Should you go deep or wide with investing....?

19 Replies

Howdy BP members, I have a question that has honestly been haunting me the past few nights. Is it better to be great at one thing/aspect of investing, or to be a jack of all trades and master of none? Many people like Gary Vee say to focus on your strengths and be kick a$$ at one thing. Be so good at that thing, that others come to you and you are known as "the guy" for that niche. You dominate that niche and are the master of that craft. On the other end you have people like our very own @Brandon Turner who say you that strategies are like tools in a tool belt. You increase your tools and you can take down any deal, because you have multiple strategies you can use to make it work for you. You won't turn away all these deals just because they don't work for a simple flip, because you know how to do wholesaling, short sales, owner finance and lease options (just to use as an example). However it could also be said that by figuring out what strategy to use for a deal, you are simply wasting your time trying to make the deal work, instead of only focusing time on deals that work for you. I have heard many discussions and valid points for both sides of the argument, but I'm still unsure which to focus on. Definitely want to heard what ya'll have to say and what your experience has been. Why do you think it's better to be a niche investor, or why do you think it's better to have multiple strategies and not do just one thing?

I guess this is true to some extent but I don’t listen much to a guy like Gary V. He’s like Grant Cardine just a giant marketer.

I have my niche . Out of state investing. Lots of people do that though and I’m not any more special then them.

Do what works for you and don’t spend to much time overthinking it.

I remember you posting the first time months again. Have you done a deal yet? @Michael Guzik

I think you need to think about what you want to start with. What do you want out of investing? I believe the natural progression of business will take you where you are most suited if you just start. If you start in multifamily, you may not end there, but you will take the skills you learned with you. Just like @Brandon Turner started in multifamily and is now gearing up toward mobile homes. It's not that he hasn't mastered multifamily, it's that he is continuing to grow his skills past multifamily and continued to a different strategy. I would suggest just starting (if you haven't already) with one thing and growing from there.

You are asking a standard business strategy question every CEO faces: Be a broadline supplier or be a specialty supplier?

There is no universal answer that applies to everyone. There is only an answer that's right for you. Find the right answer and you might become wealthy. Try the wrong answer and you might end up broke. Do either of these in a spectacular way and you might become a business school case study.

@Michael Guzik No universal answer. There is one universal constraint: time. 

You can try learning every strategy under the sun. Or focus on mastering 1 strategy, getting your systems and going from there.

What ends up happening with generalists is that they end up doing everything mediocre. 

Most businesses should start narrow until they get going. Then they will tend to add products to their brand.

I’d start with one thing that I’m interested in after the new and shiny wears off. Build some skills and go on from there.

@Caleb Heimsoth I disagree on the opinion on Gary Vee, he actually provides a lot of value in my opinion. Thanks for the input though! To answer your question yes I have! Hopped on with a mentor/business partner and am leaps and bounds ahead of where I would be if I did it solo dolo!

@Alyssa Paros Thanks for the advice. I have already started and am doing pretty well. At the moment I'm going through a transition from flipping to wholesaling. When going to meet ups and talking with friends, who also wholesale or do other strategies, I see and hear what they are doing and think "wow maybe I should incorporate that strategy". I don't know if that's the shiny penny syndrome or me wanting to expand my tool arsenal.

@Omar Khan That's a good point. My question would then be do generalists make more money since they can do everything even though it is mediocre? I just can't help but feel that on some of these past deals I lots money because I don't do that strategy, even if I was just mediocre at it.

@Michael Guzik  what about Gary V do you find useful specifically?  From what I’ve seen I see a guy who swears a lot, says things like “always be hustling” and usually throws around big metrics like 100M or a billion dollars without actually providing much actual substance.  Grant cardone is the same way.  Flashy, fun to listen to, huge social media followings but offer little actual substance.

I’m glad you found a partner, what type of first deal are you doing?  You’re not paying this partner right? Don’t fall for those expensive guru types 

Originally posted by @Michael Guzik :

@Caleb Heimsoth I disagree on the opinion on Gary Vee, he actually provides a lot of value in my opinion. Thanks for the input though! To answer your question yes I have! Hopped on with a mentor/business partner and am leaps and bounds ahead of where I would be if I did it solo dolo!

@Alyssa Paros Thanks for the advice. I have already started and am doing pretty well. At the moment I'm going through a transition from flipping to wholesaling. When going to meet ups and talking with friends, who also wholesale or do other strategies, I see and hear what they are doing and think "wow maybe I should incorporate that strategy". I don't know if that's the shiny penny syndrome or me wanting to expand my tool arsenal.

@Omar Khan That's a good point. My question would then be do generalists make more money since they can do everything even though it is mediocre? I just can't help but feel that on some of these past deals I lots money because I don't do that strategy, even if I was just mediocre at it.

That depends on your strategy. Expert-generalists like Elon Musk are worth billions, the average guy who thinks he can be good at everything, not as much. 

Traditionally, even in investing heavy careers like portfolio management and investment banking, the generalist model was the way go. But over the past few years, even those professions are veering towards subject matter experts (specialization).

Honestly, if you're raising capital for a syndication you can be a generalist because you're not finding the deal, doing due diligence, underwriting and are only responsible for capital raising/marketing. You can follow the generalist model and get to away with things (you need to bring a lot of other different things to the table).

