Mon, 30 December 2019
Financial advisors don’t talk about real estate for three reasons:
Among educated investors:
I discuss dividend-paying stocks. Ntellivest’s Brent Sutherland tells us why stocks won’t make you wealthy. This CFP-turned-real estate investor is a financial coach. Most financial clients ask all the wrong questions. That’s why they get all the wrong answers. Few realize that you can increase your income now. Brent walks the talk. He owns 9 income properties, averaging $250 cash flow each and more. We discuss common REI mistakes: financial protection, estate planning and LLCs. __________________ Resources mentioned: Brent Sutherland: Visual Capitalist: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 23 December 2019
Put more cash flow in your pocket by refinancing now. Refinance conditions are ripe: equity up, interest rates down. If you own property and interest rates rise, then hold. But if you own property and rates fall, you can refinance. This way, you’re playing both sides. Sometimes you can negotiate a lower interest without refinancing. Negative interest rates mean borrowers & spenders win, savers lose. GRE listener Andrew Stanton (Email: apstanto@gmail.com) joins me to tell us how this show has changed his life. This San Diego-based GRE follower works as a computer engineer and he’s building his investment real estate portfolio. Losing his job helped Andrew realize how important it is to have multiple income streams. The concepts of ROTI, your return from home equity is always zero, and “Don’t Quit Your Daydream” resonate with him. __________________ Resources mentioned: Andrew Stanton’s Email: GRE YouTube Channel: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 16 December 2019
Your biggest expense in life is taxes - income tax, sales tax, property tax, capital gains tax, inheritance tax. Taxation is not adjusted for inflation. I explain. Wealthability’s Tom Wheelwright joins us about how to optimize Trump’s 2017 Tax Cuts And Jobs Act to your advantage. A tax deduction is the amount by which your taxable income is reduced. Income tax is on net income. Sales tax is on gross income. The $10,000 SALT deduction limit mainly hurts coastal residents. Bonus depreciation substantially aids real estate investors - new and used property, and residential and commercial. Learn how the 20% pass-through deduction benefits you. Why you never own real estate in a “C” Corporation. Learn about Section 179 tax advantages. Opportunity Zones benefit those that invest in the renovation of distressed assets. I bring you today’s show from Anchorage, AK. __________________ Resources mentioned: Tom’s website: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 9 December 2019
You don’t have to get your hands dirty or own a tractor to have your own agricultural real estate. Humans need food to eat. Even futurists know that people will continue to need calories. The world population of 7¾ billion will rise to 11 billion by 2100. Coffee is the second most-traded commodity in the world. You can buy half-acre coffee or cacao (chocolate) for under $20K - $25K, turnkey-managed. It produces cash flow from the annual coffee cherry and cacao pod harvest. You own the land in Panama and Belize. You can drink coffee or eat chocolate from your own far. I invest in this myself. Operation with three pillars of sustainability: social, economic, and environmental. Cash returns are 10-14% annually, averaged over twenty years. This doesn’t include land appreciation. Learn more about investing, where they’re having an “End Of The Decade Special” at: www.GetRichEducation.com/Coffee www.GetRichEducation.com/Chocolate This special saves you thousands per parcel: 1 coffee parcel = $18,000 each 3 parcels = $16,650 each 6 parcels = $16,000 each For the Belize cacao (chocolate) parcels: 1 parcel = $24,500 each 3 parcels = $22,650 each 6 parcels = $22,000 each Cash or IRA funds are eligible. You won't see these prices again. For these rates, confirm your order by Dec. 16, 2019, with time to fund. There’s never been a better time to start in agricultural real estate. __________________ Resources mentioned: Learn about coffee investing: Learn about cacao investing: GetRichEducation.com/Chocolate Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 2 December 2019
Money matters. It buys you freedom, options, and even the best medical care. You have the same 168 hours per week as Jeff Bezos or Bill Gates. Getting an MBA or Ph. D. is a slow way to wealth. How many of your 8 great grandparents can you name? See. Making an impact is rare. You can either live below your means or expand your means. By the time you’re age 30, you should know how to produce income without trading your time for it. Employees are motivated by fear. Wealthy people are motivated by ideas and value creation. You can only be truly free … with wealth. Middle class people want enough money to retire; rich people want enough money to impact the world. You can either be a conformer or build wealth. Your choice. __________________ Resources mentioned: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 25 November 2019
Rent amounts are more stable than real estate prices. The rent amount you can charge is based on incomes in an area. In real estate: rents behave rigidly; prices are more elastic. Employment sectors dictate what type of worker buys and what type rents. Mortgage loan qualification is difficult; I’m qualifying myself. This is inconvenient, but it means borrowers are solvent. This creates a barrier to entry and stabilizes prices. Tips:
The BRRRR real estate investing strategy is: Buy - Renovate - Rent - Refinance - Repeat. You can double or triple your cash-on-cash return with BRRRR. Learn about Baltimore BRRRR and Philadelphia turnkey property at: GetRichEducation.com/Baltimore Turnkey vs. BRRRR compared. __________________ Resources mentioned: Baltimore BRRRR & Phila. turnkey: GetRichEducation.com/Baltimore Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 18 November 2019
Today, money is being printed on a massive scale. Interest rates have plunged. This is a Fed “U-turn” from last year when money was being destroyed and rates were rising. What’s going on? Richard Duncan of MacroWatch tells us. We discuss how far the U.S. can “kick the can” down the road with their $23 trillion in debt. Richard tells us about the future direction of interest rates and inflation. Learn how deep the U.S. can go into debt. Get 50% off Richard’s MacroWatch video newsletter. Use the Discount Code “GRE” at: www.RichardDuncanEconomics.com I bring you today's show from Vancouver, British Columbia, Canada. 1) Get my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: MacroWatch: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 11 November 2019
A four-unit building is how I began in real estate. Fourplexes can provide you with great financing terms and economies of scale. Steve Olson of the Fourplex Investment Group (FIG) joins us. Website: www.fig.us FIG builds new construction townhouse-style fourplexes for investors. They operate in four high-growth U.S. states: Utah, Idaho, Texas - and Steve reveals their new market in this episode. FIG properties often have excellent resident amenities. “Investor-savvy” HOAs help protect your investment. Their model best suits the investor that’s also a busy professional. FIG also offers duplexes and larger multi-family properties. 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: FIG Website: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 4 November 2019
Get a market update. Next, I answer your listener questions: 1: How do I start if I know nothing about real estate? 2: What’s better: existing or new construction property? 3: How do I identify an “up-and-coming” neighborhood? 4: How do I raise the rent without losing the tenant? 5: What if there’s a recession? I bring you today’s show from Anchorage, AK. Next week, we discuss four-plexes. The following week, declining interest rates and more Fed money-printing. 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Resources mentioned: Credit Score help: Neighborhood Research: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram:
Welcome to Get Rich Education, I’m your host Keith Weinhold.
It’s YOUR listener questions today; What’s The Best Guidance For Beginners, Comparing New Construction vs. Existing Construction Property, How To Identify An Up-And-Coming Neighborhood, How To Raise The Rent Without Losing Your Tenant, and How To Position Yourself In The Event Of A Recession.
All today, on Get Rich Education. ______________________
Welcome to Get Rich Education! I’m your host, Keith Weinhold with Episode 265 and I’m answering your listener questions today.
First, let’s get you up-to-speed with our asset Class Whiparound.
The Fed lowered rates last Wednesday by a quarter-point again.
It IS their third quarter-point rate cut this year, bringing the upper bound of the Federal Funds rate down to 1.75%
Just before air time here:
Year-to-date, real estate is up 3.5% per the Freddie Mac Housing Price Index. The Case-Shiller National Home Price Index is at right about that same 3.5% appreciation rate.
Next, the Freddie Mac numbers show us 30-year and 15-year mortgage interest rates are just a touch more than 1% lower than they were one year ago.
Yes, your COST of money is cheaper now than it was either one year ago OR two years ago.
The stock market has been thriving. The S&P 500 Index is up more than 21% YTD. It’s flirting with all-time highs, as its over 3,000 points now.
Oil prices have not done so well, Down 17% year-over-year
Oppositely, Gold has thrived as it’s up 17% just since the beginning of the year.
Last week, the Commerce Department told us that GDP expanded at an annual rate of 1.9% through the 3rd quarter, falling slightly from 2% a quarter earlier.
The rate of dollar inflation is currently 1.7% YOY as measured by the Consumer Price Index, which is tracked and published by the government’s Bureau Of Labor Statistics.
With the way that they calculate inflation, I think it’s a little hard to believe that the true, diminished purchasing power of the dollar is only 1.7% per annum.
I think that makes about as much sense as turning back the clocks back an hour like we all did the other night, personally.
That’s our Asset Class Whiparound like we do here just once in a while.
Let’s start with the first listener question … and I usually start off with a more beginner-type question - like this first one - and advance from there.
This question comes from Jackie in Esko, Minnesota.
Keith, I love your show. I’m 25 years old, just a year out of college with $22,000 in student loan debt, and I just began listening to you three weeks ago.
Now I’m going back to listen from the very beginning, Episode 1.
What is the best way for me to begin if I know absolutely nothing about RE?
Thanks for the question, Jackie.
Well, you’re on the right track with your learning by starting with Episode 1 of the Get Rich Education podcast.
Bigger Pockets has some very well-populated FORUM that’s good for your learning.
I’d also say, work on your credit score WHILE you’re learning about real estate investing. That’s important in a credit-based asset like real estate.
Learn about what it takes to improve your FICO score at myfico.com
Now, for a beginner, yes, it’s probably not the long-term answer that you want.
But it can be helpful to have a W-2 job … at least in the short-term … before you go onto to dominate your own real estate empire.
I mean … I had a day job for years. Not only does this income help you qualify for loans, but let’s look at some ideal day jobs that can help you advance your real estate CAREER at the same time.
Now Jackie, I don’t know what your college degree was in … but if you’re a true devotee to real estate, consider that, even if you have to accept less income ... there are day jobs that can actually align with your path toward being a real estate investor.
You could become a Property Manager for a management company. Now, that is a tough job but you will learn remarkable things about how real estate works from the inside. Property Management is perhaps the LEAST-RESPECTED job in all of real estate, but it’s perhaps the most important … at the same time and the manager is probably the investor’s #1 team member. Other day jobs that can help a real estate investor are: Being an Asset Manager, Financial Analyst, Real Estate Agent (of course), or a Mortgage Loan Officer. With any of those related jobs, you’re going to learn about things like sales, marketing, pricing, maintenance & repair, capital improvements, and bookkeeping. There are other benefits to making your day job … real estate-related.
So, that’s just one course to consider for a beginning real estate investor. If you’ve got to work a day job before you build your empire anyway, it might as well align with what you’re truly MORE interested in long-term … yes, perhaps … even if you need to take a short-term pay hit. It’s just another angle for you to consider, Jackie. If you want one all-encompassing podcast episode that tells a beginner like you as much as you need to know as possible … all in less than one hour - check out GRE Episode 249, published just a few months ago.
That episode is titled, “The Beginner’s Real Estate Investing Audio Guide” and it’s our most popular episode that I’ve done ALL year. Again, it’s Episode 249.
Thanks for the question, Jackie.
The next question comes from Tate in Providence, Rhode Island.
Tate says, “Keith, I notice that today, more providers offer new construction investment property, but it usually doesn’t cash flow like existing properties do.
Is it worth buying new construction for the lower maintenance costs involved?” Thanks, Tate.
Alright Tate, let’s compare the pros & cons of buying Brand New Construction Rental Property vs. Existing Construction.
And, this is a top-of-mind subject for me because I just wrote about this in Get Rich Education’s e-mail newsletter two weeks ago.
What’s better: existing or new construction rental property?
Like with most real estate answers: “It depends.”
But because a “2-word answer” like “It depents” is really dissatisfying, let’s expand on this.
There are at least 8 different criteria for each type.
Before we look at your trade-offs with each type, understand that new construction turnkey property was almost non-existent until recently.
That’s because during the housing crisis of 2007 – 2010, home prices fell far below replacement cost.
Therefore, builders couldn’t make new developments feasible until existing property prices rose in this decade that we’ve had since the Great Recession.
There was also an oversupply of housing back then. Absorption of existing housing took time before new construction made sense again.
And supply has definitely been absorbed.
