Which Ball do I choose?
Isn’t this the prevailing question we all ask ourselves when looking at investments? Or, really, almost any decision?
My dog Buck is overwhelmed. Just like we all can be. We don’t have to be.
Looking at all of those balls around my poor confused dog I”m reminded of the myriad choices investors face. Real Estate investing alone provides Multifamily, Single Family, Retail, NNN, Office and then we go to classes…..the list is endless. How do you determine what’s right for you?
The good news is, a process will allow you to follow and ultimately make more confident, better informed investment decisions. Process drives solid decision making. In our business, process is everything. As a founder, it’s my job to ensure process drives every facet of our business. As an investor it’s your job to do the same. Otherwise, it’s not investing. It’s gambling.
Every process and decision ideally is goal-driven. Time frame combined with risk tolerance / mitigation will significantly influence your decision criteria.
We start with a thesis on how we are going to achieve a goal. For a project I’m involved with in KC our thesis is that we can help improve housing for disadvantaged residents.
We vet our thesis with 3rd party research. We look at macro and micro-economic trends. Migration, housing starts, rental growth rates, inflation pressures, employment / unemployment, availability of employees are all factors that we analyze.
Next is a strategic plan. Continuing with KC, the plan is to use partnerships to acquire below market housing allowing us to renovate and rehabilitate with mutually aligned partners including construction, housing, marketing, finance. Upon completion we are going to sell to the “disadvantaged residents” and offer seller financing.
Execution follows planning. This stage is massive and deserves its own article in depth on execution behaviors.
Many things can and will go wrong. Confusion over which ball to select is not one of them. Our process informs us of how we go from Ball 1 to 2 and then to 3. Unlike Buck, we can work through the myriad of choices systematically.
It is the exact same with disciplined investors.
Build your process.
Set your thesis. Create a strategic plan. Execute your plan. Rinse & Repeat.
If you want help working on which ball to choose, we’d love to hear from you.