“You don’t think the Earth is Flat, do you?”
The way we look at things can be a game changer.
Pre-conceived notions and limiting beliefs will prevent us from seeing things from a different perspective.
At one time, the world was perceived to be flat. Sailors & scholars alike, felt that you could literally sail off of the edge of the earth and fall into hell I suppose.
But somebody(s) saw it differently. They watched boats coming into port and noticed that from far away, even with a spy glass, you could only see the tip of the sail. As the boats would get closer, more and more of the boat was revealed until finally the entire boat was visible.
They realized that the earth must be round—a new perspective.
Despite the logic and people actually sailing further and further, many people back then still couldn’t accept that the earth was round. To this day I believe there is a group called the Flat Earth Society that is dedicated to proving that a round earth is a hoax.
Talk about being stuck in your ways!
These Flat Earth Believers, despite scientific evidence and extensive space exploration, still believe this impossibility.
But when people are set in their ways, it’s hard to change that perspective.
Often with the Value Driven Approach when people are deciding between “List it or Flip it?”, they get hung up on dollar amounts when comparing net profits.
I’ll give you an example. I did a diagnosis for a client and recommended repairs & renovations to the tune of $10,000. The add’l profit was going to be at least $5,000. Initially, she felt that just wasn’t enough money to justify the expense.
But she was looking at it all wrong. You have to view this through the eyes of an investor. Put these dollars into Return on Investment. If you put in $10,000 into an investment, and in 3 months’ time, you get your $10,000 back, plus an add’l $5K in net profit, the Return on that Investment is 50%!
Now I challenge you to find a wealth manager or financial planner that will tell you that they can get you a 50% return on your money. Take a look at your 401K, even in these booming last couple of years, and look at what your returns have been. 8%? 12%? Most advisors would be extremely thrilled to avg 8% for you. And that’s annualized. Meaning, they are only earning you 2% per quarter. Take that same $10,000 and invest it in the market and look at your returns. I’ll model it out for you:
Q1 - 10,000 x 2% = $200.00
Q2 - 10,200 x 2% = $204.00
Q3 - 10,404 x 2% = $208.08
Q4 - 10,612 x 2% = $212.24
1-year total = $824.32
The total gain from this aggressive investment in the market was $824.32.
Let’s compare that with the VDA investment adding value of $10K to a home being sold:
Q1 – 10,000 x 50% = $5,000
VDA would make you $4,800 more in just the 1st quarter.
But the best part is, you don’t have to stop there. Once you’ve gone through the VDA process, you’ve joined the rest of my clients as Elite Investors and if you want to continue investing in real estate, we’ll make that happen for you.
So let’s compare your “market returns” with the VDA returns on an annual basis.
Q1 – 10,000 x 50% = $5,000
Q2 – !5,000 x 50% = $7,500
Q3 – 22,500 x 50% = $11,250
Q4 – 33,750 x 50% = $16,875
1-year total = $40,625
Now if you’re a world is flat kind of person, you’ll probably be more inclined to go with the market that is ever fluctuating and earn your $824.32 over the year. While it seems safe, bottoms of markets drop out all the time.
With Real Estate investing, we go to great lengths practicing “Safety of Principle”. We have so many checks and balances and margins of safety to ensure that, as Warren Buffet says, “Rule #1, Never Lose the money! Rule #2, defer to Rule #1”
When you can change your perspective & compare investing opportunities in terms of apples to apples, i.e. rate of return, then you can truly see what the MASSIVELY greater opportunity is.
Trust me, the earth is most definitely round!
#Perspective #ReeseRealty #ListitorFlipit #ValueDrivenApproach#StoryAthlete