Most investors think the yield on their deal is because of something they did.
Half the time, it's not.
I asked Aaron this straight up, what's actually producing the return. And he broke it into two buckets. The market, the macro cycle doing what it's doing... and value drivers, the stuff that's actually inside your control.
He put it a way I haven't stopped thinking about. Yield you hope for versus yield you create.
Yield you hope for is the market being generous. Rates move, cap rates compress, the tide comes in and lifts you with it. You didn't do that. The cycle did.
Yield you create is different. That's the stuff you're actually responsible for, the operational moves, the improvements, the things that still pay off even if the macro turns on you.
Every cycle, the value drivers are what you actually control. The market never was.
Save this for the next time a deal's returns look great and you're not sure why. Go find out if it's the market carrying you, or if it's actually you.