Thread: One Trick Pony

Sometimes I wonder if people are looking too many directions to try and figure out a path to take. Not that it isn't important to evaluate the options but, at some point the direction needs to narrow down.

It did not take long for me to get into the fastlane once I had decided to invest in apartments. I focused all my effort and research on defining how I could maximize my returns and continued to refine this process as I went along.

Where I ran into difficulties was when I thought the grass might be greener and went in different directions. The problem was not that there was no money in the other options, it was just a distraction that took me away from my original plan.

I tried my hand at development a few years ago. Property was purchased across the street from a site where a new hospital was going to be developed. It was zoned for medical office (and general as well). I teamed up with a CCIM from the area and we worked with a builder on the project. We thought we could finish the buildings in 4 months and lease them up. It took 1.5 years with delays from the city all along the way. I had to carry the loan during the entire process.

Money was still made on this deal but the amount of time and other resources that went into this were a major distraction for me.

I also thought that rehabbing apartments might be a good thing to try. There were some rundown units in Palm Springs, CA. that were in the foreclosure process. They had many violations on them that were in need of correction. Again, money was made but the amount of time that was absorbed by this was unreal. I could not afford to pay contractor prices so my partners and I did most of the work. Pouring concrete diveways in 105 degrees was not fun either.

If I had stayed on this path, I would have had to drop down to a slower lane.

Fortunately, these just solidified the fact that my original plan was working. When I went back to refining the original plan, the speed picked back up.

My point is that finding a workable plan to move ahead at a fast rate of speed is important. Development and Rehab are both very lucrative. I am not suggesting that there is less money in doing either one of those. The problem was with the distractions and chasing something without a fully understood plan of attack. Had I initially targeted development, the effort that I had put into it would have been different and the amount of time and path forward would have been very different.

Make your plans to move forward based on a carefully thought out plan that will take you where you want to go. If it isn't working... adjust... If it works... refine and move forward.

awesome post. not sure if it is worth anything with my lowly rep, but rep+++

Great post, Steve.

Rep added ++

That's true. I've got my mind on several things right now, but I need to narrow it down soon before I lose control over everything. Focus has always been a big problem for me.

A great post! I could use so many examples from my own life. This should be a sticky!

Awesome point Steve O...

I'd like to add ... that when you are deciding what path will work for you, pay attention to a few things...

• What seems like the most common sense solution?
• What fits in with your passion/values?
• Where does it fit in on your risk tolerence level?

The answer here will be different for everyone, and there is no wrong answer (unless you are ignoring your instincts here...)

I was speaking with a land developer recently. That is definately his one pony. He feels that self-storage is risky.... and that land development is not. I, on the other hand am very comfortable with self-storage development (my pony) but feel that land development is risky. That tells me that we have each chosen the correct pony.

However, I would also submit.... for some people, it could be... one pony at a time!

If you ride a pony as far as you had hoped - or find you have outgrown the pony... it could be time to find a different pony!!... As long as you have the self discipline to not jump too soon!

Originally Posted by andviv

SteveO, awesome post. Sorry, I can't give you rep++ as I already gave you positive Rep for another awesome post.

No problem andviv... I'm here for the beer, of which you have already bought!

there is not such a thing as too much beer!!! I'm buying the next round.

I have always liked Paul Simon. His lyrics usually hit home with me. Here are the words to this song:

He's a one trick pony
One trick is all that horse can do
he does one trick only
It's the principal source of his revenue
And when he steps into the spotlight
You can feel the heat of his heart
Come rising through

See how he dances
See how he loops from side to side
See how he prances
The way his hooves just seem to glide
He's just a one trick pony (that's all he is)
But he turns that trick with pride

He makes it look so easy
He looks so clean
He moves like God's
Immaculate machine
He makes me think about
All of these extra moves I make
And all of this herky-jerky motion
And the bag of tricks it takes
To get me through my working day
One-trick pony

He's a one trick pony
He either fails or he succeeds
He gives his testimony
Then he relaxes in the weeds
He's got one trick to last a lifetime
But that's all a pony needs
(that's all he needs)
He looks so easy
He looks so clean
He moves like God's
Immaculate machine
He makes me think about
All of these extra moves I make
And all of this herky-jerky motion
And the bag of tricks it takes
To get me through my working day

One-trick pony, one trick pony
One-trick pony, one trick pony
One-trick pony (take me for a ride)
One trick pony

Of course the following portion is the key:

He makes me think about
All of these extra moves I make
And all of this herky-jerky motion
And the bag of tricks it takes
To get me through my working day

Originally Posted by emorgan

So, Steve O is saying I should turn tricks with pride...

If you can figure out how to make it into a fastlane biz....

Originally Posted by AroundTheWorld

• Where does it fit in on your risk tolerence level?

How to discuss this point???? Hmmm...

So much risk can be averted by simply doing your homework. I have had people tell me that investing in real estate is so risky. Yet they don't even understand the situation and I am not going to waste my time explaining it at that point.

Buying a car is risky if you haven't researched it.

Perhaps some people need to explore how to minimize risk to make it fit into the risk tolerance level.

SteveO:

You are so right! Master one thing before you take off in another direction. I've got successful clients who have more than one venture, but they didn't start off that way. They focussed one one thing in the beginning.

Even within my own business (which you would think would be just one thing), I have to be careful to not get enamored of new ideas all the time. The issue is not lack of opportunity....the issue is choking on opportunity.

I'll add in one more thing as well - I think too many people get confused with the process of creating net worth and creating cash flow. Often in the beginning you need active income - money you're working for either as an employee or self-employed (fix and flip falls into this category as well). Plus, you need to grow net worth. THEN concentrate on passive income. I'm not saying you can't do everything at once - but it works so much better if you focus on one goal at a time.

Passive income almost always comes from an investment of either time or money. If you're investing time, you're not really passive...and hence, it's active. If you're investing money, you need to have money to do that.

So - my husband's and my plan has always been to keep an eye first on building net worth and then watching how good the net worth is invested to give income.

AND be careful to only invest in what we know - that one trick pony.

Great post.

Plus, you need to grow net worth. THEN concentrate on passive income.

We certainly agree Dianne. Passive income is much easier once the net worth is there.

Great idea for a new thread-- How to minimize Risk.

That is a great idea.