Being a veteran myself, I know how well the military does in teaching fast and accurate decision making. That is why I absolutely loved a recent interview I listened to with military veteran and business superstar, Clint Rusch. I was pretty fresh out of the army when I encountered this in business for the first time. I was a green, like really green, real estate investor going through one of those home study courses. One of the success principles the course claimed would create massive results in your development as a real estate investor was the ability to make quick decisions. For some reason, that I cannot even explain now, this concept hit home. Peter, the author of the course, suggested we practice making quick decisions on stuff that really does not matter. He said each time you go out to eat, make your decision in less than 60 seconds. That simple little piece of advice stuck and is something I still do today. Practicing quick decision making has helped me and my business more than I can measure.
Decision Making Tips For Real Estate Investors
One of the things I have noticed as a real estate investor is that it can get kind of lonely. Decisions on what houses to buy, what amount to offer, whether or not to accept a tenant, an offer from a potential buyer, or to sign a contractor agreement, come down to you and you alone. There is very little, if any, consulting with other team members for advice because you are the only team member. This makes decision making much harder and even more crucial to your success.
Here are some of the top points I picked up from this interview that I believe all real estate investors can benefit from.
Decision Making Fatigue
Clint mentioned that there is a study that proves that we get decision making fatigue. He claims that there is significant proof that surgeons are far more likely to recommend surgery in the morning when they are fresh and confident in their decisions and far more likely to recommend additional tests as the day progresses. As the day wore on, their confidence and willingness to make important decisions faded. This tells me as real estate investors we should make our important decision first thing in the morning when we are fresh.
40-70 Rule
According to Colin Powel, the best decisions you will ever make are when you have between 40 and 70 percent of the information needed to make that decision. If you have less than 40%, you simply do not have enough information but if you have more than 70%, you are waiting too long. This cannot be more accurate than in our industry. I see it all the time. Investors get nervous about a deal and so they keep gathering information by doing their due diligence and by the time they are ready to buy, the deal is no longer available. We are in a competitive industry, so we need to make decisions fast if we have any chance of getting the deal. Don’t wait until you have all the information, just until you have enough information.
Time Matters
Time is money, or survival if you are on a battlefield as Clint pointed out. By making decisions fast you are saving time to put more energy into money making tasks or the decisions that really matter. If you get hung up on a decision, not only will you be wasting actual time, you will be wasting mental capacity and will severely limit what you are capable of. Clint goes through this process when making a decision so that he knows he is spending his time on the right decisions:
- When deciding between two options he looks at the long-term benefit. Which one has the better long-term benefit? If one clearly does, that is the correct choice, and the decision is made immediately.
- If they both have a similar long-term benefit, he asks if one has a better short-term benefit. If the answer is clearly yes, that is the option to choose and the decision is made.
- If both long-term and short-term benefits are equal or close to equal, he asks if the decision is reversible. If one is reversible, choose that one, if they both are, then just make a decision and move on. Do not spend any more time on it.
- If the options are not reversible he asks if it is important. If it is not important, like what to order on the menu, then just make a decision and move on.
- If it is important and not reversible, then you should ask yourself if more information is needed to make a better decision. If more information is not going to help or it is going to take an unreasonable amount of effort to get the information you think you need, you should just make a decision with the understanding you will not be hitting 100%. You will make the wrong decision on occasion and as an investor and business owner, you should work on being comfortable with that. No decision is far worse than a wrong decision because no decision is always wrong, and no progress is made.
- If there is not a clear benefit long-term or short-term, the decision will not be reversible, it is important, and more information should be obtained and not over burdensome, that is the decision to spend your time on.
Using Clint’s process, or something similar to this, will enable you to capture time from quick decision making. The time you save can be used on making money or you can spend it on problems that need more time to solve. This is exactly what the most successful investors and business owners do.
If you are interested in the full interview, you can find that here. https://bestplacestolead.com/ep44/