Podcast: Ask The Guys – Choosing Markets, Tracking Trends and Calculating Cash-Flow

We take on lots of great questions from our fabulous audience, including how to choose a good real estate market … which important trends to track and how … and one of the most important jobs of any real estate investor, calculating cash-flow … and MANY more!

So tune in for another exhilarating edition of Ask The Guys!


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!

Taxes, politics, and real estate investing …

Taxes, politics, and real estate investing might not be as salacious as sex, lies and videotape … but it’s arguably just as intriguing.

By now we’re sure you’ve heard all the “outrage” about allegations the United States’ Real Estate Investor-in-Chief paid nearly no federal income tax.

This shocks no one who understands real estate or the tax code, but it’s sure to rile up those who don’t. Call us cynical, but we suspect this might be the plan.

We’re not here to pour gas on the fire … or defend or attack any candidate, party, platform, or policy. If we influence you, we hope it’s simply towards Education for Effective Action™.

After all, the tax code is a tool available to ANYONE willing to invest the time and effort to learn how to use it.

Of course, you probably already know this.

But this entire debate over what’s really in Donald Trump’s tax returns promises to push the incredible tax benefits real estate investors have enjoyed for decades …

… right into the mainstream media’s crosshairs …

… AND into the focus of nearly every moderately politically cognizant person during one of the most watched election cycles in history.

So before you put on your red, blue or orange face paint and cheer for your team and curse “the enemy” …

… let’s consider the potential challenges and opportunities of these unfolding events for all real estate investors … blue, red, green or yellow.

A Main Street Wake Up Call

The tussle over Trump’s tax returns is going to wake up a lot of people who have no idea the tax code allows real estate investors to legally reduce their taxes to nearly nothing.

Some will be outraged … at least outwardly. Most rational people will realize Trump didn’t write the tax code … he simply used it effectively.

Some people will be angry. Others jealous. Some suspicious.

But we’re guessing a big chunk of people will be curious enough to fact check the law … because it’s 2020 and they can.

And it won’t take long to find the key to tax-free wealth involves real estate.

Further, as more people discover the tax savings is legit and how to do it, we bet a lot of the newly aware will be looking to get in on the action.

Of course, not everyone will want to go out and become a hands-on real estate investor. Many busy and retired people still want the “Wall Street” convenience of passively investing with professional asset managers.

But when they find they can have their cake and eat it too ...

… it could create a surge of interest in real estate private placements or “syndications” …

… and an even better opportunity for real estate syndicators to attract capital.

In fact, one of the most successful alumni of our syndication training has been using the tax benefits of his deals to raise over $200 million in private funds.

Meanwhile, back to the political drama …

Calling Capitol Hill’s Bluff

As media fans the flame of tax-avoidance outrage … and opportunistic politicians myopically jump on the trash Trump bandwagon …

… the very politicians who created the tax laws Donald Trump and nearly every other well-advised real estate investor uses to legally reduce tax liability …

… could potentially face a lot of pressure to either defend them (at great political cost) or eliminate them.

In fact, in the first 2020 Presidential debate, Joe Biden claimed he would.

Of course, politicians of all colors are famous for making lots of promises and espousing policies they never actually follow through on.

We’ll let you decide which outcome you prefer, and which team is likely to push for it. Vote your conscience.

We’re just raising awareness so you can best prepare your portfolio … come what may.

What do we think will happen?

Well, since you asked …

When we look past the two teams on the field and the fiery rhetoric …

… we see a financial system which requires the unrelenting and perpetual expansion of debt.

We’ve explained this many times in the past, but in simple terms … any system which borrows its currency into existence at interest can ONLY repay by borrowing more.

If that’s confusing, just sit and think about it.

If you borrow $100 into existence at 10% annual interest to run your “economy” … no matter where the money ends up at the end of the year … the economy owes $110 (principal + interest).

The obvious problem is there’s only $100 in existence. The ONLY way to pay the interest and keep the economy going is to borrow MORE.

Spoiler alert: THAT is (apparently) THE plan. And (perhaps) all the rest is theater.

If this makes no sense to you, that’s because it makes no sense.

As we explained in our Future of Money and Wealth conference, it’s a faulty, unsustainable system.

