Podcast: Clues in the News – Bears, Bailouts and the 3-Headed Monster

Crisis Investing Lessons — Navigating Uncharted Waters

Crisis is part of the investment game … and while the COVID-19 virus crisis is unlike any we’ve seen in modern memory, it’s not the first … or the last … crisis you’ll face as an investor. 

The good news is that history shows us two things. 

One … the human race will survive. And two … the backside of all busts is a big boom. 

Until the crisis passes, we all need to find a way to survive … physically and financially. 

Today, we’re talking about how lessons learned from the 2008 crisis can be applied to what we face today. We are focusing on how you can not only survive … but also thrive!

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

• Your thriving host, Robert Helms
• His surviving co-host, Russell Gray

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Think and do

With so much going on in the world today, it is easy to get overwhelmed. 

Today, we’re talking about how to manage life when you find yourself in uncharted waters AND what lessons learned from previous crises can do for us in our current situation. 

We’re not here to tell you what is right and what is wrong. We’re here to talk about the facts and our own experiences. 

We haven’t seen everything … but we’ve seen a ton. We don’t know all the answers … but we have gotten pretty good at asking the right questions. 

One of our favorite sayings is, “Think and do is better than wait and see.” 

When there’s a crisis, the tendency is often to hunker down and wait to see what happens. But waiting and seeing has economic consequences. 

The big question now is …  what should we be thinking about?

Understanding what is happening in the market

Calmer heads always prevail. 

As real estate investors, we have a huge advantage. Markets like the stock market … or even the metals market … move instantly. That’s not true with the real estate market. 

If you look at what has happened in the stock market, with equity prices, and in bonds compared to what has happened in real estate … you’ll see a drastic difference. 

People who invest in stocks are seeing a market drop that appears already worse than the Great Depression. But your mortgage or your rent haven’t changed. 

That means that the person on the other end … the landlord or mortgage holder … their income hasn’t changed either. 

Now, that doesn’t mean it won’t. But the difference between now and 2008 is that in 2008, lenders were not ready to negotiate. They couldn’t see the ripple effect that would go through the financial system. 

But today, the Fed clearly sees it. Their reaction tells you they are bringing out the big guns early … and lenders are already beginning to contact people about ways to work things out. 

Even with all this intervention, there is still a chance that real estate investors will run into a cash flow problem … but the advantage is that real estate moves slower. You have more time to react now to future possibilities. 

Remember, the stock market doesn’t really reflect what’s going on in the economy. Stock prices are reacting to an anticipated slow down of corporate profits. 

There is plenty of cash out there. That’s not the problem. The problem is that it isn’t flowing. 

We’re basically watching an economic heart attack take place. It doesn’t matter what the blood volume is. The concern is that the blood isn’t flowing. 

So, you have to look at what is happening right now and make adjustments. Now isn’t the time to be a deer in the headlights investor. Now is the time to think and do. 

Making smart choices for your portfolio

We think that everybody listening in is going to want to own more real estate 10 years from now than they own today. 

Some of you may see opportunities … but you don’t have enough resources to take advantage. 

You can see bargains … quality assets going on sale. What do you do?

That’s why we are big proponents of syndication. 

We’re hearing on the street already that lenders are beginning to back off on their lending. If that is the case, it’s going to be a resurrection of private equity. 

When money goes looking for a safe haven after a nauseating ride on the Wall Street roller coaster … it often ends up in real estate. 

These investors are either on the equity side buying into real estate deals or on the debt side buying private mortgages and getting the yields. 

You have to be smart … but there is going to be a lot of money coming into real estate because of what’s happening. 

If you’re well-positioned and you underwrote your property correctly and you have a good lending partner, you’ll probably be ok. 

If you didn’t … well, there are going to be people who have to give up some real estate. 

If you’re in a good position, syndication can be a great way to get you ready to buy when those who need to sell make their move. 

And don’t forget that this doesn’t apply to just real estate. Real assets like metals and oil will have good deals, too. 

One of the biggest lessons we gleaned from 2008 is to keep your finger on the pulse of your markets and niches. 

Wherever you are in the world, whatever niche you’re in, whatever market you’re in … lean on your tribe. Enhance your participation in whatever forums or virtual meetups you have the opportunity to be part of. 

The closer you get to the front lines … the more real-time your information is … and the better you will be able to make decisions. 

