Some Thoughts on… Shark Tank Star & Real Estate Investing Icon, Barbara Corcoran

​​Barbara Corcoran is a real estate icon.
 
You’ll know her as one of the sharp-tongued, intimidating TV investors on Shark Tank, an American spin-off of Dragons’ Den. 
 
She began with nothing, and launched herself while still a teenager after falling in love with a handsome older man in a diner where she was waitressing. She was 17 at the time with a big personality and a lot of drive.

​That man, Ramone Simone, became her paramour and business partner. He convinced her to leave her family, home, and her job at the Fort Lee Diner, recommending she head to New York City.  He paid for her to stay for one week at the Barbizon Hotel for Women, which was the only hotel left in New York City at the time that rented rooms only to women. 

Upon leaving home at the behest of an older man and heading for the bright lights of Manhattan, Barbara’s mother accused her of being a prostitute. Simone did give Corcoran $100 to buy her first NY outfit, but she says that’s where the cash gifts ended.
 
So convinced was Simone of Corcoran’s skills, he gave her $1,000  to start a company. Simone kept a majority stake of 51% and Corcoran owned the remaining 49%. It was a fine investment, because that $1,000 helped her begin a residential realty in New York. She started by renting out apartments all over the NYC, hustling against the male competition and whipping them with her wiles, passion, and never-say-die attitude.
 
She ran her first apartment-rental business out of her apartment on East 86th Street, which she shared with two roommates. He company, The Corcoran Group, is now worth more than $5 billion.
 
Corcoran was hungry. She ground her way to the top and even took on Donald Trump in the 1990’s when he stiffed her on a large invoice.

Peek Inside Barbara Corcoran's New York Apartment

​​Barbara’s first commission check was $340, which she spent on a new coat. She had a bouncy, playful personality that made her stand out in a very male industry. On one occasion, she was contacted out of the blue by a wealthy patron who sent her an endless stream of young Citibank recruits, all of ehom needed a home in New York. 
 
It was such easy money, Corcoran described it as like flipping pancakes. The number of young men parading in and out of her apartment was not lost on the building’s super though, who reported her to the building’s owner for being a prostitute. The super even stuck a bright red notice on her door: Eviction Notice for Prostitution.
 
Embarrassed, Corcoran had to once again deny she was a prostitute. But she was such a sales hot-rod, not only did she convince the building’s owner she wasn’t a hooker, she turned the office visit into a marketing pitch convincing him to make her his exclusive listing agent. Instead of being evicted, she signed up to show all his vacant apartments, ironically boosting the number of young men visiting her home/office.

Barbara Corcoran the Exceptional Self-Marketer

Barbara Corcoran is dynamite when it comes to marketing and self-promotion.
 
When hiring new sales agents, she never wrote boring ads like, “Position Open, salespeople wanted. Make high commissions”.
 
Instead, she wrote, “One Empty Desk” in a double-sized heading. “Join a company that’s a lot of fun, cleaning up and having a blast.”
 
And as for being a woman in a very male and very sexist New York City real estate industry?
 
“[Being a woman…] was an advantage. It was an advantage, because I could then walk into the rooms and I always wore short, red skirts with my jackets, and I had great legs, and I knew it. And everybody would turn to look at — because a girl stood out. You didn’t even have to be special. You just had to be a girl, and you were different. 
 
“But as competing with them, I never saw myself as a woman. I never saw it as a disadvantage or a real advantage. I saw myself as a competitor, just a competitor. And boy, if they treated me badly, or spoke down to me, or didn’t give me any credence that I could possibly make it in their world — they thought I was a passerby. I would say to myself, “You just wait, I’m going to become your biggest rival.”

Overcoming Dyslexia

​Barbara Corcoran is dyslexic. She was bullied at school for this and always felt stigmatized and ‘less-than’ because of it. School was an unpleasant chore.
 
