Podcast: Recent Updates Unlock Retirement Account Profit Potential

Tax rules are often used as a tool to motivate people to earn and invest in ways policymakers deem important. So it’s no surprise there’s been some tweaks to the tax rules to help stimulate an economy struggling under the weight of the COVID-19 crisis.

In this episode, we take a look at how retirement accounts are being unleashed … and how real estate investors can get in on the action.


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Freedom, responsibility, opportunity and hard work …

We’re a little late with this week’s muse … we’ve been busy finishing up an EPIC collection of interviews for our soon-to-be-released COVID-19 Crisis Investing Webinar Series.

The original plan was to do a simple webinar with a collection of our big-brained friends. It turned into a MUCH bigger undertaking … in a GREAT way.

Obviously, there’s a LOT happening in the economy and financial system right now …

… and the issues are much deeper than debates about wearing masks … or whether tearing down statues falls under the heading of peaceful protests.

Meanwhile, as Americans head into our Independence Day celebration, there’s a lot to think about … both at the macro-policy level and the micro-investing strategy level.

Remember … your business and investments operate inside a complex, yet delicate ecology made up of people, resources, organizations, policies, procedures, and a physical environment which sometimes tosses a curveball.

Like your body, this ecology is a finely tuned machine … and though it’s often flexible and resilient … it has its limits.

Injury, disfigurement or worse are often on the other side of exceeding limits. Pain is usually the telltale sign you’re approaching the danger zone.

Ignoring the warning signs almost always ends badly. Yet even mature adults revert to childlike “covering their eyes” trying to hide from scary realities.

You can ignore reality, but you can’t ignore the consequences of ignoring reality.

Of course, pessimists only see the downside and are often paralyzed.

Optimists see only the upside … and sometimes get blindsided by dangers which are obvious in hindsight. We know. We’ve done it.

As real estate investing legend, Sam Zell says … the secret to success is the ability to pursue the upside while keeping the downside in view so it can be managed.

In other words, Sam Zell is a realist … which is probably an appropriate word for a successful real estate investor.

Our world is FULL of downside right now. Pain is everywhere.

It’s fairly obvious that people, businesses, markets, financial systems, and even society itself are all approaching their limits.

Will they bend or will they break? If they break, what does that look like? Do YOU have a plan?

Not only are those frightening contemplations, they’re hard work.

But if you love the freedom to pursue opportunity, own property, build wealth, and retain and enjoy the fruits of your efforts, it’s hard work you’ll need to do.

“Most people do not really want freedom, because freedom involves responsibility, and most people are frightened of responsibility.”
– Sigmund Freud

“If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much.”
– Jim Rohn

“Power over a man’s subsistence is power over his will.”
– Alexander Hamilton

(That last one is a little disturbing in a “lockdown” world …)

The challenges all freedom-loving entrepreneurs and investors face in this current crisis are multi-faceted but can be distilled into a few macro and micro components.

In the macro, this could be the endgame for the 49-year experiment of a global debt-based financial system.

Or maybe it’s just a bigger crash on the way to some future endgame.

Most of the bright folks we’ve talked to think the system most of us have operated in for virtually our entire lives is dangerously close to collapse and reset (again) …

… or perhaps even full-blown replacement.

All of which begs the questions … what’s going to happen in the macro and how do you prepare in the micro?

Of course, no one knows what’s going to happen, so it’s important to analyze and anticipate possibilities and probabilities.

It may seem complicated, but it’s really a simple, though potentially catastrophic, sequence of events.

It’s important to be mindful of where we are in the process … and how likely we are to advance the next level of “yikes”.

The health crisis led to the economic shutdown, which has the potential to create a financial system crisis or collapse.

So the Federal Reserve is risking a currency crisis (or collapse) by printing many trillions of dollars trying to stop it.

Will they succeed? And if they don’t, when will we know and how will it impact all of us?

More importantly, what can we each do to prepare for a worst-case scenario?

These are the issues concerned investors are wrestling with … and the subject of our conversations both on and off the mic with our COVID-19 Crisis Investing Webinar Series faculty.

For now, here are some important concepts and actions to consider …

Incomes, whether active or passive, are based on economic activity. When commerce stops, so does revenue, and consequently rents and loan payments.

You might be a little late to the party, but if you don’t have solid liquid reserves, it’s something you probably want to get in place quickly.

