Flavour of The Year: IBCs

IBCs are back in fashion. Why

MW explains - coming soon

Reinventing allotments

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Which Side of the Quadrant Do You Investing In?

If you like visual metaphors as a tool for effective real estate investing, then you would be delighted to discover the 'Reallionaire Quadrant'. Also referred to as the 'Portfolio Building Model', the quadrant is a useful and effective tool in helping investors determine which property assets they should buy and when. It also provide investors with an insight as to what type of acquisition vehicle to used, which method of finance one should tap into and which asset protection and exit strategy should be employed. It is also a yard stick for maximising quadruple returns.

To understand the model, you need to understand how property asset cycles work. Every property asset has a life cycle (regardless of whether the economy is in a booming or burst situation). A property asset life cycle begins in it infancy, subsequently grows into maturity and then dies.

The reallionaire quadrant purports that if you buy property assets when they are in their infancy stage (Quartile 1), your chances of accumulating millions in cash and equity from real estate investing is far higher than if you were to buy them when they are in their dying stages (Quartile 4). See diagram below.

This key tool is what distinguish Real Estate Cash-rich Millionaires & Billionaire from average property investors and savvy investors. There are to many property investors who focus on buying property assets that are on the left. They focus on property assets that are either cash-cow assets or dying assets. Reallionaire do not invest solely for cash flow and thus channel their energy towards buying property assets that are on the left. In short, reallionaire invest on the left side of the quadrant. see below:

Generally speaking, there are four types of property investors, namely, average investors (Q4), savvy asset rich property investors (Q3), Super savvy cash rich property investors (Q2) and the Ultimate mega cash-rich property investors (Q1). Property investors who become super and mega rich are the ones who buy property assets that sits on the left side.

So, which side of the quadrant are you investing in? Are you investing for cash flow, just to accumulate assets or for quadruple returns? To find out more, subscribe to our magazine at www.reallionaire-mag.com 

Some Like it Hot: Even Reallionaires Are Queuing Up to Buy Data Centre Properties.

In February of this year, property developer & reallionaire investor Peter Beckwith announced that his firm PMB Holding plans to invest £36 million in a data project in Milton Keynes. UK. Despite the top economic conditions across U.K. and Europe, Data centre properties are weathering the economic storm. What's more, more and more reallionaires are queuing up to profit from the data centre property sector. Real estate tycoon, Anthony Lyons & Simon Conway entered the UK data centre market with a whopping £250m investment into two sites in south east England. Clearly, data centre properties are proven to be hot-property assets.

For starters, this property asset continues to be recession proof and inflation proof, whilst simultaneously attracting blue-chip tenants. Further, rental yields are averaging double digits and possess strong demand, solid balance sheets and a lot of liquidity. No wonder REITs that own data centre properties are set for another profitable year in 2012..

Favourable credit metrics, manageable leverage, excellent equity appreciation, limited secured debt, and meaningful unencumbered asset holdings, all play a fundamental role in making it easy for data centre REITs to raise capital from a variety of markets. A conclusion fully supported by Moody’s analyst Maria Maslovsky.

Although data centre properties have been around since the dot.com boom days, they have only become a real estate asset class in its own rights around 2009. Today, data centre properties are on most institutional and super rich individual property investors shopping list.  

Whilst cost of development/acquisition and technical know-how presents a high barriers to entry for some investors, other investors are overcoming such barriers by entering into pre-management lease agreements on a long-term basis. Unlike a shopping mall which may cost around £100-£300 sqft to build, a data centre can set an investor back by £1,000-£1,500 a sqft depending on location. However, with companies having growing IT budgets and opting to use cloud-computing, owners' rental yields can easily cover all cost and still award them with great returns.

Nevertheless, it is advisable to bear in mind that a lack of specialist knowledge of the operations possess a fundamental risk and outsourcing of management should not be seen as the ultimate solution. Yes, data centre properties are a very appealing proposition and the fact that it has grown by double digit figures last year whilst other property values are falling. One should always be mindful of the fact that data centre properties can rarely be reinvented to another property asset should the sector goes sour in 7-10 years time. 

However, now is the time for great optimism and the very fact that Facebook and Google have created REITs to invest billions in data centre properties clearly indicate the strength of this property market. Moreover, the fact that less households tend to rent DVDs and rather download films / movies online and on playback TV tells you that there are a lot of bloody data needs to be stored.

At the end of the day, REITs worldwide has to find an asset that gives them a return so they can pay out money to their subscribers and data centres are helping them to achieve this comfortably. Given that Digital Reality Trust, a REIT, owns 108 data centre properties spanning 20.8 million sqft and valued at £6 billion does say something very meaningful. HIGH GROWTH & HIGH RETURNS.

There are millions to be made from agro-fuel estates. Ask a Reallionaire.

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Lithium mines: Another gold-rush property asset being chased by Private Equity Millions.

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Types of Real Estate Investors.

In the world of real estate investing, there are four types of real estate investors or property portfolio builders. These are;

1). Average real estate investors
2). Savvy real estate investors
3). Super-savvy cash-rich real estate investors
4). The ultimate real estate investors.

