Posted over 6 years ago

Why the View is Best at the Top

Warning - Paradigm shift ahead! In the old Caste System people were split up in ranks to keep lower class people from rising up and keep those in power where they are whereas today, money/mindset is the real separator of the masses. When I first got started in Real Estate investing I was lucky to have a good job and was able to skip right over the wholeselling/birddogging roles and go right into a buy and hold rentals with the conventional 20% down payment. Little did I know that I had just vaulted over about 80% of my local REIA members who had little money. To be in that 80% group was a terrible place not because of the endless books, seminars, training for the wholeselling/birddogging strategy but competition was fierce - imagine the start of a triathlon as athlete jumps into the the swim which is the first stage of competition, even the best athletes struggle to distance themselves from the pack as the pack pulls and sabotages those who try to distance themselves.

As I was purchasing rental after rental, I discovered that there was still a moderate level of competition because the barrier to entry was relatively low for someone to buy a single family home (just needed $20-70K). I was only fighting with "20% of the room" but there was still a lot of "Dicks, Janes, and Harrys" who were unsophisticated and had the "zero sum", "scarcity mindset", and not to mention bidding up my damn property. I admit that due to the culture, I held my deals close my chest because I saw little need to partner and collaborate or even build synergies with other investors. For example for about 3 years I played "Kiyosaki's Cashflow Game" by starting out with the "small deals" instead of the "big deals" because I thought I had to do it all on my own - heck that's why the games took hours to finish.

After building a sizeable SFH portfolio and more importantly a livable passive cashflow base I turned my attention to Apartments mainly because of this theory of "Why the View is Best at the Top". In my short experience, the people who do this are the 1% who have at least $50k to play ball and exhibit "collaborative" and "abundance mindset qualities". This is truly how the game should be played. If you every have climbed to the top of Mount Fuji or Mount Everett notice how much nicer the view is and how much less people there is from when you started and how much less the wait for the restroom is.

Other good reading from Tim Ferris:

"It’s lonely at the top. 99% of the world is convinced they are incapable of achieving great things, so they aim for the mediocre middle-ground. The level of competition is thus fiercest for “realistic” goals, paradoxically making them the most time- and energy-consuming. It is easier to raise $10,000,000 than it is $1,000,000. It is easier to pick up the one perfect 10 in the bar than the five 8s."

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Comments (4)

  1. @Lane Kawaoka  This article was a gut-check for me.  Thank you!


  2. great post Lane.


  3. Love it I made the jump into apartments my self should build roughly 250 SFH this year both rental , and retail. Using funds to both buy Apartments units 200 and then be  private local lender. I do want to be at the top but also want to have an end game in site.

    So the heavy flipping and moving is done by other folks

    Alex


  4. Outstanding post!  You just put my current mindset into words as i wrestle with doing what has worked for me before vs. challenging myself to do what is "out of my league."  I have to continually remind myself to do so though and your blog helps.