The longer this crisis continues, the more likely your revenue will be negatively impacted. Liquidity is essential when revenue wanes.

Liquidity is also a VERY powerful tool when credit markets seize … often taking asset prices down with them.

The best bargains are often found by brave, bold, and liquid investors in the pit of a financial crisis.

Meanwhile, at the macro level, all those missed payments could create major problems not just in credit markets, but the banking system too.

Remember … there were already symptoms of a sick banking system just a few months before the COVID-19 crisis came to light.

And now with big debtors like Chesapeake Energy and Hertz leading a parade of bad debt and corporate bankruptcies …

… the Federal Reserve is printing dollars to not only buy up corporate debtmunicipal debtmortgages …

… but some allege the Fed is indirectly supplying freshly printed dollars to prop up stock prices.

We don’t know. But it seems like there’s a WHOLE lot of printing going on. The big question is whether the dollar is strong enough to endure this severe dilution.

Meanwhile, it seems clear credit markets are full of potentially toxic assets no one but the Fed will buy. That’s a significant warning sign.

So, at the micro-level, consider your dependence on and exposure to credit markets and the banking system.

You might find your credit lines being cut off or reduced without warning through no fault of your own. That’s what happened in the lead up to 2008.

And if you’re not familiar with the concepts of “counterparty risk” and “bail-ins”, this is a good time to expand your financial vocabulary. You may have both in your future.

Remember … these are unprecedented times.

Unimaginable things may not be likely (yet), but they’re definitely moving up the ladder of possibility.

Ignoring the possibilities doesn’t make them go away.

But unless the preparation itself is exorbitantly costly or complicated, it’s better to be prepared and not have a crisis than to have a crisis and not be prepared.

After all, inconvenient or novel isn’t the same as costly or complicated.

Many people are counting on their “leaders” and “advisors” to tackle the tough tasks, stand the night watch, and provide adequate warnings.

Maybe not such a good plan.

So as we consider what America’s founders sought to accomplish when creating the United States of America, it’s important to remember …

… the American system was built by and designed for people who wanted massive freedom and are willing to accept massive responsibility to obtain and retain it.

“Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”
– Benjamin Franklin

This freedom … to own businesses and property, speak freely and debate ideas, succeed and fail based on individual effort and ingenuity versus a pedigree or birthright …

… are all based on one singular foundation: individual freedom and personal responsibility.

We can debate whether this is the best system, but the founders made it clear …

“Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”
– John Adams

Of course, the freedom we have allows us to debate the details of what morals and religions are best … and those are debates worth having.

But the core basis of both morals and religion are generally accepted to be personal responsibility.

We think it’s clear we’re in Act Two of a four phase cascading crisis.

And while we’re all in this together, we’re each individually responsible to mind our own business first. Just like when the oxygen masks drop in a crisis on an airplane.

So JOB ONE is to get into and stay in a position of excess strength, wisdom, time, and capacity so you can help those in your sphere.

Because if everyone is waiting for somebody to do something then nobody does anything. That’s obviously not good … and a weak, desperate society is often taken advantage of.

So we encourage you to work diligently on what you can control so you’re better positioned to respond strongly to the many things you can’t control.

Study, think, act, learn, and then share your wisdom with the people around you.

This isn’t the time to be passive.

Podcast: Increase Cash Flow Using Powerful Tax Breaks

While there’s no perfect investment vehicle, real estate done right comes pretty close.

And an important aspect of smart real estate investing is the extremely powerful tax breaks.

In this episode, we dig into one of the best tax benefits real estate offers. Let’s just say you need to see it to depreciate it.


More From The Real Estate Guys™…

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


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Tragedy strikes again …

Tragedies are a terrible but predictable and commonplace part of living and investing.

You don’t always know when or how tragedy will strike, but you can be certain it will. It’s inevitable.

Of course, tragedy and suffering aren’t primarily intellectual experiences. You FEEL them … and they HURT. It’s intensely emotional.

The Real Estate Guys™ family was hit with tragedy last week for the second time in the last six months when Robert’s father, “The Godfather of Real Estate” Bob Helms passed away.

Thanks to all who expressed condolences and shared memories via email or on social media. It’s a blessing to be reminded how many lives have been touched by Bob’s wisdom, kindness, encouragement, and talent.

For those of us close to Bob, our world stopped. Nothing has mattered but processing the loss and considering a new future without Bob’s presence.

