Strategy - Chapter 1B

Why did traditional business plans fall short for the author in developing a real estate Portfolio Strategy?

• They lacked financial forecasting tools

• They didn’t incorporate real estate-specific financial models

• They didn’t consider lifestyle and personal motivations

• They couldn’t be applied to single-family homes

In the author’s framework, what is the functional difference between “strategy” and “tactics”?

• Strategy is about branding; tactics are about property acquisition

• Strategy is long-term portfolio planning; tactics are short-term actions supporting it

• Strategy focuses on financing; tactics focus on renovation

• Strategy is a financial model; tactics are based on tax laws

Why is the term “strategy” often confusing in the real estate community?

• It’s a new term

• It’s used interchangeably with deal types and asset classes

• It’s a term borrowed from corporate finance

• It refers only to flipping houses

Which question best illustrates the importance of defining your Vision?

• What’s the cap rate in this market?

• Should I invest in REITs or mutual funds?

• Should I flip houses or buy rentals?

• Which real estate license should I pursue?

What metaphor does the author use to explain the importance of starting with Vision?

• Building a skyscraper with no crane

• Road-tripping without a GPS

• Building a house without a blueprint

• Managing a business without a logo

According to the author, why is it risky to begin investing without a defined Vision?

• You’ll pay too much in taxes

• You risk choosing tactics that conflict with your goals

• You won’t qualify for financing

• Your property manager may quit

What role does Deal Design play within Portfolio Strategy?

• Determines the exact ROI of each property

• Filters tactical choices based on your Vision

• Helps you get the lowest mortgage rate

• Prioritizes properties based on market value

Which of the following is NOT listed as one of the eight Deal Design elements?

• Market

• Tax strategy

• Management plan

• Ownership structure

What is one risk of trying to pursue too many deal types at once?

• It leads to higher tax brackets

• It can prevent portfolio diversification

• It dilutes alignment with your Vision

• It reduces the need for capital

Portfolio Management is primarily concerned with:

• Tracking market cap rates

• Executing on Vision and Deal Design through specific actions

• Calculating depreciation schedules

• Applying for insurance and zoning approvals