Originally Posted: August 2nd, 2010
Yes, you know you’ve heard it all, when your carpenter has a hot tip on buying the currency of a fledgling foreign government in the most unpredictable region of the world. I never discount anyone’s zest for taking risk in search of the big reward, but I had to share this with you as it just struck me as funny.
It brings to light the concept of core competencies. Would I hire my carpenter to handle my international currency trading, or would I hire my banker to fix a a leak in my kitchen? The answer is definitely not in both cases. What is important to remember is that people who focus on their core area of expertise for many years are the kinds of people you want to have handling a portion of your money.
There are many options to invest hard earned cash in today’s world. As an investment vehicle, real estate successfully competes for a place in an investor’s portfolio with other investments, such as stocks, bonds, and certificates of deposit. However, the return on any given alternative is determined, in part, by its level of risk. In analyzing and comparing choices, individuals and corporations must consider all the ingredients that add to this risk. The cost of capital and the amount required will be critical to this process. Buying on a whim or a tip is certainly not a long term diversified plan that will get you to the “finish line.” It is a recipe for losing your hard earned money.
As people focus on what they are good at over many years, they learn from their mistakes. Their “magic wands” become stronger and stronger. Those are the kind of people I like to do business with. As I focus on a long term strategy of investing in commercial real estate, I partner with seasoned experts in their fields. Whether it’s developing hotels in secondary markets with a strong brand, or buying retail “build-to-suits’ with national credit quality tenants, the people I invest my money and my investors’ money with are true experts.
Darren Nakos, CCIM
Resort Realty Capital
111 Main St
P.O. Box 630
Frisco, CO 80443-0630