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.

Continuing our series How to Win Anything, before you even begin, I want to conclude with one of my most important ritual that I do before every BIG keynote presentation and speaking engagement.

These 6 steps, if implemented, will help you live up to the potential of being a true Rock Star Presenter.  (Go here if you missed Part 1 or Part 2)

So here are the half-dozen rituals I do, by routine, before every keynote presentation.




10 Life Lessons I wish I Learned Earlier... 
10-part video series distributed exclusively through DarrenDaily.
Delivered FREE by Darren Hardy. Register here:

How often do you say this yourself:
“Man, if I only learned this earlier in life, think where I’d be now!”

Me? Several times a day!

You probably already know about my mission to prevent mistakes, shorten the learning curve, and accelerate the success of entrepreneurs through The Entrepreneur Roller Coaster.

Besides entrepreneurs, I am also worried about our graduates.

Statistically, they are leaving school with more debt and are less equipped for the modern marketplace than at any time in history.

Get this... graduates are expected to earn less in the next 10-15 years than they did the past 20. What?! That’s terrible!

I am writing you this message to ask you to help me help our graduates.

Over the last several months, I wrote down 10 life lessons I wish I knew earlier in life.
I then recorded them on video in a 10-part series that will be distributed exclusively through DarrenDaily (yes, for f-r-e-e!)

All I want you to do is to help spread the word to every graduate and your friends who know graduates. Really everyone, as these life lessons apply to ALL of us.

Just send them here to register (with your passionate prodding):

If you are already subscribed to DarrenDaily you’ll be receiving them automatically (no need to re-register.)

The series will begin Monday, May 18th.

Here’s a snapshot of what the series will contain:

  • No. 1: Best Advice I Ever Received
  • No. 2: Life’s Most Powerful Influence
  • No. 3: Maximizing Your Youth
  • No. 4: WARNING: Societies Greatest Disease
  • No. 5: The (Brutal) Cliff Notes of Life
  • No. 6: Imprisonment: Break The Shackles
  • No. 7: Activate Your REAL Motivation (no one else will admit this to you)
  • No. 8: How to ‘WOW’ When it Matters
  • No. 9: Life’s Best Decision Filter
  • No. 10: Seeking Advice (and when not to)

I think of the extra millions I could have earned (and the several I wouldn’t have lost!) if I knew 20 years ago what is in these 10 awesome life lessons.

The compound effect of the added influence, power, relationship capital and success I would have gained… if I knew then what I know now. It boggles my mind!

Bottom line, this is the stuff they don’t teach you in school (but should!)

And hey, just to make it clear, this series is not limited to new graduates only.
These are life lessons everyone needs to know (and most still don’t know).

It all starts this Monday, May 18th, but only for my DarrenDaily friends.

If you are not already a DarrenDaily subscriber click here now.

And be a hero! Send this to every high school and college graduate you know.
You are welcome to Facebook, Tweet, LinkedIN, etc. to encourage your friends, family and colleagues to register for this 10-part mini-series on life’s greatest success lessons. I wish I had a friend like you back when!

Life's Greatest Success Lessons

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