June 28th, 2010 // 4:37 pm @ Nik
“It’s not how much money you make, but how much you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki, author, Who Took My Money?
For most investors, profitability is the primary, and in some cases sole, factor used to decide whether or not to invest in something. They fly from deal to deal with no system in place.
Like an eager puppy that runs to whoever will pet it, they rush into any deal as long as they’re convinced that it will make them money. Unfortunately for them, their profits are as fleeting as their focus. They make good money on one deal, average money on another, and lose money on the next. They’re reduced to calculating returns based on averages over time, rather than the performance of each individual deal.
Also, investors who elevate profit above all other factors are those who tend to spend money as fast as they make it. They have to keep making it in order to support their extravagant lifestyle, which creates a self- reinforcing cycle. They become addicted to money and lose the ability to put it in its proper perspective as a tool and a byproduct, rather than an end in itself.
In Strait Path real estate, we’re not just looking to make money — we seek sustainable, consistent, and predictable profits. We don’t want the highest returns — we want the best returns when considered in light of every other investment factor.
Without a holistic approach, perspectives on profit become misguided. No amount of money is worth exposure to high risk and/or creating a win-lose transaction. The more time and effort you have to spend on a deal, the less it should be worth to you. The more you must depend on appreciation, the less appealing the opportunity becomes.
Category : mind set &Real Estate Compared & Contrasted &Real Estate Investing &Strait Path Real Estate
June 25th, 2010 // 4:36 pm @ Nik
Anyone who thinks that it’s impossible to make money through real estate in a diving or stagnant market is using the wrong system. Why would anyone want to spend time, money, and effort building something that will eventually crumble because of market forces beyond their control?
Why would anyone want to be subject to the whims of the market?
Of course, nobody wants insecurity and instability, but most people don’t know how to create security and stability with their investments. They follow the mainstream financial media, which teaches that “diversification” and “dollar cost averaging” are the keys to financial security.
The implicit message is that you can do nothing to control your investments: since you are subject to the fickleness of the market, the only route to take is to invest in a lot of different things, and then hope and pray that everything doesn’t plummet at the same time.
“Wide diversification is only required when investors do not understand what they are doing.” —Warren Buffett, investor, philanthropist
The truth is that long-term financial stability can be created. It is possible to secure almost full immunity from market fluctuations. In fact, the Strait Path system doesn’t even depend on appreciation to be profitable; what the market does is practically irrelevant.
In contrast, most real estate strategies require market cooperation. Strait Path followers view appreciation as icing on the cake — it’s nice to have, but it’s not necessary to enjoy sweet deals. They know that depending on appreciation is speculative investing — in other words, gambling. Market appreciation is beyond the control of the individual investor. We teach investors to profit from the things they can control. If things go well beyond that sphere, they benefit, and when things turn sour, they’re protected.
Category : Investor Experiences &Mortgages &Real Estate Investing
June 24th, 2010 // 4:34 pm @ Kris Krohn
Every investment system that creates win-lose transactions and elevates investors at the expense of buyers will inevitably fail. Get-rich-quick schemes built on manipulation and deception are the fastest route to failure, the loss
of self-respect, and destruction. The only sustainable, legitimate, and worthy path to wealth is to create real value for others — in other words, to serve people on their terms.
If you think that the only way to create wealth in real estate is to take advantage of the ignorance, fear, and/or greed of others, you’re reading the wrong book. If your intention is solely to make as much money as possible for yourself, you will end up earning only a fraction of what is possible if you were to focus more on helping others.
Service to others is a key to wealth creation. Those who serve the most earn the most. Exploiters may enjoy wealth, but they don’t enjoy peace of mind and self-respect, and their wealth is almost always short-lived.
• How well does this system/strategy serve others?
• How could it better serve others?
• Is this system fair and equitable?
• Does it create win/lose scenarios in any form and to any degree?
• Does it take advantage of fear, greed, and/or desperation?
• Will it put everyone else involved in the transaction in a better, or a worse, situation?
