Podcast: Ask The Guys – Smart Moves with Equity, Liquidity and Debt

People are paying attention to these perilous times and wondering what to do to prepare.

In this edition of Ask The Guys, we tackle questions about tapping equity while it’s still there, getting liquid just in case, and dealing with debt decisions in an uncertain economy … and a whole lot more!

So tune in as we talk making smart moves with equity, liquidity and debt in a crazy world.


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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Ask The Guys — Scaling Up, Credit Lines, and Pandemic Prepping

It’s time for Ask The Guys … the episode where you ask and we answer!

This edition we are tackling topics from how to use credit lines strategically BEFORE they disappear to how to prepare NOW for the investment problems … and opportunities likely to emerge from COVID-19 … and more!

But remember … we offer commentary, education, and resources … not advice. 

Always consult with tax or legal professionals before making any investment decisions. 

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

  • Your know-it-all host, Robert Helms
  • His know-nothing co-host, Russell Gray

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Where to get liquidity from your balance sheet

Our first question comes from Alicia in Woodstock, Georgia. 

She says, “Hey guys, I want to have liquidity to buy real estate, but I’m not sure where to pull the money from.”

Alicia says she has a homestead and a rental that are both paid off. She also has a 401K. She wants to know if she should convert the 401K into a self-directed account and take money from there. 

First, Alicia is thinking the right way. If you want to acquire more real estate, you have to have more money. 

The good news is that someone like Alicia already has idle equity sitting around waiting to be worked with. 

The cheapest money out there is mortgage money. It’s very inexpensive and long-term … so the payment and the cash flow is really easy to manage. 

Someone like Alicia could potentially borrow against her paid off rental property … and the 401K is also an option. 

But, if you roll that 401K over into a self-directed account, you’ll want to talk to your tax professional first to see if you will end up facing some type of a penalty. 

Then, the only other way to go about getting money that gives income from your own balance sheet is to think about raising money from someone else’s balance sheet. 

There are people out there who have money … but they don’t have access to deals, and they don’t have the hustle. 

When to buy a house

Don is looking to buy a house and wants to know when he should be buying. 

“Prices are still high,” he says, “and judging from past market crashes, should we wait maybe two months to buy at a lower price?”

When you’re buying a residence to live in, market timing means very little. If you’re looking for an investment property, you make different decisions than you would for a home you want to live in. 

Your first priority should be finding a home that is safe, clean, affordable, and in a good neighborhood. If you’re patient, some good deals will come. 

Finding off-market deals

DC from Edinburg, Texas, says, “Due to the pandemic, people are going to be selling their homes at discounted prices. How do I find these deals? I want to get some off-market deals.”

The premise that there will be deals to find is fairly sound … and the answer as to how to find them is simple … relationships. 

You won’t find much success cold-calling or knocking doors. Instead, find someone who already has the pulse on that part of the market and form a relationship with them. 

Build a brand of someone who people want to do business with. Don’t just throw lowball offers out there and see what happens. That will become your reputation. 

And don’t jump at the very first thing you see unless it happens to be fantastic. If you build the right relationships, you’re going to find some amazing deals. 

Scaling up your investments

John in Round Lake, Illinois, is a fledgling investor looking to scale up. 

“I can’t help but have some apprehension about jumping from small things to a big thing,” John says. “How can I make sure I don’t mess up?”

Many folks make this same shift that John is looking at … and they do it for different reasons. 

Often, it’s because they get to the point where the economics of scale efficiencies, headaches, and management of single-family houses becomes a lot for them. So, many make the jump over to multifamily. 

There are many benefits to this approach. One is that once your portfolio reaches a certain size, you can get into non-recourse financing. 

This means your lender has recourse against the property, but not you personally. 

And, with bigger properties, you typically don’t buy all by yourself. You do it with partners or syndication … and those people bring support and power to the deal. 

If things were to get dicey, these factors combine to make apartment investing actually less risky than going it alone in single-family homes. 

And, one of the beautiful things about syndication is that anything you’re lacking … including experience … you can go aggregate by finding other people who need what you bring to the table. 

A query on credit lines

Mark in Ohio has a question about credit lines. 

“I have two large lines of credit, and I’m currently not using either,” he says. “Should I draw the entire amount out now, or should I wait a bit longer?”

