Mon Sep 11 2023

Asset Selection:

• Not all properties are created equal, so it's important to focus on asset selection.
• Different types of assets include high growth assets, balanced assets, and cash cows.
• It's crucial to minimize the risk of buying an ordinary asset in an ordinary location.
• Research is essential for understanding demand and supply dynamics in different areas.
• Factors like scarcity, owner-occupier appeal, and land-to-asset ratio should be considered.

Borrowing Power:

• Buying investment property requires a game plan for finance as well as bricks and mortar.
• Understanding lending structures and strategies is critical for success.
• Concepts like deposit amount, cross-securitization, Lenders Mortgage Insurance (LMI), interest rates, offset accounts vs. redraw facilities need to be addressed.
• Leveraging productive debt can elevate returns but also carries risks that need to be managed carefully.
• Segmenting borrowings correctly and managing cash flow effectively are key components.

Cash Flow Management:

• Cash flow management is often overlooked but plays a vital role in sustainable investing.
• A proactive approach to money management ensures investment returns are maximized.
• Cash-on-cash return helps evaluate the effectiveness of investment choices.
• Building buffers, emergency funds, and applying budgeting principles increase financial peace of mind.
• Professional advice from experts can provide valuable guidance in this aspect.

Defense:

• Defense is often forgotten but a critical part of the property investment formula.
• Protecting your income through insurance against loss or damage is crucial.
• Surround yourself with a team of experts including property investment advisors, accountants, Mortgage brokers, conveyancers and building inspectors.:
• Taking measures such as setting up buffers and having emergency funds contribute Significantly towards reducing risk factors during uncertain times.:

Overall Theme:

• The Property Investment Formula consists of four pillars: Asset Selection (A), Borrowing Power (B), Cash Flow Management (C), and Defense (D).
• Each pillar is equally important, and mastery of all four leads to successful property investing.
• The book introduces these concepts in a casual and conversational manner, providing insight Into their development and application.:
• The information discussed remains relevant even during challenging times like the COVID pandemic.
• By following this formula, readers can build multimillion-dollar property portfolios that generate passive income for the long term.