In SO MANY markets today, the housing that makes the best rentals is undersupplied.
That’s why new construction makes sense again - and why you’ve gradually seen more new construction income property be offered by providers these past few years.
Let’s look at the advantages of both existing and new construction … and these are certainly broad generalizations ...
First, with EXISTING Construction property - we’re talking seasoned properties here:
Now, why would you care if your neighbors next to your income property hold higher equity positions?
If there’s a recession, this means that residents are less likely to walk away from their home. This hedges against foreclosures and a valuation downdrain - and this domino effect like we saw in the housing crisis 10 years ago.
Now that we’ve looked at what tilts in the favor of existing property - and it is a lot … let’s look at the advantages of Brand New Construction property.
New Construction:
So, there they are - the advantages of existing property vs. new construction rental property.
Of course, this is general guidance.
Based on regional and other factors, you can surely find some “exceptions” to these criteria.
But these trade-offs can help you decide what’s more important to you as a real estate investor.
Excellent question from you there, Tate.
The next question comes from Alex in Lyndhurst, New Jersey.
Alex asks, “What’s the best resource for determining if a property that I want is in an up-and-coming neighborhood?”
“The market is more important than the property - and a thriving metro doesn’t necessarily mean that every property is in the right neighborhood.
Where do you do your own research?”
Well, thanks for the question, Alex.
In short, NeighborhoodScout.com is my favorite paid resource …
… and City-Data is my favorite free resource. It’s spelled “City-hyphen-Data”.com
Now, what makes Neighborhood Scout potentially worth paying for is that they’ve got investor-grade analytics and tools.
Where the free resource, CityData is more for a “general public” user.
But both resources tell you about things like crime rate, per capita income, vacancy rates, and virtually everything else for cities, zip codes, and even subdivisions.
Of course, there are countless other resources in addition to those two.
Be mindful that you aren’t just looking for neighborhoods that are safe, you’re looking for neighborhoods that are IMPROVING and both of these resources have backward-looking data so that you can track trends.
Remember, in income property, you don’t really want to seek out “beautiful” because beautiful often doesn’t correlate with profitable for cash flow.
But, of course, boarded-up, burnt-out buildings aren’t what you want to see either.
So, as you’ll remember, it’s clean, safe, affordable, and functional. Are people out walking their pets at night? That might be a sign of neighborhood safety.
The things that you can see through Google Street view are things like: are the streets relatively clean, are people mowing their lawns.
If the neighborhood - at least looks - respectable … then tenants are likely respecting your property too.
Too many “For Rent” or “For Sale” signs on a block might be bad sign.
Of course, seeing a lot of signals of remodeling or new construction in a neighborhood - is one of the best signs that could possibly see for an improving neighbhorhood.
The problem there - is that you’ve got to get in before a neighborhood is TOO improved. Otherwise, you’re going to be paying more for the property and the numbers won’t work.
So, there you go, Alex - both some hard data resources for research - and softer signals for what might make for an up-and-coming neighborhood and a safe neighborhood.
If you’ve got a question for me, go ahead and write in at info@getricheducation.com
How do you raise the rent without losing your tenant, and then, what happens if there’s a real estate recession?
That’s after this. I’m Keith Weinhold. You’re listening to Get Rich Education. _________________________ **COMMERCIALS** ___________________________
You’re listening to the show where you don’t follow money, you make money follow you.
This is Get Rich Education. I’m your host Keith Weinhold.
Ben from Osnabrook, Germany asks:
“When it comes to raising the rent on a tenant, isn’t it better to just keep the rent the same & just … not raise it?
Because the cost of losing that tenant with its greater vacancy time is usually more of a loss than if I’m not receiving that potentially higher rent amount each month.”
And then Ben goes into a number of calculations that show his point.
Yeah, thanks for this great question, Ben.
This is the classic landlord’s conundrum.
Do I raise the rent to “market rent” & risk losing the tenant - or do I forgo that greater rent amount and just remain complacent with occupancy at a BELOW-market rent amount? Let’s use an example here. Say you are renting a unit for $1,000. The tenant signs a one year lease for $1,000 … and after a year, when renewal time comes, you give notice that rent will be increasing from $1,000 to $1,040. A couple days later, your resident responds and tells you that they aren’t willing to pay more than $1,000, and if they must, they will go find another place to live. So you risk losing them. Yes, some tenants really will leave over just a $40 a month rent increase. Now you have a dilemma. You think that you CAN rent the unit to someone ELSE for $1,040. But on the other hand, you realize that it’ll take a month to turnover and re-rent the unit. You’ll also need to see that the carpets are cleaned, the blinds are replaced, and perhaps do some wall texturing and painting. So RE-renting this unit will cost you something … plus while this work is done & a new tenant would have to be sought … it might be one month of vacancy that you’d endure. The question you’re now asking yourself is, will it cost me MORE to turn this unit over & EVENTUALLY get $1,040 than it would to keep this tenant’s rent at $1,000 … and just keep them in place - ? Yes, it usually would. Numbers-wise, short-term, it’s better to just keep that existing tenant in-place and give them their way and keep the rent at $1,000. In this case, a LOST month of rent while you try to find a new tenant then … effectively costs you ... $1,040. Plus repairs, you might lose $1,600 on the turnover. On the other hand, NOT raising rents by this $40/month will only cost $480 for the year. Which loss would your rather take — $1,600 by turning the unit over - or $480 by keeping the same tenant there? You’d rather keep the tenant in there & only lose that $40 a month or $480 a year … rather than the $1,600 for the turnover & month of vacancy. Well, there’s a solution to this classic conundrum - and it won’t work every time, but the best thing that you can probably do - the way that you can have your cake and eat it too - which means both increase the rent and keep your tenant … is to make an improvement to your resident’s unit a month or two BEFORE you raise the rent. For example, if they don’t have a dishwasher, you can add a dishwasher or add a ceiling fan in the master bedroom if they don’t have one. Or make a minor remodel that makes that tenant’s life better - before the notice of rent increase. That makes the tenant more likely to stay because you’ve just improved their quality of life - and you’ve also shown them that you care - and they’re more likely to pay the rent increase. Not only have you then kept the tenant and now receive a greater rent amount, often times, you can get a tax deduction for the repair or improvement - and above that, even if they do decide to vacate, you just improved your unit that you own. So … that’s the best solution to the dilemma, Ben from Germany. Again the short answer is to make an improvement to the unit, optimally a month or two before the rent increase. Craig from San Diego, California writes, “Keith, you are the first person that ever opened me up to the world of cash flow. I’ve bought two single-family properties from one of your providers about 8 months ago and I’ve had a good experience so far, other than one tenant that paid the rent about 20 days late month.” OK, so far, so f-a-i-r-l-y good there, Craig from San Diego. Craig goes on to ask, “There are a lot of warning signs about a recession and I’m considering putting a freeze on new purchases until I at least have some certainly in this uncertain environment. What are your thoughts about a recession?” OK, that’s certainly a valid question, Craig. You bring up “uncertainty”. I’d say that markets are always, just always, uncertain … and prognosticators and forecasters have been calling for a downturn for 3 years, 4 years, including a prominent economist or two right here on this very show. And that’s alright. That’s alright if there’s someone that’s wrong. A prominent economist’s decision is just one point of many that you have to take into consideration … … whether it’s an inverted yield curve or slowing GDP growth or inflated stock market price-to-earnings ratios that might point to a recession. Well, especially as it relates to real estate - let’s just talk about how a recession might look as it relates to real estate and what the probabilities are of a recession taking place soon. First of all, a recession is broadly defined as having two or more quarters in a row of contracting Gross Domestic Product - said another way, a declining GDP for at least six months. That’s what a recession is. Let’s relate a recession to real estate - broadly. 10 years ago, we were mired in the worst recession in a few generations. Real estate was: #1 - Overbuilt & oversupplied. #2 - Real estate was being bought with irresponsible lending practices where borrowers didn’t have the capacity to pay their mortgages if anything went wrong. Everyone was qualifying for a loan. And #3 - Ten years ago in the Great Recession, we saw ridiculously unsustainable appreciation rates. 20%, 40%, 50%, 60% per year in some markets on this speculative appreciation since anyone could qualify for a loan. Today, I don’t think we’re in position for a real estate recession & if we do have one, it would be substantially milder than what we saw 10 years ago. Why is that? Because today, we’re in EXACTLY the opposite condition than we were 10 years ago. Today, we have an UNDERsupply of housing, lending practices ARE responsible, and appreciation rates are sustainable. I talked at the top of the show that real estate has appreciated nationally at about 3-and-a-half percent. So, we’re in the opposite place that we were 10 years ago for three main reasons: supply, lending responsibility, and sustainable appreciation rates. In fact, if you’re buying for cash flow in good markets - like you should be - the question I’d ask you - uh, Craig from San Diego - is - do you WANT there to be a mild recession? Yeah, if housing values began trending down for a little while, people are discouraged from buying and then there’s more rental demand.
This is what I experienced when I owned property for cash flow, like I did 10 years ago - when rental demand increased - my cash flow increased greater than the rate of inflation.
So, you might WANT there to be a mild recession when you’re a cash flow buyer.
In fact, this - kind of - workforce housing that we talk about buying here - long-term rentals that are just below the median purchase price for an area (but not too far below) - is some of the most recession-resilient housing type that you can find.
Now, other housing types - take the SHORT-term rental market - like AirBnB properties, HomeAway, VRBOs - they aren’t nearly as recession-resistant as these long-term rentals are.
Now, that doesn’t mean that you can’t own a few STRs - but they probably should be the bread-and-butter mainstay of your portfolio like these long-term rentals are.
AirBnB properties cater to two primary types of people - businesspeople and vacationers.
Now, it seems that most AirBnB owners prefer businesspeople to vacationers … because businesspeople tend to be more quiet, they don’t have parties, and businesspeople are more likely to have REPEAT stays than vacationers.
But in a recession, both business travel and vacation travel gets cut. You saw that happen in the Great Recession - and business travel is one of the first places that businesses cut when they had to get lean.
So … this doesn’t always mean that short-term rentals are dreadful. But long-term rentals are what are recession-resistant.
Again, in long-term rentals, you might actually WANT a recession depending on how you’re positioned.
So, thanks for the question there, Craig.
Next week on the show, we’re going to focus on four-plexes - four-unit buildings and what makes them so special.
The week after that, speaking of a recession, the incomparable Economist Richard Duncan is going to join us and tell us about this QE4-type of activity that the Fed has initiated …
… where the Fed is printing all kinds of money and pumping it into the system … and what that means for the economy.
Richard can make complex concepts sound devastatingly simple sometimes.
In fact, when he was here with us, about a year-and-a-half-ago, just listen into part of that, my question and his answer:
Yeah, could anyone else possibly describe the relationship between inflation and interest rates that succinctly … that concisely?
In fact, when he’s back with us soon, I think that Richard will tell you that nearly the entire globe is ALREADY in a substantial economic slowdown.
Well, what’s one way that I’m acting - and this is something that I regularly do whether I think that a recession is on the way or not - is that I just bought two more properties this past week myself.
Yes, they’re these cash-flowing, long-term rentals like we talk about here … eating my own cooking.
When I was almost ready to buy, I qualified for two more single-family income property loans with Ridge Lending Group.
And then to find the 2 new properties, I did just what you do.
I went to GREturnkey.com, downloaded reports on a couple markets that I was interested in, connected with the provider, and decided to buy two properties in the same day.
Really, walking the walk here. So, if you’re looking for cash-flowing income property in investor-advantaged markets - usually in the Midwest and South, you’ve got to act.
That starts at GREturnkey.com
Until next week, when I’ll be back to help you build your wealth, I’m Keith Weinhold.
