The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
While investing in real estate might look like a simple and attractive method of simply growing your net worth at first, many don’t realize just how much work is involved. In order to get value from your investment, you have to manage it and place value into it. Many new investors find themselves surprised at just how much management of their investment is truly required to make the investment as a whole worth their while.
Richard Wilson: Now that you’ve been with a multi hundred million dollar real estate investment company for over 20 years yourself what do you see from your particular view of the forest that that most investors and investment firms don’t realize or that’s not obvious?
Leonard Way: Great Question. I’m going to stick with your analogy of the forest there. You know the forest is made up of lots and lots of trees, and every one of those trees has the ability to impact the investment both on a positive and a negative basis. So in order to manage that investment you have to manage the trees. What do I mean by that? It’s the day to day management of real estate. I don’t think that’s so obvious to people trying to get into real estate. They think about “Oh, I want to own real estate. This will be great for me.” And they go through the acquisition process. And then as I said before it’s like the proverbial dog that caught the car – you know, now what? You’ve got to go through the day to day asset management of a property. That’s where you’re going to create your value, create the returns for the property. You know, real estate, particularly multi-family real estate that we do really just demands day to day management. And an investor should never underestimate the amount of time and effort that such management does require.
Richard: Right. Like anything else, it looks easier from a distance, right? And then once you actually get into it you find out there’s 400 different nuances to actually succeed and excel in a niche. I’m sure like most other things in life and business.
