I like this simple explanation; assets puts money in
your pockets and liability takes money out!
2
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The most critical skill: Asset Selection
Try walking on the streets of the 3 ghost towns that I managed to set my foot on in Spain and I promise you that you come back
a changed man. I still cant seem to wipe it out of my mind. I can still so vividly see it every time I close my eyes, in fact, I am still
getting nightmares from it. I dream of zombies chasing me down on the streets of those ghost towns! The hair on the back of
my neck still stands up every time I think of it. You get my point; it is scary! It is any investor’s worse nightmare to have bought
property that end up being ghost towns, or buy into assets that people don’t want to get near of!
One powerful lesson that I bring back home is how critical the skill of asset selection is to the investors. The great investors that
are still standing today in markets that have crashed are those who are holding great assets. With simple asset selection tools
and techniques, any rational and sane-minded person may have seen how ridiculous some of these properties were. But then
again, not every investor thinks logically during times of irrational exuberance. The interrelation is quite simple actually, “Great
investors find great assets!” This is something that I will dedicate my entire life learning.
Many newbie and young investor ask me what skills do they need to first learn in order to be a great investor. I’ve identified 8
critical success factors or what I call competencies which I had explained in greater detail in my book, “The Strategic Property
Investor”. These 8 competencies shaped the 8 chapters of my book, which I give you permission to buy, if you see them in
bookstores (hehe, this is what I call soft-selling!). The point that I want to make is that asset selection, is what I call the ‘critical’ of
the 8 critical success factors of a truly strategic property investor. So what kinds of asset do I want to find? This brings me to the
next lesson
3
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IGA: The only 3 letters you need to know in Property Investment
So I get it! Find properties that are assets and that asset selection is critical. But what kinds of asset should I look out for? What
makes these assets or properties that these brave investors still hold on to today so great? You know what, today must be your
lucky day! You are reading the right article in the right magazine, because I’m going to reveal the secret, and it lies in these three
very innocent letters; IGA. What does it stand for? It brings 2 very powerful concepts which I promise, if you can apply to your
asset selection process, you will be able to find that great asset we all are looking for.
The first powerful concept is“Investment Grade Assets”. I don’t want to just find any kind of asset, I want to find Investment
Grade Assets! Now this applies to both anyone buying property, regardless if you are buying for own stay or investment. Either
way, you must buy Investment grade assets. An investor told me once that it doesn’t have to be investment grade if he is buying
for own stay. So it is ok if it is located inconveniently away from town, facing a water treatment plant or not facing the view that
he wanted if he is buying for own stay. This is wrong!
The second powerful concept is “Income Generating Assets”. I don’t want to just find any kind of asset, I want to find Income
Generating Assets! If you can nail this down in your asset selection process, I can almost guarantee that the property that
you can invest in good or bad times, and that you will end up buying an asset, not a liability. An Income Generating Asset is a
property that will end up putting money in your pocket and not take money out. But what makes an asset Investment Grade
Asset and an Income Generating Asset. That I will save for next month’s edition for part 3 of the lessons I bring back from my
property W