Chapter 22
Are You a Strategic Real Estate Investor?
Commit to reaching your own potential for the good of yourself—and everyone else.
—W. Brett Wilson
We hope you enjoyed and took some valuable lessons from the personal journeys of these successful—and very strategic—investors. Their stories illustrate what can happen when real estate investors deliberately harness the power of the real estate cycle.
Let's recap: Strategic real estate investors possess a unique mindset, they seek reality, keep their point of reference in neutral and have a clear understanding of the real estate cycle. They are also very clear about their goals and invest for cash flow and equity. These investors are equally explicit about their strategy, and they plan to make money and protect their portfolios at every phase of the real estate cycle. They put that strategy into action by adopting the appropriate tactics. That is, they buy-and-hold, lease-to-own or fix-and-flip property based on which tactic will most efficiently support their strategy and goals.
To help you put all of this information to work and become more strategic with your own investing, we offer the following checklist. Use the questions to assess yourself with honesty and purpose, because it's now all up to you. How many of the Five Essential Elements of the Strategic Investor do you already possess? What do you need to acquire? What steps are you going to take to become a strategic real estate investor?
Mindset
- What are your fear and greed motivators?
- Where is your point of reference?
- How do you filter information such as media headlines?
- Do you question that the real estate cycle exists?
Real Estate Cycle
- Have you begun to assess your local market?
- Have you built a key driver data set?
- Do you know what time it is on the Real Estate Cycle Clock in your local market?
- Are you tracking the key drivers using their long-term trends, or are you relying on point-in-time statistics to make your decisions?
- Is your radar attuned to articles and research in relation to key drivers?
- Are you discussing your analysis with other investors in your network to gain new perspectives?
Goals
- Have you set goals that stretch you beyond your comfort zone, but that are realistic in terms of the real estate cycle?
- Are you enjoying your journey?
- Are your goals adaptable to the realities of the real estate cycle?
- Do you measure your goals in terms of cash flow and equity?
- Have you stress-tested your portfolio and run your “what-if” scenarios?
Strategy
- Do you know the difference between strategy and tactics?
- Are you using the ABC Strategy? (Adjusting for the slump while in the boom, building for the recovery while in the slump, and preparing to capitalize on the boom while in the recovery.)
- Are you a one-phase-of-the-cycle investor?
Tactics
- Are you a “one-tactic” investor?
- Are you educating yourself and adding more tactics into your investing tool kit?
- Do you know which tactics leverage the momentum of the real estate cycle for your current phase?
Best Wishes on Your Strategic Journey
We wrote this book to show readers how critical it is to think and invest strategically in order to mitigate risk. We collectively want to wish you the utmost success as you embark on your journey to becoming a strategic and profitable investor.
Alert
Are you a strategic real estate investor? If so, tell us about it and submit your own strategic investor story to info@realestatecycle.ca. Your story may make it into the next edition of this book!