The Logistics Backbone Code
Happy Cashflow Code Day!
Another day to generate instant income from the biggest real estate companies in the world with just a few clicks of your mouse!
This is the fourth time we're using a cashflow code from today's company…
And the first three times netted us $340 in total…
So you can see why I'm anxious to go back to the well for some more!
Today's company leases space in its 1.2 billion square feet of properties in 19 different countries and is trusted by many of the names you know, such as…
Amazon…
FedEx…
And even BMW…
Thanks to their proximity to transportation hubs such as freight terminals, ports, and airports…
They are usually the first choice for these brands as well as nearly 6,700 other clients as their answer for distribution…
Making them the ‘logistics backbone' for some of the biggest names in the commerce supply chain…
One of the company's buildings in Edison, NJ
This company has also delivered results for its investors…
And as you'll see below, they have an income track record envied by many other publicly traded companies…
Time to grab some more cash flow from this company by using this specific cashflow code:
PLD231117P00100000
Before we get to all the details, here's what I'm going to cover for you:
- The fundamental story: You'll see why I'm still so excited about one of the biggest logistics property owners in the world. If you're ready to make some money from the largest portfolio of global logistics real estate… you're going to love this opportunity!
- How the transaction works: You'll see how to generate at least $55 in instant cash flow. You'll see the steps involved… and I'll show you a screencast showing how to place this trade in your account.
- Ongoing support: If you're confused by ANYTHING below, simply submit a question here, and I'll do my best to cover it in our upcoming Q&A podcast that we'll email you on Tuesday around 4:00 pm ET. Remember, this is a learning process. So don't be hasty. Learn each week and write down your questions. Then listen to those podcasts to learn even more about what I'm showing you here.
Let's dive in…
Happy Cashflow Code Friday!
I'm in New York for business and celebrating my wife's 40th birthday!
But the great thing about the Weekly Cashflow Triggers is we can collect our weekly mailbox money from anywhere in the world…
On Wednesday, The Fed announced it kept rates at current levels and also suggested more hikes are to come…
This has caused the 10-year treasury to break out above 4.68% and is going to put more pressure on the overall market…
This is great news for us because that means the premiums we collect will be extra juicy.
Resting Easy With Weekly Cashflow From REITs
As you can see, the Weekly Cashflow Triggers I provide each week are my best opportunities to make consistent income from real estate…
By collecting rent checks from the strongest REITs that have solid debt metrics, well-diversified tenants, and modest payout ratios…
These are the best opportunities to capitalize on high levels of cash flow that will, in turn, super-charge total returns.
Now, you can see why I love our Weekly Cashflow Triggers…
As I show you each week, retiring rich from real estate income doesn't need luck…
Nor does it need the headaches of managing tenants, termites, and toilets…
And it's the easiest… It's only a few clicks and cha-ching!
And that's my goal: Help you generate weekly real estate income with a few clicks of that mouse that beats the market…
While being able to sleep like a baby at night!
And today, we're going to use this cashflow code to generate another instant rent check:
PLD231117P00100000
Amplified Cashflow with The Fastest-Growing Real Estate
The company I'm going to show you how to generate instant cash flow from today is Prologis Inc., ticker symbol PLD.
Prologis is an industrial REIT that owns roughly 1 billion square feet of real estate and developments in 19 countries…
And it has $180 billion in total assets under management…
PLD ranks as the 68th largest company in the S&P 500, which is made up of the top 500 US companies by market capitalization…
For context, that puts it ahead of iconic companies such as Ford (F), American Express (AXP), General Motors (GM), and Citigroup ©…
What that means is global logistics is a big business, and Prologis is the global leader in this space.
The company rents out 4,800 logistics facilities to approximately 5,800 clients…
Prologis owns industrial properties – large warehouses – which the world's major eCommerce and logistics (shipping) companies use to carry out their operations…
I love this REIT because Prologis is taking advantage of the multiyear shift from physical retail to eCommerce…
Right now, eCommerce sales represent about 20% of total goods sold in the U.S…
During Q1, new eCommerce leasing for the firm hit 19% of all new leasing…
According to eMarketer, eCommerce spending should continue to climb…
But, Prologis expects to see the digital sales market share rise above 25% by 2024.
The eCommerce trend has helped Prologis become one of the fastest-growing REITs in recent years…
During the seven years from 2014-2020, Prologis generated an adjusted funds-from-operations CAGR of 18.1%…
Which is remarkable in the world known as Wall Street…
Looking at the list of Prologis's largest customers, you'll see popular names like Amazon, FedEx, Home Depot, and Walmart…
The growth in eCommerce will contribute to a fairly strong demand for warehousing and storage services in the coming years…
What makes Prologis the leader is their ability to focus on high-barrier, high-growth markets…
Even during an economic downturn, PLD's occupancy rate tends to remain stable…
What's even better is that they have been able to increase rents…
“Market rents have continued to grow, demand has been consistent, and we're seeing sharp declines in new construction limiting future supply.” -Tim Arndt, CFO
Right now, Prologis shares are down by approximately 29% from its April 2022 highs…
That's important because the market has already discounted a slowdown…
The disconnect between Prologis's fundamental growth and the irrational market sentiment has made it an attractive buying opportunity…
That's if we wanted to buy shares, but this is useful because we know the future downside risk is limited…
I look at Prologis's property portfolio and management's vision of the future…
And I see a company poised to be a gift that keeps giving to its shareholders. Prologis is on a nine-year dividend growth streak…
Over the last decade, the stock's 10-year dividend growth rate is 8.4%. It currently yields 2.83%. That level of dividend growth is likely to continue…
That combination creates an attractive compounding situation for patient investors…
For us to make a promise to buy shares lower gives us a solid floor where buyers will come in and hold prices…
This means we can keep collecting instant rent checks from Prologis in 2023 and 2024.
