Taking a Quantum Leap through Syndication

Incremental growth is interesting … but quantum growth is exhilarating and enriching!

With your own funds, you can grow your portfolio gradually over time. But we’re talking years and years.

Graduate to bigger deals on a shorter timeline by taking a quantum leap … with syndication.

Smart investors use syndication as a strategy for turbo-charging their income AND their investments.

Learn why syndication is the key to quantum growth and how you can get started on your own syndication strategy.

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

  • Your leaping host, Robert Helms
  • His lurching co-host, Russell Gray

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Creating your own quantum leap

Whether in life or in real estate investment, it doesn’t take a genius to know you can do MORE with more resources.

There are two ways to grow your resources. You can grow them incrementally over time … or you can take a quantum leap.

The question is how. How can you go bigger … and how can you do it as quickly as possible?

You can only go so far on your own account. With the money you save and the loans you qualify for, you can build a nice portfolio.

But if you want a SUPER portfolio, it’s time to look at syndication … raising money from private investors to do bigger deals.

Syndication can sound intimidating. The irony is that it’s actually EASIER to go big than you think.

Doing more … more easily … at scale

Many investors do real estate on the side … but what if investing were your day job?

Syndication allows you to invest your money alongside your investors’ money. Plus, you get a piece of your investors’ profits because you put in the time doing the work.

One of the big benefits of real estate syndication is you are no longer limited by your own thinking or your own finances.

By working together with private investors, you have a bigger budget … and a bigger budget allows you to scale your work more effectively.

Money isn’t something to be hoarded. It’s a resource to be used.

Your job is to figure out how to make smart investments with your money and your time so when the money goes out, more comes back.

Finding deals, book keeping, filing, issuing reports … all the things you have to do when you are managing real estate … you can hire people to do for you.

By hiring experts instead of trying to do everything yourself, the quality of your work will improve.

When you hire the best, it doesn’t cost you money … it makes you money.

Syndicating lets you work at scale, which makes your job easier and helps you work better.

Leveraging your real estate experience

A quantum leap requires leverage. As a smart deal-maker, you leverage your time and your money … but you also leverage your experience resume.

All the successes … and all the failures … you’ve had in real estate deals over the years become your greatest attributes.

As a syndicator, your job is to find real estate opportunities and package them as passive investments for people who have more money than they have time.

Your experience making real estate deals for yourself makes you a valuable resource to your investors. You’ll know what markets to shop in, when to buy, and how to generate cash flow.

And with syndication, the bigger the deals you take on, the smaller the cut you can take … and still make a nice return.

This means an even bigger slice of the pie can go to your investors … making the deal more attractive for them.

Creating your own job and getting paid

When you raise money to do a syndicated deal, you are creating a job for yourself.

If you do the job well, syndication can be a very lucrative opportunity.

When you partner with private investors, you make money when the deal makes money. You get paid when your investors do.

But there are other ways to earn money as a syndicator. You can charge additional fees for all the work you are doing to manage the deal.

Some syndicators bill a fee up front called a “promote.” This fee allows them to make income while they are working to make the deal happen, so they can then bring in revenue for their investors.

You can also add fees for the time you spend working to sell a property, acquire a property, or finance your deals.

There is plenty of money to be made if the deal is good.

Getting started in syndication

You don’t have to be a multimillionaire to leap into syndication. You can start small and work your way up to bigger and bigger deals.

You do need be able to sell. You have to create deals that are attractive enough to build your investment team … and you need to be able to lead and inspire your team to action.

So, you get started in syndication the way you should start with all things real estate … education.

Syndication starts with understanding. The things you learned best in life you didn’t master because someone told you … it was because they showed you.

Place yourself in the company of other syndicators who are finding success. Ask them questions and watch how they make deals.

A great way to start is by attending The Secrets of Successful Syndication. You’ll learn the details of starting your own real estate syndication business from some of the best syndicators operating today.

And you’ll meet investors just like you who are ready to jumpstart their growth.

There’s a lot to learn … but it is learnable!

Quantum leaps start in your mind. Learn the basics, get around the right people, and be diligent.


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Forecasting the Future of Real Estate in 2019

Are you prepared for the future?

In our annual yearly forecast episode, we explore the future of real estate in 2019. We don’t have a crystal ball … but we do have great resources and smart friends.

Hear from three real estate experts on the state of the housing market, the effect of changing interest rates, the outlook for commercial real estate, and MORE.

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

  • Your forward-thinking host, Robert Helms
  • His fraidy-cat co-host, Russell Gray
  • Consultant and new home expert John Burns
  • Podcaster and real-estate expert Kathy Fettke
  • The Apartment King, Brad Sumrok

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In the news …

We’ve scoured the news sources and industry journals to see what might be coming in 2019.

The National Association of Realtors predicts in their 2019 Forecast that home sales will flatten and home prices will continue to increase.

The report also says not to expect a buyers’ market within the next five years except in the case of a significant economic shift.

On the other hand, the forecast cautions sellers to be mindful of increasing competition. It notes inventory growth, particularly in high-end housing, but reminds readers of the current housing shortage.

We’ve looked at predictions from various experts. Several of those experts predicted home prices will stabilize or rise at a much slower rate than in previous years.

One expert predicted listings in entry-level markets will remain tight. Yet another predicted industrial markets will continue to sizzle, interest rates will keep rising, and apartment rents will steadily moderate.

We’ve also read an article covering the State of the Market Panel hosted by Real Estate Journals.

The panelists agreed 2019 will be a big year for commercial real estate, including some new industrial and distribution/warehousing opportunities. They noted commercial rates will keep inching up.

Investors should consider opportunity zones and changes in the tax code in 2019. There are far different incentives for investors than for homeowners, and expensive housing means even more people will be pushed from buying to renting.

Predictions for the new home industry from John Burns

John Burns runs John Burns Real Estate Consulting, and he aims to help people in the new home industry understand trends.

In 2019, John says he is, “confident we won’t see construction grow that much.” He notes sales slowed dramatically in 2018, and he believes people will continue to be cautious.

What are builders paying attention to? They’re trying to build smarter with strategies like offsite construction and materials efficiency. They’re also building better by integrating smart-home technology and pivoting toward lower price points.

