How often to marketers create artificial scarcity and tap try to manipulate their prey through fear of missing out or the acronym FOMO for short.
This kind of manipulation is repulsive, see-through and yet we’re subjected to it time and time again.
It’s like the store that has a one day sale in the window. Today and today only. But the sign has been in the window so long, it’s been bleached by the sun.
You’re not off to a good start when the very first interaction is based on a lie. If they’re willing to lie to you to get to you to come into their store, what else are they willing to lie about?
Last year, my wife and I spent a couple of weeks at a resort in the sun. It was one of those resorts that gives you a bracelet so that the staff can easily see if someone if on the property who should not be. I was walking through a crowded market and a man walked up to me and started chatting me up. He said that he was my waiter last night at the resort.
So I asked him. Oh really? Where was I seated and what did I have for dinner? Of course he couldn’t answer correctly. So I asked him if he thought lying to me would somehow induce me to buy his stuff. It’s uncomfortable to confront someone who lies to you.
Now most manipulations are not as crude as the one I just described. But we’re still subjected to them on a daily basis.
One of the fundamental principles underlying investing in real estate is the psychological contract of trust. Trust is not just whether you dealing with an honest person. That’s an absolute must. Even that can’t be taken for granted. But it runs much deeper. It’s a layered nuanced complex relationship. It involves asking a number of questions.
- Can I trust you to put together a solid plan?
- Can I trust you to execute the plan
- Can I trust you to hire the right team?
- Can I trust you to communicate in an open and transparent way?
- Can I trust you to communicate when there is a problem?
- Can I trust you to keep small commitments?
- Can I trust you with my money?
- Can I trust you to be resourceful enough to solve virtually any problem that might come your way?
- Can I trust you to manage risk in a prudent manner?
And on and on. If any one of these items is missing, it starts to chip away at the trust. The final element of trust is your track record. What have been your results? Have you lost money for investors? If so, what was the reason and what did you do about it?
Now I know what you might be thinking. You might be new to raising capital and wondering how can I raise any money if I don’t have a track record. How can I get. Track record if I can’t raise any money. I’m stuck in a circular argument.
But here’s another way to think about it.
So when a deal sponsor says, boy do I have a deal for you. That’s the last thing you should be considering. Consider first, who are you doing business with.
I have no idea what the street vendor in the market was trying to sell me. I paid no attention to that. I needed to know first if this is someone I could do business with.
