How being an Expert Generalist will Help you Succeed in Real Estate

Joe Stampone Featured, Innovation/Technology Leave a Comment

I spend a lot of time talking with college students interested in entering the real estate business. When they ask for advice, I try to steer them in the right direction by advising they work for a firm with access to a large volume of deal flow, focus on who you’ll be working with (not just the firm reputation), and become an expert modeler (every firm needs one, but few are willing to put in the work). However, the piece of advice I find most important is aspiring to be an ‘expert generalist’. This phrase, made popular by Berkshire Hathaway Vice Chairmen Charlie Munger, refers to studying wide and deeply across many disciplines.

To be successful in real estate, one must understand not just the intricacies of the real estate business, but have knowledge of design and construction, investing, technology, psycology, and marketing just to name a few.

At Atlas, we’re working on a heavy value-add multifamily deal in Florida that includes a gut renovation of the ground-floor amenity areas, unit upgrades, new retail, and a full re-branding. While we rely heavily on 3rd parties, we’re picking facade colors, determining interior finishes, choosing which amenities are best suited for our target tenancy, picking a new name and logo, and deciding how to re-purpose the existing under-utilized retail spaces. Although none of us are interior designers or general contractors, we must have the skill set to make educated decisions across these disciplines, while not letting biases influence the decision-making process. Even more importantly, we must realize what we’re not suited for and ensure we have the proper 3rd party firms lined up to steer us in the right direction. This requires an expert generalist framework.

According to Munger, expert generalists have several competitive advantages:

  • They see the world more accurately and make better predictions of the future because they’re not as susceptible to biases.
  • They have more breakthrough ideas because they can pull insights from work in other fields.
  • They build deeper connections with people who are different than them.
  • They build larger and more open networks which is the #1 predictor of career success.

Charlie Munger uses mental models (checklists) to assess investment opportunities. His mental models instruct that when analyzing any situation in which decision-making by people is involved, we must consider two things:

  1. How would people react if they acted rationally, according to their true best interests.
  2. How would people react if they succumb to their irrational biases that are programmed into their brain.

These two outcomes allow Munger to understand what is likely to happen and make better decisions. Great decision-makers understand the actions they can take, and utilize checklists of things to think about before they act.

So how can real estate professionals become expert generalists? I reached out to several trusted colleagues and compiled a list of what we believe to be some of the best resources across finance and investing, business, and technology. I personally utilize tools such as Blinkest for grasping the main concepts in books without reading the entire thing, Audible for listening to books while I’m driving or walking to work (view the ASotREG reading list here), and Hootsuite to manage various streams on Twitter, where I discover some of the most interesting resources.

Major Publications

  • Wall Street Journal
  • The Economist

Investing

Business/Economics

Technology

Other

There isn’t a curriculum to becoming an expert generalist, it’s about being intellectually curious across a wide-range of disciplines.  The wide-ranging skill set will enable you make better decisions, develop more break-through ideas, build better relationships, and expand your network.

Do you want to improve your real estate expertise? Go read a scientific journal, have dinner with someone who works in marketing, or listen to a tech-focused podcast.

What’s your favorite non-real estate related resource?

Thanks to everyone who provided inspirations and ideas for this post, I really appreciate it.