Investing, infrastructure and you …

Posted by on August 9, 2017 · Leave a Comment 

Timeless real estate wisdom says three things matter most when deciding what to buy … location, location, location.

It’s tongue-in-cheek, but the point is real estate derives its value from demand.

The key is choosing properties most likely to surge in demand relative to supply.

Of course, deciphering supply and demand means looking at demographics, economics, migration, and the potential for increases in supply.

The concept is simple.  But understanding actual market dynamics is more complex.

Still, it’s worth the effort because real estate investing is about buying and holding a property for the long term.

And even if your time horizon is shorter, you still need new buyers coming into a market to take you out.

So getting the market right matters a lot more than simply making sure the property’s free of termites and the plumbing works.

When it comes to residential rental real estate, some major demand factors are jobs, affordability, and quality of life.

Sure, everyone would LOVE to live in Tony Stark’s mansion in Malibu … it’s got a GREAT location and is low in supply.  But it’s not affordable.

And with so many retail jobs being automated or Amazoned … and manufacturing jobs still more off-shore than on …

… what kind of jobs and geographies offer the kind of growth potential likely to support working class folks?

We’re keeping our eyes on infrastructure for clues.

Both the Obama administration and now the Trump administration have said U.S. infrastructure needs attention.

It’s not a blue or red only issue, so maybe something will really get done.

We’ve commented before on Trump’s plan to spend a trillion dollars on infrastructure … and though it may seem to have fallen off the radar, infrastructure might be making a comeback.

First, even though the Fed backed off on the last rate hike, they’re still talking about reducing their balance sheet.

That’s code for tightening “monetary stimulus”.

This puts pressure on President Trump and Congress to fire up some “fiscal stimulus” … which is code for good old-fashioned government spending.

And while the military is quite likely to be on the receiving end of a chunk of it, we think some funding will probably find its way into infrastructure.

Of course, we’re not the only ones paying attention to this possibility.

Check out this headline from Bloomberg …

Buyers Bet on Infrastructure, With or Without Trump

The article is about one big company buying up another big company to get in position to feed off government spending on infrastructure.

“This rush to get positioned for an infrastructure-spending boom is a striking contrast to the stalled progress in Washington on legislation of any kind, let alone Trump’s proposed $1 trillion infrastructure plan. But like the private-equity firms raising buckets of money for infrastructure-focused funds, industrial firms are wagering the country’s roads, bridges and sewer systems have gotten so bad they can’t be ignored for too long.”

Of course, the big question for real estate investors is … where???

Some clues can probably be gleaned from the prospectuses of the private-equity and industrial funds … all of whom are presumably spending considerable resources on researching their mega-investments.

But there are also clues in the news.

The New York Times published an article claiming Trump Plans to Shift Infrastructure Funding to Cities, States and Business.

More recently, Reuters reports U.S. Construction Spending Falls as Government Outlays Tumble.

“U.S. construction spending unexpectedly fell in June as investment in public projects recorded its biggest drop since March 2002 … The decline pushed public construction spending to its lowest level since February 2014.”

So even though Uncle Sam wants to spend money on infrastructure, they’re not doing it in earnest … yet.

But think about this …

Big companies and private-equity funds are getting positioned for big infrastructure spending.  They expect it to happen.

President Trump says he wants to spend a trillion dollars in infrastructure.

We can’t imagine Congress not wanting to spend money.  It’s what they do best.  Then again, getting anything done is what they do worst.

But everyone seems to agree infrastructure is in bad shape. And we’re guessing some places are in worse shape than others.

So like the big players, we think at some point, the need is going to force the spending … ready or not.

Now if the Feds don’t pay … or if Trump puts more responsibility on the states … it seems like those states which already have the best infrastructure … or the best economic ability to build or improve it … will have a big advantage.

And because we’re always looking for an advantage, we decided to look up those U.S. states in the best fiscal shape.

