Is it better to be an investor who's quicker or smarter?

Real Estate Agent · San Antonio, TX · Member since 2022 · 33 posts · 17 votes

I find that most of my real estate investors get beat out on a deal by other investors who act quickly. Is there such a thing as being way too analytical instead of pulling the trigger? Which one would you rather be?

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Sergey A. Petrov

Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes

You need to be both. Be as over analytical as you want just do your analysis quickly and no, no analysis will get you a 100% accurate prediction/estimation. Risk=reward but each individual has their own comfort zone in that equation!

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Sergey A. Petrov
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
You need to be both. Be as over analytical as you want just do your analysis quickly and no, no analysis will get you a 100% accurate prediction/estimation. Risk=reward but each individual has their own comfort zone in that equation!
3 Reply
Bob Willis
Investor · Curtis, NE · Member since 2019 · 231 posts · 140 votes
4y
What @Sergey A. Petrov said. Personally I'd rather regret the deal I don't make than the deal I do make.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y
@Natalie Godoy
Smarter every single day. When you are smarter the deals come to you.
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Natalie Godoy
OP
Real Estate Agent · San Antonio, TX · Member since 2022 · 33 posts · 17 votes
4y
I have gotten some solid perspectives. But so far yours is my favorite comment!! Law of Attraction?
0 Reply
Mike Kehoe
Wholesaler · Chicago, IL · Member since 2018 · 84 posts · 83 votes
4y
Ideally, you're able to be analytical and move quickly, but that isn't easy if you're new and have never done a transaction.
To speed up your process, you should create a high-level baseline analysis that will allow you to approve or decline a deal quickly. If your quick analysis supports the deal, you move forward with an offer. If the analysis rejects the deal, you move on to the next.
For those that you get under contract, use the DD period to do your deeper analysis. Of course, you may lose the DD money if you put any down and/or earnest money in some situations, but I'd rather have a shot at a good deal and lose a small amount than a ton of money doing a bad deal.
If this doesn't sound like something you're willing to do, and you find yourself eternally stuck in analysis paralysis mode, partner up with one of the quick movers in your area and learn from their process.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Natalie Godoy:

I find that most of my real estate investors get beat out on a deal by other investors who act quickly. Is there such a thing as being way too analytical instead of pulling the trigger? Which one would you rather be?

Have you ever been in a gunfight? It's not the one that draws the fastest; it's the one that keeps their cool and aims the best.
Be smart, not fast.
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Scott KronePro Member
Investor · Northbrook, IL · Member since 2017 · 352 posts · 295 votes
4y
@Natalie Godoy . Interesting question. Smarter all day long. I am going to surmise that being smart allows one to have greater wisdom. Wisdom is a combination of experience and knowledge. So if one is smarter (wisdom and experience), then that will allow someone to act quicker because their experience and wisdom allows them to make decisions faster.
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Adam Martin
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
4y
Smarter seems like the obvious choice. Investments are easy to buy and offers accepted but it is quality not quantity. With that smartness though you need urgency and not get involved in analysis paralysis. My realtor knows if we go looking an offer is likely being made as my due diligence has been done before I ask him to schedule a showing. He backs me up and if there is something I missed or he finds something out from the realtor that he knows is a deal breaker we don’t go.
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William Anderson
Rental Property Investor · Mississippi Gulf Coast · Member since 2022 · 206 posts · 168 votes
4y
Keep in mind that you found that one so you will find another. There are always good deals. You should be prepared when you decide to seek out the next property but if after running your analysis the hairs on the back of your head stand up, walk away. It's hard to leave emotions out of investing but frankly, there is almost no room for emotions. It's all about money so if the numbers line up and the inspection looks good and more important, you feel good about the deal, lock it up.
Who has ever said that there are no risks in real estate investing? A key reason most of us are or will become successful investors is that we were willing to take a risk that someone else does not. Our gain, their loss.
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Mike Eichler
Realtor · Pocono Pines, PA · Member since 2019 · 183 posts · 108 votes
4y
I would say to have a mix of both, however I would say that first when starting out in a market, you need to analyze heavily the market and what is good and bad in the market. after becoming an expert in the market I would say that you can act more quickly because you can use your intuition and gut feeling on anything that looks good, and after running numbers if it makes sense go after it FAST!
I hope this helps and if you ever have any questions please don't hesitate to reach out!

All the best,
Mike

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Stephen KeigheryBusiness Member
Rental Property Investor · New Orleans, LA · Member since 2018 · 717 posts · 555 votes
4y
@Natalie Godoy you can be smart and fast. The smart investors have well defined buy boxes, understand the markers they operate in and therefore recognize a deal quickly and have the confidence to act. If you aren't smart yet then you need you need to move slower. This means that you will miss some deals but but the more deals you analysis the smarter you will get and the faster you can act.
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Natalie Godoy
OP
Real Estate Agent · San Antonio, TX · Member since 2022 · 33 posts · 17 votes
4y
solid answer Stephen! Thank you!!
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Dion Hickles
Real Estate Consultant · Chicago, IL · Member since 2022 · 4 posts · 3 votes
4y
You will need to be both and you must have your investment criteria defined beforehand in order to act quickly and keep your emotions balanced when tensions rise at the time of transaction. Figure out what location you want to invest in, how much cash you want to put into a deal and have your trusted relationships lined up. If you don't have trusted people in your corner, you're setting yourself up to get burned. When flipping/improving or investing in property, I liken it to a red light/green light game. You must know when to go fast, slow down and stop. If you do any of these actions at the wrong time, your risk level rises, potentially missing out on a deal that would work for you.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
I want to say smarter, but the over analyzer will never build the same wealth that someone who is not afraid to close any deal will.
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Natalie Godoy
OP
Real Estate Agent · San Antonio, TX · Member since 2022 · 33 posts · 17 votes
4y
Quote from @Mike Kehoe:

Ideally, you're able to be analytical and move quickly, but that isn't easy if you're new and have never done a transaction.
To speed up your process, you should create a high-level baseline analysis that will allow you to approve or decline a deal quickly. If your quick analysis supports the deal, you move forward with an offer. If the analysis rejects the deal, you move on to the next.
For those that you get under contract, use the DD period to do your deeper analysis. Of course, you may lose the DD money if you put any down and/or earnest money in some situations, but I'd rather have a shot at a good deal and lose a small amount than a ton of money doing a bad deal.
If this doesn't sound like something you're willing to do, and you find yourself eternally stuck in analysis paralysis mode, partner up with one of the quick movers in your area and learn from their process.

