7. The BIG Deal - Part 1
Updated: Jan 23, 2020
The Big Deal began as a mere curiousity.
An agent contact in Whanganui approached me quietly about a motel for sale in Whanganui East in early September. The Vendors apparently refused to pay any advertising fees and so the sale was word of mouth only. I had been aware of a motel deal Ellie and Charles were investigating about six months earlier but were unable to come to an agreement with the vendor on value and passed it over. I was professionally curious as a result of their interest but it bore no significance to me - it was a deal well out of our league. I wondered now if this was the same deal resurfacing.
I began to idly run numbers; an exercise with intent to learn, and no serious intent to pursue. Nonetheless my curiosity was piqued.
The initial numbers ran very well indeed. Despite general community knowledge of interesting vendor dealings that played out across all the curious conversations I fostered in those early days of interest, there seemed to be a very healthy cash flow return on paper. I boosted all the expenses by 50% and the numbers still played out well. Perhaps this was worth further query.
As fate would have it, I was visiting Whanganui in the ensuing weeks on other business and by chance the opportunity came up to view the property. With nothing to lose I agreed and invited Tom and Dom along for interest - it was a typical week day morning of the generally and deliberately unemployed- no one had anything better to do. Perhaps I would be more accurate to say our weekday availability was just symptomatic of the “financially free” lifestyle of the property investors we all were growing into.
Dom attached herself to the Vendor, connecting down south African lines, engaging her in as much conversation as she was able, gently probing the reasons for sale and her experience of the property. Tom and I critically reviewed the many units, ranging from studios to 3 bedroom houses, and an 1835 historic villa which was several apartments and a boarding house. The dwellings were in largely good repair and the grounds were stunning. A protected magnolia tree spread its evergreen canopy from the centre of the site, radiating magnificence and old-world charm when combined with the vintage villa backdrop.
The prospects and strategies embedded within the well kept motel complex fired our imaginations and over dinner that night our creativity and dreaming knew no bounds. Perhaps we could do this together. Perhaps Stephen and I could bring the serviceability and Tom could raise the deposit. With several houses onsite we could sell and consolidate debts or pay down investors and keep the bulk of the motel. It would definitely be a residential buy and hold strategy in the main. Even pocketing only half the cash flow profit it was an attractive deal. I had no interest in doing it alone - it was too big a step up, too serious an amount of money and I wanted the workload, responsibility, debt and risk all halved. It was also a great opportunity to experience working in a joint venture - an avenue of investing in which I had not yet grown any experience.
Conversation on this and other deals flowed thick and fast all week, opportunities presented, fated, deals swelled at our fingertips all as we all ‘levelled up’ through the week together. The power of creative community, free flowing conversations, each idea leveraging the last, each person growing from the others, tapped into a flow all together that can only be experienced to be understood. The conversation ranged across love, drugs, mindful eating, personal growth, the third industrial revolution, solving the NZ housing crisis and finding freedom from the need for money. A conversation of conscious capitalists. The concept is laughable. And completely delightful.
As I drove away from Whanganui and the energy of the company and the swirling, bubbling ideas I realised I was happy and completely exhausted. The series of necessary meetings on various issues involving our standing portfolio as well as my incurable compulsion to grasp every hint of opportunity with both hands at the expense of my body’s protests (but I’m only here for 3 days I must follow up every lead!) had left me with nothing left to give but had seeded an idea that was to grow deep roots. Maybe we could do this BIG deal. My actions and energy expenditure in those three days cost me three days of exhaustion when I arrived home, couch ridden, sleeping and very much a woeful example of parenting. I had forgotten I was pregnant and functioned furiously, spurred on by opportunity and creative energy. I chided myself for my recklessness. I am growing a human. Steve was kinder. You’re pregnant darling, just rest, Isabella is fine to watch some TV. Despite the logic, the parenting guilt arrived immediately and on cue - even as I drifted into a deep sleep on the couch at the unseeming hour of 11am on a weekday.
The seedling took root and grew. I completed an Information Memorandum (IM) for a Joint Venture (JV) partner, forcing me to lay out with clarity the strategy for converting the motel from potential to equity, assess finance options, complete comparables and run many many versions of continually growing monster spreadsheets showing cash flow figures. I burned the midnight oil. Many nights. But the plan and document came together in a very pleasing manner. A hundred phone calls, a hundred conversations, hundreds of hours of mental agility as I discovered risks and rewards, brainstormed with Steve, prepared estimates and conducted conversations. A few weeks passed I must have parented and eaten and slept and loved. I know I meditated daily. If anything was going to get us through to closing this deal it was manifesting the reality of an abundance in our lives for which this deal would be the vehicle.