Not surprisingly, several of our favorites are in the top ten …

  1. North Dakota
  2. Wyoming
  3. Texas
  4. North Carolina
  5. South Dakota
  6. Vermont
  7. Tennessee
  8. Indiana
  9. Utah
  10. Florida

Of course, when picking a market to invest in there’s more than just fiscal strength.

Affordability, market size, business and landlord friendliness, quality of life … and your boots-on-the-ground team … are all important considerations also.

Nonetheless, with record levels of debt at every level, rising healthcare costs, pensions in crisis, and fiscally cancerous unfunded liabilities growing daily …

… we think companies and governments in relatively good financial shape are best positioned to make critical investments, gain competitive advantages, and attract an unfair share of population and business.

The goal, as Wayne Gretzky says, is to skate to where the puck is going.

Until next time … good investing!

 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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Waiting for the next recession …

Posted by on August 2, 2017 · Leave a Comment 

Like waves on the beach or the rising and setting of the sun … the ebb and flow of the infamous “business cycle” is something every entrepreneur and investor must navigate.

The marketplace is fluid and dynamic.  There are no lane lines or guard rails.

More importantly, there is no singular cycle because there is no singular market.  As Jim Rickards says … it’s a complex system.

At our last Investor Summit at Sea™, Fannie Mae’s chief economist Doug Duncan warned the current economic expansion is one of the longest on record.

The odds, Duncan says, are high another recession is around the corner.

And as we’ve noted before, 10 of the last 13 times the Fed embarked on a rate raising program … the result was recession.  So …

Should real estate investors wait for the next recession to add to their portfolio?

The answer is … it depends.

That’s because it’s probably not smart to apply a one-size-fits-all simple strategy to an investing question about a complex system.

And even trying to “narrow” the question down to “real estate” is still complex.

After all, “real estate” covers a lot of ground (sorry, couldn’t help it) … in terms of geographic markets, property types, teams, available financing, and specific deal terms.

Common sense says if you look at enough deals, you’ll probably find a good one … in any cycle … because every real estate deal is unique.

So macro conditions are interesting for deciding which markets to shop in, but less so for deciding whether or not you want to find a deal.

Because if you won’t even look because you’re waiting for a macro-sale, you might miss a micro-sale… and find yourself sitting out much longer than you planned.

Remember, you can’t profit on property you don’t own.

Markets get hot for a reason …

When a real estate market gets hot, it’s because buyers are bullish about the future.  Sometimes they’re wrong, but often they’re right.

Local real estate markets are driven by local factors … the local economy, local tax and business policies; local infrastructure, weather, amenities and population trends.

When LOCAL factors are positive, LOCAL real estate prices and rents rise.  Sometimes in sync.

But sometimes, prices get ahead of rents.  Cap rates (rent ratios) fall.  Investors are willing to pay more for the same income in that market … for a reason.

And in a recession, the problem can actually get worse.  In other words, it’s not unusual in hard times for quality markets to become even MORE expensive.

That’s because when clouds form … or it starts raining … money seeks shelter in quality.

So strong markets and property types often attract MORE capital in uncertain times … thereby raising the price to acquire safe haven assets.

As we discussed last time, Americans and foreigners have already shown a strong preference for U.S. real estate … housing in particular … even as stock markets are raging to record highs.

Royal flushes are rare …

When a macro-event comes and slaps down the national or global economy, sometimes great markets get caught in the downdraft.

This happened in 2008 and it created some of the best buying opportunities since the real estate bust of 1989.  For those who were in position when it happened and acted, it was awesome.

But think about that.

If you missed buying the bargains coming out of 1989 and sat out waiting for the next real estate recession, you’d have been on the sidelines for nearly two decades.

Meanwhile, lots of people made lots of money in real estate … without getting the bargain of the century on every deal.

Pigs get fed.  Hogs get slaughtered … or starve.

This variation on an old investing adage still rings true in today’s investing climate.

