My Investing Principles: The Rules I Actually Follow
Most investing principles are written after the fact, which is why they tend to sound like slogans. Mine came out of specific situations where I did not have a rule, made a decision badly, and afterwards worked out what the rule should have been.
There are five. They are not clever, and none of them are unique to me. What they are is load-bearing, in the sense that when I have ignored one it has cost me something.
One: understand the process before you need it
This is first because it is the only genuine advantage I started with.
I worked at a local Housing Authority at 17. Before I owned anything, I spent my days watching tenancies move through the system, which meant that by the time I bought my first property I already knew what a Request for Tenancy Approval was, what an inspector would look at, and why an incomplete packet sits on someone’s desk for two weeks.
That is not talent. It is homework I happened to do years before I needed it. And the reason it matters is that most of the friction in this strategy is administrative rather than financial. The deal math is arithmetic. What actually costs people money is not knowing that rent is capped by two separate tests, or that a unit has to pass inspection before any payment starts, or that a missed correction deadline can suspend your subsidy while you keep paying the mortgage.
All of that is published. Your local agency gives it away in a landlord packet. I learned it early; you can learn it in an afternoon’s reading, and it remains the highest-return hour available in this business.
Two: buy the market, then the house
The house is the thing you look at. The market is the thing that decides whether it works.
If a large share of your rent is set by a local payment standard rather than by what one tenant can personally afford, then your returns are substantially determined before you ever open a listing. What matters is the relationship between what property costs in a place and what the housing agency will pay there.
That relationship is almost never favorable in expensive coastal metros, where prices have run ahead of rents for a decade. It is often favorable in lower-cost, landlord-friendly states. This is why I buy out of state, which sounds reckless until you notice the alternative is letting your postcode set your returns.
The discipline this principle enforces is order of operations. Pick the market, pull the payment standards, then look at houses. Falling for a property first and reverse-engineering a market thesis around it is how people end up owning something in a place they would never have chosen deliberately. I go into the mechanics of that in the method explained in plain English.
Three: price all five costs, every time
A first deal has five costs. Down payment, closing costs, repairs to pass inspection, holding costs while the agency processes approval, and reserves.
I break this out separately because the industry I work in, mine included at times, has a bad habit of quoting the first and letting people assume it is the total. I have said elsewhere that I think this is less a lie than a habit that damages the person it is aimed at, and I stand by that. Someone who arrives under-capitalised does not get a good outcome, and eventually that is bad for whoever taught them.
The holding-cost line is the one people miss even when they are being careful. Between closing and your first payment, you own the property, the mortgage is due, and nothing is coming in. How long that lasts depends on your agency’s processing speed, its inspector capacity, and whether your paperwork was complete. Two of those three are not yours to control.
The rule I apply: if a deal only works with no reserves, it is not a deal. It is a bet that nothing goes wrong, in an asset class where things go wrong on a schedule.
Four: fix things the week you are told, not the week they are due
This one came from watching other people’s abatements.
If a unit fails an inspection during a tenancy and you do not correct it inside your agency’s window, the agency can abate the Housing Assistance Payment. That means the subsidy stops while the contract stays alive. You generally do not recover that money for the abated period, and you cannot bill the tenant for it. Meanwhile the mortgage is still due.
The part that turns this from an inconvenience into a genuine problem is that re-inspection scheduling is not under your control. You can complete repairs on day three and still wait weeks for someone to come and confirm it. Every day you spend deciding whether the deadline is really firm is a day added to that queue.
So the rule is not “meet the deadline.” It is “start immediately,” because the clock you actually care about is not the one on the notice.
Five: never claim an outcome you cannot control
This is the one I hold myself to hardest, and the one this industry breaks most often.
I do not know your market, your credit, your local agency’s processing times, or what condition the house you are looking at is in. Nobody selling education does. So there is no honest version of a guaranteed return, a guaranteed timeline, or a guaranteed deal, and anyone offering one is either confused about their own business or counting on you not noticing.
What can honestly be claimed is narrower and, I think, more persuasive. A large share of your rent in this strategy is insulated from your tenant’s employment risk, as long as you keep the unit compliant. That is genuinely different from market-rate rental. It does not need inflating, and inflating it is how people end up with expectations the program was never going to meet.
The same rule applies to my own numbers. Where a figure about my portfolio or my students cannot be stated with a clear definition behind it, I would rather not state it.
Where these came from
None of these arrived as insights. Every one is the residue of a situation I handled worse than I would now, which is the only way principles ever get made.
They also travel badly as slogans and well as questions. Before a deal: do I actually understand this agency’s process, or am I assuming it works like the last one? Have I chosen this market deliberately, or did I find the house first? Have I priced all five costs, or four? And after: am I treating this notice as urgent, or as paperwork?
If you want the longer version of how I got here rather than what I concluded, that story is on this site too. And if you want the underlying mechanics rather than my opinions about them, the full walkthrough of how the voucher program works is the better starting point, because principles are worth very little until you know what they are principles about.
