Much of the difference between success and failure in real estate investing comes down to how well you manage your money and how much attention you pay to cash flow. That’s the focus of this book:
- Learn how to raise money for large & small real estate investments,
- Learn how to make the most out of the cash that you do have,
- Learn how to buy more property with less money,
- Learn how to maximize cash flow, and
- Learn how to approach each new project from a cash flow point of view rather than a net worth point of view.
It is my experience that most books and seminars about real estate investing focus on net worth. This strategy works great in an up market or a market that is trending sideways, but it is tough to do in a down market. You can easily get caught in a situation where you go over budget while renovating a property, or it takes you longer to fix and sell than you thought, leaving you stretched financially with poor cash flow.
If you focus simply on building net worth, there will be times when you are asset rich but cash poor—well off on paper but unable to buy groceries. That was my problem for the first decade of my investing career. I tried to build my net worth and ran into some serious trouble in the recession of 2008.
Between 2001 and 2010 I had done most of the major strategies: fix and flips, new construction, condo conversions, land development, repositioning old buildings, land parceling and long-term rentals. By 2010, after I worked my way back from the brink with the downturn, I started to look for a better way—a safer way. I began to focus less on building net worth and more on ensuring regular cash flow. I also picked up a few tricks on effective cash management along the way.
For example, to avoid the peaks and valleys of real estate investing, an experienced investor will:
- Temporarily stop buying buildings if they foresee a downturn, or
- Switch to another strategy more in tune with the market, or
- Have two or three exit strategies prepared even before they buy the property (i.e., turn it into a short-term rental until the market improves, or perhaps bring in some cash from a joint venture partner), or
- Most importantly, they will have other sources of cash flow to tide them over until the market turns.
Since 2001, I have bought, sold and owned over 92 properties with over 240 suites. Once I started to focus on cash flow over net worth, I grew my monthly positive cash flow by a factor of 10 within 18 months.
Then the craziest thing happened. My net worth improved dramatically at the same time. By not focusing on net worth (rather by focusing on cash flow and efficient cash management instead) my net worth seemed to take care of itself. Plus I no longer had the feast-or-famine lifestyle that characterized my first few years of full-time real estate investing.
This book is aimed at three types of readers:
- People who already have experience in real estate investing and want to learn how to increase their cash flow.
- People who are looking for ways to raise money to get started OR get bigger in real estate.
- People who want to learn how to manage their existing cash to maximize their real estate returns and be able to buy more for less.
When I first started to invest full time, I didn’t have the ability or the self-confidence to bring in partners, so I self-funded for years. I had to be inventive and customize (often through trial and error) the strategies and ideas in this book to reach my goals.
There was no way I would have been able to do that without thinking outside the box and looking for different ways to make my money go farther. As I came out of the 2008 recession, I didn’t have a lot of cash to work with so I had to be smart. I focused on properties where my dollars went farther, where I could buy cheaper, and where I could recycle and use the same money over and over. I had to increase cash flow and lower costs wherever possible.
Success not only has to do with the amount of money coming into your jeans every month, but also how well you handle your own savings. If you can:
- Make your money go farther by investing in areas where quality, cash flowing real estate can be purchased more inexpensively, or
- Get your money back quicker, or
- Keep the higher cash-on-cash return properties for yourself, or
- Recycle your money and use the same funds over and over.
I will show you how to do all of the above and more. By following the advice in this book, you will increase your profits and grow your savings at a quicker pace. Each of us has only so much to invest, so learn to make the most of what you do have. I have spent years learning how to maximize cash flow and efficiently manage cash resources. Let me show you how. Whether you are just getting started or have years of experience, everyone can benefit from the wealth of advice in this book.
Let’s get started.
Table of Contents:
- Raising Money for Real Estate Investing,
- Large Scale Financing,
- Maximizing Cash Flow from Existing Properties,
- Managing Your Cash for Maximum Results,
- Putting It All Together,
Cash Management in Real Estate Investing
This is the PDF version of the book available for download.
Total Updated and revised to 2021 !!
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