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I came across this TED video (albeit from 2006! ) and it resonated hugely with the property wealth creation sector and to a certain degree with one's own understanding of property.The video explains why making, and more importantly, defending an opinion, that is based on two things - limited knowledge and poor value data - will ultimately not serve you.Much of wealth creation marketing is based on limited knowledge and poor value data, of which their defence usually is that those that are asking legitimate questions or making legitimate challengers are labelled as "haters", "nay sayers", "neg heads", or people jealous of others' success. Or they are people who are too fearful to do it themselves, and try and instil their fear into you, or they are fearful that you might actually succeed so try and pull you down.Dismissing someone's opinion on the basis that they are "jealous" is one of the laziest things anyone could do and shows either a complete ignorance or a complete lack of understanding of the English language - point of fact, to be jealous, someone has to have something that you want and its a major failing to assume that they want the same as you.The video also addresses the issue of claimed success. Most of this claimed success is illusion based on non-transparency of data.If one person is cited as a success story, it makes a big difference to know if they are one person out of a group of 10 or one person out of a group of a thousand.If someone claims they bought 20 properties in one year, you need to know if their starting position, because, if they started with £750K in the bank, then their success is not too surprising, but it is unlikely you will be able to replicate it if you are starting with £75.00 in the bank.There is nothing wrong with marketing. There is nothing wrong with creative marketing. But, by the same token, there is nothing wrong with being a skepticAs the video states, skeptics and de-bunkers are important to society. They create clarity about an issue.The real problem in the property wealth creation sector is those that try and stop this legitimate process, and when you see that occurring, that should be a red flag in your due diligence process.The opinion of skeptics should have more weight in your due diligence process than the opinion of the marketeers/gurus as skeptics do not gain in any way from you taking on board their opinion or view.Due diligence marries theory and up-to-date granular and factual data. That is how it mitigates your risk.There are many valuable data sources like Companies House, DueDil, the Land Registry, and, of course, google.As the presenter in the video states, the skeptics and de-bunkers play a very important role in un-regulated sectors, the wealth creation industry being completely un-regulated.If you are not an expert in due diligence, the skeptics and de-bunkers might be the only line of protection to stop you losing life-changing amounts of money.Using video, images and music, professional skeptic Michael Shermer explores suggestive phenomena and offers cognitive context: In the absence of sound science, how incomplete information can combine with the power of suggestion to create a compelling story that influences behaviour that may not serve your best interests.In fact, he says, humans tend to convince ourselves to believe: We overvalue the "hits" that support our beliefs, and discount the more numerous "misses." This goes a long way to explaining why people are so easily parted from their money when it comes to "get rich quick" opportunities.
All next week, Property Tribes will be running "Business Risk Mitigation" Week. We will be examining the many risks in property investment - financial, regulatory, and encountering rogues - and how they can be mitigated.We have contributions from leading industry commentators and this is all part of the Property Tribes "Smart Landlord" campaign which is running throughout 2019.I invite you to join us all next week to learn how to reduce risk in your property business, as this will ultimately protect you from financial loss and stress and make for a much more enjoyable, peaceful, and profitable landlord life.SEE ALSO - Trust - How easily we are fooled.UP NEXT - How to use Companies House for due diligenceDON'T MISS - Property education, training, and mentoringNOW WATCH:
general operations director, site owner and moderator - propertytribes.com
Or in short:
Take everything as bullsh*t until you can prove 100% that it isn't bullsh*t.
Very insightful read!! I’d agree with Geoff that this is an important topic.Reducing risk by data driven decisions was one of the drivers behind us founding One and Only Pro.
Transparency notice: OneandOnlyPro is a commercial partner of Property Tribes.
I am that skeptic
Henri - if you want to encourage data driven decisions to reduce risk
you first have a responsibility to get the data right in order to reduce that risk
Contrary to your vid presentation I have found often
Your data is faulty, imprecise and inaccurate in many places
Here is just one example in the same block where i own, manage or know LL`s of 5 flats
You say min 995 pcm and max 1250 pcm rent for this 2 bed . That is incorrect
I say reality is in fact only 750 pcm for this very similar 2 bed
Your data is wrong and misleading as its a massive £500 pcm out I`m afraid
That kind of data increases an investors risk I fear and is part of the problem . Sorry
Jonathan Clarke. http://www.buytoletmk.com
JC, you and I know exactly why the 'data' is there - to get a deal and nothing else."£995 - £1,250" is total carp for that place.
People come to you because you give them the reality check. Unfortunately, every day people have a reality that most of them probably don't like.
If figures are 'talked up' then it makes the mundane very interesting, and a way out of the mundane. It's like those sales jobs that have £30k OTE (on target earnings) - now anyone that's done that sort of job knows that if that target is reached the carrot is set further away to make the mundane more interesting, but ultimately, less achievable.
Well done for bringing up the ongoing figures that the sponsor is mis-representing, but it is down to the investor to see if the 'exciting' is actually 'mundane'.
