3 Powerful Seth Godin Principles For Shaping Your Investor Mindset | Ep 12

James: Welcome to the Furlo Capital Real Estate Podcast, where we delve into the wonderful world of real estate investing and our mission is pretty straightforward. It's to help you do something to equip you to invest wisely, both in property and in people so that together we can build our wealth and improve communities.

I'm James and this is my wife, Jessi. Hi. Hey. So I had a quick story before we jump in. Mm hmm. I had a fun repair today. This happens on occasion where I got a call and from one of our tenants and we have these old clawfoot tubs, as you know, and she was like, it's leaking everywhere. You need to come check it out.

I'm like, oh yeah, I'm on my way. And so I went and she's like, yeah, it's coming out of the out of the, it's again, it's a clawfoot. So it kind of has a, it's almost like a like a toilet input line. Okay. Yeah. The back of it. Sure. And that goes into the faucet. So it's not, it's not connected to anything.

So she shows me a video and like, you can see the water just leaking out. I'm like, Oh man. And at the same time, she's like, and the faucet from the faucet up to the, there's like a metal pole that goes up to the shower head. She's like, that's also spraying everywhere. I'm like, Oh man. Okay. All right. Got to tighten that.

We'll figure it out. Go to the store. I just buy a bunch of materials because Home Depot lets you return and it's awesome. I'm like, I don't know what I need, but I'm going to, you know, figure it out. I get there, I show up, and I take a look at it, and the again, the shower stem, it's just loose, like, oh, well, yeah, so I, with my fingers, tighten it, and go, okay.

That's not leaking anymore. I turn it on to see where the other leaks coming from. I go, this is totally dry. There's no leaks at all. She's like, what? No, it totally was. Which again, she sent me the video. Like I saw it. She wasn't crazy. I was like, yeah, I think what happened was this thing was loose. And so it was spraying and there's like a There's a seam in the in the faucet and like, it was just dumping water in there.

So that was filling up and then overflowing outside of the tub. I just stopped it from doing that. Yep. And it was like a 30 second fix, I think which, you know, if I had to choose that one versus the other, I would take the 30 second one. And she definitely apologized. She was like, Oh my gosh, I'm so sorry.

Like I came all the way over here for that. And I was like, no, no, no, it's okay. Anyways, I was sharing with her. I was like, you know what? I've had other ones too, where people are like, the lights aren't working. Like, Oh man, let me go check that out. And I totally like, I remember I went over there and went, well, did you check the breaker, the breaker and the breaker panel?

And she was like, the what? Nice. Walked over. Flipped it. Lights all turn on. Problem solved. Like you're good. And and she was like, Oh, that was such an easy fix. And so I'm telling her, it's like, yeah, so thought the first time it's all good. And she kind of like sheepishly was like, so. Breaker panel. Tell me more.

And I was like, all right, no, this is good. And so so I walked over, showed it to her, kind of explained to her how it all worked. And I went, so next time if something happens, you just know to come over here, check it out. And or when we get on the phone call and I referenced the panel, now you know what I'm talking about.

So so it was just a good moment and it's actually, I, I love renting to younger individuals because like they're just so raw, they don't know any of this. And so they're highly trainable and they don't have any bad habits. They don't think they know better than me. There's their, they learn and they soak it all in.

And so it's just, it's just good. I like it. So it's a good day in that regards. It's awesome. Yeah. What I want to do today is I want to, I want to bring back something we did once earlier, and that's it's little Seth Godin quote from my daily ripoff calendar, but I have three of them. I just had

Jessi: a super funny thought.

I almost got you an origami calendar for Christmas, which I know it has no like deep thoughts or anything, but it just struck me funny that this would not work with an origami calendar. I mean, maybe you could fold it and explain the folding.

James: Hmm. I don't know. Let's talk about the patience of this fold and how it relates to the patience that's required when real

Jessi: estate investing.

It's just

James: supposed to be for fun. All right. Gotcha. Probably wouldn't be fun for you. So, I have three. Which one do you want to read first? Ooh, pick a card. Any card. Depending on how deep we go will depend on how many we do. We'll do

Jessi: all three. This is also reminding me of that CSL Learn to Fund card trick.

James: Oh, yeah. You can't, you can't leave people hanging like that. What's his fun card trick? Oh,

Jessi: he totally can pick your card. You just, you pick one and then you put it back in, but he has to keep his finger on it. Ah, that's the trick. So really carefully put it back in. Gotcha.

James: So he can find it later. Yeah, yeah,

Jessi: yeah.

It's impressive. Nice. Okay, you want me to read this? I want to read it. Yeah. Price versus cost. Price is a simpler number. How much money do I need to hand you to get this thing? Cost is more relevant, more real, and more complicated. Cost is what I had to give up to get this. Cost is how much to feed it, take care of it, maintain it, and troubleshoot it.

