Mon, 23 May 2022
Are “coffin homes” coming to the United States? This is concerning. Housing is so expensive that people live in cocoons. A new Biden plan makes efforts to increase American housing supply. Finally! We need help on the supply side, not the demand side. I explore recession prospects with you. During 7 of America’s 8 recessions (over the last sixty years), home prices only fell once. What Really Matters: “If you had invested $1,000 in JP Morgan in 1882, you’d be dead today.” You can borrow against your RE portfolio’s value with a cash-out refinance, tax-free. It’s like “lump sum cash flow”. Add properties to your portfolio through our international network at GREmarketplace.com Resources mentioned: Show Notes: GRE Video: What Really Matters https://youtu.be/Yhkvjg-gj9Q California’s Cocoon-Like Pods: https://www.cbsnews.com/news/sleeping-pods-startup-800-a-month-brownstone-shared-housing/ Biden’s plan to increase American housing supply: American Median Home Price Since 1963: https://fred.stlouisfed.org/series/MSPUS Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 16 May 2022
Will you be banned as a real estate investor? Some jurisdictions consider adopting this stance to keep soaring prices in check.
Some workers cannot afford to return to the office. If they leave home, they would have new expenses for gasoline, meals, parking and the big one—child care. Of the “5 Ways Real Estate Pays”, historically: three are now high, one is low, and one is the same. Caeli Ridge joins us. She’s the President of Ridge Lending Group. They specialize in income property loans. Despite higher mortgage interest rates, investor-centric mortgage companies like Ridge haven’t seen much decline in business. Learn why. Their “All-In-One Loan” can reduce the amount of property interest that you pay over time. It’s a 30-year line of credit with high flexibility. Use Ridge’s All-In-One Loan Simulator to see if you save: https://ridgelendinggroup.com/aio-loans/ We discuss interest-only loans (which I like) and negatively amortizing loans. The latter got borrowers in trouble during the Global Financial Crisis; LTVs were as high as 115%. Interest rate lock periods are up to 90 days at Ridge. Investing out-of-state is easy. A mobile notary comes to your home, office, or even on vacation at a resort. Ridge helps you sequence your investor loans, taking a long-term, holistic approach to your financial freedom. Resources mentioned: Show Notes: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE All-In-One Loan Simulator to see if you save: https://ridgelendinggroup.com/aio-loans/ Dallas’ proposal to limit REIs: JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 9 May 2022
The mad scientist of multifamily is here today. Neal Bawa is a data scientist. He keeps emotion out of real estate for investors in his $947M portfolio. He believes that higher mortgage interest rates are a smaller obstacle than the Fed’s currency creation and destruction. He says: “Accept the risk.” We discuss investor confirmation bias. Neal thinks American cash flow will keep diminishing. Of all emerging trends, Neal believes that the work from home trend is among the most substantial. Learn more about Neal at www.MultifamilyU.com or by searching “Neal Bawa”. The blockchain is a digital ledger. It allows everyone to access information publicly and securely. It allows for the democratization of information. Blockchain looks to disrupt the real estate title industry. Exorbitant title insurance fees could go extinct. Tokenization is easier with blockchain. This means that you can sell real estate shares without friction. Institutional investors are poised to own more of the real estate market, taking share from mom-and-pop operators. Resources mentioned: Show Notes: Neal Bawa’s resources: Google search “Neal Bawa” Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 2 May 2022
Rents are spiking 13-15% annually in America today. When they rise, they rarely ever fall again. This is why rent amounts are called “sticky”. Learn why.
Even when I was a landlord during the GFC fifteen years ago, my rents didn’t fall. Rents are skyrocketing due to:
Next, I talk with an Alabama / Florida builder about how he overcomes today’s material supply chain and labor shortage difficulties. They have a 93-day build time. How? They store windows so that they cannot run out. Cabinets have been a problem so bad that they’ve had to leave homes 99% complete until cabinets were ready. Lumber and petroleum product price volatility has been a challenge. They have their own division for titling vacant land for future building. Alabama has America’s 2nd-lowest property taxes. As an out-of-state investor, you get to pay property tax in the state where you own property, not where you live. To get started with Alabama income property, start at: www.GREmarketplace.com/Alabama This build-to-rent provider uses fixtures like: LVP, granite or quartz countertops, stainless steel appliances. LTRs and STRs will be available shortly. Start at: www.GREmarketplace.com/Alabama Resources mentioned: Show Notes: Get started with new-build AL & FL long and short-term rentals: www.GREmarketplace.com/Alabama Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 25 April 2022
The housing crash is 100% certain. That’s because it’s a supply crash, not a price crash.
I define a price crash as a loss in valuation of 20% or more. Here are the bubble factors that I consider in today’s show: Price, inflation-adjusted price, interest rates, affordability, bond yields, personal incomes, foreign buyers, equity position, housing supply and more. From 2018 to 2022, I tell you about my recent housing forecast history. Redfin shows us signs of a housing market slowdown. For Jacksonville investment property, start here: www.GREmarketplace.com/JAX Properties that don’t cash flow with a 20% down payment often do with a 40% down payment. But your leverage falls from 5-to-1 down to 2.5-to-1. Jacksonville has low cost properties, favorable climate, strong population growth, and growing industries like the Port Of Jacksonville. Get started with Jacksonville property at: www.GREmarketplace.com/JAX Resources mentioned: Show Notes: Get started with Jacksonville property: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 18 April 2022
One niche that people are passionate about is investing in self-storage facilities (SSF). SSFs are recession-resilient and there’s less to maintain. Your “tenants” are often cardboard boxes, not humans. This makes it easy to manage. Tenants often expect to stay for 6 months, but stay for 3 years. A 10 x 10 storage space might rent for $200. You could increase the rent by 10% to $220. They won’t move out due to a $20 increase, but you got a 10% rent hike across all your units. The best SSF locations are accessible, for example, near an expressway interchange. SSFs are little more than 4 pieces of sheet metal, a floor, and a door. You can invest alongside today’s SSF expert guest, Dave, at: www.gremarketplace.com/selfstorage This business model: Buy property from a mom-and-pop operator, add size and scale, and sell to a REIT, all in a 3 to 6-year span. One must be accredited and invest at least $50K. Investors receive reports quarterly. SSF cash flow is modest, typically 3-7%. This is an equity play, where you could 2-3X your funds on the sale at exit time. Learn more and get started at: www.gremarketplace.com/selfstorage Resources mentioned: Show Notes: Get started. Learn more about self-storage investing: www.GREmarketplace.com/selfstorage Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 11 April 2022
Why are home prices surging? I’ve got 10 big reasons and break down every one. Some reasons are not obvious. America’s residential loan-to-value ratio is just 31%. Interest-only loans are my favorite loan type. You don’t need to make any principal payments. Most people think interest-only loans awful. I explain why they’re often so advantageous. You meet GRE’s Investment Counselor, Naresh Vissa. For off market property, e-mail him at naresh@getricheducation.com. Naresh’s service is free to you. He guides you through the purchase process. He owns 8 properties in 4 states himself. Contact Naresh. GRE has 50+ properties available today - SFR up to 5-plex, LTR, STR, and more. Resources mentioned: Show Notes: E-mail GRE’s Naresh Vissa for off-market property: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “GRE” to 307-213-3475 or: By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 4 April 2022
Uncertainty is high. Inflation is spiking, supply chains are unreliable, and COVID keeps hanging around.
Russia’s invasion of Ukraine threatens to make inflation and supply chain reliability worse. Amidst this backdrop, today’s guest, Richard Duncan, discusses prospects for a US recession. Richard reiterates that the US needs credit growth of at least 2% annually (inflation-adjusted) to avoid a recession. In a recession, nearly every asset class would be affected. The wealth-to-income ratio’s importance is discussed. The Fed has begun hiking interest rates. They soon plan to begin destroying dollars with quantitative tightening. Richard wrote a new book, The Money Revolution. It includes a history of the Fed, and points out that China is positioned to become more powerful than the US. But the US can stay in power if it creates tons of money in order to finance infrastructure, green energy, biotech, nanotech, and more innovation. Richard maintains that capitalism no longer drives the economy. It’s “creditism” and “consumerism”. I ask Richard about the risk of creating more dollars than production and innovation. Contrary to seemingly everybody, Richard believes that the Fed is a force for good. Resources mentioned: Show Notes: Get MacroWatch for a 50% discount with the code “GRE”: www.RichardDuncanEconomics.com Richard’s new book: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “RICH” to 307-213-3475 or: By texting “RICH” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 28 March 2022
Now you have to earn your money twice. The first time is when you work for it, the second time is when you must invest it to beat inflation. My explainer on why higher interest rates slow inflation.
“Inflation is legalized counterfeiting. Counterfeiting is criminalized inflation.” -Robert Breedlove When wages don’t keep pace with inflation, I explain why it destroys families. We compare short-term (STR) and long-term rental (LTR) property in southwest Florida. Get started with buying properties yourself at: https://gremarketplace.com/SouthwestFlorida Of course, Florida is an in-migration hotbed. Home price appreciation and rents are both 10%-20%+ year-over-year. Today’s LTR tenants seek: infill lots, more square footage, an extra bedroom / den, and grocery store proximity. STR tenants want a pool. You really make your money November through April. LTRs have more recession resistance than STRs. LTRs have more predictable, year-round income. STRs often have $4,000-$5,000 a week of rent income. They have a 20% management fee. You can charge the tenants a cleaning fee. You owe utility costs and ~$100 monthly yard maintenance. Single-family rental properties are 1,500-1,900 sf on a ¼ acre lot, LVP flooring, granite countertops, stainless steel appliances, 9’4” ceilings, and concrete block exterior walls. Pricing is in the low $300Ks to low $400Ks. Long-term rents are $2,000-$2,400 / month. To get started with buying single-family homes and duplexes (long-term and short-term rentals) in southwest Florida, start at: https://GREmarketplace.com/SouthwestFlorida Resources mentioned: Get started with SW Florida long-term and short-term rentals: https://GREmarketplace.com/SouthwestFlorida Show Notes: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “RICH” to 307-213-3475 or: By texting “RICH” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 21 March 2022
Bitcoin Beach is a real world place. It’s in the tropics and has zero property tax. It’s on the Pacific Ocean. It reminds many of coastal California, but without the sky-high prices. Both bitcoin and the US dollar are legal tender here. Unlike the US, there is zero capital gains tax on bitcoin. A beautiful 40-acre property is being developed on a hill overlooking Bitcoin Beach. Besides luxury homes, condos, and tiny homes, the property plan includes Pacific views from every unit. Home sizes can range from 300 sf up to 10,000 sf. Novel concepts are planned in the community: a gym that powers energy for bitcoin mining, earth embed homes, aquaponics eco-farm, orchards, gardens. More common amenities like a pool, restaurant, and bar are planned. Get started with Bitcoin Beach real estate at: https://gremarketplace.com/BitcoinBeach There’s an option for residency in a second nation for you. Resources mentioned: Get started with Bitcoin Beach real estate: https://gremarketplace.com/BitcoinBeach Show Notes: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 14 March 2022
Today’s high inflation rate is poised to go higher. The latest CPI was up 7.9%. Home prices hit an all time high of $364,000 per Redfin, up 16% annually. Safety factors, building restrictions and the environmental movement all contribute to higher home prices and more homelessness. Larry Reed, the longtime former President of FEE - the Foundation for Economic Education - joins us. He believes that free market principles incentive the best of human behavior - prudent risk-taking, hard work, innovation, and ethics. Larry is an expert on the Great Depression. He relates those lessons to today’s economy. We discuss real estate, economics, inflation, interest rates, and taxes. Learn about the danger of the government “giving away free stuff”. One fault with government intervention is favorable short-term action that results in long-term destruction. Resources mentioned: Show Notes: Foundation for Economic Education: Lawrence W. Reed’s website: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 7 March 2022
The greatest tax gift that your government gives real estate investors could be the 1031 Like Kind Exchange. This allows you to defer your capital gains tax and depreciation recapture.
There is no limit to the number of times that you can do this during your lifetime. You can make millions more with 1031 Exchanges. But there are some specific rules to follow, like the 45-day identification period and 180-day timeframe in which to close upon replacement property. You must use a Qualified Intermediary (QI) to facilitate your exchange. Learn the pitfalls that nullify one from doing an exchange. This is a highly educational show. Resources mentioned: Show Notes: Get started with a 1031 Exchanges: Sign up for our free “Don’t Quit Your Daydream” newsletter: www.GetRichEducation.com/Letter Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 28 February 2022
Residential and warehouse real estate have been two hot sectors. With spiking house prices, investors are pushing out first-time home buyers. This increases the size of the renter pool. Historically, when mortgage rates rise, so do home prices. It’s the opposite of what most people think. For income property loans, get started at: RidgeLendingGroup.com Learn what it takes to qualify for a conventional loan on investment property: down payment, credit score, debt-to-income ratio, etc. There’s an update on today’s refinance climate. Appraisals are generally keeping up with today’s hotter appreciation rates. Learn about the easiest loan to qualify for that you’ve potentially ever experienced - the “DSCR”. Resources mentioned: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE Sign up for our free “Don’t Quit Your Daydream” newsletter: www.GetRichEducation.com/Letter Show Notes: www.GetRichEducation.com/episode/386 JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 21 February 2022
Inflation hit its highest since 1982. The government admits that the CPI is now 7.5%.
Even if your wages don’t keep up proportionally with inflation, learn about how to profit from inflation with real estate. What happens when your tenant can’t afford today’s higher rents? You get answers. Get my prediction on what will happen in a higher interest rate environment. Our COO Aundrea Newbern, MBA, joins us. She tells us about the snowball effect of scaling up your real estate portfolio. In a tight market with low real estate inventory, rather than the buyer waiving their inspection, it’s often better to shorten your due diligence period. Aundrea tells us how to pay yourself a W-2 salary through your LLC. This helps you qualify for more mortgage loans. E-mail Aundrea about finding Georgia income property at: info@getricheducation.com Resources mentioned: Sign up for our free “Don’t Quit Your Daydream” newsletter: www.GetRichEducation.com/Letter Show Notes: www.GetRichEducation.com/episode/385 Get mortgage loans for investment property: JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 14 February 2022
A laid-back lifestyle in a tropical climate typifies “Margaritaville”. Margaritaville is a popular and flourishing real estate brand. There’s also short-term rental income stream for you here. A new location is opening in Belize. It is closer to more of the US than Hawaii, and with warmer water. It has the largest reef in the hemisphere, good for snorkeling, diving, and fishing. This under-construction project has Caribbean beachfront. The partners with the development are the largest private employer in Belize and the nation’s largest law firm. Learn more about owning a Margaritaville villa in Belize at: www.GREmarketplace.com/belize My guest & I discuss the lifespan of tourist locales. They emerge with visits from young backpackers. Later in the cycle, once “discovered”, it matures into visits from affluent tourists. This is a rare opportunity for an everyday investor to partner with a strong brand - Margaritaville. You can own a villa, use it for a few weeks a year, and rent it out for the remainder of the year. You can leverage Margaritaville’s STR management partner. Prices start in the low $200Ks. Real estate contracts are brief and written in English. In Belize, you don’t need title insurance. The government backs all titles. In-person tours are available and encouraged. Our show guest really wants to show you Belize. Learn more and get started at: www.GREmarketplace.com/Belize Resources mentioned: Get started with this opportunity at: Show Notes: www.GetRichEducation.com/episode/384 Get mortgage loans for investment property: JWB’s available Florida income property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 7 February 2022
Housing prices surged 20% annually. Rents have now caught up, rising 19.3%. New homebuilding hit a 45-year high. There are three ways to measure housing market vibrancy: months of available inventory, sale-to-list price ratio, and days on market (DOM). The level of available housing is now just one-fifth of what it needs to be. A new poll shows that “work from home” trends benefit both bosses and employees. I tell you about my Ecuador trip. Our Operations Lead, Aundrea Newbern, MBA interviews me about real estate and my personal life. Resources mentioned: Show Notes: Today’s American housing supply: https://fred.stlouisfed.org/series/ACTLISCOUUS Video: Fitness & Financial Freedom, Age: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 31 January 2022
A high school teacher reveals the sad state of financial education today. Most students still think the path is: go to school, get good grades, go to college, get a job, work until you’re 65, and then start enjoying life.
Dan Sheeks is a Denver, Colorado-based high school teacher and real estate investor. He enjoys working with teenagers. He also volunteers for the Colorado Attorney General to advance financial education. Just last month, Dan released a book with Bigger Pockets: “First to a Million: A Teenager’s Guide to Achieving Early Financial Independence”. See it here. He discusses solutions for teenage financial independence: 1) When you turn 18, get your first credit card 2) “House hack” real estate by age 21 3) Good debt vs. bad debt - do teens understand? 4) Mindset 5) Avoiding mistakes like “meme coins” 6) Saving Dan tells us the two main reasons why there’s a pathetic lack of financial education in school today - funding and politics. Resources mentioned: Show Notes: If you have a child, get Dan’s book: First to a Million: A Teenager’s Guide to Achieving Early Financial Independence Dan Sheeks’ online community for young people: Dan Sheeks’ e-mail (It’s OK to message him): dan@sheeksfreaks.com To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 24 January 2022
There are two main ways to create wealth. Debt-free is not one of them. If you only use your own money, you’ll stay small. Learn why most investments are like baseball cards. One market in America has such astounding resilience that prices were hardly dented in the 2008 financial crisis. Median home prices are still below $300K here today. Dallas-Fort Worth now spans 11 counties, with 7.6M people. This real estate provider focuses on the DFW suburbs. That’s where the growth is happening. Importantly, they use a plan for mitigating their higher Texas property taxes. Housing here appears undervalued and underpriced. People are often underhoused. Due to supply shortages, next day appliance delivery has disappeared. This real estate provider has plenty of available inventory right now. They offer you in-house property management at 6.5%. SFR prices are $160K-$225K. This is an actionable resource where you could buy property and benefit from the five ways you’re paid at: www.GREmarketplace.com/Texas Resources mentioned: Show Notes: Get started with Texas property: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 17 January 2022
You’ve been making $438 each night in your sleep. That’s one result if you’ve been following my plan. I compare real estate’s annual performance to: stocks, gold, silver, bitcoin, bonds, and oil. This state ranked 3rd in Moody’s Housing Affordability Index, has the 7th-largest domestic economy, and is a two-hour flight from 75% of the US & Canada. This state is also home to offices for Google, Facebook, Carvana, and more. In 2020, it ranked 4th of 50 states in U-Haul’s net in-migration. You can still achieve a full 1% rent-to-value ratio here. Get started at: gremarketplace.com. Today’s guests own a turnkey company with three models: Signature Series - fully renovated Instant CashFlow Series - occupied, not rehabbed Equity Advantage Series - vacant, not rehabbed This provider has stopped charging leasing fees for property management. Remarkable. Resources mentioned: Show Notes: Get started with Ohio property: www.GREmarketplace.com/Cincinnati Check out Flip & Dani Lynn’s new podcast: Freedom Through Passive Income To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 10 January 2022
A homeowner’s average equity position is now $294K. That’s what the median home value was not long ago - now it’s one’s equity. I give a quick recap of major economic and real estate events this past year. Last year, there was an average $56,700 of equity growth per property. Our new website, GREmarketplace.com is rolling out. Register and get access to all of our: turnkey providers, pro formas, and sample properties. See videos of us interviewing property managers too. Jeff Deist, President of the Mises Institute joins me. The Mises Institute champions liberty and free market principles. Learn more about them at www.Mises.org Jeff & I discuss: real estate and rental markets, inflation, work from home, cash, low interest rates, debt. I ask Jeff how long he thinks we’ll see real price inflation through the 2020s decade, and prospects for a double dip recession. Get our free wealth-building “Don’t Quit Your Daydream” Letter. I write it myself: www.GetRichEducation.com/Letter Resources mentioned: Show Notes: Mises Institute website: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 3 January 2022
With higher property prices, what rent-to-value ratio makes sense today? I answer this thoroughly. Lower RVs make sense today due to: lower interest rates, new-build properties, the timing of equity harvesting and more. GRE Marketplace is coming soon. Tom Wheelwright joins us to help you reduce your property tax and cryptocurrency tax. Learn why some states have higher property tax than income tax or vice versa - CA, TX, NY, NJ, AK, and more. Many property tax professionals only get paid based on how much they reduce your property tax. Learn what works in actually getting your property tax reduced: comparables. In cryptocurrency, you are taxed on either a sale or an exchange - not just a sale. For example, if you trade bitcoin for ethereum, you have a tax consequence. If you buy a $3 cup of coffee with crypto, that is usually taxed. Miners of crypto are taxed when they mine it, not only when they sell it. Crypto is taxed at capital gains tax rates. Tom does not believe that crypto will be outlawed in the US. Rather, it will be regulated through taxation and reporting. Get our free wealth-building “Don’t Quit Your Daydream” Letter. I write it myself: www.GetRichEducation.com/Letter Resources mentioned: Show Notes: Tom Wheelwright’s website: Tom’s popular book (I’ve read it): To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 27 December 2021
I sold an eight plex apartment building for $789,000 last week. Learn lessons from my sale. Dr. Randall Wray joins us to discuss where our economy is headed. He tells us about inflation, taxes, interest rates, and supply chain disruption dynamics. Is Modern Monetary Theory (MMT) a utopia or disaster? Taxes remove currency from the economy. This reduces inflation. What about Universal Basic Income (UBI)? This basically means writing regular monthly checks to every citizen. Dr. Wray has strong opinions here. Rapid currency creation and inflation is explored. Dr. Randall Wray provides his recipe for full employment and stable prices. It includes his answer of a “job creation program”. Resources mentioned: Show Notes: Learn more about Dr. Randall Wray: Bill Mitchell’s MMT blog: http://bilbo.economicoutlook.net/blog/ To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 20 December 2021
Tax The Rich. Learn how this theme is gaining traction in Congress. Wealthability’s Tom Wheelwright joins us. Which taxes make sense: property tax, consumption tax, flat income tax, progressive tax? In Tom’s opinion, learn why flat taxes will never happen. Oh no! A new 3.8% net investment income tax on business owners appears likely. Will the 1031 Exchange benefit survive? Next, The eQRP Company’s Damion Lupo joins us. He tells us that the Checkbook IRA has been outlawed. The eQRP is the retirement plan answer. It has: 10X the contribution limits of Traditional and Roth IRAs, zero UBIT tax, and you can invest in real estate, bitcoin, gold, or your own business. Resources mentioned: Show Notes: Tom Wheelwright’s Wealthability: To learn more about eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Get mortgage loans for investment property: JWB’s available Florida income property: New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 13 December 2021
To get a rent increase, learn what NOT to tell tenants. Memphis, Tennessee’s Mid South Home Buyers has supplied more property for GRE followers in history. The longest-tenured GRE providers, Terry Kerr and Liz Brody tell us how they built and maintain this 20-year-old turnkey real estate investing company. They start with buying the ugliest house on the block. Rents & prices on SFRs in Memphis, TN: $675-$1100 and $79K-$120K Rents & prices on SFRs in Little Rock, AR: $800-$1300 and $90K-$130K You can get started with buying investment property yourself at: MidSouthHomeBuyers.com. They’re popular. There’s a wait list. Resources mentioned: Mid South Home Buyers: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 6 December 2021
Doug Casey tells us that freedom and liberty don’t mean much anymore. “America is no longer the land of the free.” -Doug Casey, GRE Podcast 374 He believes that a tax protester is a patriot. Doug also believes that roads, bridges, ports and schools should be run by the private sector, not governments. “Regulation is the enemy of landlords and tenants.” -Doug Casey, GRE Podcast 374 Doug is a prolific author. He produces the International Man website, blog, and newsletter, and a YouTube podcast called “Doug Casey’s Take”. Resources mentioned: Doug Casey’s website: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 29 November 2021