The idea is there’s danger in getting greedy.  It’s about being overexposed to a market top, and taking on a lot of downside risk trying to squeeze out a little more upside gain.

But it’s also true about waiting … and waiting … and waiting … for the BIG correction, so you can swoop in and gobble up distressed assets for pennies on the dollar.

Remember … you can also strike out by standing at the plate waiting for the perfect pitch.  It’s usually better to swing.

What are YOU waiting for?  

A PIG is a Passive Income Generator … like rental real estate.  It’s the kind of asset which actually attracts capital in a recession.

That’s because when asset prices are uncertain, income is reassuring.  And as prices of stocks, bonds, commodities, and currencies go up and down like a roller coaster …

… working-class people ride the merry-go-round of getting up and going to work every day to pay their rent.

And if they don’t, you can replace them with someone who will … IF you’re in a market and product type with solid supply and demand dynamics.

To be there, you may have to pay a premium for quality.  The deal still needs to make sense, but it doesn’t have to be cheap to be a bargain.

“Bargain” is a relative term … and price is only ONE component.  There’s more to value and desirability than just price.  Few people want the cheapest brain surgeon.

So long as the market, team, property, and deal make sense … meaning you’ve got staying power to ride out a recession if it comes …

… then you can sail through the business cycle riding a PIG.  It’s not sexy.  But it’s better than starving or getting slaughtered.  You can score a lot of points with base hits.

Until next time … good investing!

 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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Real Life Lessons – Raising Capital to Fund Bigger Deals

Posted by on July 31, 2017 · Leave a Comment 

Periodically, we like to bring you stories of real-life investors … investors who’ve been in your shoes and made it up rocky paths to emerge better than they started!

The investors on our show today all fell into real estate investing in different ways, but one thing brings them together … they all attended our Secrets of Successful Syndication event … and then turned their education into effective action by becoming successful syndicators!

We asked each guest to tell us more about how they got started, what happened when they ran out of money, and some of the setbacks and successes they’ve each experienced.

Behind the mics for this edition of Real Life Lessons:

  • Your psyched-about-syndication host, Robert Helms
  • His seriously silly co-host, Russell Gray
  • Engineer turned syndicator, Sep Bekam
  • The deal hunter, Peter Halm
  • Self-storage empress, Linda Murray

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Why syndicate?

At some point, every real estate investor reaches a crucial moment where they have, for all intents and purposes, run out of money.

At that point, investors have two paths … they can take the path of least resistance and simply give up … OR they can harness their expertise and provide investment opportunities to other investors through syndication.

Syndication is a more effective version of “no money down.”

The truth is, there’s a ton of money floating around out there if only you have the right value proposition.

Syndication offers you the opportunity to build a big business with cash flow, long-term gains, and profit sharing … and all you have to do is find and broker decent investments.

You have the chance to create your own perfect life. Ask yourself … What do I want to get good at? What do I like to do?

Then focus on building specialized skills. You can’t be an expert in everything.

Syndication is like assembling a puzzle … you might only be a small piece of the whole (albeit a crucial one).

All of our guests today have taken the leap of faith into the world of syndication … let’s take a look at their stories!

From fear to freedom

If you met Sep B. years ago, before he started investing, it might be hard to make the connection between the shy, analytical engineer of yesteryear to the full-time syndicator of today.

When Sep started out, he had invested his personal money in two fourplexes in his own state. He had no business background and lots of fear about the unknowns of investing out of state.

“I was very motivated but didn’t know where to start,” says Sep. But Sep knew he had no money of his own left … and his family and friends were starving for yields.

So what did he do? It’s simple. Sep constantly looked for deals.

Six months after his first Secrets of Successful Syndication seminar, Sep closed on his first syndication deal.

