Real estate still makes sense in uncertain times …

The world is full of alarming headlines which should concern any alert investor:

Pension Crisis Too Big for Markets to Ignore

The Federal Reserve Could Reduce Its Monstrous Balance Sheet Soon – That Should Terrify Everyone

The retail apocalypse has officially descended on America

We could have pulled up more, but you get the idea.  Scary stuff.

Of course, we’re still on a high after our recent Summit at Sea™ with Robert Kiyosaki, Peter Schiff, G. Edward Griffin, Simon Black, Chris Martenson, and many other really smart people.

If you’re familiar with any of these guys, you may wonder why we’re still excited.  After all, these guys are notorious for decrying the many problems facing the global economy.

But their concerns are only half the story.

There’s also lots of opportunities available … many of which are unique to real estate

So while it may be bad timing to buy an over-priced property hoping to flip it to the greater fool for fast cash, high-priced properties create opportunities too.

If you’re the proud owner of a highly-appreciated property, you have the gift of equity.

Your equity can be repositioned from an over-priced market to a growth market through a cash-out refinance or 1031 tax-deferred exchange.

Consider this headline from the LA Times

Leaving coastal California is a ‘no-brainer’ for some as housing costs rise

The article highlights a couple who are leaving Huntington Beach for Phoenix.

There’s a lot of that going on right now.  People and businesses move around in order to survive and thrive.

The key is to get on the right side of the flow.

Of course, not everyone leaving high-priced areas will want or be able to buy.  And until they do, we’d love them to rent … from us!

So record-low home ownership rates might reflect weakness in the overall economy, but they actually create demand and opportunity for landlords in affordable markets.

There’s ALWAYS an opportunity.

Now this isn’t to say that all real estate anywhere is a good deal.  Or that maximum leverage on every property is the ideal portfolio structure.

But don’t let the doom and gloom of mainstream news dissuade you from developing your real estate investing opportunities.

Real estate is not a fad.  As long as individuals are permitted to own properties, those who do will be wealthier than those who don’t.

Real estate is real.  It’s considered by the world’s wealthy to be a safe haven asset.

So when bombs are dropping, financial markets are volatile, geopolitical tensions are high … capital seeks shelter in the dollar, Treasuries, gold and real estate.

But consider that the dollar is under attack by two very formidable forces … China and Russia. If they succeed, it could cause problems for the dollar.

Besides, the dollar is only a temporary hiding place for frightened capital.

What about U.S. Treasuries?

Debt denominated in the world’s reserve currency, and backed by the world’s biggest economy and military, tends to attract flight capital.  It’s safer than other debt.

But the U.S. is also the world’s largest debtor … with no apparent plan to stem the hemorrhaging of red ink.

And if anyone eventually creates a strong alternative to the dollar for global trade, especially in oil, then Treasuries could be in real trouble.

A weaker dollar means debt holders will want higher interest rates to compensate for the lost purchasing power.

Hopefully, that makes sense.  If not, think of it this way …

There was a time when you could buy 100 pieces of bubble gum for one dollar.  A penny a piece.

If you loaned someone a dollar, it’s worth 100 pieces of gum.  But if the dollar loses purchasing power, it might only buy 50 pieces of gum … now two cents each.

If you thought that might happen, you’d need the borrower to pay you back two dollars just to be EVEN.  And you’d probably want a little more for your risk.

That extra dollar is “interest.”  And when the currency is losing purchasing power, you need MORE interest to compensate.

Make sense?

The problem is if interest rates rise, bond values drop.  In the interest of time, we won’t explain this now, but grab a calculator and play with numbers until you get it.

So rising interest rates mean a loss of principal for capital placed in bonds.

This makes bonds a scary place to park long-term capital for wealth preservation.

And with next to no yield, safety of principal is really the primary purpose of parking cash in bonds.  No wonder foreigners have been dumping Treasuries.

How about gold?

We like gold.  It’s shiny.  There’s no counter-party risk.  It’s easily convertible into any currency.  It’s been used as money for thousands of years.  It’s survived the rise and fall of empires, currencies and cultures.

