Long Term Thinking

I recently read the article on BP about What Real Estate Investors Can Learn from Facebook’s Long Term Mindset. It rang very true for me, for right now.

My favorite key points:

Real estate investors, even successful ones, are often cash poor, especially to start. – We always had an emergency fund, and a 401K untouched, but we definitely had most of our money tied up in properties in the early years. It was an uncomfortable feeling, wondering if we would need that money faster than we could get it back out of a property.

Grow at a sustained and reasonable pace – We purchased all of our properties quickly, and only stopped because the access to relatively easy capital dried up. Looking back, I’m glad we pulled back, even though I still have a longing in my heart when I review homes for sale. It gave us a chance to regroup and decide that we didn’t want to keep growing for now.

Holding real estate is where the real wealth is.– Our net worth has grown $280K in the past six years. Without the rentals it would have been about $245K. Keep in mind, this isn’t appreciation related, it’s mortgage pay down related. In another 10 years, the mortgages will be zero, the properties will have some appreciation, and net worth jumps up.

The deferral of gratification, or prioritizing the long term over the short term, is as important for individual success as it was for Facebook. – This is true with our real estate, with our faith, with guiding our college kids, with our future hopes and dreams, even with the latte I’d like right now (but I want the scale to go down more!).