I want to touch on people who are very intuitive and have early success. I got my first real entrepreneurial venture in 2002 with a good friend Ryan Johnson. It was nothing spectacular, well researched, or world changing; we simply bought real estate that cash flowed.  I can recall multiple conversations involving these phrases:

“Let’s buy every house 1 mile north of campus.”

Or “Let’s do a bunch of 0% down loans so we are fully leveraged.”

This was coming from a couple of 19 year olds with no real capital or research. Before we graduate college, we had haphazardly purchased over 15 rental properties.

Did this require some type of higher level intelligence, superior intuition, or hours of research and planning?  Absolutely not.  Anyone could have produced higher returns and tons of people did.  Real estate agents, brokers, developers, and lenders made millions.

After each successful transaction, I trusted my intuition more and more.  I began to think I could not make a mistake as long as I trusted my intuition.

This is the problem with early success; you begin to rely on your intuition, are rewarded for incorrect business decisions, and develop bad habits.

So how is this a bad thing?  First, I accredited my success to my intuition, not external factors and luck.   Second, I know may have the propensity to make uninformed decisions and assume higher risk without completing the necessary due diligence.  This may compound the problem until a miscalculation results in the loss of all previous gains.

There are people who are brilliant and very intuitive, able to succeed almost effortlessly in their decision-making.  However, superior intuition cannot compensate for advance planning, due diligence, and great execution.  Though you may be able to make great decisions trusting your intuition, imagine if you coupled brilliant decision-making with thorough research and information.

So what is the point?  The point is that I have seen multiple articles stating to always trust your intuition.  I have relied on my intuition, trusted my whimsical decision making, and seen success.  However, I look back after making thousands of mistakes and think what could have been if I were well-researched and had a larger knowledge base.  So I say trust your intuition, but make sure you have all the facts and information necessary to be in the position to make a correct decision.

As for Ryan and I, the true test of our real estate prowess is whether we can flourish under the current market conditions. In 2002, we would just pick out a house, enjoy the color of the exterior, buy it, and turn a huge profit. Now, we have to analyze the rental market, where development is going, what city laws are being enacted, and where all the economic factors are heading. I miss the good ole days.

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