Don’t Quit Your Daydream!
|
Mon, 28 October 2019
Grant Cardone is our guest today. He’s the world’s #1 sales trainer, 10X Movement Leader, and prominent real estate investor with $1.4B AUM. We discuss wealth mindset, and the importance of “getting known”. We tell you why you must embrace good debt in order to build wealth. You start by asking yourself better questions. What is “10X”? I liken how your tenant pays you their income from the first 10 days of every month. Get Grant’s take on why a house is not an asset. I ask Grant about his physical fitness. Bottom line: You must give your money multiple jobs. 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Cardone Capital: Cardone Capital Free Book: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 21 October 2019
Fannie Mae and Freddie Mac privatization could mean that the 30-year fixed amortizing loan - America’s favorite - disappears. Ridge Lending Group President Caeli Ridge & I discuss this and more. I describe the difference between primary and secondary mortgage markets. Mortgage interest rates have dropped more than 1% year-over-year. Learn what it takes for you to qualify for an income property loan today: down payment, credit score, reserves, and debt-to-income ratio. You can put 15%, 20%, or 25% down payment on an income SFH. We discuss the differences. 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Mortgage Loans: Wall Street Journal: MarketWatch: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 14 October 2019
Alabama might be the top real estate investment state in the U.S. Why? Low cost properties, low tax, landlord-friendly, growth, warm weather, and advantageous rent-to-value ratios. For cash flowing property, start at: GetRichEducation.com/Birmingham and GetRichEducation.com/Huntsville. Birmingham is Alabama’s largest urban area, Huntsville is 2nd. SFH prices: $85K - $125K. Fees and volatility degrade your stock and mutual fund returns more than most think. Want more wealth? 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Birmingham Turnkey Property: GetRichEducation.com/Birmingham Huntsville Turnkey Property: GetRichEducation.com/Huntsville Tony Robbins’ book: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 7 October 2019
The first episode of one of America’s most influential investing shows began October 10th, 2014. Here it is - uncut with gaffes, breathing and bumping the microphone. Host Keith Weinhold gives present-day commentary on this show that launched five years ago from his home’s dining room table. Want more wealth? 1) My FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 30 September 2019
$10 million in debt could BENEFIT you. I describe how. There are more “free-and-clear” homes today than in 2006. I tell you why. A major platform published that 30-year mortgages are better than 15-year. It appears terribly oversimplified. Home equity always has zero ROI. The debt decamillionaire can have a $300K annual tailwind from inflation-profiting alone. How to get informed, not affirmed. Then, Daren Blomquist joins us to discuss U.S. housing trends. The homeownership rate has declined, especially among those under age 35. The rental vacancy rate has plummeted to 6.8%. Market appreciation is cooling in a sustainable way, returning to long-term norms. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: 30-Year vs. 15-Year Mortgages: My Forbes article: Why Home Equity Has Zero Return GRE’s Tampa Field Trip: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: The NFL on CBS: www.cbs.com |
Mon, 23 September 2019
Turnkey real estate vs. syndication compared. Cannabis production is like today’s gold rush in agricultural real estate and retail. CBD is medical cannabis. THC is recreational, mind-altering cannabis. CBD is discussed today. CBD sales growth is projected at 107% every year through 2023. Get a predictable 15% Cash-On-Cash Return by making a loan on equipment that turns raw hemp into CBD oil. Learn more here. You must be an accredited investor, 12-month loan term. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: CBD Lending Opportunity For You: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 16 September 2019
Single-family rentals have 16 advantages over apartments: Tenant quality, appreciation, neighborhood, school district, retention, no common areas, utilities, divisibility, fire, disturbances, financing terms, vacancy rate, management, supply & demand, risk, exit strategy. There's nothing wrong with apartment investing. They have their own advantages. Noel Christopher, Senior VP of Portfolio Services at Renters Warehouse, joins Keith to discuss today’s single-family rental (SFR) market. Renters Warehouse manages 22,000+ homes in 25 states. They could be a good backup property manager for you. See their marketplace too. The midsize investor (owns 25 - 2,000 rental units) is becoming more involved in buying SFRs. Many say “mom-and-pop” landlords are competing with first-time homebuyers for single-families. Noel disagrees. Long-distance investing is more common today. Demographics of SFR tenants - both Baby Boomers and Millennials. Also discussed: beginner tips, build-to-rent communities. Keith brings you today’s show from Anchorage, AK. Next week: Canton, OH. The following week: Philadelphia, PA. The week after: St. Petersburg, FL. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: GRE’s Tampa Field Trip: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 9 September 2019
Five benefits of spending your money are discussed. (What? Is this irresponsible?) Keith Weinhold tackles the rarely-discussed benefits of money-spending:
Many are afraid to discuss the topic of spending. Also discussed - what goes into home price appreciation, how inflation persists despite decades of technology, Millennials waiting for home prices to drop. Back to spending:
Benjamin Franklin: “Wealth is not his that has it, but his that enjoys it.” Then, a discussion with our Tampa provider about finding the right rental property neighborhood. Join us on our upcoming Tampa Real Field Trip, Oct. 10th to 12th. Start at RealEstateFieldTrip.com. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: GRE’s Tampa Field Trip: CNBC: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 2 September 2019
Real estate math is simple: add, subtract, multiply, divide. There’s no complex math like trigonometry, algebra or exponents. Frank Gallinelli, Ivy League Professor of Real Estate Development at Columbia University in New York City, joins me to talk real estate numbers. Net Operating Income (NOI) estimates current market value of a property. NOI is rent minus VIMTUM. It does not include Principal and Interest. Your Debt Coverage Ratio (DCR) had better be greater than 1. You typically need a minimum of 1.2 to 1.25 to qualify for a property. Loan-To-Value ratio discussed. Seller “asking price” is almost irrelevant. A property’s current market value is = Annual NOI / Cap Rate. Cap Rate = Annual NOI / Property Price or Value. Internal Rate Of Return (IRR) is more of a total return. Part of it is discounting your future cash flows. This considers your opportunity cost. I give an example of buying a new $20,000 heating system for an apartment building.
Therefore, a $20K investment both improved cash flow and increased building value by $68,500. I dislike GRM - Gross Rent Multiplier. Franks dislikes CCR - Cash-On-Cash Return. Return On Equity vs. Return From Equity. Don’t get too lost in numbers. No property exists in a vacuum. The vibrancy of the market is more important than the property. Get a 30% discount on Frank Gallinelli’s “Introduction To Real Estate Analysis” video course at learn.realdata.com with Discount Code: SAVE30 __________________
Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Frank Gallinelli’s “Introduction To Real Estate Analysis” video course: learn.realdata.com Use Promo Code SAVE30 for 30% off. GRE’s Tampa Field Trip: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 26 August 2019
Keith Weinhold says the word of this real estate era may be: “supply”. Why? The U.S. just hit its lowest rental vacancy rate in 35 years: 6.8%. Also, the U.S. just hit its lowest homeowner vacancy rate in 40 years: 1.3%. Mortgage interest rates just fell to near three-year lows. U.S. existing median SFHs now a record $279,600. Year-over-year appreciation is 4.3%. Regulation and environmentalism increase real estate prices. Join our Tampa Real Estate Field Trip at RealEstateFieldTrip.com Next, Daren Blomquist of Auction.com joins Keith to discuss current U.S. trends in:
Foreclosure activity is down due to high employment, more exotic loans now “rooted out of the system”. 91-92% of metros Daren studied are appreciating in value. Net migration winners include: Florida, Texas, Tennessee, The Carolinas, Georgia, Washington, Arizona, Nevada, Colorado. Net migration losers include: New York, California, Illinois, Louisiana. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Daren Blomquist: Heat Map: Heat Map: GRE’s Tampa Field Trip: Mortgage Loans: Turnkey Real Estate: eQRP: Text “QRP” 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. JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: |
Mon, 19 August 2019
If I pay you $114 an hour to mow my lawn, could you get wealthy that way? No. You’d have to work all 8,760 hours in a year just to make your first million. Invest. The definition of investing is: “To expend money with the expectation of achieving a profit.” Then, are stocks, bonds, gold, your home, vacations, or income properties … investments? I discuss. Damion Lupo, expert eQRP Administrator, joins us. Learn more by texting “QRP” in ALL CAPS to 72000. You can have five simultaneous profit centers with income property:
To get ahead, you must give your money multiple jobs. That’s five in this case. If you’re new to this: risk and frustration still exist in real estate. Your best-laid plans will be derailed sometimes. It’s not “get rich quick”. But most people never acquire wealth at all. Why switch your retirement plan to an eQRP?
Learn more about the eQRP from Total Control Financial by texting “QRP” in ALL CAPS to 72000. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: eQRP: Text “QRP” 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. Mortgage Loans: Turnkey Real Estate: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 12 August 2019
Jim Rickards is our guest today. Debt is growing faster than the economy. In an eventual financial crisis, we discuss how a real estate investor will fare. A prolific author, Aftermath is Jim Rickards’ new book. Debt, inflation, and interest rates are macroeconomic forces that affect you daily. The U.S. has $23 trillion in debt. Why can’t we just keep kicking the “debt can” down the road? Alexander Hamilton effectively created the debt 230 years ago. When the debt-to-GDP ratio exceeds 90%, problems occur. It’s 103% in the U.S. today. We discuss debt solutions, and why negative interest rates and Trump tax cuts won’t work. Rickards says inflation has nothing to do with money supply; it’s about psychology. Learn how a new international monetary system looks - outside the U.S. dollar. In a new system, hard assets retain value. Stocks and bonds lose substantial value. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Book - Amazon: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 5 August 2019
Imagine that you’re paid $8.5 million - your entire life’s earnings - all on the last day of your life. But you received nothing until then. That income really wouldn’t serve you well anymore. It’s an extreme example about “The Power Of Now”. Delayed gratification should not be a long-term condition. You get one life. I also discuss housing affordability: which is your income, housing prices, and mortgage interest rates. Historically, affordable homes have a price-to-income ratio of 2.6 or less. In just three minutes time, I tell you how the Federal Reserve works. Their ¼% interest rate cut announced last week is the first cut since 2008. Join me in-person on our Tampa Real Estate Field Trip. Register at www.RealEstateFieldTrip.com The Phillips Curve signifies that employment and inflation are highly correlated. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: GRE’s Tampa Real Estate Field Trip: Article & Video by Keith Weinhold: How “The Fed Works” In 3 Minutes Book: Eckhart Tolle “The Power Of Now” Affordability article: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 29 July 2019
Floating ocean nations can provide solutions to rising sea levels, overpopulation, and poor governance. It’s known as “seasteading”. Joe Quirk of The Seasteading Institute describes their plans and structure. The institute was co-founded by well-known venture capitalist Peter Theil. This differs from living on a boat or oil platform, or cruise ship life. 200 miles offshore is the exclusive economic zone. Hurricanes, tsunamis. A new environment for enterprise and innovation. Seeking freedom and liberty. Aquaculture - seaweed, algae farming. Regulation by the free market rather than government. Could security evolve into an army? Today’s seasteading population. Cryptocurrency. How far we are from a seastead nation? __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: The Seasteading Institute: Blue 21 Floating Homes: GRE’s Tampa Real Estate Field Trip: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 22 July 2019
Tenant retention begins before move-in:
Ongoing tenant retention during occupancy:
How to achieve a rent increase:
We discuss why not every tenant is worth retaining. Dayton, OH has 1% rent-to-price ratios and an MSA population of 800,000. Also:
Learn more about the Dayton turnkey provider here.
