In commercial real estate, the relationships between investors, developers and owners can make or break the success of any given transaction. When communication is clear and goals are shared, investments can proceed remarkably smoothly. On the other hand, a situation where one party attempts to influence the deal in a questionable direction can bring an abrupt end to a potential partnership.
As a client, it is important to define your goals and principles from the start so that you can find the right partners and strategies to fit your situation. You must decide to what extent you are open to influence or inspiration from others and how to determine if certain advice is appropriate for you, including from experts who may have the skills and expertise to create innovative real estate value for your business.
Influence can serve as both a noun and verb, reflecting its power to change the mind and impact the decisions you make. Influence as a noun refers to the power to cause an effect, while the verb form involves the capacity to affect something.
By identifying whether certain influence is beneficial or harmful to your interests requires careful consideration of your goals and values. In that way, you can determine if you are being influenced in a way that is compatible with the path that you have already decided to embark upon. It is possible, of course, to change your mind in the face of new information, but one should proceed carefully when faced with the idea of entirely changing course while under the influence of another person.
Influence can be exerted in a number of subtle varieties, but is reducible to two essential styles.
1. Influence Through Logic
Someone attempting to exert logical influence will try to convince you to take a certain action due to some set of criteria. For example, someone may try to convince you to invest in a shopping center located in a dense suburban environment. They may tout positive factors such as the strategic location of the shopping center or the high median income of residents in surrounding townships to convince you that investing in the property is a good idea.
Keeping your real estate goals foremost in mind is essential when faced with logical appeals, since the influencer may give highly compelling reasons why you should take a certain action. Deciding whether to follow the direction of the influence is much easier when you already have a firm idea of what you would like to do. If not, you might find yourself attracted by compelling propositions that do not fit your needs and divert your time and energy from more productive ends.
2. Influence Through Emotion
Since arguments based upon emotion usually entail appeals to feelings such as empathy and fairness, their success largely depends upon your personality and values. Falling under the influence of emotional arguments is often perilous in the commercial real estate business, however, given the already strenuous task of identifying and developing profitable properties.
Knowing when someone is trying to exert influence in this way might be difficult if you agree with the sentiment of the influencer or are moved by the appeal, since you might perceive the argument as logical rather than primarily emotional. Therefore, it is advisable to never make snap judgments in the midst of a conversation and always take some time to think through ideas or propositions in a calm environment.
Unlike influence, inspiration does not necessarily result from an active engagement with another person. Instead, the inspiration you might feel to make a certain decision or pursue a certain strategy can come from virtually any source, no matter how unexpected. For instance, inspiration can come from viewing works of art, reading newspapers or biographies, or even suddenly while taking a walk. If inspiration does come through communication with another person, also consider whether they seem to be trying to influence you logically or emotionally as described above.
Inspiration usually involves becoming very moved and excited to take action in some direction. There’s no knowing when inspiration might strike, but, as in the case of making a decision under influence, you should make the effort to decide if the inspiration in question truly informs your decision making process and helps you fulfill your business interests.
Advice, Good and Bad
A common way for someone to attempt to influence or inspire you is through the giving of advice, whether solicited or not. How open you are to receiving certain advice is unique for every person and situation, but there are two main questions that you should ask yourself when considering the quality of advice and deciding how best to act upon it.
1. Do You Trust the Source?
While there might be many reasons to trust or distrust another person, most of the time you will be able to answer this question with a definitive yes or no. On one extreme is the trusted advisor and longtime mentor/partner whose credentials are unquestionable and who has never steered you wrong in the past. On the other is a pushy stranger who has lots of ideas but insists that you be the one to put your blood, sweat and capital into a seemingly shaky project.
Trust is often built over time, but a new acquaintance can certainly win you over with a combination of strong character and sharp business acumen. Just be wary of those who rely on charisma and boast of past success without clear proof. Taking time to perform a casual background check and allowing for a few interactions to take place allows you to get a fuller picture of the person who might be imparting influence on your decision.
2. Does the Person Have Your Best Interests In Mind?
Consider what you have to gain versus what the advice-giver has to gain if you take some action. If your business interests aren’t served by the proposed course of action, perhaps the advice is not intended to benefit you as much as someone else. Conversely, unless you are actively seeking advice from a trusted source, it is often unreasonable to expect good advice from someone who has nothing to gain from it. You should also consider whether the person offering advice seems to understand your goals, values and principles as that will reflect the quality of the advice.
Success in commercial real estate is often driven by the personal and professional relationships you are able to develop, so there will likely be many times when you feel influenced or inspired by partners in the field. Keeping these tips in mind will help you stay focused on your own business goals and effectively navigate the advice of real estate influencers.
Here at Black Collie Capital, we specialize in helping to find innovative real estate financing and capital solutions designed to suit your unique needs. If you are seeking personalized strategies, please reach out to us and let us know how we can help.