Of course, the rest of the world goes on … as it always does in the midst of a never-ending parade of macro and micro tragedies.

But as the hits just keep coming, it’s ALMOST enough to make you wonder if it’s all worth it.

After all, the “happiness” we all strive for in terms of financial, physical, and relationship prosperity seems so elusive and fragile.

All this has us thinking about the role of pain right now in the world and in the life of every investor reading this. Pain and loss are part and parcel of all areas of the human experience. It’s naive and foolish to think anyone gets a pass.

But pain isn’t something often discussed, and certainly not appreciated, by most people. After all, no one with a broken bone, heart, or portfolio wants to be congratulated and counseled to see the good.

Yet most mature people will tell you the greatest lessons were learned, the strongest relationships forged, the most profound transformations took place through the process of pushing through pain.

It’s analogous to a birthing process. Often the labor of pushing through is intensely painful, yet on the other side awaits one of life’s greatest joys.

So pain and loss are not only normal, they’re required and inescapable. They are part of the process of developing strength, resolve, and wisdom.

So how do we as individuals, investors, entrepreneurs, organizations, and societies deal with the personal and collective pain of inevitable tragedies?

And in case you don’t think this applies to the pragmatic goal of becoming a more powerful investor, consider how pain and the resulting panic can cloud judgment and impair thinking.

“When emotions run high, intelligence runs low.”
– Blair Singer

Good emotional control … even in the midst of tragedy, pain, fear, uncertainty, and doubt … is the hallmark of a powerful investor.

We learned a lot about pain and panic in the financial crisis of 2008. Today, we’re thankful for it. But at the time? Not so much.

In hindsight, if we’d cultivated an attitude of gratitude sooner, we probably would have suffered less, learned quicker, and recovered stronger faster.

After losing Russ’ wife last December and then losing Robert’s father last week … we turned to some profound ancient wisdom to remind ourselves …

“This too shall pass.”

– William Shakespeare, Hamlet

And in case you don’t think a 16th-century playwright understands the complex world you live and invest in, consider this gem …

“What a terrible era in which idiots govern the blind.”

– William Shakespeare

But that’s a different discussion we can have over a virtual beer someday while we’re “Sipping-In-Place”.

So gratitude is an empowering attitude … even in the midst of a tragedy and even if the only thing you can find to focus on is “this too shall pass”.

But as profound and brilliant as William Shakespeare was, we found an even older, arguably wiser author to help keep both our micro-tragedy and the macro-insanity we’re all living through right now in a healthy perspective.

And ironically, it also turned out to provide some practical investment wisdom.

So rather than delve deep into clues in the news this time, we’re using our moment of pain to share some deeper thoughts with you.

Thanks for sticking with us this far.

It’s said King Solomon was the richest man who ever lived. Many suspect he’s the author of the Book of Ecclesiastes in the Bible.

We’re not sure about all that, but this ancient muse (later adopted for a popular song in the ‘60s) offers useful wisdom about life, pain, and investing …

“To everything there is a season, a time for every purpose under heaven;

A time to be born, and a time to die;

A time to plant, and a time to pluck what is planted;

A time to kill, and a time to heal;

A time to break down, and a time to build up;

A time to weep, and a time to laugh;

A time to mourn, and a time to dance;

A time to cast away stones, and a time to gather stones;

A time to embrace, and a time to refrain from embracing;

A time to gain, and a time to lose;

A time to keep, and a time to throw away;

A time to tear, and a time to sew;

A time to keep silence, and a time to speak;

A time to love, and a time to hate;

A time of war, and a time of peace.”

– Ecclesiastes 3:1-8 New King James Bible

Entire books and sermons are dedicated to this passage. We’re certainly not qualified to expound on words many consider divinely inspired.

So we’re not here to say what “truth” is or what you should or shouldn’t do or believe.

But during the inevitable trying times we’ll all face in our individual lives, loves, careers, and portfolios … including the current COVID-19 crisis we’re all currently in together … keep these words handy and remember …

It’s just a season. This too shall pass.

For The Godfather, he came to the place where it was his time to die. We all have one, though we tend not to think about or plan for it. No one likes it.

As we’re writing this, Russ’ 13th grandchild is due any moment. For her, it’s a time to be born.

For aware and prepared investors, 2010 was an excellent time to “plant” real estate investments. Today might be considered a good time to harvest equity.

During most of their life, many baby boomers planted into financial safety nets like social security .. and are expecting to harvest in the coming years.

