The Investor Who Bought During a Bad Streak

[Drago Stanimirovic]

It seems like every time investors get together these days, the first topic isn't the property - it's interest rates.

Or inflation. Or whatever the latest headline says the market is supposed to do next.

None of those things are unimportant. But I've noticed something: sometimes we spend so much time trying to predict the market that we forget to evaluate the investment sitting right in front of us.

Not so long ago, I spoke with an investor who seemed unusually calm. He wasn't pretending the market was perfect. He knew rates were higher. He knew sentiment had changed. He knew every headline seemed to predict something worse just around the corner.

But instead of asking, "What do you think the market will do?" he kept asking different questions: "What are the rents?" "What's the occupancy?" "Does the property cash flow today?" "If nothing changes for five years, am I still happy owning it?"

That caught my attention. Everyone else was trying to predict the market. He was trying to understand the property.

A year later, the headlines were different. They always are.

Some people who had been waiting were still waiting. The investor who bought during all that uncertainty wasn't celebrating because he'd timed the market perfectly.

He hadn't. He simply bought a property that made sense the day he bought it... and it kept making sense afterward.

The headlines changed, the rent checks didn't.

That conversation has stayed with me. I've found that the investors who last the longest aren't always the ones who predict the future best. They're the ones who can separate noise from numbers.

(Have you ever bought a property when everyone around you thought it was the wrong time?)