Eric Siu discusses why you stop learning once money starts flowing. He breaks down real estate lessons from loan documents, joint ventures, and failed deals, showing how overreliance on future appreciation kills deals when value drops. Cash flow that hedges against decline beats betting on appreciation.
You don't learn almost anything when you're making money. You learn it when you have to pull the loan documents out and the joint venture agreements out and you sit down and that's when you learn. You're like, oh, okay, this stuff, these pages are real. They come to life. And then you sit down with the lenders and the investors and you walk them through and it's a painful process.
If you were to consolidate the lessons from all of the deals that didn't work out, what were the patterns that you saw?
Future, future growth, future value is going to be more. Even in the condo business, what happened with us and it was The— when you buy something, when anybody buys anything, they want it to be worth more later. And you have to have a strategy that allows for when that doesn't happen. Right. And that's a cash flow strategy. So if you can have a cash flow strategy that hedges value, that the people that are doing fine now are the ones that have enough cash flow to support whatever's happening and they don't have a predefined exit.
