Second Level Thinking

Imagine you are a poker player. If you are a beginner you are focused on the hand that you are dealt. You look forward to when you are dealt a K-Q than an unsuited 9-6.

As you gain more experience, it may appear to beginners of the game that you are not playing any differently. But you are not just worried about the hand that you are dealt, but what others have or may have been dealt.

• 1st Level – What cards do I have?
• 2nd Level – What do my opponents have?
• 3rd Level – What do they think I have?
• 4th Level – What do they think I think they have?
• 5th Level – Yes, you can keep going and going…..

It is the principle behind Game Theory in business negotiations and strategy.

The above term was coined by someone I think is an investment genius - Howard Marks at Oaktree Capital. 

What would it take to generate above average portfolio performance?  To be better than average our thinking has to be better than average - both more powerful and at a higher level.

In this blog series, I will expatiate on quick tips and tricks and introduce you to simple Excel analysis and tools to better understand and improve the operating performance of your apartment portfolio. 

HINT: As your scale grows, it is not just about rental rates and vacancy.