BUT … gold pays no yield.  It just sits there like a stack of cash.  And tax law can make it difficult to move in and out of.

Which brings us (finally) to real estate

We’re admittedly homers for real estate.  After all, we’re The Real EstateGuys™.

Still, we think there’s a LOT to like about real estate in uncertain times … like right now.

First, real estate is a tangible, physical asset.  Stock in a company that goes out of business isn’t worth the paper the shares are printed on.

Real estate doesn’t have counter-party risk.  If you park cash in real estate, no one else needs to do anything for the property to have value.  Your asset isn’t someone else’s liability … like an insurance contract, a bank deposit, or a bond.

Of course, if the tenant pays rent, the property becomes MORE valuable.

But what if the tenant doesn’t pay?

With real estate, you can evict a non-paying tenant and replace them with one who does.  Try to do that with a bond.

If a bond issuer owes you money and fails to pay, you can’t just replace them with someone who will.

The debt just goes bad … and you lose.

We could go on.  But you get the idea.

Real estate was valuable a thousand years ago, and it’s probably going to be even more valuable a thousand years from now … especially as more people compete over less land.

So the question isn’t really about real estate.  It’s about how much YOU will own.

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.

The BEST investment you can make …

We’re back from what Robert Kiyosaki described as our BEST Summit at Sea™ so far.  It’s hard to disagree.  And no, this isn’t a pitch for the Summit.

In fact, alumni already grabbed about 40% of the available spots … before we even got off the ship!

While there’s no way to describe the magic of the Summit, there are a few valuable ideas worthy of mention.

Developing social capital

New Summit faculty members Chris Martenson and Adam Taggart (The Crash Course and Peak Prosperity podcast) shared the importance of “social capital.”

After a compelling presentation about the inevitable collision between exponential growth and finite resources (a fascinating topic!), Martenson and Taggart suggested your prospects for prospering will rely heavily on your network of relationships.

That’s true whether a crisis strikes tomorrow or 100 years from now.

And it’s not just knowing a large quantity of people … it’s who those people are and how well you know them.

But even if a crisis NEVER hits, it’s wise to invest in quality relationships.

Surprise faculty member, Ken McElroy often says, “If you want to change your life, change the people you hang around with.”

This year, we had several young people take advantage of our Young Adult Program.  It allows a limited number of young adults ages 18-25 to get into the Summit for only $2,500.

More importantly, it gave these young people close personal access to many highly successful investors and thought leaders.

Our other surprise faculty member, Simon Black of SovereignMan.com joined Kiyosaki and McElroy for a one-hour private session with these young adults.

Simon said it was the most powerful experience in his four years of being a part of the Summit.

Going forward, we’re dedicating up to 30 seats on next year’s Summit to our Young Adult Program.

We believe investing in young people is one of the BEST investment we can make.  And we’re thrilled our super-star faculty agrees!

But whether you’re young or not-so-young, if you’re interested in taking your education, business and investing to the next level, it’s wise to put concerted effort into developing good relationships with great people.

Summit faculty member and legendary sales trainer Tom Hopkins (How to Master the Art of Selling) reminded us the key is being of service to others.

So it’s not what you GET that matters most … it’s what you GIVE.

That’s easy to say, but often hard to do when our own urgent needs are clamoring for attention.

Tom says always remember, “Use money and serve people.  Don’t use people and serve money.”

A billion-dollar boo-boo

Consider the recent flap over United Airlines handling of an overbooked flight.
It’s a case study in forgetting the MAIN thing.

Unless you’ve been off-planet for the last few days, you know a ticketed customer was forcibly removed … literally dragged … from a plane because the airline wanted his seat to reposition their own staff.

The details are all over the news, but the bottom line is the airline decided to “save” money by not raising the bid to buy people off the plane, or making other (presumably more expensive) arrangements to get their staff where they needed them.

In short, they served money and used people.  Oops.

Of course, the horrific decision and resulting disastrous PR resulted in a nearly BILLION dollar loss of market value.

