HAVE YOU SEEN THE HEADLINES?
What to do when the skies ahead look dark.
LOOK AT THESE RECENT HEADLINES
- “ Investment Sales Plummet 74% in the First Quarter” (Globest, April 5, 2023)
- “Recession Talk Begins Again, And Multifamily Investors Are Cloudy On What Impact It Will Have On The Rest of 2023” (Benzinga, April 4, 2023)
- “Home prices fell in February for first time in 11 years” (Wall Street Journal, March 21, 2023)
- “Rising Insurance Rates Yet Another Storm of Multifamily Investors…” (Benzinga, March 27, 2023)
- “Layoffs are up nearly fivefold so far this year…” CNBC (April 10, 2023)
- “Multifamily Investment Came To A Halt Long Before Bank Fails” (Benzinga, March 17, 2023)
- “Billionaire investor Barry Sternlicht says inflation is going to ‘drop hard’ – just look at rents” (Fortune, April 10, 2023)
- “Morgan Stanley commercial real estate report predicts steep price drop” (USA Today, April 7, 2023)
- “Amazon cuts 9000 more jobs, bringing 2023 total to 27000” (AP, March 20, 2023)
- “The Multifamily market continues to show signs of slowing…” Businesswire, April 6, 2023)
The headlines seem a bit dark, scary, don’t they? “Sales plummet”, “recession”, “prices fall”, “rising rates”, “investment came to a halt”, “steep drop”, …
What does it feel like in your gut when you read these?
How do you process information like this? What will you do with this?
At our regional real estate investors meetup a week ago, we talked about the headlines in the news. We noted what we are seeing in the economy and especially the real estate world. Some investors were a bit anxious. Some admitted they were holding back. Some seemed quite calm in the midst of the potential downturn.
REACT OR RESPOND
A long time ago, a friend taught me the difference between reacting to events and responding to them. I am sure glad she did.
Choosing to respond rather than react to events (and headlines like these) has helped me navigate through life a whole lot better. I have been able to make better decisions and take the kind of action that made more sense.
Responding works better for me compared with reacting.
A REACTION, according to my friend, is acting quickly, often too quickly. When something happens, a reaction doesn’t allow for more than a gut-level action. We don’t have time to engage our better thinking.
You have heard the saying “fight or flight”. Our bodies try to protect us with these two reactions. Nothing wrong with that. But, could it be better not to do the first thing, to react?
During the early days of the great recession, I watched several people react to the big dips in the stock market. They immediately sold their stocks and mutual funds, afraid they would go down further.
They took huge losses. Many did not recover. They had to cut back on their lifestyle. Some lost a huge chunk of their retirement savings. It was tragic.
Reactions can be tragic.
Now, of course, there are times when reactions are the right thing to do. A car has veered into your lane. You cut your finger with a knife while preparing supper. Your child falls off a ladder and breaks an arm. Someone in the restaurant is choking on food.
In these situations, of course, react. React fast. Get out of danger. That may be the best course of action.
But, most of the time, I have found it better to respond.
A RESPONSE, according to my friend means taking a moment between the event and my action. It may be a few seconds or a few hours or a few days.
When you or I read headlines like those above, it might be wise if we respond, rather than react. It might be better if we pause and engage our larger brain and our deeper capacities.
We might follow the wisdom of the counsel — “Count to 10”. Create a gap. Take a breath. Delay taking action until you can develop an appropriate response.
Those who were calm during the great recession were able to last out the market dip and regain what they had “lost on paper” and have even done well. They responded rather than reacted.
I have found the following four steps helpful as a personal system for responding to events. See if you find it helpful also. You will notice the first letters of the four steps spell R.E.A.L.
The first step is to recognize what is going on. To be aware of what is happening around you.
A part of this recognizing is getting in touch with the emotions you are feeling and the thoughts you are having. Recognize the anxiety.
Some people seem to refuse to see the dark clouds on the horizon, decide to not read articles like those above, and deny things are happening around them. The first key step is to recognize, to have eyes wide open, and to engage your mind and heart.
A part of this recognizing step is keeping up with the news, the events going on around you. A couple of the investors in our syndication have been sending me articles, like those above. Keep situational awareness, just like you do when you are driving. Stay aware.