Starting out, I went very specific.  I had some savings but moved 3 states away and had no job.  Very difficult to get bank loans with no job, so seller financing and lease options were my focus. i learned everything about them.  I read books, made notes in the margins and highlighted. I listened to cassettes and cd's (pre-BP, obviously) internalizing sips of info in that space. Mastered it, then moved on to the next thing.

Drinking from a fire hydrant while chasing the latest shiny object would leave me scattered and frazzled. I'd pick something I liked, turn off all devices, and read.  Get to the stories of others crushing it in different spaces later. I hear OOS STRs are popular for selling notes while syndicating MHP flips. You get the idea.

I think part of the conversation here is if you are heading into real estate full time or just as a hobby. For example, I have a full time job that I like and I invest in SFH as well. I'm not really interested in learning wholesaling or MFH or Fix Flip or becoming a realtor. Really depends on what you want to do, each person is different in terms of how much they want to invest in their Real Estate career. I understand the concepts of all of those topics but just not interested in being the expert.

@Michael Guzik I think you should read "One Thing" by famous Gary Keller of Keller Williams. The gist of the book is to concentrate on one thing/skill/niche until you completely excel in it. Once this first exercise allows you to automate the process, you should move to the next one. 

Best!

@Michael Guzik

F: follow

O: one

C: course

U: until

S: successful

1. I feel strongly being super focused helped me grow from one duplex to 2,000 units (and soon beyond) in addition to a management company of 65 employees.

2. Grant Cardone has some of the best sales training on the market. You have to pay for his actual courses though (good news: he has sales all the time where you can pic up courses for $99). What he puts out on youtube only scratches the surface. Not sure about Gary V.

@Caleb Heimsoth I don't think you follow his daily vlogs from what I can tell. If you watched them you would see some interviews he does with aspiring entrepreneurs and the advice/guidance he gives them which have plenty of golden nuggets in them. I also don't think there is anything wrong with him always being about the macro. I feel many people solely focus on the small details and forget the bigger picture. He really helps me realize that one loss or bad deal doesn't ruin your business and isn't the end of the world if you stay focused on your big goal/picture.

However I don't think everything he says is correct, and don't agree with some of his ideas/beliefs, but that doesn't say much, because I never agree 100% with anyone, however that doesn't mean I bash them for the 30% I don't like. I really try and focus on the good information/value from everyone. Anyways enough about him onto the subject at hand! I'm already past my first deal, but it was a wholesale deal, and of course I didn't pay him, I didn't have the money to do so anyways lol! 

Originally posted by @Caleb Heimsoth :

@Michael Guzik are you calling me old lol?  I’m not even 25 yet haha.  

Glad to hear you did a deal.  Spill the beans, what were the details ?

Gary Vee is a joke...It is almost like he got his "motivational" stuff off an old tumblr post. He just screams and yells obvious things making him seem to be always right to his audience. Which is usually people that will only make him richer while he provides no true value to you in the end.

I agree with the recommendations of mastering one area first and then expanding your horizons by mastering a second area, and so forth. As you grow, you'll have some marketing decisions to make about how you position yourself.

In the technical publications world where I'm from, there are people who can write well and people who can edit well, but rarely can someone do both well. One of my friends could do both well and put both on her resume. She got few responses because HR departments couldn't figure out how to route her resume inside the company. She ended up positioning herself as an editor who can write, which meant the editing department saw her resume first and the writing department liked having a "writer friendly" editor on staff (conflicts between writers and editors can be huge at some companies).

Other companies create "subdivisions" to keep their brands separate in the minds of their customers. Disney, for example, produces movies that parents can trust to be suitable for their young children. The Disney subsidiary Touchstone Pictures, on the other hand, produces movies with mature themes that are targeted towards older audiences. Disney doesn't want to confuse its different brands in the minds of its different customer types, so they create separate companies to produce them.

Whether you will need separate companies or only separate business cards for your constantly expanding real estate empire depends on the expectations of your targeted customer bases. The decision is one of business strategy. For example, another thread on BiggerPockets discusses how to describe yourself to your tenants when you are both the property owner and the property manager. There is no right answer in general; there is only an answer that is right for you and your real estate businesses.

It depends on what mean by deep and wide. I say go deep in one area and become "the guy" vs going wide... Choose the path that gets you to your end goal and become the expert there and get to your goal as quickly as you can. For me that was buy and hold, value add residential properties in one area. I have a lot of single family home rentals, lots of duplexes, and up to a couple 12 unit buildings. There's not much difference between doing a duplex and a 6-unit.

But I'm thinking of going wide as doing a lot of unrelated investment stuff. I'm not going to mess with notes, commercial/retail properties, ground up development, lease options, etc etc. Doing a little of this and little of that usually means you aren't doing any of it great, and you lose out on any economies of scale.

Now if you're talking about going deep as something as specific as only doing B+ single family houses with X rents etc I would disagree with that...

I continually learn new stuff and have implemented MANY different strategies and deal structures, but all in my area of investing. That's how I take what Brandon Turner says about the different strategies as tools in the tool belt. I stay in my niche, but have added many different strategies, deal structures, and tactics to my tool belt over time. That's how you become "the guy" in your niche and that's how I view what Brandon says. 

Generally deep but many investors grow with experience and also are able to pivot with what the market bears. REI is not rocket science and skills are transferable.