Podcast: Simple Passive Income through Self-Storage Investing

Investors looking for high yields and low drama are excited about how self-storage investing works.

The model is simple. The concept is proven. Self-storage investing gives investors the best parts of income property investing without the hassle of tenants and toilets.

Of course, all investments have pros and cons.

So tune in as we talk with a pro about how to enjoy simple passive income through self-storage investing!


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Podcast: Where We Are in the Cycle and What You Can Do About It

It’s been said that history may not repeat itself, but it often rhymes … and what goes up, must come down.

The persistent ups and downs of markets creates a certain anxiety when a boom starts to mature. Will the good times roll … or is the wind about to change?

Tune in as we take on where we are in the cycle … and what you can do about it.


More From The Real Estate Guys™…

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


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Podcast: How to Find a Mentor and Make It Work

Finding, vetting, and thriving with a mentor is one of the biggest shortcuts to success in real estate investing and in life.

Nearly every successful person can point to one or more people whose wisdom and encouragement played a critical role in their development.

But recognizing the value of a mentor is one thing. Finding a great mentor and making the relationship work in the real world is where the rubber meets the road.

So tune in as we take on the topic of finding, vetting, and thriving with mentors.


More From The Real Estate Guys™…

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


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Podcast: Ask The Guys – Getting Started, Analyzing Deals, and Understanding Cycles

Lots more great questions from The Real Estate Guys™ audience!

In this episode we talk about getting started in real estate investing, analyzing deals, understanding how economic cycles affect real estate investing … and a whole lot more!


More From The Real Estate Guys™…

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


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

Ask the Guys – Where to Buy, When to Sell, and Becoming an Entrepreneur

Businessmanholdingbuildings_615x300

We love it when we get more questions than we can answer. It means our listeners are paying attention and seeking advice. Keep ‘em coming, guys!

But this time, we had so many questions that we had to narrow it down … so we chose the ones with the most universal themes.

The questions in this edition of Ask The Guys touch on when to sell a property, where to buy one, and how to get educated in the real estate investing world … as a student, a military veteran, and a future syndicator.

Our only disclaimer? We are NOT tax professionals or attorneys. We don’t give advice … just ideas and information!

With that said, please sit back and listen in as we bounce YOUR questions off each other.

Behind the microphones for this all-new edition of Ask The Guys

  • Your full-of-ideas host, Robert Helms
  • His full-of-it co-host, Russell Gray

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Question: I just got an offer on my property. Is now the time to sell?

Tina wrote from Redwood City, California, to ask us about a duplex she’s owned for over twenty years. She gets decent cash flow every month, but she just got an offer, and now she’s wondering whether it’s time to sell.
To any investor wondering whether they should sell a property they’ve owned for a while, we’d say now is definitely a good time to consider it.

But … there are a few things you should think about.

First, the basic math. Ask yourself some simple questions: How much equity do I have? How much equity would I net by selling? What would the tax impact of selling be?

Once you figure out the net amount of cash you could get, divide it by your cash flow to get your return on equity.

The big question when you’re considering the return on equity is “Compared to what?”

As in, how does that number compare to other things you could do … keeping the property, investing in a different market, or refinancing, for example.

The other part of the equation is the hassle factor.

This goes back to your personal investment philosophy. You need to do what YOU really want to do … not what someone else might do.

Is capital gain more important to you, or would you prefer appreciation? The Bay Area in general is a great market for appreciation. It’s not the most landlord friendly, however.

We have a couple of acquaintances in situations similar to Tina’s.

One did the back-of-the-envelope math and decided that because she was focused on cash flow and the market seemed like it might turn the other way soon, she wanted to take all her eggs off the table.

Another friend, also in the Bay Area, was concerned because she had so much equity sitting in her properties. She decided to sell as well.

Maybe your solution will be similar. And maybe it’ll look drastically different.

Ultimately, your final decision is just a matter of sitting down, asking yourself some questions about what YOU want, and doing the math. We also highly recommend you talk things out with your advisors.

Question: I’m a veteran with a big passion for real estate investing but a small chunk of change. How can I get started?

Lewis, from Middlebury, Connecticut, told us he’s obsessed with real estate investing. His three main interests are wholesaling, multi-family properties, and lease options.

Lewis is also a veteran who’s holding on to some debt and doesn’t have much cash to work with.

To Lewis and other new investors with high motivation and empty pockets, we say that desire and passion are WAY MORE important than money.

If you’re starting from nothing … there is absolutely, positively hope that you can succeed!

Our opinion is that the best investment is education.

With that said, you do have to be careful … paying big bucks doesn’t necessarily insure you’ll learn anything worthwhile.

That doesn’t mean good education will come without a price tag.

Watch out for free seminars … most are designed to masterfully separate you from your money. Remember, there’s always an agenda.

Books are a great place to start. If you’re strapped for cash, use your local library or listen to books using Audible.com.

Books and podcasts can help you learn the language so you know what you’re talking about and can join in the dialogue.

Of course, there’s a difference between book knowledge and knowledge gained from experience.

