The Genesis
Posted on April 2, 2007 - Filed Under Philosophy |
The story about to be shared will probably span a few weeks. It has been broken down into segments; showing what decisions were made and why. The results of each decision, both good and bad, will also be discussed.
Let’s begin.
Towards the end of 2006, I found myself wanting. Yes, the houses had been completed. Yes, the value had shot up tremendously. But this tactic was not what I wanted to pursue.
As much as I tout Kiyosaki’s philosophy of positive cashflow properties, I don’t practice it. My first project relied heavily upon high appreciation, not cashflow. My desire was for cashflow.
My mind really wrestled with this dilemma. Deep down inside, I understand the ticket to financial freedom lies with income producing assets. Dividends from stocks, cashflow from real estate, income from a business; it all combines to produce a steady stream of cashflow upon which one can live.
I understand this is not free.
For days, I wrestled with this question: How to obtain positive cashflowing properties?
In California, an investor would have to put 50% into a property before it broke even. That’s the market here. For me, I wanted to be able to put 10% down on a property and have it cashflow. But those markets don’t exist in California.
The logical conclusion: investing outside of California.
This realization: I would have to depend on someone else. A property management (PM) company. This would require a level of trust on my part. Was I capable of that?
Then it occurred to me: risk is part of the game. I wanted to sit in the big chair, make the big calls. This is what investors do. Being afraid of failure is ludicrous. What was the worst that could happen? I could lose a few thousand dollars and be forced to write it off on my taxes.
That is yet another reason why the USA is great: investors get a partial refund on their loses. From my calcualtions: it is nearly 40 cents on the dollar. Why not at least try?
The decision was made: I was buying multi-unit properties outside the state of California.
The next logical question: Where to buy?
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2 Responses to “The Genesis”
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Cliff,
You’ve come to the same conclusion as I did. I’m beginning to set up my foundation for getting a large multi-unit. I don’t know where to buy yet either. But I’ve been browsing loopnet and see a couple nice looking cities.
Kenric, you were actually one of the people who pushed me in this direction.
Decidedly I hope your venture pans out!