For more lessons learned on investing during a crisis … listen in to the full episode!

More From The Real Estate Guys™…

• Sign up for The Real Estate Guys™ Free Newsletter
• Check out all the great free info in our Special Reports library.
• Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
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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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What the Coronavirus Means for Real Estate Investors

The COVID-19 pandemic and panic is well on its way to eclipsing the Great Financial Crisis of 2008 and the Great Depression of 1929 as the most devastating economic event in modern human history. 

But humanity has a way of surviving even the greatest calamities … odds are we’ll survive this one too. 

So, we’re taking a look at the current crisis through the lens of things we’ve learned from the past. 

We’re discussing where future opportunities might be and ideas for what investors like YOU can do when facing uncertainty. 

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

• Your keeping calm host, Robert Helms
• His carrying on co-host, Russell Gray

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Economic issues and COVID-19

There’s so much going on in the world. COVID-19. The Fed lowering interest rates to zero. Social distancing. Sheltering in place. 

Today, we’re going to be discussing one of the biggest questions our listeners have been pelting us with … what does coronavirus mean for real estate investors?

Let’s start with this truth … it doesn’t matter what we think. All that matters at the end of the day is what you think. We’ll just share some food for thought. 

Remember, we don’t give advice. We give ideas and information. 

What we have is our own perspective … and that doesn’t mean we are right. Right now, some of our very good friends have polar opposite opinions and positions on this topic. 

But that’s why we can talk about it! We can all respectfully disagree and share ideas so you can make your own decisions. 

We’re going to focus mostly on the economic issues surrounding COVID-19. 

From an economic perspective, this situation is what we call a Black Swan … something nobody saw coming. 

The first thing we have to do is accept that we can’t do anything about the coronavirus. It is out of our control. But we can control how we respond. 

There can still be opportunity

The fact of the matter is that when certain parts of society go away … even temporarily … it has a lasting impact. Those things don’t come back quickly. 

It slows the velocity of the economy. Even the Fed can’t speed that up. All they can do is try to increase the volume and hope the volume compensates for the velocity. 

We saw a bunch of money run from the stock market … which tanked … and that has an impact on people, especially retirees. 

That money moved into bonds, which drove interest rates way down … which actually created a huge opportunity for real estate investors to lock in mortgages at record lows once the crisis abates. 

But the flip side is that the Fed is printing a lot of money. The government is going into debt … and that changes the already frail economic system. 

The flip side of chaos, of course, is opportunity. There’s always opportunity to help the situation, because making money is a byproduct of providing solutions in the marketplace. 

SWOT analysis, potential outcomes, and diversity 

With a situation like this, there are short-term, mid-term, and long-term effects. 

Short-term there is a demand shift for certain types of real estate. Most month-to-month tenants aren’t moving over the virus. 

In fact … big picture … those tenants are probably staying put, provided they have income. If they were thinking about making a move, they are probably staying put. 

Now is a good time to do a SWOT analysis … strengths, weaknesses, opportunities, and threats … of your portfolio. 

Look at each individual property and ask yourself, “Where does the money come from? Where do the tenants work? What drives the local economy?”

Looking at the answers to these questions, you can make an educated prediction for what is going to happen in that sector in the future. 

You may even be able to make some moves now to reduce your risk or exposure … like refinancing debt, lowering costs, or tightening up expenses. 

Now, the challenge is that everybody is instinctively cutting back. That’s part of how we go into recession. 

If we cut way, way back and everybody withdraws … we’re going into depression. 

Then the question is, does the Fed and the government have enough firepower left to prevent that from happening … or are we about to go through a gigantic economic reset?

For those who have all their investment in stocks … it’s a scary time. The nice thing about real estate is that it’s stable. Stock investors might think it is boring, but it’s stable.

More of those investors are going to be looking to go into real estate … which means a huge opportunity for syndicators. 

If you’re thinking of making the move to real estate, you need to undertake that same SWOT analysis for the various real estate niches. 

And we can’t preach diversity enough. Diversity of income. Diversity of markets. Diversity of real estate niche. Diversity helps you weather the storm. 

Real estate for the long haul

At the end of the day, YOU are the only person who can decide what is best for you and your family. Do the work to get educated, analyze your deals, and do what you feel is right. 

