Finding High Yields in a Hot Market


Everyone loves a hot market! But hot markets have their disadvantages. 

When markets heat up … prices go up … and yields go down. 

But that doesn’t mean investors are stuck. 

There are things you can do to adapt and keep cash flow up … without having to change markets. 

We sat down to chat with our good friend John Larson to find out how he has made the most of one of the hottest markets in the last ten years. 

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

  • Your heating up host, Robert Helms
  • His hot-head co-host, Russell Gray 
  • Managing Partner of American Real Estate Investments, John Larson

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Adapting in a hot market

Dallas, Texas, has been a hot spot for real estate investors for the last decade. But .. like any market … the tide is starting to turn. 

After 2008, the rules of the market changed. 

Dallas stood out because it had not one … not two … but multiple drivers. 

It had population. It had education. It had transportation. It had a business-friendly environment, low income tax, medical finance, tech distribution … it was the whole package. 

It ended up being the best real estate market of the past ten years … and it’s not over yet … but yields have changed a lot. 

So, what’s an investor to do?

As Managing Partner of American Real Estate Investments, John Larson has had to adapt to the changing Dallas market. 

Many people knew John and his team as the Turnkey Single Family people in Dallas … but his company has had to change what they do while maintaining the big picture of WHY they did it. 

Debt syndication and using your retirement to make money now

John says that the Dallas market is hotter than ever … but in 2017, the cap rates on the single family homes started to get compressed. 

“You can only push rents up so far,” John says. “The values of homes kept going up because of the demand, so property went up as well.”

John says his investors came to him primarily for cash flow. They were looking for passive income. 

So, John needed to find some new ways to provide that cash flow that investors came for in the first place. 

The first project they took on was debt syndication … partnering with a developer and syndicating funds on the debt side. 

“We came in as lenders to buy the lot and get the construction completed and get those units leased as office space,” John says. 

A debt investor is someone that wants to have predictable income flow again, and it’s not as risky as other ventures … with the opportunity for BIG returns. 

At some point, you have to graduate from single family houses and move to the next level, like multifamily or office space. 

John says there are great deals to be found … but you have to do a little nosing around. 

And you can’t beat the opportunity for passive investing. 

With debt syndication, investors can be very hands-off and get as high a return as possible

Especially for the investor who is looking to lend money from their IRA or 401k, debt syndication is a great passive experience for them and a great way to maximize their retirement accounts. 

Many people don’t understand that they can put their retirement dollars to work … but as soon as you can self direct your retirement funds … you’ve opened up a whole world of alternative investments. 

Because of the nature of a retirement account, you can’t have a current benefit. It is really for tomorrow, not for today … so passive investments just make sense. 

These are solid deals in solid marketplaces … but people have a hard time getting their minds around why someone would want to use debt. 

In good deals, the asset pays back so quickly that there’s not a lot of risk on either side. 

It really just depends on how your personal investment philosophy fits in. 

Keep your money working 

If someone is looking to put their money to work in a debt syndication type of deal, the big question is … how long is this deal going to take?

John says that the longest term he has done so far was with a new construction project … that was 18 months. 

The average term for a deal is usually about one year. 

“We want to get you money back within a year and have another deal lined up for you so you can keep your money working,” John says. 

Keeping your money working … that’s the key to finding high yields in a hot market. 

Learn more about the Dallas market and how John and his team are finding new ways to create cash flow without changing markets by listening in to the full episode. 


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Ask The Guys – Syndication, Apartments, Gold and More

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

That’s right. It’s time for another segment of Ask The Guys … when we talk about trends, challenges, and investment opportunities. 

This time we’re tackling listener questions about syndicating single-family homes when to make the move to multi-family properties, the rising role of gold in the economy … and more!

Remember … we aren’t tax advisors or legal professionals. 

We give ideas and information … NOT advice. 

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

  • Your answer-filled host, Robert Helms
  • His questionable co-host, Russell Gray 

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What makes a good investment

Our first question comes from William in Maryville, Tennessee.

William recently purchased a single-family residence. He wants to know what the average difference should be between monthly rent and expenses to make it a good investment. 

