Gone Fishing!

It’s a tough part of the real estate cycle right now for buyers in my local market (Silicon Valley). I’m also struggling to make the numbers work in the out of state markets where I buy. Sure, there is always a deal. People are human. There are always motivated sellers no matter the business cycle. But deals are harder to find right now and maybe I’m not willing to work hard enough to find them.

Being a picky buyer has worked for me. Only swinging at the pitches that I feel are home runs has worked well but it’s really hard to get up to bat over and over and not swing at a single pitch. How many deals have I looked at this year? Hundreds. How many have I purchased? One. This is downright boring. I don’t have a fun story to tell my friends and family. I miss the adrenaline rush that accompanies the urgency of a new purchase. Making buying decisions is addictive.

The waiting gets worse. Sometimes I start second guessing whether that sweet pitch will ever come again. Maybe this boom will never end. Watch out! This kind of thinking will get you in trouble. It’s tough to make good decisions in a bored, desperate state.

In the words of Charlie Munger, “Patience is the art of waiting without tiring of waiting”.

So what can you do to wait better?

Distraction

Got hobbies? Is it time to hang up the sign, “Gone Fishing”? Perhaps it would be better to sit out this part of the cycle and fill up on fun.

Prepare

Feel like you can’t just sit on the sidelines and do nothing? Then get busy putting your ducks in a row for next buying opportunity. Get systems in place to handle the portfolio you already have with less effort. Invest in your network. Could someone else use your help? You’ve got some time & expertise to give. It’s also a great time to strengthen your cash position for when the deals do come along.

Improve your moat

What if there was a long downturn? What could you do to strengthen your cash flow position so that you emerge from the downturn with most (or all?) of your portfolio intact? Any chance to add slack?

These days, I’m doing a mix of moat building, preparing, and plain old spending more time on my hobbies. I actually don’t do much fishing, but “Gone Cooking” doesn’t quite have the same ring.

What are your tricks and tips for not tiring?