And that’s probably just the beginning of losses which will include customers, employees … plus money spent on public relations, training, and let’s not forget … LEGAL.

It’s shocking a mature business could be so short-sighted.

Relationships are the REAL asset

The beauty and danger of real estate is it’s not traded in impersonal, highly automated exchanges.  It’s a very PERSONAL business.

If you’ve got a good reputation and great relationships, real estate is actually pretty easy.

If your reputation is poor and your relationships are weak, you’re almost always looking at leftovers.

But it’s not just about deal flow … or even raising money.

Relationships provide access to ideas, perspectives, wisdom, encouragement, and inspiration.

Relationships change who you are, how you see yourself, what you reach for, and what you believe you can achieve.

We spoke on the Summit about Roger Bannister, the first human to run a mile in less than four minutes.

Until he did it, it was commonly believed it wasn’t physically possible.

But once he did it, others soon followed … because he broke the mental barrier holding so many people back.

If this can be done in the world of athletics, where a certain level of physical skill is required … imagine what can be done in a less demanding arena like real estate investing.

During the course of the Summit, we heard from investors who started with next to nothing … and grew portfolios of THOUSANDS of rental units in just a few years.

Until you’re around them, it SEEMS impossible.  But when you meet them and hear their stories, it opens your mind to the possibilities.  It EXPANDS your dreams and beliefs.

An epic experience

There were so many GREAT sessions including Peter Schiff on navigating the Trump economy, G. Edward Griffin on how the Fed affects everyone, Fannie Mae’s chief economist Doug Duncan on the state of the U.S. economy and housing … and MANY more.

We had nearly 25 faculty members … our biggest ever!

Perhaps one of the best parts of the Summit were the eight expert panels featuring some of the biggest brains on banking, precious metals, marketing, real estate niches, the next crash, and more.

In the information age, panels are really powerful.

It’s one thing to HEAR a great mind share big ideas.  But you can do that online.

It takes you to a whole new level when you watch several great minds DISCUSS big ideas. And to be a part of the conversation yourself?  Priceless!

With limited space on each year’s Summit, we realize it’s not possible for everyone to be there.  Hopefully someday, YOU can join us!

But in the meantime, we encourage you to seek out the smartest, most accomplished people you can … and find a way to get into high quality, win-win relationships.

They’ll expand your thinking, show you possibilities you didn’t know existed, open doors and make introductions to people and places you might otherwise take months or years to get to.

There’s nothing we know of that can help you accelerate your success faster than smart investments in building social capital.

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.

Real Life Lessons – From Student to Syndicator

We LOVE sharing success stories when we come across them … and want these success stories to be relatable.

That’s why we’ve created an all-new podcast feature: Real Life Lessons. In every edition, we’ll share stories of successful investors who started out just like you.

These investors took the life-changing steps of getting educated and then acting on their knowledge.

They told themselves, “Come hell or high water, I’m going to be successful.”

With fortitude, stick-to-it-iveness, humility, and a willingness to learn from their mistakes, these investors have navigated the bumpy, winding road to success.

We think there’s a lot to learn from the paths these investors have taken … and we hope you come along for the ride as these investors share their lessons learned, whether good, bad, or ugly.

In our very first edition of Real Life Lessons you’ll hear from:

  • Your inspired host, Robert Helms
  • His laughter-inspiring co-host, Russell Gray
  • Successful real estate investor and syndicator, David Zook

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From doing business to doing deals

David Zook is a successful real estate investor and syndicator today, but he was basically neither when we met him.

As Dave puts it, he “got chased into the real estate business” because of a tax problem.

What problem? Dave’s problem with taxes was simple … he didn’t want to pay them.

You see, as a successful business owner, Dave wanted a way to keep a bigger chunk of his profits. He realized that making a lot of money didn’t necessarily mean paying a lot of taxes … if he invested that money in real estate.

When Dave had his big realization, he didn’t want to wait. He looked around for opportunities and ended up coming on one of our field trips to Memphis … where he did his first deal.

We asked him what advantages there are to learning about a market before picking a property.

