Welcome to the 136th episode of the Alternative Investing Podcast!
In today's episode, I'll share the three biggest lessons my community members learned after meeting alternative investment dealmakers in New York.
If you're an investor who wants to learn valuable insights you can apply in your wealth-building journey, then make sure to listen to this episode!
Last year, I took a trip to New York with a group of my community members who have been investing in alternative real estate deals but haven't had the chance to see these deals in action.
The trip was so valuable for them that, in this discussion, I want to share with you the three most important lessons our group learned.
These lessons will give you an understanding of what people consider when investing in alternative real estate deals.
Now, if you’re quite new to my work and the world of alternative investments, you can listen to some of my past podcast episodes here.
However, the lessons I will share today are universal, so you don’t need to understand the intricate details.
Lesson #1: Building Relationships
Okay, so let’s talk about the first and probably most prominent lesson, which is the value of relationship-building.
For the longest time, I’ve been stressing that the people you spend time with have a huge impact on your success, especially in the investment space. In fact, some people have successfully adapted to the pandemic's challenges during the last two to three years and have done very well financially.
And as an investor, it’s super important to be aligned with people like that.
One of the reasons I value my trusted advisors is that they form an informal board of directors. So if I have issues with my investments, I can ask them questions and get updates about potential problems before they even hit the mainstream.
And from a practical point of view, that gives me insight into how to act defensively and offensively as things unfold.
In my journey of building relationships over the last 10–12 years, I have constantly been ratcheting my way into better networks, which are often private individuals who are not easily accessible to the general public.
When you spend more time with these advisors and investors, you see them from a different perspective, not just the facts and figures of their deals. You could see who they are as people, what they believe in, how they handle challenges, and how they adapt their strategy to changing market conditions.
Seeing them in this way not only gives a lot of confidence in working with them but also helps build a reliable and sustainable source of income in the alternative investment space.
As I’ve mentioned, people in the alternative investment space are often very private and not necessarily great marketers. Instead of having many bidders, they prefer to have close relationships with fewer investors over a longer period.
This was not just a theoretical idea but something that people experienced firsthand.
When they got on a call with a dealmaker, they already had a level of rapport and connection with them because of their time together.
So again, the first lesson is the value of building relationships.
Lesson #2: The Value of Seeing Real Deals
The second important lesson I heard from everyone on our trip to New York was the value of seeing real deals.
Alternative investment concepts can sometimes be theoretical, so we want to increase our knowledge and comprehend the jargon better. Understanding these details helps to fill in gaps in understanding and makes it easier to navigate the market and make informed decisions as economic conditions change.
I had one client who understood the financial aspects of alternative investments but was unclear on the practical details of how they happen. So the trip to New York helped him understand the specific steps and processes involved in cultivating these deals, such as how they are found and progress from start to finish.
As you learn more about real estate deals, you will better identify which ones are bad, good, or awesome.
People may not have realised that when they were walking the streets and looking at these real deals, they were also gathering valuable information and experience to help them make better investment decisions.
Lesson #3: Strategy Needs to be Adaptable
The third lesson I want to share is that certain strategies can be adapted to any market situation.
One of the trusted advisors that we spent a full day with was a guy who is a specialist in bridging debt. At a glance, I thought he was just good at what he did, but as we walked in the streets, I realised that he was not just good. He’s actually exceptional, almost like a savant.
The reason why I mention this is that investing inherently carries some risks, but personally, I’m watching the economic volatility unfold with very little concern.
Obviously, as investors, it's important for us to both grow our wealth and keep it safe.
And the advisor we met with showed us how the deals he was doing had strong safety nets and low risk, which is why many people, including those with retirement funds or conservative investments, trust him with their money.
What you want to understand with any investment you make is whether it can perform in different market conditions.
Will you still profit from it if the market goes up, stays the same, or goes down?
Unfortunately, most investors only rely on the market going up and may not do well if it doesn't continue to rise.
So to recap everything, here are three lessons you can adapt for your own investing journey.
Even though it was a long journey for investors from Australia and New Zealand, this trip was very valuable and well worth the effort it took to organise and attend.