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Am I Being Too Subtle: Straight Talk From a Business Rebel by Sam Zell

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Key Takeaways
  1. Willing to be gruff in order to be direct. Has a sense of urgency and doesn’t understand why others don’t
  2. Willing to sacrifice conformity for effectiveness. Listens to everyone but is willing to do what makes sense to him. No assumptions and willing to act
  3. Sam lives and breathes risk. Always be deeply respectful of risk
  4. In any business, it is all about long term relationships, trust, transparency, always leaving something on the table, sharing the risks,
  5. Reputation is your most important asset
  6. Always keep learning, thinking for yourself and making your own decisions
  7. Sam and his parents escaped Poland just before the Nazi’s took over to settle down in Chicago
  8. Where there’s scarcity, price is no issue
  9. You learn so much from seeing people in their own environments - spend the time and money to travel to meet people on their turf
  10. Being comfortable with rejection is fundamental for entrepreneurs or anyone pushing the limits. However, can only push the limits and go against convention if you know the rules
  11. Started off developing housing in Ann Arbor and after some initial success he expanded to other second tier cities where he had pricing power and limited competition
  12. Jay Pritzker became a mentor and good friend who taught him how to evaluate and think through deals and how to understand risk
  13. Use simplicity as a strategy. Organize your thinking, break each step and decision down to its core and determine what the key is
  14. Bet on people over project
  15. In deal making, speed and certainty are superpowers. Often more even than price paid.
  16. Never underestimate the power of optionality
  17. The essence of an entrepreneur is someone who recognizes a problem and provides a solution
  18. Saw there was a huge oversupply if real estate in the 1970s so began accumulating capital in order to buy properties once the timing was right. In an inflationary environment he got a fixed rate return through his non recourse debt
  19. You can be a genius but if you’re in too competitive a market it won’t matter that much. Spend your time in areas with weak competition
  20. Don’t rely on people unless you understand their motivation and your interests align with theirs
  21. Leaders have to find ways to delegate and find ways to keep level headed. Especially during difficult times
  22. Liquidity = Value
  23. Sam describes himself as a professional opportunist and doesn’t care about external opinions. This was clear when he took over manufactured home corporation which made trailer homes and RVs. People called him names and wouldn’t invest because of the stigma of the industry but he goes to where the opportunities are. MHC, later renamed ELS, has been one of the most consistently profitable companies in the space
  24. Sam has been known as “the grave dancer” after an article he penned with the same title. This refereed more to him giving valuable but rundown assets new life rather than dancing on the graves of dying companies or industries
  25. Didn’t found but helped establish and build up the REIT industry - making it a central holding of most large portfolios and making brick and mortar buildings liquid assets
  26. In real estate, replacement costs are the most important metric because this determines the price of future competition
  27. Mitigating risk comes from understanding all angles and knowing which factors will make or break you
  28. 2-3 years before a country becomes investment grade is when they’re the most disciplined and is the best time to invest in them
  29. Hire people based on whether they’d fit the culture and not on a job description or resume. Once they have the basic skills, you can teach them the rest
  30. Keep your eyes and mind open. Read voraciously, meet with a broad range of people, experience different things, travel and try new things
  31. Do the right thing. When you’re in it for the long haul, there is no other way to act. Deals with a winner and loser rarely are truly successful and likely won’t lead to another deal between the parties in the future
  32. Prize loyalty above all else in self and others
  33. Be able to laugh at yourself and maintain perspective and humility
  34. Search for and make people owners as this makes them go all in and always search for better ways to do something, new opportunities
What I got out of it
  1. Working hard, following your gut, not worrying about what others think about you and having the courage to act on your convictions is key in any pursuit. Always be deeply respectful of risk