I have a dear friend. His name is Darren Sager. His is the first text of the day – each and every day. I wake up, and there it is, on a three-way text thread with him and Brandon Turner. The text starts out the same way each time: Good morning gentlemen…
And then, most days, he proceeds to make a joke (that only he find amusing haha) about my favorite word in real estate – Delta.
Darren is right – Delta is my fave word in real estate. And my favorite phrase is – we make money in the delta.
Guys, this’ll be short, but good. Focus!
What Does it Mean to Make Money in the Delta
Delta, by definition, is “difference”. So, to make money in the delta simply refers to making money in the difference. But, the difference between what and what?
Most simplistically, here’s a chain of logic for you:
If I buy low, then in order to make money I must sell high – the money is in the delta.
If the value in apartments is based on income, then the income when I sell has to be higher than the income I bought – delta.
If I have to grow the income, then I must only buy value-add – delta.
Conclusion
I could literally talk on the subject of delta for hours. I won’t. I promised you yesterday that these articles will be frequent, but short.
That said, focus on the Delta. We buy the Delta. We pay for the Delta – the more the Delta the more we pay.
Get it?
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