Some of Sep’s major takeaways from his syndication experience:

  • Match potential investors with their needs and wants. Sep found investors were more likely to come to him when he emphasized his team, put strong systems in place to protect capital, and crucially, matched investors and investments appropriately.
  • Always be okay asking questions and learning from others. “It takes a certain level of curiosity to ask questions even if everything isn’t going right,” said Sep.
  • Find ways to mitigate obstacles. Sep and his team ask everyone they work with a series of questions to preemptively make sure companies and investors are the right fit for Sep’s syndication business.
  • Make small, controlled mistakes and learn from them. New syndicators will experience challenges along with success … and Sep’s certainly had his share of missteps. These days, he’s constantly fine-tuning, making sure he is adapting to changes, working with the right team, and offering the right product to tenants and a reliable source of passive income to investors.
  • Transition gradually from part time to full time. Before transitioning, understand how much passive income you need, Sep advises. Then break your goals into actionable, realistic steps.

From house flipper to deal hunter

Peter H. started out flipping out houses in Los Angeles. It was slow, hard work … paychecks only materialized when houses were sold, and prices in LA started skyrocketing, making deals hard and hard to find.

In January 2016, Peter attended Secrets of Successful Syndication. A year and a half later, he’s on his fourth syndication deal.

Some lessons he’s learned along the way:

  • Don’t tie yourself to one particular asset class. Peter’s deals have ranged from a mobile home park to multi-family apartments and currently to workforce housing. “If we discover a natural demand, we’ll jump in,” says Peter.
  • Align yourself with people who have great experience and access to funds. When Peter started doing deals that were big enough to be uncomfortable, he made sure he put himself out there and recruited people who knew what they were doing. “Everything was an interview process,” Peter said. “We asked a ton of questions.”
  • To build a network of prospective investors, listen to investor needs. By listening to people and discovering their wants, needs, and worries, Peter can file away what he’s learned until he finds a deal that fits a potential investor’s philosophy. It’s a win-win situation.
  • Syndication is not for everybody. “If syndication were really easy, everyone would do it,” noted Peter. If you are determined, want to work with people, and are willing to listen, syndication might be the path for you.

What is Peter’s philosophy? Treat everyone as a partner. “We’re all in this together, and we’re working toward a common goal of everyone wins,” said Peter.

From housewife to self-storage pro

Linda H. got her start in investing the hard way … when she realized she and her husband didn’t have enough IRA savings to sustain themselves during retirement.

She attempted to solve the problem by starting and then selling a business, but unfortunately, the business crashed before the deal could go through.

At that point, she switched to real estate, where she figured she could have more control.

She bought a fourplex, then a farm, then an apartment building. Then she ran out of money.

Listening to podcasts while she drove to each job site, Linda realized she didn’t necessarily have to go through the banking system … she could syndicate.

The transition from investor to syndicator was an uphill battle, Linda says. “It took a while to figure things out.”

Starting out as an inexperienced housewife, Linda had to wing it … but with some hard work, eventually her efforts paid off.

Today she just closed on two properties, has 850 self-storage units, and is currently working on building units at another site.

Her insights:

  • Find the right partners. Linda started out as a lone wolf, but after attending a seminar on self-storage, she met some people who gelled with her personality and they pooled their money.
  • Complementary skillsets can enhance your business. Linda had trouble raising money herself, but was skilled at the business side of syndication. Her partners were better at raising funds. Each person was able to focus on their own strengths.
  • People want what you have to offer. Linda noted that a lot of average people think the only option for investing is the stock market, which doesn’t offer a high degree of control. People are looking for options but don’t have the time to manage an investment … and as a syndicator, you can provide an answer, she says.

Making a REAL difference with real estate. One of our guiding philosophies is that “everything we do matters if it makes a difference in the life of real folks.” We think it should be one of yours, too.

As an investor or a syndicator, one of your goals should be to make sure people are better off with you than without you.

Another maxim to stick by? We like the words of Dave Zook, who says, “You can be conventional or you can be wealthy. Pick one.”

