I have always dreamed of financial freedom. The word “Financial Freedom” means when a passive income surpasses your expenses. Passive income here means the income that you receive without actively working such as stock dividend, interest from the bank account, and rent from rental properties. There aren’t too many options when it comes to trying to reach financial independence.
Stock dividends are 1-4% at the max with volatility not too many people can digest. Bank accounts pay interest that is below inflation which means you are guaranteed to lose money. Safe Bonds like US Treasury pays less than 3% typically. I also invested in many different products such as oil drilling, gold mining, and pre-IPO stocks that claims profitable enough to begin to pay significant dividends to investors. Unfortunately, none of them kept their end of the promises. Only viable option left is real estate rental properties.
Its land and building secure the real estate investments. The risk is limited, unlike other financial instruments where the value can go down to zero or even minus. I can further limit the risk by buying them at a lower price than readily available market price. We have a strong relationship with premier brokers that places us in a VIP list. We also actively go after pre-foreclosure and foreclosure auctions. We buy notes from banks and financial institutions; We deal with many government agencies with special programs for developing multifamily and SFRs.
We don’t just buy all the properties at a lower price. It has to fit our standard. We have vigorous steps to qualify the property whether it meets our investment guideline. This approach ensures us the objective investing principle. We designed a scorecard to score various essential data. We call it Rule 1 Algo.
Objective qualification and research process and knowledge to acquire the property cheaper further contribute to limiting risk. Our risk perimeter is about 20% max to the downside while reward or profit is unlimited. We only acquire properties that can produce 8 -12 % return per year on your investment even during the down cycle. Gains arising from the appreciation of the properties is a bonus. We don’t try to predict tops and bottoms of a market cycle. We try to create a situation where our investment produces a high return regardless of the market condition. Profits from appreciation are considered a bonus for us. This is our investment philosophy.
WhatsApp us