What about trends in home ownership? John says he thinks ownership is ticking back up. He says the millennial generation has some unique considerations … most want homes, but compared to previous generations, it may take them a bit longer to commit, especially because of increasing student loan debt.

And how do interest rates affect home builders? “It takes a big bite out the market,” John says. If people can’t get mortgages or can’t afford a new mortgage, they’re less likely to invest in a new home.

Take advantage of opportunity zones in 2019, says Kathy Fettke

Investors should look for jobs and opportunities in 2019. There will always be certain companies and cities that will thrive through a recession, says podcaster and Real Wealth Network founder Kathy Fettke.

These areas can provide investors with both equity and cashflow … and with new opportunity zones, there’s also the potential for tax breaks.

Neighborhoods that are flooded with investors because they’re opportunity zones WILL see equity growth, Kathy notes.

But just because an area is an opportunity zone doesn’t mean it’s a guaranteed good deal, and Kathy cautions investors to make sure deals make sense by investigating if they’ll hold out in the long run. That means job sources, stable and growing infrastructure, and good prospects for revitalization.

“You need the city on your side,” she says.

In 2019, Kathy is looking for stable employers that can thrive through a recession … she mentions Netflix. She warns investors not to get ahead of themselves by investing in areas that aren’t likely to improve within 10 years.

Employment is low, and interest rates are rising. We asked Kathy what she thinks will happen in that arena.

She says that while it’s hard to predict what will happen with the Trump administration, investors should keep their eye on corporate debt.

The ’08 recession happened because of a big consumer debt problem … corporate debt might cause trouble in the future. So, take a close look at the businesses that employ renters when investigating a market.

“Our world is changing so quickly,” Kathy notes. “Today is no longer a world where you can invest and forget about it for 30 years.” So in the housing realm, make sure you’re looking beyond the current tenant to say, who’s next? And will they have a job? Look for stability.

Demand and supply in multi-family, with Brad Sumrok

Last, we talked to the Apartment King, Brad Sumrok, educator and investor in the multi-family housing realm.

“I’m still proceeding with caution,” Brad says. But he notes there are many indicators that multi-family will continue to be a good asset.

We asked him whether some of the signs of doom from ’07 and ’08 are happening again in the multi-family space. The short answer? No.

Back then, there was a huge oversupply of housing. Now, there’s a 2-million-unit shortage. Most building now is happening in the A-class luxury space … but that’s not where the demand is. That means there’s an oversupply of luxury housing … but still some great opportunities to provide housing for working-class tenants.

Most people in the B and C class aren’t renters by choice … it costs, on average, $339 more per month to own a home than to rent. For blue-collar tenants, that’s a huge difference. And strict financing is further reducing the number of buyers.

That means more renters, and more demand for housing.

An increasing number of investors are looking at multi-family, which does inevitably mean cap-rate compression. But tax laws are on the side of investors.

“As the market changes, you have to temper your expectations,” Brad notes. Investors can’t expect to triple their equity in three years, and returns are likely to align with historical models.

That means there’s less of a cushion for making mistakes. It’s a strong case for investors to educate themselves before getting into an asset class.

To get educated on the multi-family market, check out Brad Sumrok’s 2019 Apartment Forecast! We wish you lots of equity in the new year.


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Single-Family Update and Hot Market Spotlight

We taped this episode of The Real Estate Guys™ show at the Single Family Rental Investment Forum in Scottsdale, Arizona.

This is our second year at the event, and while it features many big institutional investors, we’ve also spoken to a number of mom-and-pop investors who are looking at the big picture for single-family investing.

That’s a great thing to do…it means you get a look at what your competition’s doing so you can jump into market niches before they do.

In this show, we talk to a guest who has found a market niche and perfected the process for investing in single-family homes there.

Learn all about this hot market … and get an update on the state of single-family rentals. You’ll hear from:

  • Your singular host, Robert Helms
  • His singled-out co-host, Russell Gray
  • Single-family expert Patrick Grace

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Kansas City, Missouri, market drivers

We always say live where you want, but invest where the numbers make sense.

Well, our guest today happens to live and work in the same market. He has spent so much time with his boots on the ground … 20 years! … that he has his market down cold.

Our guest is syndicator and investor Patrick Grace, and his market is Kansas City, Missouri.

Pat works exclusively on the Missouri side … but there is a Kansas City, Kansas, right across the river, in case you were curious.

We asked Pat to give us a market spotlight, so let’s start with the basics. Why does Kansas City make sense?

  • The cost of living is low. Housing, groceries, and basic necessities are affordable for residents.
  • It’s a low-risk market. KC doesn’t go through big ups and downs.
  • It’s a booming metro area. KC is centrally located in the U.S., making it a transportation hub for trucks, trains, and boats. Both the Missouri River and the nation’s second-largest railroad pass through KC.
  • It’s packed with thriving educational institutions. Pat says there are almost 47 four-year colleges within 30 to 40 miles of the KC metro area. Many college grads come to the area for school, then stay to work and live.
  • It’s business-friendly. Not only because of its great location and low cost of living, but also because of labor availability.

Are there any weaknesses to KC? Pat says most jobs are fairly low-wage, which makes sense, based on the city’s cost of living and economic base. That’s actually a good thing for single-family rental investors … it means people stay renters.

Kansas City single-family rental profile

Pat is a syndicator in Kansas City. He currently owns and/or manages over 700 single-family homes in the market.

His focus … his niche … is finding distressed properties or properties on auction and bringing them back to life.

His business is a vertically integrated, one-stop-shop for investors. He has an in-house real estate company for finding homes along with construction and property management businesses.

Investors can invest in anywhere from 1 to 100 homes, and Pat’s team handles the entire process … from finding the property, to fixing and renting it.

Properties in Pat’s portfolio usually fit a standard profile … 2-bedroom, 2-bath homes with 3-car garages, sold for $130-150 thousand.

Investors usually put down 20 to 25 percent of the sale price, for which they have a variety of loan options, including Fanny Mae, IRA funds, 1031 exchanges, and private loans.

“Renters are plentiful,” Pat says. And rents are reasonable for both renters and investors seeking cashflow. The sweet spot, Pat says, is between $800 and $1,500 per month.

What about the tenant-landlord law? “Missouri is favorable to landlords,” he says.