The reality is that 10 years from now, this crisis is probably going to be in the history books. It’s going to be like 2008 … something that happened and changed the world quite a bit. 

But the long-term fact is that people will always be out there. They will need places to live. They will need places to gather. They’ll still need medical care and to eat. 

Real estate will always fulfill a potential need. In the long term, smart investments remain smart investments. 

Real estate is about buying and committing and being in for the long haul. 

For more on what the coronavirus means for real estate investors … listen to the full episode!

More From The Real Estate Guys™…

• Sign up for The Real Estate Guys™ Free Newsletter
• Check out all the great free info in our Special Reports library.
• Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
• Stay connected with The Real Estate Guys™ on Facebook,  and our Feedback page.

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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Podcast: Crisis Investing Lessons – Navigating Unchartered Waters

Podcast: What the Coronavirus Means for Real Estate Investors

Welcome to uncharted territory …

Even for a couple of old dudes, we’ve never seen anything like what’s happening now.

And we’re not just talking about the COVID-19 pandemic, though it’s proving to be the proverbial “black swan” financial pundits have been watching for.

Preppers (financial and otherwise) are feeling slightly vindicated, while mockers perhaps a little foolish. Peter Schiff is suddenly getting popular again.

Meanwhile, folks who were asleep at the wheel are snapping awake to find they’re on a collision course with a financial crash … and they’re not buckled up.

Of course, there’s the news … and the news underneath the news that the clues in the news help us find.

With all the chatter right now, it’s a little scary.

It’s important to stay calm, think clearly, and engage in quality conversations with experienced, informed, and diligent investors.

That’s what we’re doing … and because our ability to travel and attend conferences is currently curtailed, we’re using alternatives.

It’s more important now than ever to get and stay connected.

Our mission this muse is to point out some things we think are very important for investors and entrepreneurs to consider as we all sail into stormy uncharted waters together.

First of all, we’re thankful to live in a world where news and perspectives are readily available.

Access to information and ideas helps each of us find our tribe and feel connected … even in the midst of isolation and potential quarantine.

Thank you for being a part of our tribe.

In a world full of fear, uncertainty, and doubt, there’s likely to be some emotional conflicts about what’s right, who’s right, what should be done.

The truth is … nobody really knows.

So here are a couple of principles we mutter to ourselves in those times we get upset or stressed out …

“There are three sides to a coin. Head, tails, and the edge. The only way to see both sides of any issue is to stand on the edge.” 
– Robert Kiyosaki

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

In times like these, we think you’ll find those principles useful.

While we’re on the topic of helpful principles gleaned from the minds of smart people …

“Be fearful when others are greedy, and greedy when others are fearful.” 
– Warren Buffet

Most of the world is hunkering down. When you don’t know what to think or do, it’s easy to sit out and hope … or to follow the herd.

We’re not fans of either approach. Just like a physical disaster requires brave first responders, so do financial and economic disasters.

We’re not saying this is a disaster … yet. But it’s not fear-mongering paranoia to suggest it could turn into one pretty quickly.

Better to be prepared and not have a crisis, than have a crisis and not be prepared.

Of course, bad times aren’t the end of the world. They’re just part of the cycle of life.

Our friend and history buff Simon Black often reminds us that over centuries, through wars, pandemics, oppression, and natural disasters … somehow, someway, humans rise to the occasion.

We come together, we figure it out, and we go on to build a better world.

Sure, there are a lot of rocks, potholes, and pitfalls on the road to recovery. But as a little orphan once said …

“The sun’ll come out … tomorrow. Bet your bottom dollar that tomorrow … there’ll be sun.”
– Annie

With all that said, we’re going to take a quick tour through the HUGE amount of clues in the news. If you’re new to all this, it might seem confusing or irrelevant.

That’s what we used to think before 2008.

Then after getting smacked down, we realized the warning lights were flashing the entire time. We just didn’t know what they meant.

So don’t get bored, irritated, or discouraged. Just dig in and keep studying … especially if you’re in the camp of people caught flat-footed by the recent turn of events.

The stock market is tanking. Everyone can see it. It’s what most people talk about.

But contrary to popular tweets, the stock market isn’t a proxy for the economy … or the financial system.

The news is warning us the financial system is in deep distress …

The Fed’s hair is ON FIRE. Back to back emergency rate cuts.