September built up towards the Tony Robbins event. The unease grew in doing this deal with Tom. The conversation with Ellie and the yoga class of shame both came to pass (See Blog 4 - Breaking Through). Conversations conversations conversation. We let Tom down gently. I had no idea how to do this deal without him, we had not yet fostered other options, I only knew that he was not the right person this time. My gut spoke loudly.
Stephen saying repeatedly as new potential risks and potential mind-blowing rewards displayed on paper in numbers or cautions in conversations “Belinda this deal is a Game Changer, and so expect that it will change our game.” We were growing. Sometimes it hurt. I became aware of my upper limits. I broke through them with the Tony Robbins event (Blog 5 & 6 - Tony Robbins). I felt that wealth would be inevitable, but the vehicle was not revealed. I began to actually consider that we might get this deal done. I felt that the odds were against us and a long line of hurdles was arrayed before us, nonetheless I committed to each after the other, one step at a time until the moment when the deal was no longer ours, no longer a good deal, no longer possible.
Over the following weeks:
The flood zone risk was mitigated by an insurance agreement.
Future development was approved in concept by the council.
Subdivision challenges were verbally mitigated by an agreement with the surveyor.
The archaeological site was found to be insignificant.
The numbers firmed up and the cash flow remained a shining beacon.
The engineer found little significant works required at the site.
All of this research and time just to understand the offer we could place. We placed an offer in writing. The Vendor was a fight herself. She declared ridiculous expectations, she changed her mind daily, she seemed incapable of applying logic to a conversation and I learned patience and committed to playing a long game.
Another visit to Whanganui for face to face negotiations showed me a slippery and irrational character whose mind was full of shadows. My best diplomacy and negotiation was useless in the face of an illogical mind. I am nothing if not logical. I was dumbfounded. I mentally noted that my negotiation skill set needed improvement. I recognised a lack of empathy in myself that was hindering my ability to connected deeply and understand the others' needs. I wanted to negotiate a genuine win-win, I believed it possible and fair, but I failed to establish a connection of depth or trust. Meetings, strategy, conversations, numbers.
As I drove the five hours home from Whanganui after another three days of furious chess and relentless personal growth I knew my mind to be fracturing. I felt like reality shifted around me and I was tired to the bones. The road. The curving bending road. The roar of the tyres on asphalt. The grip of my hand on the steering wheel. Both hands, a calm mind. I listened to audiobooks and my mind rocked to and fro between reality and immersion in another place that I could not quite grasp. The calming voice of Jim Rohn.
If you want to have more than you have, you must become more than you are. - JR
How do you describe the sense of losing control when you know you remain firmly in control of the physical? Darkness danced around the periphery of my vision but I knew myself to be focussed and alert. The road. This drive. My family at home waiting for me. The love. The abundance in my life. Sensations and visions washed through me. I knew my essence was loosening from my body. My body was calm. My actions were clear. I observed my self driving this car on this road at this hour and I could see that Belinda was alert and focussed and capable of the drive, albeit tired. Sometimes flashes of near misses with other traffic as she struggles to pull her mind into a place of focussed rest. Was it a warning or a spurious glitch in an otherwise acute mind? Don’t manifest it. Don’t dwell. Focus on the words in the audio book. Focus on the road, the wheel, the smooth bends, the speeding landscape.
She knows her mind wanders into fatalistic visions when she is losing her grip. It has happened before, years ago: close up images of the unforgiving metal grills of road trains barrelling towards the car at closing speeds of 200km/hr, the long straight highways of Western Australia, a tiny twitch of the steering wheel decides life and death. She wrestles her mind back onto the right side of the road. Hours of asphalt pass beneath the wheels. A calm clear driver observing herself driving calmly.
It happens on a long straight stretch. There is a truck holding up a long caterpillar of traffic. I am second, behind a car that will not pass even on the straightest stretches of road. I observe the behaviour of the jostling cars ahead and behind over several stretches of possible overtake. The car ahead will not decide. When the next straight presents I commit: the mirror, the indicator and I pull out. Something is very wrong. Time is distorted and immense friction and sound radiates through the car body. Impossible. A car, another car. We are three abreast on the small country road, the car that was ahead, myself and a stranger who arrived from behind, grating against my car and fighting the ditch. The steering wheel jumps like a wild thing in my firm two handed grip. Clarity explodes, aluminium tears and temporal distortion hijacks time. I am so clear, and it seems like time expands into forever. My only task is to steer my car straight and exactly between the car grinding itself down the driver side panels and the white SUV on the correct side of the road. I calculate exactly the space required to keep the speeding brown sedan from flipping in the ditch as it scrapes through the space too small for the physical body of metal. It is over in milliseconds. The brown sedan was now screaming ahead and I was on my own side of the road behind the truck. I did a quick body assessment. My body was languid: relaxed and alert, firm but not panicked. My heart rate was slightly high but not racing. I was focussed on the road immediately in my vision.The caterpillar of cars registered no indication of recognising the event that had just taken place.