__________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Dayton Turnkey Property: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Our Tampa Real Estate Field Trip: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 15 July 2019
Two big mistakes are: 1) Renting out your former primary residence. 2) Only being invested in one market. This Beginner’s Real Estate Investing Audio Guide also helps you step-by-step with buying an income property:
**The entire audio from this episode is transcribed into words and can be found at the end.** People set up LLCs for asset protection, anonymity, or tax purposes. But there is a lot of administrative work. Is it even worth setting up? Your FICO credit score has five ingredients. Down payment, debt-to-income ratio covered. Mortgage pre-approval is better than pre-qualification. Select income property in: job-growth economies, high rent in proportion to low purchase price. Cash flow = Rent Income minus “VIMTUM”. Why would someone sell you a cash-flowing property? “Turnkey” defined. Should you make a lowball offer to a turnkey provider? Also discussed: Negotiation Strategy, Earnest Money, Purchase Contracts, Management Fees, Management Agreements, Mobile Notary, Title Company, Rent-To-Value Ratio, Collecting Cash Flow. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Mortgage Loans: Find Properties: Memphis & Little Rock Property: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Our Tampa Real Estate Field Trip: Best Financial Education: Follow us on Instagram: Keith’s personal Instagram:
Complete Audio Transcript:
Welcome to Get Rich Education. I’m your host Keith Weinhold and I’m here to help Beginning Real Estate Investors Today. The biggest beginner mistakes to avoid, when you make an offer - can you lowball a turnkey provider, and all those buyer steps like LLCs, mortgage pre-approval, inspection, appraisal, and closing. Today, on Get Rich Education. _____________________ Welcome to GRE. This is Get Rich Education Episode 249 - and this is your Beginner’s Real Estate Investing Audio Guide. Hi, I’m your host Keith Weinhold. We’re talking about how to get into long-term buy & hold RE investing - and that’s because it’s the most generationally-proven way to build wealth. First, let’s talk about a couple of the biggest mistakes that real estate investors make - it’s being invested in only one geographic market. Often, that’s the market that they just happen to live in. There is more risk with being in only one market than most realize, because you’re now tied to the fortunes or misfortunes of just one area’s economy. Another substantial, common real estate investor mistake is that they continue to hold onto one - I’ll call it - special - property in their portfolio that they usually need to get rid of - but they have either sentimental ties to it - or they just hold onto it for convenience, and do you know what that property is? I’m actually talking about a specific property here. It’s the home that THEY YOU USED TO LIVE IN yourself. Well, what’s wrong with renting out the home that you used to live in yourself? You might still have the preferable owner-occupied financing locked in on that one - and afterall, that’s a better rate than you could get on a non-owner-occupied rental. The problem is that the property probably doesn’t perform BEST as a rental. But you might be clearing, say $500 per month by using your former primary residence as a rental today. Look, for you, it’s often about the cash flow - and yes, it is about the cash flow. But there’s something even more important than cash flow - that’s because nearly any property will cash flow if the loan were paid off. That’s why it’s really more specifically about the rent-to-value ratio of a property. If you’re renting out the home that you used to live in, and it wasn’t strategically bought as a rental, if your rent-to-value ratio (or RV ratio) is 0.6%, meaning that for every $100K in value it has, you’re only getting $600 of monthly rent income, then you’re losing cash flow dollars every year - and every month. Look, let’s give a real life example of the .6% RV ratio. Say that you can get $1,800 rent out of that $300K property that you used to live in. But instead, three $100K homes bought strategically as rentals can have a combined rent income of $3,000. Yes, you can still find that full 1% rent-to-value ratio. So it’s either one $300K property at $1,800 of rent income. Or three $100K properties at $3,000 of rent income. So you’re losing $1,200 dollars of cash flow every month - you’re only getting $1,800 rather than $3,000 - by not buying and owning strategically in markets in the Midwest and South where the properties make sense as a RENTAL on the day that you buy it. Your primary residence only made sense as a primary residence on the day that you bought it. Now you can see that the only reason that you own it, is because you defaulted and “fell” into it. Don’t fall into things. Be intentional. You are a better investor when you’re intentional rather than emotional. It’s even better for you now. Beyond your $1,200 of additional cash flow with some repositioning, now, with three properties instead of one - now you’ve also taken care of the first real estate investor mistake that I mentioned. WITH three rentals rather than one, now you can be diversified across multiple markets. Two birds are killed with one stone. Now with some re-positioning, you’ve increased your cash flow by $1,200, AND you’re in multiple markets. One property isn’t divisible. We’re talking about real estate investing for beginners today, so let me clearly guide you through step-by-step on just how you go about buying your first property - writing an offer, inspection and vetting your Property Manager which is known as due diligence, appraisal, and onto closing and receiving cash flow from the tenant. As you’ll see, much of today’s show pertains to any investment property at all. But we’re talking mostly about how to buy single-family turnkey homes, especially homes outside your home market - as most of the best deals are not found where you live. Like they say, the best investors live where they want to live, invest where the numbers make sense. Get Rich Education is heard in 188 world nations. Today’s content is primarily geared toward United States real estate investors - but those that live outside the United States will benefit here too. Here’s a question that you might have - “How do I go about setting up an LLC - a Limited Liability Company - to hold my investment property in?” I’ll tell you - I don’t think “How do I set up an LLC?” is the best question to ask. The best question to ask is, “Should I set up an LLC?” The three main reasons people set up an LLC are for either anonymity, tax purposes, or asset protection. Now, if you know that you WANT to set up an LLC - I’ve done three episodes on that topic with Rich Dad Legal Advisor Garrett Sutton. You can go to GetRichEducation.com, type “Garrett Sutton” in the search bar, and those three episode numbers will appear so that you can listen. But the reason that the question is, “Should I even SET up an LLC?” is because:
Now, note that I’m not saying you can’t get an LLC or shouldn’t get one. I’m saying, prioritize those questions to yourself. First, it’s “Should I get one?”. If that’s a definitive “yes”, only THEN ask: “How do I set one up?” Why do you think you have to? Did some attorney use fear tactics to get you to? If the result of the LLC’s administrative overburden provides a greater reward in the form of asset protection, anonymity, or tax benefit - which is typically a flow-through taxation type anyway, you might then … get an LLC. So, as a beginning real estate investor, understand that real estate is a credit-based asset - meaning it’s usually bought with a loan. So let’s talk about getting your finances in order before you contact a lender or select an income property. That begins with you having enough cash liquidated for a 20% down payment on the property - add about 4% for closing costs, depending on the state that you’re buying your property in - and on the lowest-priced property that’s still in a decent area of a low-cost city - which might be a $60,000 property … 24% of that then is about $14,000 that you’ll need. You should have some extra on top of that as reserves. Now, let’s look at another part of your finances - your DTI - your debt-to-income ratio. It cannot exceed 43% to 45% - maybe up to 50% in some circumstances. So if your monthly minimum debt payments - everywhere in your life - housing payment, minimum credit card payments, minimum car payment - if that sum is $5,000 and your gross monthly income is $10,000 - that’s a 50% DTI. You can’t exceed that. Of course, before a bank is willing to loan you money, they want to have a reasonable assurance that you aren’t weighed down with debt elsewhere because their fear factor goes up that they won’t get paid back. Next, let’s talk about your credit score. We dedicated an entire episode to this back in Episode 54. If you can remember back that far, Philip Tirone was here with us and you learned more about credit scores that you probably ever thought you would … … and he even went on to call the credit scoring system a total scam. He was quite opinionated - it was interesting and eye-opening, but ... Playing within the scam here - as it might be. There are many different credit scoring models, but the FICO Score - F-I-C-O - is a respected one that you’re probably going to see your mortgage lender use. It stands for Fair Isaac Company. Their credit scoring range is 300 - the worst, up to 850. 850 is essentially a perfect score. Importantly, 740 is the highest score that helps you here. If you have a 782 or an 836, it doesn’t help you qualify for the loan or get you a lower mortgage interest rate or anything else. 740 is where you’re optimized. Now, just a quick overview of FICO credit scoring ... There are five primary ingredients that make up your credit score. In order of importance, they are your payment history, amounts owed, length of your credit history, new credit, and finally credit mix. That first one, Payment History, is the most heavily weighted one. It’s 35% of your score. As you might expect, the repayment of past debt is a major factor in the calculation of credit scores. It helps determine your future long-term payment behavior. Both revolving credit (i.e. credit cards) and installment loans (i.e. mortgage) are included in payment history calculations. Although installment loans like mortgages take a bit more precedence over revolving credit - like credit cards. This is why one of the best ways to improve or maintain a good score is to make consistent, on-time payments. The next way, your Amounts Owed – 30% This category is basically credit utilization or the percentage of available credit being used - or borrowed against. Credit score formulas “see” borrowers who constantly reach or exceed their credit limit as a potential risk. That is why it’s a good idea to keep low credit card balances and not overextend your credit utilization ratio. So if you’ve got just a $1,000 balance on a credit card with a $10,000 credit limit, that’s seen as a good ratio. You’re staying well within your limits then. The third FICO credit score ingredient is the Length of your Credit History – 15% This factor is based on the length of time all credit accounts have been open. It also includes the timeframe since an account’s most recent transaction. Newer credit users could have a more difficult time achieving a high score than those who have a long credit history. That’s because if you have a longer credit history, FICO has more data on which to base their payment history. The fourth of five FICO ingredients is your “Credit Mix” – Now we’re down to an ingredient only comprising 10% of your score. Credit mix just means that it helps your score if you have a combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Finally, “New Credit” makes up the last 10% of your FICO score. Don’t open too many new credit accounts in a short period of time. That signifies a greater risk to lenders – and that’s especially true for you if you’re a borrower with a short credit history. And you sure don’t want to open up any new lines of credit, down the road when you’re in the qualification process for buying a new property unless you check with your Mortgage Loan officer first. Knowing what factors make up your FICO® Credit Score can help you qualify for more loans and get better mortgage interest rates. That’s the bottom line. This helps you get pre-qualifed or pre-approved with your Mortgage Lender. To get prequalified, you just need to provide some financial information to your mortgage lender, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you how much they can lend you. After pre-qualification, you can seek the higher-level status and that is getting pre-APPROVAL for credit. Pre-approval is better than pre-qualification. If you think about it, it makes sense. Qualifying for anything in life is not as good as getting approved for something - I suppose. Pre-approval involves providing your more detailed financial documents - like W-2 statements, paycheck stubs, bank account statements, and your previous two years tax returns. This way, your lender can VERIFY your financial status and credit. Now that you’re pre-approved with a lender, you can focus on the market and property that you’re interested in. RidgeLendingGroup.com is the mortgage lender that we recommend most often because they SPECIALIZE in income property. They don’t have any seasoning requirements. Seasoning means that the person selling YOU the property needs to have held onto it for a certain length of time - or the lender won’t finance the property for you. While you’re in the pre-approval process, you can be learning about a cash-flowing investment market. You want to pick a geographic metro market that typically has low-cost properties, and high rent incomes in proportion to those low costs. In fact, the market is more important than the property. Because your income comes from your tenant, and your tenant’s income comes from a job. So you typically don’t want to own much property in a town with 14,000 people that’s an outlying area - not part of a greater metro - where 1/3rd of the employment is tied to one tungsten factory or even one semiconductor manufacturer. Because now, too much of your income stream is tied to just one industry. You also don’t want to buy slummy property. Those tenants often don’t pay the rent. You also don’t want to buy the median-priced home or higher, because the numbers don’t work out. So you want that working class housing that’s just below the median price point for the area. If you’re not already confident about that and familiar with the right provider ... We have information on the right market, with the right provider, with properties - and they’re typically in the MidWest and South - at GREturnkey.com. So read a market report there. That’s good, pointed information. Most investors are interested in a property for the production of cash flow. That’s the margin by which your rent income exceeds all expenses. Rent income minus expenses should be a positive number. So that’s your monthly rent minus VIMTUM. V-I-M-T-U-M. Vacancy, Insurance, Maintenance, Taxes, Utilities, and Management. I like easy ways to remember things and VIMTUM is an easy way to remember. So, you’re listening to the Beginner’s Real Estate Investing Audio Guide here as a regular episode of Get Rich Education. If you’re not a beginner & you’re still listening, it’s either a good review and you might even be learning some new things along the way yourself. Including, should you ever lowball a turnkey provider and a negotiation approach that I have for that - in a few minutes. But first, one reasonable beginner question is ... “Now why would someone would want to sell me a cash-flowing property in the first place? Why would someone sell me a good thing that pays them every month that they could continue to hold onto for cash flow? If a property pays someone every month while they hold onto it - why in the heck would they sell it to me? OK, some seller out there has a golden goose that lays a golden egg every month, so why in the world would they give me an opportunity to buy the goose? Well, there are just so many reasons for selling cash-flowing property - yes, a ton of reasons for selling even a young, healthy goose that lays golden eggs every month & is expected to so for years. Well, a turnkey provider runs out of money too. They can’t buy all the properties themselves. They’d prefer a lump sum payout when they sell this property, because their business model is to go pay all cash for another distressed property that they can fix up. And if you think that they snatched up the good ones themselves a while ago - yeah, they probably did do some of that. In fact - I WANT them