June 23rd, 2010 // 4:33 pm @ Nik
“One of the fantastic benefits of the Strait Path system is the mitigated risk. With one of our investment properties, the buyer-tenants we had were unable to continue with the purchase of the home.
The down payment they had made toward the house was enough for us to cover just a couple of mort- gage payments, if it came to that. Luckily, we were able to find new tenants within the month, so we only had to cover one mortgage payment with that reserve down payment. The new buyer-tenants were able to invest even more to build immediate equity.
They have been fantastic and are making improvements to the home while working toward ownership. They are planning to attend classes to prepare them for successful home ownership. This system really reduces risk for everyone — including tenants.”
Category : Real Estate Investing &Testimonial
June 22nd, 2010 // 4:31 pm @ Nik
You’ve heard the cliché that if you want to increase your returns, you must increase your risk, right? Do you believe it? Do you think that commercial real estate investing is risky for Donald Trump? Do you think that building a business is risky for John Assaraf or Michael Gerber? Do you really believe that you have to choose between a conservative approach with low returns and a risky approach with high returns?
Typical Investing: High Risk = High Return Strait Path Investing: Least Risk = High Return
That cliché is a deception perpetuated by institutions and individuals with vested interests — by convincing you to take on more risk, they can transfer their risk to you. High-risk investing isn’t investing at all — it’s gambling. It’s for those who get a thrill from the game or for those who didn’t work hard to earn their money (easy come, easy go). It’s certainly possible to win big with high-risk investments, but it’s more likely that you’ll lose big.
Is this really how you want to live your life? Would you prefer to feel anxious or secure about your investment choices? When investing is done right, it’s both safe and lucrative. It does require you to have more control and to be more actively involved than traditional investing, but it’s doable. Our clients prove it every day.
Personally, I’m highly averse to risk. I strive to do everything in my power to reduce risk and create certainty. I want to feel confident in my ability to earn a profit with each investment. This is why I reject 401(k)s, IRAs, and other similar vehicles — they’re way too risky and I have far too little control over them.
It’s also why I shun any form of speculative real estate investing. I’ve analyzed every other form of real estate to be able to do just that. High-flying, risky strategies have no place on the Strait Path.
No amount of money is worth the fear, anxiety, and uncertainty. And, interestingly enough, our system makes higher and more consistent returns than any other, while reducing the risk. This may sound paradoxical, given how often we’re taught that high risk equals high returns. Once you understand Strait Path real estate, however, it becomes common sense.
• How risky is this investment?
• What’s the likelihood of its success/failure?
• What guarantees does this investment carry?
• Is this investment collateralized?
• Do I have a solid exit strategy?
• What options do I have if things go wrong?
• How can I reduce my risk as much as possible?
Category : mind set &Traditional Investments
June 21st, 2010 // 4:29 pm @ Nik
A strong work ethic can be both a virtue and a weakness. I’ve known many people who are proud that they are “hard workers,” yet oftentimes working hard gets in the way of working smart. These hard workers often burn out when results don’t meet expectations.
Does your real estate strategy require hard work, or smart work? Are you engaged in actual productivity, or mere activity? Just because a person exerts energy doesn’t mean that he or she is producing real value. If that were true, you could shovel holes in your backyard and become a millionaire just through the activity of shoveling.
Productivity results in greater value. In other words, it results in profit in one form or another. Many real estate strategies require the exertion of energy that is often wasted. For example, a lot of fix-and-flip practitioners don’t realize the difference between market value and perceived value. They put a lot of money, time, and effort into cosmetic fixes that don’t raise the true market value of a home. Strait Path real estate, on the other hand, captures the market value without wasting all that energy.
I once met a man who had purchased fourteen investment properties in a city three hours from his home. After a year of six-hour commutes, he got burned out and sold the properties, even though he was making money. He learned the lesson that profit isn’t the only consideration when it comes to investing.
• How much effort and hands-on involvement will this investment require?
• How can I reduce my effort?
• Are the returns worth the effort?
• Is this sustainable — can I keep putting forth this much energy for a long period of time, or will I burn out?
