Problems are opportunities...rightly considered.
A lot of people run from problems. They try to avoid them, and they will abandon any problem, without even considering the opportunities that it might present.My friend, Don Hodges, is a contractor. He would look for properties with structural problems, buy them for a song, fix the problem, and bring it up to code, and then sell the properties for a huge profit.
How was he able to do that?
1) He would analyze the problem. If he could solve it, it wasn't a problem.
2) He would analyze the costs and the return. If he spent 20,000 dollars buying a property, and another $4,000 in rehab, and $3,000 in closing costs, and he could turn around and sell that improved property for a total of $50,000, he just made a quick $23,000.
3) If the return was less than he required, he would walk away. It wouldn't make sense. Sometimes you will have an advantage of position, and you can take advantage of that.
One time, years ago, my cousin Pam and I found a double wide mobile home that had an:
1) IRS tax lien
2) Foreclosure
3) Double homicide
4) Divorce
5) Bankruptcy
When I walked in the back yard, I couldn't see the inground swimming pool from 20 feet away because the weeds were too high.
This property had problems. What did we do?
1) We consulted with our attorney and discovered that we could make an offer contingent upon the property being released from the tax lien. (Consult with your attorney before buying properties with IRS tax liens).
2) We could get the property released from the BK, again, we did this through our attorney.
3) We could rehab the property, and spend less than $5,000 to rehab it.
4) We could make a profit on the property IF we bought it from the bank at a low enough price.
We walked into the banker's office, and said, "We will offer you 9...." He said "YES!" before I finished saying $9500, so we left it at $9,000. This offer was SUBJECT TO all of the liens being released, and the title being pure as driven snow before we would purchase it.
We had to wait 60 more days for the tax lien to be released, but it was worth it.
We sold it and made a profit of over $20,000. Why? Because we had specialized knowledge, and knew the steps to take to take a problem that nobody else wanted, and turn it into an opportunity. (The bank didn't want it, we might have been able to negotiate an even lower offer, but we were happy with the price.)
"Yes, there's a problem, but it's not MY problem"
Sometimes you will do your due diligence, and discover that the problem is bigger, and more expensive, than you had wanted. If there is not enough return...don't do it. Let me repeat that, if there is a problem, but the solution does not give you a large enough profit...don't do it.
"Yes, there's a problem, but it's not MY problem." should be your attitude. The only way to make it worth your while is to have the other party make it worth your while.
Sometimes they will be unable to do that, and you walk away. Sometimes, there will be another party that will have to take a loss, and you will have to determine if there is enough profit in the deal to make it worth your while. If not, walk away.
This one time, a business partner and I were bidding on a property. An attorney had foreclosed on the house. We did a cost analysis, and showed him the numbers. The price that he was asking was too high, but, if he wanted to get rid of the house, we would take it for $25,000. (We put ten thousand into it, and sold it for $70,000 a few months later.)
The attorney didn't want to hire a crew, and put money out of his pocket to solve the problem. When we showed him the numbers, he agreed to our offer, and walked away.
The house was a mess. It had filthy walls, smelled like dog and cat urine, and was just plain ugly. We cleaned it up, put in a new HVAC unit, and sold it for a $21,000 profit. We had a solution, he didn't want to touch it. If he had refused our offer, we would have walked away.
Every deal is a bad deal, at the wrong price. Every deal is a good deal...at the right price. You must be able to discern what is a great deal, and what is a terrible deal.
You must know your costs.
If you are buying a property, or doing a task at work, you MUST know your costs; in time, effort, and dollars. If you don't do that, you could lose money on a deal. I had one client that bought a house, at just below retail, but then spent three months on it, working 10 to 12 hours a day on the project for three months, AND putting it in great condition, and then realized, belatedly, that they had spent more money on the property than they could get out. They had over-improved the property. The ONLY way to make money on a property that needs a lot of work...is if you know the solution, and the costs, and can still make a profit on the deal. (If you don't have the solution, or know the costs, walk away.)
What if you don't know the costs of a project at work? How many hours will it take to complete? Will it take you away from your other responsibilities? Will you be doing this task in your spare time, without compensation? If you don't know the costs, don't do it.
Take on tasks at work...that nobody else wants to do.
If you want to stand out from the crowd, do the things that nobody else wants to do, and do them well. When you do that, you have differentiated yourself from the competition, and brought value to the organization. However, if you do volunteer to do a project...do it well. If you volunteer, and you do a terrible job, nobody will remember that you went above and beyond to do a task that nobody else wanted to do; they will only remember that you did a bad job, and that you can't be trusted.
When you are taking on these tasks, document what you did, explain how it brought value to the company, have your supervisor acknowledge it, at the time, in writing. On your next performance review, bring out the documentation, and have that factor into your performance. If you are thinking of staying with a company, taking on additional tasks is the best way to get ahead. If you are thinking of leaving in the future, there is no better way to polish a resume than with a series of tasks and projects that brought value to the company. Don't worry, you will either get paid for your efforts from this employer, or your next one.
Don't take on thankless, impossible tasks that drain your energy, steal your money, and waste your time.
There will be some problems that are impossible to solve, will not be resume enhancing, and will be a complete waste of your time. Before you commit to a task, do your due diligence to see if you have a solution; AND if the rewards are greater than the risks and the work. If not, pass.
Be discerning in taking on new tasks and projects. If it's a problem, but it's not your problem, what benefits would you need to receive to make it your problem? If you will not get any benefits, don't waste your time.
In summary, Problems can be a huge opportunity, if you are discerning, analytical, and can find the solution. However, always have a solution before taking on someone else's problem, and know the risks and rewards before making the offer.
