Real Estate Goal Setting – A New Plan for a New Year

 

new year real estate

It’s a new year—and time for a new YOU.

A new real-estate-investor you, that is.

Real estate investing is a math-based science, but it’s also an art of creative decisions.

Today, we want to help you figure out how to optimize the MATH and the ART of real estate investing to achieve both your inner and external goals.

Your inner goals are what you want for your own life.

Your external goals are what you want for the world around you.

We want to help you answer that big-picture question: How do I take who I am and translate that into what I want to do as a real estate investor?

In our latest episode of the The Real Estate Guys™ radio show we talk about setting goals and what YOU should think about as you start making your plan for the New Year.

You’ll hear from:

  • Your juiced-and-jazzed host, Robert Helms
  • His fired-up co-host, Russell Gray

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!


Before anything else, do the math

The first thing we want you to look at when you sit down to set your real estate goals for the New Year is money, plain and simple.

For many investors, investing in real estate means getting out of the rat race.

If you do it right, being an investor can mean you don’t have to trade time for dollars!

That’s an incredible goal.

So before you figure anything else out, do this: figure out your number, the amount of monthly passive income you want or need to live comfortably.

Next, figure out what yield you can anticipate from your equity.

Here’s where it gets a little tricky. Not every real estate investor starts with millions in equity.

In fact, many start with very little. (Don’t feel you’re alone if that’s the case for you!)

If you’re a beginning real estate investor, a critical part of reaching your number is amassing equity.

Here’s an example: Investor John figures out that his number is $10,000/month, or $120,000/year. He knows he can get 5% yield on his equity. That means John needs 2.4 million dollars equity to be comfortable.

Investor John isn’t a millionaire, however. He only has $100,000 to start with. John invests that $100,000 wisely and is able to grow it by 20% each year. In 18 years, John has accumulated 2.6 million dollars and reached critical mass.

18 years might seem … well, it might seem like a lot!

How quickly you grow your equity and reach that critical mass depends on how you leverage your equity. Maybe you’re a conservative investor like John. Or maybe you’re more aggressive?

The approach you take will depend on what you need real estate to do for you.

No matter your approach, here are the most important questions YOU need to ask yourself when you sit down to work out your goals:

  1. Where am I at right now?
  1. Where do I want to go?
  1. What do I have to work with?
  1. How can I begin to take actionable steps to get to my goal?

Imagine a pinball bouncing around. That’s what you look like without a plan!

Do the math, make a plan, execute your plan, and your chances of success will be much better in the long term.

Master the art of real estate investing

While crunching the numbers may be a doable science, real estate investing requires a certain kind of art: a creative balancing act, if you will.

This is because there is NO one-size-fits-all goal-setting strategy.

An important part of setting goals as a real estate investor is putting your goals (and your assets!) in three different buckets: short-term, mid-term, and long-term.

This is one way to balance conservative and aggressive approaches, to experiment without risking your whole nest egg.

Artfully balancing your assets can allow you to sustain yourself while you grow equity.

Two examples:

  1. Carol works a day job and invests in real estate part time. She uses the money from her day job for daily living expenses and sets aside the money she earns from real estate investing to re-invest so she can grow her equity.
  1. Dan has been investing in real estate for a while, but all his equity is invested. He decides to go full time and become a syndicator. He makes a living from the fees and profits he gets as a syndicator without taking any money from his own portfolio.

As you can see, Dan and Carol have COMPLETELY different approaches to real estate investing.

However, both Dan and Carol have figured out how to sustain themselves WITHOUT killing the goose that lays the golden egg, so to speak.

Internal goal setting: What do you want for your life?

A lot of real estate investing comes down to lifestyle decisions.

Ask yourself: How do I want to live? Who do I want to work for? Where do I want to own real estate? What kind of relationships do I want to form? Above all, what’s interesting to me on a daily basis? What makes me tick?

Don’t default into a situation where you’re not interested in what you’re doing.

RIGHT NOW, take a look at what you’re doing. Sit back and ask the ultimate question: Is this really what I want to do?

Your homework today is to take some alone time to imagine your career and your future. Think about how you want to spend your days.

Then sit down with a paper and pencil (or your laptop, typewriter, fountain pen … you get the picture) and make your internal real estate goals.

Like we’ll talk about in our upcoming goals retreat, every goal you make should be two things: specific and measurable.

Some examples:

  1. How many hours will I devote to education (events, podcasts, reading, conversations with other investors, etc.) each month this year?
  2. How many properties will I research each month?
  3. By the end of this year, how many additional properties will I accumulate?

Writing down a number is POWERFUL. And it’s critical to reaching your goals.

Maybe this is not a year of acquisition for you, but a year to get structured, get educated, find your markets, and assemble your team.

That’s okay!

There’s no right or wrong path, as long as you’re working on goals to get ahead.

External goal setting: what are you going to do for the world?

We talk a LOT about what real estate investing can do for you.

Another important component of investing is what are YOU going to do for OTHERS?

Most people want the world to be a better place, even if they don’t always agree on how that should be done.

When you’re creating your business, how are you going to serve the world?

Will you use your free time to volunteer in communities around you? Take your love of real estate and use it to help others?

No matter how much is in your bank account, ask yourself: Is my life rich right now?

As an entrepreneur, you may already be serving the people you work with. Maybe you’re providing clean, affordable housing. Maybe you’re creating housing opportunities where there were none before.

More real estate might increase your cash flow, but it can also help people live better lives.

As Steve Jobs has said, “We’re here to put a dent in the universe.”

Once you have an external goal, combine that with your internal goals in a sound business model with a good financial plan, and you’ll have a winning formula for a successful life.

New year, new you

Your personal goal setting will really come down to what we call zero-based thinking.

Ask yourself: Knowing what I know now, will I continue to do what I’m doing? What will I change?

Reevaluate your past year.

Ask yourself: What did I set out to do? What did I succeed at? Most importantly, where did I fall short and why?

Be BRUTALLY honest with yourself.

Did you fall short because you didn’t have the right people on the bus? Didn’t have the appropriate personal discipline? Or didn’t ACTUALLY want to complete that goal in the first place?

Examine what is possible for you.

Real estate investing should make you “juiced and jazzed,” as Robert says.

You can’t get out of bed and go to work every day if you don’t have something driving you. You need a purpose that’s true for you.

Get out in the real world. Look at other investors. Listen to them. Collect ideas. Go to events where you can meet like-minded investors.

Then get in touch with your inner investor. Develop your personal investment philosophy. Define the market and product types you’re interested in.

Form your big picture of what you want to do for YOU and what you want to do for the WORLD.

Then go out and make some equity happen.

Make this next one an amazing year!


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.

Ask The Guys – Seller Financing, Property Inspection Tips, and Negative Cash Flow

 

Businessmanholdingbuildings_615x300

We’re back with Ask the Guys!

Today, it’s time to reach into the mailbag for some insightful listener questions.

As always, a disclaimer: We are NOT tax professionals or attorneys (we promise), and we DON’T give advice. We simply provide ideas and information. YOU decide what to do with it.

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

  • Your field-tripping host, Robert Helms
  • His crunch-the-numbers co-host, Russell Gray

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!


Question: How do I match my personal investment philosophy to actual real estate investment options?

Coming from Little Rock, Arkansas, Mark is working through our book, Equity Happens, to develop his personal investment philosophy. (Good first step, Mark!)

To start, we  say the whole idea of Equity Happens is that every investor is different.

Obviously, YOU have unique goals, interests, and circumstances as an investor.

Once you can be crystal clear about the kind of investor you want to be, you can say no. And NO is a good thing to say!

Russell reminds us that an investment “could be a very good deal, but it might not be a good deal for you.” As we always say, “There are no problem properties, only problem ownerships.”

Mark, and all the other investors out there, we want to remind you that it all goes back to the essential question: What do you want real estate to do for YOU?

To answer this question, you have to think about some variables:

  • Is your primary goal cash flow OR equity growth?
  • Are you more interested in pride of ownership OR managing difficult properties?
  • Do you want to be hands on OR hands off?

Remember, it all starts with your basic investment philosophy.

In Equity Happens, we remind investors that after they get their philosophy down, the steps are always the same: identify your market (or markets), identify your product type within those markets, find your team, and then invest in your property.

When you’re investigating markets and product types, you have to ask yourself some questions:

  • Where is demand in this market coming from?
  • Are supply/demand dynamics stable?
  • Will an investment in this market be good for equity or immediate cash flow?
  • Who do I want to serve?

We won’t tell Mark (or you) what to do. But we can tell you that the investing process in Equity Happens will help you get to a starting place..

Remember our motto: Education for Effective Action™.

