Often when I counsel students I’ll ask —_Why is you chose to invest in real  estate? The most common answer is: To make more money and build personal wealth! Next I’ll ask: How do you propose to do it? What is your investment plan or strategy? Are you using it now and how long will it take?

Most people have great difficulty trying to explain their investment strategy to someone else. I think this is one of the major reasons why investors get themselves in a financial pickle! The biggest problem is not enough planning is done before the deal is closed. That’s a big mistake which often leads to overpaying. Most often, overpaying means no cash flow or negative flow.

At my FIXER CAMPS I teach students the value of cash flow first. Students must understand where the money comes from, how long will it take – and how much does it cost for fix-up. To me this is very basic stuff, yet you’d be surprised how many students are learning the answers for the first time – and some are already investing. I have found that once students understand the basics, success can follow quickly.

One of the major parts of my personal investment strategy, which has paid big dividends over the years, has been to acquire lower end (affordable) rental units. These properties provide me with “eating money” or cash flow. They are my biggest source of income today. Inexpensive rental units provide a much bigger (return) or “bang for the investor’s buck”. They’ve always been my number one cash flow providers. Obviously, these properties won’t normally sell as rapidly as higher grade rentals or single family houses. However, I’m a firm believer in first things first!

Stated another way — Investors like myself who begin without much money in their wallets need a clear vision of who they are (a poor investor) and what their buying capacity is (not very much). Once you can clearly visualize where you stand as an investor – and assuming you’re just an ordinary-everyday person like me, it should come as no surprise — Cash flow must be your top priority if you intend to stay an investor very long.