by Dan Trivedi
16:22 PM, 18th April 2018, About 4 years ago 2
The very things I love about property investing are often the things others can’t stand!
For me, buying and holding or buying and selling go hand in hand. I would never buy a property I couldn’t sell for a profit and I would never buy one I couldn’t rent with a strong ROI! This helps safe guard against changes in the market. I’ve said it more times than I can remember buy for the long term, but take short term wins.
Everyone has heard the phase, turnover is vanity and profit is sanity? Well in property numbers and value is vanity.
You’ve all been there, at the networking event and there are 2/3 people talking “I’ve got 100 flats or my portfolio is £8million!” This is Pure vanity!
People often get confused around Equity. How real is Equity? What does equity actually do for you? How do you spend equity?
Don’t get me wrong, having equity is a very good thing, and more equity is always better than less. Parking cash, paying down debt not only can improve cash flow, and de-risk, but does give a sense of comfort.
For example, having a portfolio with zero debt will always mean you don’t have to answer to a bank and could be safe guarded against things like interest rate spikes. This is a personal goal for me, and to eventually have a smaller, zero debt portfolio, but I’m not ready for retirement yet.
However don’t get confused! Equity doesn’t always equal security!
CASH is KING!
We’ve all read the books, seen the you tube videos and watched the links which pop up on Facebook about how inflation eats away the value of your cash, and you are fool to leave cash in the bank etc etc.
Let me tell you first hand, that in some ways this is correct, but on other it’s false! For me, having cash is KING! In fact having cash is far beyond king, it’s closer to the emperor of the galaxy!
I can’t tell you how many people say they have £50/£100/£300/£500k and they have to get it into a deal. When a deal doesn’t come long, they look at all sorts of schemes like forex, crypto, airport spaces etc etc.
I also CAN tell you I don’t know how many times CASH has saved the day! Some of the best deals I’ve been able to buy, is because I could show the cash! So although I earn pretty much next to nothing in interest while my cash is parked, if I added up the deals it’s allowed me to buy it would show how strong holding cash can be.
Keeping it really simple is the under lining fundamental to this point.
People look at me in disbelief when I sell. “Why would you sell that?” As they look at me as if I’ve gone mad.
There are times where complex techniques, are the best way to win and take forward deals (crikey I’ve built a business off the back of it), but the end result is always a simple project.
Never feel rushed in property!
Something I tell every one I work with is if you feel rushed, you should walk away, because one thing in property is certain, and that’s there will always be another deal. Don’t confuse the felling of being rushed, with that feeling the deal is so good, that you have to get it exchanged in 7 days and you are literally transferring the funds to the solicitor whilst your signing the client care letter.
I have a deal like this at the moment, and it’s so good, I lay in bed at night looking at it on google earth (I know, I know I’m a super geek) I can’t tell you much about it at the moment, but the point is this deal is only happening because of cash.
So if you’re wondering, should I sell, should I refinance or you have a cash pot, but feel you have to do something with it, just remember CASH is king.
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