How "The Box" works

Now you know the four sides to The Box. Today we are going to look at other ways The Box works. The Box serves three important functions:

1. As stated earlier, The Box defines the principles and rules that
govern real estate investing; it defines your parameters. It
teaches you what works regardless of market conditions and
location or individual – it is dummy proof and market proof.

2. The Box helps simplify economic laws. Let me explain: The
market behaves according to economic laws. These laws, in
most instances, tell you where the market is going. You need to
understand where it’s going in order to become a more savvy
real estate investor. There is always a way to take advantage of
the market; there is always a place where you can make money,
no matter what the market is doing and where it’s going. Even
in the Great Depression there were areas that investors could
have taken advantage of and profited from. You need to
understand the ebbs and flows of the real estate market and how
to navigate them.

3. The Box keeps you safe because you know the principles and
rules governing real estate investing. It is not the “flavor of the
day or year”. Rather The Box encompasses what has worked for
years and what has made millions and millions of dollars for
individuals. It will do the same for you and in a secure fashion.
Isn’t that a comforting feeling? It really is. It helps us take risks
in markets where people are running scared. The Box is your
safety net, your warm blanket on a winter day. All you need is
to stay inside The Box, follow the principles and rules, and you
will win. I have proven this time and time again.

The Box Does Three Things:
1. Defines the principles and rules of
investing.
2. Helps you understand economic
laws and principles.

Monday we will talk about examples of how The Box can simplify the
economic laws.

Can you Replicate your investment strategy?

The fourth and final side to The Box is: Your investment needs to be replicable or, in other words, duplicable.
Consider this last rule and principle as your fraud meter or your fad meter. For example, there are so many ideas that are presented to you on late night TV. Many of these ideas are fad: they may work for a certain amount of time, but they’re temporary, and that’s not good enough.
We want to make sure that the successful real estate investment we make
is something we can repeat and do over and over again, regardless of
market conditions.
What you’ll learn with The Box is how to make money when the market is going up, when the market is flat, or the market is going down. In other words, every investment we teach you is replicable and sustainable in any market condition. It is predictable in any market and it is quantifiable in all markets.
Again, by thinking inside The Box and using the principles and laws that
govern real estate investing, you will safeguard yourself from future
losses. So, let’s explain further how The Box really works. Let’s begin with
the concept of quantifiable.

Quantifiable means that you always look at measurable key indicators to
analyze when you will may make a profit on your investment. When
quantifying your investment, what you need to ask: “What is my rate of
return going to be every single year?”

Predictable means you can predict what you will do with the investment, what type of strategy you should select, how much profit you’re going to make from it, including the time table and the effort that will be needed.

Sustainable comes down to one thing: can you continue to make money over time? Can you make this an investment? If things change and your analysis is wrong, can you keep it? Time heals all real estate woes,
remember that. What I mean by this is that if something goes wrong upon
your initial investment, you can hold on to the investment and make
money later.

Replicable, again, is your fraud meter... your fad meter. If you cannot duplicate your strategy in any market, you need to acknowledge that this is something you don’t want to get into. It’s something that is probably not the right way to go. It’s probably an idea that only works in a certain type of market... or it could simply be a fad.

There are all kinds of different ways to make money in real estate.
However, what we teach is how to make money in real estate no matter the
market conditions. We want to make sure that if you are using a strategy
that only works when a market is going up and yet the market is going
down quickly, you can change and select the right investment strategy.
Remember that to ensure you have the right strategy, it must meet all of
the four laws and principles of real estate investing we’ve discussed. Don’t
get into fad investments or frauds; stay away from them. This is how The
Box protects you, so stay inside The Box. Think inside The Box and don’t
go outside The Box.

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.

Second question to ask the Box

Yesterday we touched on some criteria you should have for your investments and that we here at the RESA focus on keeping you in the box. One of those reasons was because the instructions for your success are IN the box.
One thing we do not want you to misinterpret is thinking we don't want you to think outside the box. Being creative in this industry is critical and necessary, especially in the market we are in now. However, when it comes to becoming financially free through real estate there are a few rules you need to follow when getting into any deal.
We talked yesterday about a deal being quantifiable.

The second part of the BOX you need to look at when it comes to a possible investment is your investment needs to be predictable. A lot of people ask me,
“Predictable and quantifiable, isn’t that the same thing?” Not really. What
I mean by predictable is that you can predict the future based on what your
numbers should be. Based on how you quantify things, you can predict
where things may end up. Again, predictability is key to any investment.
In other words, if you’re going to buy a property – say you’re going to flip
a property (fix it up and sell it for a profit) – you can use what you’ve
learned here to quantify it, to predict time tables; thus, you’ll predict how
soon that profit is going to come. And with that time table, you’ll then
predict your true rate of return on your investment over a one-year period.

Now you have two sides to the box. Tomorrow we will continue with the third and very critical side.

Think inside the box!

One of the key things we’re going to talk about is a concept called The Box. I really love The Box. The Box is something totally different. Chances are you haven’t heard about it before, but you’ve wanted to be in it your entire life. The Box is all about security.
Everyone wants to take risks (whether you realize it or not). You take risks
whenever you invest – whether it’s real estate, the stock market, or any
other type of investment. By applying the principles of The Box, you can
safeguard yourself against things that could make you lose money, or push
you into places that you shouldn’t go – thus, the security. So, we’re here
to say, “Think inside The Box.”

I’m going to teach you about the principle of The Box and proceed from
there. As you listen to what we teach about real estate, think about the
principles of The Box and ask yourself how these principles can apply to
you and your investments. We will come back to The Box at the end of the
course and show you, using The Box, how you can make millions of
dollars... but only if you follow the rules we teach and illustrate here.

First, let’s talk about how to think inside The Box – not “outside the box”,
as we’ve been taught the last two decades, but inside The Box. Granted,
thinking outside the box does help you to come up with new ideas, but
when investing in real estate, I want you to think “inside The Box” for your
protection.

Each of your real estate investments must meet the four laws and
principles that define The Box:
1. Quantifiable (Profitable)
2. Predictable
3. Sustainable
4. Replicable

First, The Box is all about having investments that are quantifiable, meaning
they can be measured. You need to be able to measure whether or not an
investment is going to be profitable. If the investment is not profitable you
don’t want to do it, nor waste your time and effort with it. Also, you need
to be able to measure your costs, what your rate of return or your return on
investment (ROI) is going to be. So, it needs to be quantifiable. If any
investment is not quantifiable, you can automatically throw it out.

Our next entry will discuss #2 principle- Predictable.

If you are interested in coming to a free preview event of the RES academy please visit RES Academy.com