How Sophisticated Investors Can Secure More Cash Producing Assets
Investors are entering a new phase of the economy where cash producing assets are going to be even more important.
Now is the time to lock them in before rising demand pushes up prices of these assets further.
The Income Problem
A lot of long term bets have been made with investment capital over the past few years. Many of them may not pay off if the economy and markets don’t reverse their current direction. That is particularly true of the billions tied up in startup companies and the funds that invest in them. Even titans Apple and Amazon saw share prices dive by over 25% at the end of last year. A new recession could reduce incomes and employment, right in the middle of a new extended period of political uncertainty leading up to the 2020 election. Not only could this decrease or eliminate dividends on publicly traded stocks, but it could ding the incomes of even high income earning professionals. All while America has been mounting up new debt, which faces rising interest rates.
So, while monthly expenses may keep rising, incoming cash could become thinner and thinner.
What Not to Invest in
Tech startup investments can take at least ten years to pay out. That’s if you’ve chosen the one in a million opportunity that will be the next Facebook. That’s if there is an attractive IPO market.
Most publicly traded stocks don’t pay much in dividends. Hyper volatility is likely to compound the already stretched price to earnings ratios and frothiness.
It’s true that savings accounts and CDs are starting to offer more interest again. Just not enough to stay ahead of inflation and taxes.
Precious metals like gold are often seen as a haven in these times, but no gold bars are coins are going to pay out cash every month. They aren’t very convenient for paying your mortgage or light bill with.
Multifamily Income Properties
While single residential homes and condos can be a tricky market to play in today, all of the above also increases the demand for rental apartments. These are cash cows, with deep diversification, that keep producing money every month and quarter. They can do this regardless of the wider economy or what jabs politicians are taking at each other.
Not only are apartment buildings great cash producing assets, but they provide a highly craved level of downside protection and control over asset value.
With new partnership and multifamily syndication opportunities, a much wider group of passive investors can participate directly in these deals, without having to master a new sector hands on or put their last penny in a single asset.
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.