But it’s possible their hoped for time to dance could turn out instead to be a time to mourn. We hope not, but the system is weak.

Some think many of the important social contracts born in the last 150 years are entering their time to die … to be broken down and cast away.

Many on all sides of the issues are finding it’s no longer time to be silent, but to speak.

It’s conceivable the fundamental rights we depend on to move freely, earn and deploy capital, own and operate properties and businesses … are all subject to upheaval.

And with polls showing a growing number of Americans believing civil war is inevitable, it seems it might be a time for the worst kind of war is approaching.

These are no doubt tumultuous times.

All this to say, we think it’s arguably more important now than ever for investors to reflect on ancient wisdom …

… and consider the sage author’s conclusion that “there’s nothing new under the sun.”

Yes, it’s a dangerous, world and we should all be diligent in staying aware and being proactive …

… but these seasons and cycles have been ebbing and flowing for thousands of years. There’s nothing new under the sun.

Sometimes, the hardest hits help remind you about how small you really are and what really matters in the grand scheme of things.

It’s tempting to allow tragedy to make us bitter, cynical, angry, and withdrawn.

But wise men over the centuries remind us there are predictable seasons in the lives of men and societies, and whether the current time is good or bad, “this too shall pass.”

We think what’s important is to remember who you are, why you invest, and what really matters along the way.

As our great friend, Tom Hopkins often reminds us, “Love people and use money, not vice-versa.”

Encore – The Godfather’s Tips for Working with Investment Specialists

When you’re in need of valuable advice … you talk to a Dad. 

In this Father’s Day encore episode, we are revisiting the sage wisdom provided by the late, great Godfather of Real Estate, Robert’s father, friend, and partner … Bob Helms. 

Listen in as Bob shares his top tips for working with real estate brokers who understand what it means to work with investment property. 

To contribute to the Godfather Scholarship Fund in honor of Bob’s life and legacy, send an email request to [email protected] We’ll get you the details!

In this episode of The Real Estate Guys™ show, hear from:

  • The father and host of The Real Estate Guys Radio Show, Robert Helms
  • The father of outtakes and co-host, Russell Gray
  • The father of Robert Helms and The Godfather of Real Estate, the late, great Bob Helms

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Advice from The Godfather of Real Estate himself

In honor of Father’s Day, we’d like to share some wisdom from the archives. 

We’re throwing back to late 2018 when The Godfather of Real Estate, Bob Helms, shared his best tips for working with real estate agents that understand investment property. 

That’s the thing about advice from world-class dads … it never gets old! 

Bob Helms spent many, many years actively brokering properties, teaching agents, and managing agents. He knew firsthand why it was so important to find and work with great real estate professionals. 

Our philosophy has always been that you should align yourself with professionals in every category … lawyers, CPAs, real estate brokers, and agents. 

Cooperation, not competition

Real estate is a relationship business … and when it comes to the brokerage community, it seems awfully competitive out there.

But here’s the first secret … The brokerage business and the real estate sales business are really ones of cooperation rather than competition.

More often than not, we need other agents in the community to be out there providing the inventory that we need.

You may have heard of the 80/20 rule. That rule says that 80% of the real estate in a market is sold by 20% of the agents.

“The most active agents in the network know each other,” Bob says. “They’re in deals together. They understand both sides have to win. It’s urgently important that you not practice your business by trying to take advantage of the person on the other side of the transaction.”

Many investors think they have to squeeze every last dime out of the deal. But the best transactions are whenthe deal closes and everyone looks around, high fives, and says, “That’s awesome!”

“When that happens, people also tend to say, ‘Let’s do it again!’” Bob says. “This is a relationship business. It’s a long-term business.”

The typical homeowner moves every four to seven years. When they move, they usually move out of the area completely.

That means, when you help somebody sell their house … they’re not coming back to buy a property from you … and that’s why it is so important to have a great relationship with other agents.

Working with your agent

Let’s talk a little bit about working with your agent.

Bob says that one of his biggest tips is to pay your agents … insist that your agents get paid top dollar.

Why wouldn’t you want to negotiate that fee?

“I’m going to suggest that you do negotiate the fee,” Bob says, “and the minute an agent agrees to take a discount, you know not to work with that agent.”

An agent that takes a discount on their fee will roll over when it comes to trying to save or make you money.

You want to work with someone that is firm in their value, understands what they’re worth, and will fight for it.

