Investing Architect

Category: Videos

  • Property-centric vs Tenant-centric real estate investing

    Property-centric vs Tenant-centric real estate investing

    Ever heard the expression: “When you invest in real estate you make money when you buy”?

    The idea is that the quality of your investment depends on how good a deal you get up front and it’s what I call Property-centric real estate investing.

    This method may work well for you if you aspire to make real life estate investing your full time career. But it won’t serve you as well if you’re looking to invest in real estate long term to create an income stream.

    Here’s why. The flaw in choosing a property centric approach for long term investing is that there might be a mismatch between the property you got a great deal on and the type of Tenants you want to get. And when you put together a real estate portfolio with multiple properties, Tenant issues compound and become your nightmares.

    There’s a better way and I call it Tenant-centric investing. When you invest in a long term investment property, what you’re really buying is Tenant relationships over the period you’re holding the property.

    So instead of focusing on price alone, we focus on the type of Tenant we want to have. Then we ask: what type of property are those Tenants looking for? What’s making them rent here vs there? And we buy a property that can provide those things while also providing a commensurate ROI for us.

  • What advice would I give my 18-25 year old self, knowing what I know today

    What advice would I give my 18-25 year old self, knowing what I know today

    One of the most frequently asked questions I get from readers of InvestingArchitect.com is some variation of: Knowing what you know today, what advice would you give your 18-25 year old self?

    I’ve thought about this question a LOT. The critical concept I didn’t know at that age that I know today is that Money is not the only resource/currency that matters. In fact, 18-25 year olds have a MAJOR advantage when it comes to TWO other resources that can help overcome the lack of investment capital: Flexibility and Time.

    So, the advice I’m giving my sons when they are that age is:

    1. Build and take care or your credit score. Don’t dig a hole that will take you years to fill up again
    2. Buy a home with low/no down payment as a primary residence. Live in one of the secondary rooms or the couch and rent out the others to roommates (it’s okay to be a little uncomfortable)
    3. After a year or so, turn that house into a full rental property and purchase another property as primary residence.
    4. Leverage your flexibility and rinse and repeat that process 3-5 times in the next 3-5 years.
    5. With time on your side, you’ll be AMAZED at what this strategy will do for your financial future. You will easily be in the 90th+ percentile of your peers, with lots more options to live the kind of life you want, not the one you have to.
  • How to make high leverage decisions and bring exponential growth in your life

    How to make high leverage decisions and bring exponential growth in your life

    Real estate investors are very fond of Leverage: the ability to control a higher asset value by investing only a fraction of it in capital and multiplying returns by a factor of 4 or 5 in the process.

    There’s another kind of leverage that can have exponential effects on your life. It’s called Decision Leverage.

    Here’s how it works: you make a high leverage decision once and it impacts your life going forward. Its effects cascade and compound over time. For example: making the decision to automatically transfer 10-15% of your income to a savings or capital account every month. You make the decision once and it will chance your financial life. Plus, momentum and inertia now work for you instead of against you. Another example might be the decision to get enough sleep every night. Yet another might be to read 20 pages a day every day (that adds up to 50 books a year by the way).

    What other high leverage decisions can you think about that can have impressive effects on your life?