Posted 5 months ago

On the idea of investing solely for cash flow

I have always been a firm believer in investing in what you believe in.  However, in my few years of learning about investment properties, I have noticed that a lot of people are investing in things solely for cash flow and they do not necessarily believe in the product.  For example, investors are buying houses to rent out to other people just for cash flow but they will never live in those properties themselves.  An investor even told me they are okay with it "as long as the outcome is income", which I understand the concept of greed but how can these investors live with themselves?  Let me illustrate how I see it.

It is like if you are a health-conscious person and you open up a fast food restaurant selling burgers and fries.  As a health nut, you will never eat burgers and fries but for your business, how can you expect other people to?  The food (your product) is not your core belief.  So, you are just in the business to trick people for the cash flow.  Is it sleazy to sell a product that you don't believe in?

In another case, a used car salesman knows that he is selling a car with a lot of issues but he continues to try and sell it.  He will not drive the car himself but he is invested in trying to sucker someone else to.  Doing business just for cash flow with no moral compass.  Does that not sound like dirty business?

Bringing it back to investment properties, investors are buying these properties they themselves will never live in.  I want to talk to those people.  I know the following questions sound like attacking questions but I genuinely want to know.  How can you look at a potential tenant with a straight face and try to sell rent to them if you are not willing to live in the property yourself?  Your product (the investment property) is not even your core belief.  Why do you invest in things you don't believe in?  I know you believe in the cash flow but like the fast food restaurant owner I talked about, you won't even eat the proverbial burger you are trying to sell.  


Comments (2)

  1. Hey David,

    Interesting blog... This is a great topic to discuss and explore more to turn to the right solution. Your ending questions are great but I doubt if the capitalist system would permit all to have best answers to them.


  2. Hey David,

    Interesting blog... This is a great topic to discuss and explore more to turn to the right solution. Your ending questions are great but I doubt if the capitalist system would permit all to have best answers to them.