Most know him as the billionaire entrepreneur and Angels’ owner, but there’s much more to his story.

What many don’t know is that Arturo (Arte) Moreno is one of the world’s sharpest investors who has amassed most of his $4.7 billion fortune through well-timed investments.

The secret to his success?

Although Moreno is an intensely private person and rarely grants interviews, he recently shared some insights into his investment playbook with Forbes’s John Hyatt.

Here are the key takeaways from that interview.

Don’t over borrow when the going is good

The Great Recession taught Arte Moreno one of the most painful lessons about leverage.

In 1998, he sold his billboard company to Infinity Broadcasting for $83 billion dollars in CBS stock and stock options. And much of his cash was tied up in his next $180 million purchase—the Angels.

So to raise cash to fund current investments, Moreno decided to take margin loans against his stock portfolio. For a few years, things went swimmingly.

But when the stock market meltdown of 2008 happened, Moreno had millions of dollars in outstanding margin loans. “Every day, I was getting another margin call,” he said.

(Explainer: A margin call is what happens when you borrow money from your stockbroker, using your stocks as collateral. When the value of your collateral falls, the broker issues a “margin call”—which demands investors to immediately put up additional cash.)

So, every day, Moreno had to sell off a piece of his stock portfolio to cover his margin debt. Just the act of selling off his stock created a new problem: Every sale generated a capital gains tax liability.

Then he had to raise more cash to pay the tax. That meant he had to sell still more stock. Which generated yet another round of capital gains tax liability.

It was a vicious, vicious cycle. But Moreno learned his lesson: Don’t over borrow, and keep a healthy allocation in cash.

Hold enough cash for once-in-a-lifetime opportunities

Moreno is a big believer in cash, not so much as a safety net, but as a tool to seize opportunities.

“In the last seven, eight years, I have had no debt. If I can’t pay cash, I don’t buy it,” Moreno says. “I got debt averse–to a fault. Because there’s been some good opportunities. But I didn’t want to go back to leverage.”

After the Great Recession of 2008-2009, banks were desperate to sell off vast amounts of distressed real estate. And thanks to being one of the few with access to a large amount of cash at the ready, Moreno was poised to buy a lot of quality real estate for a song.

“I was in a cash position and everybody had just got hammered after the Great Recession,” Moreno says.

“So I went to the banks and started buying distressed real estate: apartment buildings—mostly apartments—and some office space. I really had an opportunity in 2011 and 2012, because I was in this cash position.”

Invest in real estate—“they aren’t making any more of it”

When it comes to asset classes, Moreno has always sworn by real estate.

He made his first “real investment” shortly after returning home from the Vietnam War. He used a VA loan to buy a two-bedroom house. He put 10% down on the $20,000 purchase price (hey, it was the late 60s!) and promptly rented it out to two buddies.

He converted the garage into a studio apartment, which he rented out to a mailman—and his first investment was cash-flowing almost from day one.

Instead of spending the money on cars and girls, Moreno chose to reinvest his profits in real estate. As the years went on, he bought more and more rental income properties and added them to his steadily expanding portfolio.

By Moreno’s 30th birthday, he owned about 80 units.

Today, Moreno still maintains a large real estate portfolio, which he keeps spread across several different categories, including apartments, strip malls, restaurant properties, grocery stores, and raw land outside of town awaiting residential development.

Moreno’s advice to young people today is simple: Buy more real estate.

“If you're lucky enough to buy a house and own a house, that should be your number one asset,” says the father of three now-grown children. “It’s somewhere where you have your family and take care of your family.”

And once you’ve done that, Moreno recommends buying more. “There’s only X amount, and they aren’t making any more of it!”

Moreno also advises against borrowing too much—even on real estate investments, which are traditionally very highly leveraged.“

For me, real estate is limited. It’s very, very limited. And there’s always value on it.” Moreno says, referring to the fact that there’s a finite supply.

“If you buy it right, and you are leveraged properly on it, you can ride the ups and downs. People that overpay and don't leverage it right put themselves in a trap.”

Buy dividend-paying stocks at a reasonable price

Moreno’s no one-trick pony. In addition to his substantial real-estate holdings, he also holds a diverse array of stocks.

But here, too, Moreno’s investment approach is similar to his approach to real estate investing: He focuses on dividend-paying stocks that actually generate current income.

That means that each quarter, these companies actually cut a check to each shareholder, dividing up each owner’s share of the business’s profits.

In effect, these companies actually pay you in cash just to own them. If they go up in value, fantastic! If they don’t, or even if they decline in value, you get paid to wait.“

Pretty much everything I deal with has some type of return on it; some kind of dividend,” says Moreno.

"So when you're looking at a stock and not only do you really like the asset, but then they're giving you a dividend, it’s such a bonus. You're setting yourself up for potential stock growth. But you're also receiving 3% to 4% annually.”

The “15x” rule

Moreno also likes to buy stocks with a price-to-earnings ratio of around 15 times earnings. That means if a company is generating $1 per share of earnings, Moreno doesn’t want to pay much more than $15 for it.

“I look at a company that's not generating any cash, has no dividend and has this crazy high PE multiple, and I just stay away. I think it's for other people. It's not for me,” Moreno says.

Hard to argue with that kind of success.