Thread: Good synergy or lack of focus?

I'd like to follow up on Steve's thread "One Trick Pony" by asking a question of my own. I've spent a lot of time developing my plan (thanks Russ) and I'm about 90% of the way there with it.

My plan essentially consists of staying at my development firm with a goal of being a partner in 5 years, or at that time leveraging my knowledge and contacts into a partnership elsewhere. In addition, I'm going to put a group together to buy apartment buildings, with the goal of owning 100 units in 5 years. (I will reduce the group size as we move from building to building if possible, hopefully being the sole owner of the 100 units).

So I'll be 34 years old, a partner in a small development firm and I'll own 100 units of apartments.



After lots of research, I think that this is a good plan and working on development of apartments and condos and buying apartments use many of the same skills, knowledge, contacts, etc. But I'm also very aware that in today's marketplace a person must develop an expertise. I think my expertise will be apartments, and I'll know how to develop or acquire them.

Am I on the right path with this or am I not really developing an expertise? Am I not being focused enough? I'd love to hear some of your thoughts on this.

Some of the skills that are required for each path will cross. The advantage that you have from the beginning is that you are learning on the job. Most people do not have that advantage.

This does not seem divergent or spread out.

I wonder if you have made a comparison on the two directions to see which one has the most potential.

Steve,

Thanks for the thoughts. I have tried to evaluate which option will be more profitable, but to be honest, it's hard for me to tell. In addition, I am not sure if I will enjoy the process of buying apartment buildings. That is why I want to have my hands in both acquisitions and developments because I feel that in the next couple of years after spending some time doing both I will have a better idea of which one I prefer.

I am leaving the door wide open. If I spend a year buying an apartment building and love it, I am not opposed to dropping the development part of my plan at all. And vice versa.

In 5 years, I want to be running my own deals, whether in development or acquisitions or both. And I think only time and experience will tell me which one I really want to continue with.

Does that sound logical? (That wasn't meant to be rhetorical).

So I thought a lot more about this last night (which unfortunately led to only 2 hours of sleep)...

I guess here is where my issue lies. How do I know exactly how I want my life to be in the future? Do I want to have the life of Steve O and his acquisitions (who enjoys his free time and golfs, runs, etc) or my boss and his development (who owns our firm and probably works about 40 hours a week). I'm not sure what I would enjoy more. I'm worried I may be bored only working occassionally, but also fearful of being tied to projects that require all my time.

In addition, I live in the SF Bay, but all of my family lives in the Midwest (in Minneapolis). I feel at home in the Bay Area and love it here, but miss my family (and my fiancee's) terribly. We think about them everyday and both struggle with the dilemma of in 3-5 years when we start having kids, where to live. I think this plays into the decision of where to focus my time as well. I think I could possibly stay in the Bay, but if I had SteveO's lifestyle, travel home frequently. If I stayed in development, I wouldn't have the opportunity to travel for long periods of time as much.

So many thoughts running through my head. How do you guys deal with issues like these?

Originally Posted by SeanS

I'm not sure what I would enjoy more. I'm worried I may be bored only working occassionally, but also fearful of being tied to projects that require all my time.

Just because you have financial freedom and the ability to spend your time running and playing golf does not mean you have to! You said you may bet bored only working occassionally. Well.... then.... work. You have the FREEDOM OF CHOICE.

I guess the question is this... what WOULD you do with your time if MONEY WAS NOT A FACTOR?

work? development? charitable work? raise kids?

Obtain financial freedom and you have the time freedom to do what ever your heart tells you is right for you.... I guess - at the heart of it is this... what is Your Purpose? Then.. how do you obtain Financial Freedom so that you have the Time Freedom to pursue your Purpose?

Nobody has said to leave your job. You are in a great situation for your future now!!! Stay with it and learn.

So much amazing advice...Don't even know where to start with the thanks!

More work to do...thanks again.

Originally Posted by SeanS

In addition, I'm going to put a group together to buy apartment buildings, with the goal of owning 100 units in 5 years. (I will reduce the group size as we move from building to building if possible, hopefully being the sole owner of the 100 units).

This looks like a receipe for disaster to me. Only becasue the way it may turn out is this team helps you get started and thenyou just cut them out when you get the money. It sounds prime from greed over family friends. If those people are willing to take a risk with you and invest in buildings i would plan on just cutting them out so you can own all the units as soon as possible.

Just a thought that came to mind as i was reading, please dont take it out of context or as an personal attack.

Originally Posted by LightHouse

This looks like a receipe for disaster to me. Only becasue the way it may turn out is this team helps you get started and thenyou just cut them out when you get the money. It sounds prime from greed over family friends. If those people are willing to take a risk with you and invest in buildings i would plan on just cutting them out so you can own all the units as soon as possible.

Just a thought that came to mind as i was reading, please dont take it out of context or as an personal attack.

No offense taken at all. I didn't mean "cut them out" in a way that meant I was leaving them in the dust. I have a couple of people who want to work with me, and although it might be a little overly ambitious, the goal was for the 3 of us to all own 100 units in 5 years. I am a BIG believer in keeping your team, partners, investors, etc as happy as possible. I tend to look out for others before myself and I am probably not "greedy" enough...haha.

Originally Posted by LightHouse

This looks like a receipe for disaster to me. Only becasue the way it may turn out is this team helps you get started and thenyou just cut them out when you get the money. It sounds prime from greed over family friends. If those people are willing to take a risk with you and invest in buildings i would plan on just cutting them out so you can own all the units as soon as possible.

Just a thought that came to mind as i was reading, please dont take it out of context or as an personal attack.

The idea here could be that EACH partner is able to take equity and roll it into more buildings and EACH partner could end up with this many units in 5 years.

As long as each person is up front in communication about goals and intentions and each partner is willing to help and cheer on the other, then I see no problem here.

It is not a matter of "cutting" people out... the assumption is that this is a launching point for EACH partner and each one will go on to greatness!!

Sean S... you and I must have been typing the same thing at the same time! lol

Originally Posted by AroundTheWorld

The idea here could be that EACH partner is able to take equity and roll it into more buildings and EACH partner could end up with this many units in 5 years.

As long as each person is up front in communication about goals and intentions and each partner is willing to help and cheer on the other, then I see no problem here.

It is not a matter of "cutting" people out... the assumption is that this is a launching point for EACH partner and each one will go on to greatness!!

Oh i don't doubt his intentions are well meaned, I just simply stated that was a thought i had rolling over the sentences. Just simply making a point in a discussion, by no means belittling or making assumtions about any members intentions.

ATW, that is pretty funny!

The idea in reducing the investors is to buy and sell. Each time the investment group will break off to invest into other apartments or investments. As the other investors gain experience and knowledge, they will likely be interested in doing it on their own or with a smaller group. If you go into the investment with 50K and come out with 150K, the group size will naturally reduce.

Originally Posted by SteveO

If you go into the investment with 50K and come out with 150K, the group size will naturally reduce.

Hey, that sounds like a great idea!!!

let's not all talk at once.