If you’re a real estate investor … heck, if you’re listening to this show … you’re not normal. And that’s a good thing!

The world needs you. You have an opportunity to add value to other people’s lives, to fill holes left by bad stewards and uninspiring investment options.

Are you ready to take the leap from investor to syndicator? We highly recommend getting around smart, successful people.

One of the best ways to do that is to come to our Secrets of Successful Syndication seminar.

As Tony Robbins says, “Success leaves clues.” So get around people who are super successful … and pick up some clues about how to find more success yourself!

Be the captain of your own ship. And remember, this business isn’t just about making money … it’s about making a difference.

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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Real estate wins …

Posted by on July 26, 2017 · Leave a Comment 

Real estate investing can be lonely.  Very few financial conferences or commentators even talk about real estate … much less endorse it as a wealth building vehicle.

So real estate investors huddle together in obscure corners of the financial community … quietly making money and muttering about the trials and tribulations of tenants, toilets and 1031 tax-deferred exchanges.

But recently, mainstream financial headlines seem to be painting a rosier picture of real estate …

Several news outlets published articles referencing this Bankrate.com article and survey which says Americans prefer real estate over cash, stocks, gold and bonds …

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The article says …

“… for the third consecutive year real estate is the favorite way to invest money not needed for at least a decade …”

“… home prices have gone gangbusters recently, climbing back above their record pre-crisis levels … according to CoreLogic.”

Click Bait and Switch

But then the balance of the article is essentially dedicated to telling readers why the survey respondents are wrong for preferring real estate over stocks …

“Still, ‘it’s a rather poor investment,’ says [a] RBC Wealth Management financial advisor.  ‘It’s highly illiquid, and markets aren’t always rational.’”

“One study … found that housing only returned 1.3 percent per year after inflation from 1900 to 2011, while stocks tended to perform more than four times better.”

As you might guess, RBC Wealth Management deals in paper assets.

Their trite critiques of investment real estate reveal a lack of understanding at best … and a dishonest bias at worst.

Let’s break it down.  Because whether you’re raising private capital to invest in real estate …

… or just trying to convince your spouse or in-laws real estate is a viable alternative to stocks, bonds and mutual funds …

… it’s important to be able to rebut the financial fake news bias against real estate.

Liquidity – LOL

The flip side of liquidity is volatility.  When traders can move in and out of an asset quickly, it makes the asset price volatile.  So liquidity isn’t automatically a good thing.

The survey asked about money “not needed for at least a decade” … so liquidity isn’t what investors are looking for when they buy real estate.

Besides … to say housing is “illiquid” is inaccurate. 

“Illiquid” means “not easily converted into cash” and “of a market with few participants and a low volume of activity”. 

Sure, you can’t day trade houses … but we see that as a plus.  It keeps prices more stable.

And when you can usually sell a house at a fair market price in about two months, that’s hardly “illiquid”.   Drop the price, and you’ll sell it faster.

Market Rationality – ROFL

A paper asset promoter saying real estate “markets aren’t always rational” … are you KIDDING???  That seems a LOT like the pot calling the kettle black. 

Way back in the 90’s before the dot-com stock crash, Alan Greenspan famously accused stock market participants of “irrational exuberance”.

Of course, a few years later the stock market crashed … and scared investors flocked TO real estate in the early 2000’s.

With the stock market at nose-bleed levels today, we’re guessing that’s why people are preferring real estate over stocks again.

Only Returned 1.3 Percent – LMAO

The idea that “housing only returned 1.3 percent per year after inflation” is so off the mark it borders on absurd.

The argument is the PRICE of a home in 1900, adjusted for inflation to 2011, only grew on an annual basis of 1.3 percent …

… and that during that same period, stocks grew by “about four times that.”

This argument assumes the only financial benefit of real estate ownership is price appreciation, which is a false premise.

