One of the ways to remove the risk from the speculative activity of real estate & betting on CAP rate compression,
is to focus only on great deals truly priced below market or replacement cost, usually found from distressed sellers & to reduce/remove leverage from the equation.
is to focus only on great deals truly priced below market or replacement cost, usually found from distressed sellers & to reduce/remove leverage from the equation.
Also worth mentioning is to focus on the value add as a key driver of appreciation, instead of hoping for market appreciation.
The forced appreciation component that our family has focused on is construction, which is an edge to increase profits without speculation.
The forced appreciation component that our family has focused on is construction, which is an edge to increase profits without speculation.
Benjamin Graham said:
"A speculator gambles that a stock will go up in price because somebody else will pay even more for it."
The same is true in real estate or other assets.
Instead of hoping for a higher exit price, buy at a lower entry price and exit at the market.
"A speculator gambles that a stock will go up in price because somebody else will pay even more for it."
The same is true in real estate or other assets.
Instead of hoping for a higher exit price, buy at a lower entry price and exit at the market.
That is why our focus has always been: Only. Great. Deals.
Yes, they aren't easily found. Others are searching for it, too. Competition is part of the game. Sometimes you might wait for a long time before one comes your way. That is the discipline of the patient investor.
Yes, they aren't easily found. Others are searching for it, too. Competition is part of the game. Sometimes you might wait for a long time before one comes your way. That is the discipline of the patient investor.
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