Risk vs Cashflow
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What kind of deal should you be looking for? It depends on your situation. Your first deal needs to pay you 10-15%. If it pays you 20% it’s going to be section 8 and you don’t want that. Some deals give cash flow; others have no cash flow but may sell high later. When you first start out you want cash flow. Forget about CAP rate, focus on cash flow. Never weaken your first flow until your other flows that are so strong that you can walk away from it. You don’t want to jump flows. The purpose of additional flows is to have additional flows.
All that said, Grant gives you 4 ways to buy real estate:
1. You buy
4. A Syndicator with money in the deal.
You can buy and own the deal, but there is a lot of time and responsibility with that. A REIT investment is basically like a stock. The problem with syndicators is that they have no skin in the game. You want to find a guy like Grant who has money in the deal and ride him, letting him take the loan on his name.