As humans, we are constantly analyzing and assessing our circumstances and the reality that surrounds us. We have all formed a belief system that we use to interpret circumstances and helps to form our reality. No matter your age, gender, culture, generation, location, occupation, or education, you have a belief system. From the billionaire to the homeless person and in every spectrum of life, everyone believes that the decisions they make from day to day and the direction they are heading is the best for them based on their belief system.
At PassiveInvesting.com, we are guided by a belief system that affects the way we operate from day to day and governs every decision we make. We believe that we have all been given resources. We believe all resources should be used to their fullest potential. We believe that there are finite and infinite resources at our disposal. These resources consist of education, acquaintances, influence, money, family, and, most importantly, time. As we consider the resources we have, we realize how finite our time is. One thing we say over and over to ourselves is that we can always make more money, but we can never make more time. Once time is used, it is gone forever, and it is ever moving in one direction.
That is why we believe that what we do at Passiveinvesting.com is so much more than simply getting great returns and finding sound investment opportunities for our investors. It is about giving time. We want you to be able to enjoy the resources that God has given you to their fullest with the ones you love most. To provide you with such a precious resource as time, we must always strive to grow and develop our process. As your trust for PassiveInvesting.com grows, our team and our investments must grow as well. We need limitless growth.
To have limitless growth, you need to have a mindset or a belief system that supports it. One way that I personally continue to grow is through constant reading and application of what I read. One book that I have read recently is The Infinite Game by Simon Sinek. In the book, Simon Sinek lays out a mindset that sets the great achievers of our modern area apart from the “one-hit wonders” of the world.
The premise of the book is that business and life are not a game with a finite end and set rules. A game like Monopoly has a beginning, an end, and set rules. The goal is to own all the properties or all the money and to bankrupt the other players. Once that is achieved, you are done. Simon Sinek suggests that life and business are to be played on a more infinite level. The idea is to remain in the game and to be ahead in the game. There are companies that “won” at a certain point in history. For example, the Kodaks and Blockbusters of the world. However, they are no longer playing the game. The idea of continuous play necessitates constant adaptation to the world around you.
In order to constantly adapt to the ever-changing landscape of our world and culture, we must have ideals that outlast the here and now in which we exist. These, as Sinek outlines, are as follows…
A Just Cause
A Sense of Responsibility
We use these ideals as we constantly search for the best use of the resources our investors have entrusted to us. I am just going to touch on the first of these mindsets in this article. However, I encourage you to read the Infinite Game to gain insight into the rest of them. Having infinite goals means not setting limits on your goals. It is about thinking bigger than a single asset class. At the point in time when we started PassiveInvesting.com, we were focused on Class C and B, 1980-1990 vintage, multifamily assets in the Southeast. However, that was not our goal. Our goal is to always provide the best return for our investors.
This infinite goal requires us to be flexible in changing markets. We started to see a risk factor with some of the older value add deals in that there were more unknowns than with some of the newer Class A assets. The hidden underground cast iron pipes, the aluminum wires, hidden mold, or roofs leaks… the list goes on and on. In addition, there were more assumptions to be made about the return on the capital expenditure and how it should be spent, such as granite vs. quartz countertops or stainless vs. black appliances. We found that with the newer, more up-to-date properties, we were not worried about building materials being used that were obsolete. The newer the property, the less risk was found in the actual construction of the property because the recently built properties had warranties from the general contractor.
We also found that the rental-to-income ratios were much more favorable with the nicer Class A properties. While the rents are much higher than a Class C property, the resident average income was much higher in relation to the higher rents. Class A tenants spend a smaller portion of their income on rents. This also opens opportunities for other income streams, such as internet and cable services we provide. This is one instance of a shift in mentality to achieve the most stable returns. There may be a time in the market where value add deals are very favorable again and the risk is mitigated. The point is to always be aware of the need to shift.
We continue to be expanding our vision and our investment opportunities as we encounter changes in the market. These include our PIC (Passive Investing Club) Debt Fund, which provides a more liquid option of investing. Or our PIC Storage Fund, which provides an asset class that delivers stable cash flows and is not affected by eviction moratoriums. Whether it’s multifamily, storage, debt fund, hotel, carwash, medical office, or any other type of asset class, you can be assured that we have a mindset of infinite growth for you as the investor in mind. Because our “Just Cause” is to give you the one resource you can never get back and that is YOUR TIME.