to have snatched up some good properties from their own market earlier. It shows me that they believe in what they sell. Now, other reasons that the - I guess general public seller might want to sell you a property is ... One reason is moving. Say that a family in City A owns a few mom-and-pop rental homes that they self-manage and they’re moving to City B in another state, they’ll often sell their income properties. Some people want to self-manage their property (often because they never explored their best-and-highest use, but anyway) & if they have to move to City B, they’ll sell the property rather than try to find a Property Manager in City A. Another reason people sell cash-flowing property is that - even if someone is not moving, that person might be tired of the self-management hassle - but yet they don’t try professional management - because that person has the DIYer mentality - that soooo common do-it-yourself mindset. OK, most people just don’t take a strategic approach to real estate investing. Other reasons for people selling cash-flowing property are death, marriage, divorce, and all kinds of either joyous or tragic life milestones. If a husband-and-wife own rental properties but running & managing them was kind of the husband’s thing & the husband dies … the wife doesn’t know how to run the properties & she’s likely to sell rather than hire a Property Manager. People may sell their cash-flowing property in case of all kinds of emergencies - medical and otherwise - because they may need a quick lump of cash - instead of the steady stream of cash flow over time that just won’t work for them in their new situation. OK, most of those situations involve some sort of external life change for property sellers - a lot of them tragic. Well - here’s a personal one for you... A few years ago, I sold two cash-flowing apartment buildings at the same time - well, those sales actually closed on consecutive days - so nearly the same time. Both of those cash-flowing apartment buildings that I sold were 100% occupied with tenants, I had competent management in place, and there were no deferred maintenance issues with the buildings. You want to know my reason for selling two nice golden apartment gooses that were steadily laying some nice golden eggs? OK...can you guess why? Alright, fortunately I didn't have any distress or emergency in my life. ...oh, and also, I wanted to sell them fast too, I couldn’t let these two cash-flowing apartment buildings linger on the market for a while. I really wanted to get rid of them. I had no distress like those situations I mentioned earlier. So can you guess why I wanted to sell these long-producing golden gooses in a good job growth market that produced nice cash flow, nice golden eggs? I’ll tell you why. That's because I knew I could 1031 Exchange those two gooses for two even larger gooses. Now I won’t get into the 1031 here on a beginner episode. But I replaced the two smaller apartment buildings with two larger apartment buildings that would produce even larger eggs if I did it with a quick timeline - and I could defer any tax on my profitable gain. I found - I guess - two very fertile egg producers that were going to produce even more cash flow over time. So...I think you get the message here. To the buyers of my smaller apartment buildings, I appeared as a very motivated seller of cash-flowing property, even though I had no external stress in my life. It was due to internal reasons that I wanted to sell...and it’s the internal drive to expand my income. No shrinking thinking here at Get Rich Education. Now, when you’ve found a cash-flowing property that you want to buy, should you make a lowball offer to a turnkey provider? My definition of lowball here, is, a 10% discount. We’ll say, that a provider is offering a property for $120,000 - then you’d make the offer for 10% less, which is $108,000. That’s a lowball. My answer is ... No. That’s not going to work. In almost every instance, that’s too much of a discount and it’s going to eat their margin too much. Depending on how it’s presented, a seller might even be less motivated to work with you if they get a lowball offer. This company has a business to run and with a turnkey property, you’re typically paying for the convenience. You leveraged their systems of them delivering this product to you that’s already renovated, rehabilitated, tenanted, and under management. Now, can you can knock off $1K-$2K? And say, offer the seller then - $118K or $119K for the $120,000 property. Yeah, that might work. It sure wouldn’t be deemed some unreasonable request. But it’s good to at least provide a reason - some rationale - in asking for the discount. Let me give you some perspective on this negotiation too. For every $1,000 less in a mortgage loan that you take out, how much do you think that saves you in a monthly payment? Did you ever figure out how much that saves you? Well, at a 5% interest rate on a 30-year loan, reducing your mortgage loan amount by $1,000 saves you … $5. Five bucks in a reduced payment. For more perspective, keep in mind too, that once the seller accepts your offer - it’s only the first part of the negotiation. Later, it’s a negotiation with the inspection. We’ll discuss how to navigate THAT shortly. I’m Keith Weinhold. You’re listening to Get Rich Education. ________________
Welcome back to Get Rich Education. This is your Beginner’s Guide to Real Estate Investing. I’m your host, Keith Weinhold and we’re talking about buying an income-producing property.
That may or may not be a TURNKEY property - which just means that it’s already renovated, tenanted, and under management with a tenant on the day that you buy it.
Now, once your offer is accepted by the seller, I want to give you - really just a brief outline of what to expect next.
This isn’t intended to give you every step in exhaustive detail, but this is generally what comes next for United States real estate purchases, and custom varies somewhat from state-to-state.
So with that in mind, once the turnkey provider or seller accepts your purchase offer...
You need to send in your earnest money. Earnest money is not the down payment. It’s a smaller amount that shows good faith that you’re serious about your offer.
It’s often an amount of $5,000 or less and it shows the seller that you’re serious enough about buying the property that the seller has the confidence to take their property OFF the market and not show it to anyone else.
The seller should give you instructions on how to place your Earnest Money.
Now remember, your earnest money deposit is not going directly TO the seller, it is going to a third-party escrow account, and it is refundable to you in accordance with the terms of the contract you signed.
Your contract should have an estimated closing date in there. I want to emphasize that the key word there is “estimated”.
While it is important that all parties work towards closing by this date, between you and me - let’s just be realistic - the reality is that many transactions get delayed beyond the closing date in the contract for a variety of reasons on the seller side, sometimes having to do with construction or renovation delays.
If this happens, it is nothing to be worried about, just remain in touch with the seller and you can simply sign a contract extension if needed when the time comes.
As you are financing your property, be sure to keep getting your lender anything that they ask you for up so that they can keep processing your loan.
As your closing gets near, they will probably ask you for some updated information and have some final stipulations from the underwriter, so just remain in close touch with your lender and try to provide them what they need as swiftly as you can.
During most of this time where you’re under contract & even before you’re in-contract to buy the property, most of your relationship with your lender and seller is just sitting around, waiting for the next stage.
Once construction/renovation is completed on your property, I suggest that you order a professional home inspection before closing.
As the buyer, this is at your expense, but the home inspection is cheap insurance for you and it is an important part of your due diligence. It might cost you about $300 for a single-family turnkey income property.
A four-plex inspection might cost up toward $800.
When seeking an inspector - seek ASHI certification - that is American Society of Home Inspectors.
You’re looking for an inspector with a good reputation, licensed and bonded. It is good to look for a level of experience as well. The choice is really yours as the Buyer.
Your inspector points out deficiencies in what I’ll break into a few categories.
#1 is Major concerns – these are significantly defective, safety issues that require immediate repair. Often times, those things MUST be done in order for your lender to even finance the property so the seller is going to do those things for you. That might be adding a railing to a porch.
The second category are recommended repairs – So they’re recommended but not required. That might be adding some extra insulation in the attic.
The third category is “nice if it were done” - like a kitchen cabinet door that’s a little loose and doesn’t close snugly.
When you get your home inspection report back because the inspector has compiled their findings, the key to remember is that the inspector will ALWAYS return a (usually long) list of items that they recommend be corrected prior to closing.
Now, this even happens on new construction, so expect some findings.
And remember, you are not closing on the property in the condition it was inspected. Rather, the inspection is just part of the process on the path to getting the property to its final condition.
Then you and the seller agree on what will be fixed (at the sellers expense, and verified to your satisfaction), prior to closing.
The seller is anticipating that they will need to make some final repairs (at their own expense) after they get the inspection repair request from you. This is all part of the normal process.
Of course, you can get in a car or hop on a plane and visit the turnkey property yourself and walk the property with your inspector, but I’d say fewer than 10% of turnkey buyers do this.
But going to see the property in person is never a BAD idea.
Today, it’s easier than ever for an inspector or provider to e-mail you a property video. The report that you get from your Home Inspector after he visited the home will have lots of photos and details.
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage. Once the seller makes any needed repairs that the third-party inspector found, I suggest having a re-inspection done by that same inspector. This gives you the chance to confirm that any agreed-upon repairs have indeed been made. You might spend another $100 on this re-inspection. Now, if the original inspection showed that a leaky faucet needed to be replaced, and the seller said they’d do it, and the re-inspection finds that that work wasn’t done as promised, then any FURTHER re-inspection costs are often a cost borne by the seller. Which seems pretty fair - they said they’d do work - and the re-inspection that you paid for confirmed that it hadn’t been done in this case. Now, back to the negotiation. If you asked for a reduced Purchase Price, that could lean away from you asking for too much in the inspection.
How do I like to play it? Often times, I make a full price offer for the property - and I might even let the seller know at that time that I’d like to give you your price - it’s a full $120,000 in this case - and since you got your price, I’d like my terms.
My terms are - that I’m more bold in what I request the seller to do from the inspection findings. Maybe I will ask them to add that extra insulation in the attic as one of those “Recommended buy not Required For Financing” items - or replace a window pane that had condensation inside it.
Then, what’s my justification for asking the seller for that. It’s that I’m paying your full price. Again, financing an extra $1,000 only costs me $5 per month.
Now, let’s talk about the property appraisal.
The appraisal is a tool that the bank uses to verify the quality of their collateral.
Because in your loan paperwork, at closing, the bank will basically tell you that if you don’t make your monthly payments, you’ll be foreclosed upon and the bank will take back the property - that’s their collateral.
So they want to make sure that the property seems to be worth as much or more than you’re in contract for - that $120,000 in our example.
Your lender is the one that orders the property appraisal, not you. In about 90% of U.S. states, you as the buyer pay for the appraisal. It costs up to about $500.
The appraiser is a member of a third-party company and is not directly associated with the lender. It wasn’t always that way.
In fact, one factor that led to the housing downturn of 2007 in the Great Recession is that some lenders & appraisers were “in cahoots”. Haha! That can’t happen anymore.
BTW, the appraisal and some of these other steps are all part of your closing costs. All part of that … about 4% of the property purchase price.
The appraisal is typically done by a certified appraiser physically visiting the home - and these people always seemingly have a tape measure with them.
The appraiser checks out the premises and their job is to use market comparables to make sure that the lender has adequate collateral in case you, the borrower, default.
OK, the bank doesn’t want to lend out more than the property is worth or else they could find themselves underwater if the borrower defaults. The appraisal protects against this.
And don’t confuse this appraisal with an assessment. An assessment is something that a county or municipality uses the measure the amount of property taxes that are paid. It’s really unrelated to this appraisal.
Now, before you select your Property Manager, I’d really like for you to talk with them on the phone or use a free video chat service like Zoom - it’s Zoom.us - it works a lot like Skype but Zoom is easier to use.
I mean, I don’t make many phone calls in my life anymore - much like a lot of people. But I want you to have a phone or video call with your PM because ...
I want you to have a good vibe - a good feeling about your property manager and to vet that manager just like you would vet out a manager for a non-turnkey company.
Just because a property is branded “turnkey” by a company, doesn’t mean that you can dismiss doing your due diligence. Turnkey can be a great system, but there’s nothing magical about that word alone.
Don’t overlook developing a good feeling about your Property Manager, because this is the one long-term relationship that you expect to have. I just can’t emphasize that enough. Your Manager is one of your key team members.
They’ll tell you the character of the current tenant that’s currently in the home. Find out how the manager is going to pay you. Feel them out, know what your communication flow is going to be like.
If they’re part of the same company, a good manager should also connect you with whom renovated your turnkey property in case you have some questions for them.
Now, notice that I haven’t mentioned a real estate agent. Most turnkey providers work in a direct model so that you don’t have to go through agents.
You must sign a written Management Agreement with your Property Manager.
This gives the manager written authority to manage your property for you, it will state their fees, and you’ll have your contact information in that agreement.
There are typically two fees - a leasing fee and a management fee.
A leasing fee is where you’ll spend ½ month’s rent to one month’s rent amount when the Manager screens a new tenant. So hopefully that only happens every 1 or 2 or even 5 years if you’re lucky.
Yes, you can typically approve or reject their selected prospective tenant. You are going to be the owner of the property afterall.
A management fee is often 8-10% of one month’s rent income - and that’s what you pay monthly - ongoing.
You can sign a Management Agreement with the property provider if they have management integrated in-house. If not, you can lean on your provider for some management recommendations.
Now, there’s one blank to fill in on your Management Agreement - it’s a dollar amount up to which the manager can pay for expenses that come up - against your account - without contacting you.
For example, if the number $500 is written in there, that means that if a maintenance or repair expense on your property exceeds $500, they must contact you prior to incurring that expense.
You get to choose that dollar limit. As a beginning real estate investor, go with a lower figure.
Then as you get comfortable and / or you don’t want to be bothered about the property as much, you can increase that dollar limit in which they need to contract you about approving maintenance or repairs.
