Cash flow, appreciation, leverage, and cash liquidity

[Jim Wineinger]

Because of the recent back and forth among the titans, I thought it would be good to open a discussion of how to have it all.

The premise basically is that sometimes a deal does not exactly fit into our normal routine of investing. But does look very interesting on its own. So in order to not pass up a good deal you use another strategy to begin with but as is normal over time you find a way to utilize that property within your normal basic strategy thus having two, three, or all four of the main strategies in play.

How do you as an investor decide which strategy to imploy and when?
How do you decide when it is time to change strategies for a paticular deal?
Do you find that such a change is a complete change or do you incorporate a second or third or fourth strategy into the original plan for the property?

The hope for this is that in the discussions we will not have any argumentative back and forth, but a discussion for the newer investor to listen to because the more experienced investors will share with the "pitfalls" they have found and how they changed the strategy to make the pitfall just a small hole or dip in the road that was easily manuvered around or absorbed.

This hopefully will lead everyone into navigating those pitfalls for a good investment life no matter which one or combination someone would choose.

When someone does post their way of doing things, it should be looked at for the pitfalls and those be brought out and discussed, not to upset the poster or to say this is better, but for a discussion of what pitfalls each strategy has and how to avoid them.

And within each strategy how it should be changed according to the economic times.

[Will Barnard]

Great thread post!

As far as switching gears, I base that decision on the current and short term horizon outlook on expected market conditions. If a specific market is condusive to flipping (more buyers than sellers, low inventory levels, etc) I go with that strategy. If I expect a market to have a large upside in growth potential, I will accumulate as much as I can and sell at the right time to cash out my profits (of course I also make sure I buy at a good discount to help my cause). In other markets that support cash flow, I buy and have long (or at least longer) term hold periods for income via cash flow (again, I would buy at discounts).
By incorporating several investment strategies in several areas condusive to each strategy at that time, I give my business a range of income producing investments. Some provide small income streams each month while others produce large returns inside of 3-12 months, while others may take several years before cashing the paycheck.