On the one hand, John thinks it would be a shame to pay interest on money he doesn’t need at the moment. But … he is concerned that those lines of credit could freeze up in the near future. 

Short answer … we would draw them out completely. 

You see a lot of big corporations doing this right now. Ford Motor Company famously did that going into the 2008 crisis … and unlike GM, Ford didn’t need a bailout. 

Banks are nervous. The Fed is acting pretty nervous. So, if you have access to credit lines and equity … we would put the two together and get liquid. 

Having liquidity is good insurance. 

More Ask The Guys

Listen to the full episode for more questions and answers. 

Have a real estate investing question? Let us know! Your question could be featured in our next Ask The Guys episode. 


More From The Real Estate Guys™…

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


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Podcast: Ask The Guys – Scaling Up, Credit Lines, and Pandemic Prepping

Another exhilarating edition of Ask The Guys … your great questions and our questionable answers.

This time, we tackle topics about going from tiny to mighty … how to use credit lines strategically BEFORE they disappear …. how to prepare NOW for the investment problems and opportunities likely to emerge from the COVID-19 pandemic … and MORE!


More From The Real Estate Guys™…

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


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

Ask The Guys — Pandemic Landlording, Equity Management, and More

It’s time for Ask The Guys … the episode where you ask, and we answer!

We’re tackling timely topics … like how to manage property and portfolios during the coronavirus pandemic … and more!

Remember … we aren’t tax advisors or legal professionals. We give ideas and information … NOT advice. 

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

  • Your doctor of discussion and host, Robert Helms
  • His nurse of knowledge and co-host, Russell Gray

Listen


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

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Using your mortgage as a tool

Our first question comes from Suzanne in Sonora, California. 

She says, “Hey guys, I’m 56 years old. I have a duplex valued around $270K with $210K of equity. I read Rich Dad, Poor Dad, and I’ve used equity lines in the past to buy other properties, but I’m at a knowledge impasse.”

Suzanne says her problem has to do with mortgage payments. If she takes out more equity lines to buy more properties, eventually all her profits are spent on making loan payments. 

Is she doing something wrong?

Well, Suzanne, you’re really not doing anything wrong. 

A mortgage is a tool. But like any tool, it has to be used for the right job, and it has to be used correctly. 

The obvious risk here is that you take equity out of a property and then you finance it using short-term financing … and then you make a long-term investment. 

So, a basic rule of thumb is … don’t borrow short to invest or lend long unless you are a bank. Otherwise, you can end up with a cash flow problem. 

The other thing to keep in mind is the state of the market. When you’re playing this game at the top of a market, when the cap rates are very low, the cash flows on new properties are very low. 

The danger you run is that if the economy takes a downturn … like we are experiencing right now … rents go down, and you end up with negative cash flow and negative equity. 

So, the idea is that when you pull equity out, you want to lock in long-term, permanent financing. 

The other secret to doing this is what we call arbitrage … purchasing a reliable stream of cash flow that will take care of making the payments and providing you a positive net result. 

If all your payments are being used to make equity payments, then you probably haven’t made the smartest investment with the equity you extracted. 

The real key here is to borrow long and invest shorter. Focus on the quality and durability of the income and the recourse. 

Multifamily or industrial warehouses?

John in Fargo, North Dakota, wants to know if we had the opportunity to invest in syndicated deals in the upper Midwest, the Dakotas, or Minnesota in new construction multifamily or new construction industrial warehouses … which would we lean toward?

Well, we’re not going to give you advice on what to do … we don’t give advice. But it is a fair question. 

New construction multifamily is a bread and butter product where there are great loans available and an absolute need that rarely goes away.

New construction industrial warehouses are places that store stuff we need. 

Here are a few things to look at as you make your decision. 

First of all, the market is going to matter a ton … so what is the current supply? What’s the current demand? What trends are happening that are going to influence the market?

For example, if a trend is that more loans are available at lower prices, then that means people that were multifamily tenants might become buyers. 

On the other hand, if you see that certain businesses are withering and certain businesses are thriving under something like COVID-19, does that mean there will be more or less demand for warehouses?

All things being equal, some of the safest investments are in housing because people need a roof over their head. 

And like any syndication deal … the team is a big factor. Make sure the people you are partnering with know what they are doing. 

What to do with laid-off tenants

John in Helena, Montana, says, “Due to recent events, I have a couple of laid-off tenants who have done the right thing and reached out to say they will struggle making rent. Do you have any creative ideas to keep me from being the last bill paid?”