We won’t bore you with all the math, but you should grab a calculator and do it all so you can quickly blow-up this ridiculous idea that stocks beat real estate over the long haul.

Here it is in simple terms …

Leverage

When you put 25 percent down, you own property at 4:1 leverage.  So 1.3 percent appreciation is a 5.2 percent equity growth rate.

Right there, you’re even with “about four times that”.  But wait!  There’s more …

Cash Flow 

Also missing from the comparison of stocks versus real estate is the rental income.  

Even if you’re before tax positive cash flow is only two percent, with 4:1 leverage, your cash-on-cash rate is 8 percent. 

Amortization

A 30-year fully amortized loan at 5 percent reduces the loan balance (i.e., builds up equity) at a rate of over 2.6 percent per year.

Add 4:1 leverage, and you’re growing equity at over 13% per year.  Now you’re destroying stocks.

We’ll skip tax benefits, which make it even BETTER, and let you tally the total. Any ONE of the three beats “four times that” all by itself.  Together … it’s a wipe out.

People Aren’t Stupid

Main Street investors have common sense … and at this stage of the information age, they’re able to research and fact check quickly.

They know stock prices are being propped up by cheap money and corporate buybacks … and with the Fed raising interest rates, the party might be ending soon.

The Bankrate.com survey reinforced what our anecdotal conversations tell us … Main Street investors are nervous about the stock market. 

Their preference for cash over stocks for a ten year hold says a lot.  Main Street is looking for safety and surety.

And Main Street investors like real estate.  They understand real estate.  They TRUST real estate.

But it’s not just Americans seeking financial safety in real estate.  Foreign buyers just purchased a record amount of U.S. houses.

Real estate is where people park money for long term wealth development and preservation.

Go with the Flow …

Even though home ownership in the U.S. remains at decade lows, it’s actually a boon for real estate investors.  Less homeowners means more renters.

For flippers and syndicators, real estate is highly regarded and in demand.  Money wants to be in real estate … so there’s a big opportunity helping it get there.

And while anything can happen, it seems the appeal of real estate isn’t abating any time soon.

Until next time … good investing!

 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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Jim Rogers, Steve Forbes and Peter Schiff from Freedom Fest

Posted by on July 24, 2017 · Leave a Comment 

Although real estate investors deal with real assets and not volatile holdings, we think it’s crucial to understand the larger economic picture.

We’ve been attending Freedom Fest since the 2008 financial crisis.

Conventions like Freedom Fest bring together leaders of all types and set the stage for respectful dialogue between smart people with varying opinions.

We’re thrilled to bring some of those smart people on the show today and get their insights on U.S. and world economics.

A disclaimer … our guests today lean right, politically. The Real Estate Guys™ don’t endorse any political viewpoint.

Whichever side of the spectrum you stand on, we recommend you step back for this episode … and look at the information presented from the edge of the coin, objectively.

In this episode of The Real Estate Guys™ show you’ll hear from some pretty smart guys:

  • Your freedom-loving host, Robert Helms
  • His fun-loving co-host, Russell Gray
  • Billionaire publisher, Steve Forbes
  • Legendary investor, Jim Rogers
  • Economic pundit, Peter Schiff

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Steve Forbes

We hope you’re already familiar with Steve Forbes, head of one of the world’s most influential business magazines (and two-time presidential candidate in the U.S.!). We asked Steve for his thoughts on the world of media.

Steve shared a quote from his grandfather, B. C. Forbes, the founder of the magazine, who said, “The purpose of business is to produce happiness, not pile up money.”

“I always try to remember the spirit of Forbes,” Steve told us. That means adapting to the age of online media and “fake news.”

“Businesses have an incentive to get their message out there,” said Forbes. Forbes publishes approximately 110,000 articles a year on the web, always aiming to maintain a unique angle … one that doesn’t resort to tabloid journalism.

We asked Steve how people can be smart consumers of media. “Compartmentalize when you read the news,” he told us, “and concentrate on what’s actually being done.”

