Is your investment strategy sustainable?

So now you know your investment strategy needs to be first, Quantifiable (Profitable) then second, Predictable. Now you have to have a very important part of the box. This is a very powerful part because just like fashion, trends come and go and real estate or even investing in general, is no difference. Make a mistake in this third area and you are almost guaranteed to pay for a seminar in the "school of hard knocks". How do you thing we know this?

The third key to the box is your investment needs to be sustainable. Sustainability is probably
one of the most important things you could possibly measure when you’re
getting into any type of investment strategy. What do I mean by a
sustainable investment? Sustainability simply means that your current
investments should not put you in a financial bind. In other words, if you
purchase a property and you expect renters to make the payments, you’ll
need to have sufficient savings to make the payments for a reasonable
period of time if you don’t get renters right away. You have to be able to
hold the property without going into significant debt, or even foreclosure.
Any time you get into a real estate boom where things are going up 10%
or 20% per year, you get people who start breaking the sustainability rule.
Here’s another example: some people buy a home or a property with
negative cash flow. They think this is okay because after a year they
believe they’ll sell the property with an appreciation of 10% to 20%.
However, some people forget the market is sometimes unpredictable and
that appreciation may not take place as anticipated. Some people find that
they can’t sell the property after a year, and then they are stuck with a
property that has negative cash flow that they can’t sustain for another two,
three, four, or even five years.
Making sure that your investments are sustainable over time is key to
becoming a successful real estate investor. The rules and the principles we
teach you throughout the this blog are going to teach you how to make sure
that every investment you make is sustainable.

Tomorrow we will unveil the fourth and final side of the box that will support your investing success.