Creativity is really part of the big picture here. 

All tenants have decisions to make every day about where they put their money … and most tenants aren’t sitting on months and months of savings. 

The average tenant probably has less than a few weeks of savings. 

We’ve had several multi unit buildings over the years, and we always had a tenant who was our boots on the ground and eyes on the street. 

We’d say, “If you’ll do some things like just pay attention and be available and take the trash to the curb, we’ll lower your rent by a couple hundred bucks.”

It’s not free rent like an apartment manager … but it’s a nice discount. 

So, if you have someone who can’t pay you in dollars … you don’t want to forgo the rent … but you can practice some forbearance. 

Find other ways for them to contribute to your investment. Try cutting rent to a third for now and they can owe the rest later. 

You absolutely want to have an open dialogue … especially with people who were proactive and came to you with an open dialogue. 

This is a great opportunity to build your brand … to build a reputation as the kind of landlord people want to rent from. 

You also have to think of the other side of the equation, because you have your own mortgage payments and taxes to take care of. Disrupted rents affect you too. 

Be very aware of what your options are with your specific lender in terms of any relief YOU might get. 

Remember, everybody is going through this. There seems to be an unprecedented level of community cooperation. Be proactive with your lender and other people you’re going to need to pay. 

It’s also smart to talk to your attorney so that whatever arrangement you come to with your tenant can be binding. 

More Ask The Guys

Listen to the full episode for more questions and answers. 

Have a real estate investing question? Let us know! Your question could be featured in our next Ask The Guys episode. 

More From The Real Estate Guys™…

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


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

Podcast: Ask The Guys – Pandemic Landlording, Equity Management, and More

Another thrilling episode of Ask The Guys as we tackle timely topics related to property and portfolio management during the Coronavirus pandemic … and more!


More From The Real Estate Guys™…

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


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

Ask the Guys — Equity Sharing, Self-Directed IRAs, and Gold

It’s time for Ask The Guys … the episode where you ask, and we answer!

In this episode, we have another fantastic collection of questions from our fabulous listeners. 

We’re taking on equity sharing, self-directed IRAs, gold, and MORE!

Remember … we aren’t tax advisors or legal professionals. We give ideas and information … NOT advice. 

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

  • Your wise host, Robert Helms
  • His wise-guy co-host, Russell Gray

Listen


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

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Where to begin in real estate

Our first question comes from Lloyd in Canton, Georgia. His dream is to own two to three homes that he can rent out … but he wants to know where he should begin and what to watch out for. 

The whole idea of having rental homes is so you can get your money to work instead of you. 

Some people who buy single family homes like to do the work … fix them up, make them nicer, improve them, and then rent or sell them. But many people just want to sit back and let money make money. 

Where you start depends on your personal investment philosophy … who you are as an investor, what real estate you want to do, and how involved you want to be. 

You also want to think about what your investor resources are. There are seven we highlight … cash, cash flow, equity, credit, time, talent, and relationships. 

As often as possible, put yourself in an environment where you will be around more experienced real estate investors and ask questions. Learning from their experience will help you make decisions for your experience. 

One of the first things you want to do is meet with a mortgage professional as quickly as you can. Don’t wait until you think you are ready to invest. 

It can take up to two years to really prepare your financials so you can borrow effectively. Find out how to manage your credit score and your documentable income. 

While you are doing all of that, you can work on aggregating a down payment, shop for markets, and building a team. 

Looking to do real estate full time 

Blake in Gretna, Louisiana, says, “Right now I have a trade job where I’ll currently be making about $80,000 a year. How can I invest this money properly in real estate so I can eventually do that full time?”

Rule number one is to live below your means. Live as frugally as possible until you can get a stake in the game. You don’t need a ton of money to do that. 

If you’re going to leverage at 20 percent down and 80 percent loan to value … lots of great rental properties sell for $60K to $100K. 

Whatever your situation, start where you are and with what you have. Get a mortgage professional … and start ratcheting up your credit score. 

You’ll also want to learn what debt-to-income ratios are. 

If you really feel like you want to be a professional real estate investor, then recognize that your current job is a means to an end. 

And, as we said before, start surrounding yourself with people who are already doing what you want to do. 