Basically, if there’s something that has to do with the property & you don’t want to deal with it, then make sure it’s written in the Management Agreement that the manager will perform it.
Typically, it’s going to say that the manager will collect rent, handle tenant relations, respond to repair requests, send you the rent, keep your ledger of income & expenses on the property, post legal notices if a tenant is paying the rent late, and sooo many other associated duties that I personally don’t want to deal with. I just want to live my life.
Get that Management Agreement done - fully executed - signed by both you & the Manager BEFORE you close on the property.
Before you close, you can buy property insurance from any provider you choose.
Your turnkey provider is often happy to recommend some providers that their other clients have used in this market, or you can just Google and find your own.
Be sure to let the insurance provider know that this is a rental property (not a primary residence where you live and not a second home).
Most turnkey buyers purchase both hazard and liability insurance as part of their policy. Like any other insurance policy, you will have choices about deductibles, monthly payments, and coverage amounts.
If you are financing your property, your lender will most likely be able to combine your property taxes and insurance into your monthly payment, so you have one monthly payment for principal, interest, taxes and insurance (PITI) … much like you would on your primary residence.
The financing process typically takes about 30 days from the time you submit your EM.
Remember that YOU are a factor in how fast your property closes. If that lender needs another document, give it to them pretty promptly.
When you have finalized your due diligence, and verified that the seller has made all the agreed upon repairs from the home inspection report, you will be ready to close.
You likely live in a different state than the property and will close remotely. The title company (or its a closing attorney in some states) will prepare your closing documents - including your loan docs...
...and can arrange for a mobile notary to meet you with the docs wherever you choose (your home, your office, your local coffee shop, etc.) so you can sign the docs in front of a notary who will then overnight the docs back to the Title Company so the transaction can fund.
Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying.
It may seem like the closing process is a lot of work, but you’ll really spend most of the time waiting. Most of the time, you'll just be sitting on your hands, waiting for someone else involved in the transaction to come through.
So find something enjoyable to occupy your time and distract you while you wait, and feel secure in the knowledge that you've done your research and know how to make your closing process go smoothly.
When you complete that closing with the mobile notary - I’ve done these closings at my home’s dining room table, or even in my employer’s conference room back when I used to have a day job - then, hey!
You need to congratulate yourself on adding another income property to your portfolio.
You know, the good news is that of all of these stages we’ve discussed - the longest stage of them all is your ownership of the property. You Own & Collect the cash flow.
And hey, this isn’t reason enough alone - but it’s kinda cool that you own property in TN and FL and IN. You own part of each one of those states.
And with each new turnkey property you buy, you might have just increased your mostly passive cash flow by $311 per month or $118 per month or whatever it is.
If you can swing it, it can be more efficient timewise for you to buy more than one property at a time.
As you buy more income properties, it not only gets easier because you know the process, but you often get quantity discounts.
For example, a management company might charge you a 9% management fee on your first three properties, but once you own four or more, they might charge you 8% on all four rather than 9%.
Insurance companies often have similar discounts for you….so you may very well get a little more profitable as you buy more property.
A rent-to-value ratio of 1% is generally quite desirable, meaning one month’s rent is 1% or more of the purchase price.
For example, a $120,000 property and a rent income of $1,200.
$1,000 rent income on a $120,000 property would probably work fairly well too.
You typically want to avoid properties with RV ratios of less than 7/10ths of 1%, or 0.75.
Let’s keep in mind that the RV ratio is only a rule of thumb. It doesn’t account for a major recurring expense like property taxes.
In high property tax jurisdictions like many Texas markets, you probably want that RV ratio up higher.
Now, as a beginning real estate investor, or even an advanced one, don’t worry about not know it ALL. No one’s ever going to know it all with real estate.
In fact, I’ve been actively investing in real estate since 2002 and just within the steps of ACQUIRING a property, like I carefully discussed today, some incremental half-step will come up in the process that I hadn’t been thinking about previously - like signing a Lead Paint Disclosure Form.
So, you don’t need to commit all of this stuff to memory.
Now, something that novice real estate investors say sometimes is something like: “I would only buy an income property that I would live in myself.”
I contend that that is an awful criterion upon which to found strategic fundamentals on purchasing an income property.
Once one filters property that way, they have let their emotions trump facts.
If the fact that a clean, safe, affordable, and functional property has a good occupancy rate in a sound employment market, decent ENOUGH neighborhood, and the numbers make sense - that’s more important.
OK, you aren’t living there yourself so it’s not a sound criterion.
Shoot, if I moved into any income property that I own, my lifestyle would take a substantial hit. Yet I’m not a slumlord - I provide housing that’s clean, safe, affordable and functional.
But they’re not replete with fantastic amenities, it does not have Corinthian architecture with alabaster columns - OK - but I know there’s a demographic for my rental property type that demands this responsible-but-no-frills housing over time.
It’s about asking yourself a better question, like, “Will this property secure an income stream?”
Alright, would you rather have your property look “cute as a button” - or secure an income stream?
OK, we’re investors here.
Some think that in today’s electronic age, you should be able to complete a property purchase from the time you write an offer until you close on a property in the same-day.
Well, that’s certainly not true. As you witnessed, physical things need to take place because you’re buying a real, physical asset.
We’ve been talking today about how you buy an income property - just simply that - especially as it pertains to buying an out-of-state turnkey income property - from the time that you get a property under contract and submit the earnest money to escrow all the way to closing.
...because that’s how to generate passive income, which in turn, creates a rich life for you.
Again, this isn’t an all-encompassing guide today with EVERY little detail. But we’ve hit the major milestones in the process & more.
You’ve got a good general guide on the income property-buying structure.
You might have learned something about prioritization - perhaps LLCs matter less than you thought and a communicative Property Manager matters more than you thought.
Today’s show has the type of content that will be about as relevant 5 years from now as it does today.
Now, today is also evidence that real estate does not have the liquidity that some other investments do. It takes longer to get in & get out.
However, that low liquidity actually contributes to relative price stability in real estate. OK, there’s no panic selling in real estate.
Maybe the most important thing for you to keep in mind is that...
You cannot make any money from the property that you don’t own.
Your future depends on what you do today.
To “know” something and not “do” something is to really not know something.
The most important thing you can do is act...because you cannot make any money from the property that you don’t own.
Again, a recommended, specific INCOME property lender is Ridge Lending Group. Our network of income property providers is at GREturnkey.com
And one particular property provider to highlight over there is Memphis, Tennessee’s Mid South Home Buyers. Not only are they great with beginners, but they have profitable properties at lower price points, which some beginners would rather start with.
MidSouth Home Buyers has been rather popular for all those reasons and that’s created a longer wait list. Well, the news is that MidSouth Home Buyers has just expanded into another great investment market - Little Rock, Arkansas.
So that should help shorten their wait list.
If you can’t remember those three resources - Ridge Lending Group for the loan, GREturnkey and MidSouthHomeBuyers for the properties, I’ll be sure that they’re the first three links in the “Resources Mentioned” portion of the Show Notes accompany this episode.
There would be nothing worse than for me to share today’s knowledge with you - then not let you know where to go to act upon that knowledge.
It’s been my pleasure to bring you your Beginner’s Real Estate Investing Audio Guide today. If you got value from today’s show, I’d be grateful if you took a screenshot of the podcast player image here on your podcatcher …
...and posted it to your Social Media account - your Facebook, Twitter, Instagram, or LinkedIn - and let your social friends know that if they’re ever interested in real estate investing, this episode is a great place to start.
Next week, I’ll talk about how you Retain your tenants at the same time you RAISE the rent.
I’m your host, Keith Weinhold. Don’t Quit Your Daydream!
|
Mon, 8 July 2019
Property management is the glue that makes your investment stick together. But it’s a tough job. GRE’s own John Collins has done management consulting on a project of 159 single-family rental homes. Problems he encountered:
Upgrading tenants from C-Class to B-Class. Raising the rent attracted better tenants. With just a $3 monthly rent increase per unit at a 6% cap rate, the project value increases $100,000. We break down the math. What gets measured gets improved. Maintenance issues occur with a property about quarterly. Practicing “tactical empathy”. To contact John, e-mail info@getricheducation.com with “For John Collins” in the subject line. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Contact John Collins via e-mail: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Our Tampa Real Estate Field Trip: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 1 July 2019
Long-term rentals beat AirBnb and other short-term rentals (STRs) in a recession. STRs depend on vacationers. Stocks typically have a Cash-On-Cash Return of zero. Investor-advantaged property typically sells for $70 to $150 per square foot. Gregg Cohen joins me to discuss the importance of market appreciation for cash flow investors. Get started with new construction investment property at: GetRichEducation.com/Jax. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Jacksonville Turnkey Property: Tampa Real Estate Field Trip: Mortgage Loans: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 24 June 2019
If a Depression occurs, you’ll feel pain as a real estate investor. RE values and rents will both decrease. Awful. But stock and mutual fund investors will likely feel greater pain. Learn why today. Real estate investors maintain control. Interest rates would tend to go lower in a Depression. You could refinance. It’s also a better time to improve your property because people will be out of work. Join our Tampa Real Estate Field Trip October 10th to 12th, 2019 in St. Petersburg, FL. __________________ I answer four listener questions today: What happens to RE investors in a Depression? Should I invest in a college area? Do I need a home inspection? Can you explain Scarcity vs. Abundance? __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Tampa Real Estate Field Trip: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 17 June 2019
Will your property lose value now that Amazon is selling homes for under $20K? Pre-fabricated homes and 3-D printed homes often have major limitations and livability problems. All homes have materials cost, labor cost, and the cost of the underlying land. Mortgage interest rates just hit a 21-month low. Home prices are expected to rise 4% over the next year. ________________ Guest Dave Zook discusses the opportunity to invest in ATMs. U.S. cash use is increasing at 5% annually. Many ATM users pay $2 - $3 to access $20 or $40. There’s a profitable opportunity for you to invest in ATMs. Learn more here. 24.5% is your projected CCR on a lot of seven ATMs. Terms discussed: pre-fabricated home, 3-D home, cash call, accredited investor. If you’re an accredited investor, learn more about ATM investing at www.GetRichEducation.com/ATM __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: ATM Investing: MarketWatch: CoreLogic: RE Portfolio Software: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 10 June 2019
You’ve never thought about this “new way” to beat inflation. Three ways to beat inflation: 1) Tie long-term fixed interest rate debt to a cash flowing property. 2) Own gold. 3) Spend your money. Yes, I advocate spending your money. Die with memories, not dreams. Housing Data Analyst Logan Mohtashami joins us. Logan provides mortgage interest rate predictions to BankRate.com. National Mortgage News calls him a “social media star.” He’s published in Business Insider, Bloomberg Financial. He believes:
Logan is known as “The Chart Guy”. Learn more about him at LoganMohtashami.com. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Logan’s Website: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 3 June 2019
Single-family homes are today’s hottest rental type - both Realtor.com and John Burns RE Consulting agree. Boomers don’t want the responsibility of homeownership, and also don’t want to live in an apartment. This makes SFHs the hottest rental. Rental demand has shifted to basics: affordable, fewer amenities, better school districts. Suburban markets should see the concentration in future growth. Seth Williams of REtipster.com joins us to discuss the best real estate investing websites and apps. We also discuss self-storage facilities. Apps and websites:
__________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Seth Williams: seth@retipster.com Article: Website & Apps Discussed: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 27 May 2019
Compound interest doesn't work in real life. 5% is the average mutual fund investor return, though the S&P returned 10%. This is for the twenty years ending in 2015 (Source: Dalbar). This is even before taxes and inflation! Why are 401(k)s failing people? Inflation, emotion, taxes, fees, and volatility. Emotions make humans sell high and buy low - a recipe for disaster. I discuss how cash flow helps you remove emotion. Garrett Gunderson of Wealth Factory joins us. Financially-free people prioritize this way: value, cost, then price. Economic independence has five levers:
Behavioral finance is where investing meets emotion. Facts don’t change people’s minds. I discuss what does. “Facts are stubborn things. But our minds are even more stubborn.” -John Adams __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Garrett Gunderson: Articles referenced: Why Investors Get Below Average Stock Returns Facts Don’t Change People’s Minds. This Does. Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 20 May 2019
Your equity is re-positioned when you make a 1031 Tax-Deferred Exchange. All at once, you can:
Real estate capital gains tax is higher than many think: 15% - 23.8% Federal, plus State of up to 13.3%, plus Depreciation Recapture. Californians could pay 37%+ in capital gains tax. Fortunately for real estate investors, you can defer all of these taxes with a 1031 Tax-Deferred Exchange. We discuss your 45-day and 180-day timelines, “like-kind”, your Qualified Intermediary, and 1031 traps to avoid. Columbus, Ohio could potentially be a wise place to exchange your equity into. Why Columbus?