Let's be clear here, because "intent" is important in this context. One and Only Pro are not intentionally mis-representing the figures. They are creating a complex piece of software that is being fine tuned on a daily basis.With any tech product, it can take a sustained period of time to fine tune the back end to give accurate results. Many companies release software and then use user feedback to fine tune it. I know the team at OandOPro are working tirelessly to address the issues raised by JC and they take that responsibility very seriously.Henri has always stated that his software does not take the place of due diligence and I know that, even if the software was performing at 100% accuracy, Henri would still be banging the due diligence drum and advising that investors double check the data. I have heard him say this numerous times.Once the O&OPro software is firing on all cylinders, it will be a tool to reduce investor risk and that is something I am sure we all agree is important and much needed, so perhaps some forbearance in this instance is reasonable ...
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Once the O&OPro software is firing on all cylinders, it will be a tool to reduce investor risk
But until it reaches that point, it INCREASES risk by giving misleading data and therefore should be pulled until it works properly.
Imho you cannot have a piece of software that models pricing for an asset that is almost unique.
It's not like saying all Ford Focus 1.6 petrol top of the range models in metallic red are 'that price' by the manufacturer (based on cost + markup) or another price if its the retail price.JC pointed out a potentially large price differential in what appears to be the same block.
A loving owner of a property could spend 10s of thousands on upgrades for that property. Or it could be a rats nest needing gutting due to an unloving owner. There will be a big price differential here for flats that may be next to eachother! However, one of them could be 2 feet away from a train line, and the other looking out onto open fields.
I have never known a software algorithm that gets it right because where there is a human input or the opportunity for differentiation there will be potential for it to be wrong.
Any coders out there will understand the phrase "junk in, junk out".
Now I'm not calling their algorithm junk, but it will never be accurate.
We have nothing to gain by exaggerating rents as we are not paid a commission.
OneandOnlyPro is honest, impartial and independent to the entire property market.
Hi Jonathan Clarke,
I would not say that you are a skeptic but a critic.
We debuted our product online to the members of property tribes as we like the lively debates and wanted our product to be critiqued thoroughly by real property investors. From Property Tribes you are our MVP critic.
Thank you for pointing out in what your opinion is an incorrect rental estimation. We have taken a look into this discrepancy. An intelligent investor would want to know the potential of a property whether it be maximum rent or end value and then work contingency backwards from there.
It is our opinion that the potential rent for this property is between £995- £1250pcm.
It is your opinion that the maximum rent achievable is £750. We can both be correct in our realities.
2 bedroom flats in the nearby vicinity have already achieved £1400 pcm+. We feel that with the right specification and the right tenant profile type we could achieve the £995- £1250.
There is no risk as OneandOnlyPro is a website to carry out initial desktop research before further due diligence by asking property professionals and we would never advise a property to be purchased without a RICS survey.
I am both a skeptic and a critic -
I was a skeptic first because I dont think you can programme in what you are trying to programme in
I then became a critic because I began to open up numerous holes in the site
And when challenged I felt you always tried to deflect and minimise the problems I raised
Woodstock Oxfordshire should not show you properties 80 miles away in Bristol .
It still does though 2 mths after I raised it as an issue
You say here ``2 bed flats in the near vicinity have already achieved £1400 pcm +``
So what - You must compare like with like - but you are not .
A few hundred yards can make a massive difference
but of course your search engine cant pick up that so it gets it wrong
Put a Bentley by a Mini and you dont say well they both got 4 seats so they must be the same price
Your website states
``Investors can now make buying decisions in seconds, taking the pain out of comparing properties and calculating returns.``
It doesnt . It creates me pain when i see the mistakes
You may be working tirelessly to correct the mistakes but you shouldnt charge people until its right
Your website is a distraction and a risk to that DD
The ones @ 1400 + you are talking about are totally different to the one you advertise
They are about quarter to half a mile away and nothing like this block at all
This block has druggies and loud noise and swearing and fights and police crawling all over them
The flat opposite one of mine has as ASBO notice on . Some smell of cannabis and urine
The ones you are comparing with are top end posh 2 beds with secure parking, lifts ,24hrs concierge
They are worlds apart even though they are in the `near vicinity` of each other.
Your comparison has 0.1% relevance
But rather than acknowledge that fact you still rigidly try to defend your stance with phrases like
``We can both be correct in our realities``.
No we cant .
It either rents for 750 ( my reality, rightmoves reality , My AST reality and my 17 years owning these flats reality )
Or it rents for 1250 ( your reality based on never visited the location and taking the word of your algorithm )
Your reality is fantasy my friend
You pretend you know this area but you dont You wouldn`t say what you do if you did know it
I`ve been inside this block 50 times .
Have you ever stepped inside this block where you nonchalantly advertised a rent of 1250 and a yield of 9.30%?
Of course not - Its embarrassing to be honest .
Please tell me how you are going to achieve that 1250 rental income . Your website says
``Since 2007 we have given expert advice, analysis and insight ...... ``
Please then give me the benefit of your expert advice to say how i can achieve 1250 rent?