THE RADIO BLOG
Listen in as Porter talks with his longtime friend and first boss, Justin Ford. Join in as two great friends talk about what they both agree is one of the absolute best investments that anyone can make. Justin's put together a fantastic new course on real estate investing. He calls it his C.A.P Strategy. He’ll tell you why almost every real estate investor analyzes investment real estate wrong and how they focus on what they can’t control instead of what they can. - Interviewed by Aaron Brabham & Porter Stansberry
I bought my first home in 1987; in 2002 I began to buy income-producing properties. To date, I have bought 32 properties in six cities in three states. I have taken my share of lumps through the boom and bust. However, I made capital gains on properties I sold, maintained high occupancy on properties I kept, and have never been late on a single mortgage payment.
My approach can be summarized as follows: 1) I only buy income-producing properties at cash-flow prices; 2) I adequately capitalize each property. 3) I buy at or below market value. 4) I follow cash-flow fundamentals to avoid bubble markets. 5) I finance conservatively, preferring fixed-rate loans; 6) We choose our tenants as carefully as we choose our properties.
Professional Profile apart from Real Estate
I’ve spent 17 years as an editor and publisher in the financial publishing business. For the last 12 years, I have been self-employed by my own company, Seeds of Wealth, Inc., though my main client remained my former employer, Agora, Inc., the world’s largest publisher of financial newsletters. This career has taken me all over the world and helped make me a better investor.
I have visited central banks, finance ministries, stock exchanges, and leading public companies—from Beijing to Tokyo, Hong Kong, Prague, Paris, London, New York, Sao Paolo and Buenos Aires, among others. I have worked with, interviewed and learned from Global 500 CEO’s, high-level public officials and truly independent analysts.
From 1993 through 1999, I published international investment and business-to-business newsletters, covering Latin America, China, Africa and the former Soviet Union. During this time, I also became the founding publisher of the US version of The Fleet Street Letter, then the oldest continuously published financial newsletter in the world, with roots in the 19th century.
In 1997, I began publishing The Richebächer Letter, a monthly analysis of global capital and currency markets written by Dr. Kurt Richebächer, the former head of Dresdner Bank and a leading Austrian School economist. Dr. Richebächer’s training in classical economics and independent analysis enabled him to warn of the crisis brewing in Asia before it erupted in 1997 and the Internet bubble before its collapse in 2000. In 2002, he began warning in great detail of the brewing derivatives crisis, even identifying the major banks that would be most impacted in the eventual crisis. On more than a dozen occasions, the viewpoints of our analysts were quoted by The Wall Street Journal, Barron’s, andThe Financial Times.
In short, I’ve had the good fortune to work learn from independent analysts around the world—free from the conflicts of interest that led to the disastrous analysis and decisions of so many ratings agencies, financial institutions, and government agencies during the bubble.
This is not to imply I have a perfect track record. There are at least two properties I own that, if they were fish, I’d throw them back. But we’ve never been late on a mortgage payment on them or any other property. And that, I believe, is because I’ve been steeped in the ideas of value investing and theresponsible use of productive debt. As a result, I’ve bought only at cash-flow prices, I’ve budgeted reserves for tough times, I’ve financed conservatively, and we’ve worked hard at managing our properties well and maintaining high occupancy.
This approach has left me with equity, cash and credit after the crash of the real estate market. It has also left me with the capacity to take advantage of today’s extraordinary values—and help others do the same.
Authorship of Books and Articles
I have researched, written and edited hundreds of articles and papers on financial markets and real estate investing, as well as a number of books. Following are some highlights.
1. Seeds of Wealth - A parent-directed program for helping children develop good money habits from an early age.
2. Dr. Van Tharp's Safe Strategies for Financial Freemdom - contributing author
3. Main Street Millionaire - A course on real estate value investing
4. Sunbelt Value Cities - co-author of a study that showed far greater value for real estate investors in markets such as Austin, Texas than in the then-inflated markets of South Florida, California, Arizona and Nevada.
From 2004 to 2006, I wrote over two dozen articles in Early to Rise, a personal-success e-zine with over 400,000 readers, and repeatedly warned of dangerous real estate bubbles brewing in major US markets. In January, 2010, I wrote an article for The Sovereign Individual, an investment newsletter, saying that for the first time in years markets like Florida and California now offered compelling value. The article was reprinted by the California Multi-family Investors Association. In March, 2011, Daily Wealth, the largest individual investment newsletter advisory in the country, quoted my views on the current real estate market and rental demand.
In 2013, PSIA, the country’s largest publisher of investment newsletters for individuals, will publish a new residential real estate investment course by me called Justin Ford’s CAP Strategy. The premise is that there are four ways to make money in real estate: cash flow (C), amortization (A), Positive Leverage (P) and Appreciation. Appreciation is the only one you can’t control, yet it’s the one that many investors focus on. This is why so many investors and banks got hit hard in the crash. You are, however, in control of whether your investment has cash flow, amortization and positive leverage. The course teaches that by focusing on these factors you can make good returns even if prices remain flat.
Formal Education and Training
I have a B.A. from Fordham University and have studied economics and finance at the graduate level. I was a scholarship exchange student abroad, lived in four countries and traveled to dozens of others. I speak, read and write English, Spanish, French and Italian.
I have a Florida Real Estate Broker’s License, a Community Association Manager’s License, a Mortgage Originator’s License and Certification as a Building Inspector.