Legacy wealth doesn’t usually accrue in one investment. It takes several escrows over many years. This post is about apartment investment decisions, with an “s.” You will make those decisions as you make the learning journey of apartment investing. A well-honed decision process will increase the odds that you’ll make better investment decisions.
I believe that a great broker won’t tell you what to buy. He or she will help you understand your goals and values so you can make wise investment choices. He or she will help you grow in investing wisdom and improve your decision-making.
Know Your Values and Goals
Each person, each investor, is unique. Some of us like chocolate ice cream, others like vanilla, and still others don’t like ice cream at all. Knowing what’s important to you simplifies decision making. When my clients explain what’s important to them, we increase our odds of success. My team can systematically search for and help them capture their best opportunity.
I’ve worked with many people over the years. The very best investors shared two things. They knew what they wanted from their investments and they were clear about who they were. Many investing books encourage you to articulate your investment goals. That’s important, but it’s equally important to know who you want to be and the legacy you want to leave.
Learn the Market
Before you make any investment decisions, you should spend “windshield time” driving the markets to see the realities. Your goal is to learn what the people and properties are like in different areas. Then you can recognize a bargain and understand the implications of owning in various neighborhoods.
Clarifying your values and goals and learning the market set you up to make wise investment choices. They are the precursors for a lifetime of effective investing. You will also benefit if you use a proven decision-making process and develop your decision-making skills.
Use a proven process that widens your view of what’s possible.
One of the simplest ways to improve decision quality is to consider several possibilities. Our team uses a simple chart to compare a few properties on several important dimensions. This provokes intelligent discussion. We don’t talk about the color of exterior paint. Instead we talk about comparative value of neighborhoods and relative weight of unit mix versus price or age or some other measure. As a guide, my assignment is to help you move closer to your goal.
Review your decision outcomes and processes
You will hear people say, “we learn from experience.” We don’t. We learn from reflecting on our experience, learning the lessons we can, and changing our behavior in the future. It’s easy to fall into the trap of evaluating decisions solely on the outcome. Former professional poker player and author, Annie Duke, calls that “resulting.” You won’t improve your decision making that way. Savvy investors evaluate both the result and the process.
A great broker doesn’t try to “sell” you a property. He or she provides you with market knowledge and an effective decision process. Then a great broker helps you make better investment decisions as you build your legacy wealth.
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”