Rich Investor Poor Investor

[Matthew Irish-Jones]

Over the course of 12+ years as an investor, property manager, top 100 agent, construction manager, and a general student of Business I have seen my own portfolio performance, as well as that of every investor we manage properties for.   Below are what I see from investors that make it vs those that don't. 

RICH INVESTORS ____________________________________________________________________________________________________________________

- Buy great properties 

- Or... Front load the risk and build great properties by gutting and rebuilding units from the inside out, while having the experience and know how to pull this off

- Buy great locations and pay through the nose for them

- Buy for long term equity and appreciation, they are ok with barely any cash flow if its a great location and a quality asset

- Value Asset condition over cash flow

- Value location over cash flow

POOR INVESTORS ______________________________________________________________________________________________________________________

- Chase cash flow in C class or lower locations 

- Buy crap properties that have 15% CoC returns and a ton of differed maintenance that they fail to itemize properly

- Value cash flow over location and asset condition 

- Look in high risk areas that no one else is looking... for a reason 

- Buy inexpensive properties because they do not have enough funds to get into a B class location.

[Nathan Gesner]

Quote from @Matthew Irish-Jones:

Different strokes for different folks, and it changes over time for a variety of reasons.

I think there's great value to starting cheap. I started with a hoarder house for $55,000 in a market where the median home price was $275,000. It was a painful six months of renovation, but it's not had a day of vacancy since and is now worth 5x what I paid for it. At the point in my life, I couldn't possibly afford to buy a fully renovated house with zero cash flow and play the appreciation game.

As I built confidence (and savings), I bought bigger properties. They were still rougher, off-market, creative financing, etc. I had limited resources and needed the upside. I even bought a self-storage facility, but even that was a play for cash flow.

Now I'm at a place in life where I can afford to buy nicer properties, trading cash flow for less work.

I've been investing for seven years and hope to go for another 30, so my methods could easily change again.