The answer varies depending on your personal investment philosophy … but we can give a general idea based on what we see from other listeners. 

We start with what we call the gross rent multiplier … also known as the 1% rule. 

The idea is to look at whether or not a property can take in a gross rent 1% of its purchase price. 

So, if you purchase a house for $200,000, a house would need to take in $2,000 a month as its base rent. 

And this number doesn’t consider your operating costs. 

If your property isn’t bringing in 1%, you’re going to be tighter on cash flow. Making a little more than 1% is always better. 

But remember … cash flow is certainly important. But there are plenty of other ways to get money out of your investment. 

The big picture is that in single-family rental homes that the tenant pays down or pays off the mortgage. Over time, income goes up. 

You’re creating a portfolio of property that increases its asset value, and cash flow increases too. 

Even in the best-case scenario, single-family homes are making a couple hundred dollars a month. That’s why so many investors start in single-family and then move into bigger asset classes.

Going bigger and growing older

And that’s just what Lou in McKinleyville, California, wants to talk about … moving into those bigger asset classes. 

Lou is 56 years old, and he owns six multifamily property units. He wants to know if … at his age … it makes sense to purchase more. 

Age does play into your investment horizon. What you really have to think about is … what do you want your investment to do for you?

At age 56, we think Lou still has a lot of time left. 

Continue building your investment portfolio. Play into your personal investment philosophy. And when you’re ready to retire and are relatively comfortable, it’s ok to call it quits. 

There’s no need to do more if you feel like you’re done. Until then, keep up the good work!

The smaller side of syndication

Let’s talk a bit about syndication. Greg in Auckland, New Zealand, wants to know if you can use syndication to raise capital for deals in single-family homes. 

Syndication is simply aggregating capital to do a deal. It doesn’t have to be a bigger deal. 

Instead, think of syndication as the way to go bigger … faster. 

So, the short answer is … yes. You can absolutely syndicate a single-family home. 

But there is a threshold that makes sense for syndicators because there are some costs associated with doing the deal … especially on the legal side. 

A tiny deal may not make sense for syndication, because you’re going to burden the deal with a lot of costs. 

What you probably want to do is think about building a portfolio. Instead of just syndicating a single property … go buy a collection of them!

And don’t forget that syndication doesn’t only mean syndicating capital. You can also syndicate credit.

Remember, there’s not much point in syndicating if you want to play small. The whole goal of syndication is to go big. 

All the things that go into syndication get amortized over the size of the portfolio … so from a cost perspective, building a bigger portfolio is the way to go. 

The value of gold

Karen from Lehua, Hawaii, wants to know what we think the coming financial meltdown in the U.S. will look like … and why gold won’t lose its value when it happens. 

The reality is that the longer we go in a cycle, the closer we are to a downturn. 

Nobody really knows what this downturn will look like. It all depends on what the critical factor is that turns the economy down. 

The one thing we know for sure is that the concern for American right now should be making a bigger allocation toward gold. 

If you follow the news, you know that central banks recently bought more gold than any time since Nixon took the country off the gold standard and collapsed the dollar. 

That’s an indication that people are beginning to lose confidence in the dollar … and when people lose confidence in currency, we see inflation. 

So, in the short term, you’re going to need supplies … things you can barter with until a new medium of exchange is introduced. 

But, in the long term, you’ll need something that is universally accepted as currency. 

Why is gold valuable? Because the banks are stocking up on it. There’s always going to be a market for gold. 

More Ask The Guys

Listen to the full episode for more questions and answers. 

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


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Lifestyle Investing for Family, Fun and Profit

You invest your money to make more money … but there is so much more to life than cash. 

Still, you have to have a way to fund your fun. Some say invest now and play later … but why not invest now AND play now, too?

We’re talking about lifestyle investing. 

Beautiful properties are available for you to live in … part of the time … and rent out for the rest. 

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

  • Your playmaker host, Robert Helms
  • His playful co-host, Russell Gray 
  • The Grove Resort’s Nick Rohrbach

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Lifestyle investing is in style

You can find an investment property that pays you to own it … a place where you can spend time and enjoy yourself. 