Put a lot of emphasis on putting together a good team. The most important thing you build is business relationships. 

Getting familiar with equity sharing 

Jacqueline in Punta Gorda, Florida, is interested in learning more about equity sharing. 

First, the basic premise of equity sharing is that you have two parties who are both involved in a transaction but who want different things out of the transaction. 

The classic equity sharing situation looks like this. 

You have a young couple. They’re making good money. They could afford to make a house payment, but they haven’t saved up the 20 percent necessary for a down payment. 

So, they go to somebody … family, friends, parents, or even someone non-related … who brings in part or all of the down payment. 

One person puts up the money. The other person makes the payments. Then, you split the equity in the future. 

Typically you would want both those parties to be on the title, and you’d work with a lending professional to follow particular guidelines. 

Equity sharing is common in single family homes, but you can equity share any type of property you want. 

Like any deal, before you have a deal in place, you’ll want to visit with a mortgage professional. 

You’d also be smart to get a real estate attorney in the specific jurisdiction that you’re going to be transacting in and talk about legal options and considerations as well. 

Depending on the situation, you may not want to be on the title or publicly recorded on the deed. There are various reasons for that approach … specifically with taxes. 

So, it’s smart to talk to a tax advisor as well. 

The low-down on self-directed IRAs

Carolina in San Dimas, California, says that she and her husband want to open a self-directed IRA so they can invest in real estate. But she doesn’t know where to start. 

There are several different ways to do this … and it can be a little complicated … but we’ll try to give a decent overview. 

In the tax code, there are provisions that allow you to accumulate wealth for the long term. You either get benefits when you put it in or as you’re building it and when you pull it out. 

Really, all IRAs are self-directed. All self-directed means is that you can invest in anything you want to that isn’t specifically prohibited by the IRS. 

The prohibited list is pretty short … less than 10 things. 

One of the challenging things with IRAs is that when you use leverage, you gain a benefit inside your IRA from something outside your IRA, which is the debt. 

That creates a tax issue if you’re not aware of it. So, you want to make sure you understand UBIT … unearned business income tax. Talk to your IRA provider about that. 

And since most people want to use debt when they use real estate, that’s really what you want to focus your learning on. 

Starting to invest in gold

Brendan in Johns Creek, Georgia, has a question about gold. 

“I just listened to an episode where gold sounds like it is completely liquid, like it can be swapped for currency anywhere in the world,” he says, “but as I research, it sounds like in a lot of precious metals investment you own it but it is stored somewhere else.”

When you go looking on the internet for ideas for investing in gold, you’ll find plenty of propaganda trying to persuade you to invest in a way where you don’t actually own gold. 

On the other hand, you could walk into a gold dealer in your local town and buy a number of gold coins and walk out, and it would be totally private. 

A lot of people who buy gold do it that way for privacy and actual control of their gold. And there isn’t any counterparty risk when the gold is in your physical possession. 

Not to mention that the exact opposite of that transaction happens if you walk in with gold. You’ll walk out with cash. 

Gold is portable and highly liquid. There are always bids on gold. And, we’ve seen the price go up pretty consistently for the last few years.  

More Ask The Guys

Listen to the full episode for more questions and answers. 

Have a real estate investing question? Let us know! Your question could be featured in our next Ask The Guys episode. 

More From The Real Estate Guys™…

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


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

Podcast: Ask The Guys – Equity Sharing, Self-Directed IRAs, and Gold

Another fantastic collection of questions for Ask The Guys from our fabulous listeners!

In this episode, we take on equity sharing, self-directed IRAs, the very hot topic of gold, and much more!


More From The Real Estate Guys™…

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


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

Ask The Guys – 401ks, Losing Properties, and Preparing for a Bust

That’s right. It’s another episode of our favorite topics from our favorites guests … YOU!

It’s time for another segment of Ask The Guys … and we’re ready to tackle the tough questions. 

We’re touching on 401ks, purging portfolios of problem properties, and how to prepare for what many believe is an inevitable bust. 

And … there’s more!

The best way to learn is from each other. 

Remember … we aren’t tax advisors or legal professionals. We give ideas and information … NOT advice. 

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

  • Your succeed-or-bust host, Robert Helms
  • His bust-a-gut co-host, Russell Gray

Listen


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401k sitting idle

Our first question is from Lenedia in Forney, Texas. She says she has about $16,000 left in an old 401k plan that’s just sitting idle. 

