Three Lessons from Howard Hughes

Howard Hughes was one of the wealthiest people in America during his lifetime, so I thought I could learn something from him.  I picked “Citizen Hughes” up from a used bookstore when browsing with Marcy years ago, and thought it would be good bedtime material to wind down.

The book was written by a reporter who got Hughes’ secret memos from a thief after Hughes’ death.  The story of how the thief obtained the documents is a good one in itself, but we don’t have time today.

As I read this book, a few lessons presented themselves.  Hughes got great results in some parts of his life, and terrible results in others, and important lessons can be gleaned from both.

1. Learn to delegate

If there was one thing Howard was good at, it was delegation.  There was no way he could grow his companies to over $1B in the 1930s by doing everything himself.  Even during his decline and mental illness at the end of his life, his notes to his aides on how to open a can of food were explicitly clear:

“The man in charge turns the valve in the bathtub on, using his bare hands to do so. He also adjusts the water temperature so that it is not too hot nor too cold. He then takes one of the brushes, and, using one of two special bars of soap, creates a good lather and then scrubs the can from a point two inches below the top of the can. He should first soak and remove the label, and then brush the cylindrical part of the can over and over until all particles of dust, pieces of paper label, and, in general, all sources of contamination have been removed. Holding the can at all times, he then processes the bottom of the can in the same manner, being very sure that the bristles of the brush have thoroughly cleaned all the small indentations on the perimeter of the bottom of the can. He then rinses the soap from the cylindrical sides and bottom of the can.”

And on and on it goes….

The lesson here is not to leave anything to interpretation, which is very important when engaging contractors, instructing staff, and speaking with clients.   This is of course an extreme (and sad/humorous) example of the principle of delegation, but you can see how Hughes delegated throughout his life.  These instructions are much more clear than “bring me a sanitized bowl of fruit.”

2. Take a polarized position

Hughes noted in his secret memos that he observed one small newspaper selling very well because it always took at strong position on whatever it reported.  This newspaper was very biased in every article.

At the time, bias to that scale was exceedingly rare.  Large newspapers prided themselves on journalistic integrity and presenting a factual version of events, from which readers could form their own opinions.

This realization led Hughes to acquire a TV station, and later attempt to buy a controlling share of ABC, one of America’s largest TV networks.  Hughes thought (correctly?) that if he controlled ABC, he could influence elections enough for his hand picked candidates to win, capitalizing on years of investment in them (gifts/bribes).  He could then call in favors when government interfered in his business dealings.   Hughes’ bribery of politicians was so far reaching that it contributed to the Watergate scandal, which led to the resignation of President Nixon.  (Of interest to real estate investors, is was Nixon who abolished the Gold Standard and sent the world on the path of fiat currencies, which is part of the reason real estate is such a great investment.)

If you look at FOX or CNN you can see that taking a polarized position truly works.  I’m not saying it’s right, but it works.  A balanced perspective is boring, and attention is today’s currency.  The great thing is, now anyone can publish to the world (including yours truly), and you don’t need to be a billionaire to have your voice heard.

3. Have a will

Hughes didn’t have a will when he died, and his billions were subject to decades of fighting by many people, most of whom he didn’t like.  There was the “mormon will” that was thrown out in court, and like all things involving Hughes it has a crazy story attached to it too.

Perhaps Hughes thought he was going to live forever, or perhaps it was his one last desires to know everyone would fight over his estate.   Hughes enjoyed creating competition among his subordinates, and it would be tough to say that he had any loved ones at all.

Final lessson

At the end of his life Hughes had no family, no friends, and he spent most of his time naked, unwashed with long hair and uncut nails.  He died of kidney failure.  He was 6’3″ but only 90lbs.  His bed sores were so bad it’s said one of his shoulder blades had worn right through his skin so the bare bone was visible.  To confirm the body was his, his fingerprints had to be taken because no one recognized him.

It’s remarkable he was able to control his empire in this feeble state, using only hand written memos, and seeing not a single person except his aides.

Hughes net worth and business dealings are a great example of a focused will, but the way he met his end is a cautionary tale. Ultimately Hughes lost his mariages, his health, and one could argue even his soul.

The final lesson to be gleaned is to recognize the cost of the goals you set, and decide if you’re willing to pay that price.

