Two investors explain why cash flow matters first in real estate. They walk through the framework: check if a property pays for itself immediately, look at upside potential, then finance it. Speaker B adds that rigorous underwriting and realistic projections beat speculation.
Chapters
If you always buy cash flow, your income will always go up. And so I've kept all my deals that simple. It's like, hey, do we have day one cash flow? Do we have the upside we need? Let's find the deal. Let's line up the debt and if needed, let's find the remaining capital and line up the equity and close deals that increase your income. You know, do that 10, 20, 30 times.
That's the story. Yeah. That's the, that's the best approach. There's, it's interesting, you, you see all these deals come across your table and, and being in real estate, so much of what I look at now is these, these large projections, and you've seen this as well, a lot of the day-to-day comes at tearing apart underwriting and pro formas and looking at like, hey, let's normalize this a little bit because last couple years have been a bumpy road. You want to make sure more than anything that you're making safe, sound investments. So I like your strategy, cash flow from day one, no speculation. And if you can just focus on cash flowing being enough for you, you're right, the good stuff will come. It will, you know, hopefully appreciate. You'll have opportunity down the road, but you need to be focusing on that cash flow. It's the most important piece.