She wants to invest this money in real estate or in another niche that would give her a profit within a year … but she wants to know our advice for a first time investor. 

Well, we don’t give advice … but we are happy to share ideas. 

The duration of the investment is always an important factor. When you’re looking for a return in a short period of time … it limits the things you can invest in. 

When you’re using retirement savings … there are some rules and some risks. 

The best thing you can do as a first time investor is get educated. Invest in investment. The good news is that it doesn’t cost that much. 

In this particular case, you’ll want to learn about 401k plans and how they dictate what you can invest in. 

Maybe you’re at a point in your life where it’s time to start taking distributions from retirement. In that case, you may make different choices about where you invest the money. 

One of the big advantages of retirement account investing is that it isn’t subject to the same taxation.

But again … the most important thing you can do is educate yourself on all the options before you make a decision. 

What to do with non-performing properties

Christopher in Anchorage, Alaska, started purchasing multi family real estate in 2013. Currently, he’s sitting on two unfinished, non-performing properties.

Christopher says he either needs to find a buyer that wants to finish the properties … or an investor willing to front the funds so they can be finished and flipped for a cash out. 

What have we seen in these types of situations?

The real essence of the question is, “How do you get rid of a property you don’t want?”

Anytime you’re looking at an investment decision, you’re looking at its current condition. Whatever it is … it’s worth something in its current state. 

That worth is your baseline. Then, you look at what the potential of the property is … and what it is going to take to bridge the gap between where it is and its potential. 

If you can bridge that gap and make a profit … it may be an opportunity … but it still might not be the opportunity for YOU. 

Have other investors in your life come and look at the property and the market and ask them what they think the opportunity may be. They may see an opportunity that you don’t … or they may want to take it on themselves. 

Either way, it’s time to take a look at how the properties got this way to begin with. Why did this project croak on your watch?

Use it as a learning opportunity … and if you decide to take on the project yourself, you’ll need to be able to explain what happened to other investors. 

When you take the property to market … you may just decide it is best to take a loss on it and move on. Nobody gets through this business clean. 

Extra billions and the bust 

Jason in Merrick, New York, wants to know if we see the recent creation of billions of dollars pumped into the banking system having an impact on real estate. 

In the U.S. and many other countries, there is what we would term quantitative easing … printing money and creating billions of dollars out of thin air. 

Of course, there are ramifications. And there are a couple of things to think about. 

Lots of this capital gets into the system, and it doesn’t get back out again. That’s how it stays contained. 

People have access to the capital through whatever means bid up the assets that are in demand. 

That being said, there’s a lot of motivation on a lot of people’s parts to prop up real estate … because bankers make loans against real estate.

If those loans go bad … if real estate prices drop … the voters that live in those homes get angry at politicians. 

Some politicians are very motivated … that’s why you see a lot of effort to create subsidized financings and easing lending guidelines. 

All that to say that historically, more money being pumped into the system is good for real estate in the long term. 

Sometimes, it does create major disruptions in the credit markets. When that happens, credit markets dry up like they did in 2008 … and that has a negative impact on real estate prices.  

But, if you’re a cash flow investor and you’re controlling your real estate with prudent cash flows and long term structured debt that isn’t going to be called … you can ride that wave out. 

If prices were to crash again, we think it would be fair to expect that the powers that be will do exactly what they did last time … funnel lots of money into real estate until they can re-inflate. 

So, there are a lot of maybes and what ifs … but generally, real estate is the winner when there is more money floating around in the system. 

More Ask The Guys

Listen to the full episode for more questions and answers. 

Have a real estate investing question? Let us know!  Your question could be featured in our next Ask The Guys episode.

More From The Real Estate Guys™…

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


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

Podcast: Ask The Guys – 401Ks, Losing Properties, and Preparing for a Bust

Yet another enthralling episode of Ask The Guys! Listen in as we tackle more great listener questions about 401ks, purging portfolios of problem properties, and how to prepare for what many believe is an inevitable bust.


More From The Real Estate Guys™…

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


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

Ask The Guys – Markets, Growth, Condos and Credibility

You’ve got questions. We’ve got answers. 

That’s right. It’s time for another segment of Ask The Guys … when we host our most favorite guest … YOU!

This time we’re tackling listener questions about choosing a great real estate market, building a bigger portfolio, whether or not an office condo makes sense, and creating a rock-solid reputation in the real estate business. 