We have a few ideas for Lewis:

  1. Take inventory of the seven essential investor resources: cash, cash flow, equity, credit, time, talent, and relationships. You need to know what you’re working with before you can leverage it.
  2. Talk to a mortgage professional who knows how to do VA loans. Lewis’s veteran status gives him a leg up in getting a no-money-down loan.
  3. Consider jumping into wholesaling. Wholesaling can be a great training ground and is one of the best ways to make money when you don’t have much.
  4. Join a real estate investment club or an investing meetup in your area and meet other investors.
  5. Form relationships with people who can get deals and get you access to deal flow. The best option is to find a mentor.

It’s key for new investors to learn enough that they can go out and do something, but not so much that they get what we call “analysis paralysis.”

Learn the language, then focus on relationships that let you learn by doing and by example.

And remember … you will make mistakes. Don’t be afraid of them. Embrace them!

Figuring out how to turn a tough situation into a successful investment can be quite a bit of fun when you have the right attitude.

Question: What tools can I use to identify markets that have more opportunities for good cash flow?

Our third question is from an investor in Denver, Colorado. Michele’s been listening to the show and has keyed into the concept of identifying investment goals, particularly whether to invest for equity increases or income generation.

Her current goal is to find a multifamily property with cash flows, but she’s realized that the Denver area is strongly equity based, with high prices and low rents.

Michele’s question about how to find good markets for cash flow reminded us of the real estate adage, “Live where you want to live; invest where the numbers make sense.”

Unfortunately, Michele’s realization that the rents in her area don’t gel with the prices tends to be true in many other metropolitan statistical areas across the county as well, especially in regard to multifamily housing.

We are NOT here to talk Michele, or any investor, out of a personal investment decision.

But we would encourage Michele to take a step back and really evaluate why she wants to buy a multifamily property right now.

If you’re just starting out, you’re not locked into an asset class or product type yet. So now is a great time to consider whether a different product type might be better at producing the cash flow you want.

Going back to Michele’s question, if we were looking for a multifamily property right now, there are a few things we’d do.

  • First, get acquainted with the different markets around the country. Go to events, look at properties for sale, and start working on zooming in on a market.
  • Make a checklist for your ideal market … is the population growing? What’s the cost-of-living tax like?
  • It’s a good idea to look for markets with big populations. When you’re checking out a state, evaluate how landlord- and business-friendly that state is.
  • When you’re doing your research, start by looking for clues in the news, then dig a little deeper.
  • Consider broker sites and local apartment associations. Both provide invaluable information for landlords, including rent surveys and other resources and reports.
  • Analyze the numbers in those reports, and eventually, the numbers will start to talk to you.

When a deal that fits all your criteria pops up, be ready. You’ll have to be on it immediately.

It’s a hard time to be a multifamily bidder right now, but we still think there’s opportunity out there.

Find a way to stick your toe in the marketplace … maybe even consider joining a more experienced syndicator as an investor.

Eventually, you’ll gain relationships and get enough exposure that you can do your own thing.

Question: What about the smaller markets?

Listener Jay, from Scottsdale, Arizona, has also heard us tell investors to “invest where the numbers make sense.”

But he noticed that we don’t seem to mention the little markets … Akron, Ohio, for example.

There is a method to our madness. We like big markets for several reasons.

First, there’s a lot of available data, and landlords don’t have to worry about where tenants will come from.

Second, smaller towns tend to come with a host of difficulties … fewer practitioners, contractors, and resources alongside highly variable rents.

Small towns don’t have the infrastructure to support big deals. And they tend to lack good, professional real estate practitioners so you can assemble a team.

They also may not be on the receiving end of potential government support during tough times.

Third, small towns have MUCH less liquidity. Bigger markets are going to have a lot more traction.

Sticking to small towns means operating at the margins. If you’re at the margin when a recession comes around, that margin goes away and you’re in trouble.

It’s the investments at the margins that tend to collapse during downturns while the core markets stay strong.

We won’t say there isn’t any opportunity for success in smaller markets. We will say, however, that we don’t know any truly successful investors operating solely in small markets.

Question: How do I know whether I’m ready to attend the Secrets of Successful Syndication seminar?

Megan, from Santa Ana, CA just attended our Create Your Future goals retreat with her wife and says she is PUMPED about real estate investing.

Since they started listening to our show about a year ago, Megan and her wife have purchased FOUR turnkey single-family homes!

They’re searching for their first apartment building now, but they know they’ll run out of money soon and are interested in syndicating in the future.

But Megan’s worried they’re not ready to ask the right questions at our Secrets of Successful Syndication event.

We will say that the seminar is not for everybody … if you’ve never owned or invested in real estate or only listened to free podcasts to educate yourself, it’s probably not the next logical step.

Our syndication seminar is two days that give attendees the lowdown on what syndication is and where to find deals and money.

We have people who come to the seminar over and over. The beauty of our Secrets of Successful Syndication seminar is that it covers the basics for newbies, but if you keep coming back, you start understanding all the little nuances.

Our take is that someone who recognizes they’ve got the real estate investment bug, is taking action, has a resume, and is goal-oriented and humble is the PERFECT person to attend the seminar. So Megan … you’re exactly what the business needs.

And if you’re still questioning whether you’re ready, ask yourself: how quickly do you want to start preparing? Our view is that sooner is better.

You don’t want to have an opportunity arise and not have the education to identify or take advantage of it.

Even worse, you don’t want to be the person who goes out and does syndication without training.

The only reason NOT to come is if you’re not serious about being in the real estate business … and Megan, it sounds like you’re pretty serious.