Question: Does it make sense to invest in a property with negative cash flow?

New investor Chase, from Dallas, wants to know if it makes sense to keep a rental condo he owns in a rapidly developing area, even though he’s losing about $200 in cash flow a month.

We can’t give you advice, Chase, but we can give you some pretty darn good ideas.

As an investor in this situation, the first question you need to ask yourself is “Do I like this property?”

If the answer is yes, then get to your tax advisor right away!

Chase mentions he qualifies for the mortgage interest deduction. If you’re a new real estate investor, especially an investor converting from owner occupancy to rental property, you may qualify for even more deductions and tax benefits.

The next thing you should ask yourself is whether your property will increase in value over the years.

Think of an investment with negative cash flow like a retirement savings account: you have negative cash flow every month you contribute, but those contributions will give you positive returns later.

If you’re a property owner, and you’re thinking of selling to get equity, consider selling costs first. How do those selling costs compare to the money you’re losing each month?

As we always say … do the math, and the math will tell you what to do!

Question: Is it a good idea to have a third-party inspector look at a newly constructed home before closing?

To Fred from Burlingame, California, we say, “Absolutely, positively YES.”

ALWAYS get a third-party inspection anytime a home changes ownership.

Even the most honest owners and builders don’t always see every little problem.

This is a matter of return on investment. An investment of a few hundred dollars is a cheap price to pay to know exactly what you’re getting when you buy a property.

In our experience, most builders are great about inspections and will bend over backwards to fix any problems found.

Owners of older homes may be less pliable, but you need to know whether you’re making a good investment.

The second part of Fred’s question is “What about getting the inspection after closing? Would the builder be liable to fix issues that are found by the inspector?”

To this we say, WHY WAIT?

Inspect before you buy and you get leverage.

If you’ve already closed, an inspection can’t hurt, but you lose your leverage.

And although most reputable builders will stand by their work, it really just depends.

You can’t rely on your expectations, or you might end up disappointed.

Get the inspection (BEFORE you buy) and you can rely on the facts.

Question: How do I bring up owner financing to an (unlisted) seller?

Another California caller, Jill wanted to know the basics of getting started with owner financing.

Owner financing can be a great, great tool. For buyers, it can mean you don’t have to pay points, can negotiate a great interest rate, and can work with owners familiar with the collateral and possibly less reliant on your credit score.

But if a property isn’t listed, Jill, you may not want to start with owner financing.

First, you have to see if there’s seller motivation.

If an owner is selling because they have an immediate need for the money, you’ll have a hard time negotiating a seller carry.

The key thing here is to get to know what the other party is trying to accomplish, and then position what you want in a way that fits into THEIR agenda.

Forge a relationship, THEN bring up owner financing.

And always make sure your propositions meet the seller’s needs.

We’ll share the rundown of simple secrets to great sales in our sales training event.

Interested in learning more? Email sales (at) realestateguysradio (dot) com.

Question: How can I contact you directly?

This question comes from Jake, in Mooresville, North Carolina.

Jake, talking to people is exactly what you need to do.

Although we’d love to talk to all our listeners, it’s simply impractical.

BUT … that doesn’t mean it’s off limits!

To talk to us, come to one of our live events. You could even join us for a wonderful week on sea,  packed to the brim with the elites of the investing world.

We’ll be there, ready to chat, PLUS you can talk with and learn from the amazing faculty and investors from around the world.

Are you like Jake, itching to talk to someone directly about investing?   You could join a local investment club. Or start your own! It’s how The Real Estate Guys™ got started!

Like we’ve said before, it all goes back to our motto: Education for Effective Action™.

Educate yourself! For a primer on starting your own investment club, email us at club (at) realestateguysradio (dot) com.

Question: Can you put The Real Estate Guys™ podcast on Google Play? (Please?)

To Sonny, in Virginia Beach, Virginia, and all our other Android users, we say:

DONE! You’re welcome.

Question: How do 1031 exchanges work?

Here’s a question from Seattleite, Tamara: “We’re selling a rental property and are interested in doing a 1031 tax-deferred exchange. However, we wanted to add an additional unit to the property so we could have a place to stay when we come to town. We recently found out that the IRS doesn’t allow this. Is that true?”

Before we answer this question, a reminder: we are NOT tax pros! Get real tax advice!

And don’t just go to any tax advisor.

Get an experienced one—someone who actually invests in real estate will be your best bet. (Don’t be shy about asking them their own experience!)

Like our friend Tom Wheelwright exhorts in his book TaxFree Wealth, create a best plan based on what you know, then run it by your advisor.

And instead of asking your tax advisor “Can I?” ask “How can I?”

Unleash your advisor’s creativity instead of asking for a YES or NO answer.

Now, back to the question. The simple answer to Tamara’s question is “No.”

A 1031 tax-deferred exchange basically allows you to exchange like properties for like, PROVIDED you follow the rules.

You have to spend the money on the new property, not the old  property.

Tamara, before you sell this property, ask yourself WHY you’re selling. If it’s to unleash equity, considering refinancing.

Separate the IDEA of what you want to do with the proceeds from the actual ACT of selling the property.

THEN, work with that tax advisor! Figure out the best way to get access to that money and preserve your capital gains.

Question: Can I get some insider tips on investing in Belize?

When we went on our last field trip to Belize, we sadly missed out on having Paula, from DeCobb, Illinois, join us.

Paula went on her own scouting mission before she heard about ours! Paula, that’s okay. Glad to hear you’re proactively checking it out.

Paula had a list of questions for us, including:

  • Construction in Belize can be slow and hampered by politics. What has your experience been of developing from the ground up?
  • Will talk of development of a new international airport be realized? When? And does that mean the north side of Ambergris Caye is more valuable?
  • Does the debris and trash I saw covering the island hamper potential investors?

Both Robert and Russell have answers for Paula, but before we cover those, we absolutely recommend any investor interested in Belize accompany us on our field trips. We have a field trip upcoming in February.

Robert’s basic answers to the questions above:

  • Both the “island-time mentality” and the requirement that plans be approved by the Ministry of Plans AND the San Pedro town council do mean Belize is “not the fastest place in the world for construction.” Some developers have a streamlined process, however.
  • There’s a saying about the airport: If you ask when it’ll be done, you’re not from Belize. Belizeans don’t necessarily have ironclad calendars, but they do get things done … eventually. “Let’s just say I have been visiting for over a decade and am not hold my breath,” says Robert.
  • The trash is not off-putting tourists, to put it simply. Belize is the No. 1 increasing market in all of the Caribbean. Land that’s not developed is where trash accumulates, but locals do put on trash-bash events a few times a year where they go clean up trash.

Investing in another country (or even state) takes homework. But ANY entry to barrier limits competition.

We look for those opportunities because we’re willing to outwork other folks.

If you’re interested in ANY foreign market, Russell reminds us that scouting trips are how you do it.

Robert dragged Russell out to look at actual buildings years ago, when all Russell wanted to do was sit in his office and crunch numbers. That experience was invaluable.

Hope you’ll join us and see for yourself next time we go! Last question: Should I refinance a loan to buy a couple of turnkey properties?

Gary, from Austin, Texas, gave us a little more information: “I owe $100,000 with eight years remaining on a property that is appraised at $167,000. It’s my primary residence and I’m thinking about doing a $30,000 cash-out refinance to buy a couple of turnkey properties in Memphis.”

He said the idea scares him, but he’s also “okay trying to be financially free in this scenario, not debt-free.”

Here are the basics of what happens when you get a loan: early payments go mostly to interest, but as you pay the loan down, more of your money goes to the principal. Every time you refinance, you’re starting over again.

That’s a caution … BUT, starting over is also nothing to be afraid of.

Repositioning equity to put it to work for you is not necessarily a bad thing.

The best options are to either have your property 100% paid for OR 100% leveraged.

To make your property work for you, start by eliminating fear.

Then do the math, and the math will tell you what to do.

Maybe your question will be featured next … Ask us!


 

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.

Safe Haven Investing with Real Estate

 

After one of the most turbulent elections in the United States, one thing is clear … we live in a time of massive uncertainty.

If you feel like the ship is sinking, rather than being depressed or concerned, we advise you be DILIGENT.

This means putting yourself in a position to mitigate the risks and capitalize on the opportunities swirling around you.

We believe real estate is one of the safest investments you can make during uncertain times.

In this episode, we discuss areas of concern and opportunity. You decide what position you want to take, and how to protect yourself if things go wrong and keep your assets from being “low hanging fruit” for financial predators.

In the panic room studio for this episode of The Real Estate Guys™ radio show:

  • Your safe-haven host, Robert Helms
  • His risky-business co-host, Russell Gray

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!


