Real Estate Investors — Beware A Deadly Virus — Subjectivity

It cracks me up, irritates the heck out of me, and at times saddens me deeply. What behavior could possibly elicit all three responses? Actions taken or not taken by real estate investors based mostly upon one or more factors — some if not most of which were based upon pure subjectivity. The irritation often follows almost immediately when they claim their ‘analysis’ was the tipping point.

Gimme a break.

Various forms of analysis can be debated by reasonable people for sure. But subjectivity as the the driving force when you’re planning your retirement? What’s funny, or not as the case may be, is the way in which subjectivity, i.e. feelings of some sort, are used to rationalize doing what they were bound and determined to do regardless of anything objective or, forgive the word, analytical in nature.

I liken it to baseball — surprise surprise.

For years I was the guy who called every pitch for the teams I helped coach. If there’s anything requiring cold, clear thought, it’s pitch selection. For those not into baseball’s ins and outs, I’ll make it simple — pitching is one thing — the disruption of the hitter’s timing. The rest is important, but if a pitcher is consistently successful in messin’ with the hitters’ timing, he’ll win more than he loses.

This requires an objective and analytical approach by the pitcher. What’s the count? How has this particular hitter behaved in similar counts? Are there runners on base? Have I faced this guy before? And it goes on and on. Boiled down to its essence, if a batter is expecting a 92 mile an hour fastball and the pitcher throws a 78 mile an hour change-up, the odds favor the pitcher big time.

Some of the smartest pitchers in baseball are the ones who’ve relied solely upon the nastiness of their collection of pitches, but who’ve lost some gitty-up on their fastball. Now they hafta think. Greg Maddux might have been one of the smartest pitchers in baseball history. The last half of his career his so-called fastball couldn’t break glass. The average #1 starter for a AAA high school almost always throws as hard if not harder than Greg. Yet hitters in general just never could figure him out. When they knew a curve ball was coming on the outside corner, he’d throw a tailing fastball inside and break their bat. The disruption of timing. Do that for 15-20 years, and like Greg, you’ll be a first ballot Hall of Famer for sure.

In real estate investing, the same holds true. How you feel about an investment is as relevant to your success as how a jet pilot ‘feels’ about gravity. Both the investor and the pilot will be far better off once they realize neither income property or gravity care how they feel.

The only concept, principle if you will, with which I’d like you to walk away, is this: Our feelings about investing, a wholly objective process if done correctly, will not be a causal factor in your success. On the other hand, they could very well be the direct cause of some very unwanted and unintended consequences.

Try bringing subjectivity into the equation after things have gone well. At that point you can brag about how you always had a good feeling about this or that property. Before the fact, subjectivity has no place in the real estate investment equation.

I’d feel really good if you’d call me. 619 889-7100. Have a good one.

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