“Hold steady” is a mindset issue more than anything.
The world won’t accommodate you, so you’ll need some systems to enjoy the good times and weather the bad ones.
Growing up, my family always placed an emphasis on real estate as an essential tool for wealth. And as I got more involved in the industry, I was very lucky to learn from those who showed a long track record of experience and success.
When I compared all my notes from over the years of networking, and conferences, and doing deals, these three things stand out the most.
They are deceptively simple. Which I guess makes them even harder to implement, because it starts with some modesty in thought and action.
Anyway, you’ll find them especially important in an uncertain real estate cycle:
1. Focus On Legacy
Of course smaller tasks need to be done in a timely manner.
But the proper measuring stick is not what happened this week. Not even on returns from this year. But legacy.
Keep an eye on the data, and play the long game.
That means, for example, heavy due diligence up front. And not just on deals themselves, but on the team involved.
Partner with the best local experts you can find, and empower them to apply their principles over time.
Avoid the urge to micromanage during slow periods.
Which leads into the next point...
2. Discipline During A Slowdown
If you’re focused long, what do you do in the meantime?
As a passive investor you have to be aware that returns are not going to be as high as the last boom cycle.
At my company, we remain disciplined in our approach to vetting deals.
We’re not going to say “we have to do a deal this month” if there are no suitable deals out there.
We’re not going to play fast and loose with metrics just to project a higher return... only to have the investor disappointed when that doesn’t play out.
There are still deals to be made. Everyone just has to remain true to their investment criteria.
As painful as it sounds, the undisciplined actors are going to wash themselves out of an under-performing market, and the last thing you want is to go out with them.
So how do you protect against that?
3. Stay Humble
Easier said than done, perhaps.
Well, this is the most common answer I have received from mentors and industry insiders I look up to, when asked what advice they most urgently want to pass on to their kids and grandkids:
“Be humble. And stay that way.”
For myself, I try to apply this to daily business actions, rather than just repeating it as empty words.
One way to think about it is that greed is like ambition without humility.
And success is ambition plus humility.
Yeah, people can have some success when they are fueled by greed. But it eventually leads to burnout, or shockingly poor decision making.
You’re here to build wealth.
But when you stay humble, it keeps your head clear and your expectations realistic.
