What's the worst investment you ever made in real estate?
Jon Gray: "When I was young and enthusiastic, in 1999 we bought some office buildings on North First Street in San Jose. There was, at the time, a dot-com bubble. I didn’t recognize it. There was a building where the main tenant was called Gobosh dot com or GoBigOrStayHome dot com. And I should have stayed home. We bought the building for probably twice its physical replacement costs. The tenant went bust three months after we did the deal. It was a small investment, but it was so painful."
What’s the best investment advice you ever received?
JG: "I don’t know if it’s advice or what I’ve learned along the way, but definitely the best thing is to be a high-conviction investor. When you dabble and just put a bunch of money on things you don’t know or understand, it tends to work out badly. But when you see something—single-family housing, global logistics, the movement of everything online—and you lean into that, that’s when you have the best outcomes."
Takeaways…
Even the best investors make mistakes, but the most durable investors take them personally and integrate “lessons learned”.
Fight like hell to develop insight and advantage. When you find it, bet on it instead of overly diversifying.
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