Successful real estate investing is no different than other investing – a carefully planned and executed strategy is required to make it work. A seat-of-the-pants approach is a sure-fire route to failure or, at best, mediocre results.
There are several aspects to Platinum Properties Investor Network’s strategy. First, we abide by the first rule of real estate investing: never underestimate the importance of a good location. We look at both the macro and the micro of location, that is, we research geographic areas of the country that are showing the best growth rates (based on economic data, diversity of industry, population trends and other demographics, etc). Then, our clients are shown the best properties in the selected areas by top affiliated agents in the Platinum Properties Investor Network, agents who have expertise in their local areas.
Next, Platinum Properties Investor Network tries to identify the best time to purchase properties in the selected areas. Real estate, like any investment, is cyclical – there is a time to buy and a time to hold – and a time to sell. We try to buy as near as possible to the bottom of a cycle so as to get the maximum benefit from leverage as the market improves and prices go higher. We also like to have an “exit strategy” that attempts to identify the time to sell and lock in gains near the top of a cycle. The practice of “flipping” (selling soon after, or even before, the purchase is closed) is generally discouraged because transaction costs and taxes usually eat up most of the gains.
Platinum Properties Investor Network always seeks to take advantage of the power of leverage, one of the characteristics that makes real estate investing so much more attractive than other investment alternatives. Through leverage, a small monetary investment can lead to huge percentage returns while much of the risk is borne by the lender, who has the largest financial stake in the property. If property values decline, even though the investor will have to continue making mortgage payments, his or her liquidity will not be compromised through the loss of a large cash investment.
Not all properties are created equal. Obviously, appreciation potential, maintenance expenses and rental income will vary by type of property, i.e., single family homes, condos, office buildings, shopping centers, etc. In general, Platinum Properties Investor Network believes that the best opportunities for our investors lie in residential property located in rapidly growing urban and suburban regions of the U.S.A. Our business is thus oriented in that direction.
In any case, we do not encourage wild speculation as no one is clairvoyant and the future is always uncertain. We also make no promises or guarantees of performance or suitability. That is left up to our investors’ common sense and due diligence and the professionalism and expertise of Platinum Properties Investor Network’s network of affiliated agents.
Platinum Properties Investor Network’s approach is to create a cash cow rather than a money pit. Our investors are encouraged to acquire properties that are cash flow positive and well-maintained whenever possible. The income stream can help them achieve a better quality of life and weather periodic downtrends and soft spots without having to take money out of savings to pay the mortgage or expenses. This is not always possible to achieve, of course, but it is one of our primary goals. To achieve this goal, we discourage unconventional or “creative” financing techniques that may be fraudulent, take advantage of lenders or sellers, or create unacceptable levels of risk for our clients. We also encourage saving if they don’t have enough for a down payment rather than expecting something for nothing. In real estate, as in life, there is no free lunch. Sooner or later, taking imprudent shortcuts to wealth will have just the opposite effect.
To help achieve the objective of positive cash flow, Platinum Properties Investor Network’s cooperating agents search for bargain-priced properties for our clients. These properties may be below-market-value because of extenuating circumstances such as divorce, death, foreclosure, relocation, etc. While we do not condone taking advantage of unsophisticated or desperate sellers, we do believe that such individuals often price properties below market for a fast sale and our providing qualified buyers is doing them a valuable and much appreciated service. Our philosophy for getting rich does not rely on taking advantage of the less fortunate or less informed. We believe in karma to the extent that one reaps what one sows. Real estate investing can be successfully executed with honor and dignity and respect for others. That is our over-riding philosophy.
Properties in this category also may be priced at fair market value but have unrealized potential – where a relatively small investment in upgrades results in a large increase of value. We rely on the expertise of our affiliated agents to guide our clients toward properties where such may be the case.
Certain strategies such as buying government repos or rehabing fixer-uppers are not for everyone – they may require too much cash, too much time, too much red tape, uncertain expenses or the investor may have to be physically present at the property. Platinum Properties Investor Network tries to make real estate investing as much of a passive activity for the client as possible, not a full-time job. We believe real estate investors should live balanced lives and not be consumed by their investments.
Some people have greater aptitude and skill (as well as a greater emotional tolerance for risk and aggravation) than other people. Platinum Properties Investor Network tries to advise its clients in one direction or another based on their perceived special abilities. We try to exploit our clients’ strengths and sidestep situations that could magnify their shortcomings. For example, some investors have better “people skills” and are more adept at dealing with tenants, some are better at property management and others would prefer just to collect their rent checks. Platinum Properties Investor Network understands the nuances of hands-on real estate investing and, through its mentoring program, gives its clients practical advice and training to avoid a “Pacific Heights” (the movie) type of experience.
Overall, we seek to make Platinum Properties Investor Network a partner in your quest for financial independence through real estate. We value your feedback and work for you and the realization of your goals.