It’s called lifestyle investing. 

When most people invest in real estate, they don’t think about living in the house that they choose as a rental. 

But so many people own a house that they USED to live in … but now rent out. 

Lifestyle investing turns this idea on its head and blurs the lines to bridge the gap. 

You find a property that you would love to spend time in occasionally … and in the meantime, it creates income. 

Most of us invest in rental properties to create wealth so that we spend that money somewhere that we enjoy. 

With lifestyle investing, you buy and asset what you want to enjoy yourself and organize it so that it pays YOU to own it. 

A unique rental niche

In a typical rental property, your tenant normally moves once a year. But a lifestyle property is usually rented by the night … which makes management more expensive. 

On the other hand, while a monthly tenant might be paying the equivalent of $20 a day … a nightly vacation renter could pay several hundred dollars. 

You’re paying to have a hands-off experience … and you want to deliver an exceptional service level. 

One of the beautiful things about this niche is that you’re marketing to affluent people. You have customers who aren’t necessarily as burdened when economic times turn backward. 

Another great thing about resort properties … renters are typically tourists from out of town … which means you aren’t as reliant on ups and downs in the local economy. 

And when you have a really unique property, you can attract people from all over the world. 

Don’t get us wrong … it’s not just the world’s most wealthy we’re talking about. 

Some people save all year long for their vacation. They are frugal the rest of the year … but when it is time for vacation, they want to have a good time. 

Let’s be clear … lifestyle investments are NOT timeshares. 

A timeshare isn’t really real estate. It’s more like a prepaid vacation. You don’t have equity ownership. Lifestyle investments CREATE CASH FLOW. 

If you don’t have enough cash to get started, resort properties can be the perfect opportunity for simple syndication. 

With a few owners, you can all use the property for a certain amount of time each year … and share the profits the rest of the time. 

Factors to consider

When selecting a resort property, you need to decide how the seasonal market is. 

It’s like being in retail. If you have a strip mall, you know your tenants lose money during the off season … but they make it all up during the holidays. 

If your property is a prime skiing location … think about what happens to it during the summer. 

You need to look at the property as a totality of ownership … and then you have to be really good at managing cash flow. 

The good news is that you don’t need to go in blind. It’s like we always say … if you’re going into a market you’re not familiar with … BUILD RELATIONSHIPS. 

In this case, you really want to build relationships with property managers

They know the demographic. They know the trends. They know the inventory … and they really know the income. 

It is so important with any deal … and especially with lifestyle investments … to do your due diligence. 

But once you do … if you choose your market correctly … you’ll discover a market that is robust and not hung up in too much seasonality …. and then you choose a product that makes sense for you. 

Rentals at The Grove Resort

We caught up with our friend Nick Rohrbach at The Grove Resort to learn more about a really interesting lifestyle investment opportunity. 

The Grove is an amazing resort property in Orlando … amazing facilities, a 7-acre water park, a four-star spa, and a stone’s throw from the Disney theme parks.

The people who visit here are all about the lifestyle. 

And for investors, it means owning a beautiful, professionally managed resort property in one of the hottest markets in the USA. 

Nick says that many tourists come to spend their days at theme parks … but then they want somewhere comfortable and luxurious to come back. 

What makes The Grove a unique opportunity is that the big ticket amenities … including the water park … are included in the rate. 

“That’s what makes our occupancy higher than average, and average occupancies in the area are already fairly high at 77.5% in Orlando,” Nick says.

The Grove caters toward a wide variety of guests … there are spaces for weddings, family reunions, and small conventions. 

The suites at The Grove are all two and three bedroom condos … perfect for families or employees. 

Units are completely turnkey … and managed by a team that has been in business in the area for over 40 years. 

“And Orlando really is a year round destination,” Nick says. 

Ultimately … like any investment opportunity … you need to find a deal that works with your personal investment philosophy. 

Interested in learning more about The Grove? “Come on-site and stay with us,” Nick says. 

To learn more about lifestyle investing and opportunities at The Grove Resort, listen in to the full episode. 


