He maintains strict cash-flow criteria for every acquisition and focuses on expanding net operating income by adding revenue streams like reselling internet, adding storage facilities, and converting units to medium-term furnished rentals. He also uses fixed-rate debt for predictability and builds reserve funds to offset short-term negative cash flow periods.
He follows a structured risk management process where he lists potential risks, assesses their probability and severity, and creates baseline plans and contingency plans. This preparation removes uncertainty and helps him remain calm and methodical rather than reactive.
He recommends keeping a majority of debt in fixed products for predictable cash flow, using HELOCs or re-advanceable mortgages to create accessible contingency reserves, and opting for longer amortizations during refinances to preserve monthly cash flow while building reserves.
He believes that naive investors will panic and sell low, creating opportunities for disciplined investors with a clear acquisition methodology. He continues to buy assets that are immediately accretive to cash flow and advises others to stay calm and ready to act.
His key takeaway is the military saying "slow is smooth, smooth is fast." He advises investors to slow down, think through problems carefully, build solid action plans, and execute methodically rather than rushing into emotional decisions.
