Think and Grow Rich
Think and Grow Rich
The Science of Getting Rich
The Science of Getting Rich

Matt Napier's Real Estate Warning to InvestorsSince the beginning of the Great Recession, there has been a debate on cash flow between real estate investors, many of whom learned some tough lessons when the Recession began (including myself). Specifically, the debate is: What kind of deals should you focus on and how is your money best used!? Should you focus on creating equity or focus on creating solid income and cash flow?

You may be saying that they don’t have to be mutually exclusive. While that is correct, many investors tend to focus on either building equity OR cash flow. To me, the decision of what kind of deals to focus on is made easy if you boil it down to one thing- how much money do you need right now to live the lifestyle that you are already living (provided it’s already a decent standard of living) and do you already have enough cash flow to live off of on a monthly basis? If you do not have enough to live off of, do NOT focus your efforts too heavily on equity build up. Instead, focus on cash flow (quick flips, wholesaling, and only rentals that will generate strong cash flow); investments that will put cash in your pockets within 1-9 months.

One of my mentors when I got into real estate investing nearly a decade ago, Del Hinds, who headed the SCREIA, made a point of continually telling me not to focus too much on gaining long-term equity, until I had enough to live on today. His famous words still haunt me- YOU CAN’T EAT EQUITY! I also had another mentor that swore to me, you better have a sure fire exit plan and back up strategy if it doesn’t work. I will explain that more in a minute, but for now, let’s talk about Del’s words. At the time, I thought that he just had a different approach to investing, but he was 100% correct. Although I’d built up a significant pile of equity in properties, that was slowly being squeezed out each month when the Recession hit and since I didn’t focus on strong cash flow from the beginning, the $100 to $150 I was making per property on gross rents (before expenses) barely covered basic maintenance and vacancies, meaning my true profit per month on rentals was close to zero.

This serves as a warning. If the economy goes into another recession (which is certainly possible given the lack of fundamental improvement in the economy and massive spending by our government) and you do not have more than enough cash flow to live on already and are focusing too heavily on equity, change your focus… FAST. Focus on wholesaling, rehabbing, and flipping properties, or if you do buy rental properties, ensure that you have at least 30 to 35% cash flow after PITI payments plus a 10% allowance for vacancies and a 10% allowance for repairs (I actually look for 50% net cash flow now). Just because there are enough properties with potential equity that we can buy all day long right now, don’t buy too many properties too quickly if the strong cash flow isn’t there, and if you’re choosing not to re-sell them right away. Your equity may get squeezed out and you may be stuck with a property that you can’t sell for what you thought, and then you’re holding onto properties that aren’t cash flowing well enough to make it worth your time. You’re one of the smart ones though; you know to focus on cash flow, and thus, you will be a successful investor.

Matt Napier

With nearly a decade of experience in specialized niches of real estate, Matt is considered a highly knowledgeable real estate investor in the Charleston, South Carolina area. Matt has dedicated himself to learning highly specialized skills which allow him to find high-return real estate investments for his clients and his investment company, The Napier Organization. His company offers high-return investment opportunities to select individuals and funds, secured by real estate. In his free time, he enjoys coaching new real estate investors on the technical details of real estate investing.

The wait has become unbearable….

I’ve been working very hard to put together the podcast. Being a perfectionist, I’ve put off releasing it because it’s just not perfect enough.

Then, the realization hit me that maybe it’s best that it’s not perfect. When it comes to these things, being real is much more important.

The Real Real Estate Investing Podcast

After editing the initial episodes, I’m very happy to say that they are very real.

It took some persuading, but my initial mentor (that still mentors me to this day), agreed to be interviewed. He is none other than my dad. :)

Now my dad doesn’t like to talk publicly, especially about business, but he did this for me and you, my audience.

So, if you want to find out more, not only about how me and Melissa got our start flipping houses, but also about how my father got his start in this business, you will definitely want to check out the podcast.

I’ve also interviewed some other local investors that have amazing stories that I’m sure you will gain a lot of insight from.

Next Week is the Big Day!

I’m going to release the podcast next week on Tuesday, October 13th (as long as iTunes accepts it within a day of submitting it).

As soon as it’s live I will be sending out an email to subscribers to this blog with links to the podcast on iTunes and Stitcher.

Click Here to Subscribe FREE to Flipping Junkie

I can’t wait for you to experience the new Flipping Junkie Podcast.


The post Flipping Junkie Podcast Going Live Next Week! appeared first on Flipping Junkie.

The Epic Odyssey

The entrepreneur journey is usually an epic odyssey--one YOU can succeed at as Clyde is going to prove, no matter how old (or young) or your prior experience (failure or lack thereof).

I recently visited a local California farmers’ market and met Clyde, the owner of the Desert Olive Farms booth. Clyde looks like your quintessential cowboy; but as we talked I got the sense that this guy had seen more than just a few rodeos.

Like many of the great masters of reinvention, Clyde started early... CONTINUE TO POST


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