As a business woman, she overcame her dyslexia through clever workarounds. The files in her office were organized by colour instead of having written labels. One bedroom apartments were given one colour and two bedroom ones a different colour, and so on. She structured her business visually. When sending thank you notes, instead of writing, she pasted together images to express herself. Colour-coding and photos were just one of many systems she put in place to scale her business.
 
On a single day in the late 1970’s, Corcoran made a cool $1.225 million USD. And she did this at a time when interest rates were 18% and no one was buying real estate. New York City’s real estate market was dead!
 
The kicker is that she made that money in only three and a half hours selling apartments that were acknowledged as duds – apartments that the owners had given up on because no other realtor could sell them, they were that bad: no views, no kitchens, back walls, different locations across the city. Awful!
 
So, what did she do?
 
Corcoran leveraged the scarcity heuristic. When people think the supply of something is running low, they are deeply psychologically motivated to buy some of that thing before it is gone forever.
 
This was the plan:  all 88 dud apartments were priced exactly the same: $59,900. Corcoran told her realty sales agents they could notify only their best two customers of the sale. No more! This was an exclusive offering. She had 300 sales people so that generated 150 leads. Corcoran leased a bus, decked it out with signs that said Wheels and Deels, and drove the buyers to all of her locations. 
 
At each stop, she had a stack of sales contract, each one with her signature on it, giving the impression that these were for completed sales. More scarcity.
 
It worked. Buyers were lined up out the door. Every dud unit sold, and Corcoran earned $1.225 million in three and a half hours. She never advertised during her early career. All her listings and business success came via word of mouth.

Showing off her Pacific Palisades Double-Wide Trailer Park Home which is where she stays when in Los Angeles

Fighting Donald Trump in Court & Winning

In 1994, Barbara Corcoran took on Donald Trump because Trump had failed to pay her millions of dollars in owed commissions. Looking back, Corcoran describes Trump as, “an intimidating man, a real-life bully in every way.” And that’s what made her take him on.
 
“I’m not a fighter… I don’t like to fight. I’ll walk a mile to avoid a fight. But when someone insults me, it brings out the fight in me. I don’t know where that comes from. 
 
“It was the first year I made a real profit in Corcoran Group, because I never made money, because I was always throwing my money back in and living so cheap so that I could afford to open offices. Always, the money went to the business, the money went to the business, never came to me. And that year, I had more money than I could spend. I had over a million dollars in profit. The year before, the many years before that I either had losses, or 100,000, but it cost me $500,000 to sue.
But I had the cash, think about that. So, I felt powerful, and I got the money to fight it, and I’m certainly not going to walk away. Because you know what my thinking is? I’m walking away from a well-fought fight. You resent it and regret it for the rest of your life. I didn’t want to be that girl who said, “Son of a bitch, how did he get away with…” You really, you regret when you don’t confront things, I think in anything, but particularly with a moral fight. And in my mind, that was morals, it’s all about morals. I earned the money, “You signed you’d give it to me and you’re not giving it to me? You’re suing me instead? Oh, no, I don’t think so.”
Corcoran won the case, but it took her five years to get the money. Trump was close to bankruptcy at the time, so the judged ordered him to pay $55,555 a month for five years.
 
After accepting the first instalment in a hand-delivered check, Corcoran told the messenger to wait a moment. She dashed inside and hand wrote a note that said, “Thank you Donald. I really appreciate the check.” 
 
In return, Trump scrawled on the note card in thick marker “Rejected” and sent the flowers back to Corcoran. So, each time Corcoran received a Trump check over the next five years, she bought herself a bouquet of flowers – choosing blooms that she personally loved - and sent them to Donald Trump, knowing that he would send them back and she would get a lovely bunch of flowers for her home or office.
 
 
The quotations in this blog post were taken directly from Barbara Corcoran’s interview with Tim Ferris. A copy of this interview is included below. Please watch it and support Tim Ferris’s eponymous podcast. It is brilliant!

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