Strategy vs opportunity

I'm a bit of a contrarian by nature in someways . When someone says that won't work , I'll look for ways to make it work , if someone says THIS IS THE WAY TO DO IT , I'll look for flaws in their strategy .

One recurring theme on the forum is the need for a strategy . Work out your strategy and that will determine what you buy . There is a significant degree of logic to this , however sometimes the market place will conspire, making it difficult to follow through with a strategy that is too fixed in concrete .

I have an overall strategy of what I want too do , which is to have a portfolio of close to fully paid of properties and live off the rent , however within that overall aim , I'm happy to look at the market and see what areas / segment of the market offer the best opportunity at any particular time .

If you can't find that development site because everyone else is looking for one and driving that segment up , what segment isn't attracting much attention etc

Cliff

 

I concur.

I think a good strategy looks like:

"Do x to get to y but adapt as necessity–or opportunity–dictates".

I had to do a complete 180 following the tsunami of APRA changes recently.

 

Definitely! The plan/strategy needs to be flexible and evolve as your journey progresses, no point missing "an amazing"deal if you can't work it into yourplan... unless you're plan says otherwise.

 

I personally believe that all good strategies should be flexible.

Strata units were never in my line of site but we did purchase one and it has far exceeded any expectation that we could have believed. Nearly doubled in 5 years which is fantastic considering it is a regional.

 

There is in my view no "actual way" . There are many ways to travel to any destination, what way best suits you and causes the least amount of resistance with the maximum amount of success.

I have found if you follow a strategy which covers the full gamut from property type and selection (including all your relevant macro and micro due diligence) through to finance and contingency, I don't allow instant gratification, or 'too good to be true', 'gottta have because it's a bargain', to come into play. Have I missed out on some deals because of that, yes, do I care, no, because I'm thinking long term.

A solid system will outlast any whim or 'gut buy' opportunity every day of the week.

 

Thank you for this thread! I'm a realist and am fully aware of how things change over time. I'm also aware of how strict plans not adhered to can lead to a sense of failure (type A personalities ). I'm a fan of having an end goal, a loose plan and flexibility to overcome any hiccups along the way. I figure living within your means to set yourself up the best you can to capitslise on opportunities as they arise is how I'm moving forward.

 

From Southpark.

In the words of the underpants gnomes:

"Underpants. ........
..........
Profit!"

Replace underpants with whatever you like. Better still, go commando.

 

I have a broad strategy (roughly where I want to be, roughly how I will get there) but the tactical day to day can change as much as it needs to. Life is too unpredictable to plan every minuscule detail decades in advance.

 

Chilliblue, I came back after sending my children to school and saw an old unit up for sale that is surrounded by new apartments. Less than 100 metres to school and 30 metres to local shops. Now, I'm thinking and going to make enquiries. I set out to look for houses but if numbers work, it would work I think.

 

Great post. I agree that strategies need to be flexible in changing environments. I have my overall goal in mind and when I am faced with my strategy not exactly working in a particular situation according to my criteria, I always ask the question, "OK, it may not exactly fit my criteria for X reason, but is it still sound enough to get me closer to my goal or not?". If it is then I will investigate further and not automatically discard it because it didn't meet a step in my criteria. An example i had not so long ago: I was looking to buy a place and one of my criteria is a few areas have to be at least 7/10 in my judgement or i walk away.

I judged this acquisition to be:

Buy price: 7.5/10
Rental yield: 5/10
Add value potential: 8.5/10

According to my criteria I should have passed this in because rental yield didn't meet my standard. However the 'add value' component was way more than I needed as a minimum to be interested. So I decided to be flexible in my strategy and buy it anyway. Turned out to be a great buy as well! So I definitely agree flexibility is important.

cheers.

 

Always pays to keep your options open

 

I think strategy is important but circumstances change- mine had to change when I became self-employed and married.

When I was single I looked for cheaper properties and aimed for owning 10.

When I got married "we" changed our tactic and looked for slightly larger properties with reno potential.

When we became self employed "we" changed our plan again, which will align with our future business plan. We plan to hold different types of property with different family members with a plan to buy each other out after a few years. I know it's wrought with danger but its something we have to do because we alone can't finance the property because of rapidly rising property prices.

 

I agree. I see property investors with no strategy at all running into problems. Conversely, a strategy should not be too fixed and inflexible or opportunites will be missed. There is a middle ground where you have an overall strategy but are also open to assess opportunities as they arise. P.S. I don't think that "buy 10 houses in 10 years" is a strategy.

 

The need to be flexible is actually quite important in any aspect of life or asset acquisition, in my opinion. Plans and strategies certainly help you to focus, however, without taking action or implementation plans are fairly useless. Over the years I've seen some impressive plans laid out on even more complex colour-coded spreadsheets by potential clients who have over-analysed to the nth degree, in their quest to acquire an IP. Some of them are probably still at home adjusting the columns rather than out there taking action or putting a foot in the door of an actual property....

 

Change is inevitable,

Adapting to change while keeping your eye on the big picture and working toward "the end goal" is definitely a challenge.

You have to give it a good old fashioned crack though!!

 

Steven, explained simply and apply

 

If I end up buying a property just found online right now, it'll be a perfect story for this thread.
Will reveal if all goes well.
Basically, I started looking into commercial properties for the first time 2 days ago and hope to be able to buy something which will enable returns many multiples of the market yield with zero issues.

 

There's nothing wrong with being opportunistic - if the opportunity presents itself go for it.