Cash needs cannot be ignored
You will always hear the mantra that this or that business deals on the basis of cash on delivery. You will also meet business people who are not willing to give credit no matter what the circumstances. They will insist that you give them the money before they do any work for you. Real estate investing is no exception.
Although it is not always that you use actual cash in the real estate investing business, you will be required to have plenty of liquidity in order to successfully undertake all the relevant tasks that you will need to do on a daily basis in order to make your business a successful one.
The challenges that will befall you as you try to inject cash into the business
Tenants can be very quick to refuse to pay rent for any number of reasons and some of the will even make up the most ridiculous lies in order to put away the notion that you can easily collect money from them. I have once been a landlord and I can tell you that collecting rent was one of the most difficult things I faced when I joined the real estate investing business.
They know very well that without their rent the business will collapse but that is not a priority for them as long as they are living in the house. When you try to pursue them with too much vigor they will take you to the courts to ensure that you do not go too far.
If you are having problems with collecting rent that means that you are even more likely to have problems with repairing your property. If you choose to completely ignore your responsibilities to repair and maintain the properties that you own, your real estate investing business is in mortal danger and you could end up losing everything.
When the rent comes, the repairs works might become such a priority that you do not leave anything for your own profit. Now that is not a good result. The fact that you put in all the work and take all that risk without proper rewards is not a good business model and will not encourage you to grow your real estate investing business.
People talk of investment as being risky and that one of the consequences of being a constant investor is that you will not have plenty of cash to play around with. I think this is a disgraceful notion. It does not matter whether you are into real estate investing or you are doing some other business, if you cannot get to the bottom of the cash flow problem then you might as well give up. The only valid justification for business acumen is that you are making a profit. Anything else is equivalent to charity.
It is your responsibility as a real estate investing participant to ensure that you have enough money to meet your cash flow requirements. If you are unable to achieve this then you might want to consider an alternative career.