Words from a Wise Real Estate Investor

Filed under: Market Comentary

No… that wise real estate investor is not me. This advice comes from someone with a ton more experience than me and much richer than me. My dad’s cousin, Frank, was a very successful real estate investor, and he offered this advice in 2006 or 2007. At the time, we were on the brink of the big real estate mess that was about to follow.

Frank taught me an important lesson. He said: “Bill, real estate is all about cash flow.”

At the time, I didn’t really understand what he was telling me. The investment we were discussing was something that wasn’t about cash flow for me. Instead, I was putting money on the line hoping that the real estate trends would continue to go up. When the market turned and there was no cash flow, then it made for a really big mess.

Cashflow for Today’s Investments

This lesson is still relevant today, even though the real estate market has recovered from the crash. It doesn’t only relate to your investment properties. But, the advice also needs to be followed for your own primary residence.

Instead of counting on the real estate property with the anticipation of increased value in the future, there is a different way to look at the purchase. Choose a property that makes sense for your cash flow, giving you a long-term solution. Don’t stress about mid-term equity increases; it is better to look towards the future and choose a property that turns into something that really makes cash flow king when the home is paid off.

Personalized Advice for Your Mortgage

Back in the day, I learned the lessons that needed to be learned, and it shaped my own decisions and the advice that I offer my clients. Rather than taking a big risk with a speculative property, it is better to buy something that you can afford and hold onto for the long-term future.

I’d love to have this conversation with you if you are thinking about a real estate purchase. Please reach out to me any time if you would like to talk about your situation. Also, I would appreciate it if you like, share, and comment because it helps out a ton!

Franklin Loan Center | NMLS 237653
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