ScaredyCatGuide to Trusting Your Gut in Business and Life

There is something most people learn or realize as they experience life. Your gut seems to be right more and more often. What exactly is behind this phenomenon? Why is it that my gut seems to be right alot more often now than it was 20 years ago?

Just like the kid in the picture - I have had that reaction many a time throughout my life. Sometimes it was when I trusted my gut, but more often it was when I did not.

Your Gut Instinct

Here's the thing: your gut instinct is never going to be perfect. That's just impossible anyway, no one can make the right decision every time all the time. However, you gut instinct isn't just some feeling. It's derived from much more.

Items like:

• Experience
• Information

They form the decision your gut instinct comes too. Let's be real here though; your opinions and biases do so as well.
However, with that said the conclusions you come to based on your experiences and the information you have retained over the years is still valuable and serves you well when you follow your gut.

Example

The best examples I can give is those of personal experience.

Recently I purchased another rental property. Once I got under contract for it something didn't feel right. It was not a bad deal though, the financial numbers were acceptable. The rental comparisons look to be good. Though it was in a lower income area, the community it was in was one of the desirable ones in that area. The property was in good shape and just had a new roof put on. Really there was nothing to worry about.

During the closing process there was an issue with how much the bank would finance, this gave me the opportunity to negotiate a lower price or walk away from the deal all together without loss of my deposit. I seriously considered the latter for a day or two as something just felt off.

Like I said, the property was fine. i just wasn't the biggest fan of it. It was all the way in the back of the community, based on the layout of these units there isn't a whole lot of daylight that gets into the property and just other little things that bugged me.

Decided to go ahead and negotiate. Ended up getting a reduced price I liked, which made the deal even better on paper so moved forward. The whole time my gut had little confidence in this property.

Two Months Later...

The property is still vacant. My agent has had nearly 100 showings and out of a dozen applicants none of them meet the homeowner association (HOA) requirements. The requirements are pretty relaxed to boot!

So, I had my first unaccounted for month of vacancy thus taking a loss. Every other property I have I "felt good" about and they have worked out well. Apparently my gut knew something.

The Lesson

The lesson is that though my gut will not be right 100% of the time, it will be right more often than it is not. Those "gut instincts" are derived from all that I have learned and experienced over the years of real estate investing. Some think I'm to rigid in my process of real estate investing, however when I loosen up and do not go with my gut.

Your gut is not some mysterious feeling, it is derived from your experiences and the information you have gathered over the years. Trusting it is better than ignoring it.

Think about, when's the last time you regret not trusting your gut?

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Thanks for the pic pixabay