Mike Browning

Tag: Leverage

  • Everything Is Great, Til It Isn’t

    Everything Is Great, Til It Isn’t

    Then they explain to you how it wasn’t really their fault they lost 100% of your investment.

    (This one needs a big fat disclaimer: I’m not a CPA, licensed securities professional, an attorney, or anything like that. I’m a real estate broker. I shoot straight, but none of this is legal or financial advice. You should consult the relevant professionals in those fields should you have questions. All of this is for informational purposes only.)

    If you follow business news at all, over the last few months you know that commercial foreclosures are up (“commercial” being a catchall for anything non-residential, not necessarily retail buildings). Office and multifamily seem to be hardest hit. Especially class B and C properties.

    This month another large real estate fund announced investors would receive no return of capital.

    I’ve been at it long enough to see it play out more than once, although not always in the same market segment. You’ll see glowing profiles on a supposed investment genius who’s outperforming everyone, then a few years later you’ll see much more subdued stories about how his company imploded.

    Most of the time in these things, the people who appear the most successful when times are good are simply the ones who are taking the most risk.

    A rising market can hide a lot of mistakes, which you may not even realize you’re making. You start to believe your own hype, things keep working, and you do more and bigger deals. And since you’re succeeding, people throw more and more money at you, meaning you have to keep doing even more.

    Then the market turns, and there’s really nothing you can say but sorry.

    It happens over and over, especially when debt or leverage is involved. One minute you’re riding high, then your guru calls you and tells you all your money is gone.

    I prefer land investing on a cash basis. One reason: it doesn’t require a heroic story. It doesn’t need perfect occupancy, rent growth, refinancing, or favorable debt markets. You buy it right, keep your carrying costs low, and let time do most of the work. You may not see giant annual returns, but you’re also a lot less likely to lose everything because someone borrowed money against your investment. It may take longer to see a return, but looking at it historically, land prices have trended up in north Texas.

    That doesn’t mean throw a dart at the map and buy whatever it hits, of course. You make your money when you buy, not when you sell. The safest way to play is to buy things that are underpriced in today’s market, while also being in an area expected to grow.

    Easier said than done for most of us.

    I spend a lot of time looking at land. Most of what I see isn’t interesting. Occasionally something is.

    When I find something I think deserves a closer look, I let a short list of people know first. If that sounds useful, click below and tell me what you’re looking for.

    Takes a couple minutes, no commitment required.

    Learn About It Here

  • The Danger of Needing It

    The Danger of Needing It

    The second you need the deal, you’ve already given up the good version of it.

    One of the best books on negotiation is Start With No by Jim Camp. Probably the single most important idea in it: neediness is the first thing you have to get control of. Until you do, you’re at the mercy of whoever you’re sitting across from.

    Doesn’t matter if it’s a car, a house, a piece of land, or where you’re going for dinner Friday. Same rule.

    Go shopping for a car and it’s about a sure thing that once you show real interest, the salesman mentions someone else. They’re coming to look at it this afternoon. Or they were in yesterday, said they’d probably be back. Whatever the line is, the point is the same. Make you feel like if you don’t move now, you’re going to lose it.

    And it works. Not because you’re gullible. Because it’s aimed at something real. The second you stop thinking “I like this” and start thinking “I need this,” you’ve handed over the leverage.

    You don’t even notice it happening. You just start agreeing to things you wouldn’t have agreed to an hour earlier.

    Here’s what your brain skates right past. On the way to that lot, you passed a few thousand other cars. Other lots. Other listings. These things are mass produced. If this one gets away from you, there’s another one out there, probably better, and you’ll never think about this one again.

    You need food. You need shelter. Around here you probably need a vehicle of some kind. But you don’t need this particular car. You don’t need this particular house.

    Land’s a little different. No two pieces are exactly alike, so in a technical sense a specific tract really is one of one. But different doesn’t mean irreplaceable. Miss it, and the sun still comes up tomorrow. You still eat dinner. You’ll find something else that checks the boxes, maybe something you like better, and you won’t spend one more minute thinking about the one that got away.

    Wanting something is fine. Wanting it enough to stretch a little, work for it, negotiate hard. Also fine, as long as you’re doing it with your eyes open. Needing it is where it goes sideways.

    That’s when you stop negotiating and start hoping nobody notices you’re begging.

    The people on the other side of the table notice. Even the ones who aren’t trying to work you over will feel the shift, and the good ones absolutely will use it. Not because they’re crooked. Because that’s the game, and you just told them you’re not really playing it anymore.

    The fix isn’t complicated, even if it’s not easy. Notice when you’ve crossed the line from “I’d like this” to “I have to have this.” That’s your signal to slow down, not speed up. Ask yourself what you’re actually risking by waiting a day. Usually the honest answer is: not much. The deadline was mostly invented to make you feel exactly what you’re feeling right now.

    Camp built an entire system around this, and it’s worth your time if you’ve never read it. Whether you’re negotiating a purchase, a sale, a raise, or just trying to get your teenager to clean their room. Once you see how much of negotiation is really about who wants it less, you can’t unsee it.

