Invest Like a Billionaire
169. Avoiding Rookie Investing Mistakes feat. Steve Suh
Jul 25, 2024
Steve Suh, a founding member of Left Field Investors with 15 years in private syndications, shares invaluable lessons from his book on avoiding rookie errors. He emphasizes the importance of operator communication and thorough due diligence. Suh highlights the critical role of diversifying investments and suggests focusing on reliable asset classes. He discusses the significance of building a supportive investment community and offers key resources for enhancing investing strategies, urging new investors to learn from seasoned peers.
35:55
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Quick takeaways
- Consistent cash flow from stable asset classes like multifamily housing reduces investment risk significantly compared to high-risk development deals.
- Effective communication with general partners and engaging in educational communities are vital for making informed investment decisions and avoiding mistakes.
Deep dives
The Importance of Cash Flow in Reducing Investment Risk
Receiving cash flow on a monthly or quarterly basis is essential when investing in syndications, as it helps to de-risk the investment. Each dollar returned decreases the overall risk associated with the initial investment, making it vital for investors to ensure consistent cash flow. For instance, if a $50,000 investment returns $20 in the first month and $30 in the following month, the investor reduces their risk with each payment received. This approach contrasts sharply with development deals, which may not yield returns for years, thereby increasing the risk factor significantly.
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