I started in an era when late night infomercials were dictating investment strategies. Years ago that is what all the gurus suggested. To be able to sell their information to a broad audience, they drove the point home that you can do these strategies in any location.
While this is a little disingenuous, there is an element of truth to it. If you get a good real estate investing education, and you take action, investment strategies will work anywhere.
Live Where You Wish But Invest Where It Is Best
My wife and I moved from the cold state of Minnesota to Florida in the fall of 2003 when the markets were booming. I left dozens of investment properties back home and turned them over to property management companies. I was now living the dream. We arrived in the most highly sought after state for enjoying life, full of beaches, golf courses and activities. We were now living where we wished.
I suddenly noticed, however, that I was unable to invest in any properties that had any financial merit. The cap rates were running 3 percent to 6 percent and I stopped investing.
I wondered why there was such a dynamic shift from Minnesota investing to Florida investing. It intrigued me big time. I began to study markets to learn why. Then suddenly came the financial collapse – the real estate collapse followed by a global financial breakdown, and it appeared all hell had broken loose.
Yet I still saw certain markets throughout the country that were making investment sense.
What was my big epiphany? Just because you can acquire an investment with any particular strategy and make it work, it does not mean that you have acquired the best investment.
Just because you are able to get cash-flowing investments that match your investment return criteria does not make this a great investment. The big missing piece of the equation for a great investment was sustainable cash flow with an element of capital growth.
Fast forward nine years, and during that time I have interviewed Harvard graduates and economists all over the world. What I uncovered are some of the best strategies used by the Donald Trumps and the Warren Buffets of the world: Invest in the best locations to get the sustained cash flow, and the best opportunity for capital growth, and your investment returns over time will increase exponentially.
I no longer settle for good returns on cash flow just because they are in my backyard.
I study markets. I want the best investment available.
Doing your due diligence and studying to uncover the best locations for real estate investing should be your No. 1 priority when investing in real estate. This is why I coined the phrase, “Live where you wish but invest where it is best.”
As an investor, if you too want the best investment do not settle for anything less than the best locations. We have a huge planet here, and only a few people actually reside in areas that represent the best locations.
For the rest of us, we want to follow the money. Seasoned investors are investing all over the world. Why do they do this? Real estate is now and always has been about location. Follow the best locations.