Nonetheless, this is the system which was born in 1913 as a result of a secret meeting at Jekyll Island, Georgia. If you don’t know the story, it’s a great Halloween read.

But because the system is based on debt, the tax law encourages borrowing.

And because the best collateral for loans is real estate, it’s no surprise the best tax breaks are with real estate.

As CPA Tom Wheelwright has been telling us for yearsthe tax code is written to coerce people and businesses to do what the government wants.

And just in case you’ve heard the argument taxes are necessary to pay for government … there’s a different perspective from someone well-qualified to have an opinion …

Click here to read the transcript of a public speech given by a high-ranking Federal Reserve official who admits …

income taxes are NOT necessary to pay for government… AND the tax code is overtly used to manipulate private sector behavior for political purposes.

So will the tax breaks for real estate go away?

Probably not completely. But some of the best bonus depreciation breaks are already slated to expire soon … unless they’re extended to create more stimulus.

We’re not waiting around. There’s a window of opportunity for real estate investors … so we think the smart move is to grab them while you can.

Until next time … good investing!

Podcast: High Return Turnkey Rentals in Affordable Indianapolis

In tough times, demand for affordable essentials goes UP. When it comes to real estate, it doesn’t get any more essential than residential.

Indianapolis is a rare major metro which is very affordable while still offering tremendous quality of life.

It’s no wonder Indianapolis is attracting nearby mid-westerners trying to escape high-price, high-tax states.

In this episode, we visit with our Boots-on-the-Ground guy and talk high return turnkey rentals in Indianapolis.


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!

Markets matter more than ever …

In an age of macro-economic turmoil and stress, the risk of the tide going OUT is far greater than the odds of a rising tide lifting all boats.

So as Warren Buffett famously quipped …

“Only when the tide goes out do you discover who’s been swimming naked.”

And of course, if that happens to be you … it’s often expensive and embarrassing to have your shortcomings exposed.

Anyone paying attention right now expects the tide to go out any time now. In fact, many pundits are shocked the Fed has been able to prop things up this long.

So for strategic real estate investors, market selection matters more now than ever. You can’t count on a rising tide in all markets.

People and prosperity will start to flow away from some markets and flood into others. We’re already starting to see this polarization.

Get it wrong, and there you are in your financial birthday suit with water around your ankles.

Get it right, and your portfolio of “average” properties has you floating in equity and cash flow amidst a flood of demand with capacity to pay.

Long time followers know when we say “markets” we’re referring not just to geographies, but also product niches and demographics.

So it’s places, products and people.

And when times get tough … which is what’s clearly on the weather report …

… the question is: where will people and businesses go, and what kind of real estate will they need?

If you only invest in your own area, this might seem simple.

After all, you know the lay of the land well. You talk to people. You have your thumb on the pulse of the local market.

But if you don’t happen to live in a great investing market … and the local economy or cash flows don’t make sense … then you need to look for clues about markets that might make sense.

For example, Visual Capitalist just put out a nifty 3D map they call …

The U.S. Cities With the Highest Economic Output

   

Of course, these aren’t really cities … they’re metros.

But it’s a great top-down start for homing in on a local geography in which to search for teams and opportunities.

However, this is only a start. There are several other factors to consider when delving into markets … but strong economic activity is a biggie.

So before you jump on a plane and tour the nation, dig a little deeper.

If you’re a residential rental property investor … single or multi-unit … there are several markets you’d probably eliminate from consideration, simply based on their hostility towards landlords.

Losers in this category would be California, Illinois and New York. In fact, of these ten, probably all but Texas and Georgia would get crossed off our short list.

Of course, while the macro-financial strength of a metro is a solid sea and can float a lot of boats …

… trends in the economy and employment also matter quite a bit too.

Remember … the Titanic was a big, powerful ship. Even after it started leaking it still seemed very robust. Many thought it could leak without sinking.

Of course, those passengers who didn’t understand what was happening or didn’t take it seriously were slow to make it to the lifeboats.

By the time the slow-movers were looking for safety, the best spots were all taken. It didn’t end well for them.

Keep this in mind when deciding how to navigate this current crisis.