Hi Mike! I appreciate you chiming in! Do you ever wholesale in Texas or only in Chicago?
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Paul De Luca
Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
4y
@Natalie Godoy
You need to be both, and neither exist in a vacuum.
The "quicker" investor will pull the trigger too quickly and make a foolish decision & lose money.
The "smarter" investor that has analysis paralysis will sit behind a spreadsheet all day coming up with reasons why an investment won't work.
These are two extreme ends of the spectrum.
At least the "quicker" investor is taking action and making mistakes. Assuming the investor doesn't lose all their money and can keep moving forward, in the long run the quicker investor is shortening their learning curve by actually getting experience and will likely make better decisions in the future. The smarter (over-analyzer) can't make a decision because they are ruled by fear because they are terrified of making a mistake.
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Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
4y
@Natalie Godoy
There really is no good answer that fits everyone, because there are many kinds of people. Most beginners in real estate are really focused on not getting anything wrong, so they tend to over-analyze. These are the people that more experienced investors want to kick in the behind to get moving. These are the people that need to understand that over-analysis is a choice made out of fear, not intelligence.

All the same, there are some beginners in real estate who do not analyze out of fear. They complete whatever analysis they're doing and pull the trigger on an offer. Since that was me, I heard the "analysis paralysis" advice starting out, but I thought it was misapplied to what I was doing. Turns out I was right. Once I learned what I needed to do better, I became much faster.

Then there are the real morons who will run from one deal on offer to the next with whatever cash they have falling out of their fists. I've met one or two of them in my time. They tend to go broke pretty quickly and retire to whatever bar they spend their free time at, moaning endlessly about how hard it is to get into real estate. It's like these people WANT to fail so they have an excuse for not really trying.
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Jonathan KlemmBusiness Member
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Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
4y
Hey @Natalie Godoy - First off I love this forum group "Investor Psychology" maybe they should make it "Investor mindset"? Also, I love your question!
Anyways, I am in Chicago and my opinion would be that you need a somewhat healthy balance of both, but it ultimately depends on each person's individual risk tolerance. I think the quicker you go, without being reckless the faster you can grow, but I personally have a very high-risk tolerance compared to most.
I think mindset is everything and as long as we are always learning and growing we will continue to move in the right direction.
Fail fast, forward, & often is my motto
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Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
4y
I'd rather be the tortoise than the hare, personally.
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Mike Kehoe
Wholesaler · Chicago, IL · Member since 2018 · 84 posts · 83 votes
4y
Quote from @Natalie Godoy:

Quote from @Mike Kehoe:

Ideally, you're able to be analytical and move quickly, but that isn't easy if you're new and have never done a transaction.
To speed up your process, you should create a high-level baseline analysis that will allow you to approve or decline a deal quickly. If your quick analysis supports the deal, you move forward with an offer. If the analysis rejects the deal, you move on to the next.
For those that you get under contract, use the DD period to do your deeper analysis. Of course, you may lose the DD money if you put any down and/or earnest money in some situations, but I'd rather have a shot at a good deal and lose a small amount than a ton of money doing a bad deal.
If this doesn't sound like something you're willing to do, and you find yourself eternally stuck in analysis paralysis mode, partner up with one of the quick movers in your area and learn from their process.

Hi Mike! I appreciate you chiming in! Do you ever wholesale in Texas or only in Chicago?
No prob!

I live in Chicago, but my wholesale business operates in NC. We don’t have plans to wholesale in Chicago, but Texas is on our future market list!
1 Reply
Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
4y
@Natalie Godoy yes I have seen several clients with analysis paralysis. Especially new investors, they want to make sure everything is just right and they miss out on good deals and in the end spent more money than they wanted to because they didn’t heed my suggestions. That is why one builds a team, and usually with people that know different things and are better than them in those fields. I may or may not have somewhat answered your questions. But the other thing I would say is you do need to be comfortable with your underwriting and be committed to pulling the trigger. Best wishes.
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Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Natalie Godoy:

I find that most of my real estate investors get beat out on a deal by other investors who act quickly. Is there such a thing as being way too analytical instead of pulling the trigger? Which one would you rather be?

I think it is about being smarter, yet with that if you are smarter then you will act fast because you would have done your research, know what you want, and acted on it.
0 Reply
Larry Turowski
Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
4y
If I’m in a competitive bidding war I’ve already lost. I prefer to be the only one making an offer.
1 Reply
Jordan Sand
Investor · Seattle, WA · Member since 2016 · 87 posts · 30 votes
4y
You need both but i found smarter works better in the end. With the market shifting, i've seen a lot of dumb money realize it's not so easy ... for the past four years, it was easy but that's changing.
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Natalie Godoy
I think being smarter is always better than being quicker.
You should get adequate knowledge of real estate and strategies you are planning to apply.

Also explore various financing and partnering options.

You can start by joining local real estate clubs, attending meetups and connecting with local agents and investors.

Do a thorough local market research and analysis.
Good Luck!
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