In Real Estate, Cash Flow Is King (VNQ)

From Collin Kettell: In this interview, Dave Zook gives a presentation on the real estate market and how he developed his personal investment philosophy.

He has been inspired by investors like Robert Kiyosaki and Jim Rogers. He learned how to invest in commodities after reading Jim Rogers book “Hot Commodities.” You can quickly calculate the cost of production of a commodity and Dave has used that strategy to benefit his own business.

He created several successful businesses and then began investing doing lending and flipping houses. He enjoyed the work but then ran into a big tax bill and then it wasn’t quite as much fun. He later taught himself how to minimize and avoid paying taxes. He went out and got advice from great mentors who had experience.

He discusses various real estate opportunities including multi-family apartments and resorts. Even when prices are high, there are opportunities if you are correctly positioned. Many of his investments are not extremely exciting, but they are steady and bring in consistent returns. He is careful to ensure that his investments are secure in a downturn. He invests for cash flow and has grown his business by organically investing with friends and family.

Mr. Zook says you need to know what is important to you. He had a cash flow and a tax problem. You need to find a good market and a solid team. He and his team find the assets, guarantee the debt, and then they invite in investment partners. You should look for problems, see them as potential opportunities, and fix them.

He discusses another business that he is involved in selling ATM Machine Services they bring steady cash flow, tax benefits, and diversification.

The Vanguard REIT Index Fund (VNQ) was unchanged in premarket trading Tuesday. Year-to-date, VNQ has gained 5.18%, versus a 16.64% rise in the benchmark S&P 500 index during the same period.

VNQ currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 20 ETFs in the Real Estate ETFs category.

This article is brought to you courtesy of Palisade Research.