Cashflow
I know I bring this up a lot, but I just want to reiterate something. Cash flow is all that maters when looking a an income stream weather it is buying a operating business or a piece of real estate. It is only worth a multiple of its cash flow. I think the biggest single mistake investors make when it comes analyzing cash flows is that they underestimate expenses. Be very realistic when you predict future expenses. If you are buying a business make sure you include in your expenses a dollar amount for the amount of work you put into the business. To many people assume that it is going to take no work to run. I do not care what kind of business it is or even if someone else is running it. All business need some work on the part of the owner. The time you spend on your business needs to be an expense to the business. I read some place that the owner of a business should always pay him self first not last. Most business owners, take out of the business at the end of the month with what is left over. I propose that at the beginning of the month you pay your self your salary, that way you know that if by the end of the month there is a cash flow problem, you need to change something
