A story told by Earl Nightengale tells of an African farmer who was hearing stories of men striking it rich by finding diamond mines in Africa. The tales excited him so much that he could hardly wait to sell his little farm and set off to search for his own diamond mine. He sold the farm and spent the rest of his life wandering the African continent searching unsuccessfully for the gleaming gems that brought such high prices on the markets of the world. Finally, worn out and in a fit of despondency, he threw himself into a river and drowned.
Meanwhile, the man who had bought his farm happened to be crossing the small stream on the property one day, when suddenly there was a bright flash of blue and red light from the stream bottom. He bent down and picked up a stone. It was a good-sized stone, and admiring it, he brought it home and put it on his fireplace mantel as an interesting curiosity.
Several weeks later a visitor picked up the stone, looked closely at it, hefted it in his hand, and nearly fainted. He asked the farmer if he knew what he’d found. When the farmer said, no, that he thought it was a piece of crystal, the visitor told him he had found one of the largest diamonds ever discovered. The farmer had trouble believing that. He told the man that his creek was full of such stones, not all as large as the one on the mantel, but sprinkled generously throughout the creek bottom. The farm the first farmer had sold, so that he might find a diamond mine, turned out to be one of the most productive diamond mines on the entire African continent. The first farmer had owned, free and clear … acres of diamonds. But he had sold them for practically nothing, in order to look for them elsewhere. If only the first farmer had taken the time to study and learn what to look for ahead of time and then looked in his own surroundings first… things would have turned out very different for him.
Opportunities are all around us. But they aren’t wearing big orange vests that say “OPPORTUNITY” on it. They’re a little more subtle than that. A diamond in the rough is not cut or polished – and it doesn’t look like anything special in fact – except to the trained eye. This means that to seize opportunities, we must not only be on the lookout for them, but we must know what we’re looking at to recognize whether it’s really an opportunity or not.
So one of the first things we need to understand about opportunities is that often times they are disguised as problems or challenges. They say that one man’s trash is another man’s treasure . Well , the same can be said of problems. For example – If a frustrated landlord wants to get rid of his “problem ridden” rental complex – than his ‘problem’ becomes someone else’s opportunity. This is where understanding your market or field will serve you. You must continue to educate yourself in the field of your endeavor .
If you’re looking to “buy and flip” – then you need to understand how to budget time, schedule jobs, calculate material costs, and what the local market will bear among other things. And if you want to buy and hold, you’ll need to know all that PLUS what your local rents are and a myriad of other administrative tasks as well as local laws. The point is, that when you understand your specialty, you can also recognize when something passes the sniff test and whether or not your onto something.
But how often are we actually seeking new opportunities? Are you waiting for something to come your way? They say the man who is always waiting for his ship to come in misses the boat. When you make it a practice to always be on the lookout, you’ll start to see potential opportunities everywhere you look. They can show up in the form of a news report – or a neighbor is complaining about something. Maybe you can’t find a product or service your looking for – if that’s the case, perhaps you have just uncovered a hidden opportunity – if you can find a way to make that product or service available.
So look around to whats going on around you and what people are talking about – listen long enough, look around enough, and you’ll start to recognize opportunities everywhere. You could be standing in field of diamonds right now. Remember the diamond farmer story.
So if you understand how much 3b/2b 1500 sq ft homes in your target area are selling for – then you will recognize when one is selling below market value – and if you know how much multi-families are selling for, what the local rents are in a specific part of town and how much it cost per square foot to build it out – then you will know if the lot for sale is an opportunity or not. Without knowing, everything just looks like a bunch of numbers – with no true context to go by. How will you know when you’ve found a good deal otherwise? So understanding your specialty and your market is key to recognizing opportunities.
How do we know when we’ve recognized a real opportunity?
When problems arise – is it really a problem or is it just an opportunity in disguise? Why hasn’t someone else resolved the issue? Is conventional wisdom keeping everyone else away?And could this be your chance? Do you know how to resolve the problem? Do you know someone who does? Does your specialized knowledge or skill give you an advantage? Maybe all the wires have been ripped out of the walls and the panel boxes stolen – as well as all the copper plumbing – maybe your an electrician by trade – and your buddy next door is a plumber – the combination of your abilities and contacts and en ever watchful eye could turn that eyesore into an opportunity.
What motivates us to take action?
Emotions play a strong part in our decision making process and one emotion that is good at motivating us is FEAR. Fear of loss, fear of failure, fear of missing out, fear of looking foolish. These fears can motivate us but can also stop us in our tracks.
Greed is another emotion that motivates many people. The problem with greed is that it is usually the result of selfish craving and excessive desire for more than necessary – opportunities motivated by greed typically prey on the vulnerability or ignorance of others. And in many cases – those blinded by their own greed fail to see the pitfalls awaiting them before they themselves are taken advantage of. Ever get an email from a “Nigerian Prince”?
Hope and desire can also be two very motivating emotions – the hope for a better life while providing for your family while still being able to spend time with them. It can be strong enough to push you out of your comfort zone and to the point of taking action. But it takes more than emotions to embrace opportunities knocking at your door – another factor at play is the ‘means’ – to take advantage of it. If your neighbor just got a divorce and was forced to sell his sports car and split it with his ex…and just out of spite , he sells his $150,000 car for $10,000.
Wow! What a deal…. But say you don’t have the 10,000 – you may think that you don’t have the means to take advantage of this wonderful opportunity so you walk away from it .. knowing that someone else with the money is going to get a terrific deal – a deal that could have been yours. So the means to take action is very important.
The means doesn’t necessarily need to be money. Sometimes its know-how or personal knowledge about how something works; how to structure a deal, how to write up a seller carry lease back contract, how to access hard money….anything that may seem simple to you but mysterious to others. You may become privy to a situation that seems to daunting to those with less confidence, but something manageable to you and your team. That right there could be your golden opportunity.
Confidence is also key, but it’s built on the two previous foundations. Specialized knowledge and the means to make it happen helps you to be confident in your ability to fully realize the opportunity at hand . Keep in mind – and this is key – this doesn’t have to be your specialized knowledge or your means.
If you recognize an opportunity but you know someone who understands it better, then you can always recruit them into it – and if you know someone who has the means, be it money,equipment, contracts, distribution channel, whatever – you can recruit them – this doesn’t have to be just one person. Now you have the know how and the means, you can have the confidence to take action.
So, to summarize..
Recognizing opportunities starts with learning about and understanding your specialty in the field you plan to work in. Learn to identify when conditions have moved into your favor so that you can strike while the iron is hot. You need to be on the lookout continuously , gauging the situation, watching your market until an opening presents itself. This isn’t the same as waiting for something to fail into your lap. Someone looking for bird eggs isn’t going to just wait for a birds nest fall into their lap – they will be scouring the woods and trees – until they spot clues that could lead them to their prize… then they followup on those clues until they find are looking for.
Look for ways to recognize problems that you know how to solve. Find situations that others are shying away from – figure out how you can resolve that problem. Get control of your emotions by minimizing fear through knowledge. Connect with others who have more experience or access to resources so that you can have the confidence to take action. Continue educating yourself and always be on the lookout … and you will develop the habit of …. Recognizing Opportunities.
Do you have a story about a challenge that ended being an opportunity? Share it with us below and tell us how you turned a problem into an opportunity.