Landlords can get in front of a judge within a month and get non-paying tenants out within 30 days of the court date, typically … although usually, it doesn’t come to that.

And occupancy is high. “Our portfolio is 97 percent occupied,” Pat notes. He says he gets a pile of rental applications every day, which means he can be selective about screening and vetting tenants.

The turnkey rental model

Pat’s business functions on a turnkey rental model. In fact, he says, 90 percent of his investors live outside of Kansas City, simply because Pat and his team are so good at handling every component of the buy-rehab-rent-manage process.

Investors don’t have to use all of Pat’s services, but most choose to once they buy one (or more) of the properties within his portfolio.

Most investors come in after Pat has found, rehabbed, and rented the property, but some like to get involved earlier. That’s the “skinny cow” rental model.

In those cases, investors are involved from the beginning. They know exactly how much the property costs and have a say in rehab and construction. They still work with Pat’s vetted crews and companies, but they get to see the process from beginning to end and have a say in tenant placement.

This allows investors to get some education on the process.

Pat’s business model works well because he’s exploiting a niche. He says most hedge funds and bigger investment companies go after more expensive homeowner-sold, ready-to-rent properties instead of choosing the more intensive value-add option.

By working with distressed properties, Pat can force equity. And he’s learned that by choosing premium-grade materials during rehab, he can also charge premium rents to tenants. That means spending maybe $1,000 more than he could to put in quality tiling, fixtures, and appliances that draw more, and better, tenants.

And because Pat owns his own rehab and construction companies, he can use the same materials in bulk and renovate quickly and efficiently.

Tenants usually sign one- to two-year leases. Pat says his contracts have automatic lease renewal clauses along with 3 to 5 percent yearly lease escalators.

Low-entry, high-cashflow investing

What does Pat wish people knew about Kansas City?

“Kansas City is low-entry and high-cashflow, but we also have a duel-exit strategy,” Pat says. Owners can rent for cashflow or sell rehabbed properties for equity.

Pat also says he wished people knew how metropolitan KC is. It’s a big metro area with a revitalized airport, great infrastructure and transportation, including over 1,000 miles of bike lanes, and a growing number of commercial and retail facilities.

Yet despite its growth, KC remains affordable to the tenants that are Pat’s bread and butter. He says he primarily serves service workers, medical professionals, mechanics and truck drivers, warehouse and distribution center workers, and tech professionals. Most tenants work blue-collar jobs, making them reliable long-term renters.

And the growth shows no signs of stopping … millennials and college grads are flocking to KC and settling down there. KC is the perfect combination of affordability and lifestyle.

Kansas City sounds pretty great to us, but if you want even more information, check out Pat Grace’s exclusive webinar, which you can access by listening in to the podcast. He also created a market report just for our readers. Check it out here!


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Ask the Guys – Long-Distance Landlording, Property Management and More

Welcome back to an all-new edition of Ask The Guys!

Today, we’ll be answering listener questions. So listen in for our best real estate tips and tricks!

A disclaimer … we are not tax advisors or legal professionals. In our Ask The Guys series, we give ideas and information … NOT advice.

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

  • Your tipster host, Robert Helms
  • His tricky co-host, Russell Gray

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How do I find a property management company?

This question comes from Lee, in Bay City, Michigan. He wants to know whether we have any advice for finding—and vetting—management companies.

He says he’s investing in his area, but the only management companies he can find are run by real estate agents on the side. He has a day job, and doesn’t have time to manage on his own … so he wants to find a reputable company that’s up for the task.

He also asks whether he should move out of his local area, since there aren’t many management companies.

We always say you should invest where the numbers make sense … but you also need to invest in places where you can find a great team.

In the long term, your property manager is the most important person on your team. So if there aren’t any great property management solutions where you live … perhaps it’s time to expand your geographic investing boundaries.

Start by refining your personal investment philosophy, then look for a market that both matches your goals and has the management companies to fill your needs.

You don’t want single-point failure. Make sure the company you choose aligns with your philosophy. Ask them, “Who supports you, and how?”

You want to make sure their compensation model is aligned with your best interests. In other words, when you earn money, they do too.

And choose your property management company BEFORE you buy your properties. They can be an excellent resource for finding properties and asset class types that will work well for both of you.

Remember, you can’t scale up without putting the right team in place. Getting a great property manager on your team helps you find the professional distance you need to run your business properly.

How do Section 8 rentals work?

Laura, from Naples, Florida, wants to know how Section 8 rentals work and how she can acquire affordable housing in her investment market.

First, a few things about Section 8. Section 8 is housing subsidized by the Department of Housing and Urban Development (HUD). But it’s administered by local public housing agencies, so it’s not always available and differs across the country.

Section 8 can be great because a portion of the rent is paid by the government. You basically have a guarantee you’ll get most of your rent on time, regularly.

But tenants in this housing can be a tough crowd … sometimes they don’t blend well with other, non-Section 8 tenants. For that reason, we like a property to be all Section 8 or none.

A great resource for learning about Section 8 is Mike McLean, who has published a book called the Section 8 Bible and has some great online resources, too.

Affordable housing can be a good place to be because of stagnant purchasing power … but make sure you’re playing close attention to the program from which funding comes.

And keep in mind … the devil is in the details. If you’re not managing the property yourself, make sure your property manager is well acquainted with Section 8.

Should I invest now, or later?

Casey, in Lehi, Utah, has been listening to the podcast, and now he has a pressing question.

Casey has saved up $100,000 to invest, but he wants to know whether he should invest now or wait until the market takes a dive. He mentions worries such as rising interest rates, an unstable dollar, and inflation.

Let’s start with a premise … markets will either do well or poorly in the future. We know that. We also know that when the market hits the bottom, you can only go up.

Real estate is a long-term, buy-and-hold business. But it is interest-rate sensitive, so you want to make sure you lock in long-term financing if you invest now.

It’s also good to keep some liquidity for if and when the market does go downhill.

Something we like to say is, “Opportunities are like busses. Another one will always come along … but you have to get on the bus at some point.”