Cost is my lack of focus and my cost of storage. Cost is the externalities, the effluent, the side effects. Just about every time, cost matters more than price. And shopping for price is a trap.

James: Yeah. I, I like that quote for all sorts of reasons and obviously I think it's relevant to real estate because you obviously have the price of the property.

You have the minimum investment like we talked about in the previous week. You have those kinds of things, but there's a cost associated to it and, and it's important to count the cost when you're doing all that. Like for us, like when we're looking at a property, yeah, again, there's a price, but there's other stuff too.

Like even just like. Well, there's property taxes, there's insurance, there's utilities, there's maintenance, like those are all costs, but then there's the cost of investing in a place that's 50 minutes from our home, like in Sweden, and like, okay, I'm going to have to drive over there, I'm going to have to take care of it, there's that, even if you decide to get a property manager, there's a cost there, and not just in terms of like the percentage, but just you got to manage the person, you got to help them out, there's a learning curve, there's a learning curve is a cost.

Well, and like

Jessi: added relationship, and you know.

James: Those are real. And I think if if you're a passive investor, there are additional costs like yeah, there's obviously, there's the money that you give and there's taxes that you eventually have to pay because you made money, but there's the cost of like, well, you can't access your money for a certain amount of time.

And there's the cost of. Trust in me and my analysis and my underwriting and business plan. And there's a cost to just understanding each of those factors and deciding, okay, I'm going to do this. And so I think I think it's just important to recognize these things exist and to really think about it.

I also think that it's important when you're evaluating investments not to get hung up on the overall return number because believe me, I could absolutely. Dial some of my knobs and make it look astronomically awesome, but they may not be realistic, right? And so if you're simply chasing the highest ROI, that may not be the best strategy because there may be other costs there in terms of like predictability and, and real and realistic activity, realisticness.

Jessi: For you,

James: how would you say that? There's, there's other realistic costs. Yeah. Something anyways. Well, there's other realistic, like assumptions and things going into it that were non realistic. I don't know. Wow. So anyways, it's just important to keep all that. Here's the point. Don't just chase after the highest IRR, the highest average annual return, the highest equity multiplier.

Those are good. Definitely look at those, pay attention to those, but also look at what are the assumptions that underlie that and what's the track record of the person who is creating that. What have they done? Cause that you can increase or reduce your cost and risk, which I think there's a, there's definitely a correlation there between risk and cost.

So that is the first one to left. Which one do you want to read next? Stretching! Ooh, I like

Jessi: this one. There are two polar opposites, staying still and breaking. It's easy to visualize each end of the axis. Whatever the activity in between is stretching. Stretching is growth, extending our reach, becoming more resilient, limber, and powerful.

Stretching hurts a bit, and maybe leaves us just a little bit sore. But then, tomorrow, we can stretch further than we could yesterday, because stretching compounds. If you're afraid of breaking, the answer isn't to stay still. No, if you're afraid of breaking, the answer is to dedicate yourself to stretching.

James: Yeah, I like that one. Obviously. Otherwise, I wouldn't have had you read it. I like it. If you're listening to this podcast, that's what you're doing right now. You're stretching, you're learning, you're growing, you're improving your skills. And I think For some people, there's some concerns about investing in a syndication, investing in a person specifically who's going to go off and do it.

And so that requires some trust, some stretching on it. And what I like about the implication behind this is that it's one of my other favorite. Quotes or sayings is that action breeds clarity and taking action as a form of stretching. Let me do something again. It's not, I'm not going to sit here. I'm not going to say no.

I'm just not going to do anything. It's let me do something. I mean, I ultimately invest, but I'm going to take steps. I'm going to learn. I'm going to read the materials. I'm going to try to understand it and I'm going to play the what if game. Okay. For the moment, I'm assuming that I'm doing it. Now what?

Yeah. And moving forward through that process just to, just to see it out. That's.

Jessi: Yeah. It reminds me of like some of the things we set up for our kids to do. You know, if, if their inclination is, oh, that's just too hard or, you know, having that breaking mindset, it's like, okay, well maybe here is too hard, but what if you just went a little bit, you know, and then it's like, okay, yeah, okay, I could do that.

And then you just do a little bit more and you start moving forward and suddenly you're like, oh. That wasn't so bad. I, I stretched myself and now I built muscle and now I could get to that, what I thought was the breaking point, but it wasn't. It's awesome. Growth mentality.

James: So my. Okay. My yes, growth mentality mindset.

My challenge to you listening is if you do have some sort of questions or concerns, stretch and ask, and you can email myself for a little calm slash call. And that'll actually set up a time to make a call or you can just email me, I will not be answering your call.

Jessi: No, you're good. I just, I just do podcast

James: answers.

