Posted by When you’ve had a long career in real estate and investment, it’s inevitable that at sooner or later you pass on a deal that you later look back on with a shred of regret, that went onto do something amazing.
I’m often asked how you should mentally deal with these missed opportunities – which are very categorically not failures – which can take many shapes or forms, so I thought I’d share a couple of my own experiences…
My first story is from 2012, during the deepest part of the recession that followed the 2008 crash. I wasn’t living in Ireland at the time but I was keeping a close eye on the Dublin market and read the property pages of the Irish Times on my iPad cover to cover.
There was an old warehouse in the Docklands area on the market for €1.3m. At the time I was personally deep in the red, but I could see this was a massive bargain and could be a great deal. It was right next to a tech company – I thought it could be the deal that would dig me out of trouble. I approached a couple of investors with a view to buying this property, using their money, looking to development management fees and a carry (a reward for putting the deal together and reaching specific performance metrics) for myself.
I had a number of Middle Eastern investors because I’d been living and working in Qatar, but they were fixated on the London market: as soon as I mentioned Dublin, their eyes glazed over. As hard as I tried, I just couldn’t get them interested in this small warehouse.
Even though I knew this would be a winner, I didn’t have the network at the time to go out to other investors. In the end it was bought, refurbed and sold to that same tech company by a different developer who cleared a €10m profit from it a couple of years later… it’s still a little painful for me to think about that even after all this time!
So how did I get over that missed opportunity? To be honest, it wasn’t that difficult: the reality is the deal was never in my control, and I try not to get caught up emotionally in things I don’t have any direct control over. There were so many variables and I had no control over the process. Even if I’d secured the property, the investors may have wanted it turned into apartments rather than a commercial building. In the end, it was one of those ones that slipped away
Around the same time, I was at a weekend barbecue with some friends. We were stood around talking about investment and one of the group, who was very tech-savvy told us all about this new opportunity called Bitcoin…
He suggested that as a group we each invested a set amount into a fund, to buy a small amount of Bitcoin and see what happened. At the time, Bitcoin cost less than $100 per coin and we could potentially have made a killing, but just 3 days later the price had virtually doubled. We decided that we’d missed the boat so dropped the idea there and then.
If we had gone ahead with the deal (and bought at the lower price), at one point in early 2021 my stake would have been worth around $3.5m. Since the crash of course it would be worth substantially less than that, but how do you deal with ‘losing’ that amount of money?
There’s no point beating yourself up. I know myself well enough to know the emotional rollercoaster I would have gone through over the ride up in value. Even if we’d gone ahead and bought at the slightly higher price, our fund might never have reached the price it did.
When the price of Bitcoin started to properly rise, the pressure to sell would have come in from the other partners and we wouldn’t have let the investment grow to its highest potential. With crypto being so volatile, I know for a fact that I would have been far too anxious at the thought of the price dropping and losing our profit, and would’ve checked out far sooner. I certainly wouldn’t have a profit now!
Longterm investing is the way forward. If, for example, you had decided to invest in crypto and got into the habit of tracking it daily or weekly, you’ll be too emotionally caught up whether to keep or sell it – whether you’re making or losing money on your investment.
The key is to invest and forget it. I bought some shares in an Irish company about 10 years or so ago and had forgotten about them, so I was delighted to recently find out that my investment was more than 8 times what I’d paid. Had I been tracking it continually, I would have seen it double, then maybe sold it, patting myself on the back for being an investment genius. By forgetting about it, it’s gone on to make me a lot of money.
It’s the same with property – most of the time the value of property goes up over time (as long as you’re looking after it), so whatever price you buy it for, if you hold onto it for the longterm, you’ll do well out of a sale.
So what are my key takeaways for you? Firstly, don’t beat yourself up for the deals you didn’t do – there are too many variables involved to guarantee that the end result is what you would have ended up with. Secondly, think longterm! Set and forget – don’t check your investments every day, otherwise you’ll get caught up in a whirlwind of decision making.
You can’t dwell on these things, all you can do is use the sense of missed opportunity as fuel to drive your ambitions. Just make sure you don’t miss the next one!