Getting two or more real estate investors talkin’ about when to make a move and/or what move to make can be interesting to say the least. Usually I can listen for awhile and pick out to what ‘school’ each investor adheres. One thinks tax deferred exchanges (IRC Sec. 1031) are the be all end all to everything but athlete’s foot. The next guy is horrified at even the mention of voluntarily going out of ownership of a single piece of real estate, absent dire personal emergency. The Achilles heel of both these belief systems is their inflexibility.
You can hand both these guys an incredibly well done analysis showing multiple options and their predictable consequences. They’ll both smile, then do what they’ve always done.
Over the last 30+ years I can’t count how many times I’ve demonstrated beyond debate how their revered approach had cost them hundreds of thousands of dollars, sometimes millions. A few times they’ve challenged me to show their CPA these numbers — much to their chagrin. See, I don’t have a dog in that fight. I care about one thing — which strategy gets them to their Point B faster and/or more safely?
Know what gets overlooked though? Whether to make a move at all. Guessin’ here, but roughly 15-20% of the time, I tell clients not to make any moves ‘at this juncture’. ‘Course they wanna know why, which is easy, almost always ending in some chuckles and a clearer understanding of the advice. For me it’s policy — Brown and Brown policy, which has been in place since Carter was in office.
If any proposed move, in my judgment, will produce marginal benefits, it’s probably not worth the effort — or the expense. My standard reply when asked to more precisely define ‘marginal’ goes something like this.
“I’ll probably benefit from this transaction more than you will.” That usually does the trick. 
The honest, unbiased analysis of any particular situation will almost always indicate clearly what options are available. Sometimes the most prudent option is to do nothing. More times than investors realize, the best strategy will involve the use of several strategies combined to engineer the best possible end game for the investor. Things don’t always come out just ‘this way’ or ‘that way’.
The proper approach to the analysis of any move involving your real estate investment portfolio is legitimately analogous to science. An honest scientist may have a strongly held belief about a particular theory, but will brutally test that theory with one result in mind: Finding the truth. He’s just as happy to learn his theory proven incorrect as he would be to have had it upheld. He knows that no matter what he does to bias his experiments, he’ll never ‘prove’ water ain’t wet.
The analysis done to uncover if A) A move should be made. And B) what that move should be — MUST be executed without a care in the world about the results. It is what it is. Executing a strategy ‘cuz it’s the way you’ve always done it, is frankly, absurd. If you’ve always used a worm as bait to catch fish at your local lake, and insist on the same procedure when at sea fishing for tuna, the consequences of your stubborn mindset will find you without any tuna, but still very tired and sunburned.
If it makes ya feel better, most of the time the analysis allows for relatively easily made decisions. But the key is for the analysis to be completely without bias, or better said, a simple search for ‘what is’.
If you think it may be time for a few investment decisions concerning your current situation, call me at 619 889-7100 any time. If you miss me, I’ll get back to you pretty quickly. 95% of the time it’ll be the same day. Have a good one.
Related posts:
- How Does The Real Estate Investor Know When It’s Time To Make The Next Move?
- How Do Real Estate Investors Know When To Make A Strategic Move?
- A Real Estate Investor Asked What Might Make Us Pass On A Potential New Region?
- Here We Come San Diego — Move It Or Lose It Local Real Estate Investors
- When It’s Darkest It’s Time To Move It — Talkin’ To YOU Real Estate Investors
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