    Grab a copy here

    It’ll change how you walk into every negotiation. And since everything is a negotiation, it may change your life.

    PS- That link goes through Amazon, and I’m an affiliate. Doesn’t cost you a dime more, but if you click through and buy the book, or anything else while you’re there, I get a small commission.

  • No Wonder They Keep Losing

    No Wonder They Keep Losing

    Don’t apologize for what worked, even if you don’t always agree

    Winning and then apologizing is one of the fastest ways to give power back.

    Last week I read an opinion piece in The Dallas Morning News that stuck with me.

    Not because of the policy details. If you know me, you know I don’t spend much time arguing minutiae like that. I have a business to run.

    What stood out was how it revealed a misunderstanding of power. Even by people who should know better.

    A local Republican official publicly criticized a Trump-era policy that affected his family. He framed it around service, loyalty, and merit. I don’t doubt his sincerity.

    But sincerity isn’t the issue.

    Posture is.

    The broader platform he’s distancing himself from just delivered real wins. Big ones. Not narrowly. Not accidentally. It won by drawing clear lines, showing contrast, and refusing to apologize for what it stood for.

    It won every battleground state. Donald Trump still finds a way to mention that in almost every media appearance.

    When you win, you gain leverage.

    What you do next matters.

    Running to a hostile audience after a victory to explain why your own side went too far isn’t nuance. It’s signaling. And it’s a bad signal.

    This isn’t really about immigration. Or about Trump. It’s about coalition math and basic negotiation reality.

    You don’t gain power by trying to reassure people who cannot, or will never, say yes to you.

    Urban Democrats aren’t waiting for Republicans to sound slightly less Republican so they can switch teams. Identity comes before policy. Always has.

    All this kind of signaling does is weaken trust with the people who actually might vote for you.

    Urban Republicans aren’t meaningfully more “moderate” than Republicans elsewhere. There are just fewer of them. That’s a numbers problem, not an ideology problem. And numbers don’t change when you blur contrast. They change when you give aligned voters a reason to show up.

    I see this same mistake in business often.

    A seller prices correctly, gets traction, then starts explaining themselves when someone objects. Serious buyers notice. Leverage erodes. The deal gets harder, not easier.

    Same pattern here.

    Minorities don’t gain power by dilution. They gain it through discipline.

    That means accepting that some people will never like you. It means being willing to irritate your opponents. And it means understanding that respect doesn’t come from apology tours.

    People don’t judge intent. They judge posture.

    When your first instinct after a win is to explain yourself to people who already oppose you, you aren’t broadening your coalition. You’re signaling that pressure works.

    And once you signal that, you invite more of it.

    Clarity beats comfort. Contrast beats consensus.

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  • Sound Good? Keep Your Head On a Swivel

    Sound Good? Keep Your Head On a Swivel

    Win/Win usually means they plan to win twice.

    There are certain phrases that just scream “look out” as soon as you hear them.

    Most guys know that if a woman says “we need to talk,” it’s not an invitation to a discussion. You’re about to be told something—most likely about how you’re being a jerk.

    If someone shows up talking about “fairness?” It’s a pretty safe bet they aren’t about to start listing ways they can improve things for you.

    And if someone tells you “it’s not about the money?” Trust me, it’s about the money.

    If you’re perceptive, you’ve noticed that all three of those things usually come right before a negotiation of some sort.

    There’s another phrase that should set off the same alarm bells: Win/Win.

    For most people, that phrase conjures visions of cooperation, collaboration, and conviviality. But win/win usually isn’t the real goal of those who preach it.

    For a trained negotiator, it’s a tactic—a way to use your good nature (and your neediness) to skin you alive.

    They say win/win, but they mean win/lose. And they don’t intend to be on the losing side.

    What win/win really means in practice is: “I’m about to demand concessions from you and give little or nothing in return.”

    And if you complain afterward? They’ll tell you the deal was fair.

    After all, any agreement you voluntarily sign is technically win/win by definition.

    Negotiation is voluntary. Everyone has the right to say “no.” The fact that you didn’t means you saw yourself as better off with the deal.

    So technically, you “won.” Just not as much as they did.

    So what do you do about it?

    First, lose your neediness. In almost every case, you don’t need to make any particular deal. You may want to, but the sun will come up tomorrow either way.

    Don’t let your need for approval push you into doing things you don’t want to. If your counterpart’s a pro, they might act offended—but that’s just theater. People actually respect those who won’t be pushed around. Once you drop the neediness, everything changes overnight.

    Finally, learn to live in your adversary’s world. You don’t have to agree with their position, but you have to understand it and be able to explain it as well as they can. When you can describe their perspective and get back a calm “That’s right,” (not “You’re right”)—you’re ready to win for real.

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    PS — I talk a lot here about how negotiation touches every part of life. It’s one of the biggest leverage points you can improve. Two of the best books I know on the subject are Start With No by Jim Camp and Never Split the Difference by Chris Voss.

    I recommend both, but you can start with either. You can buy them at the link below.

    Recommended Reading

    Disclosure: As an Amazon Associate I earn from qualifying purchases. If you buy something—anything—after clicking that link, I may receive a small commission. It doesn’t change your price.