And they’re putting ONE TRILLION DOLLARS PER DAY into the repo market … which was flashing trouble way long before COVID-19 showed up.

The Fed also cut rates to ZERO and pledged to buy up $700 billion in Treasuries and mortgage bonds. The last time they did that was the 2008 financial crisis.

The Fed also dropped bank reserve requirements to ZERO. So your bank doesn’t need to have a single penny in reserve to back up your deposits.

Meanwhile, the Federal government (which is different from the Federal Reserve) is planning a $1 trillion fiscal stimulus (spending) plan to help boost the economy.

But the Federal government doesn’t have a trillion dollars. Apple probably still has more cash than Uncle Sam.

And because there’s already a huge cash crunch, the Federal Reserve will need to print all those dollars … and buy Uncle Sam’s bonds, so Uncle Sam can spend.

But how do you boost an economy that’s shut down? You can’t step on the gas of a parked car and expect it to go fast.

Worse, many businesses and jobs may not survive an extended shut down … or even a substantial slow down.

For example, the oil industry was almost the sole job creation vehicle for the U.S. coming out of 2008. To get there, the shale industry took on TONS of debt.

You could argue whether the debt made sense at $60 a barrel.

But at less than $30, many oil companies will go bankrupt. Until and when they do, lots of jobs will be lost.

Perhaps, it’s obvious that job losses make it hard for tenants to pay rent … which will eventually make life hard for landlords.

So although real estate is insulated from the price declines Wall Street is facing, it’s not immune. And some of these “cures” could be worse than the disease.

But we’re not saying the Fed or Uncle Sam should or shouldn’t be doing what they’re doing. It doesn’t matter what we or anyone thinks SHOULD happen.

This isn’t a policy discussion. It’s a REALITY discussion because it’s happening.

But if the Fed blows up its balance sheet to ten trillion or more, what happens to the dollar? Over-printed currencies fail. The dollar isn’t immune.

And if production is shut down because no one’s going to work, what happens to production? Are empty shelves the exception … or the rule?

Lots of cash and empty shelves in Venezuela. Yikes.

There’s more bad news, but we know you can only handle so much.

So take a deep breath …. exhale slowly … ahhhhh …..

The world isn’t ending. It’s changing. The pace of change just accelerated, which means you need to process and react faster.

It’s not too late to look at your portfolio, sources of income, strategic direction … and do a SWOT analysis … Strengths, Weaknesses, Opportunities, Threats.

They’re all present … if YOU are.

People, businesses, and money will all migrate in search of safety.

So certain markets, asset classes, investment vehicles, and structures will lose.

Some will win.

Your mission is to look at the landscape of the changing reality and make good decisions about where YOU go from here. Get in a position to thrive.

We’ll be talking about this a LOT in the weeks and months ahead. Stay tuned!

Is this a cure for coronavirus?

There are SO many things happening in the financial news and markets right now, it’s hard to focus on any one thing and say it’s the biggest story.

Obviously, the coronavirus panic is dominating headlines and airwaves everywhere.

And many of the other major stories such as stocks, bonds, interest rates, and oil prices all seem to be considered somehow a derivative of the coronavirus.

Of course, we just keep asking … what does all of this mean to real estate investors?

Two weeks ago, we posited interest rates would fall as investors piled into U.S Treasuries for both safety and speculation.

Of course, we were right … but not because we’re brilliant, but because it was SO obvious.  As Treasury yields collapsed, mortgage rates followed.

And because you never know how long these “sales” on cheap money are going to last, it’s a good idea to watch for clues … and then move quickly when opportunity presents itself.

The odds are the coronavirus scare will last months … but your uber-cheap mortgage can last for decades. Nice.

Last week, we dug a little deeper into the WHY behind collapsing rates after the Fed came out with an “emergency” rate cut.

Though billed as a preemptive strike to stop recession, most pundits viewed it as a lightly veiled attempt to calm traders and boost stock prices.

How’s that working out so far?

Of course, WAY before coronavirus, we’ve been pointing out …

… the financial system is fragile,

… the Fed’s intervention in the repo market is a potentially ominous sign,

… and gold could be flashing a “bridge is out” warning even as the U.S. economy is hurtling down the highway at a decent clip.

In other words, the coronavirus might not be a cause, just a catalyst.

Which brings us to the theme of today’s muse …

Insulation matters. And when the climate is extreme, people who don’t have it, want it.