Remember … we always regret the things we DIDN’T do a whole lot more than the things we DID do.

Question: As a current student, what can I do to prepare myself to be an entrepreneur?

Our last question comes from Yahoso, who’s been listening in all the way from Benin City, Nigeria.

We think there are a lot of things you can do to prepare to be an entrepreneur while you’re a student. A few:

  1. Listen to podcasts and read books, as many as you can get your hands on. These will help you learn the language you need to speak.
  2. Get involved in a dialogue with people who ARE successful. Have conversations with people who know what they’re doing. Play the student card! Many entrepreneurs will let you interview them simply because you’re a student.
  3. Learn sales skills. Whether you like it or not, you can’t be an entrepreneur without ‘em.

Build your box of tools. When you have confidence in your skillset, you’ll find doors will open for you.

Have a question for the guys? Ask us here, and we’ll try to get you on the 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.

Peak Portfolio Management

 

portfolio management

Are you prepared to hit a peak in your investing cycle?

Whether you’re an old hand at investing or a beginner, you’re probably wondering what to expect in a changing political and social environment and how you can optimize market cycles to work for YOU.

On our latest show, we interview successful multi-family investor and Rich Dad advisor, Ken McElroy.

Ken currently owns over 10,000 units and provides safe, affordable housing for thousands of people.

We picked Ken’s brain so we could get YOU his best advice on managing multi-family rental units and figuring out what tenants want.

We also chat about what’s changing in real estate, how to get started as a new investor, and what to do when you’re at your peak.

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

  • Your peak pontificating host, Robert Helms
  • His past his peak co-host, Russell Gray
  • Award-winning multi-family investor and Rich Dad advisor, Ken McElroy

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Your cycle as an investor

One person can look at the metrics and notice that unemployment’s down, the stock market’s up, and wages are trending higher. That person might think the market’s ticking up.

A different person can look at the same metrics and note that home ownership is down and inflation is up. They will conclude that the market’s trending down.

There are so many different metrics to measure market cycles.

Here’s the secret: there’s more than one cycle.

Rent prices can be up while occupancy is low. When home ownership trends upward, landlords will have fewer tenants.

The most important cycle is YOUR cycle as an investor. You might be still acquiring knowledge, OR you might be an investor at the top of your game.

Wherever you are personally as an investor, there are things you can do to optimize your holdings (and potential holdings).

We think Ken McElroy is a GREAT example of how to optimize holdings at the peak of a cycle.

Q&A with Ken McElroy

Ken and his partner, Ross McCallister, of MC Companies, were recently honored as one of the top 10 management companies in the U.S.

We sat down with Ken to get an insider’s view on what’s happening with multi-family units right now.

What’s going on in the apartment space right now?

For now, Ken said, “It’s time to sit back and let others buy.” Last year MC Companies only made one new deal, and he’s moving really slowly.

Not that that’s always easy. MC Companies has over 800 investors. With his partner Ross, Ken manages a team of 350 people who buy, manage, and close on properties.

To have the discipline to say no … especially when they have the equity … is difficult. But it’s what’s best for their company right now.

They wait until they see the right fit for their investing philosophy. Then they buy.

Not before.

How’s your tenant retention?

Ken hasn’t tested it this cycle, but across the nation, 96% of rental units are occupied. Occupancy is high across the board right now, with some exceptions in certain markets.

“What will really be interesting are the next few years,” says Ken. “The companies that are hunkering down now are the ones who’ll do really well.”

How are tenant expectations changing? What can investors change to add value and retain tenants?

Ken’s properties are a level below high end. What he’s really seeing demand for, he says, are basic services you’d come to expect: a safe community, garden spaces, pet options, and WiFi.

Those things are pretty easy to deliver. Especially when you take Ken’s approach:

“We’re continually trying to figure out what tenants want,” he said. “That’s what keeps people there.”

Tell us more about pets.

A couple years ago, Ken and his company realized they’d never had a problem with a pet.

So they took a leap and decided to completely embrace tenants with pets.

They’ve even formed a whole brand around it, including pet clubhouses and pet parks in every community.

They’re now known as the go-to management company for pets.

It’s all because they went back to basics, Ken says. They looked at what residents want, and they asked themselves, “What could we do differently?

Ken’s tenants have, as you can imagine, a doggone good time.

What are some technological changes you’re seeing in the real estate market?

Ken pointed us to what’s happening in retail right now: thousands of big box stores are closing, while online retailers are booming.

People are buying differently now … and that includes real estate.

It’s possible to find and bid on properties electronically, rent apartments online,  and even buy properties … all without physically seeing them.

Ken projects brokers will need to make themselves resources in an age where heaps of information reside online.

You figured out a way to show apartments without labor. Tell us about that.

Ken’s company has actually moved away completely from paid advertising.

Their strategy now has two parts.

First, they’ve moved toward community and blog-based awareness. Ken has a team that manages his company’s digital presence and writes blog posts.

As soon as they started blogging, he told us, their traffic went up.

Second, they’ve reallocated the money they spent on advertising to call centers that help answer questions and set up appointments.

Interested potential tenants can make an appointment and then just show up at the property. Although every property has an office with a property manager or two, prospective tenants can look at open model units on their own.

This gives people the option to engage how they want, then ask questions after. And, it means a property manager is always in the office.

What’s your advice for newbies?

