WHAT ARE YOUR BLIND SPOTS?
Don’t let them ruin your day
My blind spot in the car just about caused an accident with another car on the Interstate last week. Blind spots can ruin your day.
I was pulling onto Interstate 4 and getting up to speed. As I veered left to merge into traffic, all of a sudden a car horn blasted to my left. That car had been in my blind spot. I just about pulled out in front of it.
Have you ever become aware of your “blind spots”?
There is the old classic blind spot of having a bit of spinach in your teeth and not being aware of it. Talk about embarrassing.
Blind spots are everywhere — as we are driving, in our daily life, and at work.
A big, previously blind-to-us spot hit all of us about two years ago when Covid slammed our world.
Who was aware that Covid would disrupt life for so long? Who saw this virus coming? For how many of us was it in our blind spot? Which of us had a plan in place to prepare for it, adjust to it, and deal with it?
A blind spot is something that you don’t know. Other people know it, but you don’t. tThere are blind spots in every area of our life.
Perhaps like me, you have some things you do that have an impact on other people, but you don’t know that you have this impact. Something you say. A habit you have. A mannerism. You are not aware. You don’t see this impact. This is a blind spot to you.
Now, if a good friend of yours pulls you aside and tells you about this thing you do and about the impact it was having, that friend would have pulled it into your awareness. It is no longer a blind spot. You can now see and decide what you will do about it. Are you following me?
We can be blind to changes in our bodies. I’ve known too many people who weren’t aware of a major medical issue. They hadn’t kept up with the tests and checkups. And then it was too late. Men often discover too late about prostate cancer because it hides. High blood pressure can be a killer if it remains in a blind spot, undetected and untreated.
When we adjust the mirrors on our cars or have sensors (like the side mirror in the picture above) to make us aware of objects around us, those objects have been pulled out of our blind spots and revealed so we can see them. And when we see them we can drive more safely and avoid unintentional accidents.
When someone points out to me that I have spinach stuck in my teeth, I can do something about it, now that I am aware. Make sense?
I find it very helpful to eliminate, or at least reduce, as many blind spots in my life as possible. This often either requires some research or study on my part or the involvement of others who know what I don’t know.
Those who study what makes people more effective often point to this reality of blind spots. They say we gain effectiveness by reducing the size and number of blind spots in our lives.
BLIND SPOTS IN REAL ESTATE INVESTING
A single-family real estate investor recently found and bought a house she was going to fix up and sell. She thought she had a really good deal. She didn’t think she needed to get it inspected.
But, when she walked through with her contractor to determine the scope of work for the fix-up, they kept finding things she hadn’t seen before she purchased it. Aluminum wiring, a Federal Pacific electric panel, significant termite damage, problems with the HVAC, and more.
These house-buying blind spots cost her thousands and thousands of dollars.
My friends who are home inspectors are great at making potential home buyers aware of things we wouldn’t otherwise see in a house. They can often save us big headaches, many dollars, and more.
For many of us who are not trained in the law, we know the value of a good lawyer to help us with our blind spots with legal documents, partnership agreements, and the like.
In real estate, there is something we call “due diligence”. This is a process or system of looking for and eliminating, or at least reducing, blind spots when we are about to purchase a property. It means taking a good, thorough look at the property and all its parts.
ONE OF OUR PROPERTIES
Several years ago we found a property, a 100-plus unit apartment complex.
There was a lot we didn’t know about this property or about how we would purchase it. In other words, we had a lot of blind spots at first.
MARKET BLIND SPOTS. Our previous research of the market in which this property was located gave us a good understanding of the rents at comparable properties, of the supply and demand of apartments in the area, of the schools in the area, employment, job growth, population growth and the like.
This research revealed we were in the right market. Some people don’t do adequate market research and go in with many blind spots related to that market.
SYNDICATION BLIND SPOTS. Because of the amount of money we would need for the down payment on this property, we knew we needed to syndicate. This meant we would need to put together a group of investors to partner with us, and make investments in the property. But, we are not attorneys nor experts in the requirements of the Securities and Exchange Commission when it comes to syndicating.