Another important thing to remember when shopping for real estate markets, jobs and population matter … a lot.

LinkUp.com puts out a lot of great (and expensive) data … but sometimes you get free samples that are useful.

In this case, they did a study of Changes in New Job Openings for a one-month period and created this very cool state-by-state graphic …

 

 

This adds a little color to the analysis … literally. 😉

Our audience knows some of our favorite markets for the last several years are in Florida, Georgia, Tennessee and Texas.

These numbers don’t surprise us because these are business-friendly, landlord-friendly, relatively affordable markets.

Of course, this is just a snapshot … but it’s another clue about where to search for resilient opportunity.

Another fun resource is Zumper.

They have a semi-interactive tool which visually shows internet search volume for where renters are interested in moving to.

Seems like that would be good to know.

Here’s an interesting chart they recently put out …

 

As you can see, there are some new markets to consider adding to the research bin to see how they stack up in terms of strength in economy, jobs, and landlord friendliness.

While we love top-down data … we like to compare and contrast it to “thumb on the pulse” feedback from people who know the market intimately.

For example, we can see from this data that Indianapolis is attracting a lot of interest. We just don’t know WHY.

But we learned from talking with our Boots On The Ground correspondents, Indianapolis has been the beneficiary of people fleeing Illinois.

Our point is that as we continue to navigate this COVID-19 induced cascading crisis … people ALWAYS need certain types of real estate … and residential is always at the top of the list … no matter what’s happening.

People and businesses will move to pursue or preserve quality of life and opportunity … which is about income, expenses, amenities, and climate (weather and business).

In good times and bad, there will always be winners and losers.

Investors who win are more strategic, informed, well-advised and supported, and therefore more aware, prepared, brave and bold … and move smartly and decisively as trends emerge.

To paraphrase Charles Dickens … these are the best of times and the worst of times … and history proves both are ever-present.

So it’s not the circumstances which make times good or bad. Success depends on how well each individual responds to whatever is happening.

The good news and the bad news is … each of our individual destinies remains largely our own responsibility.

If that thrills you, then you’ve probably got skills and a great team … and are looking forward to the impending economic white waters.

If it freaks you out, then it’s probably time to work on your training, tribe and team as a top priority.

The great news is it’s never been easier to find great ideas, information, people and resources. Those all lead to great opportunities.

Thanks for being a part of our tribe … and for reading our stuff. We like it when you reply, give us feedback, comment on our videos. Especially while we’re still in semi-lockdown.

We look forward to getting back into visiting with our audience at live events … but until then, we’ll see you on the radio, podcast, social media and YouTube.

We’re stepping up our content creation now because talking heads on mainstream financial media don’t understand real estate investing.

They don’t talk about real estate investing because it doesn’t promote or protect Wall Street … and real estate is not an asset class or commodity.

But because properties CANNOT be used as chips in the casinos, they’re much more stable in stormy seas. We think that’s going to become VERY attractive.

The right real estate in the right markets controlled with the right financing and managed by the right team is about as good as it gets for building resilient wealth in tumultuous times.

Keep this in mind while watching the storms … and as you focus on the fundamentals, your odds for success go way up.

Until next time … good investing! 

Principles for Building a Successful Brand and Database

To profit in real estate you must attract the right opportunities and do the right things. 

Too many investors put all their focus on how to do deals … but they neglect the HOW of attracting people and opportunities. 

Business has proven principles for building a brand people like and trust … and for building a database full of the active and prospective sources of deals, capital, and services you need to succeed. 

Today, we’re visiting with a world-class marketing genius to discuss how to build a profitable brand and network. 

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

  • Your successful host, Robert Helms
  • His unprincipled co-host, Russell Gray
  • Marketing legend, Kyle Wilson

Listen

 

 


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

real estate podcast on itunesSubscribe on Androidyoutube_subscribe_button__2014__by_just_browsiing-d7qkda4

 

 


Review

When you give us a positive review on iTunes you help us continue to bring you high caliber guests and attract new listeners. It’s easy and takes just a minute! (Don’t know how? Follow these instructions).

Thanks!


Building your brand and your network

Why is it that some real estate investors are so much more successful than others? It boils down to habits of success. 