But first, understand the U.S. dollar

To understand threats to your investments in the U.S. market, you first need to understand our currency.

For the past 100 years, the U.S. dollar has been under ATTACK.

For better or worse, our beloved greenbacks have been constantly losing value by the Federal Reserve since its founding in 1913.

This happens subtly and slowly with inflation.

Doesn’t that mean real estate investors can buy properties cheaper? Yes!

BUT it also means the dollar – the basis of our ENTIRE FINANCIAL SYSTEM – could go the way of the dodo …

The trend is clear. If that happens will you be prepared?

Speaking of the U.S. and world financial system, we live on a currency of debt.

We borrow money into existence. creating insurmountable debt in the process.

For instance, if you had an economy of $100, and borrowed the money into existence at a 10% interest rate, you would owe $110 at the end of the year. That’s $10 more than what you actually have.

It’s a cycle of eternal, perpetual debt.

There can be a devastating domino effect by something as simple as someone defaulting on a loan.

Bring back any memories of 2008? During that market crash, property wasn’t the problem. People were able to assume loans and sell properties.

It’s not about having the real estate, it’s about the STRUCTURE. Loans in 2008 weren’t structured to weather the storm.

Real estate investment in a safe haven portfolio is about having the real estate with the right structure for an UNSTABLE financial system.

It’s always better to be prepared and not need it, than not prepared and need it …

Focus on income over appreciation

One way to shore up against damages is to focus income in the right places.

With real estate, INCOME is EQUITY.

It’s easy in a hot market to focus on equity outside of income. If you can sell a property for more than you paid for it, you make money, right?

Yes in a technical sense, but it’s not as solid as other methods.

To increase income fundamentally, you need to improve value of property.

Favor assets with income you can influence. Pick a market, then choose property strategically to maximize profit opportunity and gain equity.

Unlike investing in stocks and shares, with real estate there are SO MANY things you can do to increase income, and create a “durable income.” To name a few ideas:

  • Select a desirable property.
  • Select an area with a high number of renters.
  • Upgrade the property.
  • Build new units.

The bottom line? Increased income means increased equity.

If the dollar were to collapse, your tenants will always find some way to add value to you to earn the roof over their head, because it’s a basic human need.

Use cash flow to create equity

Real estate gets a bad rap for being a slow way to build wealth.

That is true from a strict cash flow perspective …

HOWEVER, when you realize that properties like stocks trade for a multiple of earnings, a new world is open to you.

You can manage a cash flow topline (like revenue and expenses) with a solid bottom line (net operating income). Your portfolio of assets can be creating value no matter that the currency is.

Real estate TRANSCENDS borders, economic times, currencies, and more.

Building a portfolio of income-creating real estate that addresses basic human needs, agriculture, energy, and niches in housing, creates SAFETY.

These things will be in demand despite the ups and downs of the economy.

Consider the “time horizon” of your investments. Rather than flipping homes, (buying, fixing up, selling) you are adding to your portfolio.

Times change. Properties increase and decrease in value.

Interest rates are high, then low, then high again. There an ebb and flow to so many factors over the span of 10 to 20 years.

We want to increase value from inflation and appreciation. We do this by CONTROLLING a property long-term—through the cash flow.

Hedge all the bets… counter-party risk

Many people think about investing for income as investing in bonds, annuities, CDs, bank accounts, etc.

Real estate investors think about buying real estate properties.

The hard truth is whatever you have purchased relies on someone else in some way.

A bond is only as good as the person behind it. If they go bankrupt or default, you are out of income.

All kinds of investments are risks. Real estate mortgage is counterparty risk, tenants are a counterparty risk … so WHAT can you do?

Identify income from real assets and not liabilities that can default.

Tenants who cannot pay rent can be evicted and replaced with paying tenants.  Can you imagine if bonds worked that way?  They DON’T!

On the mortgage side of things, private money loans typically have 30-40% of equity in the property, and the borrower is making the payment.

If they default, your assignment of rent clause gives you the rental income. You then can take over the property through foreclosure, replace the tenants, sell it, etc.

Real estate is superior to a paper asset from a yield, tax, and counterparty risk perspective. To get a report on real asset investing, send an email to realasset (at) realestateguysradio  (dot) com

Warding off financial predators

When you have a lot of assets in a big portfolio, your wallet is hanging out there.

Like an armadillo or porcupine curling up, there are lots of things you can do to make yourself undesirable to predators.

Picture a large tree as a metaphor for the grand scheme of investing:

The low hanging fruit that predators can access easily are bank accounts, brokerage accounts, properties in your own name and paper assets. Think twice about these investments!

Middle hanging fruit that is more difficult to access are domestic real assets, real estate that is real, investing in private placements, entity structures and private banking (check out our awesome special report with Patrick Donahoe, the Perpetual Wealth Strategy.)

High-level fruit that are impossible to reach for most predators are holding real assets outside jurisdiction and international investing.

How can you get the red target off your back?

Hold assets outside of the financial system. Your brokerage account and bank account are visible by lawyers and courts.

We want to believe the best of our judicial system. Unfortunately, we all know that sometimes whether you are right or wrong has little to do with whether or not you WIN a lawsuit.

Own property in multiple states or go offshore. Spreading your investments across different areas makes it difficult for predators to see all of your investments.

Use privacy structures that make it difficult to find that you are the owner. Liens and second mortgages make you more difficult to go after.

As you grow your portolio, it’s important to seek out advisors for professional coaching. You could even invest in your own knowledge through a memorable week with us and our investing expert friends.

Be smart about where and how you invest – and you’ll be paid in profits and peace of mind!


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.

Farming for Profits Part 2 – Cash Flow vs. Legacy Investing

 

Real estate serves many human needs. Whether you’re investing in rental properties or agricultural properties, you’re reacting to basic human demands—and agricultural products will ALWAYS be in demand.

In our latest episode, we hear from agricultural investment expert Rachel Jensen about how agricultural investments can take decades to yield profits—but they tend to have an ENORMOUS payoff in the long run, not just for you, but for your posterity as well.

Specifically, we’re talking about investing in teak—an extremely valuable hardwood that provides tremendous value and security by mitigating investment risk. It allows you, the investor, to sit back and relax, knowing your investment could grow into serious profit in the long run.

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

  • Your seek-the-teak host, Robert Helms
  • His teaky-and-cheeky co-host, Russell Gray
  • Vice President of Sales at Teak Hardwoods, Rachel Jensen

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!


Diversifying your personal investment philosophy

When it comes to real estate investing, everything you do has to go back to YOUR personal investment philosophy.

If you’re investing, you have to line up liquidity points with your own liquidity needs.

Agricultural investing is NOT the same as investing in residential properties! A property owner and manager is used to monthly cash flow from rental payments.

BUT … trees can’t complain! While investing in agricultural properties may not provide a monthly cash flow, it does mitigate many of the risks of traditional real estate investment, including vacancies and turnover costs.

When you invest in agriculture, you have to be able to step back from the idea of monthly cash flow and add a zero to your thinking by calculating the long-term growth of your investment.

Investing in agricultural properties like hardwood plantations provides a myriad benefits that can match needs outside of basic monthly income. These benefits include:

  • International diversification
  • Privacy and asset protection
  • Mitigation of investor risk in MULTIPLE ways

Secure, stable, and sticking around: The ultimate long-term investment

Rachel Jensen, vice president of Teak Hardwoods, was kind enough to pay us a visit to talk about a hardwood investment that’s been popular for centuries: teak.

When you think about timber, the first think you might think about is the risks. Teak is different: it’s resistant to fire, rot, termites—all the traditional risks to owning what is essentially a giant lot of wood.

It’s also an extremely secure investment. During the recessions of 2008, when global markets were shrinking, demand for teak was high—in fact, demand increased by 9.5% during the period, Rachel tells us.

Teak is NOT an investment with short-term payoffs. In fact, teak is best harvested at age 25 and age 60.

It might not be easy to make the transition from working on a monthly or yearly timeline to working on a 25-year timeline. “For those who see the benefits of generational wealth stewardship, it’s an investment that pays off,” says Rachel.

If you have the patience to wait 25 years for the payoff, you end up with a lump sum of cash at the end of those 25 years.

This is especially important when you consider that tuition could skyrocket by 2030. Teak investment provides security for those who have kids, grandkids, nieces, nephews, or even causes they want to support in the long term.

Growing in fertile land: the benefits of South American teak

Around the world, teak is harvested at a rate of 8-12 times more than it is planted, especially in countries where it’s grown naturally. As you can imagine, this is a huge problem.

One area of the world has solved this problem, however: South America.

