Are you ready to take the first step in investing? Here are some do’s and don’ts to help you prepare for your future investments!
DO – Study Market History
Don’t discount history! There are market cycles and you can see patterns and variables today similar to ones from the past. From what’s happening with the stock market to national banks rolling out easy access to capital, we can see quite a few similarities between now and the roaring twenties. The benefit we have today is we can see all of the variables that are different from the past and that may impact the future. For example, technology. Given the current conditions, I wouldn’t be surprised if we have an event similar to that of the Great Depression. However, technology is a variable that sets us apart from the build-up to the last Depression. Technology has the potential to exacerbate or elongate a Depression. If you ask me, given the variable of the government printing a lot of money, a Depression may be pushed a little farther down the road.
DO – Pay attention to what the big companies are doing.
CBRE (Coldwell Banker Robert Ellis) is the largest commercial real estate firm in the world. Their decisions impact REITs (Real Estate Investment Trusts), institutional capital, sovereign wealth funds, and so much more. Their decisions impact the market and the deals you may or may not make. The key is to stay ahead of institutional capital. Today, institutional capital is mainly interested in larger deals on commercial real estate and not small deals– there’s a focus on macro instead of micro. In my chat with Steve Trang, I share more about what I learned from Innovation Homes’s macro-correct approach that ended up making them billions of dollars.
DON’T – Start without a safety net
In your first couple of deals, make sure you have a safety net! Right off the bat, you don’t want to find yourself in the negative. Once you have built up your experience and portfolio, it’s easier to make higher-risk investments that won’t completely devastate your portfolio. Don’t set yourself up for failure!
DON’T – Only take value.
In order to make beneficial and successful partnerships, you must add value. The reality is everyone needs something–even the most successful people in the industry. Sometimes, people cannot even see what they need. When you are able to add value to others by finding solutions, you’ll begin to see a difference in the type of partnerships you make and attract. To level up your partnerships, you can no longer only take and leverage others’ resources and knowledge; allow others to leverage what you bring to the table!
DON’T – Be driven by emotions
I’ve seen this many times. Don’t let emotions cause you to make mistakes. I’ve seen investors with money that they need to place in a certain amount of time panic and throw their money somewhere that stretches them and causes them to overpay with no backups. Don’t be that guy! If you’re strapped for time, take a breath! There are always multiple solutions. Don’t be afraid to take a step back or ask for wisdom from others. Trust me–it’s always better to take a minute longer to make decisions rather than lose a couple hundred grand extra.
Want more Real Estate Investment Tips? Check out my conversation with Steve on the Real Estate Disruptors here.
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