Learn why I believe US home prices will rise 9-10% next year. That’s higher than historic norms and lower than this year. Expect higher mortgage interest rates too. Counterintuitively, higher mortgage rates correlate with higher housing prices. Higher rates also correlate with lower supply. Today, inflation (6.2%) is double of mortgage interest rates (3.1%). This means that when you repay the bank, those dollars debase on them twice as fast as the bank’s interest charges can accrue on you. Since 1994, mortgage rates have risen six times. House prices rose every time. Next year, the same thing is expected to happen; it will be seven in a row. I explain why higher rates correlate with lower housing supply. Housing supply has dropped an astounding 63% from two years ago. That’s the housing crash; it was a supply crash. Resources mentioned: Today’s low housing supply: https://fred.stlouisfed.org/series/ACTLISCOUUS Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 22 November 2021
Real estate investing and geography are both: location, location, location. Economic guru and geopolitical strategist, Peter Zeihan, walks us around each US region to describe its economic strengths, weaknesses, opportunities, and threats. “The next 24 months will be the greatest period of change that we have seen… at least since the second World War.” -Peter Zeihan Get your map out. We discuss the US: New England, Mid-Atlantic, Southeast, Deep South, Great Lakes, Ohio, Texas, Great Plains, Intermountain West, California, Pacific Northwest. Learn the three best states that are attracting foreign direct investment. Peter loves Houston, Texas’ economic future. Resources mentioned: Learn More About Peter: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 15 November 2021
I talk with the person who I lend money to in order to rehab distressed properties. We discuss how it works and the 6-12% annual returns. Importantly, many properties are secured in stable, cash flowing Ohio and around the Midwest and South. SFHs are common. You are the lender, not the borrower. Get started at: GetRichEducation.com/Lending Unlike owning a rental property where a tenant pays you to live there… a private lender program means that someone pays you to “rent out” the use of your money, typically for a year or less. The operator, Dani Lynn Robison of Freedom Capital Investments in Springboro, Ohio, tells us how she has never lost an investor’s money. They have always paid back the lenders’ initial investment, plus interest, as agreed. Learn about investing on the “debt side” of real estate rather than the “equity side” with private money lending at: GetRichEducation.com/Lending Resources mentioned: Learn More & Get Started: www.GetRichEducation.com/Lending Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 8 November 2021
Buying a huge $5M apartment building is daunting to most people. We discuss how you get the money and experience for this. Investor vocabulary explained: Capital stack, General Partner, Limited Partner, Non-recourse loan, Acquisition fee. Owning a duplex is different from owning a 200-unit building. With the latter, you’ll have private investors, an on-site manager, and perhaps Yelp reviews to manage. Advertising is different. Our guest, Michael Blank, emphasizes the importance of doing your first deal - big or small. Do it. That’s when the real learning begins. Michael excels in teaching you how to find other investors to fund your big apartment deal. To start, merely educate others. Don’t ask for money. Get started in learning more with Michael at: GetRichEducation.com/Apartments Resources mentioned: Get started with Michael: www.getricheducation.com/apartments Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New-Build Florida income property is here: GetRichEducation.com/SunshineState New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 1 November 2021
Will Rogers said, “Find out where the people are going and buy the land before they get there.” Florida in-migration has been a persistent trend since the late 1800s. Again, Florida led US in-migration between 2020 and 2021. I interview a Florida property provider that I have heard other developers comment about, saying: “I don’t know how they deliver such low prices.” You don’t have to pay agent markups. Buy direct. These are new-build SFRs up to four-plexes. Get the report and connect with the provider at: GetRichEducation.com/SunshineState These Build-To-Rent properties are in central Florida, including Palm Bay (halfway down the Atlantic coast), Ocala, The Villages (both nw of Orlando) and more. Growth of industry has been both varied and substantial: medical, technology, finance, international trade, agriculture, aerospace, and more than just tourism. Amazon, Space X, and Blue Origin all have a substantial presence. This is path of progress real estate investing. Recent sample property: New-build SFR, 3/2/2, 1,400 sf, concrete block construction, $225K sale price and $249K appraisal. (Appraisals don’t always exceed sale price; that’s a wider gap than usual.) Build-To-Rent advantages: everything is new, warranties, higher tenant retention, location, provider buys in bulk, built-in equity, lower insurance cost. These new-build properties are on both infill and contiguous lots on tracts of land. SFR communities often have amenities like pickleball courts, swimming pools, and gyms. Tenant demand is so high that this provider gets first & last month’s rent for you in addition to security deposit. Get actionable. New-Build Florida income property (with property management) is available here: GetRichEducation.com/SunshineState Resources mentioned: Show Notes: New-Build Florida income property is here: GetRichEducation.com/SunshineState Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 25 October 2021
One question that I’m asked is: “How do I actually buy an investment property?” I’m going to walk you through it all today, step-by-step. You know, even after I bought my first property, it would have been difficult to recite all the steps. This is partly due to the process's 30-60+ day duration. Though real estate has made more ordinary people wealthy than anything else, it is illiquid. [Watch the video version of this podcast here: https://youtu.be/9jH4_-Bwujs ] It takes more time to buy and sell real property. There's no brokerage "point-click-done" or Robinhood swipes here. This is both a good and bad thing. Because there are several steps involved, there is no panic selling in real estate. This illiquidity keeps real estate prices more stable than nearly any other asset class. This stability (via illiquidity) is one reason why real estate comprises the heart of so many wealthy peoples' portfolios. Real estate prices are a smooth, glassy lake compared to the raging sea storm of volatile gold, silver, cryptocurrency, oil, and stock markets. In under 28 minutes, I lay out every step that you must know for buying rental property. This masterclass-level instruction comes to you without paywalls or logins. I've made it public and free. It includes: Myriad mistakes to avoid Improving your credit report and score A clever way to show a higher income to underwriters Where I get my loans Market selection Property due diligence Making an offer Get an inspection (Always!) Appraisal Signing a Management Agreement Property Closing Own and collect rent (Cha-ching! Finally.) More Resources mentioned: Show Notes: Watch the video version of this podcast here: https://youtu.be/9jH4_-Bwujs Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 18 October 2021
I’m in Birmingham, Alabama for a real estate field trip today. Alabama is an investor-advantaged real estate market: low cost of living, some of the nation’s lowest property taxes. Mindset: I tell a story on affording the time. One of the most prolific real estate authors, Ken McElroy, joins us. I ask him about what happened to his 2021 housing crash prediction. Ken & I discuss why there haven’t been more evictions since the national eviction ban ended. We explain why don’t believe this will be massively disruptive. It matters. But to me, evictions will be a diffuse condition, not a sudden one. Sadly, if a tenant owes their landlord tens of thousands of dollars, they’ll rarely pay. Ken describes how he’s actively buying big real estate deals in today’s environment. Ken gives a new “mark my words” prediction today. Resources mentioned: Learn more about Ken McElroy: Birmingham, AL investment property: www.GetRichEducation.com/Birmingham Huntsville, AL investment property www.GetRichEducation.com/Huntsville Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 11 October 2021
Landlords collect rent payments. "Lienlords" collect mortgage payments. Learn how to obtain a stream of mortgage payments by owning the note (an IOU). I tell you why banks would sell mortgage notes. Learn the difference between performing and non-performing mortgage notes. Bob Fraser from Aspen Funds joins us to tell us more. Fewer borrowers defaulted on their mortgage payments in-pandemic due to forbearance. Learn why a bank will sell you a mortgage note at a discount. What happens when a borrower stops paying their mortgage. There are either first lien or second lien positions to occupy. You wouldn’t expect this, but second liens can often be better due to their deep discounts. Resources mentioned: Learn more about Aspen Funds: Get mortgage loans for investment property: Show Notes: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 4 October 2021
Learn how to qualify for an income property loan today. We discuss what just made mortgage interest rates for investment property drop 1% overnight. First, I discuss the difference between adequate safety vs. too much safety for tenants in investment properties. Too many safety regulations have a cost that gets passed onto tenants and even increases homelessness. Caeli Ridge, President of Ridge Lending Group joins me. A few weeks ago, mortgage interest rates for income property fell a full 1% due to the suspension of added risk layers that were added back in March. For an income property loan, you need: 1) 15-20% down payment and ~4% closing costs. 2) Credit score of 680 or better, 3) Show sourced & seasoned liquid assets, and 4) 50% maximum debt-to-income ratio. There are pros and cons of paying monthly PMI. Today’s “typical” income property interest rate = 3.75%. What happens when you try to get more than 10 income property loans? We discuss the terms, called “non-QM” loans. Get started on your income property loan at: www.RidgeLendingGroup.com Resources mentioned: Get mortgage loans for investment property: Show Notes: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 27 September 2021
When money supply is high, this lowers interest rates. I explain why. Interest rates & inflation are positively correlated. Interest rates are usually higher. This upside-down today. When interest rates rise, real estate prices rise too (Yes, not fall). Learn why. Join me this Thursday, Sept. 30th, for a live Texas Properties webinar. Learn more here: www.GetRichEducation.com/Texas Brien Lundin, organizer of the world’s longest-running investment conference, joins me. It’s the 47th Annual New Orleans Investment Conference. He’s also editor of the Gold Newsletter. I will attend the event in-person. Meet me Oct. 19th to 22nd. Sign up here: New Orleans Investment Conference. Brien does not believe interest rates will rise appreciably anytime soon, nor will the Fed taper. He feels that this will be good for real estate. The Fed must continue with massive currency creation. Like many, Brien feels that inflation is not transitory. Why isn’t the gold price higher than $1,700 - $1,900 per ounce? Brien likes owning physical bullion. He thinks that crypto is worthwhile. Resources mentioned: Sign Up & Meet Me At the New Orleans Investment Conference: GetRichEducation.com/Events Brien Lundin’s Gold Newsletter: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 20 September 2021
Should you buy for negative cash flow? Afterall, rents are rising fast; maybe they will catch up. I have a firm answer for you. With a tight rental market, landlords can skimp on repairs because tenants have few alternative places to live. Do the right thing. Make repairs. Don’t be a slumlord. Property bidding wars are subsiding. Meet me in-person Oct. 19th to 22nd at the New Orleans Investment Conference. A provider of brand new construction Florida & Georgia investment properties joins me to discuss industry trends, including the challenge of supply shortages. Developing vast tracts vs. infill lots. Tenants love living in a new construction. This provider builds SFRs up to 13-unit buildings with vinyl plank floors and stainless steel appliances. They sell investment properties to individual investors like you, with SFRs in the $200Ks. Start buying property at: GetRichEducation.com/Southeast Resources mentioned: Buy new-build FL & GA investment property. Start: GetRichEducation.com/Southeast Sign Up & Meet Me At the New Orleans Investment Conference: GetRichEducation.com/Events Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 13 September 2021
Steep rent increases are spreading like a… pandemic. Some metros are seeing annual rent increases of 10% to 15%. It's all part of real estate's new "space race". It’s easier to get big rent increases *between tenancies*, not with your long-term tenants. GRE’s own Aundrea Newbern joins us to answer, “Should you become a real estate agent?” Aundrea has her RE license in GA and is now training in her new home state of MI. Pros of obtaining your license: more information, better access to MLS, training, networking, and income from representing buyers & sellers. Cons of obtaining your license: your time, upfront cost & ongoing fees, splitting commissions with your broker, disclosures and liability, traditional licensee activity has little to do with investors. Summary: You need to use your license for at least 2-3 deals per year to potentially make it worthwhile. For real estate in MI and GA, e-mail Aundrea at: aundrea@getricheducation.com Resources mentioned: Show Notes: Contact Aundrea: aundrea@getricheducation.com Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 6 September 2021
Rents are skyrocketing, up 11.4% just since the start of this year per Apartment List. Increases like this could mean a 25% increase in your cash flow. Rod Khleif has made big failures. I mean that in the best way. Ultimately, he was willing to fail often in order to become the giant success that he is today. He lost $50M in the 2008 crash, even though his properties were at 30% LTV (70% equity). Rod is a multifamily apartment building investor and syndicator. He motivates many with his successful seminars. We discuss “The Law Of The First Deal”. Who you spend time with is who you become. He’s an active RE buyer now, with 296 units under contract in San Antonio. However, he sees an economic contraction coming. To hedge against a potential RE market downturn, Rod likes to avoid C-Class property. He likes investing in “A” and “B” areas in southern states. Resources mentioned: Show Notes: Rod Khlief’s website: Rod’s podcast: Lifetime CashFlow Through Real Estate Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 30 August 2021
Today’s guest has been a GRE listener since 2019. He’s an MBA and Industrial and Manufacturing Engineer at a Fortune 500 Company. He still works at this full-time job. Eric Schodowski learned about GRE and listened from Episode 1. Leverage, arbitrage, and inflation-profiting were new concepts to him. When he switched jobs, he was able to access 401(k) and pension funds. Then, rather than living below his means, he expanded his means. Eric Schodowksi has added 11 rental units: a four-plex in his home market of Baton Rouge, LA, and turnkey properties in: Memphis, west Florida, and northwest Indiana. His returns have been as high as 120% per year. Eric prefers turnkey real estate investing because it’s “hands-off”. Turnkeys are designed to perform for investors. Resources mentioned: Show Notes: Eric’s e-mail address: Eric.LaBlue@gmail.com Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Const. Florida SFHs & multifamilies: Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 23 August 2021
A 60% housing drop is what I’m talking about today. That's the real estate crash. What has driven housing prices 23.4% higher year-over-year? Scarcity, utility, and demand. I’m talking about a housing *supply* crash, not a price crash. The guys from Wealth Without Wall Street, Joey Mure and Russ Morgan, join us. They discuss why Wall Street makes money managers profitable, not individual investors. Most individual investors are so used to abandoning what they really want, that it’s difficult to remember what their dream even is anymore. Racing to “zero debt” is a losing game for most people. Resources mentioned: Show Notes: WWWS’s financial passport resource: WealthWithoutWallStreet.com/Passport CNBC: Rent Prices Rising Faster: https://www.cnbc.com/2021/08/11/rental-bidding-wars- heat-up-as-economy-improves-in-tight-housing-market.html Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 16 August 2021
Fifty years ago, money changed forever. Robert Kiyosaki joins us. He’s the “Rich Dad, Poor Dad” author. President Richard Nixon effectively removed the dollar from the gold standard on August 15th, 1971. We play the audio clip. Inflation ensued, exceeding 10% in the 1970s and 1980s. What is money, anyway? I answer. Gresham’s Law - bad money drives out good. Kiyosaki tells us why he promotes freedom and economic decentralization. My solutions to monetary inflation: 1) Real estate debt. 2) Gold. 3) Bitcoin. 4) Spend. Resources mentioned: Show Notes: Nixon removing dollar from gold standard: https://www.youtube.com/watch?v=4-cB1Z9qceI Jerome Powell on dollar printing: https://www.youtube.com/watch?v=lK_rYS8L3kI Buy real estate: Buy gold: Buy bitcoin: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 9 August 2021
Homes in car-dependent areas have appreciated at 33%; mass transit areas 16% over the last eighteen months. Suburban real estate wins. Alabama and Tennessee have: net in-migration, low cost of living, high rents with a low purchase price, low property tax, jobs, and housing affordability. SFRs and duplexes are offered in: Chattanooga, Birmingham, and Huntsville. In many Alabama markets, low income areas have appreciated more than high income areas. Chattanooga duplexes: $2,200 rent / $240,000 price. 0.9% RV ratio. SFRs are 3 bed, 2 bath: $1,300-$1,500 / $160K-$210K price. Get the report & connect with the provider at: GetRichEducation.com/Chattanooga Resources mentioned: Show Notes: Alabama & Chattanooga Investment Property: GetRichEducation.com/Chattanooga GetRichEducation.com/Birmingham GetRichEducation.com/Huntsville Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 2 August 2021
You achieved 95% total rate of return if you bought a turnkey property one year ago, on average. How can that be true? It’s the “Five Ways Real Estate Pays” revisited. Get our free, wealth-building “Don’t Quit Your Daydream” newsletter. It’s the real estate industry’s best at: GetRichEducation.com/Letter Doug Fudge joins us. He’s President and CEO of Fudge Insurance. They are a brokerage where customers get a choice of insurance provider. Fudge provides insurance in: CA, CO, FL, GA, NC, TN and KY. He suggests higher deductibles and lower premiums for well-off investors. Doug & I discuss trade-offs between replacement cost and actual cash value insurance. Vacant land is generally not insured. Every policyholder in Florida has had a rate increase in the last year. This is largely due to frivolous lawsuits. Get a lower insurance rate with property that is: new-build, concrete block (not frame), further inland (not coastal), hip roof (not gable). Flood and earthquake coverage are separate policies. We discuss how to administer renters’ insurance and umbrella insurance policies. Learn which insurance document you should never sign. Resources mentioned: Show Notes: Fudge Insurance: (407) 965-4253 Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 26 July 2021
Housing inventory could finally be turning the corner. There are now more available homes (549K) today than one month ago (504K) and two months ago (492K). 56% of homes still sell above their asking price. Get our free, wealth-building newsletter. It’s the real estate industry’s best at: GetRichEducation.com/Letter I provide a condensed history of the income tax. In 1913, the top income tax rate was 7%. Tom Wheelwright joins GRE for a record 21st time on green energy tax breaks. Wind, solar, hydrogen, geothermal, nuclear, and car charging stations will likely receive more tax incentive support under Joe Biden. Oil & gas tax deductions could be limited or eliminated. Resources mentioned: Show Notes: Tom Wheelwright’s network: Watch Tom & I on YouTube: Active Listing Count Of Homes: https://fred.stlouisfed.org/series/ACTLISCOUUS The Income Tax Since 1913: https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx# Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 19 July 2021
Rents are shooting up in many metros, including GRE cities. Cyclically, housing prices shoot up first. Rent raises follow. Inflation is hot: CPI is up 5.4%, PPI up 7.3%. Tom Wheelwright, CPA of Wealthability joins us. Topics: Will income tax and capital gains tax increase? The 1031 Exchange is at risk! How to contest your property taxes. Involving your children in your business for tax breaks. A more active tax audit climate. This is Tom’s record 20th GRE appearance. Resources mentioned: Show Notes: Tom Wheelwright’s network: Get mortgage loans for investment property: JWB’s available Florida income property: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 12 July 2021
Society and media often lambaste landlords. I discuss an absurd article titled: “Landlord System Morally Unethical… Contributing Nothing To Society”. Some slumlords exist, but many landlords are responsible. Many landlord critics think money is inherently evil. Damion Lupo joins me to discuss what happened at the latest Real Estate Guys’ Investor Summit. The homeownership rate is expected to decrease, meaning more renters. It will take at least a decade to raise housing supply to meet demand. We discuss whether inflation is here to stay or not. Damion provides you with the best retirement plan that I’ve ever heard known - the eQRP. Make gains truly tax-free, have $100K+ annual contribution limits, and invest in virtually anything - real estate, crypto, your own business. Learn more. Text: “EQRP” to “72000”. Resources mentioned: Show Notes: Chantilly News on landlords: https://chantillynews.org/7141/opinions/landlord-system-morally-unethical-contribute-nothing-to-society/ Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: eQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 5 July 2021
Paid-off properties have an opportunity cost that few consider. Wealthy celebrities that choose mortgages are: Mark Zuckerberg & his wife, Elon Musk, Megan Markle & Prince Harry, Beyonce & Jay-Z, Chrissy Teigen & John Legend, and Charlie Sheen. I personally have held millions in mortgage debt from a young age. I’ve long had the ability to pay it off, have not, and will not. Good debt defined: 1) Secured. 2) Low mortgage interest rate. 3) Payments outsourced to tenants. How your bank sees your debt: 1) You have insured their collateral. 2) When you improve the property, you improve their collateral. 3) 1-4 unit properties - comparables. 5+ properties - income & debt coverage ratio. The risk of high mortgage debt is being overleveraged. This means you cannot service the debt payments. Chris Naghibi joins me. Though he dispenses financial guidance to celebrities, he helps everyday people qualify for mortgages. We discuss mistakes to avoid with your credit score and debt-to-income ratio. Learn about today’s appraisal environment. Today, on average, homes sell for more than the asking price. That’s weird! The average credit score is now 786 for mortgage borrowers. Resources mentioned: Show Notes: Chris Naghibi: TikTok: @ChrisNaghibi Instagram: @ChrisNaghibi YouTube: Chris Naghibi Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 28 June 2021
Legendary investor and business mogul Jim Rogers joins us from Singapore. Inflation is on the rise. I was just asked to leave a tip at Subway for the first time. Inflation nudges most people toward poverty. It moves GRE listeners toward prosperity. Rents for detached SFHs are up 7.9% year-over-year. The NAR just told us America is 6.8 million housing units short of demand. World governments are printing, spending, and driving interest rates to all-time lows. Historically, this has led to higher inflation. I ask Jim Rogers about inflation and the prospects for U.S. hyperinflation. He believes interest rates will go higher “in the next few years”. He likes tying up 30-year fixed rate mortgages. Jim thinks the free market might take control of interest rate policy away from The Fed (wow!). “The next recession is going to be the worst in my lifetime.” -Jim Rogers Jim Rogers & I also discuss: MMT, agricultural real estate, cryptocurrency, and advice for a young person. I explain what CBDCs are - Central Bank Digital Currencies. Resources mentioned: Jim Rogers’ resources: SFH Rents See Huge Gains: America Is Short 6.8 Million Homes: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 21 June 2021
Rents are up, up, up. This is because surging home prices are displacing the first-time affordable homebuyer. Rich Dad Sales Advisor Blair Singer joins us. He helps you get that “little voice” in your head to tell you the right thing. When you master your little voice, you more often move from employee to business owner or entrepreneur. It takes self-belief. Begin with the end in mind. Blair tells you why you don’t have to be an attack dog in sales. Just help others! I try my sales pitch with Blair, then he tells me that my sales style is a retriever. In a selling situation, the person with the highest energy wins. Resources mentioned: Blair Singer’s resources: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 14 June 2021
Learn the housing price level every year from 1963 to present with an entertaining retrospective - from $18K to $372K. Top takeaways over time: 1) Real estate usually goes up. 2) Real estate does not always go up. Housing rents and prices often correct toward each other. Home prices are rising globally. The highest: Turkey, New Zealand, Luxembourg, and Slovakia. Some of the lower rises are in East Asia. Canadians can hardly believe that Americans get 30-year fixed rate mortgages, 1031 Like-Kind Exchange. Redfin CEO Glenn Kelman believes that high housing demand is cooling off and the market is normalizing. Building a home has never been more expensive. I cover a case study for you about how new-build Boise single-family ranch homes had a sale price increase of $472K up to $747K over the last two years. Your tenant is probably doing better this year than last. Unemployment is down to 5.8%. Rent amounts are more stable than home prices. I draw the line. Current rent vs. own dividing lines are 0.7% RV ratio and $250K purchase price. You can still find decent $100K - $150K properties in: Memphis, Little Rock, Cincinnati and Dayton. Resources mentioned: Median New House Prices (Census, HUD): https://fred.stlouisfed.org/series/MSPUS Bloomberg: Global Home Price Rise: Music samples used with permission. Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 7 June 2021
With only small rent increases, your cash flow can rise 20-50%. Learn how to successfully achieve these small rent increases. Also, learn what to never say to your tenant. It’s a mistake that I made. Make gradual rent raises and provide justification for the increase. Florida’s surging net in-migration provides tons of rent-paying tenants. The numbers work here for out-of-state investors. Learn more & get properties at www.GetRichEducation.com/CentralFlorida These new construction SFRs are often $200K. Investors must come in all-cash and do a cash-out refinance later. This BRRR is: Buy, Rent, Refinance, Repeat. (No rehab.) Rent-to-price ratios are near 0.8%. Insurance premiums are often extremely low on these brand new builds. Renter demand is astounding. There are more than 1,000 tenants on waiting lists for these new-build Florida SFRs on quarter-acre infill lots. Get started with new construction Florida income property at: www.GetRichEducation.com/CentralFlorida Resources mentioned: Find new-build Florida income property: www.GetRichEducation.com/CentralFlorida Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 31 May 2021
