Expertise is not simply a good thing, an admirable advantage for a CEO or another professional. It is, instead, a necessity. It means the difference between deciphering complex information, making the right decisions and avoiding the wrong ones, no matter how attractive they appear. It means, in short, having the knowledge to identify opportunities and the ability to seize the moment, for the benefit of your business and the satisfaction of those you want to engage.
Nowhere is that expertise more critical than in the real estate industry, where the divide between distinguished investors and seemingly naive speculators is significant. For the health of the market itself, particularly concerning the sale of distressed properties, it pays (in multiple ways) to know this specialty thoroughly. This emphasis on knowledge reflects the principles of the late Richard Feynman, the famed physicist and Nobel Prize Winner, whose enclosed words (about the dangers of pseudoscience) are just as relevant within the realm of business and executive leadership.
“See, I have the advantage of having found out how hard it is to get to really know something, how careful you have to be about checking the experiments, how easy it is to make mistakes and fool yourself. I know what it means to know something and therefore, I see how they get their information and I can't believe that they know it.”
Feynman's comment resonates for me in a powerful manner because, in my role as a franchisee for HomeVestors and as the owner of Clear Key Property Solutions, I know, in my own way and for my own business interests, what it, too, means to really know something. I know how easily people can consider themselves real estate experts, making bold but false assertions about pricing, economics, demand and inventory. And I also see how they get their “information” – their reliance on emotion over reason, financial mania over budgetary common sense – and I can't believe that they know it.
Indeed, the real estate collapse proves this point: That, among non-investors and, with all due respect, blind-to-reality speculators, there is little or no effort to check the experiments (since history shows the real rate of price appreciation) or identify the mistakes (like overbidding for homes well beyond their true worth) that culminate in huge losses and panic selling.
So, in response to the question, “How can we prevent a similar disaster from occurring again?” my answer is simple and direct: Only work with those investors who truly know something, the distinguished professionals who know the details of a city – in my case, the Greater Dallas Area – on a granular level, neighborhood-by-neighborhood and street-by-street.
Now, apply this same principle – the rule of expertise and genuine knowledge – to any other field of business, and the facts are just as true: That a CEO, who has the skills and longevity of experience to understand the way the economy works, is an asset; he or she has the wisdom, which comes from practice and not theory, to make the right decisions for the right reasons, backed by verifiable data.
Does this, then, mean real estate or business in general is like physics? Far be it for me to even share the same verbal company as Professor Feynman, but every industry is like his example (about knowledge) in one very obvious way: They rise or fall based on evidence, not hopes, ambitions or dreams. In fact, there is a follow-up statement from Feynman about this very issue. He says:
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.”
I abide by that admonition, which benefits owners of distressed properties, because it gives both parties an acceptance of reality and the confidence (among sellers) to do business with me. Neither of us resorts to the temptations of pseudoscience, nor do we enchant ourselves with elegant but misguided theories.
Simply stated, I have the trust of sellers because – and I issue these words without any braggadocio or self-promotion – I really know something; I know how to fairly price, purchase, renovate and rent distressed properties. Equally important, I know how to combine this knowledge for the good of a seller of a distressed home – I understand their dilemma – and can create a proverbial win-win solution for that person.
That strength, the commitment to really knowing something and knowing how to apply that knowledge to solve a customer’s problem, is a principle every CEO should adopt and practice because it elevates security over speculation, reason over the refusal to abandon broken concepts and ill-conceived ideas.
By working with a business expert, or by entering into a real estate transaction with an accomplished investor, people can profit and protect themselves. They can profit financially or personally, thanks to the peace of mind of dealing with an individual who really knows something. That strategy has the added advantage of accuracy, not overreliance on deceptive ideas or illusory promises.
From there, we can move forward – together – towards success.
Kevin Guz, owner of Clear Key Property Solutions (http://www.clearkeypropertysolutions.com), a HomeVestors franchisee in Dallas, Texas.