I recently turned 30 and have been working for Atlas for over 5 years now, which feels like a long time, but is nothing in the grand scheme of an entire career that could last 60+ years. We’re under contract on our 40th deal and at this point I have the core ingredients to do my own deals; the skill-set needed to execute all aspects of a deal, a network of investors, lenders, and brokers, and the grit to succeed as an entrepreneur, but I’m not ready to do my own deals.
Most young real estate professionals want to do their own deals, but greatly underestimate the difficulty and risks of going off on their own. Here are a few of my observations from watching several friends successfully and unsuccessfully do their own real estate deals:
- It’s incredibly challenging to do your own deals during a hot market. Market timing, which is nearly impossible to gauge, is the biggest determinate of success early on.
- Failure is not an option. Doing a deal and failing could bring damaging consequences to your career. You lose credibility with investors and the market when you put your neck on the line and you fail.
- You can’t go out there and do what everyone else is doing. You need to bring something new to the market. There are too many smart groups already doing what you intend to do in your market, so it’s tough for you to compete.
- The market doesn’t care that you went to a good school, have great working experience, and work hard.
- At 25 or 30, you don’t have experience. You haven’t worked through multiple cycles and you haven’t built enough trust with your network. There’s no reason you can’t start a firm at 40, 50, or even 60, ages where you have the experience, a rolodex, and net-worth that will make doing your own deals much easier.
- Intelligence, the ability to analyze deals, and a passion for the business does not guarantee success. You also need to be a ‘deal guy’ and have the ability to negotiate and assemble a great team to execute a specific investment strategy.
- Luck plays a massive role. In order to be successful you need to match your experience with timing and great market opportunity. From there, it’s what you do with your luck that dictates your success.
- Work-life balance doesn’t exist for entrepreneurs, especially early on. If you’re sleeping soundly at night, something bad is going to happen.
This post is not intended to deter you from doing your own deals, it’s intended to ensure you succeed when you ultimately decide to go off on your own.
Do you still think you’re ready to do your own deals?