Will the rise of 3-D printed homes make housing construction so cheap that values of all existing homes will depreciate? I explore this with you. It’s the third installment of our 3-part housing supply crisis series. 3-D printing uses lots of concrete. It is the world’s most popular building material. No matter how one builds, there are still costs of: labor, land, materials, design & planning, architecture & engineering, site work & drainage, and regulation. A recent NAHB study shows that the regulatory cost of building a new single-family home is a staggering $94,000. Resources mentioned: Show Notes: $94K Regulatory Cost To Build A New Home: https://www.nahb.org/news-and-economics/industry-news/press-releases/2021/05/regulatory-costs-add-a-whopping-93870-to-new-home-prices Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 24 May 2021
What one thing could crash the housing market … even more than expiring forbearance? It’s something that NO ONE is talking about. Is the economy REALLY coming back? Where is inflation headed? Hyperinflation & real estate is discussed. I tell you what surprising investment I personally made last month. Then, what’s an important part of your investor mindset that you probably haven’t thought about before? Through Q3 of last year, homeowners have an all-time inflation-adjusted high of $257K in equity. Some NYC mayoral candidates have embarrassing perceptions of Brooklyn housing costs. Aundrea Newbern from GRE Operations & I review a book we like: “NOT Your How-To Guide To Real Estate Investing” by Ali Boone. My new 5-part Video Course on the “5 Ways Real Estate Pays” is free and open to all. Go to “Get Rich Education” YouTube now. Resources mentioned: Show Notes: Get mortgage loans for investment property: JWB’s available Florida income property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 17 May 2021
A shipping container costs less than $5,000. Why doesn’t America build more housing with them? Gregg Cohen of JWB Real Estate Capital in Jacksonville, FL reveals how their 18-unit shipping container apartment complex created financial loss. The shipping container apartments are 320 square feet each. Learn about: what a vertically integrated company is, build-to-rent homes, turnkey real estate, the pros and cons of shipping container housing, permitting, and zoning constraints. Making shipping containers livable adds expense: windows, heating, cooling, electricity, water, ventilation and fire safety. JWB blew their budget! $1.3M budget vs. $2M reality. Gregg estimates that shipping container building costs them 20-30% more than conventional wood frame construction. Their non-pandemic rent collection = 98.5% In-pandemic rent collection worst = 97% 2020 rent collection total = 98% JWB has available inventory of Jacksonville income property now - during the housing supply crisis. How can they do that? He tells us. If you seek more income property, start at: www.CashFlowAndGrowth.com or phone (904) 677-6777. Resources mentioned: Show Notes: JWB’s available Florida income property: JWB’s Facebook Group: Get mortgage loans for investment property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 10 May 2021
Kristin B. Tate (FOX News, CNN, MSNBC) joins me to discuss Biden tax and housing policies, inflation, and investing. President Joseph R. Biden, Jr.’s bill to create a $15,000 first-time homebuyer tax credit is wrong. It helps the demand side. America needs help on the supply side. I give ideas. Biden wants to severely limit the 1031 Tax-Deferred Exchange for real estate investors. Only your first $500K of gains would be exempt from capital gains tax. This would cause a rush of sales in the real estate market. It would also hurt long-term liquidity for larger apartment buildings. Zumper’s National Rent Report shows substantial rent increases in many Midwest and South real estate markets. I detail them. Next, Kristin B. Tate tells us why printing trillions of dollars means that investors should get out of the dollar. We discuss Joe Biden’s proposed increases to both income tax and capital gains tax. Kristin favors buying real estate assets to hedge against inflation: real estate, physical gold & silver, and cryptocurrency. Resources mentioned: Kristin B. Tate on Twitter: Kristin B. Tate’s website & books: Show Notes: Zumper National Rent Report: https://www.zumper.com/blog/rental-price-data/ Get mortgage loans for investment property: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 3 May 2021
Today, available homes are as scarce as a rare earth mineral. Under 500K homes are available for sale today, well below the historic 1M-1.5M at any given time Source: Federal Reserve. High demand exists independent of low inventory. Developers and homebuilders need years to help us build our way out. The development team of Rob Fuller and Jared Garfield tell us how today’s developers cope with the rising cost and unpredictable supply of: copper, lumber, PVC and other building materials. Their project in Colorado Springs, CO is in the path of progress. In 2019, U.S. News & World Report named the area the #1 Economy In America. The Denver Post stated that by 2050, Colorado Springs will be larger than Denver. (Wow) The project is 800 acres of higher-end homes on 2.5-acre lots. Homes start in the high $600Ks. That does not work for cash flow via direct ownership. This is not “spec building”. Homeowners have already funded with non-refundable earnest money. You can project a construction loan to the project yourself. Cash-on-cash returns are 9% to 15%, depending on the investment amount. $100K minimum. Learn more about this project at www.GetRichEducation.com/ColoradoSprings. Investors have substantial guarantees and financial buffers. This is an A+ real estate asset class. You can view weekly project drone footage. On-site visits are available. I might attend one where you could meet me in-person in Colorado Springs. Resources mentioned: Private Lending in the Path Of Progress: GetRichEducation.com/ColoradoSprings U.S. Active Home Listing Count: https://fred.stlouisfed.org/series/ACTLISCOUUS Show Notes: Get mortgage loans for investment property: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 26 April 2021
Three reasons NOT to buy income property: 1) It is illiquid. 2) Speculative mania without cash flow. 3) You want zero involvement. With that understanding, direct ownership of rental real estate still has the best risk-adjusted return today. President Biden wants to keep people in their homes. He doesn’t want residents removed from their homes under his watch - both homeowners and renters. Higher mortgage interest rates lead to both higher prices and lower supply. This is counterintuitive to many. I explain why. The last six times that interest rates rose in America, housing prices rose too. I read the menu prices from McDonald’s restaurant in 1974. It makes inflation’s effect apparent. Then Ken McElroy joins me. Together we discuss how inflation affects consumers and real estate investors from an in-person video at his Scottsdale, AZ office. Ken reminds us how high inflation can go. It was 15% for a time in the 1980s. Resources mentioned: Show Notes: Get mortgage loans for investment property: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 19 April 2021
These homes are tiny, eco-friendly, and affordable, with the option of having smart home technology. Panama has friendly people, safety, a low crime rate, and robust economy. Organic food is grown on-site, recycled graywater waters your garden, there are community orchards, hiking trails, a yoga area, bird-watching stations, pool, river, and a sense of community. This tiny home community in the highlands often experiences temperatures in the 70s and 80s fahrenheit. It is a lush greenscape, not close to the beaches. These tiny homes have 300 - 600 sf of interior space. Rachel Jensen joins us to tell us more. Only a few tiny homes are available now at: www.getricheducation.com/tinyhomes Foreign owners can get full title to their property. You can earn rental income from your tiny home, with in-house property management. You can fund your property via: all-cash, 50% loans, 80% loans, IRAs, gold, or cryptocurrency. Property prices start at $119K. Second residency in Panama is an option for property owners. The next property tour is June 23rd - 27th, 2021. Learn more and get the report at: www.getricheducation.com/tinyhomes Resources mentioned: Panama Tropical Tiny Homes: www.GetRichEducation.com/TinyHomes Show Notes: Get mortgage loans for investment property: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 12 April 2021
Your home is a liability, not an asset. That’s according to Robert Kiyosaki. This is because your home takes money out of your pocket every month. An asset puts money into your pocket. Today’s guest, author and economist Daniel Amerman, has a different perspective. He states that forces like inflation and a mortgage (leverage) make your primary residence a strong investment vehicle. Daniel’s research shows that historically, homeowners nearly double their equity in three years, triple it in seven years, and quadruple it in ten years (80% LTV loan). We discuss whether home price increases are derived from appreciation or inflation. First, I remind you why financially-free beats debt-free. Convert equity to cash flow. Extra mortgage principal paydown does the opposite - it converts cash flow to equity. Classically, on a balance sheet, your home is an asset. Remember that a homeowner’s return is not generated from equity. It is generated from the local housing market. Hear my rant about how carpet beats hardwood floors. Resources mentioned: Daniel Amerman’s website: Show Notes: Get mortgage loans for investment property: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 5 April 2021
Learn how to bring as little money as possible to the property closing table. Ridge Lending Group President Caeli Ridge tells us how to do this. She also predicts the future interest rate direction. Mortgage interest rates hit all-time lows three months ago. Freddie Mac has tracked rates since 1971. The 30-year fixed rate mortgage debuted in America in 1948. It’s an incredible tool that few, if any, other world nations have. Before this, it took a 50% down payment and refinancing every 3-5 years. Mortgage rates have been falling for 700 years! From the year 1311, we look at interest rate history in the French Crown, Spanish Crown, Italian merchants in Milan, Genoa. The latest marker of today’s low housing supply is the fact that there are currently more real estate agents than available homes. Is rush hour traffic a thing of the past? We explore this. Caeli Ridge helps us understand the ominous new 7% Fannie Mae funding limit on single-family mortgages on second homes and investment properties. Result = higher loan prices. Does it make sense to pay discount points at the closing table? Discount points are like prepaid interest. We explore pros and cons. Often, a seller can pay up to 2% of your purchase closing costs. Caeli predicts the future direction of interest rates. I’m refinancing properties with Ridge myself right now. Start at: www.RidgeLendingGroup.com Resources mentioned: Get mortgage loans for investment property: Show Notes: Early 1900s Mortgage Rate Charts: https://www.thetruthaboutmortgage.com/check-out-these-mortgage-rate-charts-from-the-early-1900s/ Interest Rates Have Been Falling For 700 Years: https://www.visualcapitalist.com/700-year-decline-of-interest-rates/ There Are More RE Agents Than Homes For Sale: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 29 March 2021
The Fed is about to unleash a tidal wave of liquidity that you probably don’t know about. I was recently at my favorite Mexican takeout restaurant. It was the first time they began asking for tips. This is inflation. It is likely not measured in CPI or Core PCE. Richard Duncan from MacroWatch joins us to discuss how the coming monetary tsunami will stoke asset prices. This can continue the “price runup party” in real estate, stocks, crypto, and other assets. Key learning: The Fed changes inflation policy when they see wage price growth, not commodity price growth. Inflation won’t be high enough to cause interest rates to rise anytime soon. We know that the Fed currently creates $120B per month. What few know about is the new, simultaneous $900B that the Fed is releasing from their Treasury General Account by the end of June. More currency + monetary velocity = inflation? No. Richard says there’s more to it, like credit expansion. The newly passed $1.9T American Rescue Plan, plus a new Biden-proposed multi-trillion dollar infrastructure bill could stoke inflation in the short to medium-term. Richard does not believe high inflation is sustainable long-term. Get 50% off Richard Duncan’s “MacroWatch” when you use Discount Code “GRE” at: www.RichardDuncanEconomics.com Though consumer price inflation should stay low, a lot of asset price inflation should continue. Richard also reveals a scenario where interest rates could decline. Resources mentioned: Get 50% off MacroWatch. Use Discount Code “GRE”: www.RichardDuncanEconomics.com Show Notes: Mortgage Loans: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 22 March 2021
With shrinking national housing supply amidst surging demand, some investors cannot find sufficient inventory. People are moving to places like: Texas, Tennessee, and Florida. Suburban properties have higher appeal with today’s work-at-home trends. New construction properties in infill areas have advantages: an established area, neighbors with equity. Learn about a system to help keep your property taxes discounted. With all this in mind, learn about what capitalizes on all of these trends - and there’s available inventory. Purchase prices are from the $140Ks & up - new construction - SFHs up to fourplexes and larger. Who knows how long this will last? Get started at: GetRichEducation.com/Texas. You will receive a report and an invitation to a live Texas properties webinar with me this coming Friday, March 26th at 3PM ET. Resources mentioned: Show Notes: Learn more & attend Friday’s Texas properties webinar: www.GetRichEducation.com/Texas Mortgage Loans: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 15 March 2021
I hope that it changed you. Don’t quit your daydream. -Keith Resources mentioned: Show Notes: First American Real HPI: https://www.firstam.com/economics/real-house-price-index/ Mortgage Loans: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 8 March 2021
To get money for real estate, you don’t always have to save up every dollar yourself. You can use: Equity from another property - my favorite Seller-paid closing costs Seller financing House hacking Rent income from duplexes and fourplexes Lease-Purchase Agreement Mortgage assumptions Seller-held second mortgages Syndication Partnerships Ken McElroy joins me to discuss how to attract investors to your real estate deal and more. He outlines borrowing from your 401(k) and using your retirement plan for real estate. Teach others about what you know. Just give with nothing in return expected. People will trust you later when you have a real estate deal. Resources mentioned: Ken’s free resource: www.kenmcelroy.com/getricheducation Show Notes: Mortgage Loans: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 1 March 2021
Will a housing price crash occur when homes can be foreclosed upon again? Sean O’Toole of PropertyRadar.com and I compare 2007’s housing crash with 2021’s health crisis-related recession. “Home prices never go down.” That’s what many people said in 2005! Wrong. Learn the housing differences between the last recession and the current one: lending standards, housing supply, regulatory change, construction labor force, construction supply disruptions, household formation. Sean tells why we will not have a big dump of housing supply on this market anytime soon. There will still be some delinquent homeowners after the forbearance period ends. The Biden Administration plans to work with borrowers that have federally-backed mortgage companies and provide them with repayment plans. Prediction from Sean: mortgage rates will dip below 2%. Resources mentioned: Show Notes: Mortgage Loans: New Construction Turnkey Property: Ali Boone’s Recommended Book: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 22 February 2021
If you hold a savings account, you’re a lender. You lent money to the bank and they pay you under 1%. You can lend for real estate, get a 6-12% cash yield with low hassle, and hold real estate as collateral. This is some of the most passive, hassle-free income in all of real estate. Learn more at: www.getricheducation.com/lending Typically, a real estate company seeks to: buy a distressed home for $50K, pay another $20K to rehab it, then sell it for a profit. That $70K is what they seek private lenders for. This means that the real estate company can provide the distressed seller with a quick, all-cash closing. (Remember, these properties can’t be financed with banks.) Loan duration is often twelve months. Dani Lynn Robison of Springboro, Ohio-based Freedom Real Estate Group tells us how Private Money Lending works. Everyday investors like you can fund this with cash, retirement accounts and HELOCs. Resources mentioned: Begin with Private Lending at: www.GetRichEducation.com/Lending Show Notes: Mortgage Loans: New Construction Turnkey Property: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 15 February 2021
Today’s guest reveals how he gets $10,755 of monthly cash flow with four SFHs. They’re long-term rental tenants. Get our free newsletter here: www.getricheducation.com/letter I tell you why a man with $20 million of debt is a financial winner, making analogies to Brett Favre and Cy Young. Ryan Chaw of Sacramento, CA joins us. A full-time pharmacist, he’s age 29, on track to retire from real estate income by age 31. Unusually, he invests in California single-family homes (SFHs). It’s not an area known for cash flow. He rents them to carefully-screened college students. He self-manages, but hasn’t visited his properties in over a year. In areas like Stockton, CA, he gets $3,000 rent from a $300K SFH. Ryan uses his “PRIME” Method: Placement of ads, Review applicants’ social media, Identify tenant type, Measure responsiveness, and Ensure proof of income. He has 17 tenants in four SFHs. Ryan gets money for down payments with his W-2 job. He also uses a HELOC to reset his leverage and create arbitrage. He travels the world too. He won’t delay all gratification. Resources mentioned: Show Notes: Ryan Chaw’s free guide: www.NewbieRealEstateInvesting.com Mortgage Loans: New Construction Turnkey Property: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 8 February 2021
Hear a mock negotiation between Chris Voss & I for a fourplex building today! The former lead international hostage negotiator for the FBI, Chris is now America’s top negotiation coach. In a negotiation: Who goes first? Does “anchoring” work? In real estate, terms are often more important than price. “Never be so sure of what you want that you wouldn’t take something better.” -Chris Voss, today's show He does not use the term “win-win”. It’s a giveaway that someone is trying to pick your pocket. The “other side” always has hidden cards that could benefit you. Be curious. A positive mind frame makes you 31% smarter. At times, it helps to address “fairness” at the beginning of a negotiation. Let the word “no” out softly. If there’s an elephant in the room, address it. Chris uses the “mirroring” technique on me. He makes me think that conceding was own idea! Amazing. He has free negotiation resources for you. For his newsletter, text blackswanmethod to 33777. Outside the U.S., go to: www.blackswanltd.com Silence and humor are effective negotiation techniques in certain situations. I tell Chris my favorite negotiation line and get his opinion: “What flexibility do you have?” Resources mentioned: Show Notes: Get free newsletter from Chris Voss: U.S.: Text blackswanmethod to 33777 Outside U.S.: www.blackswanltd.com Chris Voss’ book: https://www.amazon.com/Summary-Never-Split-Difference-Analysis/dp/1683784391 Mortgage Loans: New Construction Turnkey Property: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Best Financial Education: Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 1 February 2021
After your first 10 rental properties, what comes next? Buying more than 10 financed properties of 1-4 units often incurs an interest rate about 2% higher. Apartment buildings of 5+ units is an option. You can become a real estate syndicator. It is sophisticated. This means you identify a big real estate complex and attract other investors’ money to the deal. Syndications often SEC-regulated. To attract investors, you must also build your brand. You can be a private money lender with a stable 10% cash-on-cash return. Real estate is your collateral. See: www.getricheducation.com/lending With agricultural real estate, the trees are the tenants. They don’t vacate the property and they’re low maintenance. The asset literally grows; land is titled to you. See: www.getricheducation.com/teak “Family offices” manage wealth for affluent families and individuals. They might cost $1M per year, meaning you’d often need assets of $100M+. Direct real estate investors “feel the bumps”. I recently had a truck accident-damaged property that was in disrepair for 9 months! This year, John Burns RE Consulting predicts existing home prices to rise +8%, new homes +9%. It took Tesla 17 years to make a profit. You often do this in 1 month with real estate. Damion Lupo drops by with crucial eQRP updates. An eQRP lets you: invest your retirement funds in nearly anything, $58,000 annual contribution limit, no custodian, and avoid a 37% UBIT tax hit (like you have with SD-IRAs). Resources mentioned: Get the free eQRP book; text “EQRP” in all capital letters to: 72000 Great turnkey provider for beginners: Rare provider with 1% rent-to-price ratio: www.GetRichEducation.com/Dayton Private Money Lending: www.GetRichEducation.com/Lending Teak hardwood trees: New fourplexes in West: www.GetRichEducation.com/Fourplex New fourplexes in Southeast: www.GetRichEducation.com/Southeast Turn $100K into $300K in five years: https://www.getricheducation.com/turn-100k-300k-five-years/ Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 25 January 2021
Joe Biden’s economic plan for real estate investors is detailed. Expect: higher income tax, extended eviction & foreclosure moratoriums, $15 minimum wage, $15K first-time homebuyer tax credit, more stimulus checks. Can landlords still evict tenants for non-payment of rent? Yes. I explain how. With all this money printing, I expect inflation to stay low due to low velocity. Ken McElroy joins me again today. He’s the Rich Dad real estate advisor. Migration patterns per U-Haul favor these top 5 states: TN, TX, FL, OH, AZ. #1 for out-migration last year was CA. 72% of people move within the same state, per Ken. Today’s tenant trends: Larger units, security gates, pets, outdoor lighting, small yards, remote rent collection. Proximity to central business districts is less important. Pets attract seniors. Ken has increased income by embracing pets, and reduced expenses by requiring that tenants have Renters Insurance. Learn about how he handled recessionary apartment income disruptions for his investors. Resources mentioned: See Ken McElroy’s predictions video: www.KenMcElroy.com/GetRichEducation Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 18 January 2021
My housing prediction for the next few years is revealed at the beginning of the show. Learn why higher interest rates mean less housing supply. Learn how to buy new construction income properties as inexpensively as $169K at: www.getricheducation.com/southeast Last year: Real estate was up 11%, mortgage rates fell from 3.72% down to 2.67%, inflation fell from 2.5% to 1.4%, S&P 500 up 16%, dollar weakened, bitcoin surged 400%+, gold & silver had their best years since 2010, oil down 21%. “Build-To-Rent” (B2R) means that properties are constructed with tenant-occupants, not owner-occupants. Durable finishes are used, like cement hardie board, vinyl plank flooring, and granite countertops. B2R single-family homes as low as $169K (new construction). Duplexes, triplexes, and fourplexes are also offered in Florida and Georgia at: www.getricheducation.com/southeast Tenants in these B2R properties often have incomes of $100K+. Today’s renters want a yard, even if it’s small. They don’t want a fireplace. With remote working trends, proximity to an urban area is now less important. Resources mentioned: Build-To-Rent FL & GA property: www.GetRichEducation.com/Southeast Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: Chris Voss on Masterclass: www.Masterclass.com |
Mon, 11 January 2021
Has “debt-free” now become a poverty marker? Debt is good when: 1) The interest rate is lower than inflation, and 2) When tenants pay your debt for you. Get our free “Don’t Quit Your Daydream” Letter at: www.getricheducation.com/letter Home equity is: unsafe, illiquid, and its rate of return is always zero. If you pay an extra $100 toward your mortgage principal, you just converted your cash flow to equity. That’s the opposite of financial freedom. Learn myriad reasons for removing equity from property: a litigious society, natural disasters, job loss, and more. Paying down your low interest rate debt won’t create wealth. But using debt to create residual income streams can. More equity = more risk. Why would you even want to be debt-free? Resources mentioned: Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 4 January 2021
The largest building you can buy with the best loan terms is a residential four-unit building. Noticing high fourplex demand years ago, one savvy developer has been successfully providing new build-to-rent fourplex communities in the U.S. Intermountain West. Get the report and connect with the provider at: www.getricheducation.com/fourplex These often have a price point of $750K or more, and require a 25% down payment. You’re rewarded with Fannie / Freddie 30-year loans at low interest rates. High-growth Utah, Idaho, and Arizona markets are served with these new construction fourplexes. Learn how a developer selects land tracts at the edge of metro areas. I use what is considered a profane term in the industry. Resources mentioned: New Build-To-Rent Fourplexes: www.GetRichEducation.com/Fourplex Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 28 December 2020
A summary of major housing and economic stories this year. Then, a framework for how you can achieve any goal is revealed. Our own Aundrea Newbern joins me. She describes her concrete goal of going from her current $10K up to $30K of monthly residual real estate income. Get our free “Don’t Quit Your Daydream Letter” here: www.getricheducation.com/letter Resources mentioned: Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 21 December 2020
Learn mistakes to avoid and how to buy a distressed property at a discount at a foreclosure auction. First, the average borrower now has $194K in home equity due to high recent home price appreciation. Only 3% have a negative equity position. Freddie Mac shows home prices up 9.7% year-over-year. First American’s Real House Price Index accounts for home prices, interest rates, inflation, and affordability. The surprise? Real prices are down 26.8% since January 2000. Today’s guest, Colin Murphy, is an acknowledged expert in buying properties at foreclosure auctions. He reveals how it works in some Florida counties. Death, divorce, drugs, and unemployment can all lead to a borrower missing mortgage payments and having their property fall into foreclosure. Foreclosure auctions have moved online in states like Florida (but not Texas). Often, you must give a 5% deposit at bid time, 95% balance paid same-day. 2 minutes of bidding per property. Learn how high one should bid on a foreclosure property. You can find mortgage, lien and permit information online. You must know how to estimate renovation costs. Assume the worst. Foreclosure moratoria have created low inventory levels in the market. Resources mentioned: More about Colin Murphy: FATCO’s Real House Price Index: https://www.firstam.com/economics/real-house-price-index/ Recent Homeowner Equity Gains: https://www.cnbc.com/2020/12/10/homeowners-gain-1-trillion-from-pandemic-driven-housing-boom.html Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Get our free “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 14 December 2020
