There is a saying in behavioral theory that "Repeated past behaviors yield the same results."

If you have conducted business in a certain way in the past and achieved specific results, continuing to do the same in the present will likely yield unchanged outcomes.

However, with the emergence of a new real estate future influenced by Covid-19 and the ninth era, we may witness drastic changes.

Covid-19 could lead to a prolonged economic downturn, impacting an already sluggish real estate market significantly. By the time we reach the ninth era in 2024, the real estate business may not resemble what it once was.

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The impact on organizations remains uncertain, but one thing is clear: today, entrepreneurs or executives, as the captains of their ships, must prepare their vessels. They need to decide whether to navigate through the storm in a Reactive or Proactive manner.

What to Do Now:

  1. Don’t wait for government assistance because it’s uncertain when or how the government will respond. It’s like trying to extinguish a fire with water that’s too far away; help yourself first.
  2. Cut expenses as if you are patching leaks in a ship. Reduce sails and eliminate unnecessary baggage. Cut out non-essential expenditures and save as much as possible.

Prepare to face the storm with a mindset known as Lean & Mean.

  1. Hoard Cash by keeping as much cash on hand as possible. Sell off unnecessary items. If you have properties like land, houses, townhouses, or condos, sell them if you can make a profit or even break even... sell while people still have purchasing power.

Image from https://europe.chathamfinancial.com/negative-euro-rates-arbitrage-opportunity-borrowers/

A real estate master once stated in an interview late last year that survival in a downturn does not rely on everyone competing to lower prices but rather on cutting costs to maintain profit margins. However, as Covid-19 intensified, he advised his team to close sales quickly, regardless of how much customers negotiated, to agree immediately.

This is akin to selling high-priced items to attract interest, regardless of the negotiation outcome, a practice known as "Negotiate to Sell".

If a master can act this way, can we still be unaware of the situation?

  1. Negotiate with banks, not to request additional loans as this adds burden and increases debt. Instead, negotiate to restructure debt or request a payment holiday, paying only interest if necessary, to improve the company's cash flow. However, do not damage your credit.

There’s no rush to agree; just initiate negotiations because banks have many procedures before approval. Buy time and prolong discussions. By then, government assistance may arrive just in time. Prepare your requests in advance to secure approval sooner.

Remember, banks currently have liquidity and excess deposits but are hesitant to lend due to fears of non-performing loans (NPLs). Start negotiations while no one else is talking to them; banks will have to address your concerns and find ways to assist. As long-term clients, they likely don’t want to see you in trouble, as unresolved issues could lead to NPLs, forcing them to reserve capital.

  1. Manage internal matters holistically, utilizing every resource effectively, whether it’s capital, assets, or personnel. Involve all stakeholders, including employees, contractors, suppliers, and subcontractors, in decision-making.

Don’t think alone; no matter how skilled a captain is, they cannot navigate through a storm without a united crew.

  1. This point is the most crucial: entrepreneurs or executives must change their mindset.

Old behaviors will yield old results and cannot be applied to current situations. The survival of the organization depends on you. No matter how long you’ve been in business or how many challenges you’ve faced, you cannot solve this problem with past experiences.

Because the storm you are facing is a Perfect Storm, the largest and most severe storm ever encountered.

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You must "Think New, Do New" because thinking old and doing old will not lead to survival. Sometimes, you may need to think outside the box to find new avenues for business.

This era is not about "Big Fish Eating Small Fish" but rather "Fast Fish Eating Slow Fish".

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Don’t forget: think before you act to gain an advantage, like adjusting your course early to avoid a storm rather than waiting until it’s too close to escape.

Change your thoughts and habits to create new behaviors and learn new things you’ve never encountered before.

The science of Feng Shui is intriguing in the real estate business because Feng Shui relates to the environment and people.

Image from https://fengshui-instituto.com/2017/06/20/why-does-feng-shui-work/

Come learn about Feng Shui at TERRABKK

We will help you clear the dark skies and see the bright future that awaits ahead.