How? South America provides incentives to investors for reforestation. This is an unbelievable opportunity that provides benefits not only to investors, but to the local community, world economy, and environment as well.

In Panama, these reforestation incentives include zero income tax at time of harvest and zero property tax.

Investing in South American countries provides other HUGE benefits to investors.

Most obviously, investors can diversify their portfolio internationally. Rachel’s teak plantations rest in the fertile lands of Panama and Nicaragua.

Investors are also eligible for the Friendly Nations Visa, a residency that’s one of the most popular in the world because of its simple requirements and low cost. This visa allows users to get work permits, obtain eventual citizenship, and even move their families to Nicaragua.

How YOU can invest in teak

If investing in hardwood properties is starting to sound pretty darn good, we agree!

How can YOU get started? It’s quite simple.

Investors in Teak Hardwood interested in a plot of land in Panama can start with as little of ¼ acre of ownership. The title of a ¼ acre parcel goes for $15,700—investors typically start with two to four parcels.

One benefit of this specific property? The teak trees are already 17 years old, meaning investors get a payoff in just eight years.

This is an incredibly accessible investment, especially for millennials who are willing to look at the big picture. Investors even have access to a five-month, zero-interest payment plan, says Rachel.

As a millennial herself, Rachel says, “I like knowing I don’t have to do anything.” Teak is what Rachel calls a “peace-of-mind turn-key” investment.

You make the investment, and Mother Nature basically just does her thing—usually with the help companies like Geo Forestal, an experienced plantation management company that manages Teak Hardwood’s properties in Panama.

For someone who wants to get in on the ground floor, Teak Hardwood also has a new program in Nicaragua with trees planted just this year. Proceeds start in year 12, when the trees are thinned.

Interested in learning more about investing in this tried and true wood? Rachel compiled a packet of information just for us. Email teak (at) realestateguysradio (dot) com for more information.

Diversification: Security in an unstable world

It’s important for investors to think about global issues when they make an investment.

“Currently, there is worldwide pushback against established institutions,” Russell reminds us. “This means there is potential for radical, substantial change in coming years.”

Investors have many concerns to consider: market crashes, climate change, the collapse of established traditional institutions, disruptive technology to name a few.

In the face of these concerns, teak investment is one way to insulate wealth.

And it’s not a time bomb—unlike other agricultural investments, teak has a shelf life. So does coffee.

Robert reminds us of David Sewell, founder of International Coffee Farms. David buys coffee farms and turns them from commodity farms to specialty coffee growers and harvesters. This allows him to narrow his target market and eliminate commodity competition.

He’s insulating his wealth from potential dangers by investing smartly and finding a competitive edge.

If you’d like to learn more about investing in coffee, we’d love to provide you with more information! Email coffee (at) realestateguysradio (dot) com.

There’s many reasons people are getting off the beaten path when investing—it may take a little more time and diligence, but the path’s not as crowded, and the risks are much lower.

If you want to step into the world of agricultural investing, consider investing in your future with a whole week for YOU to talk to experienced agricultural investors and look at investing from a global perspective!


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.

Farming for Profits Part 1 – Investing in Essential Resources

 

compelling case for Uruguay

What if your tenants were trees, bushes, and plants?

We usually think of real estate in terms of housing. But what is a farm? It’s a piece of dirt where wealth grows.

As we’ve said before, there is tremendous opportunity in agricultural investments. These investments are less dependent on economic changes, and ideal for creating wealth over time.

The U.S. is still a one of the strongest economic engines in the world. Powers shift, and there seems to be a shift coming. Whether it happens in 20 years or 100 years, it may be wise to diversify your portfolio.

Rather than focusing on the right economic location factors such as the job market, agricultural investments rely on getting the right geography.

From there, if you get the crop right, the entire world is your customer.

Don’t think you need to sprout a green thumb to yield results from agriculture.

YOU don’t have to be the farmer. Product distribution can be hired. Your mission as the investor is simply to own the LAND the product comes from.

Read on (or listen in!) to get juicy insights from experts at the New Orleans Investment Conference 2016 on what growing assets can look like for you.

In this podcast you’ll hear from:

  • Your coconut-loving host, Robert Helms
  • His coco-nutty co-host, Russell Gray
  • Managing Partner of Fischer & Schickendantz, Juan Fischer
  • CEO of Precious Timber, Alex Wilson
  • Editor of Gold Newsletter and CEO of the New Orleans Investment Conference, Brien Lundin

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!


A New, Safe Option for Agriculture … Uruguay!

Juan Fischer makes a compelling case for“why Uruguay?”

Known for its stability and safety, Uruguay has the lowest crime and poverty rate in South America. Did you know Uruguay also enjoys the highest GDP per capita?

The country (about the size of the state of Washington) is called the Switzerland of South America.

With a population of 3.5 million people, Uruguay produces food for 50 million. Uruguay is in the top six food producers in the world in beef, rice, grain, and dairy exports.

What’s more is the land is fertile and not over farmed. The country recently realized its opportunity in agriculture.

Just 15 years ago Uruguay was what Juan termed “a big cattle ranch” with only 250,000 acres of farmland.

Then the food revolution spurred large demand from countries in Asia …

Uruguay evaluated its land, finding one-third of the country’s highest yielding land underutilized. Agriculture has since jumped to more than 2.5 million acres.

Something we LOVE about Uruguay’s agriculture is its transparency!

Every lot has a number you can plug into a website. There, you see a map with soil types, the percentage of each soil type, productivity index of each type, and a weighted average productivity of the whole product.

Uruguay was the first country to provide this service on a national level. Today it is only offered by both Uruguay and France.

Why overpay for high quality soil? Nutrient-rich soil is perfect for crops, but sandy soil is good for forestry. Uruguay boasts two of the world’s biggest paper mills, and the demand for trees is growing.

Does Uruguay Fit into Your Portfolio?

People who gravitate toward agricultural investments are usually playing the long game. Some profit comes at harvest, and more with land appreciation.

Juan reports that right now prices are lower than they have been in 12 years. “The last time we had a price drop was in 2002,” said Juan.

After the China slowdown in 2014 and the resulting drop in commodity prices, U.S. land prices dropped 12-14%, and currently Uruguay land prices have dropped sometimes 30% less than their 2013 peak.

“A window has opened for the first time in 20 years,” said Juan. “This is a great buying opportunity.”

Juan thinks the opportunity will last through 2017, followed by an upward trend as appreciation continues.

Land prices in Uruguay range from $700-$800 per ace for lesser quality soil, to $3,500 for best land. Typically good acres can be bought for between $2,500-3,500.

As Managing Partner of Fischer & Schickendantz, Juan realized there was interest in foreign investments about 10 years ago.

“We offer a passive, hands-off experience for any size investor- large, small, individual, and institutional,” said Juan. “We are fed all the properties in the country by the three main brokers.”

The company learns what size of land, or amount of money an investor wants to begin with, and takes it from there.

They source all properties, classify them, help clients understand them, and take clients on a tour of the area. Once an investor decides on a property, they structure the purchase, manage it, find a tenant, and do the bookkeeping.

Why Timber is a Great Investment

Next we spoke with Alex Wilson of Precious Timber about his forestry in Central America.

In 2004, Alex and his partner started growing precious hardwoods, including Mahogany, Cedar, and Teak.

Three years ago, they brought on private owners. Like many investing in agriculture, most of his clients are looking for long-term investments.

“The geography in the tropics is ideal for precious hardwoods,” said Alex. “There is plenty of sun, rain, nutrients in the ground, and access to putting product into furniture.”

He mentions the local artisans are VERY HELPFUL. “Growing it is one thing, processing it is something else,” said Alex.

When talking about the lifecycle of timber, Alex mentions the “liquidity premium,” a little extra return you get for holding assets that are less liquid. He credits the term to Bob Rice, author of the book “The Alternative Answer.”

Those with a high net worth like investing in timber because of the security and added bump in ROI. Timber has an 8-10 year harvest cycle.

When first planting, investors need to wait until the trees mature to harvest, then re-plant and repeat the cycle. With a diversified plan, harvest times can be staggered.

So Why Coconuts?

Coconut plants yield more regularly, but Alex wasn’t always interested in the exotic crop. His inspiration came from an unlikely place …

When Alex’s daughter, who was then age 13, had acne, she read about coconut oil, tried it, and the break out was cleared up. That led to coconut lotion, coconut milk, and other products in their home.

Alex called his friend in Central America and asked if he knew anyone with coconut trees.  Alex and his partner tracked down the only certified coconut seed pollinator in Central and South America.

Then they took a leap of faith, planting several hundred thousand acres of coconut trees a few years ago.