This provider has turnkey rehab operations integrated with management so that you can buy an “all-done-for-you” single-family rental property Connect with the provider and get their Columbus Investor Report here: www.getricheducation.com/columbus. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Columbus Income Property: Forbes: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 13 May 2019
More people are renting. The homeownership rate has declined to 64%, from 69% in 2005. Credit score “inflation” has occurred due scoring model changes and a strong economy. The average FICO score is now 704, a record high. GDP in Q1 grew 3.2% year-over-year, exceeding expectations. A new program called the Home Select Loan (All-In-One Loan) operates similar to a 1st Lien HELOC. Ridge Lending Group President Caeli Ridge & I discuss the details:
Use the simulator to see how much interest you save vs. your current mortgage. I bring you today’s show from Dallas, TX. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Best Financial Education: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 6 May 2019
If you make $110K per year unfulfilled, would you leave that job to make $78K fulfilled? Commentary. Learn how to put only a 5% down payment on your home, get a great interest rate with conventional financing and pay zero monthly Private Mortgage Insurance (PMI). GRE Listener Anna Ferntheil joins us. She is a former co-worker of mine at the State Department Of Transportation. Still at her day job, Ferntheil has bought her first two turnkey properties in Ohio at GREturnkey.com, totalling about $400 of total monthly cash flow. Rather than “trading her time for dollars” for decades, she’s building passive income streams through real estate. She now “thinks different”. Ferntheil stresses the influence of associating with like-minded people. She’s also investing in our referred Private Money Lending program, cash-flowing agricultural real estate, and moving her retirement to an eQRP (Enhanced Qualified Retirement Plan). You don’t want “job security”; you want freedom. Security is the opposite of freedom. Today’s show is coming to you from Anchorage, AK. Next week, I’ll be in Dallas and Houston, TX. The following week, Guatemala City, Guatemala. After that, Portland, OR. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Anna’s E-Mail Address: Best Financial Education: Find Properties: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Follow us on Instagram: Keith’s personal Instagram: Program contains a sample of The Notorious B.I.G.’s “The What” by Bad Boy and Arista Records.
|
Mon, 29 April 2019
Keep your debt. Get financially-free instead. We’re talking about good debt. Retiring your debt often means you can’t retire yourself. Home equity is:
So then, why have so much equity in any one property? Back in The Great Depression Era, banks could call your loan due-in-full anytime. They can’t do that today. Don’t fear mortgages. Embrace them; even collect them! Every dollar that goes into mortgage principal paydown is a dollar that you didn’t invest. Separating equity from your home gives you more dollars to invest, not save. Paying down your mortgage INCREASES your foreclosure risk. Most think the opposite is true. Have a lot of home equity? Treat it as you like. But you probably have more dollars to invest than you think. So what’s the formula? Consider keeping low equity positions in many cash-flowing investment properties. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Find Properties: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 22 April 2019
Chicago and Philly are doomed. Today’s guest, Peter Zeihan of Zeihan.com, tells us why. U.S. housing will change with shifts in immigration. Future immigrants will have more skills than current immigrants. Peter & I discuss city-by-city economic fortunes: New York City - Top U.S. destination for capital. But capital is beginning to flow to secondary cities like Charleston, Dallas-Fort Worth, Denver. NYC is not business-friendly. Philadelphia - Should be an economic powerhouse, but make poor business decisions. Not a world-class city. Will hollow out. Washington, D.C. - Could face problems with contractions in government demand. Cleveland, Pittsburgh - Both trending well with tech-based reinventions. Chicago - Rife with deep economic problems. May take national emergency to save them. Florida metros - Tampa, Orlando, Jacksonville areas will keep booming. Memphis - Looks positive. Transportation center. Texas metros - Business-friendly, thriving, decisions made at local level. Big regional differentials in property tax. California - Most economically “unequal” state in U.S. Seattle - What pushes up housing prices? Geographic isthmus, new business. Hawaii - Real estate prices are high and resilient. Much of this is due to geography. With NAFTA’s restructure, Texas and the Great Plains are poised to prosper. Want more of Peter Zeihan? He was on Get Rich Education episodes: 101, 114, 236, 237. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Peter Zeihan’s website: Peter Zeihan on Twitter: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 15 April 2019
Learn how the U.S. compares to the rest of the world today - economically, geopolitically, and demographically. The global order no longer serves American interests. It’s over. Today’s guest, Peter Zeihan of Zeihan.com, tells us why. Peter & I also compare strength among global currencies, and discuss inflation vs. deflation, and interest rates. The U.S. has 90-95% economic self-sufficiency. For comparison, Germany’s is 40%. Chinese global financial interaction is waning. Europe’s negative interest rates are a future likelihood. Mexico, Myanmar, Vietnam, and Indonesia are poised for a bright economic future. China and the United Kingdom are expected to be future losers. Zeihan: London will decline. That money and activity will come to New York City. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Peter Zeihan’s website: Peter Zeihan on Twitter: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 8 April 2019
#235: Under age 30? Then you’ve never been smacked in the face with an economic recession. I discuss. At 33, Tim Bratz is an expert in apartment buildings, finding deals, raising money, coaching, personal development, and mindset. Tim’s real estate epiphany came when he saw a lucrative Manhattan real estate deal from the inside. He bought his first house in Charleston, SC in 2009 with a credit card for $14,000. Today, he has substantial equity in 2,000 doors and $150M+ in value. The key? "Give before you ask." I ask Tim about falling apartment cap rates today. He has an answer and plan for resilience. He buys distressed properties at a discount and forces appreciation. Tim attributes his rapid success to attending mastermind groups. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned Tim Bratz Websites: Tim Bratz Facebook: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 1 April 2019
#234: Learn why Millennials still cannot buy homes, and why real estate sales are down. Real estate cannot be flash-printed or mined. It has a finite supply. If you live in an investor-advantaged market in the Midwest or South, should you still buy out-of-market? Get mortgage pre-approval before you make offers on property at GREturnkey.com. Wealth Factory’s Garrett Gunderson & I discuss why net worth is not the top wealth measure. Learn the “one question” to define another’s scarcity and abundance mentality. Two key formulas: Cash Flow Index = Loan Amount / Min. Monthly Payment Investment Index = Down Payment / Monthly Cash Flow I’m bringing you today’s show from the southern Caribbean island of Bonaire. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Garrett’s Website: Garrett’s Book: Text “WWRD” to (801)503-9667 Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 25 March 2019
#233: It's Rich Dad Month, Week 4 of 4. Guest Robert Kiyosaki joins us. Robert authored the landmark book “Rich Dad, Poor Dad” and is the #1-Selling Personal Finance Author Of All-Time. He & I discuss the difference between real assets and fake assets. Real assets put money into your pocket every month; they feed you. Fake assets need you to feed them. Robert thinks all this is wrong: Go to school. Get a job. Work hard. Save money. Get out of debt. Invest in the stock market for the long-term. Savers are losers. We also discuss: the dollar and the gold standard, teachers, taxation, derivatives, debt, socialism, infinite returns, and the Alaska Permanent Fund Dividend. It’s Robert’s third all-time Get Rich Education appearance. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Rich Dad Website: Kiyosaki’s New Book: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 18 March 2019
#232: It’s Rich Dad Month, Week 3 of 4. Learn how to pummel your tax bill with Rich Dad Tax Advisor Tom Wheelwright. Retail store closures continue to change the complexion of American malls and retail. Hear a humorous comparison between spending your retirement at an Assisted Living Home vs. the Holiday Inn. Learn how to take the home office deduction, about real estate Opportunity Zones. Did you know that to take advantage of Opportunity Zones, you basically must be a developer? With Bonus Depreciation, it could now make sense for you to tear down your IRA. Consider converting it to cash, then invest it for cash flow. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Tom Wheelwright: Freddie Mac House Price Index: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 11 March 2019
#231: It’s Rich Dad Month, Week 2 of 4. Learn how to optimize your rent income with Ken McElroy. Learn how to create a profit spread just like the banks. Case-Shiller vs. Freddie Mac - learn who has the best U.S. Housing Price Index. Freddie Mac tracks all 50 states; Case-Shiller only tracks 20 large cities. Freddie tracks sales from mortgages. Case-Shiller gets data from county assessor and recorder offices. Real estate prices have an inverse relationship with rent amount. If rent demand exceeds supply (tight market), learn how quickly you should raise rents. If rent supply exceeds demand (slow market), learn how low you should let your standards drop. Learn how to avoid “over-improving” a rental unit. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Ken McElroy: Freddie Mac House Price Index: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram: |
Mon, 4 March 2019
#230: It's Rich Dad Month, Week 1 of 4. If you work at a W-2 job, learn how to reduce your taxes. Become a “real estate professional”. If you’re married with a stay-at-home spouse, you increase your chances. To qualify as a real estate professional, RE must be your principal activity and consume at least 750 annual hours. There are four income types for tax treatment: 1) Earned 2) Ordinary 3) Capital gains 4) Passive Passive losses are only deductible against passive income. We’ve recently undergone the most sweeping tax changes since 1986. Your bonus depreciation benefit was introduced in Trump’s Tax Cuts And Jobs Act - are you taking advantage of it? __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Your actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Tom Wheelwright: Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 25 February 2019
#229: Holy shift! Mortgage rates have hit their lowest level in a year. 5.5% interest rate and a 20% down payment for an income property are today’s terms. 740 credit score gives you the best rates. Beyond your first 10 properties (single) and 20 properties (married), there is NO LIMIT on the number of properties you can buy (SFHs to four-plexes). Though after 10 single / 20 married, your interest rate will be higher, though not by much. Learn from Ridge Lending Group CEO & President Caeli Ridge about what you need to qualify for an income property loan today. We discuss your DTI: debt-to-income ratio. I give an example of how to determine yours. Want a cash-out refinance of your income property? 75% LTV for SFHs, 70% LTV for 2-4 unit properties. Learn about why today’s smart money often buys 1-4 unit properties rather than larger apartment buildings … … it’s the safety & stability of 30-year fixed loans. Remember, last month on the show, Jim Rogers told us interest rates will go much higher over the long-term. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Resources mentioned: Mortgage Loans: Find Properties: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Follow us on Instagram: Keith’s personal Instagram:
|
Mon, 18 February 2019
#228: Is Trump’s real estate wealth self-made or inherited? You get surprising answers. Also learn about property hold time, equity flipping, cap rates, health insurance, a mastermind group. How long should you hold onto an investment property? Short answer is 8 years. Generally, sell when you have at least 15% more equity than your contemplated replacement. “Equity flipping” is a term that I introduce to you today. Don’t flip property, flip equity. This increases your velocity of money. Learn all about Cap Rates. Cap Rate is income divided by price. Cap Rates are driven by supply and demand. Cap Rate excludes financing because you brought a mortgage to a property, the property didn’t come with the mortgage. Learn about health insurance for entrepreneurs. Next month on the show: Robert Kiyosaki, Tom Wheelwright, and Ken McElroy will all be here for “Rich Dad Month”. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Visual Capitalist: World Real Estate Trends & Climate: Collective Genius Mastermind Group: http://invite.thecollectivegenius.com/ Mortgage Loans: Cash Flow Banking: Turnkey Real Estate: QRP: JWB New Construction Turnkey: Find Properties: Follow us on Instagram: Keith personal Instagram:
|
Mon, 11 February 2019
#227: You are aging. So is America. The U.S. median age keeps rising. We need more senior housing. Your demographics are baked in the cake. Gene Guarino, owner of the Residential Assisted Living (RAL) Academy & I tell you about the opportunity. Serve seniors by converting Single-Family Homes into Assisted Living Homes (ALHs). There are two distinct pieces here: 1) The real estate. 2) The business with residents & care staff. Average U.S. ALH tenant pays $4,000 per month x 10 residents = $40,000. Your net is about 30%. That’s $12,000 month. We discuss how to find the right real estate and strategies for filling it with residents. Rule of thumb: 300 sf for every resident is quite comfortable. Learn how an ALH-SFH “Profit & Loss Statement” looks. ALH tenants are long-term, low impact, and pay above-market “rent”. My friend Brandon heard Gene here on the show before. Brandon got started. We discuss. It’s easiest for you to buy an existing business. If you can’t then learn about your care staff’s necessary qualifications. Financing for ALHs? 80% loans. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Brandon’s e-mail: thrivealh@gmail.com Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com Follow us on Instagram: @getricheducation
