6/24/12: Ask The Guys – No Investor Left Behind

Interest in real estate investing is picking up based on the number of questions coming in from our listeners.

Of course, it probably helps that The Real Estate Guys radio show is the most downloaded podcast on iTunes and Apple is one of the most successful companies on earth.  It’s fun to be us.

So, sitting humbly behind the microphones in the palatial recording studios of The Real Estate Guys radio show’s international headquarters:

  • Your right up front host, Robert Helms
  • Your left behind co-host, Russell Gray

In this episode of Ask The Guys, we field a variety of excellent questions from all over…including Indiana, New York, Alberta (Canada), Washington DC , Montana, Facebook (wherever that is), and more!  Wow.  The Real Estate Guys are a global farce….er, force.

Included in today’s list of questions:

  • Is it a buyer’s or a seller’s market right now? (Hint: If you can use cheap long term financing to get a property in good condition that cash flows well, for a price that is well below replacement cost, in a market with solid economic and demographic fundamentals – buy it!  Right now, that’s possible.  Just sayin’…)
  • What do you do when you live in a market with lousy economics and you can’t get the numbers to make sense?  (That’s why they have moving trucks.)
  • What the heck is leverage?  (Besides the 9th wonder of the world and one of our favorite things?)
  • In Getting Deals Done, you say it’s important to find out what the other party wants.  But how, when your real estate agent is in between you and the other party?  (We took the question because we always show up when someone says there’s another party).
  • Once you’ve built up huge, massive, ginormous amounts of equity (critical mass), how do you convert it to cash flow to fund a lavish lifestyle without getting slammed with taxes?  (We brought Paris Hilton in to help answer this one…just kidding. But we’re not really experts on lavish lifestyles)
  • How to invest when I don’t have much money? (We get this one a lot.  Probably because there’s a lot of people who don’t have much money.  The good news is that you really don’t need much to invest in real estate.  That’s what partners, lenders and investors are for.)
  • What are the 7 essential investor resources you always talk about? (Cash, Cash Flow, Equity, Credit, Time, Talent and Relationships)
  • How can I learn how to analyze markets?  And how can I use my 401k to invest in real estate? (Hey, only one questions per player.  Not really.  These are both great questions, so we answer them both.  Plus, he’s got $250,000 in his 401k, so he’s our new best friend.)

There’s more, but we’re getting writer’s cramp.

We even respond to one listener who didn’t like a political comment made by one of our guests.  Well, it is that season and… do you smell that?  Yes, politics is in the air.  And as long as politicians and their policies affect investors and our investing, we’re going to have to talk about what those rascals are doing.

Not sure why people get their undies so knotted up when it comes to politics.  After all, that’s just one of many things we can all disagree about.  Some people like to drink light beer and cheer for the Cleveland Browns.  Can you imagine?  Whatever.

Anyway, we had fun doing the show and love getting your questions. So keep ‘em coming!  Meanwhile, tune in and enjoy this exhilarating edition of Ask The Guys!

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The Real Estate Guys™ radio show provides real estate investing news, education, training and resources to help real estate investors succeed.

6/17/12: Turning Adversity Into Opportunity – How Real Estate Saved My Family

Will Smith brought the world the heart-warming story of a down-on-his-luck real life Chris Gardner in The Pursuit of Happyness.

In the film, Smith portrays Gardner, a homeless single father who lands a job as a stockbroker and with true grit and determination becomes a financial success.

Not to be outdone by Wall Street, we found a real estate investing version of our own that will inspire and challenge you.  If you’ve ever thought you didn’t have enough to get started investing, this interview will make you think again!

In the radio pulpit, preaching the gospel of real estate:

  • Your reverend of real estate, host Robert Helms
  • The altar boy of alternative investing, co-host Russell Gray
  • Special guest, real estate success story and entrepreneur, J Massey

We met J a few years ago when he showed up at one of our mentoring club guest orientations.  We’d seen his name (actually, it’s just a letter) on our newsletter list – and he’d ordered several of our free reports.  So we knew he was a voracious student and consumer of content. Great!

But it wasn’t until we had dinner with him on our 2011 Investor Summit at Sea™ that we really got to know him and his amazing story of real estate redemption.  (Later that same Summit, J led our Cash Flow game and did such a great job, we invited him back to do the same on our 2012 Summit.  There he shared the stage with the Cash Flow game creator and Rich Dad Poor Dad author Robert Kiyosaki.  When you hear the interview, you’ll understand why this was such a thrill for both of them – and us.)

As you’ll discover, J’s a family guy.  Like sometimes happens to folks, he fell on some hard times.  And not just your run-of-the-mill hard times.  We’re talking REALLY hard times – the kind that destroys most people’s zeal for life.  But not J.

So this episode is more than just a feel good human interest story.  There are some very important lessons that J found along the way – lessons we’re sure you can apply to your own life and investing that will help you too. Normally, we’d summarize much of the content of the interview into this blog – but in this case, we’d be doing you a disservice.  This is a message you want to hear with your own ears.  So grab your notepad and listen in to this enriching episode!

LISTEN NOW:

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  • Don’t miss an episode of The Real Estate Guys™ radio show!  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.

