The Stealth Menu Of Too Many Real Estate Investors — Hittin’ The Ball

3

When investing long term, we can count on one hand and have fingers left over, the folks who aren’t investing for their retirement. Given that virtually axiomatic fact, understanding the depth and breadth of the menu from which you’re making life affecting decisions is beyond crucial. Investing in real estate obviously isn’t as simple as buy low/sell high. The investor’s menu offers more options than most know exist. How’d you like to order off a restaurant’s menu, then find out later the actual menu offered triple the choices you’d perceived? To make things worse, what you missed was their best stuff. This is the reality of far too many long term investors.

I’ve long had a different way of saying ‘we don’t know what we don’t know’. I prefer, ‘It’s not the questions we have that do us in. It’s the answers to questions we never knew to ask’. The unknown info need not be impressively sophisticated or even mildly so. It only needs to be unknown to you. Big or small, it’s almost never just one piece of datum. And there’s the rub.

Though many of you have read or heard me talk about Strategic Synergism, it’s important to understand the concept’s potential impact on your end game. I think this story works well as an analogy For years I was a youth baseball coach. Whether it was hitting or pitching, proper mechanics was everything. Here’s an example.

A tall, very strong young man came onto our team late one season. The kid was tall and strong for his age. Yet, he couldn’t translate his size and strength advantages due to a fundamental flaw in his swing. In fact, his swing was literally obstructing his ability to get his bat in the hitting zone on time. No need to get detailed here, but the bottom line is, he wasn’t rotating his hips immediately as his swing commenced. This had a negative synergistic affect. Since his hips remained in a static position, it was virtually impossible for his back foot to pivot while swinging. Also, again due to the recalcitrant hips, his hands were literally slowed down in their frenzied attempt to get the bat to the ball.

The Fix

This is the fun part. Once he trained himself to begin his swing by rotating his hips towards the pitcher, it allowed both his back foot and hands to ‘do their things’ as well. This resulted in gettin’ his bat in the hitting zone WAY faster, with increased bat speed, and in his case, much authority. Besides hittin’ pitches he couldn’t touch before, he was now able to hit much faster pitches. There are one or two baseballs he hit with his new swing that still haven’t been found. :)

That anecdote/analogy works from A to Z for real estate investors. You can’t fix what you don’t know is broke. You can’t utilize what you don’t know is on your menu. The difference between one investor’s knowledge and another can appear to be marginal, when in fact it’s often dozens of little factoids that have combined to create a positive juggernaut. The inability of the investor to benefit from their entire menu manifests itself in a few ways.

They miss golden opportunities.

They execute a strategy seriously inappropriate for their circumstances. 

They maintain their status quo when a move or moves would enhance their position in a big way.

Worst though, is when they set their agenda back in such a way it costs them in terms of years lost. Years they can’t get back. Meanwhile, those pesky candles on their birthday cake keep growin’ in number.

What so many think of as trivial things, become potential problems as they’re paired with many other ‘trivial’ things. Together they can easily morph into dangerous, unintended outcomes. Add to this the magnified results of the damage caused due to the stealthy nature of the surprise attack you never saw coming. Synergy works both ways. When used with full knowledge and an appropriate purpose, it can indeed produce magnificent results. When brought into play accidentally and in random combinations, it can be brutally destructive.

In other words, the right swing mechanics are hips, hands, bat. Hit the pitches thrown your way on Purpose, and with full knowledge.

Photo: Melvin Schlubman

Subscribe to our mailing list

* indicates required Email Address * First Name Last Name

About Author

Licensed since 1969, broker/owner since 1977. Extensively trained and experienced in tax deferred exchanges, and long term retirement planning.

3 Comments

  1. To me, that’s one of the biggest uses of BiggerPockets… I get access to ways of investing, rental types, and markets that I would never even fathom on my own. Between the Blogs and Posts, you get exposure to so much that is all clumped into “real estate investing”. At some point I hope to fully utilize that to diversify my investments for both better returns and less risk.

  2. “What so many think of as trivial things, become potential problems as they’re paired with many other ‘trivial’ things. Together they can easily morph into dangerous, unintended outcomes.”

    This is so true in so many facets in life! I work in aviation, and this is Plane Crash 101. It’s not one big thing that brings a plane down, it’s many small, often unrelated things, that combine to create potentially dangerous situations (See: Swiss Cheese Model).

    This is also why BiggerPockets is so important for ANY investor. The opportunity to meet and talk to other investors can probably provide opportunities we don’t even know exist.

    Thanks for the post!

    Nick

Leave A Reply

css.php