The way we see it, Casey has a few options …

  1. Invest in things that are likely to do well, even when the market is bad, particularly mid-level rentals and below. There will always be demand for housing, especially mid-range housing.
  2. Invest in a forced equity situation … a neighborhood or property that has room for improvement, which you can force upward in value. This will help you mitigate downward pressure to the dollar.
  3. Invest in a bigger market … this provides stability, as these markets have more ballast during tough times.
  4. Step in on the debt side of the market by lending money to other investors.
  5. Work with an experienced syndicator who is more likely to get investments right, even when times are more precarious.

Remember, when you’re in property for the long haul, most of the time you’ll be fine. The key is to structure deals so you can weather the ups and downs.

Another thing to consider … the price only matters when you buy and when you sell. In between, it’s all about cashflow.

Real estate is one of the best inflation hedges if you structure the financing properly relative to cashflow … but you can’t fledge against inflation if you don’t do anything at all!

How do I create residual income with little savings?

Jeff, in Fountain Hills, Arizona, says he is in an interesting situation.

He doesn’t have any income, but he has enough cash to live on for 24 months. In the meantime, he wants to figure out how to create residual income that will pay for his living expenses going forward.

Jeff is looking at building a balance sheet of passive income sources.

But right now, he has time, labor, and energy he can put to work. And since he’s not holding on to a chunk of cash, the active investor route is a good one.

Some options …

  1. Force equity by fixing and flipping.
  2. Earn cashflow by fixing, holding, and renting.
  3. Become a syndicator and use other people’s money to make great investments. It’s our favorite way to go full-time, fast.
  4. Try wholesaling.

Basically, what Jeff needs to do right now is to build up his investment capital so he can start getting some cashflow.

But before he does that, we suggest he invest in education and build relationships. Get the right tools in your toolbox and the right advisors at your back before you go big.

Can you recommend turnkey management companies?

Keith hails from East Sandwich, Massachusetts. He recently bought a home through Mid South Homebuyers and is ready to buy another.

The problem? He’s on the waitlist at Mid South. In the meantime, he’s looking for another turnkey company that manages the houses it sells.

One disclaimer … we don’t know anybody quite like Terry Kerr at Mid South.

But we do know lots of other great folks.

The idea of a turnkey provider is that they do the whole thing … find the properties, get them in great shape, put tenants in, and manage the rentals.

But before you look for a provider, think about the type of property, market, and team you want.

Then go ahead and search our provider network for someone who can help fill your needs. We don’t guarantee anyone on the list, but we do promise we’ve spent a lot of time with them on the ground and have seen enough to trust them.

Should I attend Secrets of Successful Syndication now, or later?

Gene, in Boston, Massachusetts, is an investor who owns two duplexes. He wonders whether he should attend our signature Secrets of Successful Syndication conference now, or later in the year when he has more experience.

We’ve gotta say, we really think the key is for investors to come early and often.

This conference is designed for investors who already have a portfolio and are ready to take the next step.

But even if you’re just starting out, it’s a great way to get around what we call “evidence of success” and learn the power of networking.

Experience is something you can accumulate through other people. And syndication is all about having the experience to make good investment decisions.

So, for those who want to move forward, we recommend you start as soon as you can.


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Making Fast Money with Wholesaling

Real estate investing is the process of building a portfolio of properties that produce passive income.

But to build a portfolio, you need to be able to purchase properties … and to purchase properties you need cash.

So what can someone without a ton of equity who’s just getting started in real estate do to earn the money for a down payment?

Wholesaling.

This real estate-adjacent technique is a low-risk way to quickly convert hustle and relationships to cold, hard cash. Listen in as we discuss the ins and outs of wholesaling with an industry veteran.

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

  • Your wholesome host, Robert Helms
  • His wholly absurd co-host, Russell Gray
  • Educator and wholesaler Tom Krol

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What is wholesaling?

Wholesalers play an important role in the food chain of real estate.

Let’s start with a definition. A wholesaler is someone who finds properties and gets them under contract … but then finds a buyer to clinch the deal. The wholesaler gets a fee for doing the work of finding low-priced properties and getting them to buyers.

You may notice signs in your neighborhood that say something like, “We buy houses!” Probably a wholesaler.

It can be a brilliant way to go if you’re committed and excel at building relationships.

By building up pipelines of hard-to-find deals and committed buyers, you can make real money … fast.

Why does wholesaling work?

Tom Krol got his start in real estate by wholesaling.

Actually … he got his start in lawn-mowing, but then he got fired. His brother convinced him to try wholesaling, and he has never looked back.

Tom has now done hundreds of transactions. We sat down to chat with him about how YOU can get into the wholesaling business.

Wholesaling is “more like a pawnshop than a real estate business,” Tom says. That’s because your main task is to form relationships with homeowners who want to sell quickly.

When owners are selling, they can choose two out of three criteria … speed, price, and convenience.

Wholesalers are looking for sellers who are willing to give up a high price for a convenient, quick sale. “We’re the ‘this week’ guys,” Tom says.

People sell for different reasons … divorce, bankruptcy, job changes, disrepair. Another type of seller wholesalers look for are absentee landlords looking to get out of a property.

Wholesaling works because if you can find a discounted property, there will always be SOMEONE who has the cash and is willing to pay.

Finding sellers and buyers and valuating properties

“A common stumbling block for wholesalers is valuations,” Tom says. “I always suggest you just use your gut.”

He says most people have a good feel for what homes are worth in their market and what prices are good and bad.

Knowing the local market is helpful. “The best deals are in your backyard,” Tom says.

A good rule of thumb is to shoot for a selling price between 40 to 60 percent of the home’s valuation on Zillow or other property appraisal sites, although that will vary by area.

You get a feel for what will work over time, Tom says … but the key is finding a deal and jumping on it. Ultimately, a wholesaler’s job is to find and seal deals quickly.

Plus, you risk very little by mis-estimating a price for the home. Price a home too low, and you simply get more money. Price it too high, you just don’t get a contract. You’re not putting any money down yourself.

“What’s great about wholesaling is it produces a lot of cash in a short amount of time, and then it provides a pipeline of cherrypicked properties you can choose for your own portfolio,” Tom says.

What about finding buyers? Tom says as long as you can find consistently discounted properties, you’ll always be able to find a buyer.

“The art is just to get really good at finding discounted properties. You can then go into any room and someone will say yes.”

All you need is grit

From wholesaling, it’s very easy to make the transition to traditional real estate investing. Wholesaling allows you to accumulate cash … and find great properties on the way.