Category : Investor Experiences &Mortgages
June 18th, 2010 // 4:28 pm @ Nik
Real estate is a complex, multifaceted industry. From finding deals and negotiating to signing contracts and managing properties, it requires massive amounts of knowledge and time. However, not all systems are created equal. Each form of real estate has specific, intrinsic time commitments.
Never, ever underestimate the value of time. This is one of the biggest mistakes I see would-be investors make. People get excited about the prospects of real estate investing, jump in headfirst, and then spend way too much time doing the wrong things, or doing things that they shouldn’t be doing themselves. The inability to delegate, and thus maximize, time is the curse of the do-it-yourself types.
Successful and sustainable real estate investing requires that you learn how to reduce the time you expend, while at the same time increasing your profits. The more time you spend on any individual deal, the less time you have to spend on creating multiple deals.
The more time your strategy requires, the less successful you’ll be, and you’ll be inclined to wash out of real estate investing entirely. The more time an investment takes, the more it feels like a job, as opposed to a true investment, which should demand passive participation on your part.
The success of the Strait Path system is largely a function of speed. Speed is achieved by eliminating flawed perspectives and habits, focusing on the right deals in the right ways, and leveraging the time, talents, and efforts of others. In short, you’ve got to use the right system executed by the right people in the right ways.
• How much time will this investment require?
• Are there ways that I can reduce the amount of time I spend on each deal?
• How can I leverage the time, talents, and efforts of other people while still managing the investment responsibly?
Category : mind set
June 17th, 2010 // 4:25 pm @ Nik
The Strait Path system is the most sustainable form of real estate investing available to most investors.
It was created by studying all forms of real estate investing, identifying and incorporating the good elements of each, eliminating the flaws, and then putting it all together in a simple, stream- lined, coherent, replicable, predictable, and safe system. It’s the system I continue to apply with unwavering dedication in any market.
It allows me to serve individuals, families, and society in ways that are impossible to accomplish with other systems. It always makes sense, everyone who applies it properly can be successful, and it avoids every pitfall that drags down investors who take the “broad and crooked paths.”
Let’s consider each of these six elements in turn to understand why they are so important. Each element is followed by questions to ask your- self as you’re considering any type of investment. We will then compare and contrast the Strait Path system with other forms of real estate.
Category : mind set &Real Estate Compared & Contrasted
June 16th, 2010 // 4:19 pm @ Nik
The Six Elements of Successful Investing: various Methods compared and contrasted
I put more than $15,000 and hundreds of hours of work into my first property. I eventually sold it, making a $54,000 profit. My second property required $6,000 of repairs and about sixty hours of work, and I made over $100,000 upon selling. I never set foot on nor did I put a penny into my third property, which I sold for a $20,000 profit. Which deal yielded me the greatest return?
Even though my second deal made me $100,000, it still required a lot of time and money. My third property was the winner because it only took a few hours of my time and no money.
Profit is just one aspect to consider when you’re seeking the best way to invest. Granted, it’s a vital factor, yet far too many people consider it to be the most important, which leads to faulty decisions. There are actually six elements of successful investing, all of which must be considered with every deal, every system, and every strategy in order to make wise investment decisions.
Category : Real Estate Investing
June 14th, 2010 // 4:20 pm @ Nik
When I began creating the Strait Path system, I wasn’t just looking for what would make me the most money.
I wanted a system that would create the greatest profits after considering these other core factors. Everything else being equal, I prefer to make $20,000 in a few hours of my time versus making $40,000 with a hundred hours of my time. I don’t care how lucrative a potential opportunity is — if it’s highly risky, I stay away from it.
A strategy that may make me tons of money in a hot market could very well tank when the market turns.
What sets the Strait Path system apart from almost every other form of real estate investing is one key word: sustainability. Strategies and systems that focus on profit alone may make money in the short-term, but they are unsustainable.
This applies to every system that does not consider each of the six key elements equally and holistically. These inconsistent, unreliable forms of real estate include the following: rentals; fix-and-flip; lease options; speculative building; equity leveraging; distress sales, including short sales and foreclosures; land development, residential development, and commercial development; and multi-unit investing.
Category : mind set