|
Mon, 4 February 2019
#226: You’re at risk with only one income stream. Federal government workers thought their income stream was “secure” until the recent shutdown. Recently, my friend was uprooted when his employer handed their family a job transfer (move or be fired). With only one income stream, you’re beholden to one boss or one company’s whims. You need multiple, durable passive income streams. America uses its land in surprising ways:
Surprisingly, America is becoming less mobile. Fewer people move homes annually. Effects discussed. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Bloomberg: How America Uses Its Land 2019 State Business Tax Climate Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com Follow us on Instagram: @getricheducation
|
Mon, 28 January 2019
#225: Learn what manager fees you should pay & not pay. The “glue” that binds you & your profitable property together is your Property Manager (PM). Higher PM fees might be better or worse for you - it depends on what duties they perform. You pay both a Management Fee and a Leasing Fee. If there’s an activity that you DON’T want to do with your property, then make sure your PM will do it as stated in your Management Agreement. What should Managers DO? Collect rent, find tenants, market vacant property, perform maintenance, pay bills, handle emergencies. What DON’T Managers do? Sell or refinance a property for you. What falls in between? Extensive renovations, evictions, regular maintenance inspections. We discuss Property Management Agreements. GRE-Houston is perhaps the best investment market we’ve never discussed before. As America’s 4th-largest city, Houston has good rent-to-value ratios, low property prices, a vast economy, stunning growth, and laws benefit landlords over tenants. The Houston provider has BRAND NEW construction SFRs and duplexes for you. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________
Houston Turnkeys: GetRichEducation.com/Houston Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com Follow us on Instagram: @getricheducation |
Mon, 21 January 2019
#224: The legendary Jim Rogers tells you about a recession, the economy, interest rates, residential & agricultural real estate, inflation vs. deflation and more. Jim Rogers co-founded The Quantum Fund, has his own commodities index, own ETF, and is one of the most influential business and investing moguls of our time. He tells us interest rates will go much higher. Lock in your debt now. Why inflation will win over deflation. Wall Street is coming to an end. He tells you why. Jim loves agricultural real estate. See our provider at GetRichEducation.com/Coffee I ask: “What should today’s young person do?” __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Listen to this week’s show and learn: 04:15 The place to be was London 200 years ago, NYC 100 years ago, Asia today. 06:12 Interest rates will go much higher. 09:38 Inflation vs. deflation. 12:33 Recession. 14:40 Real estate, agriculture. 18:06 Wall Street is coming to an end. 21:25 What won’t change? 24:35 Coffee, water. 27:54 “What should today’s young person do?” 30:12 Korea. 34:48 Interview summary. Resources mentioned: Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com Follow us on Social: @getricheducation
|
Mon, 14 January 2019
#223: You must build streams of income, not pools of income. Learn why. Then we recap what really happened in 2018, and predict how that affects you in the next couple years. Real estate up 5.5%, Dow and S&P down 6%, NASDAQ down 4% year-over-year. Learn how stock and bond movements affect mortgage rates. Next week, business mogul Jim Rogers joins us. Finally, will you “Live Before You Die”? (Lyrics to this segment below.) __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Listen to this week’s show and learn: 02:40 Income Streams vs. Pools: The context of asset capital values. 07:21 Running the annual numbers - real estate, stocks, CPI, gold, oil, etc. 09:48 President Trump’s barbs. 14:23 Stocks and bonds affect on mortgage interest rates. 16:30 Predictions from Realtor.com’s Chief Economist. 20:51 Jim Rogers joins us next week. 23:32 “Live Before You Die” Audio Program. 29:22 “Live Before You Die” thoughts. Resources mentioned: Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com
“Live Before You Die” lyrics:
If you work for a salary or a wage, then money is an important factor in your life.
So there you are, making between $60,000 and $150,000 per year.
You’ve got a good home, steady employment, you drive a decent car. Sometimes you even feel “comfortable.”
This one precious life of yours is made up of time. Are you trading away that time for dollars at a job that you aren’t passionate about?
Every morning, you might even separate yourself from those you love… in order to do this.
With real estate investing, you don’t want properties so much as you want its passive income - income that you don’t have to work for.
Now your eternal time vs. money dilemma is solved.
If you don’t know why you urgently need financial freedom, do it so that you can “Be Yourself”.
See… you wake up to a blaring alarm to get to your job - and that’s how your day starts. Then you’re programmed to tote company lines all week.
Near the end of the work day, you’re playing another tireless charade - screwing around on the internet while you’re watching the clock like it’s a countdown timer so you can get out of there. that’s unethical.
You aren’t being yourself… because you wouldn’t naturally do those things.
Most employees aren’t driven by purpose, they’re driven by fear.
Your growth can only begin when you peel back each layer of your vulnerability onion and get honest with yourself.
The roots of change are nourished with genuineness.
You’d rather quit your job and be a nature photographer or a Red Cross volunteer or a sports writer or travel.
Even if your job is OK, wouldn’t life be better if you were job-optional?
You haven’t created the time to feel peace, joy, happiness, giving, love and freedom in your life.
You spend all this time learning how works works, zero time learning about how money works... yet money is the only reason that you even go to work.
Look… you won’t obtain freedom by getting your money to work for you.
Every dollar that you put in a stock or 401(k) plan can’t leverage other people’s money...
...for freedom, you must ethically employ other people’s money. That’s the mindset shift.
Real estate gives you limitless access to other people’s money - the bank’s, the government’s, and your tenants.
When you have enough passive income to meet all of your expenses, you can quit your job and be free!
Real estate is the generationally-proven way to build wealth and you don’t even need any degree or certificate.
That’s why I talk tirelessly on my podcast, and in videos, and articles and newsletters and wrote a book, and keep visiting the best geographic markets to find the right opportunities and properties and to meet the right people.
In this one life of yours, you can either be a conformer or you can build wealth.
Once you have time freedom, whether or not you want to go on to be rich from there - well, that part’s up to you.
This is an unselfish act - because when you do what you love, you’ll produce better results for both your family and society. You can’t help others if you’re poor.
Don't live below your means. Expand your means - with anything that you do in life.
The sad thing is, you have a choice in this - yet you’re selling your time and your soul for money. And that’s what breaks my heart.
Learn how to invest in real estate - the smart, patient, stable way.
Most people get used to “settling” in life. When you were 12 years old and thought about your adult life, I’ll tell you one thing that you never thought:
“Someday, I’m going to live a small life.”
Well, now that’s precisely what you’ve done.
Get real with me. How much did your employer pay you to quit your dreams?
Do you even remember what your dream was from when you were 12? I bet you’ve forgotten.
When your dreams die, you die.
Most people die at age 25. It’s just that they’re not buried until age 85.
Will you live before you die?
-by Keith Weinhold of Get Rich Education ___________________________________
See the “Live Before You Die” VIDEO when it is released by subscribing to our e-mail newsletter at: GetRichEducation.com
Also, follow me on Instagram:
Facebook:
YouTube:
Twitter:
LinkedIn: |
Wed, 9 January 2019
If you work for a salary or a wage, then money is an important factor in your life. So there you are, making between $60,000 and $150,000 per year. You’ve got a good home, steady employment, you drive a decent car. Sometimes you even feel “comfortable.” This one precious life of yours is made up of time. Are you trading away that time for dollars at a job that you aren’t passionate about? Every morning, you might even separate yourself from those you love… in order to do this. With real estate investing, you don’t want properties so much as you want its passive income - income that you don’t have to work for. Now your eternal time vs. money dilemma is solved. If you don’t know why you urgently need financial freedom, do it so that you can “Be Yourself”. See… you wake up to a blaring alarm to get to your job - and that’s how your day starts. Then you’re programmed to tote company lines all week. Near the end of the work day, you’re playing another tireless charade - screwing around on the internet while you’re watching the clock like it’s a countdown timer so you can get out of there. that’s unethical. You aren’t being yourself… because you wouldn’t naturally do those things. Most employees aren’t driven by purpose, they’re driven by fear. Your growth can only begin when you peel back each layer of your vulnerability onion and get honest with yourself. The roots of change are nourished with genuineness. You’d rather quit your job and be a nature photographer or a Red Cross volunteer or a sports writer or travel. Even if your job is OK, wouldn’t life be better if you were job-optional? You haven’t created the time to feel peace, joy, happiness, giving, love and freedom in your life. You spend all this time learning how works works, zero time learning about how money works... yet money is the only reason that you even go to work. Look… you won’t obtain freedom by getting your money to work for you. Every dollar that you put in a stock or 401(k) plan can’t leverage other people’s money... ...for freedom, you must ethically employ other people’s money. That’s the mindset shift. Real estate gives you limitless access to other people’s money - the bank’s, the government’s, and your tenants. When you have enough passive income to meet all of your expenses, you can quit your job and be free! Real estate is the generationally-proven way to build wealth and you don’t even need any degree or certificate. That’s why I talk tirelessly on my podcast, and in videos, and articles and newsletters and wrote a book, and keep visiting the best geographic markets to find the right opportunities and properties and to meet the right people. In this one life of yours, you can either be a conformer or you can build wealth. Once you have time freedom, whether or not you want to go on to be rich from there - well, that part’s up to you. This is an unselfish act - because when you do what you love, you’ll produce better results for both your family and society. You can’t help others if you’re poor. Don't live below your means. Expand your means - with anything that you do in life. The sad thing is, you have a choice in this - yet you’re selling your time and your soul for money. And that’s what breaks my heart. Learn how to invest in real estate - the smart, patient, stable way. Most people get used to “settling” in life. When you were 12 years old and thought about your adult life, I’ll tell you one thing that you never thought: “Someday, I’m going to live a small life.” Well, now that’s precisely what you’ve done. Get real with me. How much did your employer pay you to quit your dreams? Do you even remember what your dream was from when you were 12? I bet you’ve forgotten. When your dreams die, you die. Most people die at age 25. It’s just that they’re not buried until age 85. Will you live before you die?
-by Keith Weinhold of Get Rich Education ___________________________________ See the “Live Before You Die” VIDEO when it is released by subscribing to our e-mail newsletter at: GetRichEducation.com Also, follow me on Instagram: Facebook: YouTube: Twitter: LinkedIn: |
Mon, 7 January 2019
#222: Learn how to reduce vacancy and turnover cost in your property. Nationally, the rental vacancy rate is between 7% and 8%. If you increase occupancy from 90% up to 94%, that’s just 4%. But this could boost your CASH FLOW 20%. Increase occupancy by avoiding properties with functional obsolescence. Avoid high turnover cost by owning 1,500 sf single-family homes, not 2,800 sf homes. Learn more about investing in northwest Indiana’s 1% rent-to-value ratio turnkey property at www.GetRichEducation.com/Chicago Learn how to fit the property to the tenant. Find the best questions to ask both turnkey sellers and property managers. __________________ Want more wealth? 1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book 2) Actionable turnkey real estate investing opportunity: GREturnkey.com 3) Read my best-selling paperback: getbook.at/7moneymyths __________________ Listen to this week’s show and learn: 02:52 How to find area vacancy rates. 04:01 How to reduce vacancy with your lease agreement. 05:18 Importance of occupancy. 09:45 How to start right. 10:50 Avoiding functional obsolescence. 13:42 Avoiding larger SFHs. 18:18 Remodeling trends. 20:45 Handling late rent payments. 22:30 Tenant-property fit. 26:22 Best questions to ask a turnkey seller. 28:56 How to interview a Property Manager. 35:16 Geographic arbitrage in northwest Indiana, “Chicagoland”. Resources mentioned: Connect with provider: GetRichEducation.com/Chicago Mortgage Loans: RidgeLendingGroup.com Cash Flow Banking: ProducersWealth.com Turnkey RE: NoradaRealEstate.com QRP: TotalControlFinancial.com Find Properties: GREturnkey.com |