The reality is that the vast majority of real estate agents don’t really work with investors … not because they have anything against it but because they’ve simply never done it or been taught how to do it.

The difference between working with a typical agent and someone who specializes in working with investors is gigantic.

And, if you’re a real estate agent wondering how you can make more money … working with investors is the answer.

Investors are clients that buy properties again and again and again. The pricing of those properties can also be higher.

Investors tend to purchase larger properties as their portfolio grows … which means larger commissions for the agent.

Resources for getting ahead

Bob’s book, Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche, is a great resource for agents looking to get ahead and for investors hoping to understand more about where their agent is coming from.

Bob’s biggest tips for agents are to recognize there is no limit on how much commissioned income you can make … and that you don’t have to stop doing what is already working for you.

If you’re selling single family homes and doing well … you can keep doing it! Just add investment property as a new segment of your business.

As an investor, the person who benefits most from agents who take on investment property is YOU.

As you develop your relationships with agents across markets, they will bring you great deals.

For more tips from The Godfather of Real Estate … Bob Helms … listen to the full episode!


More From The Real Estate Guys™…

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


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!

Encore Podcast: The Godfather’s Tips for Working with Investment Specialists

Fathers often provide the most valuable advice in life, career, and investing.

In this Father’s Day encore episode, we revisit sage wisdom provided by the late, great Godfather of Real Estate, Robert’s father, friend, and partner … Bob Helms.

So listen in as Bob shares his tips for working with real estate brokers who understand investment property.

To contribute to the Godfather Scholarship Fund in honor of Bob’s life and legacy, send an email request to [email protected], and we’ll get you the details.


More From The Real Estate Guys™…

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


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!

Passive Investing through Real Estate Investment Funds

There are plenty of people out there who want the benefits of real estate but don’t want to get their hands dirty. 

For those folks, private funds can be a great option. 

While it can be expensive to send your money on the long round trip to Wall Street … Main Street funds are a lot leaner and a lot more transparent. 

We’re visiting with a Main Street real estate fund manager and exploring the benefits of passive investing through real estate investment funds. 

In this episode of The Real Estate Guys™ show, hear from:

  • Your hyperactive host, Robert Helms
  • His passive-aggressive co-host, Russell Gray
  • Real estate investment fund manager, Paul Moore

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Broadcasting since 1997 with over 300 episodes on iTunes!

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A space for passive investment

You can be an active investor that does all the work … finds the market, puts together the team, rolls up your sleeves, even paints and carpets. 

Or, you might leave that work to somebody else and invest passively in real estate. 

Today we are talking about one of the many ways to passively invest … real estate investment funds. 

A real estate investment fund has a specific purpose. It invests in a particular type of real estate …  maybe in a geographic area, maybe a specific product type. 

The difference is that a fund isn’t typically going to invest in just a single property. And, it’s not a single investor … multiple investors come together to share both the risks and the rewards. 

In today’s environment with the volatility we’ve had in the stock market, many people are looking at other ways to invest. 

Real estate investment funds usually invest in commercial properties, because they’re playing at scale. So, you become a Main Street investor investing in Main Street. 

If you drive around your community and see a new apartment building or self-storage facility going up … it’s likely those aren’t owned by individual investors. But they aren’t usually owned by institutional investors either. 

There is a middle space. 

That space used to be a good old boys club … you could only find them if you knew the right people. 

But things have changed. Depending on the type of investor you are, a fund can make sense for you in so many ways. 

The basics of real estate investment funds 

Our guest today has a multitude of real estate investment funds and is here to show his approach to that business. 

Paul Moore is a fund investor and manager from Wellings Capital. Before COVID-19 hit, Paul and his team raised a record amount of money. By the end of March, they decided to hit pause on the fund. 

“We pressed pause to evaluate opportunities in this new light,” Paul says. “We’ve been evaluating syndicators for years and have a short list of people who meet our criteria to invest with.” 

The fact that the fund is made of passive investors means that Paul had this luxury … it’s not like they were stuck in escrow and wondering if things would work out. 

Let’s talk about what makes the type of funds Paul works with different than your average syndication deal. 

Often, syndication is a single property. You find investors that fit the criteria of your deal and your investment fits them. 

What Paul does in a fund is bigger than that. Funds have multiple properties … which offers great diversity. 

With funds, you’ll see diversification across five or six different metrics. 

