Recently, my wife and I spent a week kayaking the Salmon River in Idaho. It was a week of nature sounds instead of traffic noise. You realize how the stars look without the ambient light of the city. We were dead-tired and exhilarated when we returned to San Diego.
Now that I’m back in the office, I’m thinking about the similarities between whitewater kayaking and apartment investing. Here are a few.
On the river or in investing drifting may take you to places that may not be in your best interest
When you’re drifting, you’re moving at the whim of external forces. On the river or in investing that put you in a place you don’t want to be. In kayaking, drifting can push out of the current, into an eddy which can take you to intense rapids and far more excitement than you can handle. In investing, drifting can mean the equity drifts as neighborhood declines or superior opportunities escape because the equity is stuck in an investment backwater.
To succeed, you must pick your challenge and develop your skills
Rejecting drift means choosing your level of risk/adventure. You might choose a river cruise or a visit to a theme park. If you choose kayaking, there are more choices to make.
Rapids are categorized by difficulty, from Class I (easy) to Class VI (extraordinarily difficult, like risk of life dangerous). I categorize apartment investors from Novices through Masters. Kayakers and investors pick different challenges as they develop their skills.
On the river or in investing a good guide makes the trip better and safer
My wife and I are beyond that awkward rookie stage, but we’re not experts. Since we wanted the best possible trip, we needed a guide. We wanted guides who were expert kayakers and who also knew the territory, the Salmon River. A good guide helps you get the most from an adventure while avoiding costly and dangerous blunders.
You need a guide for investing, too. The broker you choose as a guide can have an immense impact. In almost every field, the top performers are several times as good as the rest of the pack.
San Diego County has 15,000+ agents. In the last generation, there have been more than 10,000 apartment building listings. Only 42% of those apartment listings sold during their listing period. My team’s success rate is 85%.
Well-prepared is better than any excuse or explanation
You must do your homework no matter how good your guide is. Before you go on the river, you should develop your kayaking skills and your fitness. You’ll do well to learn about the techniques of whitewater kayaking.
Before you choose an investment, you should do your homework, too. I suggest that investors drive the neighborhoods to learn about the market. I help them clarify their goals so they can make wise decisions.
You can begin preparing for wise investing by reviewing some of the resources on this site.
Shameless plug alert! My book, Building Legacy Wealth – while leading a life worth imitating, has been endorsed by heads of Institute of Real Estate Management and National Apartment Association. Regular readers like it, too. As I write this, 56 of 57 Amazon reviews are five-star.
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.“