The brown sedan had pulled over ahead. I pulled over too. The caterpillar whooshed past us and the countryside became quiet and still in the absence of the sound of car engines. The breeze was cool. The grass was green. I felt only gratefulness. No resentment at the dents and scrapes down the length of my car. Just a car. Just a moment. No wild rationalisation or mind fighting reality. Wow, I said, holding my hand out in greeting to the irate Maori approaching me. Wow, we are so lucky that wasn’t worse. My name’s Belinda.
It took me quite some time to calm down the angry man in front of me but his emotion washed past me, insignificant. I had time to idly wonder if he was likely to hit me. He tried blaming and anger. I shrugged. I check my mirrors mate, I always do, I’m a very reliable driver. You must have been travelling very fast.
He was not the car behind me, he came from several cars late down the body of the caterpillar,I knew this from my observations prior to overtaking. He must have accelerated hard and fast approaching the straight and committed earlier than me to overtaking the whole caterpillar of cars. He must have been travelling above 160km judging by the rate he had scraped past me. My brief glance to the mirror, while one can never be sure of ones own actions without video playback, had likely taken place and had either not revealed the speeding bullet in the frame or had not registered his existence. My fault for not having greater situational awareness. Or his for reckless decision making. I found the concept irrelevant. Mate, I said again, unruffled in the face of his anger, what a blessing it wasn’t worse. That could have been a very different outcome. I smiled. I felt nothing but gratefulness and the almost total lack of consequences. He visibly changed. His angst melted and I noticed a car full of kids watching him. He nodded. Yeah…ok. He examined the paint damage down both our cars. Panel replacements required he observed. I shrugged. Not a big deal mate, I’m not worried, easily sorted. Administration. We swapped numbers, discussed insurance, he didn’t have any, I didn’t know if I would bother filing any. He hesitated as he went to step away. Then he stepped closer to me. You look like you didn’t need the drama either, he pointed at my growing stomach and hugged me.
As I drove the remaining few hours home I mused whether my ability to manifest had become so strong that I had a created this event as a warning to myself to control my own mind. I mused on what the lesson was. What was I meant to learn from this glitch in the very fabric of my life where two paths had opened up in flashing moment of unexpected danger? Potential for death had hovered so close to life but the outcome was so benign, so gentle as to be insignificant, a paperwork burden only, a scratched and lightly dented car. I wasn’t even annoyed. I felt it roll off my back. I drove in wonderment, marvelling at the sensations of the last hours and days. Feeling that my life was shifting significantly.
The fatigue from this trip to Whanganui weighed heavier again than the last on my pregnant body. But now we felt that we could do this BIG deal. It would be ours.
It was a short-lived expectation.
Over the following days we brainstormed. We would get a number on paper with a signature and we would get a valuation and renegotiate from there when it came in lower than our offer. We chose a number that worked, but was higher than we wanted. Just another hurdle. She became irrational. She requested a specific Valuer. I agreed despite the Valuer being my least preferred and having a 3 week delay to completing the work. She wasted time, the Agent was wishy-washy and insufficiently sharpened for the task of managing vendor expectations of the current market. Weeks of fruitless back and forth on contract and then in my mind I let it go. We would not even get a contract across the property. Despite our research and ideas and growth we could not even clear the first hurdle. The research and relationships had been a great opportunity for learning, but this deal would not be ours. The Vendor, despite her declaration of wanting to sell, could not let go.
I returned her final ridiculous counteroffer with one last attempt and wrote in a sunset clause stating that if my offer was not countersigned by 5pm the following day then all offers were removed and our negotiations were at an end. I had invested enough time and energy in this project, and I was done. I hit send. I went to bed. I had done everything I could. We had learned a lot.
At 4pm the following day I had a call from the Agent. She signed it. It was the wrong contract version but she signed against your offer. We’ll just fix up the contract. You’re in Due Diligence phase.