The good news is that these are learnable skills … and we’ve got a great guest who is going to share some awesome ideas about how YOU can connect the dots to get your message out there. 

How do you market? How do you brand? How do you build a reputation? How do you work through other people?

Where a lot of real estate investors fail is they think success is about the transaction. They think it’s about the numbers. They think it’s about due diligence. 

Those things are important, but in any business, none of that matters if you aren’t building your brand and building your network. 

How people know you … how they think about you … how they feel about you … determines whether or not they move closer to your circle and bring you opportunities. 

Those relationships are the key to having a great business … which we know is just as true for real estate investing as it is for any other venture. 

Tactics vs. principles

Our guest today has an amazing background. He’s probably the best-known guy in the personal development world that you’ve never heard of. 

Kyle Wilson has more than 10 number one Amazon bestseller books and has been business partners with the legendary Jim Rohn for … but before that he owned a service station in Vernon, Texas. 

“I grew up in a small town, never went to college, and eventually owned this service station, but at age 26 I moved to Dallas looking for a new opportunity,” Kyle says. 

Kyle went to a seminar and ended up working for the speaker selling tickets to events. He then struck out on his own hosting events, which is how he met Jim Rohn. In 1993, they went into business together. 

The key is that Kyle was marketing before there were modern marketing tools … like the internet. 

Today, people think that marketing means they have to be online … but marketing principles have been constant for decades. 

For example, what’s easier … a referral or a cold call? Obviously, a referral is better. 

Kyle says he thinks of marketing as a wheel … you’re the hub, and each spoke is one of your different products or services. You want to get people on the wheel and take them around. 

It’s the mentality of hunting versus farming. You can try to hunt people down for a one-time opportunity, or you can try to grow and nurture lasting relationships for many opportunities in the future. 

The first big principle is having a great product. Second is having great service. Third, is being consistent and relational over a period of time. 

“People confuse tactics with principles, and so they put all their money and effort into tactics and ignore the principle side. But if you have a great product and great service and connect with people over and over, you’re going to watch your business compound,” Kyle says. 

In real estate, people who churn through clients aren’t really interested in taking care of people long term … but if you are watching masterful agents, they keep in touch and do so much better. 

Strategies for success

One strategy anyone can use is to create platforms where you can make connections … things like podcasts, seminars, email lists, and more. 

“I think the way you take responsibility for your own business is that once you get a customer, you want to keep them, and you want to communicate with them,” Kyle says. 

Remember, it takes people time to engage. 

We have people show up at our own events who just found our podcast two weeks ago … and we have people who have been listening for eight years and just decided to take the plunge. 

You want to get those people on your platform. Get them on your list so you can talk with them and interact with them. What you communicate to them is the biggest thing in your control. 

“My ultimate goal is to get someone’s contact information so I can follow up. If you lose track of people, that’s throwing money away,” Kyle says. 

There are certain things on your “marketing wheel” that are designed to bring people to you. 

That could be a newsletter. It could be that you send out cool articles from other people. It could be a podcast like ours, or it could be that you’re doing a YouTube video once a week. 

Whatever it is, you’re sharing something. 

You don’t have to share with the mind to sell a specific product. Instead, simply think about creating value for these people. 

Once you have built an audience and are sharing with that audience, then you can periodically give them the opportunity to say yes to something … but you’re not having to constantly sell. 

If you build an audience, then you can attract talented thought leaders. They need an audience to talk to … and they might want to do business with you. 

For more on principles that build a successful brand and database … listen to the full episode!


More From The Real Estate Guys™…

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


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

Delaware Statutory Trusts — A Powerful Tool for 1031 Tax Savings

Real estate investors LOVE the 1031 tax-deferred exchange. 

But when you want to exchange your equity into a partnership so you can get into bigger, better deals in new markets with professional management … a 1031 comes up a little short. 

A great solution? Delaware Statutory Trusts. 

Even though they have been around for years, many investors don’t know about this powerful investment tool. That’s why we are talking with a syndicator who knows how to use this strategy to keep your equity compounding. 

