As a former sport psychology consultant, I focused on assisting athletes in maximizing their potential on the athletic field. The athletes I worked with wanted help performing better during extremely high anxiety situations. Investors often are risking their entire “nest egg” in real estate, which is also stressful. When asked what the major similarity is between sport psychology and investment brokerage, I always say: “helping people perform well under high stress”.
What are the other similarities between sport psychology and investment property investing? I see many parallels from the sports world to commercial real estate investing, and there are many lessons investors can take from sport psychology to improve their “performance”. I had three initial goals with each client as a sport psychology consultant:
- Help the client assess who they were in order to help them.
- Based on the assessment, predict where they may have difficulties under stress.
- Make a plan to operate as effectively as possible.
For example, while a graduate student at San Diego State University, I served as the sport psychology consultant for the baseball team. I worked directly with the pitchers of the team, and one pitcher was having issues pitching well under stress. The problem: when he knew he was going to pitch in advance (a few days ahead) he would struggle to perform well.
However, on other days the coach would surprise him and give him last minute (often last second) notification that he was pitching. On those days he pitched extremely well! The player knew this phenomena was occurring, but did not know why he was only performing well when he was surprised.
I started the consultation assessing the player with an interview, paper and pencil test, and then observation. We realized together that he “obsessed” mentally over important things, including obsessing for days in advance when he knew he was scheduled to pitch. By the time he got to the mound, he was mentally exhausted, and performed poorly. In contrast, when he was surprised last minute by the coach, he did not drain his “emotional gas tank” and then played well.
We were able to predict when he would have problems and we created a solution- before home games the player put himself in charge of laying down the batter’s box chalk lines, and he would “obsess” over making the lines perfectly straight, thereby distracting himself from the pitching obsession! Genius, I wish I thought of that!
Here is a fun video on the focus it takes to install the chalk the “old school” way that the San Francisco Giants do it (thanks to Casey Pratt’s youtube channel):
How does this relate to commercial real state investing, specifically when buying apartments? Like many athletes, investors often “dive in” without making a full assessment of their strengths and weaknesses and without making an overall plan.
Here is a quick checklist for apartment investor’s using the sport psychology model:
Assess– Who are you, what do you want? What is the most important factor for you in apartment investing: cash flow? Appreciation? Paying off debt? Retirement income? Get clear on absolutely who you are and what you want. In my seminars I discuss how this is the trait all “super successful” investors have, but it is often the hardest part to do.
Predict– When will you have problems in the process? Will it be finding the right property? Will it be the financing? Are you “too picky” when it comes to buying apartments and lose deals? Are you the opposite: too forgiving of physical obsolence? Find out the areas you will have trouble, and get the help you need to counterbalance potential problems in advance.
Make a plan– What is your plan for finding the “perfect” investment property to buy? How will you deal with the brokerage community? How will you research and choose your broker? Who is your lender? Who is on your team? (property manager, real estate attorney, mortgage broker and/or lender, CPA). How will you deal with your own stress?
Assessing, predicting and planning your real estate investments is a great start to your investment process, I’ll write more details on each of these item soon or feel free to call me at 503-546-9390.