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Cashflow, Cashflow, Cashflow!

DO THE NUMBERS!

I'd like to re-iterate the importance of doing the numbers on your prospective property purchase, as I've heard a few people saying they know it cashflows, but can't produce a spreadsheet to prove it.   In my opinion, and believe me, I've learned my lesson in this area, properties that seem like they would cashflow don't necessarily cashflow.  And that's fine, provided you're buying for equity (and that's your strategy) AND you can support the negative cash flow in your overall picture.  Notice that I've attempted to make an impact on readers by dramatically highlighting the key phrases.  

CONCENTRATE ON THE BIG PICTURE

It's also important to consider the "BIG PICTURE".   To do that, the best suggestion I have is to buy a large piece of bristol board, (like you did in Grade six when you had to do that project on the Native Peoples of Canada) and plot it all out in boxes.   What do you have?   Colour code the cash flow properties one colour (blue - solid/boring, but cashflow productive) and the equity properties another colour (red - to signify hot/lucrative, but dangerous).   Make the bristoal board total picture match your goal.  If your goal is to purchase three cashflow properties by December, then you should include three empty boxes, which should 'bug you" as you look at them sitting empty every day - right beside your desk or hanging by your bedroom lamp, where you'll see it all the time.    This simple exercise will help you: identify your goals, write them down (in visual format), see what's missing visually, and constantly try to fill in the missing pieces.   It will keep you on track when you're looking at investments, because it'll make you think (while you're hearing people talk about great deals) - "does it fill in my empty box bugging me on the bristol board beside my desk?"

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