“I believe in my soul that real estate investment is the greatest thing,” Ken told us. “There’s nothing better.”

Ken’s lifestyle attests to that. He takes several months off every summer to travel with his family … and the money still comes roaring in.

For Ken … and for many others … real estate investing means financial freedom.

Ken’s advice? “Start how I started.”

Ken started with a single two-bed, two-bath condo. He worked on the ground, getting to know every aspect of the real estate business.

Fifteen years later, he’s living proof of the benefits of real estate investing. He now co-owns a company with 350 employees, builds his own units, and has hundreds of investors.

To be successful starting out, first get educated, Ken says. “People invest in us for what we know and what we stand for.”

Then, “Jump in.” You have to start somewhere.

The timing matters, the market cycles matter, yes … but ultimately, you just have to DO it.

A stellar example of smart, successful investing

We’ve learned a lot from Ken over the years, and we think Ken has a lot to offer to you, too.

Ken was the first person to help us think about strategic market selection. We realized there was a strategy to choosing markets.

Success wasn’t actually just dumb luck.

Ken was looking at geographies in a way that made sense, and now he’s looking at market cycles the same way.

He’s not buying right now … but not because he doesn’t have the money. He’s simply unwilling to compromise his company’s needs.

Of course, if you’re like Ken, the temptations you’ll face are many.

There’s pressure to perform from investors and employees. There’s the thrill of the deal.

Not giving in to those temptations is one of the reasons Ken is so successful.

He’s figured out a way to channel his DESIRE for acquisition into his current portfolio … by fixing, leveraging, remodeling, improving, and generally taking his investments to the next level.

Ken uses his time and his team to focus on ways to bring quality up and costs down so he can squeeze every penny possible from his holdings.

And he never neglects the human factor. His properties provide a great environment for tenants.

When the market pulls back, he’ll be prepared.

We like to say that “There’s no perfect investment, but real estate is the most perfect you can get.”

Ken started his entire journey with a single duplex. Look where he is today.

Wherever you are in your investment cycle, we hope Ken’s journey inspires you!


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.

Robert Kiyosaki on Why the Rich Get Richer and How You Can, Too

 

kiyosaki

When you look at successful people, from the outside, it might seem they’ve just gotten lucky.

We think “luck” is what happens when you’re prepared at the right time. There’s no such thing as an “overnight success.”

Your ability to be successful in real estate depends on your ability to get educated, take action, and not be paralyzed by fear.

We’re hoping you get very wealthy from real estate investing—but don’t make the mistake of thinking it will happen overnight.

You have to put in the work. And choose your teachers wisely.

On our recent show, we chat with Robert Kiyosaki, well-known author of mega-bestselling Rich Dad, Poor Dad, and one of our favorite teachers.

He’ll give us some insights about why the rich get richer—and how you can get richer too.

In the Rich Dad studio for this rendition of The Real Estate Guys™ radio show, the three R’s of real estate investing … 

  • Your rich-and-getting-richer host, Robert Helms
  • His riches-to-rags co-host, Russell Gray
  • The richest best-selling personal finance author of Rich Dad Poor Dad, Robert Kiyosaki

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Special preview: Three books from Kiyosaki and team

We were lucky enough to get a preview of THREE books that Robert Kiyosaki and team have coming down the pipeline.

  1. More Important than Money, written by the advisors of Robert Kiyosaki.

Readers will get nuggets of wisdom from Kiyosaki’s team of experts, bright minds like Ken McElroy, Andy Tanner, Garrett Sutton, and Tom Wheelwright.

In real estate, and in life, it’s crucial who your friends are.

In fact, the quality of your relationships is more important than money. The value of the people you hang out with—if they’re the right people—is priceless.

This book will provide crucial insights into those relationships.

  1. A new book from Kiyosaki himself called Why the Rich Are Getting Richer.

If you’re listening to our podcast, you’ve probably read Rich Dad, Poor Dad. If you haven’t yet… we HIGHLY recommend it.

Robert describes his new book as Rich Dad, Poor Dad “graduate school.”

This book goes one level deeper into why the rich get rich (and how you can too).3. A special 20th anniversary edition of Rich Dad, Poor Dad.

Don’t worry—the classic content is still the same.

But this edition includes brand-new material. Robert takes a look back at the economy of the past 20 years—and projects what will happen in the next 20.

This is a book that helps people take control of their lives. If you haven’t read it yet, perhaps the 20th anniversary of this finance gem is a great time to pick up a copy!

How to prepare for the unknowable

Of course, none of us have a crystal ball. But a lot of Robert Kiyosaki’s work is about preparing for the future.

We asked Robert to weigh in on a timely question: How can we prepare for what is unknowable?

He was kind enough to give us some sage words of advice.

  1. “Choose your teachers wisely.” In this case, history is your teacher.

There are a thousand possibilities, but in the end, the history of every paper currency only goes one way: down.

But wait, you say… I read in the news that the dollar’s at an all-time high! Well, yes—compared to other paper currency. Historically, Robert reminds us, “every paper currency has gone to its true value, zero.”

  1. “Be entrepreneurs, be smart, study, choose good teachers, have good teams, support each other, and do the best you can.”

Many people are highly educated in terms of degrees, but have no financial education. Educate yourself!

  1. “Risk is a four-letter word.”

