How Interstellar relates to real estate
I haven't seen anyone make a connection between the Christopher Nolan film Interstellar and buying multi-unit real estate.
I found that the movie had a profound effect on me after watching it 3 times in theaters.
Aside from the main characters connection with his children, these are 3 of the main concepts that I related to in buying 20+ units in the last 6 months:
You don't always know what will happen next. But you have checklists in place to respond. In property management, you are not in control of the daily tenant problems, but you are in control of how you respond to their maintenance and late payment issues. This will determine a positive outcome every time.
Also, when buying you will have a set criteria for purchasing. For example, in a multi-unit property we screen for value-added properties with a minimum of 8 CAP rate, 12% cash on cash, and a 1.6 debt service coverage ratio.
Once we find a property with this criteria, we trust the math and stsrt inspections. We would not do this, without the numbers working out. The key is to get rid of the bad properties fast, and then purchase the property and stabilize the good ones. We usually plan on a 6-24 month stabilization plan. As every real estate, there are patterns, but the timelines vary based on what your end goal is with the property.
2. Be stubborn on your final destination. but be flexible on details and adjust course along the way
In Interstellar, the main characters had to pivot on their plans to save mankind.
In real estate, you will often have to jump through hoops to close deals and get them stabilized.
There will always be things that come up that you are not in control of (sewage problems, roof leaks, late payments, evictions, etc).
However to avoid these problems, you will have a set checklist to process and handle all situations.
Success is a process, not an event.
3. It's a numbers game:
In interstellar there would be no spaceship without the mathematics behind it.
At the end of the day, real estate is a numbers game. You can't make emotional decisions when you buy. It's 100% based on strategy. You must always buy on the numbers and make sure you're getting the right numbers from the seller.
P.S. Here's a highly inspirational song called "Docking" from the Interstellar soundtrack. I enjoy listening to this on loop while I work in the morning. It must be heard in its entirety: