3 SMART ways to mitigate your house flipping risk (or any REI) AND manage your thoughts around certainty.
-- I share with you the results of 28,000 predictions by "experts" and just how accurate they really are.
-- Why it's dangerous for your mindset and your business to put too much weight on any prediction anyone gives! The key is to run a nimble business that quickly responds to the actual things that happen, not the "these may happen" things.
-- The real reasons people try to "time the market" even though it's impossible.
***I'm having a heart to heart with you, just as I wished someone had with me 17 years ago.***
With faith in yourself and in your business' mission, YOU have got this.
1. New Webinar: 3 Part Method to Confidently Buy, Renovate & Sell Houses in Any Market
2. Follow That Flip! Follow me and 2 local students as we flip a house together!
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4. Continue the house flipping conversation in our free Women Flipping Houses Facebook group
You're listening to the flip houses like a girl podcast where we educate, empower and celebrate everyday women who are facing their fears, juggling family and business, embracing their awesomeness and wholeheartedly chasing their dream of flipping houses. Each episode delivers honest to goodness tools, tips and strategies you can implement today to get closer to your first or next successful house flip. Here's your spiky haired breakfast, taco loving host house flipping coach, Debbie DeBerry.
Debbie DeBerry 00:39
Hey, hey, we made it another week in this shelter in place situation that we're in right now. And I hope that you are finding ways to give yourself some self care and some grace and patience. And know that we will get through this. All right, there is an end in sight. All right. So today, first of all, I want to let you know that I have a new webinar out called the three part method to buy, renovate and sell houses in any market with total confidence. All right. So here's the thing. I'm also currently accepting students into my program, because I've been bombarded lately by you telling me, Debbie, I want to get in, but the doors are closed. So here's the thing, I'm opening up doors for a little bit, it will not be an ongoing enrolment situation. So if you are ready to make some serious progress and get off the freakin sideline, let's do this. Go to first flip dunrite.com and save a spot for the time that works for you. In that training, you'll learn the top three mistakes that you need to avoid that most all beginning investors make. You'll also learn some of the philosophy behind the processes that I teach to my students. And you'll hear all about my program. So if it's a great fit, you can join right then the only way to join my program is by going through that webinar, there are no workarounds. And again, you will only be able to join every so often, it's not ongoing. So if you're ready to take action, take action. First flip dunrite calm. Okay, now that the housekeeping is out of the way, let's get into today's episode. If you missed a recent Facebook Live I did. I talked about timing the real estate market. You can't do it. By the way. I'm, and I'm going to share with you three smart ways to mitigate your house flipping risk and manage your thoughts around certainty. I'm going to share with you the results of 28,002 predictions by experts and just how accurate they really are. I hear a lot of you guys talking about Oh, the experts say the experts predict this. Okay, well, they're just people. Also, we're going to talk about why it's dangerous for your mindset and your business to put too much weight on any prediction anyone gives? All right, the key always is to run a lean and nimble business so that you can quickly respond to the actual things that happen. Not the so called predictions or the these may happen things all right. I'm also going to lay out exactly the reasons why people try to time the market, even though it is completely impossible to do.
Alright, let's dive in. I want to chat about something today that is definitely at the forefront of everyone's minds. And that is certainty. Okay. Rather, I want to talk about the illusion of certainty, because here's the fact that our brain hates uncertainty. All right, absolutely detest it. Okay. For example, let's just think about this. Has there ever been a time when you didn't know the answer to something, let's say you had some blood work done. Or maybe you had, for example, I had a lymph node removed when I had cancer last year, they had to remove a lymph node to see if the cancer had spread. So I waited for two weeks for the results of that right and in the during that time, it was maddening. I just wanted to know the uncertainty was driving me absolutely mad. Can you relate to that? I had a feeling okay. The worst thing is just not knowing, right? It's like, if you just know, then you can act accordingly. So the executive function of the brain, it's a planning machine, okay? We like to plan, we plan vacations, we plan what we're going to buy at the grocery store. Heck, I plan what I'm going to eat the next morning, because I tend to wake up starving. And many of you will not be surprised to know that it's usually breakfast tacos that I'm eating the next morning. We like to plan. And if you have uncertainty, if you don't know what's going to happen, you can't plan effectively. Even if the news is bad, the brain says, okay, it's bad news. But at least I know, and I can figure out the best steps going forward. We like predicting the future. Or at least trying to just look at how many people watch The Weather Channel. I know I checked my weather app every day, maybe sometimes a couple times a day if I'm being honest, or study probability, or listen to psychics. But none of these methods provide absolute certainty. And so we keep watching and we keep studying and we keep staring at the crystal balls, right. And we forget that certainty is a double edged sword. We think it will bring a security, but forget that it can actually also bring us pain and suffering.
It's scary to live in a world where literally anything can happen, good or bad. And some people would rather settle for a less than ideal existence, then to risk uncertainty. Regardless of the kind of investing you're doing, when it comes to real estate investing, regardless of the kind you're doing, there is always uncertainty. Heck, right now, what's going on right? Short term rentals, that market has been completely obliterated. There is no income for short term rentals right now. There's no trouble happening. or long term rentals, a lot of tenants aren't paying their rent. So there isn't any segment of real estate investing, that is better than the other, that totally reduces any risk. And if anybody tells you otherwise, they're lying. Are there ways to minimize your risk? Absolutely. I talked about that all the time, ways to minimize your risk, especially when it comes to flipping houses. Three ways you can do that. One, you can leverage your local data, you better know your local data like the back of your hand.
