Property is my vehicle - I invest in shelter. I take risks on the way into low-risk investments. That risk comes in various forms such as creative financing, taking on a property with a bad tenant, an extremely run-down building. I am a cashflow investor that uses value add strategies to manufacture equity regardless of market conditions. I would rather make a little bit on a larger portfolio with minimal risk than make a lot on a lower volume with increased risk.
The properties I buy are in below average condition, at below average price, in affordable areas, collecting affordable rents. I renovate immediately to generate equity and improve the rental return. I withdraw equity as quickly as possible up until the amount of cash I had to invest. 100% of the rental income is attributed to the costs of holding and the pay down of the loan. The deal then owes me nothing, every dollar of profit is earned on $0 invested. I take the initial funds - rinse and repeat with the next purchase.
Unit blocks best suit thanks to commercial financing, and they tick every other box. I'm interested in exploring build to rent developments in the future. Flipping is a job, not investing so it doesn't follow the investing rules. The profits are used to for deposits to acquire more investment grade properties.
I allocate 10% of my personal net worth to interesting property projects for even more fun. Treated like a satellite portfolio - Profits will be rolled back into future fun projects that interest me but don't meet my investing criteria, hotels for example.
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