Though his partner Ken lives in Central America now, neither of them directly manage the day-to-day farming operations, as they opted to hire professionals.

“If you come to my house you might notice a plant bought on Tuesday from The Home Depot could be dead by Sunday,” laughed Alex, “I’m not a green-thumb guy.”

Their lack of garden know-how doesn’t stop their operations from thriving. Precious Timber collected a modest harvest this year, and are looking forward to a harvest next year. Coconut trees fully produce after six years and have a lifespan of 60 years. “I call it my agricultural annuity,” said Alex.

Alex and Ken generally work with accredited investors, with a minimum of a $100,000 investment. Alex advises clients to invest with people they know and like.

“If it feels good, do it,” said Alex, “if it doesn’t feel good, don’t do it.”

He regularly invites new investors to visit the plantation. “In the beginning it’s a good idea to get down and get to know the people,” said Alex. “Walk the plantations, shake hands with the people doing the work, meet accountants and attorneys.”

He and his partner plan scheduled visits, guided tours, and can meet almost any time spontaneously because Ken lives in the area.

Are you interested in more information on Precious Timber and Coconuts? Email timber [ at ] realestateguysradio [ dot ] com to have a packet of information about investing with Precious Timber sent to you.

New Orleans Investment Conference

2016 marks the 42nd annual New Orleans Investment Conference. It was incredible to broadcast from the LONGEST RUNNING investment conference in the United States

Brien Lundin, CEO of the conference and author of Gold Newsletter, has some great insights for you.

People gather from all over to discuss everything from the economy, gold and silver, oil, real estate, and politics.

“Until people come here and experience it, you don’t realize all the benefits and advantages of being able to talk to people,” said Brien, “to talk to big name speakers in the hallways and mingle with other investors who are very successful and have great ideas to share.”

Brien notes that this year gold has been a BIG performer, which has caused mining stocks to look different. “There are lots of smiles this year.” Said Brien.

Last year the market made a turn for the better around this time as well. Brien credits it to the fed trying to “squeeze in a quarter-point rate hike” at the end of the year, marking a launching point for gold.

The new year is around the corner, and we’re always fans of meeting with like-minded people to get closer to your goals. Whether you’re a seasoned investor or just getting started, planting a smart investing plan will yield profitable results!


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.

Tips for Delivering Value to Your Tenants

 

People often think of real estate as an asset, not a business.

But real estate investment is ALL ABOUT the number one tenet of running a business: keep your customers happy.

In the real estate world, your customers are your tenants.

It’s important to remember that you’re not just collecting properties: you’re collecting tenants.

So how do you reach the ideal—low turnover, low vacancies, stable income, and high profitability?

Our guest in our latest show, innovative turn-key developer, Terry Kerr, offers tips gleaned from making ugly 1,500 houses pretty in Memphis. Yes, you read that right. 1,500!

Whether you’re a property manager, a turnkey operator, or someone rehabbing houses in your spare time, our podcast today is chock-full of practical tips for keeping your customers happy.

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

  • Your #keepthecustomerhappy host, Robert Helms
  • His tips-not-tricks co-host, Russell Gray
  • President of Mid South Home Buyers, Terry Kerr

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!


Happy tenants, happy you

What are the best ways to keep tenants engaged? The NUMBER ONE thing tenants want is value.

Our guest, Terry Kerr, offers three insights into what property managers can do to create value for tenants (and for property owners):

  1. Offer nice amenities. Terry says he wants his tenants to be able to say they can’t do any better. He makes sure his properties include new and high-quality fixtures, woodwork, baths, and kitchens.
  1. Keep rents slightly below market rates. In Terry’s case, he rents properties in the $700-$1000/month range. For his customers, $25 or $50 can make a big difference. Terry wants customers to be able to say his properties are the best option for them.
  1. Provide friendly and responsive service to tenants. We’re particularly impressed with Terry’s system for repair requests and fulfillment, which gets problems like a broken water heater fixed within a day.

As a real-estate investor, you’re not just dealing with property. You’re dealing with people who expect the best from you.

Providing them with the best in terms of cost and facilities can make a HUGE difference for them—and for YOU.

The “Wow” Factor: nuts and bolts that make the difference

Before Terry’s prospective tenants even get out of the car, he wants them to be able to say “This is the one I want!” He calls this the “WOW” factor.

A key component of the “Wow” factor? “Everything’s brand new,” says Terry. “We make the house new.”

New floors, light fixtures, counters, sinks, faucets, bathtubs, showers, doors, closet rods, hinges, doorsteps: you name it, and Terry’s thought about it. His houses look like they’ve just been built.

At this point you may be thinking, “That’s a LOT of money!” We agree, but it’s money well spent. It’s an investment. And one that can pay off.

Terry makes his investment count by assembling a team. His company has contractors, technicians, electricians, plumbers … and they’ve worked with these guys for 10 or 15 years. He knows them and they trust them. In fact, they trust their work so much that Mid South Home Buyers can offer a one-year warranty on all homes they sell.

Terry also is able to be efficient by buying high-quality materials in bulk, saving his company, his homeowners, and his tenants money.

This kind of economy of scale saves money for everyone in the long run. The initial investment may be steep, but the long-term cost will be dramatically lower.

Getting the most juice is all about efficiency

We’re particularly impressed with the tips and tricks Terry gave us about increasing efficiency.

Terry’s locked into the best strategies for keeping turnover and cost of maintenance down and occupancy up.

They’ve paid off for him: the 1,500 homes he manages have a 98.7% occupancy rate. That kind of rate is STAGGERINGLY good!

One strategy Terry uses is the cookie-cutter strategy: every house gets the same materials. This has several advantages. Terry buys materials in bulk and saves money. Mid South Home Buyers maintains its own warehouse of materials. This also means that maintenance is incredibly simple and incredibly quick.

Mid South’s philosophy for technicians is unique too.

A technician coordinator manages all materials, repairs, and technician routes, figuring out how technicians can do the least amount of driving and repair reported problems in the most efficient manner.

A property manager should ALWAYS be concerned about maintenance, and Terry’s figured out a strategy that gets problems fixed within a day, always.

Small tweaks make a HUGE difference. For example, easy re-key locks can cost more initially, but they save Terry and his team the $150 they used to spend on a locksmith every time a tenant moved out.

High-quality paint means houses don’t have to be painted as often.

A system that allows tenants to text, email, OR message about needed repairs makes tenants happier and repairs easier.

You get the picture—the better the system, the happier the tenant, and the more successful you are.

Did the above advice get you nodding your head, or wondering what else you can do? You’re in luck: Terry goes in depth on these tips in his special report, Terry’s Tips for Happy Tenants … just for YOU. Send an email to happy (at) realestateguysradio (dot) com to get your own copy.

Capitalism at its finest

We say what Terry’s unique business structure is capitalism at its finest.

When we spoke to him several years ago, he was rehabbing 20 houses a year. Now he’s up to 300.

He’s working hard, making small adjustments to the machinery and process of his business, tweaking his team—finding better ways to get things done.

Terry buys better, rehabs quicker, has a higher occupancy rate, higher retention rate, and offers high-quality customer service. He provides a better deal to his tenants and competitively priced investment properties to investors.

He’s meeting needs and leaving houses (and neighborhoods) better than he found them. He’s creating win-win-wins for himself, his investors, and tenants … and his bottom-line profits are higher, too. Isn’t that the goal?

Terry didn’t get here magically. It all starts with worthy goals. You have a real estate dream? Like the old adage, “A dream not written down is merely a wish.” Put your goals on paper, gather people who can help you, keep keepin’ on … and maybe someday we’ll get to hear about YOUR success on our show!


 

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.

Add a Zero to Your Thinking

 

Businessmanholdingbuildings_615x300

In this mind-expanding episode, we’ve uncovered some great ideas to help YOU think bigger.

Thinking bigger is all about the people you know—your mentors and your team. To step up your game, it’s important to move out of your comfort zone and get comfortable getting uncomfortable.

The key is to step back and look at the bigger picture so you can add a zero … to your bottom line, to your profits, to whatever you’re doing.

We’re not talking about incremental improvements here. We’re talking about expanding what you do EXPONENTIALLY.

To help you get there …

We met with a dynamic investor, world traveler, and creator of website Sovereign Man to talk about how YOU can add a zero to your thinking.

So live from New York … it’s The Real Estate Guys radio show, featuring:

  • Your big-brained host, Robert Helms
  • His zero co-host, Russell Gray
  • Global investor and creator of Sovereign Man, Simon Black

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!


