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.

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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.

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