6/3/12: Schiff Happens – Is The Real Crash Yet To Come?

When the mortgage-backed securities (MBS) market collapsed in 2008, real estate owners – both homeowners and investors (and radio talk show hosts) – got hit hard. Banks failed, loans became scarce, buyers disappeared, and people everywhere (including tenants) lost their jobs.  Very ugly.

Lesson: pay attention to macro (big picture) economics.  So now we do.

In the aftermath, we went looking for people who’d called the disaster ahead of time and for the right reasons.  Then we started stalking them, so we’d be first in line to hear the next prediction.  When we went to the Las Vegas Money Show to interview economist Mark Skousen, we ran into one of these guys.  So grabbed an empty meeting room, set up the microphones and persuaded him to sit down to share his big brain with us – and you.

Coming to you from Caesar’s Palace Hotel in Las Vegas, Nevada:

  • Your talkimus maximus host, Robert Helms
  • Your talenti minimus co-host, Russell Gray
  • Special guest, money manager, author, economic and financial pundit and biggimus brainimus, Peter Schiff

In case you don’t know Peter Schiff, he is the President of Euro Pacific Capital investment brokerage.  He’s a former candidate for the U.S. Senate, a prolific author, and an outspoken financial commentator.  Just for laffers, set aside 10 minutes and watch this montage of pre-meltdown TV appearances by Peter as he argues with a host of “experts” about the problems Schiff saw approaching.

Now some people don’t like Schiff’s politics.  Whatever.  We aren’t a political show.  We want to learn how to be better investors.  And we sure wish we would have been paying more attention to Peter Schiff back then.

In his 2006 book, Crash Proof, Peter detailed why he thought the U.S. mortgage markets would collapse.  In his 2011, “I told you so” update, Crash Proof 2.0, Peter revisits the original text with the benefit of hindsight.  It’s one of our favorite books and is on The Real Estate Guys Recommended Reading list in our bookstore.

In this interview, Peter talks about his new book, The Real Crash – America’s Coming Bankruptcy.  Scary title! And we thought the whole Mayan calendar thing was spooky.

Peter explains to us that while the mortgage meltdown was horrific, it was really only the tremor before the big earthquake.  What’s yet to come is the real crash (hence the catchy book name) which will be caused by the collapse of the mother of all bubbles: U.S. Treasuries and the U.S. dollar.

Of course, the implications for real estate investors should be obvious.  Mortgage interest rates pivot off of Treasury yields.  When the value of Treasuries go down, interest rates go up.  The bigger the collapse, the higher rates go.

Now if the Fed decides to prop up Treasuries by purchasing bonds using their “magic checkbook” (for more on this, check out our multi-part blog on The Great Debt Ceiling Debate), called “Quantitative Easing”, which is essentially printing money.  The outcome?  Inflation.  Maybe even hyper-inflation.

Of course, in all of this doom and gloom, there are tremendous opportunities.  And Schiff doesn’t leave us feeling completely freaked out and helpless. In fact, he actually has many ideas about what you and the country can do to mitigate the inevitable pain created by an unsound monetary system.

During the week we spent with Robert Kiyosaki on our last Investor Summit at Sea™, he told us he thinks there’s an 80% chance of hyper-inflation.  The solution?  Use mortgages on income producing real estate to short the dollar.  That is, borrow dollars today that are worth more than dollars 10 years from now.  Then pay the loan back with tomorrow’s cheaper dollars.

Now, if interest rates rise, and inflation hits, then real estate prices and rents will go up, more people will need to rent, new housing will be too expensive to build, and your mortgage will be easier to pay off with devalued dollars.  However, it’s important to remember that even though people will be being paid more dollars (in an inflationary environment, wages go up too), prices will also be going up – and probably faster than wages.  So people who are savings and don’t own real assets will actually get poorer in terms of purchasing power.  That’s why we like low cost, positive cash flow real estate markets.  Positive cash flow means we can control the property long term no matter where values go in the short term.  Low cost markets are more likely to see an increase in demand as people lose purchasing power.

Now Peter Schiff is a stock guy, but some of the things he says can apply directly to real estate.  First, he likes dividend paying stocks.  The real estate equivalent is rental real estate.  He likes bargain stocks.  The real estate equivalent is affordable markets.  He likes shorting the dollar.  As we just discussed, mortgages are a great way to short the dollar – as long as the tenants are paying them!  Lastly, he likes diversifying in non-U.S. assets.  Of course, we’ve been fans of investing in real estate outside the U.S. for the last several years.  One of our favorite markets is nearby, English speaking and really beautiful (that’s a bonus) Belize.

So even though Peter’s a stock guy and we’re real estate guys, we actually have a lot in common.  So much so, we decided to invite him to join us as a guest faculty member for our 2013 Investor Summit at Sea™.  At this point, it’s supposed to be a surprise, but since you’ve read this far, we thought we’d reward you with a sneak peek.  Thanks for being a fan!

For now, we encourage you to listen to this episode and make some Schiff happen to you!

Listen now:

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  • Don’t miss an episode of The Real Estate Guys™ radio show!  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.