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

  • Your powerful and trustworthy host, Robert Helms
  • His tool of a co-host, Russell Gray
  • Delaware Statutory Trust organizer, Paul Moore

Listen

 

 


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

real estate podcast on itunesSubscribe on Androidyoutube_subscribe_button__2014__by_just_browsiing-d7qkda4

 

 


Review

When you give us a positive review on iTunes you help us continue to bring you high caliber guests and attract new listeners. It’s easy and takes just a minute! (Don’t know how? Follow these instructions).

Thanks!


Building on the 1031 exchange

One of the things we have to manage as real estate investors is our tax liability. We want to pay as little tax as possible, but we also want every tax advantage we can get today. 

Today, we’re going to talk about a relatively unknown technique that’ll help you preserve tax and make more money. 

There is a strategy behind how and when you change assets. If you sell a rental house after five years, you’re going to do something with the proceeds. 

In this episode, we’re talking about a structure that doesn’t get talked about enough, because it allows people some really great benefits. 

As always, we are not tax professionals. We don’t give advice … but we will share some ideas and information. 

One of the great tools we have to repurpose and reposition wealth is a 1031 tax deferred exchange. 

People talk about this strategy as a way for an individual investor to avoid tax … but it has been more difficult for syndicators. 

How do you implement this strategy in a group investment? 

Solving that problem has been really difficult … but there have been some new innovations in terms of the way people are using some of the structures available. 

What is a Delaware Statutory Trust?

Paul Moore from Wellings Capital is a syndicator who specializes in some great asset classes … but he has also helped unlock the key to a new chapter of 1031 investing. 

“The 1031 exchange is great. When the 2017 tax law came out, we were all concerned that maybe they were going to take it away, and they did for almost everybody except real estate investors,” Paul says. 

As real estate investors, we are really fortunate that we were able to keep the 1031 exchange. It gives us great leverage and the ability to compound tax deferred. 

And … you could even swap till you drop and never pay capital gains or recapture tax. 

But even with all the advantages of a 1031 exchange … it’s really hard if you want to go from an active manager to a passive manager. 

Paul says over the last three or four years he has had many people call him with 1031 exchange money that his funds couldn’t help. 

They were frustrated and his team was too. 

The last thing any investors want is to see other investors give up and pay taxes or invest in something that they might not have otherwise just to avoid taxes. 

So, Paul started looking into the Delaware Statutory Trust … an ownership model in which a legal entity allows people to buy fractional interest in a property and even diversify among several DSTs. 

This takes away the time pressure, the negotiation, and the management hassle of the 1031 exchange. 

It also gives direct ownership … which means that the replacement property is going to flow the tax deferrals to the individual investor. 

Now let’s be clear … it’s a Delaware trust … but the property doesn’t have to be in Delaware, and the person doesn’t have to be in Delaware. 

The beneficiaries are actually the people who buy the fractional interest, but the professional manager who runs it takes on all the hassle. 

A DST also allows the 1031 exchange investor to get a stabilized, predictable return. 

Another benefit is the ability to slowly transition your portfolio over time into bigger and bigger projects under the watchful eye of professional management. 

In a nutshell, the Delaware Statutory Trust allows people the same benefits of a 1031 exchange … but rather than investing in a specific property, you’re investing alongside other folks. 

One big downside to the 1031 that does carry over to the DST is the debt rule. 

If you’re investing $100K and you have 40% debt and 60% equity, you have to have that same percentage in the new investment. 

If you don’t, you just pay tax on the part that’s out of whack. But you still have to pay some tax. 

Types of properties for a DST

The return and the income model for the investor will depend on the property itself. 

What are the range of types of properties that make sense for Delaware Statutory Trust operators to consider?

For a long time, the most popular properties for DSTs have been things like triple net leases … a long-term lease that delivers predictable income. 

But now, DST providers have also gone into multifamily. There are self-storage DSTs. There are even mobile home park DSTs. 

The important thing is to have a stable, predictable, passive income. If the property isn’t generating something that’s predictable and stable, it will throw off the DSTs. 

But, that’s why investors can expect a set return. 

For more on 1031 exchange and Delaware Statutory Trusts … listen in to the full episode!