Dave told us that kicking the dirt is essential … not only did visiting Memphis allow him to see the field before buying, but even more importantly, Dave was able to meet the right teams to assist with transactions in that market.

“When you get around good folks, they know good folks too,” Dave told us. This was a key lesson for Dave. With some of the folks Dave met, he did his first deal … then another, and another …

Pretty quickly, Dave realized there was a big opportunity to bring other people in too. He started doing deals with friends and family, but he didn’t see himself as a syndicator yet.

Today, Dave is a fund manager with approximately 2,400 units in Memphis as well as other properties across the nation, but in 2013, he was just getting up the courage to solicit funds for one of his first buildings in Memphis.

For that deal, Dave had to raise $850,000 in 45 days. He’d never asked people for money before and felt he was known in the community for his business chops, not his investment skills.

Soliciting funds was “incredibly scary,” Dave told us. But Dave had seen some success with his first real estate investments, which he used as leverage to go out and talk to folks. Did he raise the money? Absolutely.

Lessons from the field

Dave’s experience has earned him some excellent lessons in real estate investing … although some of those lessons have come at a hefty price. Dave’s been featured not once, but TWICE on our Halloween Horror Stories show.

One of the best lessons from Dave’s experience is it doesn’t matter what TYPE of syndication you’re involved in … success comes down to finding people in your market who know their stuff and working with them.

It’s easy to operate as a lone-eagle maverick in the real estate field, but team building is critical. Dave’s teams in the field have been crucial to his success as an investor and a syndicator.

We like that Dave takes a teamwork approach with his investors … he treats each investor as a partner, an important member or the team.

When Dave started out, he was bringing in friends, family, and eventually local community members. Now, his investors find him through podcasts and friends of friends.

But that sense of partnership hasn’t changed. Dave makes sure every investment is a good match for potential investors before taking them on … even if it means turning down money.

Dave also talked to us about expanding to new markets. His number one priority when he explores a market is finding a team he can do business with. For Dave, it comes down to the idea that accelerating success means aligning himself with the right people.

Just like Memphis, Belize wasn’t on his radar … but Dave knew we were involved and knew he would be able to find a team, so he took the leap. Now he’s successfully syndicating there.

We think Dave’s willingness to expand is a good lesson for other syndicators and syndicator wannabes. When you only have one thing to sell, you present investors with a yes or no situation. Add another market or product type, and it becomes either/or. Three or more and all of a sudden you’re not just that “Memphis apartment guy” … you’re a syndicator of real estate opportunities.

Dave’s a successful syndicator now, but the path hasn’t always been rosy. He recalled a time when he laid in bed and asked himself, “Why am I doing this?” He didn’t NEED the money.

But Dave knew in the back of his head that real estate investing was the right fit for him. When he ran up against that wall, he threw out his concerns in his monthly mentoring call and got some advice.

With help from his support network, a lot of work and fortitude, and some small but important realizations, it wasn’t long before he broke through the barrier and got his momentum back.

Successful syndication

As a syndicator, Dave’s raised $26 million so far. That’s right … twenty-six million dollars rerouted from Wall Street to Main Street.

We asked Dave how it felt to send that first check to his investors. He said it was so much fun, and still is … especially when he can over-deliver on his projections.

As Dave’s syndication efforts have taken off, he’s been able to raise his minimums and start to work with a new set of investors. Dave told us he never wants to forget his roots in his local community … but that he’s had fun reaching out to new people.

He’s big enough now that he doesn’t have to worry about funding deals. In fact, since most of his deals get funded quickly by current investors, he’s had to carve out space for new folks.

Dave’s discovered that most of his investors are more than happy to have HIM do the heavy lifting. He told us he can relate to those business owners who have their plates full … that was him, once upon a time.

Because he can relate, Dave can also deliver value to those people … and for him, that’s what makes syndicating worth doing.

We asked Dave for his best advice for the investor who doesn’t know whether they can make it.

His number one tip for new investors? Seek out people who are successful in the space or asset class you’re looking at. Lean on those mentors because they will help you avoid making the mistakes they made along the way.