Yeah. Yeah, that's fine. And but yeah, I think it's good to stretch. Like you said, to have that mindset of, I don't know, but I'm going to find out. I'm going to learn a bit more. I'm going to take a step, be deliberate about it. Last one. I got one more. Is this your card? Is this your card? Yeah. Right. Let's see here.

Do you want to read it or do you want me to read it? You've been doing a good job reading them on the fly. You can do this one. Freedom, fairness, and equality. Ooh, those are all

Jessi: like buzzwords.

James: I know. Freedom doesn't mean no responsibility. In fact, it requires extra responsibility. Interesting. Freedom is the ability to make a choice, and responsibility is required once you make that choice.

And I That's just, that's part one of three. That really strikes me as true. I'm like, yeah, absolutely. To have freedom, you have to have responsibility. Otherwise, it's not really free or it's not worth much or just delves into chaos. Yeah. So I was gonna say it's chaotic. Chaotic. Yeah. And I was just thinking about like with real estate, right?

Like it. Provides not only it requires, requires choosing and you can make a choice. You have the freedom to invest in it or not. And then if you do stick with it for long term, you get the kind of freedom like we've had and then it allows for a new set of choices. But there's also those responsibilities, right?

I don't just get to go off and do whatever I want. Like I got to maintain and take care of these properties and there's responsibilities there. Which for the record, I do not think there is such a thing as absolute freedom. That's impossible. That's not a thing. I think anyone who is choose trying to chase after absolute freedom cannot do it by the very fact that we are making choices.

Like for example, let's go extreme. I do not have the freedom to go to the moon. I just can't do it physically, cannot make it happen. Sure. The fact that we've decided to have kids has dramatically changed a lot of freedoms that I have. Yes, I suppose I could just walk away and leave it all, but there are certain things that would happen.

Yeah. Hey, like you would garnish my wages and things like that. Right. So many other things. And I think like, because we have chosen to invest in real estate, but that that money Can't be used for other things. There's opportunity costs, ultimately, is what I'm getting at. And so there's, because of those, there's no such thing as absolute freedom.

Fairness, though, isn't a handout. Fairness is the willingness to offer dignity to others. The dignity of being seen and heard and having a chance to make a contribution. And So

Jessi: interesting. I, I just have never heard that definition of fairness. Usually, fair is like You're

James: splitting something up. That's not fair!

Well,

Jessi: yes, we hear that a lot. And it often is like, you're not getting the same thing. You know, it's something that you're dividing, and you're getting. That is more like an opportunity. Are you being given a chance? Are you being given, like, not equal, like, the same thing, but it's like, do you have the opportunity?

Like, anyone else would have the opportunity to do whatever.

James: Yeah I mean, in our sense, like, my fairness when it comes to passive investing is, well, whoever invests first gets to get in. Sure. Like, that's it. And I don't necessarily care, like, yeah, you have to have the funds, it's a requirement, I can't help that.

Yeah. But, like, outside of that, I really don't care

Jessi: Yeah, there's a requirement, but the opportunity exists for anyone. Mm

James: hmm. And equality, not equity, equality, doesn't mean equal. Equality doesn't guarantee me a starting position on the Knicks. Must be a fan of them. Equality means equality of access. The opportunity to do my best without being disqualified for ill relevant reasons.

And that's one of the things we actually post on all of our posts. We say we're an equal opportunity housing. Houser. We equal offer, we offer opportunity housing. Yeah, thank you. And yeah, and that's all like, yeah, we don't think about anything. That's irrelevant. So super important as landlords, especially when you're screening.

And again, I also think it's super important when we're talking to passive investors. Like, okay, like, like I will. Yeah. As long as your money's good here. And yeah. And so same as your time and attention and questions and try to treat all those things equally I think is important. And I think it's also just like, yeah, outcomes aren't always the same.

Like some people make good investments, some people don't. Sometimes markets happen. Sometimes they don't. Like things happen. And I think that's, that's okay to recognize that. So anyways, those were. Three deep thoughts, three deep thoughts that I thought were just they're good things to remember, to think about the mindset because investing in real estate is totally different than just throwing money into a 401k or into an index fund.

Yeah. Where kinda like it just goes and it does. I, I think to be a successful real estate investor, it requires some of that, like, some of those other thoughts about yeah, just about life and, and what you're actually doing and what you're trying to accomplish, and. And I think it's just a more fun journey if you have some of those broader thoughts.

It probably

Jessi: is for any case, but especially in real estate.

James: Yeah. Yeah, no, I agree because in some ways you're jumping into a business, you know, like you're really directly related to it and it's good. So there you go. That's what I have to share. Simple, easy, but fun. And so if you enjoyed this podcast, thank you.

And we'd really appreciate it if you left a like or a comment, wherever it is that you listen to your podcasts. Thanks again for listening and have a fantastic day.