Type 3 and type 4 investors are those that have accumulated millions and/or billions in cash from real estate investing. Hence, they are classed as reallionaires.

Reallionaires or real estate cash-rich millionaires & billionaires include investors, such as, Samuel Zell, Donald Bren, Guy Hands, John Whittaker, to name a few. Reallionaires make millions and billions in cash from real estate investing because they invest in emerging gold rush property assets. They are not interested in solely acquiring income producing real estate.

To obtain a list of reallionaires, click on the link below or email me.

http://www.forbes.com/2007/10/19/property-richest-investors-forbeslife-cx_kk_1019realestate.html

http://www.estatesgazette.com/rich-list-2011/

The Reallionaire Matrix: A proven formula for analysing high performing property assets.

To dominate a real estate sector, amplify quadruple returns and accumulate millions in cash, reallionaires subscribe to a proven success formula. In fact, real estate cash-rich millionaires/billionaires (or reallionaires for short) know this and therefore, focus their energy on analysing real estate assets via a proven formula: ‘The Reallionaire Matrix.

The reallionaire matrix is used to analyse the performances of property assets over the propertys life cycle, within a given market. The concept was developed by property investing expert, KT Cunningham, after interviewing, studying and applying the investment patterns of over 300+ property investors worth £100m or more. It was concluded that, unlike other real estate investors, reallionaires differ in that they are both cash rich and asset rich as a result of monitoring industry trends and applying some key fundamentals.

So, to briefly describe the concept, the reallionaire matrix divides a property asset’s lifespan into four quadrants. In this way, a savvy property investor or asset manager can determine which property assets are emerging gold rush properties, which property assets are high performing cash cows and which property assets are heading for the graveyard. Dying property assets possess the propensity to bankrupt investors as they are nearing the end of their life cycle. At this stage, such assets begin to produce negative equity and negative cash flow. Today, a typical example of such these assets, include, retail shops and residential property. (See diagram below).

                                   

The reallionaire quadrant is one of the most effective tools for analysing property portfolios in the post credit-crunch era. It has the power to indicate which property assets to buy, when to buy and which to avoid. It also helps investors to deleverage property cycles. It does not encourage investors to become asset rich and cash poor investors.

Examples of reallionaires include, Donald Bren, Ted turner, The Reuben Brothers, Peter Jones, Richard LeFrank and Ray Lee Hunt, just to name a few. These investors have stuck to the reallionaires formula and continue to make millions despite the recession.

Now, here is the good news! Anyone can learn this formula.

To fund more about reallionaire matrix and how you can use it to find high performing property assets that can generate millions for you, visit our youtube channel or email me for a free MP3 audio.

Waste-to-Energy sites: A lucrative investment story

coming soon...

Reallionaire strategy 1: Invest in recession proof assets like data centres!

Buildings that house corporate servers and back-up facilities in remote locations are vastly emerging as a gold rush property asset. Ironically, whilst the property market is still rife with falling property values, negative equity and repossessions, real estate cash-rich millionaires or reallionaires have single out data storage centres as one of the best performing property assets over the last five years. Yes, there are lots of statistics to support this. Evidently, the notion of a property crash is utter rubbish.

Nevertheless, as traditional property sectors continue to become obsolete, reallionaires have adopted certain strategies that will help them continue to make millions in cash from real estate investing. Investing in recession proof property sectors is one of many strategies used by reallionaires to grow their wealth. To date, there are around 20 real estate assets that are proving to be recession and providing their owners with excellent equity growth, double digit rental yield and superb returns on investment. Sadly, residential, retail, hotel and office properties does not make it into the G20 league.

The reason why data centres are proving to recession proof are as follows:

Firstly, the world has rapidly grown in demand for IT services (especially for the internet, coupled with a surging demand in emerging economies). Yet there is still considerable room for more IT functions within the public, private and social-enterprise sectors. The biggest driver of growth is the vast emerging demand for video content from the entertainment industry via the internet.

Secondly, the number of internet users has jumped in the last five years from 1.043 billion users (16% of the world’s population, June 2006) to 2.11 billion (30%, June 2011) (source: Internet World Stats).

Thirdly, according to the International Telecommunications Union the number of smart-phones is projected to rise from 500 million in 2011 to 2 billion by 2015. More and more people will be access rich content via the internet stored on cloud servers.

As reallionaires find new ways of developing data storage centres more cost-effectivey, the cost of content storage will drop and the volume of tenants and occupancy rates will double, thus giving owners of data centres real estate steady income streams for decades to come.

Why Reallionaires Are Chasing Green Real Estate?

Property investors who have successfully survived periods of economic downturns know its hard work to stay afloat in a down economy. Whereas, investors who have been financially battered have become increasing frustrated with buying traditional property assets. Generally, in times of economic hardship, traditional property assets tend to lose their appeal. However, it is only the average investors who tend to sit back and wait for the next boom economy, whilst the money making property investors switch to new real estate sectors.