Want to know more of Dave’s lessons learned? Listen in for access to a specially prepared report on Dave’s Eight Great Lessons.

Making connections in a modern world

Seeing people like Dave go from student to success story is what makes our job worth doing.

Human beings are social by nature. We need people to collaborate with, but in our modern world, it’s hard to find unscripted, unplanned opportunities to get together with other people.

We’re huge proponents of putting yourself in a position to get lucky. After all, luck is when preparation meets opportunity. There’s no guarantee you’ll meet the right people, but it won’t happen sitting in front of your computer screen.

Put yourself out there in a real-life meet-up, and it’s easy to connect with the right people, and eventually, start making the right deals. Just take a look at Dave!


 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.

Stability in a volatile world …

On his Peak Prosperity podcast, first time Investor Summit at Sea™ faculty member Chris Martenson interviews financial pundit Grant Williams.

Williams isn’t a real estate guy (that we know of). He’s a former paper trader who spends a big chunk of his time studying, thinking about, and commenting on financial markets.

We listen to guys like Grant Williams because their comments help us understand how paper asset investors look at the world … and what they worry about.

These insights are valuable to real estate investors … even if you’re not personally investing in paper markets.

That’s because those paper markets impact things which affect real estate … like interest rates, inflation, business and consumer confidence, etc.

And if you’re a syndicator raising money for your real estate deals, you’re wise to be aware of how your offering compares to the paper asset alternatives.

Some of the things Williams says in the interview make us go “Hmmm …”

Williams contends there’s an “… incredible amount of counterintuitive moves that we see in the markets. It’s all inextricably linked to the rise of computer trading …

And, “There’s really only one equity market around the world …

Of course, he’s referring to stocks.

He also says, “But we are … reaching a point of newly introduced volatility …

And, “… the thing markets hate most is unpredictability. They can deal with good news. They deal with bad news pretty quickly … But unpredictability is the enemy of markets. And I think in President Trump, we have a very unpredictable force …

Hopefully, the mere mention of President Trump isn’t a polarizing comment. We don’t think he meant it that way … and we certainly don’t.

Love him or hate him, it’s fair to say Mr. Trump doesn’t always behave like a typical U.S. president, so by definition that’s unpredictable.

So what does all this mean to real estate investors … and how can we use it?

First, let’s look at Williams’ comments about computer trading and the notion of a singular equity (stock) market … and compare and contrast that to real estate investing.

Oh wait, we can’t. Because there is no comparison.

Think about it …

Are individual properties sold in lightning fast computerized exchanges? Um… no.

Could they be? No again.

That’s because units of value in a flash trading exchange need to be uniform.

You can’t flash trade real estate because every single property and transaction is unique.

The closest thing to a “flash crash” that can hit real estate is probably a collapse in the mortgage-backed-securities market. We saw it happen in 2008.

But for properly structured real estate investors, the 2008 crash was more bark than bite. Rents only dropped a fraction of how far values fell.

Even depressions roll out slowly. Flash crashes are really the purview of paper assets and commodities … things that can be sold en masse in a fit of panic.

Real estate just doesn’t work that way. That’s why we love it. It’s so BORING.

What about unpredictability?

Let’s say Williams is right … and President Trump is “a very unpredictable force” … and that “unpredictability is the enemy of markets.

GREAT!

Because when things are unpredictable, capital flees to safety.

For paper asset investors, safety’s always been bank accounts, government bonds … and to a lesser degree, faux precious metals (paper contracts).

The PROBLEM for paper asset investors is both bank accounts and bonds pay very little yield … and precious metals pay no yield.

So for a paper asset investor, the choices are to grab the barf bag and go for a ride in the global, flash-traded stock markets …

Or, to loan hard-earned wealth to banks, governments and corporations in the form of deposits accounts and bonds … for next-to-nothing yields.

Of course, those “safe” investments also mean accepting counter-party risk (default), inflation risk (negative real yields), and principal risk (bond values fall when rates rise).

Yikes.

So where can a concerned paper asset investor go for both stability and yield?

