencing these because it’s key that we understand our psychology so we don’t get caught out by any of these.

The other common pitfall for ambitious entrepreneurs is to fall into black or white thinking (called “splitting”). In other words we can hold ourselves to impossible standards and when we inevitably fail to meet those, we write ourselves off/mentally beat ourselves up. An example might be pushing yourself in all areas of life but still not feeling like you are winning, like the ultra entrepreneurs you might read about or hear on podcasts.

On a smaller scale it might be as simple as putting in a solid week of action taking towards your goals but not feeling like you’ve achieved enough at the end of the week (I used to get this a lot, but I’ve worked on how to manage it).

HERE ARE SIX WAYS TO HELP COMBAT THIS ALL OR NOTHING THINKING

One big antidote to this is to re-frame our thinking to recognise that incremental progress is the ONLY progress. The reality is that the titans we read about were not overnight success stories.

Splitting (or black and white thinking) happens because we fail to plan for incremental progress. The journey HAS to be rewarding for us to be congruent about our ambition.

If you can relate to any of these mental pitfalls then use these 6 exercises below:

1. Journal and plan out your goals – figure out what it would be like being in the trenches working towards your goal, with all the in between steps, and brainstorm how you can make the journey itself feel better (i.e. more fulfilling and fun). This kind of thinking helps us prepare for the opposite of black and white thinking, it shows us that realistically there are many steps involved.
2. Ask yourself, what would it feel like to be 50% done? What would it feel like to get started? (think- what can I do to make the answers to these questions feel better?)
3. Write out baby steps building towards the much larger projects (ie this can be straightforward with a refurb on a BTL but also more straightforward than you think on a larger conversion project).
4. Commit to three specific actions that you are 100% in control of completing each week.
5. Always set your commitments to the most courageous and important work (i.e. not just the easy stuff you would do anyway- THIS IS HUGE)
6. Get used to celebrating incremental (week by week) progress.

These exercises will help you understand that getting into the thick of things and being ‘in the process’, rather than at the destination, is the fulfilling thing. For property entrepreneurs, and indeed any entrepreneur for that matter, this is key as big goals aren’t achieved every week.

Ultimately the goal is to be comfortable working towards things. Success is a practice not a destination.

I hope posts like this serve to help you through the slower periods and encourage you to keep taking meaningful action. It’s not purely about the end destination, it’s about continuous steps in the right direction and reflecting back every few weeks to see how far you’ve come, and feeling good about that.

When you look back on the last seven days, what did you progress with your own focused efforts that you can recognise as a win for the week?

This week’s post was inspired by, believe it or not, by a short guided meditation I found on youtube titled, “Have No Fear Of Screwing Up”. 

Hearing the words being spoken in the voiceover reminded me of several occasions where my own fear of messing up almost stopped me from doing the thing, but where in hindsight I can see the good and the growth that came from doing that thing in spite of the fear of failure. In particular it brought up memories of starting a software business and of the first approaches I’d made to letting agents when starting out in serviced accommodation. 

Everyday brings opportunities for you to course correct and to grow-  that is IF you are out there taking action and colliding with the marketplace, stretching yourself, having new conversations and tripping up.

The key message is this – give yourself permission to go screw up, you’ll benefit from it. Now of course I’m not talking about being reckless and ‘screwing up’ when it comes to money decisions or pulling the trigger on a new property deal without thorough diligence. No. I’m referring to all the micro decisions and conversations that have to come before reaching a level of certainty or mastery with something. 

If you’re in a situation where you are learning, or doing something for the first time then give yourself permission to make a mistake. In fact, revel in it, celebrate the mistakes that accelerate growth. I know this is difficult for the perfectionists out there, believe me, I’m a recovering perfectionist. 

The message in this meditation I referred to serves as a great reminder right now for anyone exploring new avenues to do business as a result of this lockdown. Just a few weeks ago I shared a great brainstorming exercise to help encourage people in property to identify ways to survive and thrive in the new reality. Finding answers to those questions would likely lead you to exploring new revenue streams from potential new problems to solve. However if fear of sounding sounding silly or tripping up stops you from making the call you will never know. For example in the last couple of weeks I’ve found myself opening up new conversations with divisions of our local authority to ask questions I’d never asked before in search of new ways to serve. 

I even asked our council about whether we could help in providing storage solutions for certain tenant segments they look after. Fear of picking up the phone and looking daft can prevent productive conversations like this, but it needn’t be that way. Turns out it was a relevant question to ask, just a bit late as the contract had already been awarded to another organisation earlier in the year. 

The same sentiment goes for anyone beginning their property investing journey or introducing a new property strategy right now. Embrace the opportunities for learning by making little mistakes today, and going forwards. Be the eternal student. But don’t not take action in favour of protecting the ego. 

For those who have kids, or those who are gamers- if you think about how the kids get so good at the games like Fortnite so quickly, it comes about from the rapid feedback loops they get from trying something new, failing, getting back into it and trying again slightly differently. To me it just looks like my kids are frantically tapping the keyboard keys in random order, but the truth is they’ve learned the patterns of what to press and how fast. 