Amidst the recent financial and economic chaos, reallionaires have been doing just that; switching their focus to new property sectors, in particular, green real estate. The green real estate sector can be defined as a convergence between green technology and the reinvention of ageing property assets, such as car parks reinvented into solar car park or EV re-charging stations. The green real estate sector consists of property assets, such as, solar farms, agro-fuel estates, landfill gas sites, energy from waste facilities, solar car parks and bio-fuel plantations to name a few. An astonishing US$211 billion was invested in green tech and green real estate in 2010, up by US$51b on 2009 figures. As a result, green real estate is the most highly sort after real estate asset among real estate millionaires and there are some excellent reasons for this.

Firstly, reallionaires are putting their money in green real estate because it has pulling power when it comes to attracting capital. Not only are the World Bank and Sovereign wealth funds lending millions to developers and owners of green real estate projects, but many financial institutions and private equity firms are also very keen to throw cash at such assets. As reported in the UK's Independent Newspapers, property tycoon, Vincent Tchenquiz through his acquisition vehicle, Consensus Group, raised over £71 million from sovereign wealth funds and institutional investors to acquire and develop solar farms, wind farms and bio-fuel refineries in South Africa. Likewise, in 2010, Vattenfall secure £150m from the European Investment Bank to develop a wind farm in Thurness Point, Kent UK.

Another reason why reallionaires are adding green real estate assets to their property portfolio is due to the knowledge that it attracts near zero taxes and other types of investment incentives. Under Governments' legislation in the UK and Europe, investors operating in the green real estate sector pay less taxes, in comparison to their counterparts investing in mainstream commercial property. Green property assets, such as, recycling centres is almost a tax free investment. In other cases, investors benefit from other incentives, such as, tax rebate, tax credit, government loan guarantees, grants and feed-in-tariffs. Such incentives and promotional policies helped in making this sector recession proof over the last five years.

Third, but not last, reallionaies are in love with green real estate assets because, unlike other property assets, it offers investors three to four sources of income. Generally most property assets give investors a rental income. However, green real estate provides investors with carbon credit income, feed in tariff income plus rental income. Reallionaires become mega rich by acquiring high performing assets that provide them with multiple streams of income.

To date, most of the richest real estate investors have bought into to the green real estate phenomenon. Reallionaires, such as, Samuel Zell, Vincent Tchenquiz, The Duke of Westmister and John Whittaker have all invested millions in this fast growing lucrative sector. To find out how you can get into the green property sector, email us for more details.

Are you the next reallionaire?

As the western financial crisis enters it fifth consecutive year and continues to erode traditional asset values, rendering them obsolete, most real estate investors are struggling to revive their ailing fortunes. In fact, they are becoming poorer and poorer by keeping dying property assets in their portfolio. Mind you, it is bloody hard work surviving and thriving in a rubble economy (as opposed to the bubble economy of pre 2007). Thus, it has become a law of economics that cash is king in this economy.

In this new decade, being rich is no longer about how much assets you accumulate, but rather, how much cash you can accumulate from owning new assets. Consequently, a new breed of super rich real estate investors are emerging, owning specific types of property assets that brings them millions in cash. This new breed of property investors are referred to as, “Reallionaires”. A reallionaire is someone who has accumulated a million dollars or more in cash (not assets) from real estate investing. In short, a reallionaire is a Real Estate Cash Millionaire.

Recently, the Estate Gazette published its EG Rich List 2011, which included the names of the UK's top 250 super rich property investors or reallionaires. An equivalent publication in the US is the Forbes Magazine rich list, which published; 'America's Richest Real Estate Billionaires'. Only property investors who have accumulated millions in cash from real estate investing over the years are featured in these illustrious publications. Investors, such as, the Reuben brothers, Samuel Zell, Donald Trump, Donald Bren and Guy Hands have all made it onto these rich list.

To a reallionaire, there is no such thing as a property market crash. In fact, the idea of a property crash is completely false and misleading. Instead, what the super rich real estate cash millionaires and billionaires believe is taking place is a “property market shift”.A shift away from investing in traditional property assets, and a move towards investing in emerging goldmine property assets. Sadly, those investors who continue to invest in traditional property assets will continue to get poorer and poorer. Whereas, those who invest in emerging goldmine property assets will accumulate millions in cash. What distinguishes a reallionaire from other property investors is that they understand the importance of acquiring emerging gold rush assets that produce quadruple returns. [For a list of the Top 20 emerging gold rush property assets, google: “Surviving Amid the Rubble” by KT Cunningham].

Reallionaires are innovative, philanthropic, savvy trend spotters. Take for example, Samuel Zell, the American real estate billionaire who has been acquiring recycling centres and making them energy-from-waste-facilities (EFW) in the US and Europe. Guy Hands, who bought around 135 landfill sites, is creating landfill gas field sites that produce green electricity and bio-gas. (see further: http://www.terrafirma.com/infinis-wrg.html)

The question this article seeks to address, is whether today's property investors' goal is to become the next reallionaire.