We’re probably a wee bit biased, but we think a strong argument can be made for income-producing real estate as a REALLY attractive option.

Income property investing puts capital into a real asset outside the purview of Wall Street flash traders … with arguably better yields, wealth preservation, stability, and inflation protection.

Plus, real estate … and especially residential real estate … is ALWAYS front and center for EVERY politician of all shapes, sizes, colors and political persuasions.

All the “powers that be” from bankers to businesses to governments have a HIGH level of motivation to support residential real estate.

Of course, income property isn’t a totally safe investment. There’s only ONE place that exists … Fantasyland.

But in the real and very unpredictable world … it’s hard to find anything much better for stability than income-producing property.

However, most paper asset investors don’t understand real estate … because most financial pundits don’t talk about it. Why would they? They can’t compete with it.

Of course, nothing’s free. Real estate comes with a hassle factor.

That’s why some paper asset investors who DO understand real estate avoid it anyway.

Real estate can be messy. You can’t sit in your crib with a trading app and move in and out of properties with clinical efficiency. That’s exactly why it’s so stable.

It’s also why a Main Street syndicator has a HUGE opportunity.

That’s a drum we’ll continue to beat … because we think the world needs a LOT more of Main Street investing in Main Street, which effectively de-funds Wall Street.

When you build a business helping hassle-averse investors enjoy the benefits of real estate investing without the messiness, you’re adding real value to the world on many levels.

But whether you’re investing your own money or that of investors … it’s good to have a well thought-out conviction as to why the right real estate provides investment stability in an increasingly volatile world.

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.

Sweet Returns with Low-Impact Tenants

Your creativity astounds us.

No, really. We’ve met investors from all over the world, and are always impressed with how fundamentally creative real estate investors are.

Real estate investment gives you enormous freedom to choose a market and product type that works for YOU.

Although people often equate real estate with single-family housing, there are so many other niches. That’s especially important to remember when competition in the housing space heats up.

Instead of people for tenants, our guest on our latest show has trees.

Our long-time friend, David Sewell, tells us all about his latest venture into agricultural real estate. He’s put a twist on a very sweet product type for maximum returns. Plus, he gives us details about his unique, sustainability-oriented business model.

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

  • Your chocoholic host, Robert Helms
  • His cacao-crazy co-host, Russell Gray
  • Agricultural investor and founder of International Coffee Farms, David Sewell

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From caffeine to cocoa

David’s company acquires underperforming commercial coffee farms in Panama, replants them with specialty coffee over a period of three to four years, then sells parcels of land individually to investors while maintaining and operating each farm as a unit.

He’s one of a group of investors who’ve found that “rehabbing” a product … switching from a generic, commercial coffee bean to a specialty one, for example … can add tremendous value.

We asked David what makes specialty coffee different.

He told us specialty coffee is handcrafted from start to finish. Every bean variety is specifically selected, carefully grown in small quantities, handpicked, and thoroughly checked for defects.

In addition, David’s hired a team of artisans to oversee the growing and processing of the beans.

In the past couple years, David’s expanded to a new crop, one everybody loves … chocolate. Specifically, five-star, artisanal, organic cacao.

Although David uses the same tried-and-true investment model for his cacao farms as he does for his coffee farms, we asked him to give us the rundown of how his cacao farms function.

A cacao farmer who’s NOT in the candy business

The biggest cacao growers are located in Africa, along the Ivory Coast and in Nigeria. These growers produce mainly commercial cacao for large candy manufacturers. That ubiquitous milk-chocolate bar you can pick up in the check-out line of your local grocery store? It probably contains beans from Africa.

David emphasized to us that he is NOT in the commercial cacao growing and candy manufacturing business … and he has no desire to be in the business of exploiting children or slaves, who make up many of the workers at traditional cacao farms.

Instead, David took his resources to Belize, which has developed a world-wide reputation for specialty chocolate.

Under the heading of the Belize Cacao Consortium, David operates three businesses that grow, trade, and process chocolate.

His business model is based on three pillars: economic sustainability, environmental sustainability, and social sustainability.

