In multifamily real estate when an investor has built momentum, they are extremely hard to compete against. Every broker and seller wants to do business with them. In this video we discuss The Law of The Big Mo as author John C Maxwell calls it in his book The 21 Irrefutable Laws of Leadership.
1. MOMENTUM IS THE GREAT EXAGGERATOR
When deals are being brought to you, and you’re closing, and more investors continue to give you money, and management is managing well, momentum makes it look even better. In contrast when you can’t find deals, and nobody is bringing you any, and you’re in a dry spell for closing, and you can’t find equity, momentum makes you look even worse.
2. MOMENTUM MAKES LEADERS LOOK BETTER THAN THEY ARE
The more deals you’re closing on, the more brokers and sellers are wanting to bring you deals. The world forgets about how long it took you to get there, all the bids you lost, a moment or two you had to retrade, etc.
3. MOMENTUM HELPS FOLLOWERS PERFORM BETTER THAN THEY ARE
When you’re acquiring more deals, and they are being managed well, and rents are increasing, and your value add program is working, your staff becomes inspired to perform at their highest levels. It becomes contagious.
4. MOMENTUM IS EASIER TO STEER THAN TO START
Momentum is hard to get started but all elite investors found out that once a win became another and another, it becomes infinitely easier to do the next deal compared to doing their first several deals. And those deals find them much faster than it took them to find them in the beginning.
5. MOMENTUM IS THE MOST POWERFUL CHANGE AGENT
When you are building your multifamily portfolio and have momentum on your side, making major changes in your organization is easier to accomplish because people trust your success. Like firing a major person in your company that is no longer a fit, changing investor terms, adding a different asset class to acquire, changing property management groups, etc.
6. MOMENTUM IS THE LEADER’S RESPONSIBILITY
Just like it sounds, the principals of the multifamily investment company need to be the ones that are demonstrating the vision, building the right team, and providing motivation and they are the ones that have to continuously keep that momentum ball rolling.
7. MOMENTUM BEGINS INSIDE THE LEADER
The 7th fact about momentum is that when the main principal (s) of the investment firm is passionate about growth, and displays the energy and motivation consistently, that belief begins to grow on the staff and then like a virus, it becomes extremely contagious, except in a good way.