More From The Real Estate Guys™…

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


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Cashing In On the Space Race – New Homes in a Market Ready for Lift-Off

The space race is on!

No … we’re not talking about the great cosmos overhead. We’re talking about a race for space in a thriving market. 

Central Florida is thriving thanks to international tourism, low taxes, strong population growth, and great infrastructure. 

Billions of public and private dollars are making their way into this market … We’ve liked it for a long time … and it’s getting even better. 

Discover how YOU can cash in on this space race as we hear tips from an on-the-ground expert. 

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

  • Your out-of-this-world host, Robert Helms
  • His out-of-the-way co-host, Russell Gray 
  • Central Florida investment property specialist, Jean Gillen

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Welcome to the “space coast”

Today we’re talking about a market that is well-positioned for growth and equity … it’s the “space coast” in Florida!

Central Florida is one of the markets we’ve loved for a long time … every time we visit we see cranes helping build new projects. 

When we analyze a market, we look at the dynamics in supply and demand, capacity to pay, and what’s going on in mortgage rates and demographics … and don’t forget taxes and incentives!

There are so many things happening right now in this particular market that create an environment where equity can really POP. 

One big story of this area is … the space coast. 

For many years, the space industry was 100 percent a government entity. You had NASA … and that was it. 

But when the shuttle program stopped … everything changed. 

Individual businesses and entrepreneurs came in to fill the void and pick up the slack … and things really blasted off!

We see a lot of similarities between what is happening in Central Florida now and what happened several years ago in Silicon Valley. 

These organizations are growing and bringing in a new workforce to fill jobs … but there aren’t enough houses. It’s a great opportunity as an investor to help find a solution. 

Growth and opportunity in Central Florida

Our good friend Jean Gillen and her team at Gillen & Associates are Central Florida investment property specialists. 

For nearly 30 years, Jean has been actively helping investors cash in on opportunities in this marketplace … she knows this place like the back of her hand. 

For Jean and the investors she helps every day, the space race is real. 

The Central Florida market is uniquely nestled within an hour of three international airports … Orlando, Orlando Melbourne, and Orlando Sanford. 

It’s the number one visited place in the world … 75 million people come through each year. 

Some are passing through to other connections. Others come for theme parks and to hop on cruises. And the rest … it seems … come for NASA.

And so many of those people come to stay. 

Over 350 space industry companies have moved to the market … after all, it’s the only place in the United States from which you can put a man in orbit. 

A huge amount of millennials have followed those companies for job opportunities … but baby boomers are moving in as well. 

With no intention of retiring any time soon, baby boomers want to live around other baby boomers. The 55+ communities come calling … and they are cheap and cheerful. 

But it’s not just the space industry that has come to town. Infrastructure has to grow to serve all those new residents … like doctors, retail, and restaurants.

Florida is also a prime spot for tax incentives … and there’s no state income tax. 

“I don’t think there is a better economy in the United States right now,” Jean says. “Oh, and the weather’s good.”

Another important thing to note, Jean says, it that many of the people coming to the area aren’t necessarily coming for a full-time gig. 

Many of the workers in these industries come on a one or two year contract … which means that these folks will always be tenants … and you can plan on a steady flow of tenants for rentals.

Properties with potential

Most of the houses Jean and her investors work with are new builds that come in at around $210,000. Insurance … including hurricane insurance … comes out to about $600 a year. 

“The hurricane risk in the area is very low. That’s why the insurance rates are so low. It should make you feel fairly safe on that front,” Jean says. 

Another unique factor in the Central Florida market … it’s actually a better deal most of the time to buy a new build over a resale house. 

And tenants are definitely attracted to new … and all the amenities that come with them … granite countertops and stainless steel appliances anyone?

Jean also feels it’s important to keep most of the homes owner occupied. 

“It keeps the neighborhood up, so we usually keep the amount of houses owned by investors in a development at 10 percent. It works out so much better that way for everyone,” Jean says. 

But as with any market, there are unique considerations to keep in mind. 

Jean says she never helps investors buy lots that are in flood zones. The properties have to be turnkey … and a good school district is always a plus. 

