OK so you’ve read The Art Of The Deal.
Have you ever found yourself in quiet moments alone, pondering the Trump story, thinking you’re going to do what he did? Whatever liquid motivation Donald Trump was channeling from the gods, you’re going to get some of that and do what he did?
Alright, so now twelve months have gone by and you are looking back, trying to reconcile the gap between your humble output and the record of the early Trump years.
Don’t beat yourself up.
As with the legend of Bill Gates, there is more to the story than just other worldly will, and “brilliance”. Gate’s case is documented in Outliers by Malcom Gladwell. But Trump’s story has remained as a touchstone for real estate investors over the decades, when really, he should have been one of Gladwell’s ‘Outlier’ subjects as well.
Gladwell’s premise for Outliers was extraordinary success is no accident, however it is not repeatable due to the extraordinary circumstances that contribute to it occurring.
First, Trump got his 10,000 hours at the knee of his father, Fred Trump. Fred Trump built his first house in 1923 at the age of 18, and by 1945 when Donald was born, he had a thriving construction company building houses and apartment buildings for returning GIs. Donald began accompanying his father to the construction site at age five. Throughout his childhood Donald had a front row seat, watching Dad negotiate with vendors and contractors in the living room of his home in Queens.
In his teens Donald got more involved in his father’s company. By his early twenties, when he located and partnered with his father on the 1,154 unit Swifton Village Apartments (a foreclosure) in Cincinnati, the business of real estate is all Donald Trump had ever done.
Second, he had the financial backing of his father, Fred Trump. By the mid 1970s Fred Trump had been in business for 50 years and accumulated 100,000 units. His financial statement was significant, around $40 million. He introduced Donald to his private and institutional banking relationships, Manufacturers Hanover Trust, and the Equitable Life Insurance Company. Read more…
When you look at buying and turning around a large apartment building, the “how to” is a pretty straight forward process. However due to the nature of the project, and what needs to be done, fear often gets in the way and sabotages your progress.
What kind of fear?
Fear of the zeros, fear of not being having the money for down payment, or earnest money, or even the loan application fee. Fear of not having answers, for brokers, attorneys, private lenders. Fear of embarrassment, fear of feeling stupid, of being rejected, to name a few.
The fear that is most destructive though, and lurking just below your awareness, is fear of success.
When you buy, syndicate, and turn around, say, a 150 unit building, your life changes in some fundamental ways. You start at the beginning and set your goal, then take the first step and talk to some brokers. You discover that you actually know more about how to value a deal than the broker, and you get some confidence.
You learn to address blind fear, and break the fear inducing activity down into steps, then set goals around those steps, and achieve those goals one at a time. Then you make progress, and you gain more confidence each time you do this.
You learn to sell others on the benefits of investing with you, helping them overcome their blind fear with your confidence. You learn to have faith in yourself and your vision for the property and push forward into the unknown.
You become more confident and connected with “reality”, you learn to hold other people and organizations to account.
Then finally, after solving all the problems in the deal and achieving all your goals, you own a fully stabilized apartment building with $15,000 a month net spendable income hitting your bank account each and every month.
Now at this end of the process, you see the world as one endless succession of opportunities, rather than feeling trapped by your current circumstances. In short, you go through a transformation, and become a different person. You leave the old “you” behind, and go forward as the new “you” with your new skills and perspective
However, it is at the beginning, when you are starting down the path of your transformation that fear of success raises its head.
Here’s how it works.