The Importance of Consistently Good Returns: Lesson Learned from Michael Blank

About 6 months ago, I attended a zoom event where Michael Blank was the key speaker being interviewed.

It was only today that I truly got what he was saying.

In the interview, he mentioned that he doesn't want to hit home runs for investors. He just doesn't want to give returns less than promised.

I though to myself. why on earth would you not want to hit home runs?

So in the Q&A portion, I asked him if he could elaborate more on why he didn't want to hit home runs on his deals.

His response was that it would be great to hit home runs, but when managing a lot of investors, for the to repeat, they only have to be given what they were promised in the pro forma to be happy. He said that hitting home runs is great, but it gets repeat investors about the same as when you steadily give promised returns.

I of course said thank you, but am thinking to myself..."I'm definitely going to keep being picky to try to only choose home run deals!"

So why did the truth of this just hit me about an hour ago?

On my way back from California for a real estate event, there's one thing you can expect to see on about every other freeway exit. The Yellow Arches of McDonalds.

I asked myself why and the answer I came up with is consistency.

They don't have to have the best quality or blow your expectations out of the water with each new time you go. They meet expectations that they promise nearly every single time in every single store.

There is almost no way you can ever get a bad meal from McDonalds. You might order something and find out you have a different preference, or not get the right sauce on your order, or want something healthier, but almost never is it enough to make you not want to come back.

It hit me then that that is what Michael Blank was saying. Be the real estate syndicator that provides the promised returns every single time and you will see more and more people reinvest with you.