The deal is the debt. Why? Because mortgage rates are at all-time lows. People are buying property like crazy. Learn why 30-year fixed rate mortgages are a great deal for the borrower and a bad deal for the lender. Caeli Ridge, President of Ridge Lending Group, tells us about qualifying for income property loans today. Your first 10 loans single / 20 loans married for 1-4 unit properties have the best rates and terms: 20-25% down, 50% max. DTI, super low interest rates. For more loans, called “non-QM” loans: $135K minimum size, 75% LTV, higher interest rates. Opinion: Fannie & Freddie will stay in conservatorship, keeping mortgage rates low. Conforming loan limits will increase from $510,400 to $548,250 (SFH), and higher for 2-4 unit properties. Rate & term refinances - SFH: 80% LTV | 2-4 unit: 75% LTV Cash out refinance terms - SFH: 75% LTV | 2-4 unit: 70% LTV We get an update on appraisal climate. I educate you on the three appraisal approaches: cost, income, comparison. Ridge does loans in 43 of the 50 states, all except: AK, ME, ND, NY, VT, WV, WY. Resources mentioned: Mortgage Loans: Phone: (855)747-4343 E-mail: info@ridgelendingroup.com Show Notes: Top Properties & Providers: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 7 December 2020
How would you value a four-plex in bitcoin? The world’s largest cryptocurrency, bitcoin, needs more stable pricing to gain faith for widespread currency use. Crypto pros: Generational, international, blockchain, increasing faith. Crypto cons: Security, not widely accepted, short history, volatile, government intervention fear, no price bottom. Learn the pros and cons of buying rehabbed & tenanted turnkey property vs. doing it all yourself. Find property here: www.GREturnkey.com Three big reasons people don’t invest in real estate:
Turnkey pros: Save time & hassle, leverage economies of scale, leverage professionals, geo-diversification. Turnkey cons: Higher initial cost, risk of suspicious pre-placed tenants. I explain why it’s best to own properties in 3 to 5 different markets from www.GREturnkey.com. Resources mentioned: Show Notes: Top Properties & Providers: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 30 November 2020
A crystal ball prediction for the housing market does not exist. The best measure may be the forward-looking Homebuilder Confidence Index. It just hit an all-time high for optimism. Interest rate direction has little to do with housing prices. But it helps. Real estate is not an asset. Real estate derivatives are assets, whether it be a mortgage or a lease. Gregg Cohen of JWB Real Estate Capital joins us. He’s a longtime provider of new construction turnkey rental property in Jacksonville, FL. See their properties at: CashFlowAndGrowth.com We discuss how appreciation makes long-term real estate investors more money than cash flow, amortization, tax benefits or inflation-profiting. Resources mentioned: Jacksonville new turnkey property: FHFA Home Price Index: https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx? Suburban Rents Rise: https://www.realtor.com/news/real-estate-news/race-for-space-pushing-up-suburban-rents/ Show Notes: CNBC on home price rise: https://www.cnbc.com/video/2020/11/13/rise-in-home-prices -will-be-tremendous-for-builders-analyst.html Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 23 November 2020
Learn how to keep insidious thieves from stealing your wealth - taxes and inflation. Higher taxes = lower inflation. I tell you why. The IRS does not recognize inflation in regard to capital gains. I discuss property tax, income tax, and sales tax state-by-state. Many coastal states have high property tax and income tax; southern states have high sales tax. A recent Harris poll showed that work-from-home types value saving money on lunch and gas more than being with their family or having extra time! (Geez.) Subscribe to our Don’t Quit Your Daydream Letter here. Tom Wheelwright joins me. Tax brackets are marginal, so use your childrens’ lower tax brackets. The last dollar you earn is taxed at your highest taxable rate. The first dollar of a tax deduction comes off your highest taxable rate. Tax credits beat tax deductions. Reducing your property tax can be fairly easy. Resources mentioned: Connect with Tom: Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 16 November 2020
Before you buy foreign property, consider: access in rainy season, infrastructure, water pressure, safety, community, and developer track record. Learn about a real estate performance bond and why it’s important. Own tropical tiny homes, including over-the-water property, as low as $92K. Start here: www.getricheducation.com/tinyhomes Subscribe to our Don’t Quit Your Daydream Letter here. These exotic, affordable homes in vacation destinations are in Belize, Nicaragua, and Panama - both beaches and mountains. As a foreigner, you can own full title to these Central American properties. These homes are truly “tiny”, often 300 - 400 square feet, a little larger than an RV. You can live in the property, or rent it out. The developer has been in business 20+ years. I personally met them nearly 5 years ago. You can get 50 - 80% financing. Use self-directed IRAs, gold, or crypto for purchase. To get started, get the Tropical Tiny Homes Report and contact the provider through: www.getricheducation.com/tinyhomes Resources mentioned: Tropical Tiny Homes Report & Provider Contact: www.GetRichEducation.com/TinyHomes Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 9 November 2020
In this recession, people still ask me how housing prices and demand are surging. I explain. Then, I discuss the highest cash-flowing hands-off investment I’ve ever heard of. Learn more here. Subscribe to our Don’t Quit Your Daydream Letter here. Cash use is increasing, not declining. In fact, the CEOs of PayPal and Venmo even say that cash will be in use for decades. An individual investor like you can own a lot of 6 ATMs. ATMs are profitable because some users pay a $2-$3 surcharge to access a $20 bill. $2,184 is your monthly cash flow. The operator has never missed a monthly payment nor their pro forma projection. ~19% ROI plus tax benefits like bonus depreciation. In the pandemic, some ATM locations have fared worse, like airports; some better, like a Walgreens. Many people want to withdraw & store money in the pandemic. If you’re an accredited investor, learn more about ATM investing and contact the provider through: www.GetRichEducation.com/ATM Resources mentioned: For ATM Report & Provider Contact: Show Notes: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 2 November 2020
“Miracle Morning” author Hal Elrod tells us that to turn the impossible into the inevitable, you need unwavering faith and extraordinary effort. Subscribe to our newsletter here. “The Miracle Morning” has been translated into 37 languages and sold more than two million books. More than 500,000 people actively practice his work daily. Hal overcame a car accident where he was clinically dead, then a rare form of cancer. This made him genuinely grateful for every moment thereafter. In your life, you will pursue what you feel is probable, not possible. The purpose of your goal is not to reach a goal. It’s to attain the qualities and characteristics of becoming the best version of yourself on your way there. Hal’s new book is called “The Miracle Equation”. Resources mentioned: Show Notes: Hal Elrod’s website & books: Book recommended by Hal: Man’s Search For Meaning - Victor Frankl Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 26 October 2020
Will home prices stop rising soon? No. I tell you why. It’s my prediction. Subscribe to our newsletter here. Four reasons home prices will keep rising in the short and intermediate-term are:
Many Americans have been suffering from a lapse in federal pandemic stimulus relief. Hear a Nancy Pelosi clip about this. I discuss hands-on ways to improve your properties’ appeal: paint, flooring blemishes, light fixtures, cabinets, vanities, front door. GRE’s own Aundrea Newbern joins us. Learn about finding properties and tenants with guaranteed rent income. You can find these properties and tenants at: GetRichEducation.com/Section8 Concerns about the HUD Section 8 Program are: you must screen tenants harder, property inspections from the HUD case manager. Section 8 tenants have more motivation to pay rent because they don’t want to lose their housing voucher. They have longer tenancies and are less demanding during tenancies. If you’re pre-qualified for a mortgage loan and want investment property with guaranteed rent income, start at: GetRichEducation.com/Section8 Resources mentioned: Show Notes: Find Section 8 properties & tenants: www.GetRichEducation.com/Section8 Get the Don’t Quit Your Daydream Letter: www.getricheducation.com/letter CNN: Blitzer, Pelosi on stimulus: https://www.cnn.com/videos/politics/2020/10/13/nancy-pelosi-intv-stimulus-bill-trump-offer-coronavirus-tsr-vpx.cnn Post free to find Section 8 tenants: U.S. and World Population Clock: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 19 October 2020
Learn how to avoid getting ripped off from a: Vacant land scam Foreclosure relief scam Loan flipping scam Escrow diversion scam Rental ad scam Common consumer scams More Subscribe to our newsletter here. Asset Protection Attorney Garrett Sutton joins us for the fourth time on the show. His new Rich Dad Advisor book, Scam-Proof Your Assets, releases this month. Scammers sell other scammers lists of names of gullible people. Tell scammers that you want to share their deal with your attorney or CPA. They’ll run away. Those that get scammed tend to be: less educated, vain, both young & old, crave a good deal, feel isolated, and are more impressionable. Scammers are often someone you already know; they’re close to you. Resources mentioned: Garrett Sutton’s New Book: Corporate Direct for LLC Formation: 1-800-600-1760 Report and track scams at: Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 12 October 2020
Your goal might be $15K of monthly real estate income and a $3M net worth within twenty years. To achieve this, I explain why getting trapped in the future is as bad as getting trapped in the past. Start early, understand there will be bumps in the road, don’t overanalyze, the worst case scenario almost never occurs, and don’t “time the market”. Today’s guest offers both rehabbed and new construction rental homes in a thriving market where the numbers work - west Florida. If you’re pre-qualified for a mortgage (or paying all-cash), get started buying investment property at: GetRichEducation.com/WestFlorida. Buying one property, one time won’t change your life. When you’re young, you’re more likely to want a low-priced rental property with higher cash flow and higher maintenance = existing construction. When you’re older, you’re more likely to afford a higher-priced rental property with lower cash flow and less maintenance = new construction. House flippers have spending money; buy-and-hold investors build real wealth. At its core, it’s simple - rent houses to people. Resources mentioned: West Florida Income Property: GetRichEducation.com/WestFlorida Mortgage Loans: EQRPs: text “EQRP” in ALL CAPS to 72000 or: By texting “EQRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 5 October 2020
Learn how income tax rates, capital gains tax rates, the 1031 Exchange, the estate tax and more will change - or not. The outcome depends upon whether Donald Trump gets a second presidential second term or Joe Biden is elected as the new president. Subscribe to our weekly newsletter here. Tom Wheelwright, the most recurrent guest in show history, joins Keith. He’s the world’s foremost expert at reducing your taxes permanently. He can help you at Wealthability.com Resources mentioned: Tom’s company: The Tax Foundation: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 28 September 2020
You can only have one job. But you can own as many rental properties or vending machines as you want. Trillions flow through the economy. Build a device to divert this flow to you; you'll see that money is an abundant resource. Dr. Michael Ehrlich from NJIT’s Martin Tuchman School Of Management joins us to discuss asset bubbles and real estate technology. We discuss financial bubbles, narrowing credit spreads, debt, overleveraging, NYC overbuilding and financial technology. Dr. Ehrlich is a general advocate of borrowing for cash-flowing residential real estate today. Solutions to avoid bubble damage include: residential real estate, water, agriculture, even connectivity. I discuss real estate technology: 3-D printed homes, autonomous cars, iBuying, indoor drones, virtual tours & staging, remote online notarizations. Subscribe to our weekly newsletter here. Resources mentioned: NJIT’s Martin Tuchman School Of Mgmt.: Dr. Michael Ehrlich e-mail: iBuyer: Virtual staging: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 21 September 2020
What does the CDC eviction ban really mean to you? Learn how to win home price bidding wars in today's hot market. GRE's own Aundrea Newbern joins us! Besides working with GRE, Aundrea is an active RE agent in Brunswick, GA. She owns 28 rental doors and has her MBA in Finance. She owns long-term rental SFHs and apartments, including some Section 8 tenants. She self-manages. Rock & Roll Hall Of Famer Flavor Flav “drops in” to congratulate the show on 3 million listener downloads. Aundrea tells you nine ways to avoid being outbid in today’s hot real estate market: 1 - Pick a buyer agent that’s courteous to the selling agent. 2 - Write a letter or send a video to the seller. 3 - Agree to use the seller’s preferred title agent, lender. 4 - Offer more than the asking price. 5 - Offer more earnest money than the customary 1-2%. 6 - Add an escalation clause. 7 - Simply ask what it takes to get your offer accepted same-day. 8 - State that you’ll pay out of pocket in case there’s a low appraisal. 9 - Consider waiving the inspection. (This is risky.) Subscribe to our weekly newsletter here. Resources mentioned: CDC Eviction Moratorium: https://www.nytimes.com/2020/09/16/business/eviction-moratorium-renters-landlords.html Aundrea Newbern email: Aundrea@GetRichEducation.com Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 14 September 2020
The pandemic has fueled remote work. A New Yorker paying $4,000 rent in a 1 BR apartment can now work from Florida, paying $1,500 rent in a 3 BR & 2 BA single-family home. Central Florida benefits from this in-migration. Florida has law that favors landlords, zero state income tax, a low cost of living, beach proximity and of course, warm weather. Get the report and learn more at: www.GetRichEducation.com/Orlando These Central Florida Build-To-Rent properties are brand new. They often appraise for $5,000 to $10,000+ more than your purchase price. That’s built-in equity. Your rent-to-price ratio is often 0.8% to 0.9% for single-family rentals. The average tenant stay is 3+ years in this new construction. Get the report and learn more at: www.GetRichEducation.com/Orlando The growth and economic diversity in the region is astounding. The time is likely “now”: brand new construction, high rent occupancy, cash flow, low interest rates, low insurance premiums, low $160K - $220K property cost. Resources mentioned: Central Florida Build-To-Rent: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 7 September 2020
Should you rent or own your home? Host Keith Weinhold reveals the biggest homeowner myths. Complete episode transcript below. Read along. Subscribe to our weekly newsletter here. Resources mentioned: Business Insider: Rent vs. Own: Housing Wire: Homeowners Wish They Were Renting: https://www.housingwire.com/articles/49743-quarter-of-us-homeowners-wish-they-were-renting-instead/ Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
Welcome to Get Rich Education. I’m your host, Keith Weinhold. Is homeownership a sham? Is it a rip-off?
When it comes to the home that you live in yourself, is it better for you to pay rent to a landlord, or own that home yourself?
For your primary residence, what should you do in your specific life situation? You’ll learn today … on Get Rich Education.
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Welcome to GRE! From Syracuse, Sicily, Italy to Syracuse, New York and across 188 nations worldwide. I’m Keith Weinhold, this is Get Rich Education.
Usually on this show, you learn about how buy-and-hold rental property, when bought strategically - produces wealth. We’ll return to that next week, but today ...
… it’s about your primary residence. And, when we talk about, should you own your home or is it better for you to pay rent to a landlord - think about how important this is.
Because whether I’ve had the chance to meet you yet or not, there’s one thing that I definitely know about you, and that is, you are always going to live … somewhere.
Your housing expense is one of the biggest financial expenses in your life.
Despite that it’s such a substantial financial decision for you, some people revert to orthodoxy - this FLAWED orthodoxy where they think that owning is always better. That’s not true.
I really want you to watch your mind as I tell you this today, because there are very likely a few tripwires installed there … and I am about to hit some of them. So do your best to remain calm … if you must.
Though more people are waking up to the fact that renting is sometimes better, I still think that popular culture has long reinforced this misplaced notion that owning is always better.
“Are you a homeowner, Greg? No. I rent. Oh.”
Haha! That’s from the classic comedy movie “Meet The Parents”. Owen Wilson & Ben Stiller - while Robert De Niro - the future father-in-law was party to that chat where he’s thinking that the homeowner is the more apropos suitor for his daughter than the renter is.
Look, if you can OWN a home and your monthly housing payment is $2,500, but you could instead PAY RENT on an equivalent home for $1,500 - now your cash flow has increased by $1,000. That’s money in your pocket today that could be re-invested at a rate of return.
Now with your $2,500 housing payment in this example - that’s more than just a mortgage payment remember.
When you own, your HOUSING payment consists of mortgage principal & interest, property tax, property insurance, maintenance, repairs, utilities and more. You’ve got to add all that up to get to $2,500.
What about that TIME it took you on HOW to repair the leaky faucet when you owned the home? Factor that in.
Now, the homeowner might reply, but at least part of my $2,500 payment is building equity for me. Yes, it is. A minority of that payment is building equity. You’d rather have equity - you’d rather have principal paydown than lose it to interest.
And you’d rather have equity than nothing.
But, as I’ve discussed extensively elsewhere - so I won’t do that again here - home equity is unsafe, illiquid, and it’s rate of return is always zero.
You can probably repeat that to me at this point - ha!
Also, what’s more important in your life? Cash flow or equity? Cash flow is what creates financial freedom. As an investor in the pursuit of freedom, in fact, you want to CONVERT your equity to cash flow.
Remember, in this $1,500 rent payment vs. $2,500 housing payment scenario on your primary residence … it’s the renter that has the additional $1,000 cash flow and the homeowner that builds the equity.
Let me remind you. If you would like to READ along as you listen to the show today or you know someone that’s hearing impaired, you can read the complete transcript to this episode at GetRichEducation.com/309.
That’s GetRichEducation.com/309 to see all the Show Notes and the entire written transcript for this episode.
Well, some people think that buying & owning their primary residence is: "LIke paying rent. Except you get to keep it." Well,that has caused millions of people to buy houses that they later regret.
I know a young, married couple - Jerome and Jessica - they’ve got two kids. They wanted to move from snowy Anchorage, Alaska to Las Vegas, Nevada. They had lived their entire lives in Anchorage and were tired of the snow and wanted some heat.
You think that they might discover an overcorrection problem, btw? Vegas is in the middle of the Mojave Desert. But anyway ...
They had owned their Anchorage home for five years before they put it up for sale. That was the first home that they ever owned - starter home.
Had they been renting that home - they could have moved where they wanted to in as little as a month.
But as homeowners, by the time they made all the make-ready repairs to the home, got it listed for sale, had to repeatedly prepare their home for showings - meaning they had to intermittently get their home in pristine condition to make it look good for showings - uprooting their lives every time … they finally sold it in 4-½ months by the time their buying got their financing in order & inspections & appraisal & the deal actually closed.
If Jerome and Jessica had been renters instead, they could have been on their way in a month.
Plus, over the five years, their home appreciated a little, but not enough to offset the 4% closing costs when they had bought five years earlier, all the maintenance & repairs that they had put into place DURING the five years they lived there, plus then they then had to pay a real estate agent a 5% commission when they sold.
They not only lost money by owning, they lost time, they lost mobility. They didn’t have liquidity.
For Jerome and Jessica, they got a lesson. “Paying rent is not the same as throwing money away.”
Well, I can tell you, Jerome and Jessica moved to Vegas one year ago now. They have been renting from Day One there, they’re still renting, and they have no plans to buy in Vegas anytime soon.
“Paying rent is not throwing money away” because you get the BENEFIT as using that space as a home, a place to sleep, prepare food, eat, shower, study, entertain - how in the world is that throwing money away? It isn’t.
You know that I’ve told you on this show before that paying rent is not throwing money away just like the five hour flight that you took from Boston to Phoenix last year wasn’t throwing money away.
No one called it throwing money away when you paid $500 to “rent” that airline seat for five hours. Why, because you had the BENEFIT of travelling somewhere.
Sheesh, how far are people going to take it with this nonsense that “Paying rent is like throwing money away?”
Your gym membership is $50 a month. But you didn’t get to take a set of the 40-pound hex dumbbells home after six months of membership did you?
Gosh, how far would you take this nonsense line of reasoning?
You like to go mini-golfing? I’ll bet that you paid some portion of your fee to rent the put-put club and a little orange golf ball for two hours.
How are you going to think - that you now expect to own equity in a put-put golf club that’s all nicked-up and was used by 80 different people? Sheesh, that’s ridiculous.
You had the benefit of a gym membership because you’re healthier. You had the benefit of mini-golfing because you like some recreation. You didn’t throw money away.
What about renting an RV for a week? You didn’t throw money away. You had the benefit of using it.
This whole misguided notion that paying rent for a place to live is throwing money away is a … replete farce.
But that also doesn’t mean that renting your primary residence is always better than owning either.
Well, let me give you some numbers here. This will help you debunk that notion that - ad infin-I-tum, homeownership is better.
Look, in a place like Manhattan’s Tribeca neighborhood, a small apartment has, just for simplicity, say a rent-to-value ratio of three-tenths of one-percent.
That’s a lousy deal if you’re the landlord and an awesome deal if you’re the renter.
So, what that means is that market rent is only $300 per $100K worth of property. That’s that three-tenths of 1%.
That ratio might then be $3,000 of rent on a $1M apartment in Tribeca, Manhattan.
But look, in a place like Memphis, Tennessee or Little Rock Arkansas, the rent-to-value ratio might be a full 1%.
Now see, if you’re a renter here, you’d have to pay $1,000 for every $100K worth of property. (Not $300 like Manhattan)
Well, in that case, it makes more sense for you to own your home.
BTW, it also then, makes sense for you to own Memphis real estate & rent it to others - because for every $100K of Memphis property you own, you’d RECEIVE $1,000 in rent. You’d RECEIVE a full 1%.
Generally, on the coasts, it’s better to pay rent for your primary residence - and in the heartland, it’s better to own that real estate - whether you’re renting it to others OR living there yourself.
But there are so many more considerations here than just numbers and geography. So, what else makes sense to your specific situation?
And before I go on, please don’t think that I’m “against” the real estate AGENT industry. That’s not true. Gosh, I’ll stand up for a GOOD real estate agent when it makes sense.
For example, when it comes to selling your home, you might not want to pay a 5 or 6% sales commission to an agent. Some people would rather sell it themselves and pay 1 or 2%.
But what some sellers fail to consider is that an agent might help you get 4% more for it because they know how to reach more buyers, and do it fast, and save you a lot of hassle and uncertainty.
So, there’s just one example of how I’ll stick up for agents when it makes sense.
But, getting back to should you own or rent your primary residence, I’m here to help you decide what’s best for you. You’ve ultimately got to decide.
I WILL tell you when it’s better to be a homeowner than rent shortly. But first ... A recent survey from Freedom Debt Relief shows that homeowners have many regrets when it comes to the purchase of a new home, mostly because they are largely unprepared for the initial cost and the ongoing financial responsibility that comes with homeownership. Of the 1,028 people surveyed, 29% said homeownership makes them feel anxious and stressed, while 26% said the cost of owning a home is a burden and they wished they were renting instead. When it comes to affording house payments, it was Millennials and Gen Z homeowners who said they are struggling the most. Half of these homeowners said property taxes turned out to be higher than they expected, while 52% said their monthly mortgage payments are too high. With renting comes an always-available maintenance team and the ability to call the landlord when there is a problem. Conversely, homeowners have to mow their own lawn, paint their own walls and fix their own leaky faucets. And some of these tasks have homeowners shelling out more cash than they planned, with 59% saying maintenance and repairs are more costly and require more effort than expected, and 60% saying they cannot afford needed upgrades. That said, it seems the idea of owning a home is still attached to the concept of what it means to succeed in this country, with 59% of homeowners saying they believe that owning a home is still part of the American dream. I’d like to add that the survey was conducted “pre-pandemic”.
Most people think that owning a home is a financial asset.
That's debatable.
The Rich Dad school of thought is known for saying that, "A home is a liability, not an asset".
An asset puts money into your pocket every month. A home is a liability because it takes money out of your pocket every month.
Of course, in the conventional sense, a home is in your asset column and it’s mortgage is in your liability column.
Though owning a home is often a poor financial investment, you still tie up a lot of money in your humble abode.
You really have more than two choices in how you live - it’s actually more than just rent or own.
You have four choices in how you live: you can own your home, pay rent to a landlord, be homeless, or live with your parents – ha!
We’re only discussing two here: Rent vs. Own.
Fannie Mae associates “Home ownership with the American Dream.” in their marketing slogan.
In America, how many people own their homes vs. rent their homes anyway? About 2/3rds own and ⅓ rent. The homeownership rate is currently about 68%.
Well, I’ve probably got your wheels turning now on “rent vs. own”.
Let’s break things down further. I’ve got 16 factors that I came up with here for you to consider, many of which you’ve never thought about before - on this.
Often it’s an exercise in pros vs. cons for you. Often, it’s rationalizing a series of trade-offs for you.
The first of these 16 factors is ...
Now, a homeowner may also get an unusually outsized equity benefit if they buy in the right place at the right time. For example, if they had bought 10 or more years ago in a place that’s appreciated a lot - for example in Charlotte, Nashville, Austin, or Boise. That could be a homeowner boon there. But if you buy a home and it’s value doesn’t appreciate - or even goes down - plus each month you paid more than you would have as a renter - plus you’ve lost time doing repairs & maintenance, then you’re REALLY lost out as a homeowner.
Some people find themselves owning a home for a few years, then later realize that they don’t even live in a region that fits their interests. Maybe you don’t want to move far away because you want to be close to family. That’s legit. Family can be a good reason for NOT making a distant move. It’s about what’s important … to you.