For example, Steve sees exciting things happening in the areas of deregulation and tax cuts. He’s keeping his eyes peeled to see what will happen.

What does Steve think about the state of real estate investing in the U.S.? “Location, location, location!” (We agree wholeheartedly.)

“In a vibrant economy, people want spaces to work and live,” Steve said. “Prosperity solves a lot of problems and covers a multitude of sins.”

Jim Rogers

Jim Rogers is a legendary investor, and we’ve been itching to do an interview with him for years. We asked him for his thoughts on the state of today’s markets.

“Interest rates have never been this low,” Jim told us. “The central banks have made mistakes. Debt has gone through the roof across the world.”

His conclusion? “The next time we have a problem, it will be worse than 2008 because there’s so much debt.”

What do U.S. investors need to know about the global picture? “All investors have to understand the world now in 2017,” Jim said. He advised investors to think … which nations have the largest economies? Which nations are the biggest creditors? A clue … all these countries are in Asia.

And which are the largest debtor nations? “Look out the window,” Jim said.

What can folks do to stay sharp in a multi-media world? Jim had a few words of advice. He told us investors need two essential things … knowledge and judgment.

How can investors obtain both knowledge and judgment? Read and listen to a lot of different media types from different sources and countries. “You won’t understand just by reading the American press,” he said.

Once you obtain a wide variety of perspectives, that’s when you use your judgment to sort out what makes sense.

And what about real estate? “Many cities are in a bubble right now. But in rural areas, there isn’t quite as big a bubble,” Jim told us. He sees the most promising opportunities in agricultural investing (a topic we love to discuss!).

“I don’t know how to farm,” Jim admitted. Luckily, there are many ways for non-farmers and small investors to align themselves with agricultural investments today.

How about gold and silver? “I own it. I haven’t been buying it since 2010. I hope I’m smart enough to buy a lot at the right time,” he said.

Jim predicts that people will eventually lose confidence in paper money. When that happens, he says people will buy land, gold, and silver. “Why not start today!” he said.

Peter Schiff

We asked Peter what’s changed and what’s new since the advent of the Trump administration? “Not much has changed with Trump,” he said.

He told us he sees a lot of talk and very little action, a lot of hypocrisies.

What about the Fed’s interest rate hike? “They’ve raised rates, but not much.” Peter noted we’re at the same levels we reached at the bottom of the housing recessions and told us the Fed’s talk of quantitative tightening is “a bunch of talk.”

In an age of conflicting reports, what does he think investors should pay attention to? “Actually look at the markets,” Peter advised. “Look at the dollar, the price of gold. There are still lots of bubbles in the market.”

He noted recent high-profile disasters happening in the stock market and the possibility of less market protection from the Fed. “The key is to pay attention and be prudent.”

What can investors do in tiring times? No. 1, “Diversify out of the U.S. dollar,” said Peter. “The dollar is a tailwind for foreign stocks, which will be a safe haven.”

We also asked Peter about the advantages of obtaining residency and doing business in Puerto Rico. He has first-hand experience … he lives there with his wife and kids.

“What people don’t understand is that Puerto Rico holds all the benefits of being in the U.S. without the cost,” Peter said. Residents of PR don’t have to pay federal income tax and gas tax, Obamacare penalties and taxes, or tax on capital gains.

Choosing the right ingredients for your investment blender

While none of our three guests today are primarily real estate investors, they possess a wealth of knowledge on business trends and economics.

These guys study the key components of what you put into your own investment blender … taxes and investing, owning property, job markets, financing, and more.

We love talking to knowledgeable people like Steve, Jim, and Peter because they take those essential components of the U.S. market and try to figure out where we’ll be years in the future.

If you’re trying to build a real estate empire, there’s nothing more important than being well-informed about a market you might be married to for years or decades to come.

We hope you were taking notes … because like we always say, education is the path to effective action!

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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