Integrity
What a fantastic morning! Nothing like a few hours of vacuuming rooming house floors, finding, dust bunnies the size of actual bunnies, old toenails to suck up and spills in a room that you just cannot imagine how they could be accomplished. So there is the less glamourous start, but the good part is the time I have to just think while I am actively cleaning and painting a room.
The topic I was reflecting on this morning was integrity. Integrity in Real Estate specifically. The problem with integrity is it seems to work off of a sliding scale for many individuals. The more I thought about it, the more I realized something. Something incredibly obvious, but also important to be aware of about integrity.
Before we get to that, here are some nice generalizations I’ve seen, been subjected to and been exposed to over the years. Some you may agree with, some you may not, either way I would love to hear your thoughts after you read the post.
Money Changes the Rules
There is a lot of freaking money to be made in Real Estate. Depending on which side of the fence you are on, either having money or not having money, this can change people’s level of integrity.
I have had upstanding tenants who in a normal situation would be people I could trust and have trusted. People I typically have helped quite often in the past, just to get past a hurdle or two. However if this hurdle becomes more of a wall, if their challenges become more severe, suddenly their level of integrity has shifted and they move from a situation of paying their bills to survival.
I have also been in numerous partnerships with people in Real Estate. I’ve had partners use us for information, initially indicating they were bringing us in to the deal and then as the amount of profits became more obvious and larger, suddenly we have been pushed to the side. This shift in integrity is due more to greed.
Our most recent experience (other than bank’s greed), was a property we had with a partner that was sold in very early summer of last year. It was a five year hold, the term was coming up, the lender had given us ample warning they were no longer in the mortgage business (GMAC) and wouldn’t be able to offer a renewal, so we knew we were selling.
Since we had held the property for a considerable time, we were looking at over six figures of equity and it was going to be a nice payday for both parties. Except the other party changed the rules once they arrived in the city from out of province. It was interesting as they actually called our integrity into account and suggested we had cost the other partner $30,000 or more in profits.
We managed the property for five years, dealt with evictions, repairs, problem tenants, broken windows, broken doors and basically did everything we could to turn the property into a great home for people, yet here we are almost ten months later and we have never been paid. In hindsight, this particular partner most likely never intended any fair equity split. I truly believe, again in hindsight, that her integrity level was never there.
We made some amateur mistakes initially and we believe she saw them, understand the benefits to herself and allowed her integrity scale (although after some of the conversations and letters sent to us by her lawyer wonder if she has any integrity) to shift drastically to the nasty side. Meanwhile, we’re $50-60,000 short of some profits we could really use to help out in other areas.
Integrity Changes One Decision At a Time
I think in the money examples above, for the first two instances, the changes in these people came fairly quickly. However, I also think many of these changes begin with one little decision which quickly gets followed up by another and another until the change can be justified.
When it comes to integrity, any misstep or decision that has to be justified, may not involve following the normal path of integrity and has suddenly become a new path forking off to who knows where. Anyway, I’m wandering off on my own path here, so just to get to the point, integrity involves keeping a certain set of standards and not letting those standards slip.
Now I’m not a choir boy, I may not be the nicest person, I may not even be a borderline person to some, but I follow a certain level of integrity that my partners know they can trust, as do my friends. This brings up the question, how flexible is your integrity??
Investor’s Perspective on Integrity
It seems over the last few years, as the market has turned on so many, I have been burned so many times by people who normally would have had good integrity. It hurts and it’s cost me friendships and a significant amount of money, but I have also learned some valuable lessons for both Real Estate and life.
We are not in the 60’s anymore, a handshake counts for nothing, you need full and complete documents and contracts for Joint Ventures, partnerships and any and all leases you are involved with. Whether it’s a deal with your neighbour or a deal with a superstar in the industry, trust counts for zip compared to properly completed documents.
Do not wait for when you have time, do not wait until it’s convenient, if there is going to be a significant amount of risk of cash, your credit or your integrity, get everything signed, sealed and delivered before committing to anything.
So just to close off, have any of you been burned by partners, investors or tenants? Now don’t name names, but tell us your story and tell us any lessons you’ve learned. Sharing and reinforcing this to people is the only way to help others avoid similar nightmares.
Nice post Bill,
Here’s what I’ve learned: “We create everything and are victims of nothing” Remember the law of attraction? There’s something about “US” that attracts people like them. That’s what I’ve realized, is that we play an equal role to other people screwing us. And sometimes our fault is that we have a big heart and “allow” others more space than we should have. But that’s life, no right or wrong way but just doing what made sense at that time!
I believe what you are referring to in this article is what has become known as the “Integrity Baseline Syndrome”. Much of this integrity baseline comes from within, but it is also agreed upon by groups of people which ultimately tends lowers the level of integrity. This usually happens as people agree that the higher level of integrity is not achievable and hence talk themselves out of their original commitment to being integrous. If all people had it that “without integrity, nothing works” you would see a whole new world out there.
In conclusion, do the Landmark Forum and stay in the integrity conversation. People like you help raise the baseline which creates a world that works for all. I am happy to join you there.
Jennifer Belland
It really is surprising how fast someone changes personalities when money is involved.
People are so greedy, that they’ll say the most ridiculous crap, get aggressive and turn the facts to benefit themselves. Sometimes the headache of trying to get the fair money isn’t worth the hassle.
Its a real eye opener to who you thought was your friend, when money is involved.
I agree, always document your agreement, and sign it.
You’ll find that they will still try to scam you, and lie to you, but the paper work usually slows their greed scheming down.
Perhaps I should have added time and money can change integrity. Two of the instances that I related to covered time frames of five years or more of relationships. While I do believe their is quite a bit of law of attraction that goes on in the universe, it’s amazing what we have attracted in the last few years!
Thanks for the comment John
If I understand it’s basically the level of integrity slowly reducing itself as minor compromises slowly lower the bar further and further? Don;t worry, we are hoping to attend another Landmark Forum!
These were long time relationships in two of the situations. Some people the BS detector immediately goes up, others just put of the good front and say what people want to hear, even if they have no intentions of ever doing it.
Thanks for the comment Tyrone
It’s amazing the level some people are willing to stoop to, isn’t it? When their dealing with their survival, it’s somewhat understandable. But just for money? I’ve dealt with this time and time again and I’m getting to the point where I am less and less surprised. Still a shocker, though, when you think a situation is one way, and it turns out to be another. Doesn’t really give one faith in their fellow man/woman.
Ha! I like what John had to say. My mom always told me I tend to attract the “down & out” (people that just need a little help). That’s what I found when I rented out my condo for a summer & moved away to work in between attending University.
Bill you are right, documentation is the only security we have.