“I believe [analysis paralysis] is the one thing people consistently get wrong about real estate,” says property consultant Keyan Chang. “They’re so focused on ensuring nothing goes wrong that they never make a move. Nothing goes wrong for them, but nothing goes right either!”
Keyan Chang is the President of Key Realty Consulting, a company that manages over $12M in assets. He reckons this trap comes from a general lack of research that prevents people from seeing the big picture.
“Every time I talk to someone who says they’re interested in real estate, the first question I ask is why they haven’t started investing yet,” says Chang. “More often than not, they say they have no idea how to get started or what to buy. And when I ask if they’ve done any research on the subject, they say no. That’s the problem.”
Keyan Chang himself never struggled with analysis paralysis. He considers himself a “delusional optimist,” someone who shoots for the stars and figures out how to get there along the way.
While doing sales and marketing gigs to put himself through engineering school, Chang stumbled upon a property investing opportunity from a friend who went to Brigham Young University (BYU). His friend told him there was a shortage of BYU-approved housing because of a rule that said unmarried students must live within a one-mile radius of the school. Chang recognized that he had a golden opportunity and got his friend to split the costs of buying a five-bedroom apartment by the school. Chang’s friend lived in one of the rooms, so while he physically managed the property, Chang managed the financial aspect of their investment.
From that initial foray into real estate, Chang established a remarkable career and reputation as a property consultant. “I still consider myself a delusional optimist, but since I’m dealing with multi-million-dollar deals, I also balance that out with careful due diligence and risk mitigation,” he says.
Before investing, Keyan Chang pre-determines how much a property might sell for in the future and how much rent it might command in the current market. “I look at every possible exit strategy, so I can decide the best play or the best thing to do with the property,” says Chang. “After that, I get quotes for the taxes, the insurance, and everything I have to pay for. Then, I run a few scenarios to account for situations like low vacancy rates to high maintenance costs. This is how I ensure that my numbers are as real as possible. And only when I have all those data points do I pitch the property to someone who might be interested in investing.”
Keyan Chang says this is the kind of research people should do if they’re genuinely interested in real estate investing. “People usually ask me for recommendations on what real estate books they can read,” shares Chang. “I tell them just to do it. I can help you, sure, but I won’t be helping you by assigning you some readings. Instead, let’s find some properties that can make you good money and do our due diligence. Stop asking yourself what could happen if everything goes wrong. Instead, imagine what can go right.”
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