In recent weeks my trust has been violated by people that I chose to do business with. I trusted these people to do the right thing, to follow through on their promises and was instead left wronged and disappointed.
On this podcast, and while working with students and clients I preach to always document everything and to be sure all parties sign agreements that are prepared by attorneys.
My mom raised me to be honest and ethical in all my dealings, to not take advantage of people and to be transparent and not feel that I have to hide from people or the truth. My Dad (who I loved dearly; God rest his soul) had a tendency to “stretch the facts” so to speak. That always bothered me growing up. Sometimes family and friends called him a “BS Artist”, which upset me although I must admit that was partially true.
In my early twenties I “stretched the truth” to a friend and was found out. This person was very hurt by this incident and knowing that my poor choices had a negative impact on another person bothered me deeply. I will even go so far as to say that the thought of me hurting someone else by my statements changed my life forever. Even though I was 19 or 20 at the time, I knew better. Since then, I have always remained vigilant in telling the truth and not ever intentionally misleading anyone.
As a father, I have raised my daughters with the same principles I learned from my mother. I encourage my daughters to not live in fear and to be open and honest with people. I taught them to work hard and help other people whenever you can. I thought them to make a difference in the community instead of ignoring it or destroying it.
As investors, trust plays a huge part in our success. When someone violates that trust it sets back everyone. We exist in a society where we are constantly lied to, where critical facts and figures are either not reported or worse, manufactured with no basis. Americans have actually coined the phrase “little white lie”, Really?
Lies in marketing:
Have you ever seen a sign that says “We Buy Houses Cash”? How about “We will close in 7 days or less” or “No Commissions or Realtor Fees”?
If you post a sign like this and do not fully intent on paying cash, closing in 7 days or intend on working without any compensation then you are part of the problem. You can use all the fancy interpretations you want but that won’t change the fact that you are simply lying.
I see Facebook posts and ads promising specific returns for those willing to invest in another person’s real estate deal, I wonder what the Securities and Exchange Commission would have to say about that? It amazes me to what lengths people will travel to attempt a shortcut. Raising private money involves the development of a relationship and adherence to a strict set of rules, yet these rules often go ignored.
I have seen ads on Craigslist offering properties for sale with the seller conveying only a quit claim deed which is a super high-risk transaction.
Ladies and gentlemen, nothing good comes from deception..ever.
When advertising, simply don’t make false claims.
When two or more people agree on something it used to be such that the word of those people was their bond. We have gotten away from those ideals over the years but I still want to believe that there are good honest folks out there that do good honest business.
Larry Harbolt teaches to negotiate at the kitchen table. Part of the reason he teaches this is that it is a highly successful means of negotiating. To look someone in the eye is uncomfortable for many, and for those who do good honest business it is a proven deal maker strategy.
Liars, thieves and cowards have a tough time looking you in the eye. They will look everywhere else but at you. Liars, thieves and cowards exemplify everything that is wrong with this country.
When you structure a deal, PLEASE make sure it is in writing, clearly understandable and signed by all parties (with witnesses for good measure). Try not to get suckered into the belief that “it won’t happen to me” when it comes down to seeing a deal through. Our most recent lesson taught both Jill and I this very fact.
Sometimes, people are so paranoid that they are making a mistake or getting screwed that they actually convince themselves that details exist that are not real. By this I mean they actually talk themselves into a scenario that is not actually happening. When fear sets in to this degree, your best bet is to take a step back and let the dust settle.
Fear is a natural emotion to have, but we all must realize how crippling fear can actually be. Try your best to not let fear drive you to make irrational decisions that are not based in fact.