Question #
How can personal financial management and reserves impact business development and problem-solving?
Answer #
This is also an example of how I learn from almost everyone I work with.
One of the people I work with owns multiple businesses, like many of us.
He also owns and has developed real estate and wanted to break into self-storage.
He contacted me to mentor him because, although he was very successful in other asset classes, he had never done storage.
He had humble beginnings and started with very little.
Everything he has, he has created and worked for.
He purchased a portfolio in a smaller market, as well as started a self-storage ground-up development in the same market.
In other words, he entered the market with a large footprint.
He purchased the portfolio right, upgraded it, and drastically increased the NOI and cash flow.
On the development side, everything went well until the roofs went on his new climate-controlled buildings.
With the first big rain, bam…water everywhere.
In development, stuff happens.
This was his curveball, and I learned a lot by watching how he operated with this issue.
He took all the right steps, contacted the system manufacturing company, got validation that the roofs were not installed to specs, notified the contractor and subcontractor responsible for installing them of what was going on, and sought relief.
He was not overly lawyered up, but enough for the parties involved to know he meant business.
It is still ongoing.
But here is where he separates himself from many others.
The person I work with knows how critical speed to market is and decided to use his reserves to repair the roof so he doesn’t lose a lot of time hitting the market.
He will replenish the reserves when the issue is settled.
Now he, like many of us, was not given a lot of money to start off with.
If he had, I’d say he most likely wouldn’t have the reserves he has today.
He has spent a lifetime putting away money, both in his businesses and in his personal life, so when these issues arise, and they always will, he is ready.
Source: The One Habit I Wish I Had Started Early in My Career