So, let's collect our weekly rent check using this cashflow code.
The LV-Strip Cashflow Code
Here's this week's cashflow code we're going to use: PLD231117P00100000
At last glance, this cashflow code is trading between $.45 and $.60 per contract.
So that means for every contract sold, I'm going to collect between $45 and $60 of cash flow. If you sell more than one contract, the cash flow you'd generate would go up.
How will this cashflow code generate that cash? Well, this cashflow code identifies the Prologis, Inc. (PLD) November 17th, 2023, $100 put option that we're selling for cash. (Module 3 of the quick start series specifically covers options pricing and how to conduct these transactions if you need a refresher.)
Here's a screencast of me finding this cashflow code and entering the transaction in my brokerage account:
Here are the instructions written out…
Action-to-Take: Sell-to-open Prologis, Inc. (PLD) November 17th, 2023 $100 put option
Here's what I do while in a brokerage account if you're not just copying and pasting the cashflow code. (Remember, depending on what brokerage platform you're using, it might look different than my video. But these instructions should help.)
Step 1: I type in the ticker symbol PLD
Step 2: I open the options chain for the November 17, 2023 expiration cycle.
Step 3: I locate the $100 “PUT” strike, which is located in the November 17, 2023 expiration cycle
Step 4: I double-checked the ticker symbol, expiration, strike and options contract type or what I call the “cashflow code”: PLD231117P00100000
Step 5: I click on the “BID” price to open the order entry menu. (The bid price will be lower than the ask price.) The order entry MUST say “SELL” & “SINGLE”
Step 6: I select how many contracts to sell-to-open (remember from the quick-start series, this strategy is to “selling-to-open” or “STO… not buying.)
Step 7: I enter my price at $.55 since prices are trading between $.45 and $.60… $.55 is in the middle of the market and will likely get filled at that price, which is why I chose that.
Step 8: Click “Confirm & Send” to review the order. This is where I double-check again to make sure that it matches the exact cashflow code, quantity, buying power effect, and that I'm selling-to-open.
Step 9: Then I press “send”
Or, if you're using ThinkorSwim, you can paste the pre-populated order with this code SELL -1 PLD 100 17 NOV 23 100 PUT @.55 LMT
Remember, it's best to use your paper trading account for this starting out. After you've done it successfully in your paper trading account, if you feel confident enough, then you can replicate it in a real money account.
Now, this instant cashflow transaction in a margin account would've meant that the broker would have set aside $1,000.50 in buying power for every put contract we sold. (I discuss margin accounts in detail in Module 2 of the quick start series.)
You don't have to use margin, but if you do, that's important to understand and ask questions about.
This margin calculation is based on the broker's margin schedule, which is determined by the current expected range. This requirement could increase, which is why you'd want to have a cushion of cash in your account if you use margin on these trades. That helps you make sure you don't get into trouble.
Now, if we wanted to use a cash-secured approach (cash-secured put-selling is also covered with JP in Module 2!) on this transaction, we would've used a cash account.
In that case, the broker would set aside $9,945 for every put sold.
This cash set aside is to make sure that if PLD share prices started dropping below the strike price by expiration, I would be able to take on the risk of buying back the stock instead of keeping my cash flow.
Let's play out a few scenarios…
Ok, so here's how I am going to manage this cash flow position.
Best case: I'm going to be looking to buy-to-close the Prologis, Inc. (PLD), $100 put option contract at a 55% profit or at $.25 per contract. The reason is because we want to manage to keep our profits and reduce our market exposure.
The stock market moves, and we want to dance with it, not stand still.
Once we lock in our profit, we can redeploy for another opportunity with more cash flow opportunity.
So, best case scenario… generate and keep instant cash flow.
Then rinse and repeat…
Worst case: We don't have to worry about Prologis, Inc. (PLD) going bankrupt, so the real risk is short-term market volatility that could push shares below our $99.45 (strike price – premium collected).
If that does happen in the short term, I'll buy-to-close this position and roll it out for more time while collecting more cash flow.
So, in other words, we would just need a little time for the market to go in our favor. This will take a little more buying power, and why we always want to keep 50% of our buying power available.
Next steps…
Ok, so this alert covered A LOT…
Read this multiple times… write down your questions as you go.
And then, submit them on this page in the question box. I’ll answer them in an upcoming Q&A podcast. Those podcasts are sent to you each week, and I’ll do my best to get to everyone’s specific questions.
Josh Belanger
Editor, Weekly Cashflow Triggers