In our last podcast, we talked about risk. Robert re-emphasized our point that risk can work to your advantage. He reminded us that financial education and experience give you control over risk.

Educate yourself: More Kiyosaki insights

We’re all swimming in the economic sea. If you don’t have any education, you don’t understand the way the wind is blowing and can’t see tremors forming.

Preparing for the future is really all about educating yourself. Like our motto says, it takes Education for Effective Action™.

When we talk about Rich Dad, Poor Dad, we sometimes tend to wax a little poetic.

That’s because we think this book is much more than informational. It’s  transformational.

To be truly successful in the real estate investing world, you have to work within the right paradigms.

The problem is paradigms become ingrained over time. They don’t break easily.

Take a look at the rise of populism in the U.S. and Europe. People are uncomfortable. “They know something’s wrong at the gut level,” says Robert Helms.

We don’t necessarily think the answer’s political. The answer is in educating yourself, in making that shift so you can see into the future.

You have to be able to sense what’s coming. “This is a time to make new friends, get new ideas, and look at the world differently because there will be more opportunities,” says Robert Kiyosaki.

There are two sides of the coin: risk and control. You have to switch the paradigm and learn to stand on the edge of the coin.

For some people, the best advice is to go to school, get a job, and save money the traditional way. But in Robert Kiyosaki’s words, “The rich don’t work for money.”

The rich flip conventional thinking on its head. Debt becomes a good thing. Getting a job and even a college education? Maybe not as good as you think.

“Debt is like a chainsaw. If you don’t know how to use it, stay away. If you do know how to use it, debt is wonderful. It’s one of our favorite tools in our toolbox,” says Robert Helms.

It’s this kind of thinking that will help you survive the future.

“When the chasm opens up,” says Russell,” you have to decide: will you fall on the side of the rich or the poor?”

With a rapidly narrowing middle class, flipping the coin on its side is a necessity.

Start educating yourself today! Transformation is a process. Pick up a book, talk to your tribe, or…

Join us at the Investor Summit at Sea™

An ESSENTIAL part of being a smart investor is hanging out with the right people.

That’s why we created the Investor Summit at Sea™. It’s an opportunity for YOU to meet great people and get great ideas.

This year, we’ll have some amazing faculty, including Peter Schiff, Tom Hopkins, and G. Edward Griffin.

If you don’t want to fall off the back of the bus into the poor pile, or you’re tired of being part of the squeezed middle class, come spend a week with people who are already rich … and getting richer!

Think about the time you’d spend reading a book like Rich Dad, Poor Dad and the knowledge you’d gain from it.

Now multiply that times 100.

There will be 100 different investors, insights, and paradigm shifts. The Investor Summit at Sea™ isn’t just an afternoon spent reading. It’s a WHOLE WEEK for you to soak in knowledge from some of the most brilliant, hands-on investors.

We’ve created the opportunity for you to spend an entire week wrestling with new ideas and networking with new people. Come join us!

We’re more than 80% sold out, but there’s still a room left for you.

Tune in next time on The Real Estate Guys™ radio show to hear Kiyosaki advisor Ken McElroy on what’s happening in the world of multifamily units and beyond!


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.

Smart Risk Taking for Real Estate Investors

 

tribe

There’s no getting around facing risk in life – and real estate.

Whether you’re risk adverse or a risk lover, the best way to approach risky business situations isn’t to jump, guns a blazin’.

Being prepared to take risks SMARTLY is half the battle

Your BIGGEST DANGER as captain is failing to educate yourself and failing to ask for help. Know the seas you navigate, and rely on your crew (your tribe!) to pull you away from shipwreck.

Our latest episode helps you get in touch with your “rings of risk”  and evaluate whether YOU are taking the RIGHT risks, the right way.

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

  • Your risk-taking host, Robert Helms
  • His deal-making co-host, Russell Gray
  • Our always-honored guest, the Godfather of Real Estate, Bob Helms

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Discover the three rings of risk

Before you take ANY risks at all, you need to evaluate your personal investment philosophy.

Having a personal investment philosophy doesn’t mean all the investments you make will fit in one box.

The investments in your personal portfolio should fit into three rings of risk:

  1. a conservative base
  1. a slightly riskier but still cautious second ring, and
  1. a high-risk outer ring

In your core set of investments, you DON’T want to take much risk. For example, you don’t want to risk losing your own house or the money from your kids’ college funds.

Determine your starting place. How much money do you need to have on hand for personal living expenses in case something goes wrong? Three months’ worth? A year? Are you comfortable having a mortgage on your primary residence, or should that be investment be loan-free?

In the next ring, you can start taking a little more risk and using a little more leverage.

If you lose some money in, say, your core real estate investments, it should be disappointing, but not devastating.

Once you’ve made some solid investments and see cash flow, consider jumping to the outer ring. To operate in this ring, you have to be okay with losing 100% of the cash you put up.

You can do this because those losses shouldn’t touch your personal funds AT ALL.

You have a ring of security between your high-risk investments and your personal possessions.

Ask yourself: What degree of risk is reasonable for me and my family? Before I make this investment, what else could I do with this money? With what risks? Am I prepared for every possibility? What will happen if everything goes according to plan? What will happen if something goes wrong?

Taking smart risks

Here’s a question for you to consider. Which is riskier: to buy a plot and build from the ground up, or to buy an existing building?

