Why Being a Generalist as a New Investor Could Lead to Analysis Paralysis

[Jonathan Greene]

It's great to learn about all of the asset classes before you are ready to invest. It gives you a broad base to work from and a substantial range of knowledge when making connections. But, far too often, I have seen new investors stuck in analysis paralysis because they are being a generalist. A generalist is interested in many asset classes and strategies, making it impossible to focus.

The best way to steer clear of analysis paralysis is to research, build relationships, and get the confidence to make a first choice regarding your intended asset class. This doesn't have to be the one you choose, but you should focus your energy on one asset class or strategy to vet it thoroughly. You can pivot, but if you are trying to do due diligence on how flipping, BRRRR, STR, and syndications would work for you, you will likely get stuck in the mud.

Don't think that if you spend three months learning about flipping and decide the numbers don't work for you, you lost time. You didn't. You can flip later; it just may not be the right fit for you now.

In addition to books, these forums, and podcasts, the best thing to do to get you focused is to meet other investors who work that asset class or strategy at local meetups. Nothing can beat other people's real-life knowledge.

The longer you invest in real estate, the more you realize you must be decisive. But that doesn't mean you always make the right decision. You make a decision and then adjust because when you don't make decisions, you are in analysis paralysis.