The second one is to leverage the financing, use smart money and analyze your deals in a smart way. And then the third one is, I like to say I call it running a lean business. So have as little overhead as possible. And the way to combat uncertainty is by minimizing your risk. So just because you're certain about something or think you're certain about something does not mean that there's no risk involved. And I just want to be very clear, because the amount of uncertainty anyone is feeling right now, maybe you're feeling a whole lot of uncertainty right now. We are fooling ourselves. If we believe that there is more uncertainty now than there was eight weeks ago. It is the exact same amount of uncertainty. It is the exact same amount of certainty. There is no difference. Tomorrow, a massive pandemic could come again. Like there's never 100% certainty and if you need that, no kind of investing is right for you. No kind of risk is right for you. I fear because there is nothing certain in this world except we're gonna die right I just think it's really important that we realize and I've kind of gone down a rabbit hole lately of really thinking about certainty and risk, and how we do trick ourselves into thinking we're certain about something or less certain at a certain time and more certain at another time, when it's all it's just a tricks. It's all an illusion. Here's the thing, honestly. So, analysts, okay, I keep hearing people say, Oh, I hear people predicting that it's going to be worse than 2008. Or predicting this or predicting that that's great. Read all the predictions you need to read. The truth is, experts are not good at forecasting future outcomes. So it's interesting because I came across some studies that actually demonstrate that experts predictive abilities are no better than random guessing. So there's a gentleman by the name of Philip Tetlock, he reviewed like 28,000 prior predictions and forecasts by experts, both financial and non financial experts, and found that experts predictions barely beat random guesses. The statistical equivalent, basically, of throwing darts. Ironically, though, the more famous the expert is, the less accurate his or her predictions tended to be based on those 28,000 prior predictions that Philip reviewed. That's fascinating to me. So I think it's better to embrace uncertainty, and really drop the illusion, that certainty is a good thing, because it's not necessarily a good thing. If you're certain that you will get sick in exactly one week, you might spend that entire week in fear, and worry, anticipating that sickness and extending your suffering even more. If you're certain that something will definitely be a success. You may not try as hard as you may, by not trying as hard lose the opportunity to develop grit, or persistence, or tenacity, or any of those things. So since you can never be certain whether something good or bad will happen, or whether you're going to succeed or fail. Really, there's no reason for you to not try to keep chasing your curiosities, keep chasing what lights you up, keep chasing your passions, you cannot be certain that this business venture, or the next business venture is going to be a huge success. And you also cannot be certain that it's going to fail. So why not freakin try? I don't know, I don't know why people wouldn't just try. There are ways to mitigate your risk. It doesn't have to be going into something blindly. Just because you're willing to embrace uncertainty doesn't mean you're willing to go into something blindly, or stupidly or without mitigating your risk as much as possible. It's not at all what I'm saying. The secret about certainty is simple. It doesn't exist. Not if you're looking for 100% certainty that is, and I don't know, I don't know that there's a scale of certainty. Maybe there is, I'm not sure it's it feels black and white to me. You're either certain or you're uncertain. I don't know if you can be 63%. Certain, doesn't feel that doesn't feel right. To me. Uncertainty is a fact of life. Instead of receiving it reluctantly. We can try to accept it with a sense of curiosity, really, and a sense of, Okay, great. Let's figure out now how we're going to minimize our risk as much as much as possible. You don't have to be fully exposed to risk just to take on uncertain thing. It's like people who are trying to time the market, right? It is literally impossible to time the market. You cannot do it. And so what people do is they keep putting off their investing. Oh yeah, I'm going to invest when this happens. And either that doesn't happen, or it does happen. And they still don't invest because they hear someone else say, Oh, no, that's not the right time to do that. That's not the right time to flip houses just like they told me in 2008 No, Debbie. not the right time to flip houses. I still did it. very successfully mine. Or no, it's too hot. The markets too hot. I don't want to buy houses right now. The markets too hot too many investors buying houses. Okay. And then on the other hand, oh, no, yeah, I'm not going to buy now either, because it's too slow. So I'm not going to buy houses now. Because it's just too slow. No buyers. psych. Oh, my God. Do you hear how crazy that is? It's really crazy. When I hear these things, and then it's like, well, the balance the market is balanced. You know. So I don't know, I'm gonna wait until it's really hot. Again, when I know my house is going to sell, you know, within just a few days of putting it on the market. Oh my gosh, then this can all be from the same person saying these things. And it just baffles me. What it tells me actually is they're never going to do it regardless. Regardless of whether the market is perfect for them in their eyes or not. They're never going to invest. So if they can blame it on the market not being right, then they don't have to take action. And guess what if they don't take action, they never fail. And if they do fail, they don't look foolish in front of their friends and families. So that is what really is happening. If you want to know the truth. All right, you guys that's it. You know the drill. Go out there flip houses like a girl. Leave people and places better than you find them and make it a great day. Bye, y'all.