One of the phrases I repeat to myself often is:

“I can learn any skill set, in any area, any time I want.”

It is important to realize you are not stuck. How could you be? The mind is agile & “plastic,” it can be molded, updated, tinkered with & upgraded.

The best investors develop rules and systems, but equally they develop a level of “agility” so they can take advantage of change, when it happens.

A great example of this can be found in my own investing career.

At this time last year, my one and only investment focus was real estate. To get more granular — single family, residential, “long term” rental real estate. The way the supply chain affected rehab times in 2021 was just ridiculous.

At one point early in the summer, we had 60 projects active in rehab, all held up and empty because the world ran out of (a) pain and (b) windows. We had to be agile.

I started looking at trends & patterns. This is a skill set. Finding (and capitalizing) on “trends” is a very peculiar skill set that can be developed if you aim for it.

Trend 1: build for rent. These are communities that are built (40, 60, 100 houses) all for rental.

Trend 2: short term rentals. AirBNB and VRBO, nightly rentals, vacations, etc. As the pandemic faded people wanted to travel more nad more.

Trend 3: extended stay. Small condominiums or hotels that specialized in 3-6 months leases.

We capitalized on all three trends and started standing up short term rental, “build for rent” communities with extended stay lease capabilities. The cap rates on these subdivisions is absolutely insane — we’re a bit early and banks are fighting for our business.

The key lesson here is this: your forward movement in life is correlated to your ability to find and capitalize on new trends, in old industries. I enjoy investing in new industries as much as anyone. But the REAL big plays, at least for me, are still in long-lasting, older industries that just needed some new optics.

You can change the vertical. Or you can change the WAY you approach the vertical.

You should model me in this: I’ve made it a weekly practice to pause for 30 minutes, and try and think about where the world might be going. How is crypto going to change real estate? Is the old model dying? People need houses, obviously — but where are those needs going to change, converge, or re-invent?

Even if you don’t nail it every time (you probably won’t), what you’ll find is just this practice of thinking about it, will make you a better investor.

Cheers,
Taylor

02.02.22 - Skills and deals