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Our minds are powerful. The simple way of looking at life in a new way can have a drastic change on our rate of success and future opportunities. While I always knew that determination and passion were positive attributes of mine, it wasn’t until I read the book “Mindset: The Psychology of Success” written by Carol Dweck, that I realized that I had a growth mindset. The book details the difference between having a “fixed” mindset or a “growth” mindset. A fixed mindset views life as stagnant. A person with a fixed mindset is afraid to change, scared to make mistakes, and views failure as the end of the road. People with a growth mindset believe in their abilities to change for the better, look to improve themselves, learn new things, and take calculated risks to create better opportunities for themselves.
When investing with a sponsor, it is critical to understand who they are as a person, and how they operate as syndicators. As a syndicator myself, I want to open the door and give a peek behind the curtain of who I am to give a better understanding of how I deal with challenges. The events in my life, and how I have decided to deal with them, have led me to success in the Multifamily Real Estate Industry, growing and building my company to be worth 8 figures. Here are five times a growth mindset has helped me further my career.
Striving for More
For those of you that don’t know my story, it’s one I tell often as it is a reminder of how far I have come. I was born in Israel and my family was impoverished. Lack of money was always a large concern for us, and followed us in day-to-day decisions. In order to make some extra money for my family, I started cleaning synagogues around the age of 11. Although it was hard work, I'm thankful for my parent’s mentality, as they gave me the tools to be a good person, even when life wasn’t perfect. At a certain age, I remember cleaning the steps and thinking to myself, "I want more. I don’t ever want money to be an issue." Upon reflection, this is the first memory I have of utilizing a growth mindset. A fixed mindset would have been complacent; with a growth mindset, I began to view life as a challenge worth taking on, and that excited me.
Overcoming the Limited Thinkers
As I grew older into my teenage years, it became time to start thinking about my career. For the longest of times, I wanted to be a lawyer. Admittedly, I was never the smartest, but I was always the most motivated. In order to get into the university that I desired, a certain test score was required to be admitted. I took the test multiple times without any success. I would go home, study, test take, and repeat for months. Finally, I had one last chance to pass in order to make the Fall admissions class. I was nervous to look at the score when it arrived in the mail. I handed it over to my ex-husband because I couldn’t bring myself to look.
He pulled out the paper and read the score. He then looked me in the eyes and said, “You will never be a lawyer.” At first, I was hurt that he didn’t believe in me. However, after a moment I thought, “I’ll show him.”
A fixed mindset accepts other’s opinions as fact. They allow commentary to infiltrate their goals and objectives, until they themselves believe that they are not capable. A growth mindset uses other’s negative words to fire them up, and motivate them into success. Shortly after that conversation with my ex-husband, not only was I accepted to the university with a scholarship, but I then graduated with a bachelor’s degree and master’s degree in Law.
Betting on Yourself
Years later, I came to America with the idea of being a real estate syndicator. After being on the litigation side of real estate investing, I wanted to be sitting at the table myself. The issue was that I had no idea how to get a seat.
I was at a crossroads in my life, with little to no savings and student loan debt. I wasn’t totally sure at first if I could afford to learn the industry. However, thanks to my growth mindset, I convinced myself to pounce on the opportunity. I spent almost all of my money to enter a mentorship program and learn the ins and outs of real estate investing. It can definitely be scary to take a risk like that, but your instincts and intuition will often help guide you down the right path. A fixed mindset would have feared a risk of that magnitude, but someone with a growth mindset will bet on themselves every time. Growth mindsets believe in their capabilities, and are willing to trust in their own success.
Losing with Grace
When I was first breaking into the world of syndication, my first deal was a property that I was very passionate about acquiring. While I made it very far in the process of obtaining it, a much larger company edged me out. Of course, I was disappointed, but I knew there would be more deals. A few weeks later, the company called me and asked for me to partner with them. It was much less equity than I initially wanted, and my wound was still healing from losing the property. A fixed mindset would have let their ego control their decision. They would have been too bitter from the loss to accept the partnership. However, a growth mindset makes you excited to take on new opportunities, so I joined them. Although it was not what I had initially wanted, I learned a massive number of tools and information that I still use even to this day.
Viewing Challenges as Opportunities for Success
Finally, there was a recent asset that had an issue. When we signed the deal to acquire it, the occupancy was very high. The asset was in a good location and had good bones. We were excited about the deal. However, two months later and a week before closing, the seller informs us that they were not able to keep occupancy at its previous high percentage, and it had dropped to the low 80%. A fixed mindset would have tried to change the deal entirely, and conduct themselves in an angry or immature matter:
“This isn’t right.”
“We’re going to court.”
“I’m pulling the contract.”
A growth mindset finds the positives in the property, and embraces the challenge in full swing.
“How can I make this property more alluring?”
“The location is still in a great spot.”
“The business plan will still work; we just have to adjust.”
I took a chance on the property and went with the growth mindset mentality. A few years later, we exited with a 25% IRR and had an 11% CoC in the last year of the hold period.
How Growth Mindsets Impacts Passive Investors
Understanding how a sponsor thinks and operates is essential to knowing how they will handle hardship. While the industry is performing strongly now, it will not always be like this. It’s inevitable that deals may underperform or unexpected road blocks may appear. It is how the sponsor views the issue that is more important than the issue itself. Do they have a fixed mindset, where an underperforming investment is a lost cause that can’t be changed? Or do they have a growth mindset where they view the issue as a challenge and say, “I got this, let’s turn it around.”
I encourage you whether you're a syndicator, passive investor, or anyone for that matter: Begin to look at life in a new way, as an opportunity. Take calculated risks. Build bigger. Work harder. Before you know it, you will have adapted the growth mindset, and you will thank yourself for it.
Want to Invest with Ellie Perlman?
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About the Author
Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the host of REady2Scale , a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital at www.bluelake-capital.com and learn more about Ellie at www.ellieperlman.com.
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