We asked this question to some of the investors and got a wide variety of answers.

The truth is, there’s no right or wrong answer in this scenario. Either choice takes on different kinds of risk.

Everything you do as a real estate investor involves risk. The goal isn’t to AVOID risk. It’s to be smart about the risks you take.

A KEY part of being a smart risk taker is investing in things you understand and have a degree of control over.

If you can’t do your due diligence on an investment because you don’t even know where to start, that’s probably a BAD investment.

To be a smart investor, you have to be self-aware.

Taking smart risks isn’t just about the inherent risk in a property. It’s about YOU and how much YOU can handle.

Also keep in mind that sometimes saying “yes” to the good can cost you the great.

Don’t be afraid to say no.

Ask yourself: Where am I in my life? What are my needs? My capabilities? My ability to engage on this project? My knowledge? Is my team up to par?

Balancing the investor emotions scale

We’ve established that risk is omnipresent in real estate investing. You can’t make a real estate investment without some degree of risk.

To take smart risks, you need to weigh the upsides and the downsides of a potential investment, then make an educated risk assessment.

You also need to think about your own emotional makeup.

Investor emotions run on a scale from greed to fear. In between is rationality.

To be a smart investor, you have to find your own middle ground of rationality.

How do you handle uncertainty? If your answer is close to “not well,” perhaps smart investments for you would have more predictable outcomes and a high degree of control.

But leaning too heavily toward the fear side of the scale won’t get you anywhere.

If your goal is to make money, you have no chance if you don’t make a deal.

On the other hand, tipping too much towards greed can turn making deals into personal badges of honor.

When you have your eye on the prize, it’s easy to lose sight of rationality.

Whether you’re too afraid or too greedy, letting your emotions run high impacts how you behave, which impacts your decisions, which ultimately impacts your bottom line.

Smart investors have tight control over their emotions.

They strive to always operate in a zone of low emotions and high intelligence.

When a deal comes, these investors are the ones who make good, pragmatic, and well-informed decisions.

Ask yourself: Can I stay composed about this investment? How do I handle uncertainty? Do I get carried away when I’m making a deal? Can I evaluate this decision rationally instead of emotionally?

Nine ways to mitigate risk

Risk in the real estate investing world is not going away.

But there are some things you can do to mitigate your risks.

Our list of nine:

  1. The obvious one: get insurance.
  2. Hire the right people (don’t hire cheap; hire the best). Make sure your hires hit all three Cs: character, commitment, and competence.
  3. Educate yourself. Before jumping into a new market, get familiar with it. Jumping into an investment with no background knowledge is an unnecessary risk.
  4. Be self-aware.
  5. Have a strategy.
  6. Have the discipline to execute that strategy.
  7. Choose your partners carefully. You can’t have someone hitting the panic button every time something goes sideways.
  8. Know there’s not one right way to do things.
  9. Most importantly, THINK THROUGH every decision you make. Be a sober decision maker.

Risks come in two varieties: those inside your control and those outside of it.

You can’t obsess about the risks outside your control.

You CAN make the best available decision based on the risks you can control.

Think of yourself as a boat in the big ocean of economic activity. When you can learn to understand the tides and winds, you put yourself in a better position to navigate when it gets stormy.

You can’t mitigate a risk you don’t understand.

Our final note for today: embrace risk smartly, and great things can 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.

Tribes – Why and How to Find or Build Yours

 

tribe

No matter how brilliant you are, going solo in real estate won’t get you very far.

It’s a team effort, which is why you need a tribe.

We’ve joined (and founded!) many tribes, and  encourage you to do the same.

Have you ever considered you are the sum total of the people you spend time with? The people and habits in your life can either drag you down (misery loves company!) or help you progress.

YOU CHOOSE your tribe, or the people who get to take up time and space in your life.

We want your tribe to bring you up—to help you learn from others, grow as an investor, and connect with like-minded folks.

Today on The Real Estate Guys™ show, coming to you from sunny San Diego, you’ll hear sage advice on finding your tribe from:

  • Your shy-no-more host, Robert Helms
  • His frog-kissing co-host, Russell Gray
  • The godfather of real estate investing, Bob Helms

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

 

 

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Find a balance between diversity and common goals

We just wrapped up our yearly goals retreat in beautiful San Diego.

While we were at the retreat, we had the awesome opportunity to observe our own tribe in action.

We were also able to ask ourselves: What makes our tribe so great?

We realized our tribe worked well because it was diverse. It wasn’t an echo chamber, but instead, a group of people with different perspectives united by a bond of commonality.

Take a group of people with similar values but diverse perspectives, and you get an incredible synergy.

It’s that synergy that helps you know when you’ve found your tribe.

“You know it’s your tribe because of how you feel,” Russell tells us.

Yes, it’s that simple.

Step out of your comfort zone

Do you feel embarrassed, overwhelmed, and underqualified to show up in a room of investors?

If so, THAT’S OKAY!

Once upon a time, we felt that way too.

But we want you to know that new investors can be invaluable to a group.

You help people farther down the road understand new perspectives.

And you allow others opportunities to refine their thought processes and share information they’ve acquired.

If you think you can’t network because you’re “too shy,” we have three words for you: GET OVER IT.

Step out of your shell. Push yourself out of your comfort zone.

We’re “shy guys” too, but very early on we realized that being shy didn’t serve us in the world of real estate investing.

