In recent conversations with investors, a common question keeps coming up:
“With all this uncertainty right now, don't you think it's smarter to just sit on cash and wait for better deals?”
It's a reasonable concern. With the new administration's policies settling in, concerns about tariffs, and consumers starting to pull back, there's more uncertainty in early 2025 than we've seen in years.
And let's be honest – when uncertainty rises, our natural instinct is to pull back and take a “wait and see” approach.
It feels prudent. It feels safe. It feels smart.
But is it?
The Invisible Financial Drain
Here's the thing about waiting: the cost doesn't show up on your balance sheet or bank statement, but it's very real.
Let's put some numbers to it.
If you're sitting on $100,000 waiting for the “perfect time” to invest, and even a middle-of-the-road deal would yield 8% cash-on-cash returns, that's $8,000 of income per year that you're sacrificing by waiting.
And that doesn't even factor in:
Missed tax benefits
Lost compounding returns
Purchasing power lost to Inflation
This invisible drain is known as opportunity cost – and it's a concept I think about constantly as an investor.
Time Beats Timing
There's a persistent myth in investing that success comes from perfect timing. Just get in at the right moment, get out at the peak, and you'll maximize returns.
But what most people don't realize is that even successful professional traders – those who've devoted their entire careers to market timing – typically achieve only a 50-60% success rate.
Think about that. World-class market timers are wrong nearly half the time!
What matters far more than your entry point is your duration in the investment.
This is one reason I'm not a huge fan of the standard five-year hold period for multifamily syndications. That shorter timeline makes the entry much more critical and exposes you to market cycles.
With longer hold periods, the entry point matters less because more forces have time to work themselves out. Time smooths the bumps.
A Better Approach Than Waiting
Instead of waiting to deploy $500,000 into that one “perfect” deal, consider investing $100,000 each into five good deals.
This portfolio approach gives you:
Protection against any single deal underperforming
Diversification across different assets
Exposure to different markets
Varied timing of entry points
The question shouldn't be whether to invest but how to invest strategically, regardless of timing.
Even in today's market, opportunities exist. While multifamily deals might be less abundant than before, the private credit space has opened up (and we’re taking advantage of it).
The Bottom Line
Waiting for the perfect opportunity is often more expensive than acting on good opportunities. And even in times of uncertainty, good opportunities can be found.
Take a moment to evaluate your own investing strategy. Are there opportunity costs silently draining your wealth potential? Have you been letting perfect be the enemy of good?
Remember: It’s hard to be an investor if you're not actually investing.