With initial friends & family investors:
Lean away from: “this is an amazing, can’t miss opportunity”
&
Lean into: “I, a person you like & respect, have decided to devote my time to, & risk my credibility on, this project, & am asking for your support”
The Fed Since 2020:
1. Mar 2020: Inflation won’t be a problem
2. Jan 2021: Inflation is “transitory”
3. Sept 2021: Interest rates won’t rise until 2024
4. Jan 2022: Recession is needed to lower inflation
5. Dec 2022: Disinflation has begun
6. Feb 2023: A “soft landing” is possible
7. Mar 2023: Banking system is “stable”
Not a single statement was correct.
With a few exceptions, as we get into our 40s, my friends who are doing best are those who chose long-term games with uncapped upside…
… and then played those games diligently for 15+ years.
State of the market right now is exactly why you invest based on stabilized yield, not IRR
Stabilized yield is based on the present market rent. IRR is based on the future exit cap rate
Imagine pretending you have any idea what the exit cap rate will look like 5 yrs from now