So instead of hiding out, terrified of rejection, we faced our fears and did some hard things. We still do, every day!

Put yourself in environments where you’ll be surrounded by successful people.

Then ask yourself whether those environments are working for you.

If you realize you’re in a place you don’t want to be, don’t stick around! Cut your losses.

Realize that you might have to kiss a few frogs before you find your ideal match.

You might even have to kiss a lot of frogs!

Begin with little things, one-time events: paid seminars or talks by published authors.

Attendees at these events WILL have commonalities with you. Start there.

Then latch on to the people you want to spend more time with. You never know where things will lead.

One person can open up a whole new world of connections and new tribes.

Start with your values

The basic gist of finding your tribe is to set course, then be smart about where you’re headed and what you’re doing to get there.

How do you set course? The VERY FIRST thing we encourage you to do is identify your values.

Set out your personal investment philosophy and your goals. Identify what is most important to you.

Beyond whatever else we may have in common, it is truly our values that bond us to others.

When you start looking for your tribe, look for people who share and reinforce your personal values.

And make sure you act on your own values. Be the best version of who you really are.

In a new environment, DON’T

  • Play close to the vest
  • Pose and pretend you’re someone you’re not
  • Try to look smart

DO

  • Be willing to open up
  • Ask questions and share ideas
  • Make an impression
  • Prepare talking points
  • Bring business cards!
  • Get contact information for new acquaintances

Don’t insist on acting alone

Real estate can be a lonely business.

While we trust you to be an innovative independent operator, we also believe strongly in the power of a tribe.

We know finding your tribe isn’t a piece of cake.

You have to commit time and energy. You might have to put yourself out there and overcome some natural inhibitions. You might even have to form your own groups.

But being a member of a tribe is a sacred and special thing.

When you’re part of a tribe, you have a community and responsibility. Treat that responsibility with the utmost care, and in return, it will give you more than you ever thought it could.

Remember, your environments and associations can either drag you down or bring you up.

Today, we encourage you to start the work of finding your tribe by asking yourself these questions:

  • Who do I spend time with?
  • What do these people have me thinking? Doing? Reading?
  • What do they have me BELIEVING?

Then ask yourself the big question: Is that okay with me?

If your answer is yes, you’re on the right track.

And if your answer is no, then maybe you have some work to do.

Go out today and kiss some frogs.

We guarantee you’ll find Prince Charming, or at least a good friend, a role model real-estate investor, or a terrific tribe.

Now get out there!


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.

Stupid Investor Tricks

 

investor tricks

Let’s take a look at some investor tricks.

Not stupid, simple tricks. Not the kind of tricks that earn you $100k overnight Spoiler alert. Get-rich-quick schemes are rarely more than just that … schemes.

No, these are investor tricks that went way, way wrong.

Today, we hope you learn from the lessons of others and spare yourself the pain of making mistakes you could easily prevent.

In the words of Franklin P. Jones, “Experience is that marvelous thing that enables you to recognize a mistake when you make it again.”

In today’s special edition of The Real Estate Guys™ show you’ll hear from:

  • Your wise(?) host, Robert Helms
  • His wise-cracker co-host, Russell Gray
  • The godfather of real estate and seven-decade investor, Bob Helms

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!


Trick #1: Terrorizing your tenants

Enterprising entrepreneurs look for workarounds. When life hands them an obstacle, they look for a way to work around it.

Some workarounds are smart investor tricks that actually work.

And some workarounds are really stupid investor tricks.

For example, see the story of these two landlords in Brooklyn, NY. To get tenants out of a rent-controlled building, they resorted to illegal tactics: not providing heat or electricity, enticing drug dealers to the building, even running dogs through the hallways.

Good workaround? DEFINITELY not.

You don’t want to be someone who resorts to those kind of tactless tactics.

Rent control can be a tricky situation. It gives owners a perverse incentive not to maintain the property.

But there ARE things you can do—legally.

First of all, think long and hard about your decision to own a rent-controlled building in the first place.

Understand that everyone in a transaction will have a short-term view except you. The loan broker, real estate agent, and seller only care about what happens in the short term. YOU’RE the one left holding the bag.

Don’t be naïve about what you’re getting. Do your homework. Verify tenants and make sure they’ve been at the location for longer than a month and have been paying their rents.

And before you make the final decision, check the rules of your location—can you raise rent a certain percentage each year, or are you stuck at one rate?

Property managers in the area will be your best friend. They know all the rules and regulations and can tell you what the real inventory of a property is.

If you do own a rent-controlled property, think in the long term.

Maybe you can move slowly, making improvements and raising rents as tenants move.

Maybe you can make improvements that’ll save you money in the long run and make your building more enticing when you look to sell it—like changing the plumbing system.

Whatever you do, avoid these stupid investor mistakes:

  • Not doing your homework before buying.
  • Holding a short-term view.
  • Doing anything that could come back and bite your reputation—like pushing tenants out illegally.

Trick #2: Coloring outside the lines

We want to touch on a serious subject here: the warehouse fire in Oakland, CA, which claimed the lives of 36 young people.

Our hearts go out to the victims and their families.

We want to examine the responsibility of the landlord and owner in this situation.

The building where the fire occurred was designed to be a warehouse. It was leased by the owner to a single tenant, who then created individual living and artist spaces.

