Launched this past fall, TheMindfulBroker.com aims to address a critical gap in our adult education - how to approach our basic need for a home successfully.
In his new consumer education platform, TheMindfulBroker.com, Realosophy's John Pasalis extends the high quality, facts-based education we now benefit from in the areas of personal finance and relationship counselling to residential real estate so that we approach our basic need for a home successfully.
My father had fallen ill with Multiple Sclerosis and his lawyer arranged to have a power of attorney set up so my mother and I could jointly make decisions about my dad’s real estate investments when he wasn’t in a position to decide for himself.
While he was ill, my father got an offer on a property that he had listed for sale and after some back and forth we were advised that this was the buyer’s final offer.
The problem was that the offer was for $15,000 less than what my father bought the property for 10 years earlier.
The cardinal rule that my father had about real estate all his life — and one which he repeated to me often – was “never lose money”. He would always prefer to – hold on to a property rather than sell it for a loss.
That night at the hospital was particularly difficult and emotional. My mother, distraught by my father’s illness which had turned our family life upside down, wanted to sell for the security of seeing some extra cash in the family bank account. My parent’s lawyer – wanted to make sure I knew about every possible risk my decision might entail.
Finally, for a number of different reasons, I agreed to sell the property at a loss.
Having to tell my father what I had done was one of the few times in my life I have actually dreaded something.
And yet, a couple of days later, when my father was in one of his relatively well states, that is what I found myself having to do. Walking into his hospital room, the first thing out of his mouth was, “So I heard you sold the property on Woodbine”.
I said “Yes, we sold it.”
He said “How much did you sell it for”.
I said “We sold it for $188,000, which considering the $10,000 in repairs it needs, is not a bad price.
There was a long silence. I avoided eye contact.
Then my father said, “Look at me. I didn’t kill myself my whole life working in restaurants to buy property so I can lose money, I only buy property to make money.If your goal with real estate is to lose money then I suggest you go out and buy your own properties – don’t touch mine.”
I was upset of course, because I knew I had taken the easier path. It’s easy to sell a property for a loss, it’s a lot harder to hold on to it when times are tough to avoid losing money.
After coming to terms with my mistake, I then became upset – somewhat irrationally – at my family for putting this burden on my shoulders. Not only was everything that my father owned in real estate – our family’s income came from those same investment properties. There was no pension plan, no retirement savings, no safety net – everything was in real estate. So the decisions I was going to make tomorrow really mattered.
I started to think to myself, I have mid-term exams to study for at university, I don’t have time to learn about and manage commercial real estate and I certainly don’t have the time to ensure I run things in such a way that we never lose money. The task he had given me seemed impossible at the time.
Luckily, that moment, one I still recall vividly to this day because it is probably the worst I have ever felt about something I had done, turned out to be a gift.
While I felt overwhelmed, I was majoring in econometrics which uses math and statistics to better understand economic systems. And I was beginning to wonder if the theories I was learning could be applied to real life decision-making.
This project, the Mindful Broker, explains the particular approach I have taken to real estate, first as an investor, and then as the founder and President of my own real estate brokerage, Realosophy, which is based in Toronto, Canada.
Every week, I will help you apply the latest thinking in economics, psychology and statistics to help you make real estate decisions that protect your money and enhance your life.
Listen to the Mindful Broker Podcast
In this weekly Q&A, Urmi Desai, editor of MoveSmartly.com, talks to John Pasalis of Realosophy about how to put each week’s idea into practical action.
See this episode on the Mindful Broker YouTube Channel
Today’s blog post is a transcript of the latest episode on the Mindful Broker YouTube channel.
This post originally appeared on TheMindfulBroker.com
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About the Mindful Broker
John Pasalis is President of Realosophy Realty, a Toronto real estate brokerage which uses data analysis to advise residential real estate buyers, sellers and investors.
A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been shared with the IMF and cited by the Bank of Canada and CMHC.
A frequent commentator on the Toronto housing market and real estate consumer and industry issues, John has contributed to the Globe and Mail, CBC, BNN Bloomberg, TVO’s The Agenda, Toronto Star and other media, government and industry organizations. He most recently advised the Government of Dubai on international best practices for the real estate sector.
John holds a B.Sc. in Economics from the University of Toronto and is a candidate in the Doctorate of Business Administration program at the University of Toronto and Henley Business School (UK).