Introducing dynamic investor, Simon Black: Starting from scratch

Simon Black started investing in real estate when he was just 21. He had just graduated from West Point when he read the life-changing Rich Dad, Poor Dad, by Robert Kiyosaki.

To Simon, buying large properties and investing in real estate had always seemed like things “rich people” did.

He started asking himself “Why not ME?” The book was the kick in the butt he needed to get started.

Driving down the road one day after reading the book, Simon saw a Century 21 office, and he asked himself … “Why not me? Why not NOW?”

He hopped out of the car, still in his military uniform, and told the real estate agent exactly what he wanted. The agent said, “I got just the thing.” And THAT’S how simple it was for Simon to get his start!

Learning to learn: Two ways to figure out what you DON’T know (yet)

When Simon started out in real estate investing, he knew NOTHING.

Maybe you’re at the same place Simon was when he started out? If you feel so fresh you don’t even know what there IS to know … you’re in good company.

Simon admits it was a steep learning curve. He says the most important thing for him was to learn HOW to learn.

How can you transform yourself from a know-nothing into a successful real estate mogul? Simon tells us it starts with just two steps:

  1. Self-assess ruthlessly and constantly.

Self-assessment isn’t a skill, it’s a habit. Get in the habit of asking yourself hard questions about your performance: What did I do poorly? What do I need to learn? What do I need to do differently next time?

Self-assess constantly. And don’t sugarcoat reality. That’s lying to yourself. Be ruthless. It’s the only way you can figure out how to do better the next time.

  1. Find a mentor.

This is THE most important thing you can do as a new (or current!) real estate investor. Seek out people who are smarter and more experienced than you.

When Simon got started, he spent HOURS looking at public listings.

He realized the same names were coming up over and over again, and started keeping his own internal database of all the people who owned a lot of property.

Then he reached out to them.

He told them he was a young guy, new to real estate investing, and asked if he could take them to lunch.

He only got one response … but that’s all he needed. He took the investor to lunch and picked his brain—and kept doing it for years.

“I think I paid twenty dollars to take him to lunch, and I got to suck in all this knowledge that he’d spent years and years accumulating,” Simon says. “It was an incredible return on investment.”

Finding a mentor can be intimidating. It’s easy to look at smart, high-achieving, hard-working people and their accomplishments and feel inadequate. (Right?)

But we have learned the people at the top of their game are more than happy to share. They’re gracious, generous with their time and wisdom … and they’re extremely curious too! They want to learn from you as much as you want to learn from them.

Stepping back so you can add digits, not decimals

At some point, every investor or business owner will get so deep into their own thinking that they stop thinking of the big picture. But Simon reminds us, “We’re only limited by our own thinking.”

To really be successful, you have to step back and self-assess. Ask yourself:

  • How do I apply my experience to leverage this and make it ten times bigger?
  • What resources do I need?
  • Who can help me?
  • How do I add a zero to what I’m doing? How do I turn 100s into 1000s?

Ask yourself those questions, and you start seeing things in terms of projects and procedures. You start building teams. And you step back and stop seeing individual investments. Finding the big picture is a skill EVERYONE can acquire.

People power: Building your own team

Building a team is an ESSENTIAL part of adding a zero. Simon learned quickly that he couldn’t handle everything himself.

Robert reminds us “It’s easy to say yes; it’s hard to say no.”

To be successful, you have to learn to do two things: say no, and delegate.

Once Simon realized his biggest limiting factor was his own time, he starting learned to say no. Now he doesn’t say yes to a project unless there’s a guaranteed, dependable manager that he can hand the ball to.

If you’re juggling twenty opportunities at a time, you’re not getting a lot done. You’re not able to step back and ask yourself how you can add a zero. That’s why taking on people who can juggle those opportunities FOR you is essential.

Everyone has their own way to delegate and build a team, and there isn’t one right way. Some key factors? Maintain very high standards. And experiment!

You DON’T have to have someone on your payroll for them to be part of your team. But you do have to be able to depend on them.

And THEY have to be able to depend on YOU.

As you grow, you will become a mentor too. Spend more time coaching and mentoring so people can take over for you, and you multiply your experts, expanding your impact exponentially.

It takes time and a serious dedicated effort to form a good team. But it’s doable.

Learning from Sovereign Man

Simon Black does a lot of different things to ensure his success … and YOURS. One of those things is his website, Sovereign Man.

Simon says he often doesn’t particularly like what he sees in the world around him. The United States has more than $19 TRILLION in debt. The Federal Reserve isn’t solvent, the FDIC fails to meet minimum capitalization requirements … all these things cause concern.

But Sovereign Man has an optimistic outlook. “We hold the opinion that the path to prosperity is in production and savings and not debt and consumption. We try to help people find the right way forward.”

One way Simon does that is by hosting an entrepreneurial camp, Sovereign Academy, once a year. Fifty people are selected from thousands of applicants to attend a weeklong camp that tries to help people shine a spotlight on what they don’t know and step up their game.

Interested in attending? Visit sovereignman.com learn more and start your application.

Optimism is key!

There are two ways to think: scarcity and abundance. We want YOU to believe that there are an abundance of people who want to connect with you! Create a future where you’re offering the world your best, and that effort will be returned to you.

Your challenge for the week: Add a zero to your thinking. What can YOU do to step back and add a zero to your investments? Who can you reach out to this week?


 

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.

Ask The Guys – Market Indicators, Wholesaling, and Raising Money

 

Businessmanholdingbuildings_615x300

There’s always twists and turns in real estate, creating a labyrinth for investors. Who can you trust with your questions along the way?

When you find them, let us know. In the meantime, we’re happy to share our thoughts 😉

(Our lawyers make us add this friendly reminder: We’re not lawyers, accountants or financial planners. In fact, we’re not even all that bright. We just share ideas and information for you to consider when working with your own professional advisors.)

In this latest edition of Ask The Guys, we take a deep dive into our email bag and pick out some great questions, including…

  • Should I flip homes or rent them out?
  • What are some market indicators I should know about?
  • How do you recommend I raise money?

Tune in and see what we have to say in our latest edition of The Real Estate Guys™ radio show with:

  • Your on-a-quest-for-answers host, Robert Helms
  • His (trusty?) answer-finder co-host, Russell Gray

 


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!


Question: Should I flip a house or hold and rent it out?

Andrew from Portland, Oregon, reached out to us, “tired of getting a paycheck while someone else gets the profit.”

The Real Estate Guys don’t do a lot of flipping. In our mind, flipping is not real estate investing, but flipping IS a way to make good money.

The essence of business and investing is to build a machine that accumulates the efforts of others (time, money, etc.) as an organized “asset” with a cash flow.

Investing is putting your dollars out to work instead of your labor.

When renting to people, they pay you rent out of their earnings. That’s their effort, turned into a cash flow for you.

A lot of folks think in terms of: Cash > Asset > Cash. (Taking cash to build an asset that creates more cash.)

We encourage you to think in terms of: Asset > Cash > Asset (Using an asset that creates cash flow so you can invest in more assets.) Assets are our end goal.

So you could use your skills to rehab a home, tenant it, and keep the income.

We have a good friend Terry Kerr who has built a portfolio of properties in a thriving business in Memphis using that model.

Question: Should I buy a home before an investment property?

Sonya from Pembroke Pines, Florida, is a smart woman looking for the best way to use her $32,000 VA loan.

She’s renting right now, “because it’s tough to find a home in order to afford to buy an investment home. Which should I do first?”

We say where you live is a personal choice based on where you want to be and the type of home you want to live in.

Sonya isn’t sure she wants to stay in Florida long-term, which is part of her dilemma in choosing a property.

She’s got this VA loan eligibility for a primary residence. The nice thing about the VA is that once you buy a property is that even though it’s an owner-occupied loan, if you live in the home and move, the loan can stay in place after you move.

You could even buy another home as an owner-occupied loan. Keep in mind, you can generally only have one VA eligible property at a time.

If Sonya buys a home to live in, and there’s a possibility of moving, it’s probably best if she feels comfortable it would be a profitable rental, in case it’s not easy to sell.

(That’s the thing about home ownership: You will pick up some tax breaks but you’re also tethered to the property.)

There’s always the chance you may end out getting stuck in a property.

Sure, home prices have been going up, but it doesn’t mean it will keep going to the moon.

Based on the chance you may or may not be trapped in a property you may not want long-term to take that VA and use it somewhere else.

As far as renting goes …

We say there’s really no harm in renting today if you’re figuring out how to put your assets to work.

Question: David in Boise, Idaho, asked: “Are there limits, as a percentage, to invest my self-directed IRA? Can I invest it into one property?”

We definitely recommend you talk to a tax advisor. If your IRA is self-directed, then yes, you are legally allowed to invest as you please.