More From The Real Estate Guys™…

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


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

Podcast: Principles for Building a Successful Brand and Database

Profiting from real estate investing is the result of attracting the right opportunities and doing the right things. Many investors focus on how to do deals but neglect the how of attracting people and opportunities.

In any business, real estate investing or otherwise, there are proven principles for building a brand people like and trust … and a database full of active and prospective sources of deals, capital, and services necessary to succeed at a high level.

In this episode, we visit with world-class marketing genius Kyle Wilson to discuss how to build a profitable brand and network.


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!

This is a SHOCK! … said no one

We’re proudly filing this under the category of “We told you so.” ….

Stripe workers who relocate get $20,000 bonus and a pay cut
– Bloomberg, 9/15/20

“Stripe Inc. plans to make a one-time payment of $20,000 to employees who opt to move out of San Francisco, New York or Seattle, but also cut their base salary by as much as 10% …”

“… companies … have expanded opportunities for employees to work remotely while also signaling … pay cuts if workers move to less-expensive cities.”

“VMware Inc. … Facebook Inc., Twitter Inc. and ServiceNow Inc. have all considered similar measures.”

Of course, we could just as easily file this under “Duh.”

After all, when companies discovered they could move jobs to China and Mexico to save money and increase profits, they did.

Modern tech empowers remote working.

And while many info workers might not be keen on moving overseas … moving to low cost, low tax, good quality of life states is not just palatable … it’s appealing.

The COVID-19 lock-downs have forced businesses into improving their remote workforce management … opening everyone up to a win-win move.

Companies LOWER their labor expenses, while employees improve their NET lifestyle in more affordable markets.

Also obviously, this has implications for the demand for real estate … housing, office, retail … in both the markets losing and those gaining people and their paychecks.

This is just one of many trends the COVID-19 crisis has accelerated, though likely still in its infancy … and worth watching.

That’s why we created the COVID-19 Crisis Investing video series … and why we’re getting regular updates from our Boots-on-the-Ground correspondents.

Shift is happening … and faster than usual.

Investing in this environment is like driving a car … the faster you go, the farther up the road you need to look so you have time to react well.

Here’s another noteworthy article with insights which are a little more challenging to decipher, but worth the effort …

The Death of the 60/40 Portfolio
– Yahoo Finance, 9/6/20

“That’s stock talk. It doesn’t apply to me. I’m a real estate investor!”

Really?

Well, before you click away to check the latest mortgage rates or political pandering, consider …

While 60/40 refers to a typical Wall Street portfolio allocation model for a mix of stocks and bonds.

The reason it’s been a staple … and the reason it’s changing … is highly relevant to real estate investors.

“The biggest takeaway is that Woodard’s team is more confident than ever that … interest rates … will likely … move considerably higher … arguing that investors should start to move away from bonds in their current allocations.”

The “Woodard” they’re referring to is Jared Woodard, Head of the Research Investment Committee for Bank of America Research.

So he’s well-qualified to have an opinion worth contemplating.

But it’s not just rising interest rates that are interesting to real estate investors …

(though that’s a compelling reason to secure as much low-cost long-term debt as you can while you can)

… but his recommendation to “move away from bonds” is important.

So in another “surprise said no one” moment, are reports the two biggest U.S. bondholders in the world (China and Japan) have already started “moving away”.

That’s because when rates rise, bond values fall.

And like any bubble … when bondholders head for the exits en masse, it sets off a very disrupting chain of events in the macro-strata of the financial system.

Of course, as you might suspect … it all rolls downhill onto the often unsuspecting denizens of Main Street.

The reason it’s SO extreme is because of the way bonds are used in the financial system.

In real estate terms, they’re used like properties with equity. The owners borrow against them to raise more cash to lever into more “assets”.

Except these loans against bonds come with margin provisions … which means if the value of the bond falls, you’re either forced to sell at a loss or borrow more.

The point is when balance sheets at every tier of the financial system are stuffed with leveraged bonds …

… a collapse of bond prices is a BIG problem for everyone … including real estate investors. Remember 2008.

(Yes, we know we’ve covered this before. But although the asteroid is moving slowly towards Earth, it still seems important to talk about it and prepare.)

Of course, in 2008 bonds collapsed because of a higher than expected default rate in sub-prime loans.