And … there’s more!

We never tire of hearing what is on your mind. 

Remember … we aren’t tax advisors or legal professionals. We give ideas and information … NOT advice. 

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

  • Your rock-solid host, Robert Helms
  • His rocking out co-host, Russell Gray 

Listen


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Broadcasting since 1997 with over 300 episodes on iTunes!

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To office condo or not to office condo

Our first question comes from John in Houston, Texas. He’s considering purchasing an office condo for his investment management business. 

“I’ve been doing research, and I get mixed feedback about these being a good investment,” John says. 

Is purchasing an office condo really better than leasing if you plan to be in the space for over 10 years? 

It’s a great question. 

Let’s start with what an office condo is. Maybe it’s obvious, but just like you would own a condominium home, you would own a part of an office complex. 

It could be the third floor in the corner or it could be its own building. It really depends on the development and its structure. 

These types of properties appeal to landlords who want commercial tenants instead of residential. The incentive for a business owner is that for what they are paying in rent, they could be working toward owning a building. 

Office condos can be really great investments. 

The biggest consideration for owner users is that not everyone has part of their business plan dedicated to owning real estate. 

But one of the great things about owning the business and owning the real estate is that you can do those two things separately. 

Your business doesn’t have to own the building. If you own it instead, you have the flexibility of just selling the business but keeping the building to lease out or selling the building and staying as a tenant. 

It also provides some asset protection benefits and other flexibility in terms of taxes. 

At the end of the day, talk with your legal or tax professional and run the numbers. Figure out the cost of ownership and if it makes sense for you. 

Growing bigger, faster

Casiana in Battle Creek, Michigan, wants to know how to grow her portfolio fast. She currently owns four rental properties and is interested in syndication. 

The whole premise of syndication is being able to do more … faster. 

Every property only cash flows so much … and to get to a really great passive income could take a lot of houses. 

Syndication isn’t the only way to go … but it is the next step for many folks, because it allows you to use other people’s expertise, money, and resources. 

You can also take advantage of great networking and education events like our Annual Investor Summit at Sea™. Come prepared … reading books by the instructors beforehand is a great start. 

Remember … education for effective action.

The main message is don’t trade time for dollars. Put your money to work for you. 

Money doesn’t buy happiness … but money can help take the things that make you happy and bring more of them into your life. 

Making sense of markets

Alex in Poulsbo, Washington, is looking to buy a first investment property … but doesn’t know where to begin. Maybe markets outside Seattle?

Well, you can make money in Seattle … but Seattle is very expensive. It’s one of the more expensive places to try to buy in the U.S. 

You may find out that investing in your home market means the numbers don’t work out very well … and since you are thinking about other markets, you’ve probably figured that out already. 

For those of you that live and invest in the same market … good for you! There’s no reason to go outside your market if you live in a place where the numbers work. 

Market analysis starts with listening to the industry buzz … what markets other real estate folks are excited about. 

Then, you look at each market and the key market drivers … factors that create vitality, jobs, and the need … or want … for more tenants to be there. 

Then, you need to look at the market in terms of your personal investment philosophy. 

What are you trying to accomplish as an investor? And what are you willing to do and not willing to do to achieve those goals?

Once you’ve found a market … or three … that look good to you, get on the ground. 

Go see things in person, and work on building a team. Latch onto a great property manager. 

Find experts who know the area. They should know where the path of progress is, where demand is going, and where the good tenants are.

They will help you drill down to the neighborhood where you should look for property. 

Carefully building credibility

Mike in Buffalo, New York, wants to know how to build credibility in his brand new real estate investment company as a wholesaler or investor. 

Credibility takes time to build. It’s like a reputation. 

You have one reputation. It takes you years to build it … and the whole thing can topple down in a minute. 

So, you’ve got to be very strategic and careful about building your credibility. 

It starts with presentation … how you show up, look, walk, and talk. 

Then, look at who you associate with. Seek out experts in the industry who are top notch quality, and find ways to enter their circles. Offer your help. Ask them questions. Find mentors. 

And … of course … do great work. 

In the end, credibility takes time and consistency. 

More Ask The Guys

Listen to the full episode for more questions and answers. 

Have a real estate investing question? Let us know!  Your question could be featured in our next Ask The Guys episode.

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