I am aware that those who write these articles likely have a bias of some kind. Perhaps the headline is a bit over the top to get more readers, more hits. It is also possible to give too much time and attention to the news. It can be a dangerous loop, a waste of time.
But, recognize is the first step in managing the events happening in our world.
The second step is to embrace where you are.
The market is in a bit of a turbulent state right now, isn’t it? Interest rates are up, inflation is up, a recession is possible, housing prices are not as hot as they were last year, and several big companies are announcing layoffs. All of this is true.
Some might want to argue with the facts and fight the market.
You and I might wisely choose to simply embrace these facts.
I take a deep breath and accept the situation happening around us. I don’t try to deny it. I don’t hide from it. I learn what I can from it.
I am in touch with my feelings, my emotions. There are times when I don’t sleep well at night, if you know what I mean.
Another friend of mine once told me, take the market where it is. He reminded me I may not like what is going on, but also that I can’t do much about it. Accept it. Embrace it.
There are the first two steps. Now to the third.
The third step is to act. Not just any action. A well-considered, intentional, effective action.
I saw a YouTube video of two people who were on an escalator on their way from the first floor of the mall to the second floor. And then, crunch. The escalator abruptly stopped. They were jolted and found themselves standing on a broken escalator. Then they panicked. Both stood on their step frozen in place. They began to yell for help.
It was ridiculous. Their solution was as simple as walking up the rest of the way on the escalator. But they wouldn’t take a step. (Here is the link. It is less than 2 minutes. Take a look: https://youtu.be/Kq65aAYCHOw
Reacting is taking action, often too quickly.
Response also means taking action, after recognizing what is going on and embracing the situation. Response means developing a plan of action in the gap between the event and the steps you will take to solve your problem.
Results come from our actions. As one wise person told me – our thoughts produce our feelings, our feelings produce our actions, and our actions produce our results. What do you think? Are actions an important step?
The third step in the R.E.A.L. approach is “act”. Do something. Don’t just stand there.
Effort, action does produce results.
Deciding not to take any action immediately is a decision, can sometimes be an appropriate action. After thinking about it, you may decide to continue to wait for more information or to give you time to consult with others.
Consider your options. Explore the risks and benefits. But, do something. Take action. Step 3.
4. LINK WITH OTHERS.
The fourth step is to link up with others. This means not trying to go through life alone.
I sure am grateful for the two friends I mentioned in previous paragraphs, the one who taught me about the difference between reacting and responding and the one who taught me to take the market as it is. I am glad I linked up with those two.
Life really is a relationship game. So is real estate. Over the years, I have been blessed with many people who have walked alongside me, taught me, held me accountable, shared insights with me, partnered on projects with me, cared for me, and loved me. I continue to choose to link up with others in my life, especially in my real estate investing.
The two other general partners I work with on my multi-family investments balance me out, fill in the gaps, and help us have a solid leadership team for our investments. The property managers and painters and plumbers and accountants all play an important role on our team.
We couldn’t work in large multifamily without our passive partners in the syndication. We choose to link up with them so all of us can work in this space.
So, who are you linked up with as you read the headlines in the news these days? Who can you call for counsel? Who is a sounding board for you? Who comes to mind that you can add to your team? And where can you be of help to others on their journey?
We at Attune Investments would like to link up with you so we can make our way together through the turbulent markets in which we live.
As you read all the headlines in the news, perhaps you will find it helpful, as we do to employ the four steps in the R.E.A.L. approach.
HELP US GET TO KNOW YOU BETTER
What has been your experience with partnerships? What have you gained? And what lessons have you learned that you are willing to share?
Attune Investments provides a better return for our investors. And we make a positive impact in people’s lives and in our world.
If you want to learn more about how others are investing with us then we invite you to join our club and request a conversation with us. See below.
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.
Or you can choose to loan money, get in with a clear return, and get out earlier.
If you haven’t already subscribed to our BLOG, you can increase your knowledge and comfort with this asset class by subscribing now. It’s free. We publish an article every week. SUBSCRIBE HERE And take one more step. Become a member of our ATTUNE INVESTORS CLUB in which you have more personal access to us. JOIN HERE.
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.