You’re diversifying across operators … across geographies … across asset types. You’re also diversifying across strategies and time.

All of that diversity helps create opportunities that are recession proof and still offer promising returns. 

Diversification across time is a particularly intriguing part of a real estate investment fund. 

An investor that joined a fund … say in June 2020 … would get the benefit of assets that have already been purchased by that fund. 

Basically, you’re buying into a portfolio, and about three quarters of the assets have already essentially been de-risked. 

Because a fund is diverse, you’re going to have a home run or two, a grand slam … and maybe a few base hits. 

In Paul’s current funds, you’ll find multifamily properties, mobile home parks, and even self-storage. 

Nothing in investment is guaranteed … but funds are pretty well protected pieces of collateral. 

Understanding operators and managers

When you talk about funds, you have managers and operators. Some people act as both. They have a property management company and they manage portfolios. 

That’s not how Paul’s team operates. They search out properties and operators. 

“We spend a lot of time getting to know the operators,” Paul says. “We get to know everything about them, about their company, about the way they treat their employees. That due diligence really pays off for us in the long run.” 

Paul says that the team is always more important than the property. Once you have a great operator, they can lead you to potential properties. 

The right operator can stay with you and shepherd you through whatever comes in the market. 

Paul’s job as a fund manager is managing and interfacing with these operators on behalf of all the investors who take part in the fund. 

“We have such good operators that we never want to try and take control, but we do stay in close touch with them and get regular updates on what is happening in the market,” Paul says. 

For more information on passive investing through real estate funds and what you could expect from working with Paul and his team … listen to the full episode!


More From The Real Estate Guys™…

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


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!

Podcast: Passive Investing through Real Estate Investment Funds

Private funds can be a great option for busy people who want the benefits of real estate, but don’t want to get their hands dirty. And while it can be expensive to send your money on the long round trip to Wall Street … those big buildings, extravagant bonuses, big fines, and fancy ads all come between you and the profit from the real estate … many Main Street funds are a lot leaner so more of the deal can make it to you. They’re also a lot more transparent.

So listen in as we visit with a Main Street real estate fund manager and explore the benefits of passive investing through real estate investment funds.


More From The Real Estate Guys™…

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


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!

Which rabbit to chase?

The person who chases two rabbits catches neither …

Another week and a thousand sub-plots and angles to the COVID-19 story and how all this might affect real estate investors.

In a run-of-the-mill market gyration, those are usually fun and relevant rabbit-trails to go down. But there will be plenty of time for that later.

Sometimes it’s more important to stay focused on the main thing … even if it’s a little boring, redundant, or even (gasp!) political.

This is one of those times.

Think about it …

Virtually all major factors impacting the future of the economy, financial system, and currency that your portfolio and financial security depend on are being driven by policy.

Market participants like buyers, sellers, investors, tenants, and businesses all seem to be left out … or perhaps “locked down” is more accurate … of the process.

And the “gauges” most people focus on to determine the national, state, corporate, and individual health are questionable at best.

Whatever is going on right now is a far cry from “free” markets. It’s all driven by Federal Reserve and government (again, they’re not the same thing) policy.

So are we here to critique policy or rant about what “should” be?

Heaven forbid.

We’re not that smart … or brave. Besides, no one in charge is asking us what we think, so our opinions don’t count much in the real world anyway.

But with a thousand things to distract you, we’re simply pointing out that policy matters … and it’s a good idea to pay attention to policy so you can pivot to avoid problems and capitalize on opportunities.

As of this writing, we’re waiting to see what the Fed will say and do. They’re the makers of those important monetary policies which affect everyone everywhere.

For the uninitiated, the Federal Reserve is the issuer of U.S. dollars. The U.S. dollar currently serves as the reserve currency of the world.

Even though a lot of people know this … very few really understand it … and that’s a problem for both individuals and societies …

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

– John Maynard Keynes

The Fed expands and contracts the amount of dollars in the system to directly or indirectly manipulate interest rates, inflation, asset prices … including stocks and real estate.

If you’re paying attention, you’re watching a hyper-active Fed operate in real-time.

The Fed underwrites the United States government’s debt and deficits … including all the stimulus spending, bailouts, and vote-buying handouts by both parties.

If you think of dollars like blood … a currency that flows through the body of the economy supplying nutrition to individual cells (people) and organs (organizations) …

… then it’s easier to understand the impact of the quantity, quality, and velocity of those dollars.