Those are the 16 factors that I compiled to help you figure out what makes sense for you.
A decided stigma still exists with renting. But you don’t live your life for the Joneses, you live it for you.
I’ve got more for you on: “Should you rent your home or own your home.?
Hey, have you had something on your mind that’s made you want to write into the show, but you just haven’t done it yet?
Well, I think that it’s been a while since I mentioned our Contact Page here on the air.
You can get ahold of us at GetRichEducation.com/Contact.
What you can do there is either send us a WRITTEN message - or you have the option of leaving some audio - basically leaving a voicemail.
I really like it when you leave us a voicemail personally, because it’s something that I might be able to play & answer on the air for you.
I like to hear your voice.
We get a ton of messages - and we’re grateful for them. But understand that we sure can’t give personal replies to every one of them.
You can either write in OR leave a voicemail, again, at GetRichEducation.com/Contact.
More on rent vs. own, next. I want to try to help you make the best decision that you possibly can. I’m Keith Weinhold. This is Get Rich Education. ____________________
Welcome back to Get Rich Education. I’m your host Keith Weinhold.
Homeowners have a higher net worth than renters.
The average homeowner net worth is $195,000. The average renter net worth is only $5,000.
That is a substantial gap. The means that homeowner net worth is nearly 40 times what renter net worth is.
Does that alone mean that owning is better? No. I think that it does TILT toward owning.
But see, to even BE a homeowner and qualify for a mortgage, you would have already needed to have assets and income … in order to cross that threshold.
I don’t think these figures are a good reflection of WHERE the homeowners wealth actually came from - was it equity building through leveraged appreciation & principal paydown or how much income they earn from their job?
That’s information that I’d like to see.
Of course, in the greater context of Get Rich Education - net worth matters. Not as much as cash flow, but it matters, because net worth can be converted into cash flow.
Nonetheless, that net worth stat still tilts to the homeowner favor, just not as much as one thinks. "People often say that buying a home was the best investment they ever made," that’s what Ne ela Hummel said - the chief planning officer at financial planning firm Abacus Wealth Partners. "The problem is that their return as investors is often worse than they think. When calculating how much they made on a home, most people do not include the out-of-pocket costs they incurred through things like replacing pipes, repairing roofs, or numerous other unexpected expenses that come up. As a tenant, your costs are fixed, but as a homeowner, you are on the hook for any repair that comes up." That’s the end of what they said. Those needed repairs to your home may involve you doing a lot of research online - and watching YouTube videos - to find a solution or simply paying a repairman to remedy the issue. Either way, you’re on the hook for investing more time and money into your home when something breaks. Now, I’ve got another test on renting vs. owning your home.
Is a home an “investment”? Do you see your primary residence as an “investment”.
Well, what is an “investment” anyway? What is the definition of “investment”.
We are an investing show - and we take deep consideration of both the value of your time and your money here, so …
The definition of “investment”, per the Oxford dictionary is … “the action or process of investing money for profit or material result.” That’s it.
So is your home an investment? I think some people see it that way.
Like I’ve said, if you’re rather lucky and buy the home in the right place and at the right time - you could profit from it. Though that’s more the exception than the norm … probably.
What I like to say is that in general, your primary residence is a poor FINANCIAL investment. But it is a good LIFESTYLE investment.
See, in this way, your primary residence is like a vacation.
That is because, think about the money you spent on your last vacation. Whether you went to the beach or the ski slopes or French vineyards, it was not a good strict FINANCIAL investment, but it was a good LIFESTYLE investment.
You improved your quality of life. You improved your standard of living.
A home is typically a good lifestyle investment and a poor financial investment.
Now, look, we’re all somewhat biased based upon our own set of experiences. That goes for me too. I am an 18-year real estate investor.
I grew up in a home that my parents … owned. They even had the mortgage completely paid-off early.
In fact, I think I shared with you before that my parents still live in the same Pennsylvania house that they’ve owned continuously since 1974.
But when I grew up in upstate Pennsylvania, all my friends’ families OWNED their homes. No one rented.
Later, I’d go on to learn about socioeconomic stratification and how I’d just be less likely to associate and even meet kids from renter households.
There was one notable outlier. When I was about 14 years old and the Petroski family moved to town - they were some pretty nice, relatable friends that were into sports & baseball cards - and I learned that they rented.
And that was the first time that I ever remember hearing the word “landlord” in my life … when the Petroskis talked about their landlord, Mr. Hosley.
I’ll tell you, my parents owning their home might have help stabilize my childhood. I’m not really sure, because I can’t compare what it’s like to move as a kid, because we never moved.
If you’ve got kids, is uprooting them to move damaging to them?
Or does it help them become more adaptable later in life? I truly don’t know the answer. I haven’t read about that at all.
But all the kids knew where I lived & could count on me for getting together.
I had an awesome childhood, raised with two married parents, playing wiffle ball in the yard, catching crayfish in the creek, going camping, and collecting Star Wars action figures. All that great kid stuff. And part of that is … well ...
Home felt like home. If it’s important for you to build a legacy for your family and have your home incorporated into that - then perhaps only homeownership will give you those … nostalgic feelings.
For me, it was knowing how my brother & I’s Christmas stockings were going to be hung from the mantle in the living room next to our wood-burning stove.
The love from my parents is the most important thing for sure. But knowing that everything was going to be in the same place every year too?
You need to understand something. That right there brought me a FEELING, an emotion, that concern for a rent-to-value ratio NEVER could. That’s stuff’s got NOTHING to do with math.
If you can’t feel at home, at home, then where you can feel “at home”?
Remembering that spot on the living room floor where I was watching the television when the Phillies won the World Series. Yeah, I can still go there and show you that in my parents’ home.
See, if I go much further down this track, I’ll soon get teary-eyed here with you.
So, with rent vs. own, is there a hybrid approach? No, there’s not really. There’s something called a lease-purchase. But those agreements are uncommon.
One somewhat hybridized approach is … one that I’ve taken.
I own the home that I live in. I’ve lived in that home for 8 years. But see, what I did is, knowing what we know about equity, is that I decided to own my home but have a low equity position.
I made a 5% down payment with a conventional loan.
See, now I’ve got 20:1 leverage, very little skin in the game, and still have control, plus I got a 3.5% interest rate back in 2012.
See, instead of putting 20%, with 5% down, now I have that difference of 15% of the value of the home … out working for me as equity levers in other income properties in other states.
And no, I pay ZERO monthly PMI despite putting 5% down with a conventional loan. I’ve given you detail on how I pulled that off on previous shows, and you can too.
The short story is, make a strong offer on your buy price and put it into the contract that your seller pay upfront PMI for you.
Now, there are some other distinct things happening in my geography where - if someone wanted to come buy my primary residence from me, but yet I could keep living here as their renter …
… and it was written into the contract that they couldn’t make me move, and I know I would pay them a lower rent amount than I’m currently paying in my mortgage & all those other homeowner expenses, I WOULD consider doing that.
Those situations are hard to find.
Yep, I would convert my mortgage payments to rent payments if I could get that arrangement.
And why do this? Because the lower rent payment would increase my personal monthly cash flow, plus it would free up any dead equity that I have in the home.
Part of the rationale there is that my home market has few prospects for substantial appreciation in the next few years.
Well, in rent vs. own, what’s the bottom line with what makes the most sense for you financially? (Just … talking financial only here)
Be a renter in a high-end home and then buy low-cost income properties in investor-advantaged markets in the Midwest and South - that you rent out to others.
See, if you’re a renter in a high-end home, now you’ve got zero dead equity tied up in your home - and instead, it’s leveraging property in sensible markets.
In fact, I know a few other people - savvy people - that understand rent-to-price ratios and do exactly that.
They’re FAIRLY wealthy people that are renters by choice - and own lots of rental property in low-priced markets.
But there’s no one definitive OVERALL factor in your Rent vs. Own decision because this is where finances and feelings intersect.
So here’s hoping that you’re finding a few considerations that you’ve never thought about before!
To be clear here and to summarize overall ...
They’ve heard the same “Paying rent is like throwing money away.” thing for so long, that they’d rather argue than really think it through.
Well, the reason that I did this show today - though it’ll be just as relevant if you’re listening 5 to 10 years from now, is pandemic-related.
It’s because the COVID-19 pandemic is appearing to increase the migration rate as people look for less dense housing.
Whether you’re migrating or not, now you better know whether renting or owning your home makes the most sense for you.
Next week here on the show, we’ll discuss what we usually do - INCOME property - property that you don’t live in, but instead, rent to others - and just exactly why the investment makes more ordinary people wealthy than anything else.
If there’s one thing that I know about you, it’s that you are always going to live somewhere.
And you know what else, so is everyone that you know.
Every person that you know - may or may not own rental property - but everyone that you know is always going to live somewhere too.
Do you think that this show would benefit them?
This episode in particular might save your family and friends SO much time and money.
I love it when you share the show with others. So I’d be grateful if you took a screenshot of this episode and shared it on your Facebook, Instagram, Twitter, LinkedIn, or even through an email or text with those that you care about.
I always endeavor to make things clear to understand here on the show. I’m Keith Weinhold.
Don’t Quit Your Daydream!
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Mon, 31 August 2020
Where are the big investment risks today? Economic forecaster Harry Dent tells us. Despite pandemic-driven unemployment, tenants are largely paying the rent. The price of an existing American home is now $304,100, surging 8.5%. Lumber prices for a new home are up $16K since April. This increases the value of your property’s replacement cost. The new 0.5% adverse market condition fee for refinances is annoying. Learn how to avoid it. In the pandemic, real estate keeps shining. Harry Dent is fired up. He joins me to tell us why he thinks most assets are in a bubble: economics and demographics. His latest book is “Zero Hour”. Baby Boomers find renting to be more acceptable today. Harry predicts when stocks will fall 80-85%, a crash occurs, and about the profligacy of the Fed printing trillions in the pandemic. Resources mentioned: Harry Dent’s website: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 24 August 2020
The wealthy are enjoying federal monetary stimulus. Meanwhile, unemployed tenants can now be evicted nationally (check your local law). Own assets? Great. Mortgage interest rates are at historic lows; the S&P 500 is at an all-time high. (Entire episode transcript is below. Read as you listen.) In the pandemic, tenants want single-family homes more than communal apartments. Fannie Mae & Freddie Mac want to add a 0.5% refinancing fee. Homebuilder sentiment is high? Why? High demand, low inventory, low rates. Stagflation is explained. It is a stagnant economy with high inflation. There are signs that inflation is poised to increase. Resources mentioned: Inflation Triple Crown video: Section 8 turnkey property: www.GetRichEducation.com/Section8 Stagflation video: https://www.youtube.com/watch?v=YaC_PNKu_Cg&feature=youtu.be Elevator Anxiety: https://www.axios.com/elevator-anxiety-reopenings-9a474985-4786-43a3-8b64-5119ff7f2267.html Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
Complete Episode Transcript:
Welcome to Get Rich Education. I’m your host, Keith Weinhold.
The rich are getting richer and the poor are getting poorer. I can’t think of any one time in my life where that’s been happening more than it has been than right now.
I’ll tell you why - and what you need to do to get on the right side of that.
What is going on in the real estate market and what are the real estate economics that matter? Then, a discussion about inflation. Today, on Get Rich Education. ____________
Hey, you’re inside GRE. From Manila, Philippines to Managua, Nicaragua and across 188 nations worldwide, I’m Keith Weinhold. This is Get Rich Education.
The rich are getting richer, the poor are getting poorer - and I can’t think of any one time in my life where that’s been happening more than it has been than right now.
Because Americans living paycheck-to-paycheck might now be ... paycheck-less. Some of them are laid off - because of the pandemic - and now they're concerned that there's no national eviction ban.
That’s right. In most states, non-paying tenants CAN be evicted at this time. Now, you’ve got to check your local law.
Well, when is Congress going to do something to relieve those that the pandemic has left unemployed?
Well, they don’t even reconvene until after Labor Day.
Some people are wondering - “Where is the CARES Act 2?” Where are those updated forbearance options, eviction moratorium, the PayCheck Protection Program, and the $1,200 stimulus checks and the stepped-up weekly unemployment compensation?
In fact, Richmond Fed President Thomas Barkin had good metaphor. He said: “Months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate.
Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate.” That’s the end of what the Fed President said.
Now, look, I think there’s a lot to be said for just letting the free market do it’s job.
But it’s a little hard to be in this laissez-faire, Austrian economics school of thought when some people could be suffering.
So that you know what I’m talking about, “lay-say-fare” basically means no government intervention into the free market.
Meanwhile, the rich are bingeing off Federal Reserve policy and liquidity injections that keep mortgage interest rates at historic lows and the S&P 500 at an all-time high.
Mortgage rates recently dipped below 3%, which is just amazing.
You don’t even have to be THAT rich … to benefit. If you’ve got substantial exposure to the real estate market or the stock market, chances are, that those assets are doing alright.
One thing that you need to keep in mind as an investor, is that, when the Fed puts rates on the floor, it affects more than just MORTGAGE rates - it affects other rates too - like savings account rates.
Just look at the rates at bank savings accounts.
Even if you’re in one of these online banks that give better yields than traditional brick-and-mortar banks - we’re talking about online-first banks like Ally Bank and Popular Bank - they were paying two-and-a-half percent on savings accounts not all that long ago.
Even those banks are now down to about three-quarters of one percent - probably less than the real rate of inflation.
So because savers get punished worse than ever right now, that, in turn, forces more people INTO things like real estate, because you’re in search of that yield.
Even retirees can’t rely on the paltry income from three-quarters of one percent yield so they have to go to the markets to chase yields too - sometimes unwillingly.
Well, when all these people that got negative REAL yield on savings accounts and CDs - and aren’t going to stand for it anymore, it forces more demand … and money into markets and consequently, floats the price of everything up.
That’s what’s going on now.
Now, I personally don't really like this deepening canyon between the "rich” and the “poor". But I know which side I'd rather be on.
Besides the investment properties, a lot of people want to move and shake-up their living situation like never before - their primary residence - and filter their new home-buying criteria on pandemic ways of life.
Bidding wars are rampant for single-family homes. How rampant are they? Well, Zillow just reported their highest daily active user count ... ever.
Now, though property data can move even slower than your last 1031 Exchange did, Real Estate Economist Daren Blomquist just compiled THESE year-over-year price changes through quarter two.
You’ve heard Daren Blomquist on the show here. He broke this down this way:
City real estate is up +4% - again, this is all year-over-year through the second quarter. Town +4% Suburban +5% Rural +11%
The two sources are ATTOM Data Solutions and the U.S. Census Bureau.
So rural is appreciating the best. City and town is appreciating the least.
With time, I expect urban areas and apartments to slump. Of course, urban areas and apartments kind of go together.
In the pandemic, living in a lot of large apartment buildings has become about as fashionable as Jazzercise and The Atkins Diet.
Of course, at GRE, we've long focused on rental single-family homes. We’ve talked a little about apartments and you know that I started out with a four-plex & got my start in real estate that way.
This week, NAR Chief Economist Lawrence Yun noted:
" ... (There's) an oversupply of apartment buildings, especially in city centers given the evident recent shift in consumer preference for single-family homes in the suburbs.
Lawrence Yun continued: "Apartment rent growth could therefore be tough going ahead.
The rise of single-family units is welcome, as overall inventory of homes for sale are down 19% from one year ago and there is intense buyer competition in the market as a result." That’s the end of what Lawrence Yun said.
As long as your tenant can pay the rent, this is welcome news for your existing single-family rental homes - like the ones that you’ve acquired through GREturnkey.com.
It puts upward pressure on the price. So congratulations there.
The appetite for real assets, especially desirable rental single-family homes, now propelled by low inventory and low interest rates has put you in good shape if you’ve acted.
But of course, the COVID pandemic isn’t over. We don’t really know how all of this is going to turn out. And even when a vaccine is developed, remember that it will probably take … at least a few months to distribute it.
In my OWN portfolio, all of my single-family rental homes are occupied - 100%. But my apartment building vacancies are unusually high right now.
When we talk about apartment buildings and office buildings as well - Axios recently reported about how residents and workers are experiencing what they call “elevator anxiety”. I’ll put that in the Show Notes for you.
An elevator is one of the most physically, uncomfortable awkward places to be in the pandemic.
If you’re wondering about how that real estate looks - we’re generally talking about buildings that are four or more stories in height.
In fact, the ADA - the Americans with Disabilities Act - stipulates that properties with four or more stories generally are going to need to have an elevator.
I’ll tell ya - if apartment buildings are as unfashionable as the Adkins Diet these days, then being inside an elevator is about as hip as Jane Fonda workout videos, NordicTrack, and Sweatin' To The Oldies with Richard Simmons.
https://youtu.be/na9ZZ4ZjVa8?t=28
Oh geez. Did that really just happen? I guess it did. So … while we’re all processing that, getting back to real estate here.
Now, Fannie Mae and Freddie Mac recently said that they will start charging a 0.5% “adverse market fee” on all refinances, including both cash-out and non-cash-out refis. They were trying to put that new fee into effect for next month. What a drag that would be. So for every $200,000 you refinance, you’d have to pay an additional $1,000 fee - or maybe your lender would pay it. What Freddie Mac said is: “As a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty, we are introducing a new … what they call ... Market Condition Credit Fee in Price”. Freddie sent in their notice to lenders. Wouldn’t that be an annoying fee? Well, almost immediately, the National Association of Mortgage Brokers struck back. They launched a campaign to reverse that newly announced one-half of one percent refinancing fee. We’ll see where that goes.
Now, things are really good for homebuilders these day. An index measuring homebuilder sentiment matched its highest level ever yesterday. Why? I mean, it’s simple. There is a healthy amount of DEMAND from buyers and not enough homes to meet it. Also, the 30-year fixed mortgage rate bottomed out at 2.88% in August, the lowest point on record. Those low borrowing rates are boosting homebuyers' appetites … obviously. There really are a few recent stories that are de facto microcosms - reflections of this appetite for a work-from-home arrangement and less dense housing. For example, it’s really telling to look at what the outdoor clothing and gear company, REI just did. Do you like REI? I like shopping there. Even if you aren’t into outdoor stuff, you can always find a cool water bottle or something at REI. Well, they just announced plans to sell the lavish corporate campus that they had just finished building near Seattle. REI executives concluded that employees were able to collaborate remotely better than the company originally THOUGHT ...so a massive physical HQ just wasn’t worth the cost any longer. So REI is selling what they had just built. Other real estate segments falling out of favor - are those high-density places, like you might expect - New York City and San Francisco.
NYC and San Francisco were already the most expensive housing markets in the country BEFORE the pandemic. And life under lockdown has given people that nudge they had already been considering for years. And then, single-family homes in outlying areas are the real beneficiaries here. There have been a number of notable milestones. COLORADO SFH sales rose 21% July-over-July. The median price statewide in Colorado is now $444,000. Just looking at Denver, Denver just broke the $600K mark for the first time ever.
So, a few months into the pandemic, we’re getting a clearer sense of who the winners and losers are - a lot of them are what we expected.
If I had to slim it down to just a 3-word answer for you on why the rich are getting richer, those 3 words are: Federal Monetary Stimulus.
And the stimulus is disproportionately benefitting … asset owners.
Well, the pandemic hasn’t affected some real estate investors at all. Others, feel more reliant on the next government stimulus program to give their tenants the wherewithal to pay the rent.
Well, if you, as an investor want to have the majority of your rent income payment guaranteed to be made by the government to you over the long-term, well, that’s what landlords of tenants with HUD-funded “Section 8” housing have enjoyed for decades.
You have guaranteed rent income.
I think you remember that I had a turnkey provider that specializes in Section 8 housing here on the show on Get Rich Education Episode 297. So just ten show ago, which was 10 weeks ago.
Like any investment, Section 8 Housing is best viewed through a prism of pros and cons.
Section 8 is not for everybody. Some love it, some don’t … but this provider manages the Section 8 administration FOR you. They’ve got a great relationship with the housing authority.
That’s something that most landlords of this government-subsidized housing never had.
“Guaranteed rent income” has a nicer ring to it than it did just a year ago.
Get the provider report and learn more at GetRichEducation.com/Section8
That’s our Richmond, Virginia provider. In fact, CNBC named Virginia as the most business-friendly state in the entire nation.
I’m Keith Weinhold and I’m coming back to talk to you about inflation.
Again, learn more at GetRichEducation.com/Section8. This is Get Rich Education!
_________________
Hey, you’re back inside Get Rich Education. I’m your host, Keith Weinhold.
Both the pandemic-driven CARES Act, and whatever other monetary stimulus acts that follow … are injections of trillions of dollars into the economy.
In fact, it’s now driven our national debt to nearly $27 trillion dollars.
Of course, this has the effect of … money printing. It’s not literal money printing. The more you learn about it, it’s often U.S. government bond issuance.
A bond really just means that the government issues an I.O.U. that someone else, like China buys.
Those are some of the semantics behind, what we you can really more closely think of as “currency creation” rather than money printing.
Will this result in inflation? That’s the big question. Well, longer-term, many think, “yes”. Short-term, “no”. We are in a low demand environment.
Of course, as a real estate investor, you want inflation. You might have seen on the Get Rich Education YouTube Channel where, I have visually mapped out how you win “The Inflation Triple Crown”.
In fact, if you just Google the three words, “Inflation Triple Crown”, you can probably see me - as the first hit on Google - and you can watch me doing the whiteboard video.
As you’ll remember, real estate investors win the Inflation Triple Crown because inflation provides you with: #1 Asset Price Inflation, #2 Debt Debasement and #3 Cash Flow Enhancement - that all works terrifically when you’re leveraged.
There are more signs of inflation out there in the economy right now than we’ve seen in the recent past. Though I still expect it to be mild as long as we’re in this pandemic-driven low demand environment …
The consumer price index rose six-tenths of one percent last month. That beat the two-tenths expectation that economists had had.
Food are prices up substantially, and then, a substantial input to homebuilder pricing and therefore the future value of homes - is lumber - and lumber prices have been soaring higher.
Treasury Secretary Steven Mnuchin said that the administration is unfazed with these historically obscenely high levels of government spending … thanks to the nation’s very low interest rates.
See, the Fed is less concerned about mounting debt when the interest rate that THEY pay on their debt is low … much like you’re less concerned about your debt when the interest rate is so low - you might be looking to take on more debt now.
Of course, YOU’VE got a better deal on your real estate debt than the Federal Government does, because the Federal Government doesn’t have tenants to service their debt for them like you do in an occupied rental property.
Could America reach a STAGflationary state again like it did in the 1970s? We haven’t discussed the economic phenomena of stagflation before.
Do you know what that is? Stagflation is a stagnant economy with inflation. That’s what it means.
OK, usually a more stagnant economy - like we’re in now - is characterized by low inflation due to lower demand not running up the prices of consumer goods and household staples.
But again, stagflation means that there’s a stagnant economy WITH high inflation. Could THAT happen this decade?
To reinforce your learning here, let’s listen to the audio from this explainer video from One Minute Economics about stagflation.
This is less than a minute & a half in length.
https://youtu.be/YaC_PNKu_Cg
Yes, well, if we get stagflation, meaning again, a stagnant economy that we have high inflation, I don’t know that we’d have another Fed Chief like Paul Voelcker - who, 40 years ago, brazenly raised interest rates so aggressively to combat inflation that mortgage rates were 18% forty years ago.
I don’t know that anyone would prevent inflation from running away at that point.
But again, that’s STAGFLATION.
Now, I know what you might be thinking. Maybe you’re thinking that all of the Fed currency creation to pull us out of 2009’s Great Recession didn’t produce high inflation, so why would it be any different this time, with all these CURRENT cycles of massive dollar creation once again?
That would be a valid thing for you to think.
At least based on the official government numbers, we’ve only had about 2% monetary inflation in recent years.
Well, see. Though high inflation wasn’t the RESULT ten years ago, it might have actually been CREATED and you just didn’t know it. So, here’s what I mean.
Say that the expansion of globalization and technological advancement REALLY meant that we had NEGATIVE 5% inflation - another way to say that is that what if we WOULD HAVE had 5 points of deflation if they’re WEREN’T any excess dollar creation?.