Right now, MANY people are discovering their portfolios are naked and exposed to the extreme hots and colds of publicly traded financial markets.

Equity investors are experiencing nauseating drops and dizzying bounces … all within an overall trend which is flirting with becoming the mother of all bears.

Income investors are watching yields collapse 30-50% from already anemic levels. Savers and income investors were already suffering. Now it’s torturous.

When yields aren’t enough to live on, you have no choice but to consume equity.

And it’s hard to ride the equity roller coaster back up if you to get off at the bottom to eat.

It’s like a starving farmer who eats his seed corn has nothing to plant for food in the future. He eats now but is doomed in the long term. Equity consumption is suicidal.

So while the coronavirus might threaten your physical health, the vast majority of people who catch it will survive and go on to thrive.

But the effects of the panic on fragile financial markets are definitely making paper asset investors’ portfolios sick … and recovery could take a LOT longer.

Of course, most real estate investors are doing what they often do when these things happen … much popcorn, watch the fireworks, and cash rent checks.

Sure, if the storm is bad enough, it can blow your insulated, brick real estate portfolio over too.

But compared to the poor folks living in straw portfolios built only for sunshine, real estate looks pretty darn secure.

So it’s no surprise, that even the mainstream financial media are pointing out the safety features of real estate … at least what they think is real estate …

Don’t Panic – Buy REITs
– Forbes, 3/9/20

These are the safest and highest dividend-yielding REITs as the coronavirus spreads, BofA says
– MarketWatch, 3/7/20

REITs And Bonds Rose Last Weeks As Global Stocks Fell
– Seeking Alpha, 3/10/20

Of course, REITs are still publicly traded stocks … essentially a mutual fund collection of individual properties all put into one fund and offered in the Wall Street casinos.

So, while real estate is attractive in times like these, REITs are still subject to Wall Street volatility …

REITs fall in February amid broader market sell-off
– Institutional Real Estate, 3/10/20

Perhaps obviously, the further you are away from Wall Street, the more insulated you are from insane volatility.

Of course, as a real estate investor, YOU already know this. That’s why you read commentaries like this, and probably don’t have much exposure to Wall Street.

But remember there are MANY MILLIONS of people who haven’t discovered real estate investing … yet. Or only think of it as Flip This House.

Of course, true real estate investing is about using low cost, long-term debt to acquire passive income and generous tax breaks …

… and enjoying superior cash-on-cash yields (compared to bonds), while benefiting from long term inflation … insulated from short term deflation.

Real estate is slow, boring, and STABLE. And right now, stable is sexy.

As we’ve said before, you’re not seeing headlines announcing rents have collapsed 50% in the last 90 days because of coronavirus. That’s short-term deflation.

And ten years from now, when this current panic and its ramifications have joined all the other freak-outs of the last 100 years in the dust bin of history … do you think it’s more likely rents and real estate values will be up … or down?

History says “up” in dollar terms … because the dollar has a 100+ year history of losing value against REAL assets.

And most of what’s going on right now … more printing, more debt, more deficits … is BAD for the dollar in the long term.

Sure, most people can’t escape the temptation to gamble. “Buy low, sell high” brainwashing makes it nearly impossible to resist Wall Street volatility.

But SOME people … especially more seasoned folks … will decide the Wall Street roller coaster is more nauseating than intoxicating … and they’ll want off.

So while we’re concerned about the coronavirus panic and its near term effects on the economy and the financial system …

…. we’re SUPER EXCITED about the lessons being learned by Main Street Americans.

Because when more of Main Street gets back to real investing … in real assets and cash flow …

… it could create a big flow of funds out of Wall Street into Main Street … where the real wealth comes from and belongs.

Last time we looked, there’s usually BIG opportunity when money starts moving. The key is to put yourself in a good position to help facilitate it.

So whether you choose to borrow lots of money flowing into bonds and acquire properties in your own account …

… or you decide to start a syndication business to raise private equity to pair with abundant and cheap debt …

… this isn’t a time to be hiding under your sheets with a bottle of hand sanitizer.

Yes, be careful and stay healthy.

But keep your eye on the long-term big picture. It’s easy to get lost in the hype and miss big opportunities that grow out of the chaos.