Yes, it’s true, that was then and this is now. But with an economy still largely locked-down, headlines like this should surprise … no one …

Lower-Credit Homeowners Weigh Heavily on U.S. Mortgage Market
– Bloomberg, 9/15/20

But whether it’s sub-prime borrowers defaulting, large foreign holders dumping, interest rates rising, or leveraged bond-loans going bad …

It doesn’t matter WHY bond values fall … if they do, it’s a threat to the financial system.

The fix, of course, is lots of dollar printing by the Fed, which (as we’ve been saying and saying and saying) puts a lot of pressure on the dollar 

Dethroned Dollar Is Making Waves Across Markets, in Five Charts
– Bloomberg, 9/15/20

Of course, as this article points out, there are different tactics for investors to mitigate risk and capture opportunity …

“Savvas Savouri at Toscafund Asset Management recommends switching out of conventional Treasuries and into inflation-protected securities.”

“’The simple reality is that the only feasible way to get the U.S. to the preferred inflation target is through a dollar devaluation,’”

The article also mentions gold as an alternative tool for the job …

“The dollar’s decline has also helped thrust gold onto center stage … some investors are betting that [gold] bullion will prove a better haven than Treasuries as inflation bites …”

So while there’s a fair amount of consensus about the challenges … there are variations on how to best address it.

And in yet another “surprise … said no one ever” moment …

… real estate is completely missing from mainstream financial media’s discussion of potential solutions.

That’s like heading out to a job site and leaving your best power tools at the workshop. Then again, if you don’t know how to use them, what good are they?

Of course, any talk about the what, why, and how of real estate investing is completely omitted because (in our not-so-humble opinion) mainstream financial media exists to protect and promote Wall Street.

That’s probably why YOU are here. It’s certainly why we are.

The GOOD NEWS is, whether you’re investing in your own account or organizing syndications with private investors …

… there’s a LOT of opportunity RIGHT NOW to use the right real estate as the foundation of a resilient real asset portfolio.

The GREAT news is that even though things are moving faster than normal …

… there’s still time to build your knowledge and relationships and to organize your life and portfolio to get in on the action.

The asteroid hasn’t struck yet … and while it may not … better to be prepared and not have a crisis than to have a crisis catch you unaware and unprepared.

We’re working hard to step-up the volume of ideas, resources, people and opportunities we share with you right now … because we think the times demand it.

There’s a “new normal” on the horizon …

… and while real estate is real, essential and a time-tested vehicle for wealth building and preservation …

… there are new rules and strategies emerging … because market conditions are dramatically shifting.

So be SURE to subscribe to our re-launched YouTube channel, follow us on Facebook, and of course, subscribe to the podcast.

When you support ALL our distribution outlets with your listens, views, likes, shares, comments, questions, and reviews …

… you make it easier for us to attract the guests and resources necessary to produce more and better content for you.

We appreciate you … and look forward to thriving through this crisis with you.

Until next time … good investing!

Build-to-Rent Residential in Central Florida – Affordable and New

Many people ask us what the best way is to get started in long distance landlording.

THE ANSWER … buy an affordable, brand new property in one of the best markets in the country. 

We’re taking a deeper look into how one innovative developer is building new residential properties especially for investors like YOU. 

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

  • Your good as new host, Robert Helms
  • His very affordable co-host, Russell Gray
  • Veteran Central Florida real estate broker, Jean Gillen
  • Build-to-Rent real estate developer, Wagner Nolasco

Listen

 

 


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

real estate podcast on itunesSubscribe on Androidyoutube_subscribe_button__2014__by_just_browsiing-d7qkda4

 

 


Review

When you give us a positive review on iTunes you help us continue to bring you high caliber guests and attract new listeners. It’s easy and takes just a minute! (Don’t know how? Follow these instructions).

Thanks!


Sunny Central Florida

All real estate markets are not created equal. With the current COVID-19 crisis, there are markets that have weathered the storm pretty well while others are in complete disarray. 

The thing is … people and money and business don’t just go away. They do, however, move around. The key is to see where they are going. 

When you can see that, you see that there is going to be an opportunity on the opposite side of a problem. 