But yet, all of the dollar creation after the Great Recession caused 7% inflation.
Well then, 5 points of DEflation offset by 7% INflation resulted in ... 2% inflation.
Think about it that way. Maybe something like that is what really happened … and that is why all of today’s currency creation COULD result in high inflation. We don’t know that it will. But that’s just one reason why it COULD.
Now, overall, to pull back and look at the state of housing in this pandemic-driven recession.
Housing has been - and continues to be - substantially better off in this recession THAN it was in the 2008 Great Recession - that event - twelve years ago, had a housing COLLAPSE as a driver. People left the keys and walked away from their homes back then.
Now, instead, we’ve got bidding wars for housing.
I want to temper that with a reminder that the pandemic is not over yet, and it could still take an unforeseen turn.
The bad part about this recession is that we’ve got higher unemployment than we did back then.
Now, the reasons that real estate is BETTER OFF in this recession compared to the last one is:
They are … the key differences.
Coming up on a future episode here - we’re primarily a show about how buy-and-hold residential INVESTMENT property produces wealth for you - and how to avoid mistakes.
But so many people are re-evaluating their primary residence situation lately, that, coming up on the show, I’m going to go deep on - “Should You Rent Your Home Or Should You Own Your Home?”
There is some counterintuition and paradox here.
I’m going to give you a new twist on the fact that - if you pay rent, that is NOT The Same As Throwing Money Away
Also, some people seem to think that homeownership is like: "Renting. Except you get to keep it." That is false and that has caused millions of people to buy houses that they later regret.
Is your primary residence an investment? Do YOU consider it an investment? Well, in almost EVERY case it is a poor financial investment, but it could be a good lifestyle investment.
So, “Should You Rent Your Own Home Or Own Your Own Home that you live in.” That’s coming up on a future show.
Well, regardless of your living situation, pandemic-driven unemployment might have made you realize that … you need a durable, long-term 2nd source of income - if you don’t already have one.
Even if you aren’t losing your job, circumstances have hit close to home for a lot of people.
You can either let other people make money off your money, like the bank paying you 1% on your savings.
Or you can make money off OPM (like borrowing at a 5% mortgage to invest at 11% - or hopefully, a lot more than 11% with the (up to) five profit centers that real estate has.)
RE is that instrument of arbitrage.
As they say, you can either teach a man to fish or give a man a fish. Well, why not do both? That IS the abundance mindset afterall.
At GetRichEducation.com, we teach you how to fish.
At GREturnkey.com, we give you a fish too.
What is going on at GREturnkey?
Well, first, get your mortgage pre-approval at a reputable lender that specializes in investment property like Ridge Lending Group.
You’ll see at GREturnkey.com that Birmingham and Huntsville, AL have investor-advantaged numbers that work.
Pockets of Huntsville may have better appreciation if they’re tied to employment in the space industry.
Gosh, love him or hate him, Elon Musk gave us something to actually celebrate in an otherwise tough 2020 as he led the first private company to launch astronauts to space - emblematic of the burgeoning space industry - both Huntsville, AL and Orlando, Florida there at GREturnkey pick up on some of that.
We just discussed Chicago here last week. Chicago and Dayton, Ohio are two markets that keep sourcing existing inventory that they beautifully renovate, and both markets have rent-to-price ratios that are typically OVER 1%.
When you’re over 1% and mortgage interest rates are this low, it makes your affordability as an investor REALLY advantageous. That’s Chicago and Dayton.
Des Moines, Iowa is sourcing a little inventory lately - not as much as some of the other providers. That’s a stable place.
Florida is a bright spot for new construction turnkey property - Jacksonville, Tampa, and the aforementioned Orlando all sourcing brand new construction property.
When it’s NEW construction, your insurance cost is often really low too.
Memphis, Tennessee and Little Rock, Arkansas are both the SAME provider there at GREturnkey - and that provider name is MidSouthHomeBuyers. There you have lower price points and MidSouth Home Buyers is so good with beginners.
And then, Oklahoma City - the numbers work and some media outlets have named Oklahoma City as the most recession-resistant market in America. You’re getting a 1% rent-to-price ratio there too.
Finally, Richmond, Virginia - I mentioned them earlier. They specialize in knowing the ways and means of how to optimize Section 8 tenancies because they have a great relationship with the housing authority there.
Most, or really all of these markets that I mentioned are in the United States Midwest & South.
Florida - oddly enough - is not culturally the South - though it’s the most southeastern state there is - their history of net-in migration makes them culturally disparate from what we think of as the south, but …
… all these markets I mentioned are in investor-advantaged metros where you generally have more stable prices, and landlord-tenant law that favors your rights moreso than the tenant’s rights.
So these markets are hand-chosen pretty carefully for you.
Once you’re pre-qualified for a loan, find all those providers & a few more at GREturnkey.com.
I am honored because you have given me something … and that is that I have had the privilege of having your time today.
Until next week, I’m your host, Keith Weinhold. Don’t Quit Your Daydream!
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Mon, 17 August 2020
You contribute to homelessness. I do too. The problem goes right through real estate. Factors include: NIMBYism, minimum wage, salamanders, smoke detectors, and rent control. (Complete transcript on homelessness segment below.) Then, Chicago is a world class city with lots of economic diversification. Chicagoland’s numbers make sense for real estate investors. In northwestern Indiana (suburban Chicago), you avoid the high cost of Illinois property. A typical SFH has $1,350 rent and a $125,000 purchase price. If you’re serious about building your cash-flowing portfolio, learn more and see property at: www.GetRichEducation.com/Chicago Resources mentioned: Chicagoland turnkey property: www.GetRichEducation.com/Chicago Environmental regulations & housing: https://www.huduser.gov/periodicals/cityscpe/vol8num1/ch5.pdf NIMBYism: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
Welcome to Get Rich Education! I’m your host, Keith Weinhold, with a two-part show. Real estate is a substantial input into homelessness. Why are people homeless - and why might you & I be partly RESPONSIBLE for it, in fact?
The second part - in general, world class cities don’t make any sense to invest in for cash flow - New York, LA, DC, London, Singapore … but we’re going to discuss one “world class” city that actually DOES. Today, on Get Rich Education. __________________
Here it is - hey! You’re inside GRE. From Sarasota, Florida to Sarajevo - in Bosnia and Herzegovina - and across 188 nations worldwide.
I’m Keith Weinhold, this is Get Rich Education.
Even in the affluent United States, there is a large and growing population of vagrants - homeless people … more than half a million of them … and you & I … unknowingly play a role in keeping them homeless.
Why are people homeless? Well, the #1 reason is real estate-related. So that’s why I’m talking about it in the first of two show segments here.
Let’s look at the Top 5 cited reasons that people are homeless.
5th most common - Substance abuse - drugs. 4th - Mental illness. 3rd - Poverty ...OK, that’s sort of an obvious one. 2nd - Unemployment 1st - Lack of affordable housing
Lack of affordable housing is the #1 reason that people are homeless. Well, one mission here at GRE is that we PROVIDE society with affordable housing.
But, it’s generally not the same kind of Class D, lowest-end housing that there is - and that homeless people are looking to get into.
We focus on properties just below the median housing price in some of the lower-cost U.S. metros - B-class and C-Class. That’s a notch or two above where those on the brink of homelessness would be.
The homeless population is more visible in my own home city since the pandemic - and perhaps yours too … now that the unemployment rate is 10%.
I’m going to tell you what contributes to homelessness - and a lot of this has to do with real estate: contributors are carbon monoxide detectors, minimum wage, salamanders, NIMBYism, and over the long term: rent control.
Now, before we unpack that. Let’s define homelessness.
One of the better accepted definitions is - a condition where people lack "a fixed, regular, and adequate nighttime residence". That’s “homelessness defined”.
I think you & I can agree that “homeless” is not the best technical term - right? Because even if someone lives under a bridge, that IS their home.
Houselessness would actually be more accurate.
Vagrancy is an even better way to say it. A vagrant is a person without a settled home or regular work who wanders from place to place and lives by begging.
That’s what we’re really talking about here. But homelessness is the widely understood term, so I’m going to it.
Now, HUD - the U.S. Department of Housing and Urban Development has a lot of statistics on the homeless, and ...
… as of 2018, they reported there were roughly 553,000 homeless people in the United States on a given night,[2] or nearly two-tenths of 1% of the population.
That’s about 1 in 500 Americans then. Well, many people - me included - believe that the real number of homeless is greater than this 553,000.
In fact, private & local reports tell you that the homelessness have increased 40% per annum in recent years - yeah, 40% per year!
A big mistake is that people think about the homeless as all one type. But there are so many different types of homeless.
There are the temporary homeless - passing through that 553,000 number.
Some are voluntarily homeless. Others are really couch-surfing because perhaps they were in a divorce or domestic violence situation.
Then you need to realize that about 2/3rd of their population is sheltered, and ⅓ unsheltered.
Consider too, that there are at least 40,000 homeless veterans. To think that a person could have served this country - and maybe even risked their life for this country - but don’t have a home in this country … can be heartbreaking to think about.
Now, though I’m not sure, I don’t believe that a digital nomad would be considered among the homeless - the laptop entrepreneur that stays at a different AirBnB location, say monthly.
Before we bring in the real estate angle, let’s get some historical context. Just talking about the U.S. here ...
Homelessness emerged as a national issue in the 1870s.[6] Early homeless people lived in emerging urban cities, like New York City.
Into the 20th century, the Great Depression of the 1930s caused a substantial rise in unemployment and related social issues and distress and homelessness.
In the 21st century the financial crisis of 2008 and resulting economic stagnation and downturn has been a major driving factor and contributor to rising homelessness rates.
That is probably happening again, right now, in the COVID pandemic.
A Zillow report found that people in communities where the average renter spends more than 30 percent of their income on rent — meaning that they can be described as being “rent-burdened” — are particularly vulnerable to rapid increases in homelessness rates.
Eviction obviously creates homelessness.
Now, some naively think - can’t we just raise taxes to build permanent housing for them & move them all in there? I really doubt that that’s a viable long-term solution.
Because at some point, if taxpayer funded housing is just “provided” for people, then people don’t have incentive to work & pay the rent.
That’s in general. Right, maybe someone has a disability that prevents them from making a living.
Some think - maybe we SHOULD impose rent control. Rent control means capping the amount of rent that a landlord can charge.
I’ll tell ya - that could reduce the number of homeless people in some areas that HAVE enough housing. But long-term, rent control is a terrible plan.
Because now an income property owner like you has zero incentive to improve the property any longer.
Long-term, rent controlled areas fall into serious dilapidation.
And because homelessness is concentrated in inner cities. It’s those exact same big cities - like New York - that have tried rent control.
It doesn’t work. So many areas that have tried to impose it, have to repeal it, because it eventually turns areas into ghettos.
What if you own property in an area where rent control were imposed? Even if you did improve your property - not only would you NOT get more rent for it - but you had better believe that property owners all around you wouldn’t be improving their property … and the entire condition of the neighborhood would be on a loooong downhill slide.
You might remember that I devoted an episode to the rent control topic. You can look that up on Get Rich Education Episode 192 if you’re further interested there.
One factor that contributes to higher housing costs - which prices people out of having any shelter and creates more homeless people are … environmental regulations that limit development in certain areas.
Sometimes you need to leave a development buffer for streams or you can’t build in areas that are wetlands in order to protect flora and fauna.
A rare orchid, or a spotted salamander or a threatened egret or an endangered heron. They say, you can’t build in their critical habitat areas. You’ve got to protect them.
But yet, often, the same type of people that want more environmental regulations are the same people that say that they want more affordable housing options.
Well, when you limit where you can build, now you’ve reduced the housing supply. Real estate pricing is highly susceptible to supply/demand factors, of course.
All these wildlife protections limit supply. That makes prices go up. That prices people out.
Now, maybe you’re thinking I’m anti-environmentalist? No, I’m not taking a side either way.
It’s just that one needs to understand the cost and the longer-term ramifications of decisions that limit development in protecting the spotted salamander.
I think it’s easy to make a case that more biodiversity is better than less biodiversity. But the better question is: “At what cost should we protect species? How far do we take it?”
Environmental regulations in the United States are intended to improve the quality of the environment; preserve ecosystems - that includes wildlife; and protect human health too.
But these regulations are often written without considering how much they will cost.
Another contributor to homelessness is excessive safety regulations.
Again, some safety regulations are good. But how far do we take it?
My gosh, when an area needs to build more affordable housing for people - which is something that would reduce the homeless rate … and ...
Sheesh, a new home today might need fourteen smoke detectors and five carbon monoxide detectors … then the detectors need to be connected to each other so that they can communicate with each other … and all these devices and this added complexity increases the cost of housing.
That makes mortgage payments higher, rent payments higher, and it just prices more people out of the real estate market. The lower end of the income spectrum gets priced out of affordable shelter.
I’m not anti-safety. But at some point, one has got to ask the question, “How much safety do we really need?”
Even - “What is the cost of a human life?” There actually is an answer to that question. In fact, the EPA pegs the cost of a human life at $10M - one of the highest of any federal agency.
And then, there’s the entire question of how can you ever monetize the value of a human life. You can make the case … that it’s priceless. That’s a different discussion.
But the point is, all these safety regulations increase the cost of housing and increase homelessness.
Minimum wage does, in many instances, increase homelessness long-term.
This might come as a surprise to you. You would think that raising the minimum wage would have to DE-crease homelessness - because a higher wage would mean that low-income workers could now afford housing.
Well, long-term, besides higher wages in an area creating inflation & soon making the cost of everything go UP - including housing …
Think about it from the perspective of if you’re an employer & you have to pay your workers a higher wage - now that minimum wage is higher.
If someone that works for you makes $9 an hour - but they only produce $12 an hour worth of productivity for you...
And a new minimum wage of $15 an hour is implemented, you’re losing money if you retain that worker. So you would lay them off.
You would find ways to automate - or make a machine do the work that that employee used to do for you. That layoff increases homelessness.
Just look at the number of self-serve checkout kiosks in grocery stores. Those lanes used to be staffed by humans that earned a wage.
With a hike in the minimum wage up to $15 an hour, you’d begin to see a trend where more fast-food restaurants have self-serve kiosks. You’ll have fewer humans there.
That’s because some employers can’t afford to pay people $15 an hour. Every self-serve digital kiosk that you see represents a laid-off worker.
Talk to your parents or grandparents and they’ll tell you that gas stations used to be attended by humans that would pump your gas for you, check your tire pressure, check your fluid levels - that’s been gone for a couple generations.
Now, an increase in the minimum wage would help get some people out of homelessness short-term … yes.
I’m giving you insight so that you can see both sides & see the long-term consequences of government intervention into the free market.
Let’s say that you’re an employer at a warehouse, the minimum wage is $15 an hour and you want to hire someone to help you sweep floors & do odd maintenance jobs around this warehouse that you own.
Well, now it’s illegal for you to hire them at $12 an hour. You’d love to give a kid a job and help him learn - and you can’t make the numbers work at $15 an hour.
So now he’s unemployed because the government said, “No. You can’t hire him at $12 an hour.” That’s what a $15 minimum wage says. Try looking at it from that angle.
Another phenomenon that keeps people homeless is NIMBY - Not In My Backyard.
NIMBYists are the ones that say, “No, I don’t want you to build low-cost housing in my neighborhood, because I’m afraid that it’s going to ruin the character of my neighborhood and it’ll stifle the rate of home appreciation here.”
Lafayette, California is a wealthy San Francisco suburb. It is nestled in Contra Costa County, where its residents fight to stop what they call a "very urban," "unsightly" 315-unit housing development
It was recently profiled by The New York Times.
Over in the suburban community of Cupertino, California—we’re talking Silicon Valley now—local activists spent years trying to stop the development of an abandoned mall into apartments, half of which would be rented out to lower-income tenants at below-market rates. In Berkeley, California, activists often argue against new housing on the grounds that it will threaten their community's sustainable character. Well, what is another example of NIMBYism? At a recent Zoning Adjustment Board Meeting in Berkeley, I think one resident summarized NIMBYism really well - and this was published in the New York Times - they said "Berkeley needs to prioritize a livable, sustainable environment for people who already live here” … … when they were opposing a 57-unit development of student housing. They went on to say: "We are not obligated to sacrifice what is best about Berkeley to build dorm rooms." That’s the end of what they said. NIMBY - this “Not in My Backyard” opposition to new housing development - centers on concerns of property values and crime and gentrification and environmental sustainability. Even though it’s often not their intent, the result of NIMBYism is that less housing gets built, housing costs go up and homelessness … rises. So, let’s draw some conclusions here and look at some actionable ways that you can make things better.
Though it isn’t immediately apparent - carbon monoxide detectors, minimum wage, salamanders & egrets, rent control, and NIMBYism - all go right through the heart of real estate investing and contribute to the long-term cycle of homelessness.
A giant takeaway for you here, is that, what is the common denominator in ALL of these factors. There is one common theme.
You know what that is - it is Government intervention.
Government intervention and interference in the free market - is the contributor here - excessive safety, minimum wage, protecting salamanders & egrets, rent control, and NIMBYism.
Every single one of them.
And now, maybe if you’re a new Get Rich Education listener - especially - you might be wondering, am I some anti-government guy where I think that the answer to EVERYTHING is free market economics.
Well, though I think that less government would be better.
I’ll tell you that SOME government regulation is good - just less than what we have now.
For example, look at all the smoky, hazy pollution in Pittsburgh, PA in the 1970s. It was a hazard to your health just to walk Pittsburgh then.
You might have heard about this: famously, in the summer of 1969 - An oil slick in Ohio’s Cuyuhoga River caught on fire.
Companies were committing rampant pollution such that it was a hazard to human health. Well, government regulations like the Federal Clean Water Act Of 1972 helped to clean that up.
So, that regulation helped. Government has a role, but it’s often overly intrusive.
When it comes to you helping the homeless directly, I like the campaign slogan that says, “Give real change, not small change.”
That means, don’t give money directly to panhandlers on the street. Where do you think that your goes then? Probably straight to cheap monarch vodka in those plastic bottles.
Also, if you don’t want to see homeless people in your neighbourhood, don’t give to them if they’re on your city’s street corner - like they are mine - because you’ve just given them an incentive to show up there again & do the same thing.
So instead of small change, give real change. When you donate to your local homeless shelter or soup kitchen, your money is going to do MORE REAL GOOD for the homeless.
It’s going to provide them with shelter, or educational resources, or a computer so that they might be able to apply for a job. That’s real change.
You want to help the homeless? I think that’s great. That’s kind. Give real change, not small change.
When it comes to NIMBYism and the environment, there’s a great saying out there.
What do you call a developer – someone who wants to build a house. Well, what do you call an environmentalist – someone who already owns the house, [LAUGHING] because they don’t want anyone else to build there, right?
Well, we avoid investing in coastal areas here at Get Rich Education. They’re what I call the volatile markets - they have a history of more regulation, more rent control, and more laws that are disadvantageous to property owners.
Just more reason … as to why we invest in the U.S. Midwest & South. They’re what I call the stable markets.
You’re listening to Get Rich Education, Episode 306.
We are your source for independent groundbreaking, original content on really three main topics: real estate investing is what we major in - with minors in both wealth mindset, and real estate economics.
Get Rich Education is not affiliated with any large media conglomerate.
And we’re here to enrich you - and sometimes even rescue you & help you survive in this widening difference between the “haves” and “have nots” - that continues to broaden in pandemic times.
This show is also when you can find all your finance heroes - that have come onto the show to run alongside me for an episode.
Check our shows published over the years to find me here with the best-seller finance author of all-time Robert Kiyosaki, the world’s leading sales trainer Grant Cardone, global wealth mindset magnate T. Harv Eker, and other economic minds and thought leaders Jim Rogers, Jim Rickards, Sharon Lechter - all your favorite thought leaders are here on this show.
We have more of them coming onto the show in the future, including the upcoming Get Rich Education debut of success thought leader Hal Elrod and others.
There is so much real estate & economics news that the pandemic is providing to us ... more & faster than before.
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Get ahold of that completely free - at GetRichEducation.com
Again, What do you call a developer – someone who wants to build a house. What do you call an environmentalist – someone who already owns the house.
Kind of exciting next - A world class city where the real estate numbers actually make sense for you … straight ahead.
I’m Keith Weinhold. This is Get Rich Education.
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Mon, 10 August 2020
GDP fell 33% annually, the unemployment rate is high, and even the Tokyo Olympics have been postponed, all pandemic-driven. Housing continues to hold up well. Nearly all assets are - gold, stocks, crypto, and some commodities. This is partly due to a weaker dollar. The gap between “haves” and “have nots” widens in the pandemic. 15-year mortgage rates fell below 2%. VP of Grocapitus, Anna Myers joins us to discuss real estate trends, market analysis, and where to invest for economic survival. Neither she nor I see a “V-shaped recovery”. I’ve been saying this for five months. Anna & I discuss real estate’s winners and losers in the pandemic. With more people having shakier job situations, fewer qualify for loans. This increases the renter pool. Winners: smaller cities, suburbs, e-commerce, tech, warehouses, places like Salt Lake City, Raleigh-Durham, Memphis Losers: high density places, hospitality, medical, oil, long-term college. Resources mentioned: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 3 August 2020
Income over $75K-$95K does not increase happiness. Earning over $105K actually decreases happiness. This is based on studies from Princeton and Purdue universities. Then what’s the point of building wealth? You get answers. These surveys do not consider replacing your active income with passive income. Matt Bowles of Maverick Investor Group joins us to discuss: market due diligence, pandemic changes, and how to use real estate to build lifestyle design. We also discuss changes to the rental market from 2007 to today. Ten years ago, you could buy properties for less than replacement cost. No longer. Markets like Phoenix, Dallas, and Atlanta have largely lost their investor-advantaged status. Check out Matt’s podcast, called: “The Maverick Show”. Resources mentioned: How Money Really Affects Your Happiness: Podcast on Apple Podcasts, Spotify, etc. Remote due diligence: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
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Mon, 27 July 2020
We compare do-it-yourself vs. professional property management. New home price annual sales volume spiked in June. There’s a scarce inventory of suburban SFHs. The co-founder of Avail, Laurence Jankelow joins us. Avail.co streamlines life for DIY property managers. Avail is free. It enables you to centralize your: rental listings & applications, tenant screening, credit / criminal / eviction reports, rent collection, maintenance tracking, and even rent price analysis. Becoming a landlord is like becoming a parent. There’s no certification course or degree required. You cannot violate Fair Housing Laws. Giving one tenant a break - and not another - could violate Fair Housing Law. Smart home technology often still does not exist for the most profitable long-term rentals. Rent collections during the pandemic continue to be greater than most people anticipated. Avail is best for landlords with 1-9 rental units. There is a general minimum standard for what landlords must furnish to tenants. It’s called an “Implied Warranty Of Habitability”. This includes: access to clean water, heat, electricity, sanitation, rodent-free, fire-safe, and meets local building codes. Resources mentioned: DIY Property Mgmt. Software: New construction Florida income property: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 20 July 2020
Learn how real estate pays you up to five ways simultaneously. Should you be playing offense or defense as an investor now? Learn how a return of less than 20 to 25% is disappointing. We’ll add up all five ways you’re paid and see what your Year One return is from: Appreciation, Cash Flow, Return On Amortization, Tax Benefits, Inflation-Profiting. See brand new construction SFRs and duplexes in central Florida at: www.GetRichEducation.com/Orlando Central Florida rent-to-price ratios are about 0.8%. Interest rates are at historic lows. What does late rapper Notorious B.I.G. have to do with real estate investing? You’ll see today. Kind of. **Complete episode transcript below. Read along as you listen.** Resources mentioned: New construction Orlando income property: Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
Welcome to Get Rich Education. I’m your host, Keith Weinhold. There are seasons in your investor life where you either play offense or defense. What should you be doing now? … as we refresh the “Up To 5 Ways That Real Estate Simultaneously Pays You.”
Anything less than a 20 to 25% rate of return in buy-and-hold real estate investing is disappointing. How can that be? Today, on Get Rich Education. ______________________
Welcome to GRE! From Asmara, (Air-UH-tree-UH) Eritrea to Ashtabula, OH and across 188 nations worldwide. I’m Keith Weinhold. This is Get Rich Education.
