I’ve been hearing from a lot of investors lately on the subject of FOCUS and it’s importance to real estate investing. Briefly, there seems to be a split between those who feel it’s better to concentrate on one or two areas of investing, and those who believe an investor should do whatever kind of deal happens to come along.
A little clarity might help the situation.
Strategy and Tactics- What?s the Difference? First, it’s important to distinguish between tactics and strategy as they relate to investing. Tactics are the methods and techniques you use to tie up deals, take deals down, or put deals together. Simultaneous Close, Subject 2, and Lease Purchase are all examples of tactics.
Strategy, on the other hand, is largely determined by your overall investing stance, and how and when you plan to hold and exit out of your property. For instance, your intention might be to buy a property, fix it up, and sell it on a lease option contract. You may use one tactic to acquire the property, and a different tactic to sell it, but your overall purpose and plan to buy, repair, and resell is your strategy.
Maybe your strategy is to acquire 6 properties a year, using a variety of tactics to do so, hold 4 of them for long term rental, and flip two of them to other investors for quick cash. The overall plan is your strategy (and one that will gradually make you wealthy, I might add!)
Strategy and Tactics- Why Does It Matter? Second, why is this distinction important? It’s important because when someone offers advice about the importance of focus they are, or should be, talking about strategy. It’s vital to decide what your investing strategy is going to be, and then stick to it like glue. It’s akin to setting a course when starting on a great journey and following it faithfully. You adjust your route only when conditions change so much that the old route becomes impractical.
Isn’t investing just like a great journey? Of course it is, and strategic focus is what separates the successful from the pretenders.
Tactics on the other hand, are tools- nothing more or less- and the more you have in your toolbox the better. Are you lacking in focus just because you?re knowledgeable in both Lease Purchase and Subject 2? Of course not- those are simply different tactics, or tools- like a wrench and a screwdriver- and sometimes the wrench is right for the job and the screwdriver is definitely wrong for the job.
Having the right tactics, and knowing when to use each, gives you the best chance to successfully implement your strategy. Don’t fall for the myth that knowing and using different real estate investing tactics causes you to lose focus.
Focus on your goal, develop the best strategy to take you there, and fill up your toolbox with the right tactics to make it happen. For more on focus, see The Power of Focus.
Now, go make more offers!
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