There are MANY issues at play in today’s world. But we think the dollar may well be the most important developing story.

Of course, long-time followers of The Real Estate Guys™ know we’ve been watching the dollar for quite some time.

The long-term demise of the dollar is a mega-trend which began in 1913 …

SO much we could say about this one chart, but we’ll save it for future rants.

Profiting from the dollar’s persistent decline is the essence of leveraged real estate investing and the main thesis of Equity Happens.

Yes, we know we need to re-release Equity Happens. It’s on the to-do list. But it’s kind of flattering to see used copies trading for hundreds of dollars.

In fact, let’s use Equity Happens as a quick case study in inflation …

Right now, the supply of Equity Happens books is small. Apparently, the demand is high, so the price has been bid up.

(Note: We don’t get any of that premium. We wish. But it goes to the used booksellers. We’re still rummaging around the garage looking for copies so we can get in on the action.)

But the high price of Equity Happens isn’t the result of inflation. It’s the result of limited supply against relatively high demand. A copy of Equity Happens is rare.

Compare that to Rich Dad Poor Dad, the best-selling financial book in history.

At the same time Equity Happens is selling for over $400 per copy … nearly a 20x premium to the retail price …

… Rich Dad Poor Dad is selling for $5.39.

Does that mean Equity Happens is the better book? Or the demand for Equity Happens is higher than Rich Dad Poor Dad?

Not at all. In fact, far from it.

Now stick with us because this is the important lesson …

The disparity in price between Equity Happens and Rich Dad Poor Dad is a function of how many copies of Rich Dad Poor Dad have been printed.

While we only printed less than 100,000 copies of Equity Happens … untold millions of copies of Rich Dad Poor Dad are in the marketplace.

As a product, abundant supply is fantastic for the consumer. Mass production creates abundant supply which produces low prices and allows more people to acquire the book.

In other words, falling prices are a boon to consumers. It expands the ranks of the “haves”. Cheaper books mean more people can afford them. Remember this when some official tells you deflation is a threat. It is … but not to you.

What if Rich Dad Poor Dad wasn’t a book, but a currency that you were earning and saving … how’s it working now?

Let’s say you went into the market and traded the blood, sweat, and tears of your labor for 100 copies of Rich Dad Poor Dad at a time when the book sold for $12.

Then suppose Robert Kiyosaki prints another 10 million copies because his printing cost is only pennies per book.

This printing increases supply and drives the book price down from $12 to less than $6.

Yes, more people get copies of Rich Dad Poor Dad. In fact, maybe Kiyosaki deposits books directly into the libraries of readers everywhere.

But you … you worked for your copies at a time when the value of your work was based on a price of $12 per copy.

And you saved your copies in your library so you could trade them later for other books you’d like to read. But now, your copies are worth half as much.

You lose. The act of printing more books diluted the value of the books you already earned.

Now, go back and re-read the story of Equity Happens and Rich Dad Poor Dad … but replace Equity Happens with gold, Rich Dad Poor Dad with dollars, and Robert Kiyosaki with the Federal Reserve.

Monetary policy … the printing of dollars … affects you and EVERYONE earning, borrowing, saving, and investing in dollars.

And just in case you didn’t hear, the Fed is printing TRILLIONS of them … more and faster than at any other time in history.

There are a LOT of angles to the cascading crisis created by COVID-19, so it’s easy to take your eye off the main thing. We could be wrong, but we think the main thing is the dollar.

Unfortunately, most Americans and the pundits who inform them aren’t really talking about the dollar. So we are … and have been for years and years.

Today, everything is moving bigger and faster. Extreme policies are likely to produce extreme results.

Whether those extreme results harm or benefit you and your portfolio depends on how aware, prepared, and responsive YOU are.

But your results also depend on what everyone else in the eco-system does … and the policies they support. So talk with your family and friends. Encourage them to pay attention too.

Spreading financial awareness and preparedness helps flatten the curve of economic impact to the financial system.

Like COVID-19, bad ideas are highly infectious … especially when people are highly vulnerable. Ideas affect individual actions and institutional policies.

We’re not telling you what to think or do.

But if you’ve been hitting the snooze button up to now, it’s probably time to snap to attention and start studying. Think and do is better than wait and see.

There’s a lot more to this chain of events to come.


Thanks to all of you who’ve taken the time to send a little sunshine our way.  It means a lot to us!