So we found and hired an excellent syndication attorney for our team. She asked a lot of important questions, revealed to us the legal requirements, provided the proper paperwork, and walked us through the process. Without her, we would have been proceeding with many legal blind spots and might have been wearing orange in a Federal Prison by now.
PHYSICAL PROPERTY BLIND SPOTS. Once we secured a purchase agreement with the owner, we began an extensive process of due diligence with the property and the financial and legal records related to the property.
We hired roofers and plumbers and electrical contractors and others to examine the property with us. Each one gave us detailed information on the roofs, plumbing, electrical infrastructure, and other key elements of the buildings.
We walked every single unit on the property. We took pictures. We noted issues in the kitchens and bathrooms, floors, doors, windows and more.
Without this inspection of each unit, and of the major physical elements of the building, we would have been blind to the actual condition of the property, in detail.
We also walked through the leases, the rent roll, the financial records, the contracts with vendors, and more.
This was critical to clearly and fully understand the property before we actually purchased it. If we hadn’t sought out this information, the blind spots could have had major negative economic ramifications.
OTHER POSSIBLE BLIND SPOTS. The three of us who are managing partners with this particular property also talked through other potential factors which could happen in the future.
We talked about the economy and the possible changes in the economy.
We talked about our partnership and the possible events that could happen in our partnership. For example, if one of us became ill or died.
With the help of our attorneys, accountants, business coaches and others we sought to reveal as much as we could, so as to eliminate, or at least greatly reduce, our blind spots related to this property.
We did this to protect ourselves and our families as we also sought to protect our investor partners and others.
BLIND SPOTS AS A PASSIVE INVESTOR
Many of you who are reading this blog will not be active, managing partners of multifamily properties. More likely you will be passive investors. You will not be making the day-to-day decisions about the property. You will be relying on those who are operating the property for you.
Please be aware of the possible blind spots to your investment.
Read all the material in any offering. There are a lot of pages in a normal set of documents. Check them out with your advisors, your attorneys and accountants and others.
Get to know the potential operators very well. Do your own due diligence on them. Spend time with them. Ask a lot of questions. Get references.
Three words are often used, and they are so important. Make sure you know, like, and trust them.
And, after you have invested, stay informed. Talk with your operators regularly. Ask for key information from them, such as rent rolls, financial statements, etc.
BLIND SPOTS ARE REAL AND PERVASIVE.
The Johari Window in the picture above points out four areas. Our Open Self is known to us and others. Our Hidden Self is known to us but not to others. Our Blind Spot is not known to us but is known to others.
There are areas of our life where there are things others are aware of but we are not. We reduce our blind spots by asking others to tell us about things of which we are currently unaware or don’t know.
In our personal lives, we can go to our health professionals to run tests or do checkups to reveal to us things of which we are not currently aware. We can consult our attorneys or accountants or other professionals to reveal things to us which otherwise we would be unaware.
In real estate investing, either as an active investor or as a passive investor, it is wise for us to reduce or eliminate as many blind spots as possible. This enables us to have the most effective and safe investments possible.
At Attune Investments, we are very aware that we have blind spots and we do what we can to reduce them. We draw in others to be on our team. We think through possible future events. We anticipate changes in the economy or market.
Blind spots are real. And they can often lead to real problems. They can ruin your day.
Or, you can do something about them.
LET’S GET TO KNOW EACH OTHER BETTER.
Attune Investments provides a better return for our investors. And we make a positive impact in people’s lives and in our world.
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Through the power of a syndication partnership with other investors like you, working with managing partners who are experienced in managing apartment complexes, you can own multifamily assets.
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Harland leads our Investor Relations. He is a “repurposed” Pastor and Army Chaplain. He is an author, speaker, mastermind facilitator, and coach. Harland lives with his wife, Barbara, in DeLand, Florida.