However, the building did not have the proper code, plumbing, electricity, or safety protocols (like an adequate amount of properly marked and cleared exit doors) for human occupancy or high-occupancy events.

In high-rent marketplaces, creative folks often figure out ways to find lesser accommodations for less money.

We are certain that there are many buildings in high-rent markets that are similarly creative—in this case, extremely dangerous.

“At the end of the day,” says Russell, “the owner has a high degree of responsibility to know what’s going on at their property.”

If you own a building, be aware of what’s going on. Inspect regularly—whether you go or you send a trusted employee.

Take time to understand the local code and keep your building up to date.

If you feel like giving in to a good tenant who pays on time and wants to create a similar artist space, think first.

Think about your legal liabilities in the case of an accident.

Think about the weight on your conscience if people lost their lives.

Think about all the possibilities instead of hanging on to low probabilities.

In both stories we’ve shared so far, landlords and tenants encountered a market problem. We emphasize that there are better, more creative ways to solve this kind of problem.

That doesn’t mean you have to quench your creativity. But coloring outside of the lines sometimes just creates a big mess.

There are paths and procedures to get where you need to go.

“When you bend the rules creatively to come up with a solution, there’s often fallout,” Bob reminds us.

Don’t throw up your hands. Take responsibility. And color inside the lines.

Stupid investor tricks:

  • Putting your property on autopilot and hoping everything will be okay.
  • Coloring willfully outside of the lines—that is, not following code and safety regulations in your quest for a creative solution.

Trick #3: Mistaking cheap for prudent

On our Halloween horror stories show a while back, we told a true horror story of a careless buyer.

The buyer was a realtor who thought he knew what he was doing. He figured he had plenty of expertise. So he skipped getting an inspection when he bought a four-plex for a killer price.

Six months later, he’d made some improvements, the market was doing great, so he put the four-plex on the market sell. The (smart) new buyer got a home inspection.

Turns out, there were some problems. BIG problems: the building literally didn’t have a foundation.

The buyer sold, finally, at a tremendous loss.

We’ve heard this story over and over. Buyers think they’re being prudent and saving some cash, but end up throwing their hard-earned money away.

If you are buying a property, do your due diligence.

If it’s a no-go, have you wasted your money on an inspection? ABSOLUTELY NOT!

Think of inspections as insurance. Insurance costs you a little while things are going well, but saves you a LOT if something ever goes horribly wrong.

As Bob says, “The most successful investors are the most educated investors.”

Don’t take shortcuts. Use a reputable broker. Find a good lawyer. Get a certified inspector.

This doesn’t mean you can’t save money and do things better. Learn to use your lawyer efficiently. Actually walk through WITH the inspector and see first-hand what changes can be made.

Here’s the stupid investor tricks you SHOULDN’T follow:

  • Not doing due diligence before making a big investment.
  • Mistaking cheap for prudent.
  • Failing to learn from others’ mistakes.

Trick #4: Failing to major in the minors

One of the most important skills you can learn as a real estate investor is how to differentiate between major and minor issues.

When you’re sitting down with a buyer, you have the right to bring up every issue you see with a property.

That doesn’t mean you should.

Here’s the question you need to ask yourself, says Robert: “If the seller says no, are you willing to walk away from the deal?”

Is bringing up a chipped $1.29 switch plate that you could replace yourself worth abandoning a potential purchase?

Choose your battles wisely.

And when you’re buying a property, realize that even in this do-it-yourself world, you’re working in a highly regulated industry.

Do the research. Get advice and legal help.

Listen to your attorneys and advisors, but realize: they DON’T give business advice.

They will give you technical advice. You have to make a risk versus reward assessment.

Business decisions—deciding what risks and tradeoffs you’re willing to take—is YOUR job.

You are the one who cuts through all the chatter.

Stupid investor tricks:

  • Majoring in the minors and neglecting what’s most important
  • Leaving business decisions to others

Trick #5: Making decisions in a vacuum

As The Real Estate Guys™, we ALWAYS encourage you to educate yourself.

Part of educating yourself includes surrounding yourself with smart mentors.

Listen to this brief tale of two investors.

One investor found a market he liked, LOVED the idea of leverage, but chose to invest in a market with zero appreciation.

His strategy wasn’t wrong. The market wasn’t bad. But his strategy and the market he chose didn’t match.

He didn’t do the math, didn’t look at his exit strategy, didn’t run his decision through with someone wiser before purchasing.

He trapped himself.

Our second investor went on some field trips with us and fell in love with a particular market. This market was a strong market, with great performance.

So the guy had a brilliant idea: buy a house, rent it out, use it for vacations once a year, and then use it as a retirement home in 15 years.

At least he thought it was brilliant.

We helped him see that one property was very unlikely to fill all his needs.

We encourage you to bounce ideas off those who are more experienced than you.

Don’t get trapped in your own circular thinking. Get a reality check.

Build a team. Form a circle of advisors.

Lay out your outcome, what you’re thinking of doing, and what you have to work with.

THEN, bounce it off creative, experienced, smart people! It may be there’s more than one solution.

Stupid investor trick:

  • Thinking you don’t need help from ANYONE ELSE

Tune in to The Real Estate Radio Guys™ next week to learn more about finding your tribe.

Go out and make some equity happen. (Without stupid tricks!)


More From The Real Estate Guys™…

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

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