This past week, we published Part 1 of our Covid-19 Investor Update, focusing on our Pineapple Farm in Panama. In Part 2, we looked at multiple Agricultural investments in Colombia. Our Part 3 today is focused on a few of our Multifamily investments in the United States.
Multifamily (also known as Apartment Buildings of 5 or more units for newbies) investments are the foundation of our wealth from a Real Estate investment perspective. We believe value-add multifamily investments are the best asset class for medium-term cash flow AND long-term growth of our overall net worth. For those of you unfamiliar with this investment strategy....quick education:
Let’s break it down. A real estate syndication investment is a way for investors like us to pool our financial capital to invest in properties and projects much bigger than we could afford or manage on our own. I add my...
A few days ago, we published Part 1 of our Covid-19 Investor Update, focusing on our Pineapple Farm in Panama. In Part 2 here, we are looking at multiple Agricultural investments in Colombia. Our Part 3 update will be a focus on our Multifamily investments in the US.
Let’s jump in and understand what happened to our investments in Colombia over the last month.
Our Teak Sawmill Investment in Monteria, Colombia
Colombia's Covid-19 shut-down started on Monday March 15th when the government blocked entry to the country for all foreigners and closed the schools, quickly followed the following week by a 19-day quarantine which finished on April 13th. On Monday March 23rd, the government also suspended international flights for 30 days, presumably after all citizens and residents had returned home. As part of Colombia’s nationwide restrictions, pet owners were authorized to take animals outside for 20 minutes and one person per family could leave to purchase...
Karen and I have talked a lot over the last few years about our Maslow’s Hierarchy of Needs Investment Strategies, our thesis being that everyone needs healthy food and affordable shelter, no matter the market conditions:
And also the reasons why Investing in agriculture gives us a great hedge against the volatile stock market.
But this Covid-19 Black Swan is challenging all investor assumptions at the present time. Nobody can predict how much Helicopter Money will be dished out to soften the blow of the economic shutdown or what that means for the shape of the economic recovery.
So we decided to delve a little into the actual investments we hold and discuss any early indications as to the impact of Covid-19 on our portfolio. In Part 1, I’m going to be discussing our Panama Golden Pineapple investment in Panama, Part 2 is our agriculture investments in Colombia and then Part 3 will be a focus on our Multifamily investments in the US.
Let’s get to it. Starting in...
I hope you are all healthy and social distancing and staying safe.
Karen and I have been fairly silent over the last month or so, like many of you, responding to the events swirling around us while trying to maintain a healthy dose of optimism for the future. We know this period will pass, like many of the other bleak periods in human history. We just don't know what the new world looks like. It will definitely be different than the world we left in late 2019. And I'm sure different opportunities will abound for us all.
But the reason I’m writing this post is because I’ve received calls from a half dozen people over the last 10 days asking if they should start ‘buying on the dip’ or start to ‘invest against the herd’ etc.
Remembering that Free advice is not always worth the...
This is a short blog post because a) your time is valuable and b) this simple universal truth as to why everyone in our Global Investor Alliance will succeed in building wealth over the long-term…
If you consider any field of activity where different probabilities play a role, the outcome is largely unknown because of the many variables that you cannot control.
Research has also identified a common trait among successful performers in any field, that they all value process over outcome.
Let’s apply this to investing for a second. Across the internet, you will see many claims by so-called experts and gurus in investing that highlight the outcome; you will make X amount in so many months or years. Rarely do they detail the process used to get to this outcome (hint: sometimes the claim isn’t really true and often times, it was a set of factors that aligned for them which might not align for you!)
Now of course the result or outcome does matter, as that is the...
If you’re a typical investor today, now holding 70-100% of your invested capital in the stock market, then you’ve got nerves of steel or total blinders on or both. I admit the seemingly endless upward climb of the market does light up the “easy money” greed button in most of us that's hard to resist.
But, in your gut, you may also have a growing anxiety that most of these gains are not based on anything real in terms of business fundamentals; rather, they're driven by media hype, emotional sentiment, and Fed buying behind the scenes. That’s a recipe for a house of cards that can topple on a whim, as we often experience when corrections occur.
You see, often things that seem alluring and lucrative on the surface are something altogether different when you take a closer look. Like a poorly laid foundation, the tell is in the cracks and crevices (in this case, in the spreadsheets). So, let’s get out our magnifying glass and take a...
We all understand why it's important to invest in asset-backed real estate... it is a powerful vehicle for building long-term wealth whilst diversifying a substantial portion of your assets outside of the often volatile stock markets. But how to successfully invest in real estate with low hassle and high impact is not a path well known or understood by the average working professional.
It's not as hard as you might imagine, but as humans we always seem to automatically fear (or presume impossible) anything not known to us. In our experience, probably the best and safest way to invest in real estate without having to deal hands-on with the 3 T’s (Tenants, Trash, Toilets) is to invest collectively with other investors in a private offering or syndication.
In a syndication, a professional real estate operator (also called an asset manager or project sponsor or general partner) manages all aspects of the investment business plan, start to...
Karen and I have spent most of the last decade following a focused plan to properly globally diversify our wealth rather than turning a blind eye to the unrest both within the US as much as, if not more so than, beyond our borders.
So, we’ve steadily taken some healthy stock market gains off the table and transferred most of that capital from the very sentiment-driven volatility of the stock market into what we believe is safer harbor in hard assets - primarily real estate-backed assets. For us, this means a portfolio that has included: single family homes, multifamily apartments, mobile home parks, and other syndicated real estate-based investments.
Our bet on real estate has given us many advantages over investing in stocks, bonds, or mutual funds; it offers predictable cash-flow, appreciates in value thus keeping up with inflation, provides higher returns due to leverage, and offers equity growth through debt reduction.
Then about 5 years ago, we opened our eyes to...
10 years ago, if you’d have told us that we'd have more than 25% of our wealth in organic farmland and agriculture investments today, we’d have called you crazy!
But here we are and we sleep well at night knowing that even when the stock market corrects, people are still gonna eat, drink, and use products made from coconuts!
Where is your wealth invested? If you have pension, IRA or cash invested in the stock market today and want to learn about protecting and growing that wealth using Agriculture, please comment below
Mistake #1: Fail To Treat Real Estate Investing Like A Real Biz
We’ve seen too many people treat real estate investing like a hobby versus a proper business. They get caught up in emotion, FOMO, and can't resist the allure of being a Landlord / Investor / Genius. So they jump in with two feet, leaping before they look too deep, and making mistakes that are avoidable.
In reality, most real estate investing mistakes are avoidable with education, mentoring, analysis models, data sources and a bit of practice and patience. This is particularly so in the US and other efficient western markets, where the formula for success is a data driven equation anyone can learn to master.
The price of the property is X, taxes and insurance equals Y, a property manager charges Z, and the rent you can charge a tenant is within a known range for that street and neighborhood. Add in a bit of maintenance and vacancy to cushion the ebbs and flows of landlord...