“What keeps people out of wholesaling is belief that homeowners don’t sell at a discount,” Tom says.

But that belief is a myth … if you have the tenacity, there will always be owners looking to sell quickly and conveniently.

Tom now teaches other folks how to wholesale. It takes a lot of work, a lot of persistence, grit, and determination to get started, he says.

And while it doesn’t cost a lot to get started, it does cost a bit … you have to spend the money to market yourself properly.

It’s a great business for people who are just getting started in real estate, or those who are already landlords or rehabbers and want to step up their game and find great deals.

And, if you’re starting from nothing, don’t worry. “Rock bottom is the strongest of foundations,” says Tom. You have nowhere to go but up if you really want it.

Tom has created a special report for our listeners on the five big things he wishes he had known when he was starting out in wholesaling. You can access that report here.

Now go out and make some equity happen!


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Precious Metals for Real Estate Investors

In our latest episode, we’re chasing shiny objects. Gold, silver, palladium, and platinum, to be specific.

Now, you might be wondering how precious metals investing is relevant to you as a real estate investor. But guess what? When people want somewhere to hide equity, and don’t want to put money into stocks and bonds, they turn to gold.

Precious metals play an essential role in the worldwide economic sea. They act as a hedge against falling currency and a way to diversify.

So, we invited a special guest to explain how the precious metals business works … and give you the information you need to decide whether gold and silver might be a great investment for YOU.

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

  • Your golden host, Robert Helms
  • His silvering co-host, financial strategist Russell Gray
  • Precious metals expert Dana Samuelson

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Basics of precious metals investing

We met with Dana Samuelson at the 44th annual New Orleans Investment Conference. It’s our 6th year attending, but Dana’s been around since 1983, when he started working in the precious metals business for Jim Blanchard.

Dana owns a national mail-order business, through which he buys and sells modern bullion coins. He is also an expert in classic U.S. and European gold coins.

We asked him to explain the goal of precious metal investments.

Gold is not necessarily an investment, Dana says. But, “We live in a world of enormous debt, so precious metals are a good insurance policy,” he says.

Dana says investing 5 to 10 percent of your net worth in precious metals offers a way to keep your equity solid, even when the value of paper assets is fluctuating.

He calls gold a “safe, proven, real money investment.”

There are different ways to invest … you can collect precious metals bit by bit over time, or you can pick up larger amounts during periodic price dips.

Gold and silver are slightly different investments. For one thing, gold is more portable than silver. A handful of gold equals a wheelbarrow of silver.

Another difference … people tend to put their equity in gold over silver when the stock market and the dollar aren’t doing well.

The gold-silver price ratio can be used to determine the relative value of gold to silver. To find the ratio, simply divide the gold price by the silver price.

Traditionally, this ratio has been 20:1. Today, it usually hits somewhere between 60:1 and 80:1. Right now, the ratio is on the high end, about 85:1, which means silver is cheap relative to gold.

It’s a good number to look at when you’re trying to figure out what … and when … to buy.

Different methods for precious metals investing

Gold and silver come in many forms.

There are gold bars, which are now mainly produced by mints around the world and have to meet purity and weight integrity standards.

There are also smaller American Gold Eagles and Canadian Gold Maple Leafs, modern bullion coins that are sold by the ounce, half-ounce, quarter-ounce, and eighth-ounce.

Since these are smaller than gold bars, you don’t have to report to the government when you buy them, typically.

Dana calls these bullion coins “bread and butter” products. They’re reliable, widely available, competitively priced, and have long-term value and viability.

You can also buy generic 1-ounce rounds from private mints, usually silver.

Many people like to have a viable alternative to paper money, Dana says. Aside from widely available bullion coins, investors can also go the numismatic route.

U.S. coins minted before 1964 are 95% silver by weight. And gold coins minted before 1933, when the U.S. went off the gold standard, are increasingly valuable.

The coin-collecting route is great because of basic supply-demand principles … as time goes by, fewer older coins are available, so not only are these older coins made from precious metals, but they also hold an inherently higher value because they’re increasingly scarce.

How to get started with precious metals

Gold has been a form of money literally since the concept of money first originated. It’s a currency of last resort because it’s one of the few forms of currency that doesn’t need a government guarantee to back it.

Gold and silver are the most popular precious metals. We asked Dana about the other two sister precious metals, platinum and palladium.

These are much, much scarcer than gold, Dana says, but they’re valuable because they’re scarce … and because they’re necessary. Both metals are used in catalytic converters for automobiles.

How can someone new to precious metals get started? “Find a reputable, long-term dealer,” Dana says.

He offers his precious metal trading business as an example. They follow principles of transparent pricing, guarantees for sold items, and guaranteed buy-backs for anything they sell.

And perhaps consider staying away from eBay.

“I can tell a counterfeit a mile away,” Dana says. eBay can be sketchy … and it’s harder for amateurs to tell real from fake. To be extra safe, stick with established, hard-to-counterfeit products like bullion coins.

Investors also need to think about storage. “Gold is pretty compact. It doesn’t take up a ton of space,” Dana notes. Silver, on the other hand, is bulkier.

Some banks are writing coins out of safe-deposit box charters. So you have a few options for storage …

  • Find a bank that offers storage options for coins and bullion
  • Get a secure home safe
  • Go with a storage company … new storage options around the country are a great option for those dealing with a high volume of precious metals

Also consider that there may be reporting requirements when you move money in and out of the country, due to the Patriot Act.

“The most important thing is to think about what you’re trying to do and find a dealer to help you walk through your options” for purchasing, storage, and selling the asset in the future, Dana says.

“Use common sense.” After all, Dana points out, “You’re your own best doctor.”

A final note for those still dubious about precious metals.

We know it might not seem immediately logical to take your equity … and then just put it away in gold and let it sit. There’s no cashflow, there are no tax benefits … so why do it?

A few big reasons. Putting your equity in precious metals allows you to …

  • Invest outside of the traditional banking system
  • Get away from inherent risk and keep your equity stable
  • Diversify your equity in terms of currency types
  • Parks your equity until you need it in a low-risk currency form

To learn more, check out Dana’s report on investing in precious metals.

Now, go out and make some equity happen!


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Oil and Gas for Real Estate Investors

Energy is the key input for all economic activity. And as populations and economies grow worldwide, there’s an increasing demand for energy.