Talking of kids, I love that they taught me this acronym for FAIL (and they got it from their primary school). 

First
Attempt
In
Learning

What a great reframe, isn’t it?

Entrepreneurs in the US talk about ‘failing fast’ because it leads to finding what works quickly to validate and build out new offerings. It seems logical yet our brains are often stuck in the old school way we were brought up that making mistakes is bad. Now more than ever is a time to make the minor mistakes quickly, to figure out what works now and where you can add value. Of course it needs to be a balance, as Dr John Demartini said, “Growth occurs at the border of support and challenge” –  right now in my view that means the challenge of constructive feedback from speaking to the market place and the support of having faith in the process and good people in your corner keeping you accountable. 

In conclusion, free yourself to make a mistake, have no fear of screwing up.

So how can you apply this to your own context in the new week ahead? 

PS. This post was inspired by a simple 3 minute meditation I discovered on youtube, CLICK HERE if you fancy doing this one.

Over the course of this week I’ve noted some insightful commentary and analysis on the commercial and resi property market due to the lockdown, from a range of sources including, newspapers, news websites and YPN magazine. 

These aren’t my thoughts, rather I’m playing reporter here for your convenience and my own insight as understanding these impacts is needed to inform our investment decision making. 

Below is a summary of insights that may help your thinking as business owners, entrepreneurs and investors looking to respond to the ‘new reality’. 

CONSTRUCTION AND HOUSE BUILDERS

*Economies of scale for developers will no longer be possible – Builders are gradually returning to work, but under new rules – social distancing rules will restrict the number of workers allowed on site.

*Safety measures will mean sites can function only at a fraction of usual capacity and most big sites will have a dedicated COVID -19 supervisors checking that subcontractors know the rules.

*Efficiency & output will likely suffer on construction sites, this will undoubtedly have a knock on effect on budgets. As an SA operator I’m also conscious of the possible knock on effect it has on demand for accommodation from certain contractors. 

HOTELS & HOSPITALITY

*SIr Rocco Forte, who runs hotels across Europe, said that when they do reopen, rooms will take twice as long to clean using UV light, and enhanced techniques, buffets will not be available and with travel restrictions in place the lucrative foreign visitors will be slow to return. He said he would have to, “increase marketing to locals”, and this will likely be the order of the day for many in this sector. 

*Zizzi and ASK Italian, under the Azzuri Group, have called in restructuring experts KPMG. 

*Pub chains are trialling home delivery while trying to figure out how to put in place safety measures that don’t completely take away the point of a pub, which is socialising. However it may work out more expensive to try to open than stay shut. 

*Sit-down meals are expected to be off the menu for the foreseeable future with restuarants encouraged to offer takeaway instead. Whilst achievable for fast food chains, not so for the mid and high end restaurants.

*SA operators whose business serves the tourism market will naturally be feeling the pain however many will be switching back to long term lets or finding opportunities to serve their local council or the NHS. Many expect that once lockdown ends, the British public will want to get out of their homes, and with travel restrictions there may well be a big spike in demand for UK holiday lets later in the year, and likely more so than for hotels. 

* Cleaning practices will naturally be on the front of every guests mind as they will be seeking extra assurances – I came a across a new phrase in one of the articles which referred to “cleaning theatre” – in other words the hospitality sector will likely make sure staff are overtly seen to be cleaning surfaces in front of the customers’ eyes. 

RETAIL

* High st retailers will have to figure out an array of logistical challenges to ensure they can trade whilst adhering to social distancing rules. 

* There is the weigh up of whether opening is worth it – I read that the cost of opening could well exceed the benefits ie once shops open it will limit their ability to request rent concessions and it will force them to take staff off furlough as well as invest in PPE and associated measures. 

* Greggs are reported to be selling a reduced range of products and have tried introducing click and collect to test whether it could operate with social distancing but have abandoned the idea. 

* Retailers expect that shoppers who do want to venture out are more likely to brave the retail parks than the high streets because of easier car access and larger stores mean easier distancing. 

*I read a lengthy article about Mike Ashley (of Sports Direct) saying the old leasing model is finished. It was about turnover rents where an agreed proportion of the rent fluctuates depending on a store’s sales. Major retailers are putting increasing pressure on landlords for this type of lease however they are complex and subjective to work out ie landlords would want a degree of online sales to be taken into account. The article went on to say that institutional property owners back the idea in theory but are reluctant to agree because it would force property valuations down.

OFFICE PROPERTY

*With social distancing likely in place for the rest of the year many offices will be operating at half capacity or less.

*Several major banks were referenced as likely to operate with 25% occupancy in the offices and doing things like moving desks into canteens to allow more people to work under distancing.

*In large buildings and skyscrapers they have to think about the challenges of how to avoid pressing lift buttons and touching internal door handles. 