Here’s what The Real Estate Guys™ Radio Show community is saying … 

Awesome analogy for gold, dollar, and the Fed! … ” – John Y., 6/10/2020

Pandemic, Civil Unrest, Job Losses and Other Good News for Investors

This year has seen its highs and lows … and the hits just keep on coming. 

Coronavirus, civil unrest, unemployment … an endless parade of bad news. If it’s all starting to wear you thin … listen in!

We’ve seen our fair share of calamity and catastrophe. While what is happening right now is unprecedented, many of the principles for thriving in tough times are timeless. 

We’re talking trials and tribulations … and why you can still have a reason to smile. 

In this episode of The Real Estate Guys™ show, hear from:

  • Your optimistic host, Robert Helms
  • His worn-out co-host, Russell Gray

Listen


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Finding good news to talk about

There is so much going on in the world! 

It’s easy to get caught up in the negativity … but these types of human emotions can often be detrimental to real estate investors. 

The big picture is that the need for real estate isn’t going to go away … we can’t imagine something that eliminates human beings from having to sleep under a roof. 

So, this week we thought we should talk about some good news. 

Tom Hopkins, a personal friend, and mentor said, “I never see failure as failure, but just the feedback I need to improve my performance to adjust my technique.” 

What a great attitude! 

The world is going to go on. People are going to be here 10 … 20 … 30 years from now and real estate is a viable asset class. 

The business model is sound … all the rest of it is just noise. 

You’ve got to calm your spirit a little bit and assess what’s going on. Then, it’s time to move forward with your wits about you.

Bad stuff happens … but in the grand scheme of things, you can find a silver lining and let these events mold you into a better person. 

Managing your psychology

How do you manage your psychology and live to become the best investor possible in light of what’s happening?

The key is to set your filter correctly. 

If you filter out ALL the bad news because you just can’t handle it, then you will be dragged down. You’ll miss the obvious because you filtered it out. 

The flip side of that is there are people that are permanently negative that can never take action because all they can see is the downside. 

If you want an excuse to quit, life is going to give you a million of them every day. 

But, the fact is that there are people out there in the exact same environment that are able to take effective action. 

That’s why the first step is to take your filter off. Look at it objectively. Clean it out. Then, start listening to people that you wouldn’t normally listen to, and read things that you wouldn’t normally read. 

You don’t need to accept things blindly … but you do need to hear them. 

Understanding different points of view is like being a general in an army. You have to get down in the weeds … but you also have to be able to step back and look at the big picture from a mile high. 

Real estate investors by their very nature tend to be in the weeds. We’re very transactionally detail-oriented, which means we can miss a lot of the big picture stuff. 

Remember to take a step back and try to see larger trends. 

Adapting to how things really are

There are people who believe that the housing market is tanked … but a recent article shows that home prices in April 2020 saw their biggest gain in two years. 

There are fewer homes on the market, and there’s still demand … coronavirus or not.

Even though the number of sales may be down, the price being paid for real estate is up. 

That’s why it is so important for real estate investors to learn to remain cool, calm, and collected. The saying goes, when emotions run high, intelligence runs low. 

Humans have found a way over the millennia to find a way to adjust to whatever the world gives them … disease, natural disaster, war, and oppression. 

The only thing you can be certain of is that people are going to find a way. 

One reality to face is that inflation is probably headed our way. When inflation happens, the rich get richer. 

If you don’t want to have your feet taken out from under you, you need to find a way to add value to the people who have resources. 

That’s what syndication is all about. 

When markets fall apart, they create a lot of opportunity for private equity and private capital. That opportunity keeps getting bigger … especially for syndicators. 

You may not have capital … but you probably have time that those with capital don’t have. It can be the perfect partnership. 

Let’s take a look at another example … with riots and unemployment, many businesses are rethinking their very existence. 

These things are causing businesses to evolve and find better ways to do business and new ways to create jobs. 

The opposite of any crisis is opportunity … and we could be seeing some of the best opportunities … especially in real estate … that we’ve ever seen in the coming months and years. 

You can’t control what happens in the world … but you CAN control how you adapt and respond. 

What are some practical things you can actually do to be ready for the opportunities that will come?

The biggest is to be financially ready to go. Shore up your financial house, and make sure you’re in a position to make the right investments. 

See if there are some places you can grab some equity … or find those ways you can be of value to people that have money. 

For more on the good news hidden in all the bad news out there … listen to our full episode!


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