So listen in as we chat with an experienced oil man and discuss the nitty-gritty of investing in oil and gas for profits and tax breaks.

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

  • Your well-oiled host, Robert Helms
  • His slightly creaky co-host, Russell Gray
  • Oil and gas businessman, Bob Burr

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How we got into oil and gas

We’re often asked how we transitioned from real estate to other real assets.

We started studying economics after the ’08 financial crisis. We were looking to see what we could have done … to better survive the crash.

We realized we needed to be more careful about structuring our portfolios so they weren’t vulnerable to the ups and downs of Wall Street.

We also realized the dollar, gold, and oil were all interconnected.

And, we looked at the tax benefits, and realized the tax path leads to oil.

Our guest today is basically the Godfather of Gas and Oil. Bob Burr started out in the gas and oil industry working on rigs as a young man in Louisiana.

“It was my life’s mission to find out the other end of the business,” Bob says.

Well, he’s made it … Bob now has several cumulative decades on the money-making side of the oil and gas industry.

And he’s still at it … technological innovations and new oil discoveries have made the U.S. one of the top places in the world for oil extraction.

Bob’s decades of experience have led him through ups and downs, mistakes and discoveries, and he has come out wiser on the other end. He met us on the Summit at Sea™ … and now he’s here to share his knowledge with YOU.

The tax benefits of oil investing

So … why oil and gas?

“The tax shelter is just tremendous,” Bob says. Oil and gas investing is the only business today where you can put in a dollar and write off 70 to 80 percent of that, whether you win, lose, or come to a draw.

There are risks inherent to investing in the industry, but the federal government makes it much more approachable by subsidizing heavy tax breaks.

“Every time you drill a well, you’re gambling,” Bob says. But since oil drives the economy, Uncle Sam is willing to place some bets.

Bob does a lot of due diligence before he even starts digging to make sure a potential well has a high chance to be profitable for him and his partners.

First, he explores the land and picks out a bunch of prospective sites.

Then, he sends those prospects to a third-party geological team and says, “Kill it.” Really. If the geological team comes back and says no go, Bob moves on.

After the geological team gives the A-OK, Bob does yet another evaluation. His sons do a due diligence inspection to examine specific site issues.

“We’ll have some bad ones regardless, but I’m doing everything to avoid that,”  Bob says.

Oil and gas exploration is a numbers game, but Bob is shaving the odds in his favor. He’s eliminating 90 percent of the bad options … before the drilling starts.

Oil and gas investing is an industry that requires high responsivity to partners.

Because it is a high-risk industry, Bob makes sure he is being attentive to his investment partners’ needs.

“We need to shut up and listen and let them present the facts,” Bob says. If there’s ever a point where he disagrees, he consults with specialists and experts first.

Bob has been in the business a long time. “I would be lying if I never did anything wrong,” he says. “I had to climb the mountain and fall back down, climb the mountain and fall back down.”

But now, “You can’t play any tricks on me,” he declares.

Who gets a cut?

How does oil and gas investing work for everyone involved?

First, there are the land owners. In usual oil and gas terms, the land owner owns the surface and minerals. The oil extractor … that’s Bob … gives the owner a bonus for each acre used, plus royalties … a percentage of the total proceeds.

“You have to look at the economics,” he says, in reference to the royalty rate.

If an oil person is pulling in millions of dollars, the reserve rate … what they take home to investors and their own business … will be less, perhaps closer to 50 percent. For a smaller pull, it’ll probably be closer to 80 percent.

“You have to play every hand differently,” Bob says. There are a lot of variables that affect each situation.

Now, what about the investors?

Becoming a partner to Bob or another oil person requires taking on a lot of risk. But regardless of the outcome, investors still get tax benefits.

Bob says he does turn-key deals on each well, and he takes on the responsibility of figuring out completion costs and risk.

If he runs into problems, he doesn’t go back to his investors to ask for more money, he says … but if there is a chance to drill deeper and get much higher profits, he will sometimes give investors an opportunity to put more money in and play the game.

As for the profits? “I’ve never had one problem having a market for oil at a premium price,” he says.

Bob recently got about $70/barrel for West Texas crude, but he says he can make money at as low as $25/barrel … so there’s a lot of flexibility. Twenty-five is still a good, solid return, he says.

The oil industry is all about developing relationships … after all, we only got to know Bob through the great relationships we form each year at the Summit at Sea™.

“I’m a team with my partners, and I’m the captain of the team,” Bob says. “And I want to score.”

Think you want to learn more about oil and gas investing? You can start your research with Bob’s custom report. And of course, you can meet Bob and other experienced investors at our annual Summit at Sea™!


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Preparing for the Future of Interest Rates and the Dollar

We’re concerned about interest rates … and you should be too.

Consistently rising interest rates affect your ability to borrow money for investments.

In this episode of The Real Estate Guys™ show, we dig into how the Federal Reserve and central banks affect interest rates. We talk about the future of the dollar. And we discuss how rising interest rates affect YOU.

We met with two knowledgeable experts in the economics field. You’ll hear from:

  • Your interested host, Robert Helms
  • His uninteresting co-host, Russell Gray
  • James Grant, economic expert and author of eight books on the U.S. financial system
  • Nomi Prins, former Wall Street analyst, journalist, and six-time author

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James Grant on interest rates and securities

James Grant was named by Ron Paul as his likely candidate for Chairman of the Federal Reserve. Over the years, he has been a voice of reason … he calls himself “a ‘yes, but’ guy in a ‘gee whiz’ world.”

We got right into the subject of interest … interest rates.

Are rates going up? “Rates tend to trend over the long term,” James says.

They’ve been on the down-swing since the 1980s, but they may be on the up-swing again … and although rates are currently rising, James emphasizes we’ll have to wait and see whether the trend continues.

James says investors should look to the bond market for clues.

A 10-year treasury bond delivered a yield of 1.37 percent in 2016 … the lowest yield since the year 1311, according to a study by the Bank of England.

In the early 80s, a 30-year security would’ve netted you a 14 percent yield. That’s a big difference.

Today, almost every security is priced next to nothing when investors account for taxes and inflation, James says.

Who manipulates interest rates? The Federal Reserve.

