More often than not syndicators focus on cash flow and the larger numbers of the deal believing that this ensures success. Our guest today, Ryan Smith, takes a different approach when it comes to deals, focusing instead on the net operating income (NOI). By using the NOI as the starting point, rather than the overall cash flow, it allows syndicators to take a more nuanced approach and also makes deals more attainable.
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Ryan is a firm believer in a ‘big things have small beginnings’ approach and by concentrating on the NOI, it is possible to reverse engineer the steps needed to reach the desired destination. This not only means that the value of a dollar changes meaning entirely, but also that large goals have smaller, measurable steps that can be taken. Ryan takes us through an example to illustrate how his NOI-centric principles work in practice. He also shares with us some of the ways he increases NOI on his own investments, why it is not possible to generate wealth through income alone and much more. Tune in today!
Key Points From This Episode:
- The distinction between the value of cash flow and the equity value of cash flow.
- Why Elevation Capital Group focuses on NOI and the three best performing asset classes.
- Discover some of the reasons that wealth generation revolves around the NOI.
- Focusing solely on cash flow gears you to favor to lower quality, higher-risk assets.
- The value of a dollar: why it is so important not to underestimate the value of a single dollar.
- How Ryan’s principles could be applied to a hypothetical portfolio.
- Big things have small beginnings: understand your desired endpoint and create a map to it.
- If your goal is NOI growth, you can reverse engineer the steps you need to get there.
- Switching rents to market, adding revenue stream and cutting expense – ways to increase NOI.
- An example of a property Ryan acquired where he increased the NOI.
- Managing and mitigating risk is how Ryan prepares for the predicted downturn.
- Why having a flatter organizational structure improved Ryan’s business.
[bctt tweet=”Our entire focus is the value of cash flow and as a byproduct cash flow. — Ryan Smith” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
Ryan Smith Direct Line — 407-602-7662
About Ryan Smith
Ryan Smith is a Principal at Elevation Capital Group, with more than 15 years of extensive business experience in market valuation, property analysis, management systems, due diligence, and finance. Elevation, through its affiliates, has acquired properties worth more than 475 million dollars and has an interest in over 175 assets across more than 30 states.
Ryan graduated from the University of Tampa with a Bachelor of Science in Computer Science. While Ryan ultimately chose to pursue a path of entrepreneurship, he was also a highly recruited athlete both for both baseball and basketball and was drafted as a senior in high school by the Baltimore Orioles, and again in college by the Anaheim Angels. He currently lives in Orlando with his wife Jamie and their four children.
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