Thanks for being here, but you’re not here for me. You’re here for you.
In your investor life, are you playing offense? Or are you playing defense right now?
Or, in general, longer-term, are you a more offensively-oriented investor, which correlates with more risk-taking for higher returns.
Or are you more defensively-minded - where you’d rather have less risk and lower return?
Are your mindset and actions aligned toward offense or defense?
Well, I’ve got an answer for you here, and you’re going to have a really valuable takeaway.
Anything less than a 20 to 25% annual rate of return in real estate is really … actually … disappointing.
“What choo talkin’ ‘about, Willis?”
What I’m talking about … Will - is ...
Really, this all comes back to how - when you buy income property the right way - you are paid up to five ways simultaneously.
A stock typically only pays you one way, perhaps two.
I think that the easiest way for you to understand the five ways you’re paid - and even celebrate these five ways you’re paid - because … this ... is ... pretty compelling - is to use an example.
I’ve discussed this before. So if you’re a longtime listener, I’m going to put “The 5 Ways” through a new filter for you.
And if you’re a newer listener, say in the last year, this could completely change your investing thought paradigm for the rest of your entire life.
In fact, compound interest is lame and rarely, if ever builds real wealth in real life. I’ll tell ya what does here.
And yes, I know that this is abject heresy. It is replete blasphemy to criticize “compound interest” in the finance world.
I am surely guilty of committing financial profanity right there.
This is really fundamental stuff I’m about to share with you here - and yet the real paradox is that most real estate investors don’t even understand this.
This is pretty fun to do. We’re going to add up the five ways you’re paid and determine your total rate of return here.
Let’s say that you purchase a $100,000 property - $100K. And, no worries, if that’s too “small time for you”, this is all based on ratios, so it scales up to a $1M or $10M property.
(Ha!) And sometimes I wonder how much longer a $100K property will even be a feasible example as inflation makes $100K properties less common all the time.
But with your newly-bought $100K rental single-family home, you buy it with a tenant already residing there, where the monthly rent income exceeds the monthly expenses - that’s a big part of “buying right”.
With your 20% down payment, you have $20K out of pocket then, and an $80K loan.
The first of five ways you’re often paid is ... 1 - Appreciation Let’s just say that your property appreciates from $100,000 to $106,000. That is just commensurate with real estate’s historic appreciation rate of 6%. But here’s the big “a-ha” moment.
Your $6,000 gain is based on only your $20,000 down payment. Well, that’s your ROI formula - your gain divided by how much you have invested. Well, your $6K divided by $20K is a 30% return to you. Really? How did that happen exactly?
How do you have a 30% return from just this first of five ways you’re paid?
This is because you achieved a 6% return on both your $20K of skin-in-the-game and the $80K borrowed from the bank. This is what is known as financial leverage. Financial leverage means that your return is 30%.
No wonder that I’m known for saying that compound interest is lame and leverage builds real wealth. More on that soon.
2 - The second way you’re simultaneously paid is with Cash Flow It’s your monthly rent income minus all the expenses (like mortgage, vacancy, insurance, maintenance, taxes, utilities, management). We’ll be conservative and say that leaves you with only $100 of residual income in this case.
Annually, that’s $1,200 more for you, divided by your $20,000 down payment.
Yes, it’s $1,200 still divided by that same $20K of skin you have in the game.
This another 6% return for you. This portion is what is known as the Cash-On-Cash Return.
So, so far you’ve got a 30% return from leveraged appreciation PLUS a 6% cash-on-cash return from that monthly cash flow & we’re still going.
3 - Loan Paydown Unlike your own home where you pay down your principal mortgage balance with money that you had to earn, well, here, your tenant pays the monthly principal portion of your $80,000 loan on this property!
At a 6% interest rate (and you know you can do better than that today, but we’re being conservative here) on a 30-year mortgage, that’s about $1,000 that the tenant pays down your loan for you annually.
Divided by your (still the same) $20K of “skin-in-the-game” means that’s ANOTHER return for you of: 5%. This portion is known as your ROA - your return on amortization. We are still going - still adding up all the ways you're often paid in real estate.
4 - Tax Benefit You can have a mortgage interest deduction, an ability to pay zero capital gains tax with a 1031 Exchange, and tax depreciation - which can tax-shelter part of your rent income.
This is hard to measure. We’ll conservatively call your investment tailwind another 5%. There’s something else called “bonus depreciation” that can certainly make this 5% tax tailwind higher, but let’s just leave it there.
And the fifth and final way is what I call Inflation-Profiting. Few people understand this.
Like inflation erodes the value of your lump of savings, it also degrades your mortgage debt balance.
How is that? It’s because your $80,000 loan today gets easier to “pay back” as wages and prices escalate over time. Your bank only asks to be repaid in nominal dollars (while your tenant pays the interest), not real, inflation-adjusted dollars.
So just say that over a few years, you had 10% cumulative inflation. Well, then rather than paying back the bank $80K, you really only need to pay them back $72K in inflation-adjusted terms.
Inflation has been low lately. We’ll call this benefit a return of another … just 2% to you.
Well, there were all five ways. Let’s add them up to see what your total rate of return is. You got a return of:
30% from leveraged appreciation, then… 6% from cash flow - which is that portion known as your cash-on-cash return, plus another 5% from your ROA - that Return On Amortization, where you tenant pays down your loan for you. Then another … 5% from tax benefits … 2% from inflation-profiting ...
And your first year total Return On Investment from this income property is 48%
You just achieved a 48% return - and without taking any INORDINATE risk. Now, your real-life return probably won’t be exactly that - it’ll be higher or lower.
A few other caveats here. I think you probably realize this example is simplified.
If we had 18 spreadsheets, then we could probably get an exact number, like rather than a 48% total rate of return for you - then it might be 46.16% or something like that. …
… but eighteen spreadsheets doesn’t work in audio format as we’ve just broken it down here on Get Rich Education Episode 302.
1) Note that in the example, we did not factor in your buyer mortgage loan closing costs (the seller can often help you pay these).
Of course, risk still exists. If you buy property in a losing job market, or hire a disreputable property manager, for example, your return can erode.
3) You will still have SOME inevitable problems along the way. It just happens in real estate.
Also, note that your property insurance premium WAS considered in the example. That hedges you from a lot of major loss types.
And that your management cost was considered here, meaning your income is largely passive.
Also, be mindful that after your 48% return in Year One of this hypothetical example, your return typically DROPS in future years.
Maybe it’s down to 38% in the second year and 29% in the third year.
Why is this? Well, primarily due to the fact that equity accumulates in the property, and equity has zero rate of return.
Compound interest? Well, you’re typically not leveraging other people’s money with compound interest.
In the example we used - you’re not just growing from the return on your own money.
You achieved that return because you got to use BOTH your own money plus three other parties’ money at the same time:
the bank’s for the leverage
the tenants for the income and the return on amortization … and
… the govt’s for the tax incentives - plus, really the government’s policies for the inflation-profiting benefit too … if ya think about it.
With just a 20% down payment, you got access to getting the return on OTHER people’s money all over the place.
Another risk is to be mindful of overleveraging. Overleveraging means that you’ve borrowed so aggressively that, say you get in a situation where the tenants rent income no longer meets or exceeds the monthly property expenses.
That’s negative cash flow from overleveraging.
With these five ways ...
Now you understand how real estate makes ordinary people wealthy!
Now you know how to actually “keep score” with real estate investing.
Now you understand how less than a 20-25% Total Rate Of Return is disappointing.
This is LEVERAGE rather than compound interest.
Long-term, one’s hopes for compound interest get eroded and worn down to nothing after applying - something that longtime listeners can almost repeat after me - applying those deleterious effects of inflation and emotion and taxes and fees and volatility.
If you understand what I just described, you understand something that Billionaire RE investors do NOT understand.
Billionaire real estate investors don’t understand what you now know.
So, when it comes down to, are you playing offense or defense as the theme for your own investing strategy?
The answer is, when you’re paid five ways, you have the ability to constantly do BOTH - you’re playing both offense and defense - at the same time, all the time.
By the way, they say that offense wins games but defense wins championships. It was legendary Alabama football coach Paul “Bear” Bryant that’s credited with saying some version of that.
I don’t know whether that’s so true or not, but here you have multiple offenses and defenses.
But what I’m talking about here, is, with the 5 ways you’re paid:
Appreciation - That’s playing offense Cash Flow - That’s more predictable than appreciation, and that’s playing offense too Return On Amortization - That’s defense. It’s slow, predictable, and it builds illiquid equity The fourth way, taxes - that’s defense too. It’s kind of built-in, predictable, and really just recurs when you do your annual taxes. And the fifth way, inflation-profiting - That’s defense too.
So, there you go, with one single-family rental home or apartment building, you’ve played offense two ways and defense three ways … all at the same time.
And when you’re paid five ways, if one or two stop providing you with yield, well, then you’ve still got three or four ways that are.
But, yeah, these return sources aren’t apparent to a lot of people.
You know, I was recently doing a review of one of my larger apartment buildings with an experienced investor, because the cash flow basically dried up.
And, for example, this apartment building has $2,100 of tenant-made mortgage principal paydown every month. That’s $25K per year in equity buildup.
$25K divided by my $475K in equity is a Return On Amortization of about 5% on this particular apartment building.
So I think that the real takeaway here is - invest in something where you’re paid multiple ways, where you can invest in offense & defense at the same time, and it pays you income so that you can begin enjoying your life now, not “maybe someday” - which correlates with more of a compound interest approach.
If you think about it, a central theme of this show is how to optimize the 5 Ways You’re Paid - and avoid mistakes.
This is really a huge part of the compelling “why” for real estate that is so often missed.
You want to own the real property yourself to make sure all five of these benefits aren’t diluted.
You also want to be sure to have a good loan on your property to amplify your ROI over the long-term.
As you know, I am “pro-good debt”. I have no interest in paying down low interest rate debt, that the tenant pays down for me and inflation even further debases.
Instead of using that dollar to pay down debt, you could use that dollar as a down payment on another property - expanding your empire.
Gosh, with interest rates this low, it puts an exclamation point on the fact that you don’t want to be paying down your debt … here in the early 2020s decade.
Paying down good debt is one of the last things that I would do with my money. You lose leverage every time you do that.
Turning a liquid dollar into equity just transferred cash into equity.
Financial freedom achieved when you do the opposite - when you transfer equity into cash flow.
The probability that I’m going to wake up tomorrow and start accelerating paydown on low-rate, fixed mortgage debt tied to this cash-flowing property - is about nothing.
It’s about the same as the chance is that my Dad wakes up tomorrow and starts listening to the Notorious BIG with Junior MAFIA.
“I chill … “ to “ … you know”.
Haha! Yeah, not happening!
Not for my Dad, anyway. Not his style. Sounds alright to me. I might drop that in during a workout or something.
You’re listening to a more detailed discussion about the Five Ways That Real Estate Pays You and we’re talking about it through a fresh lens of “offense vs. defensive” investing here on Get Rich Education Episode 302. I strongly believe: It is very difficult to get wealthy without debt. Often won’t achieve freedom without debt. It’s going to be alright ... when your debt is reliably outsourced to others.
You know, at one point in my life, when I still worked for an employer. (The last day job I ever had was working in the QA section for a state DOT, by the way).
At one point, I realized that every dollar I lock in a stock or 401(k) is a dollar that I can’t use to leverage OPM. That epiphany was a real turning point.
Checking the RobinHood app every 15 minutes isn’t going to build real, durable wealth for you.
And, sometime before that, it was the realization that for me - and for you - to get more out of life, you can’t live below your means, you’ve got to expand your means.
To achieve financial freedom, it sure isn’t going to happen by cancelling Netflix $10 for month.
That’s not going to happen if you save $80 on air tickets by adding an extra layover on your trip itinerary. You just added three hours of low-quality time to your life - and you’ll never get that time back.
That’s cheesy. That’s unattractive.
It’s not about saving money on your Butterball turkeys or car gasoline.
I’m not saying you can NEVER do those things. Sometimes you gotta do what you gotta do.
But people need to stop being congratulated for being cheap or even focusing on frugality. Gosh, that stuff can make people miserable.
People that say, “I want to live frugally.”, they don’t REALLY want to live frugally. They actually want to say, “I want to live well.”
But they don’t know how to do that. They don’t have a vehicle to move forward with.
It’s kind of like, when we had T. Harv Eker here on the show here a few years ago - it’s about setting your mental thermostat higher, so that you can get greater wealth & freedom for yourself …
And with the “five ways you’re paid” like I described earlier, hopefully, I’ve charted a substantially clearer path forward for you so that you can do that.
Well, with “The Up To 5 Way That Real Estate Often Pays You”, that’s something that I first started talking about more than five years ago. I’ve never heard anyone else talk about it before. So, as far as I know, I guess I’ve “coined this” or whatever.
But since I began talking about it, I hear other people talking about it too - even other educational platforms.
Now, I do own three real estate trademarks, so what do I think about OTHERS now teaching the “5 Ways You’re Paid”. I’ll discuss that in just a few minutes here.
I’m also going to discuss who influenced ME - and give them some credit. And this includes a couple people that you’ve surely never heard about before.
If you would like to see the “5 Ways You’re Paid” in one easy-to-read infographic - that all fits on one sheet - so that it’s REALLY cear to understand - I’ll send you a colorful electronic “5 Ways Infographic” all you’ve got to do is go to GetRichEducation.com/Book.
That’s got to be one of the greatest deals anywhere. That’s where you can opt-in to get the electronic version of my int’l bestselling book, free, emailed right to you.
Then a few weeks later, the “5 Ways You’re Paid Infographic” is automatically sent to you too.
That’s at GetRichEducation.com/Book
More next. I’m Keith Weinhold. This is Get Rich Education. ________________________
Welcome back to Get Rich Education. I’m Keith Weinhold.
Hope you like our humorous moments to lighten up the show here. Hey, you run a little math on audio and … it begs for some embellishment to spice things up.
When it comes to the up to five ways you’re paid in real estate investing. Yeah, since I first discussed this more than five years ago, I’ve noticed that other REI educators now teach the same thing.
I don’t know whether they credit that to me or not - and you know what - I don’t really care whether they do or not. I mean, it’s cool if they do, but …
… the more important thing to me is that conscientious people get the information. Share it. That is so much more important than anyone getting the credit.
So just … share it.
“Helping the people” is more important than “getting the credit”.
I think that the world would be a better place - imagine if everyone put “helping the people” before “getting the credit”.
I don’t own trademarks so that I can go after people that say the same stuff that I do. That’s just not in my nature. I’d rather do productive things with my time.
The trademarks are thre just because I wouldn’t want someone else to swoop in and tell me that I can’t use something that I might have come up with in the first place.
When it comes to “helping the people” and “getting the credit”, now, everyone has influences - things they learn from others. You & I are no different that way.
Even those that influence you were influenced by someone else before them.
Well, I DO like to give credit to those that I learned from, so ...
Though I know he’s a polarizing figure to some people, credit is due to Robert Kiyosaki and the Rich Dad Company. Learn more about them at RichDad.com
The most important lesson that I learned there is “Don’t live below means. Expand your means.”
It’s more important to increase your income than cut your expenses.
Don’t make a budget. You’re just tearing things down.
Instead, build a cash flow statement. Now you’re constructing. Now you’re making more of yourself, not less. These are really Rich Dad principles and helped develop my mindset.
Now, as for who helped turn this mindset into something actionable? I’ve got to give props to “The Real Estate Guys” - Robert Helms and Russell Gray. Learn more about them at RealEstateGuysRadio.com
That’s the first place that I learned, for example, that in real estate, the market is more important than the property.
Look, you can’t very well be in your crib with your trading app and just order up real estate - even though people are building online marketplaces.
But one mistake people make is that they buy property because the numbers look good based on some YT video they watched on how to crunch the numbers - but they know nothing about the market or the team.
Then they buy it. Then only after they go buy it, NEXT they go looking for a PM and hope there’s a good one that can handle it.
Then next, they try to figure out the market that they already bought in.
That does not work. They’ve got it backwards. If the market and your property manager check out, then & only then do you get the property in that market.
It’s sad when people get that wrong. That’s why people walk away from RE & they say that RE doesn’t work.
Well, no, that investor wasn’t very strategic. But you CAN understand how that happens to people.
And it was great to have both authors of the “Rich Dad, Poor Dad” book Robert Kiyosaki and Sharon Lechter - and The Real Estate Guys all here on Get Rich Education with us multiple times.
Another set of influencers are two guys that you’ve never heard of before.
Their names are Chris and Raj. They are simply two longtime friends of mine that bought four-plex buildings.
That got me to make my first-ever property that seminal four-plex building where, with a 3.5% down payment I lived in one unit, rented out the other three, and that started it all for me.
These otherwise “regular guys” reinforce the quote from the late Jim Rohn, “You Are The Average Of The Five People That You Spend The Most Time With”.
Today, I’m a collector of real estate - most of it in the United States. Being the geography guy that I am, did you know that I have a world map on the wall of our garage …
… and I have a little red sticker - little red dots on top of those areas where I own property. Yeah, it makes this real estate collecting kind of visual. Maybe you want to try that too.
Well, one part of the world that I’ve been adding more red dots to lately is where I’ve been buying - across Florida.
Areas around Tampa, Orlando, and Jacksonville all make sense from a cash yield perspective.
A lot of BRAND NEW construction properties have numbers that work there, especially where our Orlando provider - that’s Greater Central Florida really - have been actively sourcing brand new construction property in Sebring, Florida, among other nearby places.
Sebring is pretty much smack dab in the center of peninsular Florida, south of Orlando.
These single-family homes that make great rentals have a metal roof, they’re 3 bed, 2 bath, and the prices really are remarkable - $179,900 and $159,900.
Yes, that’s for new construction in Sebring, Florida.
The rent-to-price ratios are a very attractive eight-tenths of one percent or so. Quite good for new construction, plus you’ve got the tailwind of extremely low interest rates as well.
And when it’s new construction, the PROPERTY INSURANCE premiums are so reasonable too.
If you’d like to learn more about those, you can do so at GetRichEducation.com/Orlando
It isn’t just single-family rental homes. New construction duplexes are available too.
That’s GetRichEducation.com/Orlando
You know that I often like to leave you with something actionable like this at the end of an episode.
And knowing and doing are two very different things.
How do we already know that? Well ...
Many people aren’t at their ideal body weight … and it isn’t because they don’t know what to do, they just aren’t doing it.
You also need time to figure out what you want to do. I like eating pizza, for example, but it took me eating different foods in order to find that out. I had to try and do.
Learning is best done by trial-and-error but it doesn’t have to be YOUR trial-and-error.
Learn from me. I’ll even eat your pizza for you!
I help give you the information you need to make an informed decision.
I connect you with property teams with proven track records - many of whom I invest with myself.
You ultimately choose your investments.
There’s risk with anything … anything in life.
You either take the risk or lose the chance. I think it’s helpful too, that you follow someone that’s been through a recession.
I’ve been investing for … nearly 18 years … it’ll be 18 years next month … since I bought that landmark four-plex building.
Teach you how to fish or GIVE you a fish? Well, why not do both? You can get the fish at GetRichEducation.com/Orlando
Have you ever wondered where your money is? Well, the world already has your money. You just need to go out and claim it.
I’m Keith Weinhold - grateful, as always for your listenership. I look forward to chatting with you again next week.
Don’t Quit Your Daydream!
|
Mon, 13 July 2020
Stocks, real estate, gold, oil, inflation rate, and interest rate valuations are all updated after the first half of the year. Housing Wire tells us rents are up in: Memphis, St. Louis, Greensboro, Jacksonville, Columbus, Tampa, Cleveland, Kansas City, and Virginia Beach. I discuss where they fell. San Francisco rents just plunged 12%. Macroeconomist Richard Duncan of MacroWatch joins us to discuss depression chances, and inflation vs. deflation. For a 50% subscription discount on Richard’s MacroWatch video newsletter, use Discount Code “GRE” at: RichardDuncanEconomics.com. Fed intervention has prevented a COVID-induced economic depression (so far). We will need more to prevent depression. Hordes of dollars can be created by the U.S. because dollars are not tied to gold. Many Americans still don’t understand this. Recent currency creation has not caused high inflation. The Fed usually hit below their 2% inflation target. Could consumer price deflation create asset inflation? Yes. I describe deflation vs. inflation as a “tug of war”. Deflationary tugs: globalization, technology. Inflationary tugs: currency creation. Bottom line: Be invested in something that pays you five ways like real estate. Resources mentioned: Richard Duncan’s MacroWatch newsletter: Use Discount Code “GRE” for a 50% discount. Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 6 July 2020
Homes with many small bedrooms are hotly desired today. Why? In an economic rough patch, people need roommates. Secondly, home offices are more popular than ever. Residents increasingly want yards today too. Gardening is popular as a hedge against disruptions in the food supply chain. This all makes single-family homes more popular than apartments. *The entire episode transcript is below.* The debt-to-income ratio requirement is positioned to be removed from qualified mortgages. Three listener questions are answered: 1) What about CapEx expenses? 2) What about all these property notices I get in the mail? 3) What happened to the coffee and cacao providers? I give you four reasons about why money is a taboo topic. Learn the least likely money topic that people are willing to discuss. The most I ever made at my day job was $108,000. People must stop equating net worth with self-worth. Resources mentioned: April Home Prices Grew 5.5%: https://www.housingwire.com/articles/u-s-home-prices-grew-5-5-in-april-despite-pandemic/ Why Money Is A Taboo Topic - Ally Bank survey: The Atlantic: Why Americans Don’t Talk About Money Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Top Properties & Providers: Follow us on Instagram: Keith’s personal Instagram:
Welcome to Get Rich Education. I’m your host, Keith Weinhold.
Talking about today’s hottest rental type, then my favorite guest is here on milestone Episode 300 - because that guest is you - as I help with your listener questions about your rental property operations, then “Why Money Is A Taboo Topic” (why DO people hide their salary?), and finally a little Episode 300 bonus. All today, on Get Rich Education. _____________________ Hey, you’re inside GRE. From Phoenix, AZ to Phoenixville, PA and across 188 nations worldwide. I’m Keith Weinhold.
This IS that show that’s created more financial freedom than nearly any show in the world.
You’re listening to milestone Episode 300 of Get Rich Education. More on that later.
The hottest INCOME PROPERTY housing type today could very well be single-family rental (SFR) homes that have many small bedrooms.
Four bedrooms is often better than three. Three is better than two.
Yeah, today, a high number of small bedrooms is being favored over fewer large bedrooms.
For one thing, this is because as the economy is in a rough patch, more people seek roommates to share housing costs.
Also, with more people working from home now, they want the extra bedroom for quiet office privacy.
You probably already understand that more residents prefer SFRs over apartments to avoid common areas like laundry rooms and hallways and even elevators.
Another reason boosting SFR demand today is something that you might be overlooking when it comes to rental property … because often, you’re thinking about things INSIDE the property like amenities, and square footage, and layout.
But another reason renters increasingly want single-family rentals are yards. Now sometimes, duplexes might have a fenced yard for each side too, of course.
But … why are yards more desired today?
Well, there are a few reasons. In the pandemic, people have discovered gardening like the hunter-gatherers did.
Yeah, gardening as a hedge against these disruptions in the food supply chain.
In fact, Burpee Seed Company recently had the highest sales in its 144-year history.
People are gardening. In fact, the homeowner’s association in my own neighborhood recently put it to a vote among residents about “OK’ing” having a second detached building in your backyard (only 1 maximum is allowed now) and that’s because more people want to have a greenhouse today.
Gardens and greenhouses - these are most conducive to single-family rentals.
People are even buying egg-laying chickens like never before. It’s kind of a back-to-basics subculture that’s emerging.
Yes, humans are mammals and mammals need sustenance! Haha.
You need food and you need real estate.
In the midst of The Great Shutdown, people want to do more with their lawns.
Lowe’s & Home Depot are doing really well - and they’re selling home-dwellers a lot of things like Inflatable pools, patio furniture, and trampolines.
