067: Contradicting Strategies – Friday Fundamentals

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There are lots of times we come across contradictions. For instance, on one hand your mom tells you not to talk to strangers. Yet, on the other hand you’re told to treat everyone as you want to be treated.

Well do you not talk to strangers, or do you treat that stranger how you would want to be treated with a big smile and pleasant greeting?

Life is full of these conundrums, from social norms to laws and even business.

We’re told to diversify by some and niche by others. Should you hold a small amount of real estate, along with some stock, bonds, mutual funds, and agricultural land? Or do you focus on a niche real estate strategy, such as house flipping?

Let’s look at an example of contradicting strategies, particularly around real estate investing. In this example Sara wants to buy a fourplex,  live in one unit and rent out the others. Sara wants to buy and live in a specific part of the city close to her job, her favorite restaurants, and shopping. However, nothing in her particular area makes sense for an investment property. In order to make this strategy work financially, she would have to move to a suburb of the city, much farther away from work, where property values are lower.

Sara has long realized that her market is not the best for investing and she realizes that she wants live by the saying “Live where you want and invest where the numbers make sense”.

Sara finds herself torn trying to balance both this fourplex strategy and mindset. So what should she do? Should she move to where the numbers for a fourplex makes sense, or should she follow the mantra and live where she wants, while investing where it makes sense, even if these two things aren’t related?

Many real estate investors are faced with decisions like this every day. Decisions that make you rethink your focus, or wonder if you even have one.

The problem and solution is different for everyone. Using your goals as a road map will certainly help you make these tough decisions along the way.  They’ll give you a single point of focus to follow. You’ll be able to ask yourself “Does this decision help me achieve my goals?”.

When you come across contradictions in live, the worst thing you can do is not make a decision.  Don’t let yourself be paralyzed by indecision.

Understand there will be contradictions, confusion, and conflicts in life. Tackle these head on.  If you stumble, make the wrong turn, or get lost, simply use your goals to guide you.

 

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