In the current issue of German entrepreneurs magazinÂ impulse
constructor and hotel operator Ekkehard StreletzkiÂ gives very good insights into his business principles:
“Others say, that the most important thing is location, location, location.
I say, the most important thing is repay, repay, repay !”
And he is right, he decided to open TheÂ Estrel BerlinÂ Europeâ€™sÂ largest convention-, entertainment- & hotel-complex, with 1,125 rooms in the Berlin, in the middle of nowhere. Neukoelln was until lately a no-go area for most Berliners.
But because there are just a few hotels in Berlin to host literally thousands of guest,
The Estrel Berlin beats the competition with pure size.
And like other well known investors and business men Ekkhard Streletzki knows that only a few things bring freedom to entrepreneurs and investors:
Real cash flow and the biggest possible equity in the deal.
Location, location, location works for investors that want to secure their wealth,
but if you want to build wealth location, location, location is the wrong strategy.
Location reduces risk but reduced risk always comes along with reduced income (or yield).
To close a deal with minimum equity and to hope for a big capital appreciation is a misleading get-rich-quick-scheme in a new package.
If you think a deal is worth to be sealed, always put as much equity as possible.
If you need a loan, try to minimize the loan from the very beginning.
If you have a loan repay as much as possible.