As you may recall, in my letter from last quarter, I shared about a conversation that began in the pages of the Five Towns Jewish Times publication. A wealth management advisor, Jack Strulowitz, had written an article questioning some of the tradeoffs associated with passive real estate investing. I responded with a piece explaining why I believe professionally managed multifamily real estate can play an important role in a diversified portfolio.
What happened next was far more interesting than the actual articles.
Rather than continuing to debate from opposite sides, Jack and I decided to meet in person. We sat down, spent more than an hour talking through our respective perspectives, and quickly realized that we actually agreed about much more than we disagreed.
That conversation ultimately led us to collaborate on a joint article in the 5TJT, titled When Different Perspectives Lead To Better Investing, linked below.
I wanted to share this experience with you because I believe there is an important lesson in it: not just about investing, but about how we approach our responsibility as stewards of our investor/client capital.
Investing is not as simple as choosing one side or another. Stocks or real estate. Public markets or private markets. Active or passive. Liquidity or long-term appreciation. Every investment involves tradeoffs, and the right decision depends on an investor's goals, time horizon, liquidity needs, tax situation, and risk tolerance.
Jack and I come at the question from different sides of the table. His work focuses on comprehensive financial planning and helping families manage their broader financial lives. Our work at PREP focuses on acquiring, operating, and investing in multifamily real estate. We have different areas of expertise, but ultimately, we share the same objective: helping people build and preserve wealth over the long term.
One point we came to agree on strongly is that the investment itself is only part of the equation. The people behind the investment matter enormously. As I often say, you’re betting on the jockey just as much as you are on the horse!
Whether you are investing in a public company, working with a financial advisor, or investing in a multifamily property, you are ultimately placing your capital and your trust in people. Who is making the decisions? How do they behave when circumstances become difficult? Are their incentives aligned with yours? Are they transparent when things don't go according to plan? These are questions we believe deserve as much attention as projected returns.
This is something we think about every day at PREP. We cannot control every aspect of the markets or the economy. What we can control is how we underwrite opportunities, how conservatively we structure our investments, how we operate our properties, how we communicate with our investors, and how much of our own capital we put alongside yours.
Our conversation with Jack also reinforced something else that has always been central to our investment philosophy: diversification matters. We don't believe real estate needs to replace stocks, bonds, or other investments. Different asset classes have different characteristics and can serve different purposes within a portfolio. Public equities provide liquidity and broad exposure to businesses across the economy. Real estate can provide recurring income, tangible asset ownership, potential tax advantages, inflation protection, and multiple avenues for value creation.
The objective isn't to find the one perfect investment. It is to understand the tradeoffs and build a portfolio that is designed around your individual circumstances and long-term objectives. Our conversation with Jack was a good reminder that thoughtful disagreement, when approached with respect and an open mind, makes us better investors.
A few months ago, we were on opposite sides of a published debate. Today, we have a shared article that reflects the areas where our perspectives intersect. I think that's a good outcome.
Markets will always change. Investment opportunities will come and go. There will always be reasons to be optimistic and reasons to be cautious. What doesn't change is the importance of thoughtful decision-making, disciplined execution, and trust. Those are principles we will continue to bring to every investment we make and, most importantly, to every partnership we have with you.
Thank you, as always, for the confidence and trust you place in our team. We are grateful for the opportunity to invest alongside you and remain committed to creating long-term value with the same discipline and alignment that have guided Park Row for more than five decades.
Link: https://5tjt.com/when-different-perspectives-lead-to-better-investing/
