Lottery Lovers and the Power of Structured Finance

I noticed advertising for the health lottery recently and I realised that health itself can be a lottery for us unless we have the mind-set to eat nutritious meals and exercise properly as a priority. However it also made me think that so many things in life are a lottery including how we look at our property business. Yesterday I met a man who had been coached by a supposedly structured finance guru but in actual fact had been led down a path which whilst may be right for some people certainly wasn’t right for him due to his commitments to his existing business, lifestyle balance and financial resources. When we look at how we run a business we have to look at ourselves and where we are in life. The application of structured finance deals are very much like a lottery as the present rules and regulations simply don’t allow for the no money down or cash-back deals that many investors enjoyed before the credit crunch. We prefer to look at low cost purchasing being the right terminology as the actual structured finance connotation brings up all sorts of problems.

To understand how low cost purchasing works we really need to understand traditional buying over the structured finance deals that were banded about and simply expect to put money into every property we buy. That doesn’t mean we won’t get equity or be able to build value into a deal. Anyone could fall foul of the difficulties of running any business but if we work towards a strategic plan we can hopefully overcome a lot of the difficulties we are likely to encounter. Working with experienced people has no substitute and can make a massive difference. There are those that are experienced in their own niche or strategy that may want to convince you that it is right for you but in reality it only suits them, whereas you need to look at putting your resources across several platforms where your risk will be lessened not increased. It’s not everybody need or want to be high geared. For most people paying down debt is far better than trying to borrow more to achieve something which they don’t really understand or want.

There is no doubt that property is a wonderful vehicle for wealth building but if you can’t manage it you are going to end up with a complete life, work and finance imbalance. At any age in life that’s not good. What we really want to achieve is wealth without the hard work so sometimes it better to let somebody else do the work for you or work alongside you. Then of course you have the problem of finding who can actually do that job and who you trust in any business is a milestone to moving forward. There is a market at present where terminology is given to anything and everything which can and often does confuse the new investor. The opportunities are most definitely out there if you can cease them but without having the right strategy in place to cover your own needs you could be playing the lottery with everything you have. Having a winning ticket is against massive odds and every second of our lives can be a lottery if we look at it in terms of risk to reward. Crossing the road can be a risk but looking both ways brings an element of safety that surprisingly few people put into their finances.

What we should do with our property portfolio is cover all bases by not putting all our eggs in one basket but seek a variety of deals to reduce our risk. There are many people who will sell you a course, or a house or a whole portfolio which is really not suitable for your needs and we like to make sure that by assessing your ability and goals prior to you looking at any property, we don’t turn your financial dreams into a nightmare. By looking more at the reasons we want to invest we can see the eventual outcome that we want to achieve and can aim to have a fixed schedule of reinforcement to produce it. As long as we structure our finances in a way that suits our lifestyle then we can control it and enjoy it rather than experience the hit and miss chances of the lottery.

There are certain elementary steps that have to be mastered to establish wealth and using structured finance as a way of creating it is certainly not an option if you don’t understand what you are doing. Any form of borrowing or creative finance particularly when using bridging loans can be fraught with danger and are not for the novice investor. Some people try to deal with money by pretending it doesn’t matter but the reality of life is such that without it we are likely to lack certain critical resources which in later life can be a frightening experience.  As a source of freedom and security money is an essential so make sure you create wealth not debt by understanding how to structure your finances not be driven by structured finance deals.

Always create long term value not a lottery situation.

Written by:
Lionel Palatine – He is a regular networker and a speaker at events as well as being a property author and adviser. He joint ventures deals and shows people how to buy property for low cost which are inclusive of all fees and deposits.

You can find him on regular social media Twitter |  Facebook  |    |  YouTube  don’t forget to add him

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