“It’s an act of malpractice that the Fed and central banks worldwide are manipulating these rates,” he says.

And real estate cap rates are driven by interest rates.

To James, this means we now live in a world of great danger. “We live in a kind of hall of mirrors,” he says.

On forecasting the future and investing in gold

James notes forecasts are for people who think they know what’s going to happen … when the reality is, no one actually knows.

“We can’t know the future, but we can know how it’s being handicapped in the present,” James says.

He finds it helpful to remind himself of how our descendants will think of us.

And he says, “Successful investing is about having everyone agree with you … later.” Investors must imagine plausible outcomes before the market catches up.

We asked him his thoughts on gold investing. “Gold is interesting because it’s where people flee,” James says. “But it’s really an investment, not a flight asset.”

Gold is a way to step outside of orthodox institution investments. “Gold is simply money to me. It’s a cash balance. It’s something the central bankers can’t debase.”

To hear more from James Grant … and keep your eye on interest rates … check out Grant’s Interest Rate Observer, an independent journal covering financial markets.

Nomi Prins on the Federal Reserve and the world market

Journalist Nomi Prins was a member of Senator Bernie Sanders’ panel of advisors on Federal Reserve reform. She’s coming at this from a different angle than James Grant … but both guests are incredibly informed, with lots of great things to say.

In 2007, Nomi wrote that there could be a problem if financial institutions and the government continued the credit derivative system and high leverage.

No one wanted to hear it. But then ’08 happened.

Nomi says that over the last 10 years, “The Fed has subsidized a lot of credit problems that existed before the ’08 crisis by creating electronic money.”

That has raised the level of artificial leverage.

And THAT means the next market collapse will come from an even higher height than in ’08, she says.

Even worse, many central banks around the world created electric money and dropped rates when the Fed did. Nomi examined this situation in her book Collusion.

“We’re in a very precarious situation going forward,” she says.

Quantitative easing … the introduction of new money onto the market … causes inflation and collapses markets, starting with emerging markets.

In order to retain capital, central banks in these countries have to raise rates and increase the value of their currency. That’s what’s happening now.

This, in turn, lowers the value of foreign currencies relative to the value of the dollar. So, any debt these countries have has to be paid back or renewed at a higher rate.

Apparently, however, the U.S. is back to quantitative tightening now, says Nomi.

The Fed’s statements and its actions and reports tell different stories.

Fed Chair Jerome Powell SAYS current quantitative tightening is official. That means the government will continue to sell … but not re-invest … assets.

But in reality, the Fed is selling much more slowly than they’ve said they will.

The reason? “They know that if they sell too much too fast, rates will increase too fast, and the value of assets will go down too fast,” Nomi says. “They want to be in a holding pattern.”

More on quantitative easing, coming crisis

Nomi wants people to know there is NO correlation between GDP growth and quantitative easing. However, there is a very high correlation between quantitative easing and the stock market.

She thinks the next financial crisis will look like a bunch of smaller crises that add up to big gaps in liquidity and credit availability.

Nomi says she sees a few things happening around the world … bond defaults are creeping up in emerging markets, and certain countries are starting to have major credit problems.

“I think all of that will come to bear on the Fed.” And because of that, Nomi says, “I think their language will start to move toward growth slowing.”

Think two rate raises over the next year, instead of the forecasted four.

She predicts extreme appreciation is not going to happen. Rates will stay low, although they might continue to rise a bit relative to the Fed.

What about real estate? “Commercial real estate may have more leverage, so rate hikes will have more impact.”

Instead, Nomi recommends “any area where rent can overcompensate for an increase in cost.”

She says there are currently opportunities in emerging markets where there’s still room for upward growth in prices.

Mexico City, for example, is a place where prices are low, the government has a strong growth strategy, and there is opportunity in the near team.

Lessons learned

Debt doesn’t operate in a vacuum. Interest rates have a HUGE impact on whether your investments will be successful.

You don’t need to understand ALL the mechanics … but you should have a basic understanding of WHAT will affect interest rates and WHERE they’re headed.


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Working with Real Estate Agents Who Understand Investment Property

The world is full of real estate agents and brokers eager to do a deal … but only a small handful of those agents are qualified to service your unique needs.

The best partnerships between agents and investors create mutual success. How do you find an agent that works FOR you and WITH you?

In this episode of The Real Estate Guys™ show, we chat with Bob Helms, the Godfather of Real Estate. His experience as both an investor and a broker spans decades … and he knows how valuable relationships between professionals are to successful deals.

You’ll hear from:

  • Your play-maker host, Robert Helms
  • His playful co-host, Russell Gray
  • Bob Helms, the Godfather of Real Estate

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This is a relationship business

One of the most critical relationships you have as an investor is with your real estate professional.

Whether you’re working with an agent or a broker … and we’ll use the terms interchangeably … the partnership you have with the individual legally representing you in a deal is vital to your success.

We call Bob Helms the Godfather of Real Estate … and for good reason. Bob has spent decades actively brokering properties, teaching and managing agents, and investing in deals himself.

“This is a relationship business,” Bob says. And it’s absolutely true.

Your agent isn’t your enemy. The very best deals we’ve ever been involved in have been with real estate professionals who know their stuff.

When it comes to real estate brokerage, it’s about cooperation … not competition.

“It’s urgently important that you not practice business by trying to take advantage of the person on the other side of the transaction,” Bob says.

Both sides have to win

So many investors think they have to squeeze every last dime that they can out of a deal in order to call it a win. They think they have to get the upper hand to be the winner … which means the buyer or seller is the loser.

The best transactions are when a deal closes and everyone in the room gives each other a high five.

Those are the deals you want to do again. And real estate investment is a long-term game.

Unlike the typical homeowner … who moves every four to seven years to a different marketplace … investors do multiple transactions over time in the same market. And you do more business more often.

There’s a good chance you will do additional deals with these same people, so your attitude is important, Bob says.

If you’re the guy who is trying to exploit the other guy, no one will want to work with you again.

Remember, it’s about relationships. There IS a better way!

Working well with your agent

How do you work with an agent or broker to get the best deals at the right prices?

The first thing to keep in mind is loyalty.

You might think it’s a good idea to have several agents working for you in a single marketplace. But more often than not, this competition doesn’t work in your favor.