4 ways to deal with a troll in your real estate business

If you’re not familiar with the vernacular, a “troll” is defined by Google Dictionary as:

troll1
trōl/
noun
noun: troll; plural noun: trolls

a mythical, cave-dwelling being depicted in folklore as either a giant or a dwarf, typically having a very ugly appearance.

 

OR


troll2
trōl/
noun
a person who makes a deliberately offensive or provocative online post.
(informal )a deliberately offensive or provocative online posting.

I’m talking about the second type of troll, and this could include any kind of negative response to your ad.

 

A few months back, I had a vacancy, so I wrote some nice ads with nice photos, posted them to my website, then started to distribute them to Kijiji, Craigslist, and social media.  One of the responses was this:

Example Troll #1 Facebook Screenshot
Example Troll #1

“Oh no! No one says mean things when I advertise in the online newspapers or Craigslist or Kijiji, maybe I shouldn’t advertise on Facebook anymore!”

Continue reading “4 ways to deal with a troll in your real estate business”

Let’s K.I.S.S. – Another Profiling Tactic

By Mike Moore from sunny Australia

Have you ever interviewed an attractive prospective tenant, they were so attractive that you just wanted to hold them and kiss them and…STOP! get your mind out of the gutter 🙂

This is about Keeping It Simple Stupid.

Find tenants who have a simple profile: those with little drama happening, those whose life situation makes sense, those who can pay in a simple manner.

I learned this lesson the hard way.

Early in my landlording career, I had a vacancy during a time when the rental market was difficult. Units stayed empty for months, the prospective tenant pool was less than ideal and as
a landlord, you had to compromise the quality of tenant against having another vacant month.

A prospect arrived to view the property with a friend, in fact it was the friend who called about the vacancy. Alert! Why didn’t the prospect call herself? The woman it seemed was leaving her
partner, an apparently abusive situation. I offered her the tenancy and she said she would come back the next day to sign the rental agreement and pay the deposit. She never showed, and
when I called, she was back together with her husband.

Just this last summer, Prince George was home to many refugees from the Williams Lake wildfire evacuation. My wife liked this one woman. She was a single mom but we needed to sign
some papers for welfare so she could get the deposit paid. She was supposed to show the next day but she didn’t show, she was moving to Ft.St. James instead. Fortunately, I kept the names
and numbers of other prospects and was able to get a group of students to move in.

Not too long ago, a woman came to view a vacant unit. She had a 1 year old and a boy friend working in Burns Lake who stayed weekends. She was going to share the 3 bedroom townhouse with a friend who had a 3 year old as she could not afford the rent on her own. This was getting complicated. I could foresee trouble here: the friend would leave when she found a new boyfriend, the two would have a disagreement, or someone would be short of cash one month. I turned her down. Did I mention they both had cats?

I had one desperate individual call me another time. He had accepted a job with the local radio station and had rented a place online without viewing the place and without checking with
colleagues. He arrived and discovered the house was in the ‘hood – a notorious part of Prince George. He didn’t even unpack the trailer. He went to my property after I asked him not to
interfere with the outgoing tenants. I didn’t offer the tenancy to him either. While I think my rentals are good quality, they would not appeal to professionals looking for upscale housing. I could foresee that they would move in but be looking to move on within a couple of months. I want tenants to stay one year minimum.

The problem with tenants who have complicated personal situations is that they are prone to sudden changes in living arrangements. Roommates can have falling outs. Women leaving
abusive husbands can move back in with the ex, or worse, the ex moves into your property. People who rely on Social Assistance or Disability Pensions are frequently short of cash and paying rent is not their top priority.

What To Look For
Look for individuals who have stable and uncomplicated lifestyles. Some easy to understand situations are:
● Students – especially third and fourth year students and grad students. They are committed to studying and completing their programs, they are past their wild first and second years where partying is the norm. Because they share expenses, they can afford the rent. The downside is that they don’t last long, sometimes as short as eight months, but sometimes they will pass the tenancy off to other grad students and even though the
individuals changes, the place does not experience any vacancies for two or three years.
● Seniors – very stable tenants, living the quiet life. If they can afford the expenses they never leave.
● Married – including the newly weds and the nearly weds – especially partnerships that have been together for several years – have uncomplicated lives, just living life.
● Young adults working in their chosen career, they don’t have enough saved yet to buy their own place and may be transient as the job may require them to move.

As always, do your due diligence; check work and past rental references, google search their names, and check out their Facebook page.