Then back indoors, yeah, you may very well want to tilt your new property buys into SFRs with more small bedrooms.
Sometimes, older SFHs can have four or even five bedrooms. One reason for that is that families had more children generations ago.
Family sizes are smaller now. So if you still have a 4-5 bedroom place, it can work well for either roommates or home offices.
If you're the "hands-on" type, building a wall to divide a large bedroom has rarely been more lucrative than it’s been lately.
Now, one 300 sf bedroom is pretty big. Dividing it into two bedrooms of 150sf each is paying off more than it has in the past.
They are some housing trends in the pandemic - demand for SFR with more small bedrooms and a yard for a garden.
In the pandemic, the broader economy is getting "bailed out" more often than a bank behaving badly.
It's not just quantitative easing, dropping interest rates on every loan type, or loosening bank reserve requirements or putting free checks into unemployed people’s hands.
Many real estate investors are getting support … almost like they had opened their own GoFundMe account.
Low supply keeps housing prices buoyant. Low mortgage rates keep demand high. Forbearance keeps borrowers from defaulting - so that further supports prices.
Now, the debt-to-income ratio (DTI) requirement is positioned to be removed from qualified mortgages.
This means borrowers that have higher existing monthly debt payments on everyday things like their car or their credit cards could now qualify for new mortgage loans - when they couldn't previously.
Well, what this does is that it creates a larger buyer pool. More people have the capacity to qualify and buy property.
This larger buyer pool serves to further push up real estate prices - and that’s both investment property and primary residences.
Well, eliminating the DTI is great news if you want to lock up more property at these historically low interest rates.
But there can be too much of a good thing. It's a call-to-vigilance to be sure we don't return to those loosey-goosey days of, say, 2005.
That's when virtually anyone with a name and a signature could get a loan. Borrowers lied about their income on loan applications and the income wasn't checked - it wasn’t even confirmed in underwriting.
So then, people with historically low-paying jobs like movie theater ushers & dishwashers & pedicurists could sometimes own a fairly lavish home back then.
When appreciation stopped in 2007, liar-borrowers had no equity to remove for servicing the payments … and that whole thing didn't end well.
We're nowhere near that point. But watch that pendulum swing.
If you’re buying for resilient cash flow, you’re not so price sensitive anyway.
-----
The first one of your listener questions today comes from Chad in Saline, Michigan.
Keith, I like your easy-to-remember VIMTUM explanation of expenses but why are you excluding CapEx expenses from the cash flow calculation?
OK, thanks, Chad.
Let me translate if you, the listener, are uninitiated on this.
The easy way to remember how to calculate your monthly cash flow is to take your rental income and subtract out your mortgage (that’s principal & interest) and your operating expenses, which I call your VIMTUM. V-I-M-T-U-M.
That’s just an acronym I use for your regularly, recurring operating expenses and VIMTUM stands for Vacancy, Insurance, Maint., Taxes, Utilities, and Mgmt. V-I-M-T-U-M
What Chad is asking about are CapEx - which a shorthand way of saying Capital Expenditures.
CapEx means large, IRregular expenses that an investor or even a homeowner - often incurs with their property over longer periods of time.
An example is, what happens when your roof needs to be replaced? A lot of roofs have a 25-year life expectancy.
Now, your property’s water heater has more like a 10-year life expectancy.
Chad is basically asking me how I’m accounting for that when figuring cash flow. I think I addressed this on a prior episode, but it’s been a long time so I’ll bring a fresh angle to the answer.
First of all, I’ve mentioned previously that it's prudent to keep 3-5% of the TOTAL value of your property portfolio in a liquid side fund.
So if all your properties are worth $1M, you’d have $30K - $50K in cash or cash equivalents.
If you’ve just got your, say first turnkey at $100K - have $3 to $5K set aside.
Note that when you qualify for a mortgage in the first place, mortgage loan underwriting typically requires that you have reserves already.
And, by the way, this liquid side fund should be in addition to any overall liquid emergency fund that you have in your life.
But, Chad, on your CapEx question, you might still be thinking ...
Yes, I want to take some of those dollars that you’ve felt compelled to put in a liquid side fund account monthly and factor THAT in to your property ROI. I get that. Here’s the thing.
If you follow … really … the entire wealth formula espoused here on the show, your CapEx expense should be limited. You’re going to pay less in CapEx expenses than other investors.
Why is that?
That is all driven by the fact that, after most any 10-year slice in the housing market, you’re going to have appreciation, hence accumulated equity.
As you know, home equity is unsafe, illiquid, and its rate of return is always zero.
So it’s really due to math and the loss of leverage that makes you move your property along before CapEx expenses kick in.
And with SFRs, you can sell to an owner-occupant buyer that typically get emotions behind the home and isn’t at all concerned that you were the one that enjoyed the new roof in its first ten years of use or whatever.
Now, if you have substantial enquiry accumulation after 10 years on a property that performs really well and you want to hold onto it, then you might do a cash-out refi and have CapEx expenses like a new water heater.
So, thanks for your excellent question, Chad.
One other thing I’d like to mention that a lot of real estate people don’t like to talk about are to, in general, run your cash flow projections fairly conservatively.
That is because, in real estate, unexpected expenses are more common than unexpected income.
Thanks, Chad.
The next question comes from Lori in Pasadena, CA.
Lori says, “Keith, love listening to you. You’ve got the most relevant real estate show out there. Wow, thanks for that. Things are going fairly well with the properties that I buy through GRETurnkey.com but with each buy, I get more & more of these various letters in the mai that I have to deal with.
The latest one is an annual property rental fee statement from Florida. Things like this continue to cut into my time … umm … and then Lori goes on to give another example.
OK, Lori. Yeah, what she’s talking about here … is that the Florida municipality - the town - where her rental SFH is located has this annoying little administrative charge.
They charge a whole $50 per year to Lori for this property because she’s an out-of-area investor that has the “privilege” of owning Florida rental property in their town.
This is basically like a tax excised by the town where she owns her property.
What something like this really is Lori is … a nuisance. Just reading the form, and figuring it out what it is, and seeing how that Florida town accepts the payment. It IS annoying. It cuts into your time.
In fact, I got a piece of nuisance mail for one of my apartment buildings just yesterday.
This is from a utility provider - the natural gas provider to the building. Basically, the natural gas company is working on a high-pressure gas transmission pipeline, and the R-O-W for the pipeline is apparently within ⅛ of a mile of this apartment building of mine.
The letter said that the property residents should be informed.
Well, Lori, with the piece of nuisance mail that you received and the one that I got, here’s what you do. Get it out of your life. Get that nuisance mail out of your life.
Now, I don’t mean “throw it away”. This all comes down to one word - and that word is “manager”.
What I did was get out my phone, I took a photo of this letter, sent the letter image to my Property Manager right away.
I asked them to handle it - and also asked the manager to make sure to tell the letter sender that any future correspondence like this be sent to the manager, not me.
You know what we just did, Lori. We both just increased our ROTI. Yes, we just increased that all-important investor metric that’s even more important than ROI.
ROTI is your Return on Time Invested.
I’m a big proponent after having a professional Property Manager. Remember, it’s their job to handle communications with your residents like this - and it doesn’t cost you anything extra.
Remember to outsource these little nuisances to your PM.
Lori, I don’t know how many properties you have, but just say you have a total of ten rental doors.
With a portfolio that size, some months, you might have what investors call “a perfect month” - that is, a month with zero repairs or maintenance in your portfolio.
But whenever you do, sometimes you might wonder - well, what did I pay the manager for?
Well, you still paid your manager to collect the rent and pay your bills and itemize your statements, and just have the peace of mind that your tenants can’t get ahold of your DIRECTLY at an inconvenient time.
But ensuring that your manager handles all your nuisance notices such that you don’t even know that you got one … that increases your Return on Time Invested.
Be that responsible owner. Do good in the world. You want a nuisance tax notice to get paid, you want your tenants to be informed about nearby utility work - but be sure to outsource it and keep your quality of life.
Like I’m fond of saying, “Be sure your quality of life exceeds your cost of living”.
Bottom line is - Use your manager. Thanks for the question, Lori!
The next question is from Brian in Austin, TX. Brian says:
Hi Keith, I am an investor with $7 million in value across 32 properties. (Nice job there, Brian). I noticed you are not promoting coffee and cocoa any longer and was curious if there was concern or a reason behind it? Thanks, Brian.
Alright, Brian. What he’s referring to is that at GREturnkey.com - where our list of cash-flowing property providers is, there used to be a page for coffee investing there and a page for cacao investing there - and they’re both currently gone.
Brian, what happened is that, with the provider there - and its the same provider for both types of agricultural investment - that is, where you, the investor, get cash flow from the ANNUAL harvest of coffee and cacao is that that provider is having trouble with the deeding process where those parcels are located - namely, in Panama.
The provider is still delivering the land deeds to all the investors. But working with the municipality there is taking so long that this long, drawn-out deeding process was frustrating to some investors.
In fact, it might have taken me … something like two years to get my deeds for my coffee farm parcels. I don’t really remember - but it took awhile.
Anyway, those offerings aren’t currently on GREturnkey.com because the provider is changing their model, in part because of the slow deeding process. They’re listening to your input and responding. They’re doing, really, what you would want them to do.
So they are moving toward a Private Placement model. That way, they can issue the share certificates in a matter of weeks, not years like it is with the deeds, and they can focus their time and effort on actually developing, growing and operating the business.
Another is that under the deeded model, they couldn’t accept IRA funds any longer.
So, expect coffee and cacao to be back on GREturnkey.com at a later time. That’s why they’re not there now. There aren’t any more deeded parcels available - and they’re changing their model.
But, of course, they’re still working on getting the deeds for those that have bought those farm parcels in the last few years & still don’t have their deeds.
The main reason that you’ll see a provider be removed from GREturnkey.com is that they’ve run out of INVENTORY in that market.
If a provider doesn’t have inventory & doesn’t actively source it, then there’s no reason to waste your time & have it there at GREturnkey.com.
That is all for our listener questions today.
Homes prices for April grew 5-and-a-half percent year-over-year despite the pandemic. Yes, real estate is slow moving and we’re still looking at April data here near mid-summer.
That article is in the Show Notes for you.
My guess is that I wouldn’t really expect an appreciation rate that high over the NEXT year.
But one thing that is supporting prices are those “erstwhile” mentioned low, low mortgage interest rates that are even lower than the ocean floor at this point.
Let’s look at mortgage interest rates decade-by-decade. Gosh, this is just remarkable.
It gives you perspective sort of like a while ago when I played those cornball television commercial ads from the 1980s where you could finance a car for an 11% APR - and that was touted as a great deal.
Well, let’s look at the average 30-year fixed OO mortgage rate that was issued in the 1970s.
It was 8.9% then. That was the average rate. Inflation was increasing.
By the 1980s decade, inflation had reached a crescendo. This was the Voelcker Era - where Fed Chair Paul Voelcker famously raised interest rates to try to stomp out runaway inflation.
And Voelcker’s bold move WAS successful. But this helped result in a 1980s decade mortgage rate of 12.7%. Gosh, 12.7%.
By the 1990s, they settled down to 8.1%.
By the 2000s decade, down to 6.3%. Yeah, that sounds about right - I bought my first ever property in 2002 at right about that rate - it was 6-⅜%.
By the 2010s decade, we had low interest rates to pull us out of The Great Recession and they stayed low. In fact, the average for the 2010s decade was … 4.1%.
That felt unprecedented at the time. Well, today, take another full percentage point off that yet. Mortgage interest rates are 3.1% today … as we’re here early in the 2020s decade.
Just astonishing. 3.1%.
Now, interest rates correlate with inflation. So today we’re in a low inflation environment and hence, a low interest rate environment.
Well, coming up here on the show next week, one of the world’s most prominent economists will be on the show with me and we’re going to discuss Inflation vs. Deflation.
Which side is winning … and what is going to happen next. Of course, we’ll discuss the state of the broader real estate economy and so much more as well. That’s next week.
I hope that you are doing well. We’ve been largely sheltering-in-place here at our home in Anchorage, Alaska. I’m coming to you from Anchorage today.
Next week, if all goes as planned - it’s an awkward time for cross-continental travel, but I’ll be flying into Buffalo, New York, and then spending a good chunk of this month in both western New York State and mostly Pennsylvania … as I’m visiting family. I think I’ve told you before that I feel like I won the “parent lottery”.
My terrific parents have lived in the same upstate Pennsylvania home since 1974. They've also had the same phone number for all 46 years.
And when I visit them, I still sleep in my same bedroom that I slept in as a baby. I love Curt & Penny Weinhold - and I am so grateful and inspired by their example of goodness and stability.
As far as events - if you want to meet in-person. I had hoped to do meetups in New York City and Philadelphia this summer, as well as a Harrisburg, Pennsylvania real estate field trip. But COVID has wiped out all of that.
Of course, as always, you can keep up-to-date on all of that GetRichEducation.com/Events
Some other live speaking events have gone virtual. For example, I’ll no longer be speaking in Birmingham, Alabama at the Spartan Summit this coming October.
But I will be speaking at their “event gone virtual”. In fact, I’ll be the speaker KICKING OFF The Spartan Summit. Again, learn more at GetRichEducation.com/Events.
I hope to do some or all of the live New York City, Philly and Harrisburg events next year.
For milestone Episode 300 here, do you like the Get Rich Education … theme music? Or did you at least, wonder where the now-familiar-to-you music comes from.
Well, we don’t purport to be any type of music channel. This is an investing show.
But this one time, for Episode 300, we’re going to play all of it - it’s two minutes long - at the end of the show today.
We own the royalty-free track. This show launched in 2014, and this track has been our theme music since late 2017. It’s from a DJ named Wicksford and it’s called “Cannot Be Stopped”.
But first - why don’t people talk about money? Why are other people so secretive about their salary? Why is money considered a taboo topic, then anyway? That’s next.
I’m Keith Weinhold. You’re listening to the wealth-building Get Rich Education. ___________________
Welcome back to Get Rich Education. You are listening to milestone Episode 300.
We’ve been talking about some of your harder real estate investing skills today.
Well, what about mindset?
Why Don’t People Talk About Money? Why is money a taboo topic - one of those things that you just don’t talk about? It’s taboo stuff - right up there with politics, sex, and religion? Well, if people would stop equating self-worth with net worth, then talking about money would not be this big taboo thing.
According to a survey conducted by Ally Bank, 70% of Americans think that it’s rude to talk about money. Just, get this - Research shows people would rather talk with a stranger about an STD than their salary. Oh geez. You’d rather tell someone you have an STD than tell them how much you make? People would rather admit to contracting gonorrhea than fessing up that they only make $54,000 a year. Sheesh!! Oh, gosh … and did I really just use that word on the show. Especially here on Milestone Episode 300? So … well why this … society-wide gag rule? Why does this taboo exist? I think that it all boils down to about four big reasons. People don’t talk about money because, most people don’t have much money. So there’s this negative association. Talking about money is proportionate to talking about problems. If you’ve had more financial success in life, then it can be easy to forget that so many people think this way. The second reason that “money talk” and especially “salary talk” is taboo is that because if you have a lot of money … you know what can happen to you? Someone might ask you to borrow it. Well, lending money to family or friends is a great way to strain relationships. If they’re late to pay you back, then it’s rude for you to even ask someone when they’re going to repay you. Another reason that there’s a prohibition of “money talk” … at least in America here … is because many Americans put a higher value on PRIVACY than other societies do. Now, I think that there are gradations of what money TOPICS are acceptable to discuss and what are not. I’m pretty sure that I’ve told you on a previous show - though at this point, 300 episodes, sometimes I can forget - but I’m pretty sure that I told you that the most that I ever made at my day job before quitting it more than five years ago was $108K. At times, I had to work more than forty hours a week for that. Now, that might be $125K in today’s inflation-adjusted dollars, but that salary was no longer that interesting to me when my real estate provides value to people with very little of my involvement. Now, I’m kind of a rare person for me to even mention - a past salary like that - even though it was kind of in a former life of mine. In America, if something costs even more than a few hundred dollars, MAYBE you shouldn’t mention it. If your friend bought a canoe for the lake - you might want to know how much it cost, but you’re hesitant to ask them the question.
When we talk about gradations of cultural acceptance, I think that if you inquire about the cost of your friend’s lunch yesterday—that’s a transaction with pretty limited connections to the past and future—and that generally isn’t off-limits.
Now, in Israel, people OPENLY discuss salary. Why is that? Well, there are a couple reasons. It’s because a place like Israel historically places a lower cultural premium on privacy. Another reason … is that a place like Israel and other places in the world have higher levels of labor unionization. You see, “once it’s collective bargaining, it’s not as personal”. When you’re a member of a labor union, you often know each other’s job classification and that job title is rigidly tied to a fixed and publicly-viewable salary or wage. And then, really another reason for the cultural “Money talk taboo” in America, is because asking someone what they earn means that you are indirectly questioning their personal worth.” “By contrast, in China personal worth is not primarily indexed to financial worth, but rather one’s ‘quality’ or what they call “SUZZ-eee” (suzhi). Your moral and ethical values cannot be reduced to economic value.” Yeah, I really respect that. Getting back to the Ally Bank survey - what they found is that when people DO discuss finances socially, nearly one half of the survey respondents said they prefer to keep it neutral - for example, talking about price comparisons on goods and services like granola bars or a manicure, or where to find a better interest rate on a savings account." It also found that younger people are more open about discussing money More than any other age group, millennials (59 percent of them) acknowledged talking with others about their income, savings and debt, even though nearly two-thirds agreed it is rude or inappropriate to talk about money in a social setting.
In fact, almost half say they disclose their income to others, and 62 percent say it is important for them to surround themselves with people who they feel are financially secure. So, even kind of the second-youngest generation today, Millennials, would rather be around people that are financially-secure. Hmmm … that’s really “telling”.
Now, what I found interesting is that the survey revealed that:
That shows more there that when you to talk about it - it’s deemed to be a real breach of professionalism to discuss this stuff at work.
Of course, that’s mainstream society. Here at Get Rich Education, displaying the amount of good debt that you have probably says something rather positive about your real estate portfolio size.
Now, in WORKING-CLASS communities, the money taboo can be weaker there. Jennifer Silva is a sociologist at Indiana University and she researched the coal-producing region of Pennsylvania. The bottom line is that the working-class families she’s interviewed didn’t hesitate to disclose specifics about their income, rent amount, or expenditures. “People would say, ‘I’m an open book,’ and they’d be straightforward, open, not ashamed.” They freely discussed “the challenges or even impossibilities of supporting a family on minimum-wage work” and almost acted a little proud of their resourcefulness, like “how they would make their budget stretch, such as buying ground meat in bulk and freezing portions to make it last.” You know, from my personal vantage point, sometimes you will BE around people that you know make substantially less money than you, And you know what, you DO find yourself tilting the conversation so that person isn’t made uncomfortable. What about when you go get your hair cut? I mean, the 15-minute conversation that takes place between me & the person that cuts my hair … it’s like, if they ask me what I did this weekend - and I stayed in a resort and they already told me that they played basketball with their kids or something else - even though basketball with your kids might be a GREATER activity in a sense than staying at a resort … I don’t mention staying at a resort because it sounds hoity-toity … a little snobbish. Kinda unrelatable to them. So then maybe I’ll tilt that chat to NBA Basketball or something. Chat about something that’s not so socioeconomically stratified. You can always find that common ground somewhere. You know, another personal anecdote, in my life, I do a lot of these 5K running races & other events like that. The race event makes my time publicly available. The local news outlets might even pick up those races times and publish them. Anyone can see it. Well, that is a measure of my fitness on that day. There are clearly plenty of runners that rank both above me and below me. So, that’s made public? But yet salaries are not? Somehow, American society does not equate physical fitness nearly to the degree that we evaluate and stratify how much money you make. I don’t know that it should be that way, but it is. I think that’s rather weird. Revealing how much money you make, to many people, “exposes how you’re valued by your employer and how your contribution is valued even more broadly, by the community.” That makes an ounce of sense, sure, but why such a high value? I don’t get that part. Few people would think “You are worthless because you haven't broken the 20-minute mark in a 5K yet.” But for some reason, WAAAY more people would equate you with having a lower worth if, say they learned that you only made $54,000. Now, Eli Cook - he’s a history professor at the University of (HIGH-fuh) Haifa and the author of a book on the topic, says that this money taboo has been going on for about 150 years in America.
In the late 1800s and early 1900s, he says that many Americans internalized the lessons of mainstream neoclassical economics, which suggested, through [the economist] John Bates Clark’s theory of marginal productivity, that everyone earns what they in fact produced.”
So … that’s one opinion on about HOW LONG this has been taking place.
Really, what a lot of this comes down to is that the everyday conversations that you have with others are filled with questions about what people buy, what they do for a living, or how long they’ve been investing in real estate, and where they went to school. And once you know all of those things about someone else, the salary or net worth or cash flow are less important … because all of this is CONTEXT that you have about others - and these are all really proxies for class position anyway.
When we can stop equating net worth with self-worth, money has a chance of no longer being a taboo topic … and that really is, the big takeaway.
I trust that you’ve been enjoying MILESTONE Episode 300 of Get Rich Education.
As always, to get the Show Notes, you can go to GetRichEducation.com/300 - since that’s the episode number.
In fact, this week, you’ll find the entire transcript to the episode if you would like to read along … or you tell someone else about the show and tell them about the option to read as they listen.
Above all, I have got to thank you for listening. I hear from so many people that tell me when they discover this show, they want to go back & listen to all 300 episodes …
… usually because I hear one of two things. They say it makes actionable real estate investing more CLEAR than anywhere else … or that it's changed their investor MINDSET more than anything else.
Remember, if you’re interested, hang around until the very end of the show today to hear the entire uncut theme music … as a little Episode 300 bonus.
More importantly, if you’re one of those people that STILL has not bought your first property.
You can’t TIME the market, and you can’t make any money from the property that you don’t own.
As long as you’ve been educating yourself for a while, then, if you think that inexperience is the only thing holding you back, well, then the only way to GET that needed experience and learning is to act.
Some people wait for ALL blue sky and everything to be perfect before they begin. Well … that really never happens.
You’ll either change what you’re doing … or you’ll keep what you’ve got.
Teach a man to fish … or give a man a fish?
Well, here, we do both. At Get Rich Education, we TEACH you how to fish.
GREturnkey.com is our sister website where we GIVE you a fish too - with top national turnkey providers.
Get your mortgage pre-approval and download a provider report. We give you all 8 main steps at the top of the page there.
View available properties, make an offer, please get a third-party property inspection, then comes the appraisal, then sign a Property Management Agreement …
… have your property closing, and finally, own the property and enjoy the collected RENT that your PM auto-deposits into your bank account. Get started at GREturnkey.com
I’m your host, Keith Weinhold and I’ll be back next week and every week to help you build your wealth. Don’t Quit Your Daydream! |
Mon, 29 June 2020
Turnkey RE providers must acquire distressed property at a discount in order to stay in business. We go behind-the-scenes and see how these companies really operate. They take risks, maintain relationships with myriad parties, coordinate contractors, bear holding costs, buy & store materials, screen & place tenants, and operate a management division. It’s a ton of work that investors can outsource to turnkey providers. They are professional fix & flippers. The “consumer-profit chain” helps you understand this. Dani Lynn Robison of Freedom Real Estate Group near Dayton, Ohio offers private lenders like you 8-10% cash-on-cash returns at www.GetRichEducation.com/Lending The funds are used to purchase and rehabilitate distressed property. They’re transformed into turnkey property. Your loan collateral is tied to a specific address. A note and mortgage is produced. You have first lien position. This provider has performed 300+ fix-and-flips since 2015. Get the report and connect with the provider for predictable 8-10% cash returns for four to twelve month terms at: www.GetRichEducation.com/Lending Minimum investment amount is $50K. You DON’T need to be an accredited investor. Resources mentioned: Private Lending with 8-10% cash return: www.GetRichEducation.com/Lending Mortgage Loans: QRPs: text “QRP” in ALL CAPS to 72000 or: By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: Best Financial Education: Follow us on Instagram: Keith’s personal Instagram: |
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