In David’s own words, “We’re here to prove to the people that we are farmers.”

David provides his local workers with high wages, decent accommodations, and healthcare.

In addition to supporting his own workers, he aims to provide local farmers with a long-term place to sell beans at a price a little higher than the average market price.

And he gives these farmers a bonus, too … a portion of seedlings and saplings worth 20% of the crop price so local farmers can increase the economic viability of their own fields.

This allows the Belize Cacao Consortium to buy the yields of those saplings back at even higher prices, creating a circle of social sustainability.

David’s business model is structured to give local farmers and residents a leg up in other ways, too. He offers 10-year microloans to local farmers who want to expand or specialize, and he’s started a millennials’ program for those aged 20-34.

These young investors just need a little land, and David’s program takes care of the rest … saplings, a tool shed, tools, and guidance from the institute of professionals he’s put in place.

A stellar team for stellar chocolate

When we asked David how he was able to segway so quickly from coffee to cacao farms, he gave us a simple answer.

His farms operate virtually by themselves because he’s been able to find a stellar TEAM to operate them.

In Belize, David’s Cacao Institute turnkey manages every parcel sold to investors. This institute is composed of a group of people with 10-15 years of experience managing cacao farms, and they supervise the entire process of producing high-grade cacao … from farming, to trading, to production … they’re old hands.

We asked David to give us a rundown of the farming and production process.

This process is unique because it’s been perfected over thousands of years by the Mayans. Specialty chocolate takes many steps:

  1. The cacao pods are harvested and the beans are removed.
  1. The wet beans are fermented in a 6-day process.
  1. Over another 3-5 days, the beans are dried. Various environments provide subtle flavors to the beans.
  1. The dried cacao beans are then roasted, which provides another layer of flavor.
  2. The roasted beans are processed by cracking and winnowing to remove the cacao nibs, which are further processed to create chocolate products.

It’s a delicate process that requires a team of pros. And unlike David’s coffee business, the Belize Cacao Consortium takes the beans all the way from football-like pod to final product.

Their chocolate company, Mahogany Chocolate, will produce a product line managed by Joshua Parker, a chef and graduate of premier cooking school Le Cordon Bleu.

This product line will encompass 15-20 products that will be available to resort-goers at a shop in Mahogany Bay Village. David also aims to create an affordable candy bar for local Belizeans.

A sweet investment with even sweeter returns

If you like the idea of investing in a tasty product that’s booming in the health-foods industry—really!—you’re in luck.

David decided a long time ago that he wanted to invest in a product that would allow investors to diversify their portfolio internationally for not much money.

For new investors, cacao plots are sold in ½ acre parcels, starting with one parcel for $24,500.

Although it takes a while to get a coffee farm up and running, new grafting methods have allowed David’s group to get specialty cacao trees producing within two and a half years, meaning he has plots that are ready to go now.

Investors can rely on David’s track record and accurate return projections. The average annual return most investors in both the Panama coffee farms and Belizean cacao farms can expect is between 11 and 12%.

Revenue comes from three revenue streams … the farms themselves, trading profits from Belize Cacao Traders, and a share of profits from the Mahogany Chocolate business.

Interested in learning more? Tune in to the show to access a David’s report on how YOU can get involved in this off-shore sustainable agriculture opportunity.

A bean with a lot of benefits

We think David’s business model is great for a LOT of reasons.

He’s chosen a product type that has many exciting uses.

He manages a product all the way through the process, taking raw material and turning it into multiple revenue streams.

He’s leveraged an emerging niche to create incredible profit margins, simply by using new technology to put a twist on a process that’s been used for centuries.

And through social capitalism, he’s making an investment that will impact human lives, producing a better social and economic environment, and a better product.

If that’s not a convincing enough reason to get you to diversify your portfolio, think of the story you can tell!

In real estate, it’s all about conversation starters … sometimes, just starting a conversation can open doors. And what better than a conversation about everyone’s favorite food group … chocolate?

We’re intrigued by David’s model of agricultural investing … and we hope hearing about David’s business model gave you some ideas to chew on, too.


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