Our Co-Contributor reminds us of others' Perspective

As soon as I got my real estate license in 2003, I was more into investing than selling properties. So, I read books, attended seminars, and became members of real estate investment groups. They were all pointing me to focus on "Cash Flow" when investing in real estate. Cash flow was the name of the game. Everyone I knew in the industry, focused on it. The slogan "Cash flow is king" could be heard from everyone I listened to.

In 2006, I bought my first investment property, a triplex, with the concept of cash flow in mind. A few months later, I bought another one with the same idea. Within a couple of years, I had multiple properties in multiple cities, cash flow being the main driver.

I was expecting to receive a good monthly lump sum from all my properties. I planned to rely on the proceeds of my properties to pay for my living expenses. I was not that far into my cash flow dreams when I was awaken by the reality of investing in real estate.

Due to lack of experience, I was wrongly under the illusion that all my properties would be cash flowing. Not knowing that the reality is that there are always unforeseen situations which could change that equation. My properties were cash flowing on paper, but was draining cash in reality. It was naive of me to consider the best case scenario.

After much loss and disappointments, finally I came to my senses and realized that most of my properties do not cash flow. I learned, in a hard way, that in some rare cases where a property might cash flow, one has to consider the worst case scenario or at the very least a realistic scenario, and for sure not best case scenario. Something always happens to a property that we have not thought of and it tilts the cashflow balance negatively.

I got a clear indication that cash flow was not my cup of tea. It was not realistic for me. It was good on paper, but not in reality. I had to change my real estate investment direction. After much research and observation of others, I concluded to buy a property with exit strategy in mind.

My strategy was that I will buy a property, add value, and wait for the right buyer to appreciate what I have done with the property. For this strategy, I was not dependent on cash flow, and in fact I needed a lot more funds to add value to the property. I made my financial arrangements accordingly and more importantly I arranged my expectations accordingly.

I started investing in properties that had the potential of a growth trajectory. The negative cash flow was not bothering me as much as it used to as I had a long term vision in mind.

Although this strategy had its own risks, but overall my risk was minimal as I was buying a property with a buyer in mind. I would not consider a property if it did not have a potential to add value and a clear exit strategy.

Luckily this strategy worked for me. I took on some significant projects and the outcomes were better than I anticipated. Of course, this strategy has its own challenges, perhaps much more than the previous ones. Not to mention, continuously injecting funds into the project is not fun. My stress level was high as the stakes were high, but at the end it was all worth it.

With the confidence of my strategy working for me, I started preaching others to do the same. I suggested to my friends and people who sought my advice, to invest in real estate based on adding value.

I was very confident in my way of doing business, until one of my Co-Contributors made me realize otherwise. He told me that: "this way might work for you because of your access to funds, but it is not workable for everyone." He continued saying: "most people need cash flow to run their lives, but more so they don't have additional money to inject into the property." "Not to mention," he said: "most people can not wait for years to receive the money." Most people want immediate results or at the very least not paying to the property out of their pocket.

Once again, my Co-Contributor made me realize that I was in love with my idea. I should have known better that if it worked for me, it doesn't mean it will work for everyone.

Our way of doing things are mostly influenced from our experiences and because each one of us have our own unique life situations, our way of doing things may not work for everyone.

We can easily fall in love with our ideas. We forget that others have their own priorities and situations. Our Co-Contributor is the best source to awaken us to the reality and give us a dose of a different perspective.

If we understand that our way is one of the ways of doing things, we might be more considered of other people's situations. At the very least, we will first try to understand people's circumstances and then give our suggestions accordingly.

We can easily fall in the trap of seeing the world from our perspective only. Our ideas are influenced by our circumstances. Our life experiences impact our outlook. As an entrepreneur, we all have our own limitations and we need someone to remind us of others' perspectives.

Our Co-Contributor is our best reminder to show us another way of looking at things. If we fall in love with our ideas and if there is no one to make us realize, we might realize it when it is too late.

A Co-Contributor always looks out for the best interest of a fellow Co-Contributor and the best way to do that is to make us realize that our way is not the only way. Our Co-Contributor balances our outlook by showing us another perspective, as the saying goes: "our friend is our mirror."