Unlock Next Level Success by Turbo-Charging Your Amazing Brain

The human brain is one of the most amazing things on the planet … but scientists say that we only use a small fraction of our brain’s potential. 

No matter how successful you are … that means your brain is capable of SO MUCH MORE. 

We’re talking to someone who tapped into the under-utilized power of the human mind to get better performance … and more success … from himself and his team. 

Listen in and discover how to take your real estate game to the next level by activating your amazing brain!

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

• Your brainiac host, Robert Helms
• His maniac co-host, Russell Gray
• Author, speaker, and business growth expert, John Assaraf

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Your most important tool is your brain

What’s the most important tool for being successful in real estate investing? YOUR BRAIN. 

Today, we’re talking about how you can activate your brain and create fuel for your success. 

If you study success principles in any endeavor, you’re often going to be able to translate those directly into whatever you want to be successful in … including your real estate investing business. 

You definitely need to understand the specifics of real estate. But your team begins with you. 

If you have muddled thinking and don’t know exactly what you’re trying to accomplish, it will be hard for you to lead a team. 

You have to think about your mindset. How you think and what you believe affects what you do … or if you do anything at all. 

When people have results they don’t like, they say, “I’ll change my actions.” But it goes farther than that. It’s time to change the way you think. You have to be strategic and intentional. 

Our guest today has made a practice of studying this very thing. In fact, the reason we wanted to have him on the show is because he is an amazing real estate guy. 

John Assaraf has been investing for more than 30 years. He was one of the largest broker owners in the world, managing tons of agents and offices. 

But through his experience, he has figured out that it’s not just what you do … but why and how you train your brain.

The difference between success and mediocrity 

“When I was 26, I bought the franchising rights for RE/MAX of Indiana and proceeded to open up 85 offices,” John says. “So, I understand the residential, commercial, industrial side of real estate.”

John loves real estate … and that’s what led him on his search to figure out what holds people back and what makes people successful. 

When John was building RE/MAX of Indiana, he had 1,500 real estate agents. Some made $25K a year. Others made more than $1 million a year. 

“I was fascinated and wondered how it was possible that I’m giving the same training, the same coaching to all of my agents, and there is such different levels of success,” John says. 

By unlocking some of the mysteries of the mind, John was able to help his agents have an average income of $120K. 

What did he teach them?

“I really didn’t teach them much about selling real estate or investing in real estate. I taught them how the level of success that they would achieve would be directly a reflection of their beliefs, their self-image, and the habits they developed,” John says. 

John worked to help his agents augment their beliefs from limiting beliefs to empowering beliefs. 

There’s a saying in the neuropsychology field that says you will never outperform your hidden self-image. 

When you work on your self-esteem and self-worth, when you eliminate your limiting beliefs about what’s possible or not possible for you. 

When you start to recalibrate what you do to match the income or wealth that you want to achieve, then you have the inner game and the outer game aligned. 

So, the person who is making more money than you is not necessarily smarter than you. 

Until you train your brain to think differently and increase your self-worth, you wouldn’t act upon the information that they have in the same way. 

Training your brain

Our brain is a highly organized organism. Self-confidence is a neuro muscle. So is willpower. 

So, what would happen if we thought about some of our neuro muscles as things that we can strengthen or weaken, just like other muscles?

“If we disempower a network in our brain, it weakens. If we reinforce a new powerful network in our brain, like confidence or awareness, then we start a deliberate evolution of ourselves,” John says. 

John’s book, Innercise, is a user’s manual on how to use your brain better. “We have more control over our own brains than we ever thought possible,” John says. 

Too often, though, we take our brains for granted. 

So, we must start with awareness. Be aware of the thoughts you have. Are they empowering or are they destructive? Are they building blocks that will help you achieve your goals?

Then, think about emotions. 

Emotions are nothing more than the effect of what is happening in your subconscious mind. Emotions cause feelings, which can have a powerful enabling or disabling effect. 

After feelings comes behavior … the actions you take. 

John says, “When you look at your bank account and it doesn’t have the money you want, don’t get mad. Get curious.”

How can you shift your thinking? How can you shift your emotions? How can you change your behavior?

Changes on the outside happen because of changes on the inside first. 

For more on how to turbo-charge your amazing brain, listen in to the full episode!

