Hey, gang, from Chicago!
Running a bit behind tonight - crying in my beer over our beloved Chicago Bears took it on the chin from the dreaded, rival Green Bay Packers tonight.
Ahh, well - there's a lot of football to go, I guess!
I wanted to pay a bit of homage to my Active Rain buddy Jim Crawford from way down in Georgia, and his recent AR Post, "Where Did Positive Thinking Go Wrong."
Jim talks about how The Power of Thinking Positively, although often times admirable, may not be in complete sync with today's real estate reality. He feels that many of those who took this overall attitude and approach may have been somewhat in denial.
Perhaps they were attempting to "Positively Think" the real estate market into rebound. And many, I would imagine, may have left the business - with positive thoughts in their heads, mind you!
We all know, folks, reality doesn't work that way, although a habit of thinking positively, can help you make it through the difficult economic reality many of us find ourselves in right now.
But I wanted to expand on Jim's core idea, take it one step further -
"Can A Business Attitude of Positive Thinking Actually Prove Fatal to Your Business?"
Here is what I mean -
Many independent contractors, and all entrepreneurs, take considerable personal and financial risk in building their business. We are taught to allow enough time for often considerable monetary and labor investments to pay off.
In the real estate business, practitioners are schooled that the market is cyclical. That it will go down, periodically, but will also come back up - predictably. Everyone needs a house. There will always be a scarcity of land. And natural supply-demand forces will keep the market in check, long term.
When business does go down, however - what do you do? If you think positively, you will feel that a rebound is right around the corner. So you hang in there. Read only positive articles in the papers and on the Internet. If you need to borrow a bit to keep your business on what you consider to be a growth mode - so be it!
You'll pay things back when the market stabilizes - shortly! Right?
Another down month - "Hang In There!" Positive Feelings! You'll make it. But you have to borrow more money to get through.
Today, many in the real estate business, and thousands of others in different businesses - new car sales, for example, and in many facets of retail sales - kept thinking positively, reacted calmly - but continued to borrow. More and more, month after month.
After all . . . the down cycle is bound to turn around soon, right? It can't go on forever . . . yes?
But, unfortunately for many, the recovery did not hit quick enough. Reserve Savings - decimated. IRA's and SEPP's - depleted. Relatives and Friends - tapped for loose change, with a promise to pay them back when things get better.
Do you have Real Estate as your primary nest egg, and safety net?
In the olden days (say, around 2006), you always felt you could unload properties quickly if you needed to and stay afloat. Today's reality - here in Chicago, anyway - many investment properties are down 40% or more from their historic high values. And selling them now only creates negative equity - in many cases, a sure short sale, or far worse.
Many practitioners, a few years ago, had well-built reserves. But for these same people, things are now month to month, or even day to day - these safety nets - gone!
Some still persist, however , hoping for a quick turnaround. Reality is there, of course, but that old "Positive Thinking" Habit keeps them looking confidently forward.
But the stakes are higher, the delayed closings more painful, the steady bills that much harder to pay. And the fear of falling off the happy merry-go-round - sometimes stifling!
Personally, our Positive Thinking walked hand in hand with a bit of rainy day planning, so our Team is still hanging in there - sometimes, however, by a thread.
Others in our industry, however, are not having as easy a time. They are at wits end. And damn near flat broke!
I feel for these folks, applaud their good humor and confidence, but also hope they begin to embrace reality along with their positive outlook. Keep things light, and forward-thinking - but also dig in, scale back, work hard, and produce results - even at a slower pace than before.
Know folks like this where you are? Sure you do, and you probably feel their pain as well.
Please share some of your experiences, and your thoughts!
And . . . hey, get some sleep . . . yes?
DEAN & DEAN'S TEAM CHICAGO
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