*This new ‘Zoom era” will be prompting many organisations to reflect on working practices and the need for renting as much office space. 

*This could lead to planning laws that previously inhibited change of use soon become more relaxed.

*More than ever a commercial investor would definitely want sight of more than one exit with a prospective property ie with a feasible conversion to residential being the most likely back up. 

HOUSE PRICES

*The Centre for Economic and Business Research forecast that house prices will fall by 13% in the year to March 2021. However Savills were more optimistic expecting short term price falls to be in the 5-10% range. 

*On a positive note YPN Economist Chris Worthington commented that, “the residential property market is more resilient than most other sectors of the economy”.

*Some experts feel that many landlords who are already fed up with increasing legislation, will see this as the last straw and want to sell their properties. With fewer buyers in the market this means prices will fall a bit and it will present some great buying opportunities. 

*Many feel that rents in the PRS will drop (I’ve already experienced the need to drop rents for 3 months or more in student areas in order to attract new tenants). 

*What about home buyers seeking mortgages? – How much should be lent to borrowers who have been furloughed? An article in this Sunday’s business press stated that most lenders will only approve loans based on the furloughed income ie the 80% of salary. 

*The income multiple for first time buyers has been at 3.47 times salary and some analysts believe this will be cut to 3 times which would significantly reduce the amount the average first-time buyer can borrow. In my view these last two points make the case for decent rent-to-buy offerings even stronger. 

What have you read in relation to the economic impact for property people that might be helpful sharing?

I was reading a selection of interviews this week about some fairly new entrepreneurs talking about the transformation in their beliefs that happened from starting a business. The transformation of limiting beliefs to empowering beliefs – it reminded me of some of my own past limiting beliefs that had to change when starting out in business 7 years ago. Some of these same limiting beliefs may be stifling others out there reading this.

Our ‘new reality’, this shock to the economy, is making everyone think seriously about their financial security. Those in employment may be thinking about the uncertainty of their jobs and looking at others ways to make side income; those with businesses may be thinking about how they can adapt and possibly even start something new; those investing (or thinking about investing) in property may be reconsidering their strategy on how to get started or to grow their portfolio. 

And with that thinking there will undoubtedly be some people who know how to proceed, but there will inevitably be those who feel stuck and totally unsure. One of the big sticking points is likely to be rooted in a limiting belief, similar to what I was referring to at the beginning of this post. Hopefully by exposing this big limiting belief and highlighting the kind of thinking required to get started, it can help some people to take the next productive step. 

Here are some of the beliefs I used to have about getting started in business:

*Starting a business is painful, it’s blood, sweat and tears, and takes many years

*It takes money to make money

*You need a business plan

*You need a website, a logo, a business card and a company email address

Anyone else believed anything like this at some point, or maybe still believe that?

This thinking is not conducive to getting started at all. 

Now I know that none of these are true. To get started, you need some sales of a product or a service that solves a real problem. 

This is so obvious to me now but it wasn’t back in 2013/14, and it took a long time for the transformation to really take hold in my brain. 

However, this is the single biggest belief that transformed our (Chris and I) thinking and approach to business and property. Anyone who’s read my book “Predictable Property Profits” will be familiar with how I learned the concept of pre-selling from mentors on a course about starting a software business. When it finally twigged to apply that formula to serviced accommodation, we were able to turn a failing business into a profitable one.

The reason for bringing this up and sounding like a broken record to those who know me 🙂 is because now more than ever, in this new reality, this one empowering belief could be responsible for your big discovery and breakthrough. So’ I’ll lay it out again here:

To get started, you need a sale (or some kind of commitment to buy in advance) and a product or service that solves a problem. Here’s some examples:

In the context of property that might be finding a tenant buyer who can pay a small financial commitment now for a 3 bed terraced house in XYZ location. Then you go search and invest to order.

In the context of community small businesses, that might be finding a load of dance studios that lost their revenue due to the lockdown and need help getting online, and then approaching them with a solution to set them up with the right technology to broadcast lessons and easily collect payment online. For which of course you charge a fair set up and ongoing tech maintenance fee for. 

This is the kind of thinking and approach that will give you the ability to de-risk an investment, or uncover a new problem that you can solve for an existing client, or create a brand new revenue stream having never done anything like this before. 

There are problems all around for us to solve, if we are intentional about seeking them out and exploring potential solutions with those that have them. 

Our small management team engaged in a highly productive brainstorm this week for our SA business that has led to multiple action points around exploring potential problems to solve. These actions are what will now fill our priority activities for the days ahead. And it won’t stop there, as will revisit the process and do it again. 

What could you be turning your problem solving brain to in the week ahead?

If you’d like to take the time to reflect on powerful solution oriented questions for your own business (property or other), then you’re welcome to join an open brainstorm session on Tuesday at 11am where we can walk you through the 5 key questions we set our minds to work on. 

You can reserve your seat in the brainstorm by clicking HERE.