Destiny…

A wiseman once said “Destiny: a series of inconsequential decisions that make a possibility…a certainty.”

Sometimes this works in our favor and sometimes not. Perhaps the saying relates to a purchase you are making. Perhaps it’s a real estate investment you are considering.

One scenario might be the purchase of a revenue producing property. As you are considering the purchase you choose an advisor. In most cases people chose some one they do not know and have no evidence of this individual’s prowess at assessing revenue producing properties. Not a critical decision because the final purchase decision is still yours, right?

The individual might be the real estate agent. Great because now this person’s advise is free! And after all everyone has to make a living, right? Now this person finds a listing, shows you comparatives which clearly demonstrate this is indeed a good deal. Wonderful, but to ensure you win the deal, you are encouraged to put in an offer with a few less conditions then your lawyer might recommend. Not really a problem because you still have an out or two…right?

Now you get through Due Diligence, results are not terrific but, hey, close enough, and nothing is ever perfect, right? So you go “hard” on your deposit by removing the last conditions on your offer. No problem because it’s only the deposit. Next you are coming up to the closing and raising the final funds, but because of the challenges found in the DD, it’s a little harder to secure financing. So you commit to more down payment or guarantees, after all you don’t want to lose your deposit…do you?

So you close…and perhaps you have scored a money pit or perhaps you have scored a money machine…

In the above scenario the purchaser made 10 different small and separately inconsequential decisions. However, taken as a whole and in the excitement of doing a deal, your possibility ending up owning a pit or machine…becomes certainty. Ooops!?!? or YAY!!!!

But really is this how you would like to gamble with your financial nest egg??

I would suggest a different approach…in selecting the advisor get references (and ACTUALLY call them). Never push in an offer without allowing the appropriate time to truly do Due Diligence (DD) completely and correctly. (there will always be another deal, trust me.) If DD shows terrible trouble, even if you have gone “Hard” with your deposit money… RUN don’t WALK from the deal. Because there will always be?…another deal…absolutely! And losing a deposit, while not idea, is still better than losing everything.

Professionals do their deals differently. They start with clear goals, with clear benchmarks, clear measurement tools and because of that they make profitable decisions which they can replicate day in and day out.

Makes sense?

One way to better your chance of consistently doing good deals is to work with a team of professionals. Find a Fund that makes the kind of investment that you are interested in. Invest with them! Scrutinize ever decision they are making. Ask questions. Learn from them. Then try your new found skills out on your projects perhaps even using parts of the Fund’s team.

By making your investments a carefully developed skill set, you move from being a gambler to an investor! Congratulations!

Until next time…

Cheers,
Dean

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