While you can, the bigger question is should you invest it all into one real estate project?

Generally speaking, it’s not a good idea to put all your eggs into one basket. It may be prudent to diversify.

We don’t have all the details on David’s portfolio, but the general principle is it’s never good to be greedy. Sometimes you swing hard and get the Grand Slam, and sometimes you strike out. If you’re not prepared to strike out, it might not be the best route.

Question: Looking to diversify in several markets, what do you think?

Rick in Michigan is looking to raise money through a syndication, and has a plan to acquire four or five properties in several markets, including one or two vacation properties in Belize.

We love his idea to syndicate, putting together a lot of people’s resources to do something bigger.

Rick wants to have all the properties managed except those in his own area, which he plans to manage himself.

At the high level, we love the idea.

It’s wise to diversify across markets and property types. We like that he’s throwing in some vacation properties. But here’s our hang-up: Why manage it yourself?

Rick, you’re going to be attentive to what’s going on in the other markets. You’re managing money and time.

Time is tricky. You can’t raise more time.

If there’s room in your business model to have a property manager, then get someone else’s help to manage the properties in your area.

Also consider this …

Since you’ll be having investors as part of your building this portfolio, you have to disclose every way that you may be compensated. Being a property manager could appear as a conflict of interest.

You need to build a team and build a relationship with the team. If you’re managing the properties purely to save money, raise more money.

As Simon Black says, “Add a zero to your thinking.”

If the only gating item is the amount of money, that’s largely a mental block.

Question: What are the market indicators?

Everett in Coral Gables, Florida, reached out to get more clarification on the market indicators.

We suggest looking at net migration, which will be either a net positive or negative. You always want to look for a POSITIVE net migration.

There are some markets where more people leave than come in. That’s bad news.

For example, look at Detroit, Michigan. It had a population of 2 million people. Now it’s somewhere between 600,000 – 800,000 in population.

In Detroit, they are literally tearing houses down – removing inventory – because it’s more of a liability to have squatters in them.

Detroit’s an exaggerated scenario.

The point is these markets shift slowly and if you’re not paying attention, then you get left holding the bag.

Another indicator of market health is how long it takes to sell a home.

Not just annually, but from a month-to-month basis. What are the average days on the market?

There’s a whole lot of other indicators … check out our podcasts for more!

Question: What’s the legality of wholesaling? Do I need to be a licensed realtor?

Shawn in Fort Meyers, Florida, reached out to us to learn more about wholesaling.

Wholesaling is the idea of getting into a contract for a property that you’re not going to buy, then finding another buyer.

Since you did the work of finding the property, other time-strapped investors may pay for your efforts in finding it for them. They’ll take it off for hands for a small fee.

The legality portion is tricky.

The smartest thing is to ask a real estate attorney the question. Tell them what you want and ask how to do it within the law.

We’re guessing wholesaling would be fine.

To have a license means you are brokering, or representing a third party.

When you make the contract as a wholesaler, you’re NOT representing anyone.

Make sure you understand HOW you should sign the contract …

This will be either as a “signee” or a “nominee,” depending on what your attorney tells you.

What you’re effectively being compensated for is tying up the property at a decent price and getting a buyer.

Again …

The smartest thing to do when you have a legal question is to spend a couple hundred dollars and GET COUNSEL from a qualified real estate attorney.

Question: With fixed-rate loans, backed by real estate, am I making a bet on inflation?

Patrick in Belgrade, Montana, reached out to us with a great question.

Looking at history and trajectory of U.S. dollar, it’s tempting to think it’s going down. Is it possible the U.S. could have a lost decade of inflation?

If you’re investing for the long-term, our opinion is the trend is your friend.

If you look around the world and the economic uncertainty globally, you’ll see the dollar is less flawed that in other countries.

If all the currencies are sinking, then long-term the dollar will be in the same ship.

We see you having a better chance of inflation than deflation.

In a lot of markets in the world, the U.S. dollar is the de facto for real estate purchases.

As a real estate investor, you need to be prepared for either side – whether the dollar loses or gains value in the global marketplace.

How?

  • Structure yourself conservatively, not razor thin on the cash flow.
  • Pick markets that are more in demand, and think more about where they are GOING then where they are now.
  • Go to cheaper places, where the cost of living is lower but quality of life is good.

These are big, strategic decisions.

If you are serious about understanding about macro economy, this is more than we can dedicate to an episode. That’s why we dedicate and entire, fabulous WEEK to it: Summit at Sea™.

We commit ourselves for a week of intense discussion with some of the greatest minds in banking, commodities, real estate, and investing. They give us a 360-degree look at all of these different topics and come out with actionable intelligence.

It’s a big investment of time and money. It’s also a blast!

Question: I’m just getting into investing, partnering with my dad. What should we be sure to include in our portfolio?

Andrew in Yucaipa, California, is 31, using his dad’s retirement to build a portfolio.

We’ve learned the hard way …

Structure your portfolio to weather a storm!

If you are betting on financing to take you out of tight spot, be cautious. If you’re being conservative and you’re picking a good demographic, have adequate reserves, and not letting yourself get to the point that you might have to sell.

You NEVER want to HAVE to sell.

Instead, you want to do determine your own timing.

We recommend recession-resistant product types. When times are bad, the wealthier are going down t middle class homes. When times are good, people are getting raises and upgrading their homes.

How to protect yourself?

Stay away of high-end stuff and choose more of the bread-and-butter middle ground.

Create your future

All of these were great questions. If you’ve read this far, you’re interested in investing BECAUSE you have goals. Good for you. That’s where it all starts.

You want to improve your life.

You want to create cash flow.

You want more freedom.

You can do it! Go out and make equity happen!


 

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.

Halloween Horror Stories 2016

Sunshine and unicorns are part of what get real estate investors chasing after that next … great … deal.

Don’t get us wrong.

We encourage you to believe good things will happen to your real estate portfolio. Otherwise, no one would have the courage to try.

But every now and then, ugly, terrible, BAD things will happen, even to the most successful people.

That’s what our annual Halloween Horror Stories show is about – letting you know that nothing’s wrong with you if you make a mistake or get stunned with an upset.

When something goes sideways, learn from it.

Once, Russ heard about a business downfall happening to Robert Kiyosaki. When he saw Robert in person, he genuinely said he was sorry to hear about it. Robert Kiyosaki shot back, the way only Robert Kiyosaki can:

“Don’t be! It’s going to be great. The company’s going to be better, my marriage is going to be better. I’m going to become a better businessman. If you’re not stressed, you’re not growing.”

Hopefully these spooky tales shine some light on what YOU can do when proverbial “haunted houses” happen.

Continue … if you DARE! Tune in to our latest edition of The Real Estate Guys™ radio show with:

  • Your haunted-house-tour-guide host, Robert Helms
  • His ghastly co-host, Russell Gray
  • Host of the Wealth Formula Podcast and real estate investor, Buck Joffrey, MD
  • Mobile home real estate investor, Mike A. 
  • Real estate investor and broker, Randy Hobbs
  • Real estate investor, Paul Anthony Thomas
  • Author of Magnetic Capital and real estate developer, Victor Menasce
  • Real estate turn-key provider in Orlando, Greg Bond
  • Real estate investor, Eric Tate, MD
  • President of Mid-South Homebuyers, Terry Kerr
  • Real estate investor, Sep B. 

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!


“The Case of the Disappearing Tenants”

When Buck Joffrey, MD, bought his first apartment building, he looked at the numbers. It was a Class-D property, but the rent rolls were full, and the cash flow looked great. Buck found a property manager who owned several buildings in the area and could handle the property management for him.

After making the deal, Buck realized there was very little money coming in. What was going on? On paper, he had a completely occupied building, but he wasn’t seeing any rent collected.

He learned the previous owner, who owned other buildings, had told his tenants if they moved into the Class-D building, they wouldn’t have to pay rent!

That’s right … his building was stuffed full of non-paying tenants!

“A little bit of scar tissue goes a long way,” says Buck, who learned big things from the nightmare situation.

Lesson: Although the numbers looked good, it was a Class-D building. We recommend not buying Class-D for your first property. Wait until you have more experience. Also, do a thorough due diligence on the property manager and make sure you have some track record from the area.

Another thing to consider: Who’s the tenant standing in line to rent? You need to be aware of how easily a property manager can fill up your building if you need to re-tenant.

“What’s that Smell?”

Real estate investor and owner Randy Hobbs owns a two-bedroom, one bath home, where his tenant he says is “like a grandma” to him has lived for 28 years. She’s a great tenant, who sends in her checks like clockwork.

All was going well … until Randy received a call.

