My Lessons from the Greatest Generation

Much has been said over the last several years about the generation of Americans now commonly referred to as “The Greatest Generation.” Most of us have been fortunate enough to know one or more people from this generation and have been greatly influenced by them on a personal level. For me, the greatest of these was my paternal grandfather. From him, I learned lessons that still stay with me and influence the way I do business every day. They are not specific formulas or techniques; they are principals. My grandfather applied them on the farm. We can apply them to our industry. Others can apply them to their industries as well. I’ll share a few of these.

Lesson One: Time Tells All Tales

I remember my grandfather telling me once that it generally isn’t as bad as we first think or as good as it looks on the surface. There are times on a farm when the rain will come early and it will look like a great year is in store only to see the rain stop and the given crop dwindle. There are also times that look bleak early only to see late rains and banner years. Does that sound familiar in our industry? Did you ever miss a deal and end up extremely thankful you did when you saw it go badly for someone else? Or have you ever passed on a deal only to see it turn to gold?

Real estate is an asset class that has a long shelf life and must be judged in the window of time. Some of the best deals I have been able to make were because someone else got impatient and gave up just before the deal turned the corner. With patience and by maintaining the proper perspective of time with a deal, we can avoid being the person who sells early. We can also avoid being the impatient one who “falls in love” with a deal and fails to see the negatives.

Lesson Two: Skinny Cows Make More Money

My grandfather used to say that someone else could have the fancy, fat, registered cows; he’d take the skinny, unregistered cows every time. Did that mean he liked to keep his cows skinny and not well cared for? No. (See Lesson #3 below.) It simply meant that there was more opportunity in fattening up the skinny cow that just maintaining the fat cow.

For our purposes, it comes down to finding opportunities to increase the “weight” of our projects and increase our profits. It doesn’t have to mean that we solve some complex problems that require people smarter than me to figure out. It just means that with tweaking various aspects of a given deal, we can make a healthy profit.

The other side of that coin is that you better do your homework on that cow. Skinny because it is being underfed or has a curable problem is one thing; skinny because of bad genetics or the fact that it is about to die means your aggravation level is about to rise. You had better know your product.

Lesson Three: Fences Need Built & Grass Needs Mowed

I cannot remember a time when my grandfather wasn’t in the midst of some improvement project on his farm. Towards the end, he could have just started taking every penny out of the operations and not improve anything. After all, he was in his 80s and would not be around for the complete life cycle of the projects he was working on.

How many times have you known of a property owner that just “patched” big problems because they didn’t plan on owning the property long-term? How likely are you to ever buy a property from them? I know of owners of apartment projects that just rob HVAC units from one unit to get other units ready without ever replacing them. Eventually, they have 80 rentable units instead of 100. That sounds like the equity reduction formula if I ever heard it.

The point is that we as property owners or those counseling property owners must be diligent in maintaining the properties. If we do not, eventually our assets will be significantly reduced as will our reputations if we sell properties that have just been “patched.” This is definitely a path to eventual failure.

These are just a few of the lessons that my most significant connection to “The Greatest Generation” taught me. Unfortunately, he is no longer around to teach me more, but we as a group are blessed with some remaining members of prior generations. There is still significant wisdom to be gained from Jack Hunt, Paul Winger, Hunter Quistgard, Bill Warr, and others. These are just some of the people who forged a path for us to follow in “creative real estate” and they are regularly sharing their wisdom at our meetings. It is up to us to pay attention, learn and apply.

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