More From The Real Estate Guys™…

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• Check out all the great free info in our Special Reports library.
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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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Podcast: Unlock Next Level Success by Turbo-Charging Your Amazing Brain

Finding and Creating Value in a Hot Market

Markets can seem like a mystery. They’re hard to time … and no one wants to sit on the sidelines and miss out on an opportunity. 

Luckily, our guest today has been in the game for quite a while. He has found ways to thrive in ALL kinds of markets … and he is sharing his take with investors like YOU. 

Ken McElroy is real estate partner and advisor to Rich Dad Robert Kiyosaki. He knows how to find value in a hot market … so let’s get started!

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

• Your hot host, Robert Helms
• His hot-diggity-dog co-host, Russell Gray
• Real estate guru and Rich Dad advisor, Ken McElroy

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Meet Ken McElroy

Our good friend Ken McElroy is an icon in real estate. He started out in property management and decided it would be better for him to own apartments. 

Today, he owns more than 7,000 units. 

Ken has a lot of practical, pragmatic wisdom … and he LOVES helping people grow and be successful.  

That love is reflected in his work as Rich Dad Advisor for real estate to Robert Kiyosaki and in his library of books. You’ve probably read Ken’s classic The ABCs of Real Estate Investing. 

Well, we’re at an interesting time right now. We’ve been in a really long cycle … and everyone wants to know what is going to happen next … and what to do about it. 

Navigating market changes

“One of the mistakes people make is that they try to time everything,” Ken says. 

There’s nothing wrong with thinking about things and trying to consider what the future will bring, but don’t overanalyze yourself into a corner. 

If you’ve bought correctly, and you’ve made some good money … you shouldn’t be concerned. 

Ken said his team had some properties that they really didn’t want anymore. As you grow your portfolio, you’ll have things doing really well, things doing just fine, and things that are taking up your time. 

As you feel like you are coming to the end of a cycle, it’s a good time to dump any projects that aren’t paying off for you. 

But what about if you’re trying to force equity?

One of the classic ways to force equity is ground up construction. Ken says he is still seeing those opportunities today, but investors should be prepared for market changes. 

As the market changes, you may have to rework your strategy. You take what the market gives you. 

Ken also says not to discount the power of small wins. Small wins add up. Look for opportunities to cut costs without cutting quality. 

This is especially true if you are involved in new construction or you are working with a large amount of units. 

If you can save $10 on 100 units, that’s $1000. Look for the small wins … and if you can, buy in bulk. 

In a hot market, the key is finding opportunities to add value. If you increase value, you increase your profit. 

Keys to success in partnership, investment, and family

Ken and his real estate partner, Ross, have been working together for nearly 20 years. That partnership has been key to his success. 

What makes them so effective as partners?

“We stay out of each other’s way, but we keep each other accountable,” Ken says. 

Ken and Ross have a clear division of responsibility that plays to their strengths. Ross handles tax and legal. Ken handles operations and equity. 

Together, they work on acquisitions. 

Ken says that in your partnerships, it is important to keep each other updated and in the loop. “We periodically sit down and make sure we each know about the moving parts,” Ken says.

Those moving parts include investors and tenants. Does taking care of tenants automatically translate into taking care of your investors?

“We think that that is really where it all starts,” Ken says. “Our tenants and our employees are as important if not more important than our investors.”

Why? Because if tenants are being treated well, you can reward your employees. And if they are happy … they keep doing a great job. 

All good things flow up. The investors benefit from happy employees and happy tenants. 

Ken points out that that same lesson applies to family as well as business. 

“If you haven’t played the cashflow game with your kids, you’re crazy,” Ken says. “My kids were not particularly great at math, but we invested in their education and treated them well.”

Ken says that by the time his kids got into finance and higher math in school, they understood income and expense, asset and liability, what a stock purchase was, and how capital gains work. 

Part of treating your kids well is helping them understand the hard work that goes into purchasing and investment. 

“My sons went to private school, and a lot of the kids were driving fancy cars. I made them save their money and buy their first car. It’s hard, but it’s easier to teach them to make money than to give them money forever,” Ken says. 

For more tips and wisdom from Ken, listen in to the full episode!

More From The Real Estate Guys™…

• Sign up for The Real Estate Guys™ Free Newsletter
• Check out all the great free info in our Special Reports library.
• Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
• Stay connected with The Real Estate Guys™ on Facebook,  and our Feedback page.

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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