Buying a house is stressful in the best of circumstances. Buying a house in a distant, unknown area is a whole different level of stress. That's exactly what my wife and I decided to do -- but we didn't make the decision lightly, or without help. I had a secret weapon that made deciding easier: the alpha version of Osparna's diligence application.
Today, Osparna helps you make better investment decisions by applying decision theory to the evaluation of potential opportunities. In the early days, before we'd focused in on the investment community, the tool was generic enough to help with any kind of decision. So I used it to decide which house to buy. The process is the same whether you're buying a house or investing in a startup: establish your criteria, weight those criteria, rate your options, and review the results.
The first goal was just to get to Florida. The second was to buy a house. If we didn't find one that was clearly the best fit, we were going to rent instead and extend the search -- but ideally, we wanted to move only once. The search started in 2017. We took a couple of weekend trips to Florida to scout neighborhoods, and just as usefully, to find the ones we didn't want to live in. Our realtor showed us a few houses in different areas, and we got a good feel for what was out there.
The first thing I did was write down our criteria for the perfect house. Price had to be right -- we didn't want to overpay, or underpay for that matter. It must have a pool and a hot tub: we were moving to Florida, why wouldn't you want a pool? It must have an office, since I was planning to work from home. It must have 5 bedrooms -- we have 3 kids, two of them with steady significant others -- and 4 bathrooms. You'd be surprised how many houses we looked at with 5 bedrooms and 2 bathrooms, a configuration that still boggles my mind; we'd already lived through the "not-enough-bathrooms" scenario once, and that lesson was learned. It must be in a gated community -- less about security, since there really isn't any, and more about keeping bored theme-park tourists from wandering, and driving, through the neighborhood. And it must be within 20 minutes of Disney World.
Next, each criterion needs a single, quantifiable scale. Osparna scores everything from 1 to 100, and it's up to you to decide how the scale applies to each criterion -- which is worth doing carefully, and worth writing down in the criterion's own description. The pool-and-hot-tub requirement, for instance, could just be a yes or no. But look at enough pool areas and it's obvious some are far better than others. Be specific about what separates a 1 from a 100. Here's the scale I landed on: a 1 for no pool or hot tub and no room to build one; a 10 for no pool or hot tub but room to build one; a 20 for a hot tub with no pool; a 50 for a pool and a hot tub; a 70 for a pool, a hot tub, and enough greenery around it for privacy -- basically the high score; an 80 for a large pool and hot tub with greenery; and a 100 for a large pool, hot tub, greenery, and a pool house.
Simply listing the criteria and defining the scales is half the battle. Doing that made finding the right house a thousand times easier, because we now had an exact list of what we wanted and how to score it. Defining the scales also forces you to see where you're willing to compromise, and to name what actually matters most to you -- which leads straight into the next step: weighting.
You have to decide which criteria matter most. I like to make the weights add up to 100, and Osparna makes that easy by showing your running total as you go -- though the tool works fine with any total, and does the math either way. Giving yourself a limit forces you to choose which criteria outrank the others. If you have more than about seven criteria, you're probably better off raising the total to 200 or 1,000. We had seven, so 100 fit fine.
Then you rate each option. With the scales already defined, this part is easy: look at a house, score it against each criterion, and let the tool produce a weighted total that tells you which house to buy. We had three real options. House A was slightly above budget, but beautiful, and met every need. House B was well above budget -- and, to be fair, it earned the price the sellers were asking. House C was under budget, but needed work.
House A won, though House C gave it a real run. House B's price was high enough that nothing else about it could make up the difference. We actually put in an offer on House C, but the selling agent kept trying to change the terms in ways that didn't make sense, so we kept looking. House A came on the market soon after, at exactly the right moment. We'd been looking for over a year. We knew exactly what we wanted, and we moved on it as fast as we could. The sellers accepted.
The following week, two houses across the street went up for sale and sold quickly too. Both neighbors came over afterward and said they'd wanted our house -- but we'd taken it off the market before they could get their own paperwork together. That was the benefit of knowing our scales and our scores going in: we knew House A was better than everything else on the market, and that let us act with confidence.
Osparna will do the same for your startup or business investments. Whether you're an angel investor or a family office, Osparna helps you put the right process in place to make better investment decisions.