Today, we’re taking a look at a market that’s cheap, cheerful, and affordable … Central Florida. 

As more people are realizing that they can work from anywhere, they are asking themselves where they would like to live. 

Central Florida has great weather, sunshine, and things to do. It has been one of our favorite markets for many years … and it’s not really one market. 

It’s a huge area with multiple exciting markets within it. 

Today we’re learning why it is that Central Florida continues to do well in spite of COVID-19 from two people who really know this market well … Jean Gillen and Wagner Nolasco. 

People want cheap and cheerful

Jean Gillen has been in this business for a long time as a realtor … and her specialty is helping investors. 

As a realtor, Jean understands that the investment market is kind of unique. She knows what investors are looking for and what they need to make a great deal happen. 

“The biggest thing we have found out through this pandemic is that one of the places a lot of people want to move to is Florida,” Jean says. “We’re cheap, and we’re cheerful.”

For example, someone moving from California and buying a $200,000 house is getting a home that is equivalent to a $1.5 million house on the West Coast. 

If you look at a Central Florida parking lot and take a look at the license plates, you can see where folks are moving from … Illinois, New York, Arkansas, Missouri. 

Central Florida has tons of new jobs in growing industries like space and tech … with over 400 new employers on the “space coast.”

And don’t forget about those lovely retirement communities and the fact that there is no state income tax. 

One thing that is important for investors to know and remember is that only 60% of the land in Florida is built on. 

Jean and her team target homes on infill lots at about a quarter of an acre with amenities and neighbors already in place. 

But what about hurricanes?

“We do not worry so much about hurricanes. We do have hurricanes, but we are able to prepare. And, with 2020 construction, the homes really can withstand a lot,” Jean says. 

In Florida, investors will want to purchase a cement block house. The facade can be different, but the cement block structure means you’re ready to weather any storm … and the resell value will be higher. 

Standards for 2020 construction reduce the amount of insurance you have to have on your home. The average insurance for a $215,000 home is about $49 a month. 

Why brand new?

A couple of years ago, Jean introduced us to Wagner Nolasco. Wagner is a home builder who has teamed up with Jean to provide the type of housing that is in demand for investors today. 

They’re building single family homes … ground up construction, brand new … but literally in the path of progress and growth in these Central Floridian communities. 

There are many advantages to an investor buying a brand new house. 

“I’ve done over 400 turnkey properties in my career, and from that experience, I tell my friends that are doctors and investors, ‘You can put a brand new heart into a person, but you can’t guarantee that the arteries are going to be unobstructed,’” Wagner says. 

When you buy a 40 or 50 year old house and fix it up, there are always going to be more problems down the line. 

When you buy brand new construction, you can safely bet that your capital expenditure is going to be minimal over the next several years.

Florida has one of the toughest building construction codes in the country … concrete block construction, brand new hip roofing, energy efficient air conditioning, windows that can withstand 140 mph winds, tile floors throughout, and the like. 

“It’s more bang for your buck,” Wagner says. 

Together Jean and Wagner have re-engineered what the typical individual moving to Central Florida will be looking to pay for housing and determined what they can build brand new to offer a win for both investor and tenant. 

By building the same model house on infill lots in various communities, their team can buy in volume and lower costs while creating a better product than a turnkey property. 

And, 80% of tenants that rent a new house will stay for three or more years. Less turnover means more money in your pocket, fewer repairs, and better quality tenants. 

To learn more about investing in brand new construction in Central Florida … listen to the full episode!


More From The Real Estate Guys™…

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


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

Podcast: Delaware Statutory Trusts – A Powerful Tool for 1031 Tax Savings

It’s awesome when equity happens. And it’s even better when it compounds. This is why real estate investors LOVE the 1031 tax-deferred exchange.

But when you want to exchange your equity into a partnership so you can get into bigger, better deals in new markets with professional management … a traditional 1031 comes up a little short.

Delaware Statutory Trusts are a great solution. But even though they’ve been around for 20 years, many investors are still unaware of this powerful tool.

So tune in to this episode as we talk Delaware Statutory Trusts with a syndicator who’s using this powerful tool to help investors keep their equity compounding.


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!

« Previous PageNext Page »