If an agent knows you have other agents working for you too, they are less likely to invest time in finding you the best deals.

On the other hand, if an agent knows you are invested in a long-term relationship with them, they’ll work hard to impress you and keep you around.

Exhibit loyalty to your agent, and they’ll be loyal to you.

Find the best agent you can, and set up a meeting. If they are at the top of their market, they probably already have a full portfolio of clients.

Show the agent you are worth their attention. Be able to articulate why you are qualified, why you are serious about making things happen, and how you can add value to their business.

Can’t get an appointment? Try taking the agent to lunch. Everybody has to eat!

You may have to start with a “C” agent and work your way up to an “A” agent … and that’s ok.

Even if your agent of choice isn’t ready to take you on, take advantage of their experience.

“Say, ‘I want to be your best client in five years. If you were me and starting over today, what would you do? What do you wish your current clients knew?’” Bob says.

Show you’re there for the long haul, and start building a relationship.

Why agents should work with investors

The majority of real estate agents sell houses to people who want to live in them. But the investment property niche can be very profitable.

So, if you are reading this from the perspective of a real estate agent, here are four big reasons to get involved with investors …

  1. Do more transactions. Investors purchase properties in the same market again and again.
  2. Get more referrals. Investors tend to work in multiple marketplaces. They rely on a network of agents to help them. You can pass clients to other agents and have clients passed on to you. That saves you money you would have spent tracking down new buyers and sellers.
  3. Earn bigger commissions. Investors graduate to bigger and bigger properties over time. That means bigger and bigger commissions for agents.
  4. Become an investor yourself. Be your own best client. Learn from the investors you work with. Make a living selling to other people and get success by buying yourself.

Keep brokering real estate deals, but invest your money into deals of your own.

Investors love working with agents who invest too. That means the agent knows the rules of the game, and will bring investors the deals they can’t do … but would do … themselves.

Most real estate agents don’t work with investors because they don’t know how.

Bob Helms’ new book Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche is a great resource for getting started.

The book is aimed at agents, but investors can benefit from its lessons too … because by working together, agents and investors can form long-term relationships destined for success.


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Passive Income Investing – Equity Versus Debt

Real estate prices and interest rates are rising. Cap rates are compressing. As a result, some investors are switching from equity investing to debt investing.

So in this episode, we’ll take a deep dive into the world of debt investing.

Equity investing is a way to capture growth and get capital gain. Debt investing, on the other hand, means loaning money to other investors as a way to generate income.

There are great reasons for both strategies. As we like to say, “Different investment philosophies for different folks.”

But in times of financial uncertainty, debt investing can be a way to reduce risk and generate predictable incomes.

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

  • Your pro-debt host, Robert Helms
  • His indebted co-host, Russell Gray
  • Managing partner at American Real Estate Investments, John Larson

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A new option for investors in tight markets

John Larson is a turn-key provider at American Real Estate Investments (AREI) in Dallas, Texas. He’s worked in Dallas and other markets for many years … but now he’s seeing something new happening in Dallas.

Prices and interest rates are now higher than they were in 2006. The cap rate is compressing, and as a result, cashflow is decreasing.

And rents are starting to plateau, which puts investors in a bind. Larson says this isn’t enough for him to start moving into C and D class neighborhoods … cash flow on paper doesn’t mean easy cash flow in reality.

Instead, he’s come up with a different option … syndicated money lending.

John manages the development opportunities … investors just have to put in the capital. In return, they get a fixed, passive income stream each month.

“It’s a way to play a strong market AND get cash flow,” John says.

How debt-investing works

Which is safer … equity or debt?

In terms of rate of return, the debt investing model allows investors to get a specific, predictable rate of return.

John uses a trust deed model, where lenders get deeded the trust to the property … but in this case, there are multiple lenders.

For each deal, John raises 2 to 3 million from a group of 25 to 35 lenders.

Investors get double-digit fixed returns … 10.5 percent of the amount they’ve invested, paid out over 15 months or until the loan is complete.

Usually John’s loan deals last from 18 to 36 months. And John pays out returns on a consistent monthly basis.

It’s private lending, redefined.

John calls the solution a “win-win” for both AREI and the lender groups. Lenders get great returns … and John gets funding for many different types of development opportunities.

More nitty-gritty details about private lending

When you go into a debt-lending deal, there are two important questions you NEED to ask yourself before you say “yes” …

  1. How will the borrower pay me back?
  2. What happens if they don’t?

Typically, debt syndicators will use money from private loans to rehabilitate or develop a property. Once construction is complete, lenders get their principle PLUS proceeds back.

Debt investing is a lot different from the traditional equity route … and investors need to get their heads around that.

Do investors need to be syndicated? At AREI, the answer is NO.

Most of John’s investors are not accredited, because loans are not securities.

But often, private lending requires a minimum principle amount. John says his investors come in at around $100,000 on average, and the minimum is about $50,000.

Passive investing pros

We mentioned John works in the Dallas-Fort Worth area … but we didn’t mention WHY. Dallas-Fort Worth is top-10 metropolitan statistical area … and it hits all the right notes.

“I feel safe about this market,” John says. He notes that data shows continued demand in the area, along with multiple companies in a variety of industries. The population is expected to continue increasing in future years.

But investors DON’T have to be located in Dallas or even Texas to take advantage of John’s debt-investing program. That’s the great thing about passive investing.

For more from John, check out his podcast, The Real Estate Cowboys … which is all about how you can capitalize on passive income investing.

And listen in to this show to get access to a special report from John with more information about passive private lending opportunities.

Capitalize on a bull market

When people think about real estate investing, they usually dream about owning a ton of properties.

But debt investing is a way to expand your portfolio and bring in monthly cashflow … without having to manage a physical property.

It’s also a way to capitalize on a tight market.

With property investments, cash flow changes as rents, and rates, rise and fall. Cash flow from debt, on the other hand, is more stable.

And lending money in a hot market is a great way to help investors get around rising interest rates … while taking in great returns, yourself.

Just like equity investing, debt investing can be done many ways. You can make small loans and be more hands-on … or you can work with someone like John and be totally passive.

Regardless of the option you choose, you’ve got to look at what the market is giving you. Right now, it’s giving you rising interest rates for the first time in decades … but that doesn’t mean there aren’t great investment opportunities if you look closely.


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