I often get asked about what I do at a more detailed level - so I thought it would be good to show an example.
It's funny when I explain deals to people who think differently. Some people love numbers and others don't. One of my friends Matt loves them (we affectionately nickname him Rain Man). Other people are visual and it's all about the look of a house and how it's transformed. Others are very much emotional, it's about how investing makes them feel and how it makes a difference to the community. So I'll put a few of these items into the progress report.
Remember I am a value investor, so it is all about value. I identify value in terms of equity and also cash flow. We focus on purchasing property at a steep discount to the true value of the property and we also look for deals that provide a very generous cash flow in a safe neighborhood.
This property was purchased in Ohio from a bank who had foreclosed on the property, taken possession of it and sold it to us to clear their books of the bad debt (banks need to reserve more capital against bad debts, and this reduces the amount of money they can then loan out).
There are some great stories that go with each property. Here is a few from this property:
It's a typical deal that we at Asher Management are delivering on.
If you'd like to know more, or are interested in these types of deals, reach out to me. I'd be very happy to share more information.
A business has a commitment to its stockholders to provide returns in the form of dividends and appreciation. I feel that if the business is solely focused on profits, it can miss out on others aspects of business opportunity.
Growing up in a large family and playing a team sport, I have always been aware that my actions and behaviors have an impact on others, positive or negative. Now as a parent, I see it more than ever. As a dad I am very aware that it is not just my words, but more it's my actions that count the most. With this awareness I realize that I need to be a role model to help guide my kids in their development.
So how does this relate to business?
My business has a vision: to make a positive impact on the world, one house at a time.
It's my belief that we can live in a society that looks for a win/win - one of the many anecdotes I have embraced from my dad. Why can't we make a lot of money and help others at the same time? This is not a new concept and many businesses have adopted this and applied it in different ways. Triple Bottom Line is one way to help put focus on Corporate Social Responsibility.
Another is Conscious Capitalism, a concept originated by the co founder of Whole Foods Market, John Mackey, who describes it as a “way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact on the world.”
I resonate with this concept and have applied it to my business - one house at a time.
Our business is focused on areas in the US that have been in a depressed stage for many years and negatively impacted by global offshoring, banking regulations and corporate profit agendas.
By improving one house at a time, we can improve these areas, by providing a great house to live in, and offer the opportunity for home ownership. This in turn improves the sense of pride in the their home and then starts to be reflected in the greater community. Home ownership goes a long way to turn neighborhoods from being 'slum lord' environments to being clean, groomed and well maintained. The US has an average home ownership of 65%. In the areas that we are focused on, like the Mid-West, the home ownership is just 35%! When so many are renters, if the landlord is only focused on profits it means that there can be a lot of deferred maintenance - real estate speak for homes getting run down.
Utilizing the principles of Conscious Capitalism, we are helping life long tenants to live in a better home and have the opportunity to buy the home off us without banks being involved. The positive feedback from these people has been very inspiring, reinforcing that we are on the right path. Additionally we are helping other people put their retirement money and savings into a secure and generous income producing investment. For me and the team, we are excited to be helping these groups achieve their dreams and to be part of something that is making a difference.
How are you making a profit and making a difference?
The fires raging in Australia have been a tragic event on a global scale. It's devastated millions of acres of land and killed millions of animals. Not to mention the lives of people. What makes this even worse is that the hottest part of the year is still to come and the situation has the potential to get even worse. Thankfully my family and friends are safe and I've appreciated the thoughts and well wishes from my friends worldwide. Thank you.
Whenever there is a tragic event, I can't help but take a moment to review my situation and be thankful that I am not directed impacted. I also review and think what would I do if I was impacted and what can I do now to best manage the situation if I was impacted in a life threatening or financial threatening situation.
Many of us don't do enough to ensure we are protected and our families are protected in the event of a disastrous life changing moment. We will see in the coming months how the devastation of the bushfires will leave people without resources (money, equipment, raw materials, people) to rebuild and get back to where they were.
Coming from a military family and my sporting background, it was ingrained in me to plan for situations and be as prepared as possible. I have embraced this mindset for my investments. I want to protect my financial future and my families financial future. So I am continually learning and refining my strategy in the context of the current moment and the future direction.
It's not what happens to you, it's how you respond. Bad things happen to good people. It's important to not be a victim in life, take charge and do what you can - do your best.
One of my mentors talks about not seeking perfection before taking action - do what you can do today. One single step towards your long term goals is a step in the right direction, every step counts. What I have found is that each step actually motivates me to take another step. What also makes a big difference is surrounding yourself with people who are heading in the same direction.
The US had a great year in the stock market, with over 20% growth and now at all times high. In fact it has more than doubled since its highs of 2009. But where will it go moving forward? At this time of the year when we are all preparing for the coming year, we have our sights on where to put our attention and focus.
For me I was turned off the stock market back in 2009. In Australia it too had a big fall and in fact it is only just now reaching the high it was back then. 11 years later and it is only now getting back to where it was.
Looking forward to 2020, I see this as one of the big statement years. Everyone can remember the year 2000. Where they were etc. 2020 is a year that I have always liked to think about the word play of having perfect vision and that I will see clearly now that it’s 2020 :) My kids were having fun last week with the realization that it’s not just a new year, but also a new decade. They laughed as they said to Grandma “See you next week, next year, next decade!!” All good fun, but also an opportunity to take a moment and review where we are at and where we want to be.
There seems to be money in the stock market right? It looks good….or does it? I know most people I speak with have these internal conversations with themselves. Where should I put my hard earned money? Where should I put my focus, my attention, my energy? This was a big lesson for me, should I look for appreciation (another word for gambling) or cashflow?
A major reason for investing in US real estate is to be a value investor, make money from buying assets at a discount and make money from cashflow. I don’t like gambling.
I am looking forward to an exciting new year where I am building my team and growing my business of buying discounted residential houses, improving them to make them a nice place to live and helping tenants become homeowners.
My mission is to help improve communities, help people become homeowners and help my investment friends with secure investments that provide generous cashflow.
Happy New Year to all, here’s to providing stability and confidence in an ever increasingly uncertain time in our lives.