Creative Destruction

By Rob Jafek, Principal, Boomerang Capital Partners

We chase that perfect alignment of price, timing, financing, and comfort. But markets don’t reward perfection; they reward participation. The perfect deal is a mirage, and the longer you stare at it, the more opportunity drifts past.

Economist Joseph Schumpeter called capitalism a process of “creative destruction”, a continual tearing down and rebuilding that drives progress. Real estate is no different. Every neighborhood, every project, every cycle lives inside that churn. What looks like chaos is really renewal. And the investor’s job isn’t to avoid it — it’s to adapt within it.

The Myth of Precision

We like to believe a spreadsheet can deliver certainty. We model five-year rent growth, run discount rates to two decimal places, and convince ourselves that precision equals safety. Or maybe findgreat value in walking the property and relying on intuition and experience. But valuation is always both art and science. The inputs are guesses, the markets evolve, and even the best analysis depends on human judgment.

Perfectionists often miss the lesson hidden inside that truth: the value isn’t in the model,it’s in the discipline. The purpose of underwriting isn’t to predict the future; it’s to organize your thinking well enough to make a decision when the future surprises you. The investor who makes twenty real-world decisions learns more than the one who thinks endlessly without acting.

“Creative Destruction”

Economist Joseph Schumpeter, writing in 1942, called capitalism a process of “creative destruction”, the continual tearing down and rebuilding that drives progress. Real estate is no different. Every neighborhood, every project, every cycle lives inside that churn. What looks like chaos is really renewal. And the investor’s job isn’t to avoid it but rather to adapt within it. Growth depends on the destruction of what no longer serves. Cities prove it daily. Phoenix has reinvented itself for a century: from citrus groves to subdivisions, from single-story retail to vertical mixed-use, from cul-de-sacs to infill density. Every teardown, every rezoning, every adaptive reuse is an act of creative destruction.

Some helpful shorthand, borrowed from U.S. Marine Corps culture and training, incorporates and adds to this with the dictum: "improvise, adapt, and overcome." Improvise: Use what you have, not what you wish you had (and I don’t think many participants today think of this market as the one they wish they had). Adapt: Adjust quickly to changing conditions. Overcome: Accomplish the mission anyway. What matters is forward movement, with success based more on momentum and initiative than on moves based on perfect information. No one is going to wait for you to decide,you’ll never have 100% certainty; so, you move, adapt, and adjust in motion.

Build a Repeatable Framework

Professionals who thrive through cycles don’t predict markets; they build frameworks sturdy enough to survive them.

That means:

• A clearly defined (but broad) buy-box that filters noise and focuses time.

• An evolving checklist for underwriting, due diligence, and closing discipline.

• A post-mortem habit of reviewing what went right and wrong after each exit or refinance.

That process doesn’teliminate uncertainty; it absorbs it. Instead of trying to control outcomes, you control preparation. When conditions shift, and they always do, you’re ready to pivot instead of pause.

TLDR (a.k.a Conclusion)

Real estate isn’t static. It’s the embodiment of Schumpeter’s principle of renewal through replacement. The edge belongs to the investor who accepts impermanence as a feature, not a flaw.The perfect deal doesn’t exist because the market itself never stands still. What exists are imperfect opportunities within a living, changing system, each a small act of creative destruction in motion.

Improvise. Adapt. Overcome.