His tenant said there was a funny smell in the house, coming from the cold cellar crawlspace beneath it.

He sent someone over to check it.

Aghast! The plumbing had fallen apart under the kitchen sink! Every time his tenant washed dishes or use the water, it was spilling into a huge puddle (more like a lake) under the house. The toxic waste had destroyed the foundational supports, a costly project to fix.

Lessons: Insurance only covers water losses if they are due to a sudden water loss. Don’t let yourself get complacent if you’re managing a property yourself. Make sure you’re checking things like the attic and crawlspace (or hire someone to do it) regularly so you don’t have surprises.

 “Water Park Fiasco”

When Paul Anthony Thomas wanted to get in on the hot trend of water parks and outlet malls in Texas in the 1970’s.

During the due diligence process of a water park and outlet mall combo, he spent $100,000 on a feasibility study, plans, and incidentals. “At the time, that was a lot of money for me,” said Paul. “Any time you pay for a feasibility study, they just tell you what you want to hear.”

Paul happened to get to meet with the top water park developer in the nation, who looked at the plans and told him the reality.

There wasn’t the right mix of population and traffic to make it work. Due to the demographics of the area, the retailers wouldn’t be successful.

Lesson: You don’t know what you don’t know. Before spending any appreciable amount of money, consult experts. When you understand the experts analyze the opportunity, you can study it and become an expert yourself.

“The Dreadful Cut”

Developer Victor Menasce has a condo building in Philadelphia where there is very little parking. For one condo project, they needed to create a way to get into the parking level, and the only way to enter from the street is to get over the curb.

“To make a curb cut, you have to apply with the city,” said Victor. “The rule says if you’re sharing with three or more properties, you qualify to do so.”

Although he had the go-head from his architect, Victor learned that because his three properties were adjacent to each other, they were considered “consolidated” into one, meaning he no longer had the required three properties.

In order to make the simple curb cut, Victor would have to shell out tens of thousands of dollars to his lawyer in an appeal process with the city, and he was losing time- which meant even more loss of money.

The horror!

Thankfully, he learned that each condo unit could be considered a unique property, allowing him to bypass the appeals process and move forward with the curb cut.

Lesson: You hire an architect often based on creativity. Sure, you want some curb appeal, and an appetizing mix of form and function. However, when you evaluate your architect, make sure their skill-set goes beyond aesthetics and they understand zoning laws.

“A Luxurious Disaster”

When experienced real estate investor Greg Bond, based in Orlando, had a deal come his way for luxury home, he didn’t want to let it pass by. Already a pro at flipping rental homes, Greg figured it wouldn’t be too different to fix up this stripped-down luxury home.

“I figured I’d buy it and make some money,” said Greg. “I’d just take my crews from other properties to fix it up.”

However, he soon learned this was not his typical rental home! As the rehab costs started piling up, the ghastly numbers told their deal-killing story.

There were much higher costs for the flooring, fixtures, detailing … and Greg would have to use a realtor, which added up more costs.

“There was no profit here,” said Greg. “I was on a different learning curve and walked away with less than the realtors made on the deal.”

Lesson: Get crystal clear on what works for you, your personal investment philosophy. If you veer from your core competency, prepare for surprises.

Horror Stories Wrap-up

This is just a handful of the terrifying tales – listen to our latest show to hear more!

In the end, each of these real estate investors lived to tell their terrible tale. You’ll survive your next blunder, too.

Looking to avoid regrets?

We say the best way is to create your future, and have a goals approach that covers every aspect of your life – financially, spiritually, socially, and physically.

That way you’re prepared for anything – no matter what comes. 


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.

Finding Great Properties in Strong Markets

Finding a property can sometimes be the HARDEST part of getting a deal.

With an influx of real estate investors flooding the market, there’s less inventory available and ALSO lower returns.

Think about it …

When more people are interested, you have to pay more to acquire a property. That means your returns go down.

Why not skip the house-hunt hassle and have someone else do the hard part for you?

It’s like buying a “FAT cow” instead of buying a “skinny cow” you have to fatten up yourself.

We met with President of Greater Orlando Home Buyers to hear about another option for you … the turn-key real estate investment property.

In our latest show you’ll hear from:

  • Your beefcake host, Robert Helms
  • His cow patty co-host, Russell Gray
  • President of Greater Orlando Home Buyers, Greg Bond

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!


Evolution of the single-family investor

When Greg Bond and his wife were newly married, they decide to live on one of their incomes and invest the other salary in real estate.

As a couple, they had a vision of building a stream of passive income for retirement.

They bought their first investment house in 1988. Two decades later, after Greg’s job in the paper-based map business was starting to dwindle, he jumped into real estate full-time in 2009.

Perhaps it was his affinity for maps … but Greg had a knack for finding properties. It was one of his passions.

“I started buying as much real estate as I could, not realizing it was the bottom of the market,” said Greg.

He would pick up houses that needed some work, usually from short sales or foreclosures. Something they had in common? They were the worst houses in the best places.

He quickly ran out of cash and approached the bank for a loan, oblivious to the nationwide housing crisis at the time.

“They looked at me like I had three eyes,” Greg said. “It took me going to a few banks before I realized I wouldn’t get a loan.”

Greg already had performing properties, so he captured some equity, and continued to renovate to force more equity.

He helped other people who didn’t have the patience to find properties and had an “A-HA!” moment.

“I didn’t realize how unique I was in the market”

“In the early years I just didn’t realize I was providing a tremendous service for people,” said Greg. “I didn’t realize how unique I was in the market that I had TIME to look for properties.”

At first, Greg built a business called The Property Management Guys to help folks with their property management.

This grew into another business, Greater Orlando Home Buyers, which provides a turn-key operation for investors.

Greg and his team acquire help-needed properties, give them some fix-up love, and get vetted tenants in them.

Then they are available for purchase as a secure stream of income for investors who don’t have time, expertise, or patience to navigate the market.

Turn-key operation for investors

“You have to have discipline in this business,” said Greg. “The new, eager investor may underestimate the costs of rehabbing.”

It takes a professional team to find and source a property, do the RIGHT repairs, vet tenants and make sure the tenant sticks.

Greg’s learned some really useful tips and tricks for property management, including the right rental pricing.

Because of this turn-key product, the cost is higher than if investors did the work themselves.

We see turn-key real estate investing to be like getting yourself a good lunch.

How, you say?

Well think about it like this … some folks pack a sandwich to save a few bucks, while others show up and eat something prepared by someone else.

It can be really nice to have it all prepared for you!

We think turn-key is the ideal solution for someone who is long-distance.

Any good deals left?

With an increase of real estate investors flooding the market, it’s crucial to have a team to help you find deals.

Greg has learned he doesn’t have to find all the deals himself.

Greg used to go through 40-60 homes a week and make offers on half of them. He’d usually have ONE of those deals work out.

It takes a lot of patience, sometimes.

For example, Greg had a stretch that he made 280 offers and didn’t get a single one of them.

So, he adapted and looked for help.

He joined local real estate organizations, such as Real Estate Investors Association (REIA). He made connections with people who were bird-dogging properties.

Before Greg knew it, people were bringing deals to him.

“There’s a lot of moving parts, and I’ve been able to put together vendors and the team,” said Greg. “You can end up with a big mess on your hands and a big expense if you’re not careful.”

An insider’s look at the Orlando real estate market

Orlando, land of sunshine and theme parks, is a booming real estate market.

“Look at the indicators and Orlando’s got them all,” said Greg. “The traffic infrastructure is growing in anticipation of growth, the airport is expanding, there’s potentially a rail that will be placed from Miami.”

Besides being a theme park capital of the world, Orlando is also one of the biggest convention centers in the world. Entire industries are based there, including many prominent medical companies.

It’s something of a perfect storm!

But, as Ronald Reagan once said, “trust but verify.” Make sure you understand reports about Orlando being much more than a Mickey Mouse town for yourself before investing.

With all of this in mind, the market looks strong, but is it too late?

From the expert’s point of view, it’s not. Greg’s still continuing to accumulate his own portfolio in Orlando.

For his clients, he “leaves some meat on the bone” so they can enjoy cash flow, too. It’s a win-win-win for Greg, the buying investor, and the tenant who gets to live in a nicer place.

Don’t miss the boat

Greg Bond’s a great guy to know in the real estate world. Want to meet him in person?

Whether you’re an investing beginner or veteran, it’s a whole lot easier to hit your investing goals when you know people who’ve been where you’re looking to go.

That’s why we love bringing like-minded investors together. Being in person creates a synergy and contagious energy you’ll never find starring at a screen. Don’t miss the boat!


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.

Next Page »