Two contradictory traits make a successful acquirer

Being an effective acquirer of real estate involves two contradictory skills:

  1. Pattern matching. By this I mean: The ability to rapidly compare a new potential deal to others you have done and identify commonalities with the successful ones. For example: If you show me a picture of a building and a price, I can very often tell you if we want to buy it, even without seeing the square footage, rents, etc.
  2. Open-mindedness. This is kind of the opposite of pattern matching. Often, good deals aren’t obvious, in large part because they don’t look like the good deals you’ve done before. Keeping an open mind and working through the various ways you can (re-)develop a pice of land will often lead to surprising conclusions.

Between the two of the above, I’m far better at pattern matching than I am at keeping an open mind. The practical implication is that the deals we do look very much alike, both in terms of the buildings themselves and also the metrics underlying the deals.

The upside to this is practice. Because we do the same things over and over again, we have got very good at it.

The downside is that we very often miss out on highly profitable opportunities.