What I’m thinking about: The strangest dichotomy humanity has ever navigated…magic wand in one hand, maximum uncertainty in the other.
On one side, the AI capabilities we’re working with right now are leaps and bounds beyond anything from even a few months ago. I laid that out in detail last week and I’m only more convinced since. We have tools that are genuinely changing what a small team can accomplish in a single week, at a fraction of the cost of purely human talent…and the pace of improvement is accelerating.
On the other side…some of the people I trust most are telling me this is the “worst market” they’ve ever experienced (taken as a whole, not just RE).
And the hard data largely matches up with that assessment. (Next week I’ll be sharing my findings from diving into the history of US real estate down markets, way more fascinating and contrary to what I thought I’d discover.)
Note this update from the Fed last week, they are basically looking at the macro as a whole, and giving us the /shrug emoji…
- Weak labor market has the “feel of downside risk”
- So much uncertainty about inflation, Fed may RAISE rates again at the next meeting (*cue real estate investors crying*)
- Tariffs not working their way through economy is a “mystery to policymakers”
- “Won’t know for years” to determine whether AI is causing productivity to increase (I disagree here, for the best operators, AI is an obvious productivity enhancement, even if not showing up directly in tax returns yet, like our business)
- Fed “befuddled” by persistent gains in housing prices…when job market weakening. (This may be starting to reverse based on late 2025 data.)
- Oil/Iran War is a potential black swan (as I write this, the Iran situation alone has me re-evaluating risk posture on a near-daily basis…is it escalating? De-escalating? Genuinely can’t tell from one morning to the next.)
The primary filter I keep applying to every single piece of new information: “Does this make it more or less likely that people will want to buy real estate, especially land, over the next 3 to 12 months?”
More often than not right now…I arrive at, “less likely.”
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Cockroach Mode (And Why It’s Not What You Think)
My business partner, Everett, and I had a conversation recently about our business model, in light of decreased deal activity and the market conditions.
(I trust him from a structural perspective more than effectively anybody. He’s seen SO many previously profitable mid-market businesses just blow themselves up…from improper risk alignment and unmanaged overhead.)
So we’ve been making some really tough cuts. Overhead that made total sense when revenue and profits were flowing…just a matter of months ago…doesn’t make sense now when we’re deliberately choosing to be even more conservative with where capital goes, and market conditions continue to sour.
A lot of people would look at the amount of liquidity, and several years worth of runway, we have and ask, “What world are YOU complaining from?” But that’s the whole point. Everett points out that the best companies are almost always on the side of cutting costs early, rather than when it’s too late. If we’re going to hold ourselves to the standard of the best institutional capital in the world, then we need to act accordingly.
Now…some people hear “cockroach mode” and think it means sitting on the sidelines. Foot off the gas. Just waiting for things to turn around. (Certainly not us, we’re closing on 3 deals over the next month.)
To the contrary, cockroach mode means you’ve made the strategic decision to survive WHATEVER comes next, doing WHATEVER it takes (ethical/legal considerations in mind, duh)…while still taking intentional action every single day. You’re not frozen. You’re just way more selective about where you deploy energy and capital.
Because continued action taking still provides insights that inform your next set of decisions…and those insights compound. They put you ahead of operators who are completely paralyzed right now (or are in the midst of blowing up), and who won’t have the reps, the data, or the systems in place when the market eventually does turn (and turn it will).
There’s absolutely no shame in being a cockroach for a while. Compared to the alternative of having a higher risk of going out of business (particularly when AI is going to rocketship the best early adopters)…it’s the easiest decision in the world.
(As I’ve remarked before, it’s so easy to switch risk back on. It’s WAY harder to be genuinely risk-off. And even if you think you’re being risk-off…you’re probably less downside protected than you realize. That’s just inherently true for pretty much every entrepreneur I know, myself included.)
As we went through the exercise of cutting overhead, some cuts were genuinely brutal to swallow. But most were surprisingly not. When every recurring expense gets scrutinized, we uncovered far more legacy overhead than we realized, and a few systems that were easily replaced with near-identical free solutions, or a quick Claude Cowork session.
To be 100% clear, never stop investing in systems and tools that prime you for ongoing and long-term success. If you cut yourself to always be behind your competition, you’re already doomed. For most companies, that means further AI (and/or talent) investment. I bumped the amount of overhead going toward AI (and doubling down on some, like higher-level Claude plans, but killing our ChatGPT paid plan), while cutting other SAAS tools (story of the economy right now. Our business is part of the churn.)
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Facts, Faith, and the Beliefs You Actually Choose
I’ve been sitting with a framework recently that separates how we process the world into three categories: facts, faith, and belief.
Facts are your objective truths. 2 plus 2 equals 4. The inventory data is what it is. You don’t get to argue with it (and trust me, I’ve watched people try, and fallen victim to this myself…part of being human).
Faith is believing in something regardless of any evidence to the contrary. Has its place…but not exactly a business operating model.
Belief sits in between…and this is where I think entrepreneurs need to live right now. “Strong convictions, weakly held,” as the adage goes. You choose to believe in a direction, a framework, an approach…but it continues to be informed by incoming evidence. And that evidence can and should change what you actually believe going forward…and more importantly, how you act.
(We’re hardwired for this, by the way. Research consistently shows that people who can adopt and utilize beliefs as practical tools…even ones that might look foolhardy from the outside…tend to experience better outcomes across pretty much every dimension you’d care about. Longevity. Happiness. Financial performance. ALL of it. It’s behavioral science that encourages the right actions.)
So here’s the belief I’m choosing to hold:
We were given AI tools that are effectively granting superpowers to business owners (and humans writ large). AND we were simultaneously handed one of the most collectively challenging environments in the history of modern economics.
Navigating this dichotomy is THE challenge of our moment.
My reframe…it was always going to be hard. If we’d been handed these incredible capabilities without any corresponding test, that would’ve been too easy (and we’d probably screw it up). Think: “To whom much is given, much will be expected.”
So do you have what it takes to show up every day, play your role, and contribute to finding a net-positive path forward? For your business. For your family. For our species as a whole.
That belief has been more invigorating for me than any motivational framework I’ve encountered…because it acknowledges that the environment is genuinely uncertain, AND there’s a clear mandate to act anyway.
We’re positioned for this. More liquid than we’ve ever been. Every dollar in our overhead is stretched to the max. AI capabilities compounding weekly. And a long-term partner in Everett who’s seen enough blown-up businesses to keep us honest about structural risk when my entrepreneurial instincts want to KEEP. PUSHING.
All that matters is the long term, that’s where almost ALL of the upside lives (and way more than most people can conceive of). Make your outsized bets accordingly.
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If you’re an experienced operator with routine deal flow and you want a capital partner who structures downside protection better than anyone, while positioning for whatever comes next, send us your best deals. We write checks from $50K+. We close 100% of deals we commit to. And we bring national underwriting experience to every transaction.
Let’s grow together.
