How Time Kills Deals (Even When the Numbers Look Great)

Question

One thing that must be accounted for when analyzing deals is time.

Its just as important as cost and profit

- The time it takes to place capital

- The time it takes to build or execute

- The time it takes to sell or disposition

- The time of lost opportunity

Time is expensive

Let’s say you invest $100K and make $20K in profit:

- In 1 year, that’s a 20% return. Solid.

- In 2 years? 10%.

- In 3 years? 6%.

Same deal. Same dollars. But time cuts your return in half, or more.

How quickly you can get in, execute, and redeploy is often the difference between average returns and great ones.

V.G Jason · Answer

If time is an obstacle in your deal, you're likely trading not investing. Decay is against you. It's for you in investing.

In physical assets, likely not the route to take.

Even developers/flippers can enter deals to mitigate a timing risk. That cost is better than constantly leaving time against you, as it's inevitable you'll get burned eventually.

How Time Kills Deals (Even When the Numbers Look Great)

1 Reply