This post is part of a series:
Part I Part II Part III Part IV Part V Part VI Part VII Part VIII Part IX
Yesterday we talked about our why.
Today we are going to talk about the how. How do we become financially independent as quickly as possible?
It all starts with having a wealth strategy and specific investment criteria in place.
Think about horse racing for a minute here. I’m not big on the sport, but my old man was. I only know enough to know that when people race horses, they put blinders on them.
The blinders restrict the horses’ vision so they can only see what’s in front of them. What’s in their lane.
You know why they do that?
Because if the horse has full range of vision, it might start paying attention to what the horse in the next lane is doing. And if it does that, it runs the risk of drifting. It might even wipe out, taking a bunch of other horses down with it.
Our wealth strategy and our investment criteria do the exact same thing. They keep us focused on our own plan.
My wealth strategy is simple. I use rental real estate to build monthly cash flow. And I set specific cash flow goals each year. Those goals keep me focused on the plan.
That said, I’m not running around looking at every possible rental property I can find. Instead, I only consider properties that fit my investment criteria.
Each year I’m focused on specific markets. At first it was Dallas. Then I moved into Birmingham. Then Kansas City… and so on.
My point is this: Our investment criteria keeps us focused. That’s its purpose.
And it goes a step further.
I only consider specific properties in my target markets. In Dallas and Kansas City, I was only interested in new construction homes. In Birmingham, I focused on smaller homes that had just been rehabbed and renovated.
And there’s one more element to our investment criteria. How much do we want to make?
I require a minimum cash on cash return for any investment I consider. This also keeps me focused. If a property doesn’t meet my minimum return criteria, I don’t consider it.
It doesn’t matter how pretty it is. Or how great the neighborhood might be. I stick to my criteria no matter what.
This is how we take the entire universe of real estate investments out there and narrow it down into a streamlined analysis process.
Of course, this begs the question – where do we find these properties?
Do we spend hours on Zillow? Are we calling realtors all the time?
Nope.
To systematize everything, we need to plug into an investment network. We’ll wrap up our series on that note tomorrow.
Until then, time is running out to check out our launch workshop for The Phoenician League.
You can find it right here: https://phoenicianleague.com/workshop