How to Get 29 Rent Checks Out of 28 Units (Case Study)

There is an old Russian proverb which goes something like this:

God protects those who protect themselves.

Most things in life are outside of our control.  I may exercise as much as I want, but I can hardly change my genetic make-up.  I can buy organic label produce, but so long as I was not the one who grew it, I can never be completely sure of what’s in it.  In the same vein, I can never eliminate risk completely when investing – no matter how I try.

However, recognition that we indeed live in a world of pre-determinacy to a large extent is not an excuse to not try and make positive impact on our circumstance.  I do try to grow my own food; I should say Patrisha does.  I do exercise.  And I do practice a certain philosophy when it comes to investing which I believe lends itself to less risk and higher probability of success.  In short, while I recognize that everything is ultimately in God’s hands, I do what can to help Him…

Relative to income-producing real estate, there is a formula that I follow as to what I buy and where.  This formula is based on a global view of basic principals of investing which goes something like this:

We invest for several separate but mutually inclusive and dependent reasons.  One – we want Cash Flow, since this will allow us to live the world of traditional employment and achieve some sort of stability and financial freedom.  Two – cash flow, in order to be effective, must not only be substantive in size, but must also be stable.  Three – the assets we hold must appreciate over time to for us to have future financing and exit options.

A lot can and should be said on this topic, and I encourage you to look into CFFU for a highly detailed discussion.  It should be immediately apparent to you that achieving a juxtaposition of the above three elements is not possible with just any property you find on the MLS for sale.  Indeed, isolating the “right” kind of property which will address all of out investment needs is somewhat tricky.  However, success in doing this is akin to the protecting yourself part that I mentioned in the opening; good things are bound to happen should you choose wisely what you buy…Continue reading at BiggerPockets.com

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2 Comments

  • David D. Reply

    Hi Ben,

    Gee, I never thought of that way. I mean cash flow is almighty important but it was how you said it: (1) get the cash flow; (2) ensure as much as possible it’s stable; and (3) hopefully the asset will appreciate as well so that all 3 elements in the future will possibly secure your wealth. It’s the combination of all 3 that will give you the greatest opportunity at achieving and sustaining wealth.

    As I said I never thought of it that way, but I will going forward.

    • Ben Reply

      Hey David!

      Well – this is the way I see it anyhow 🙂

      Thanks so much!

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