Many of the tenants in the area work several days a week from home … so extra bedrooms that can function as a home office space are a must. 

And Jean is all about beautiful backyards … most lots are a quarter of an acre … and there is no HOA. 

Typically, tenants stay for three years … and tenant-landlord laws are very landlord friendly. 

Joining the space race 

Jean and her team work exclusively with investors … but those investors come from a variety of situations and backgrounds. 

Some are 30 years old … others are 70 … but they’re all looking for a profitable deal. 

We’ve said it before … and we’ll say it again … the key to a great deal is finding a market that makes sense, finding the right team, and THEN finding the right property. 

To learn more about Central Florida … and to find out if this it the right deal for you … listen in to the full episode. 


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Jerome Powell has spoken … now what?

In our last edition, we discussed what gold might be revealing that the Fed isn’t … while waiting to see what Fed Chair Jerome Powell would say to Congress.

But now the great and powerful Powell has spoken … and there are a couple of notable nuggets worthy of an inquisitive real estate investor’s attention.

According to this report by CNBC, the Wizard of the Emerald Printing Press told Congress …

“… the relationship between … unemployment and inflation … has gone away.”

If you’re not a faithful Fed watcher (and therefore have a life), you might not know about the Phillips curve. It’s been a guiding principle for the Fed interest rate policy for a long time.

It goes without saying (but we’re saying it anyway) that interest rates are important to real estate investors.

After all, debt is arguably the most powerful tool in the real estate investor’s toolbox. And interest rates profoundly affect both cash flows and pricing.

Many investors rely on their mortgage pro for interest rate guidance. Most mortgage pros watch the 10-year Treasury. But Treasury prices are strongly impacted by Fed jawboning and open market activities.

By watching further up the food chain you can get more advance notice of the direction of rates … and better position yourself to capture opportunity and avoid problems.

Through their comments, Fed spokespeople … chief among them Chairman Powell … send signals to those in the market who care to pay attention.

Of course, sometimes a little interpretation is needed. In this case, it seems to us Powell is being pretty clear.

The Phillips curve … which presumes that full employment leads to higher wages which leads to high inflation (prompting rate hikes to preempt it) … “has gone away”.

In other words, don’t assume high employment will trigger the Fed to raise rates.

But just in case the message wasn’t clear enough, Powell also added …

“… we are learning that the neutral interest rate is lower than we had thought …”

In other words, there’s a NEW normal in town … and the Fed is abandoning (just like Peter Schiff has been telling us they would) rate hikes and tightening.

But unlike Peter Schiff, the Fed is just now figuring this out.

So the great and powerful Wizard pulled not one, but TWO doves out of his hat.

(For the un-initiated, when the Fed is “hawkish”, it means tightening the currency supply by raising rates … while “dovish” is easing … like quantitative easing … and lowering rates)

It seems the Fed looked over the economic landscape … (and over their shoulder at the real estate guy in the White House) …

… and concluded the punch bowl fueling the longest recovery in history needs to be spiked again.

You might agree or disagree.

But it doesn’t matter what YOU think the Fed SHOULD do. We’re pretty sure they’re not asking you. They’re sure not asking us.

They think what they think. They do what they do. And THEY are the ones behind the curtain with their hands on the levers.

Our mission as a real estate investors (accumulators of mass quantities of debt used to control assets and cash flows), is to watch and react appropriately.

So here’s some food for thought …

Fed “dovishness” usually translates into higher asset prices … primarily stocks and real estate. Equity happens!

It’s EASY to get enamored of equity growth based on momentum (price changes) and not fundamentals (income). Be careful.

Sometimes the Fed loses control or misses a major problem until it rolls over the market.

If your portfolio is anchored with strong fundamentals, you’re more resilient.

Equity is wonderful, but fickle and unproductive.

If your balance sheet is telling you you’re rich, but your cash flow statement doesn’t agree, you’re not really rich.

Read that again.

The key to resilient real wealth is durable passive income. And rental real estate of all kinds is a time-proven vehicle for building durable passive income.

But wait! There’s more …

It’s no secret President Trump wants to weaken the dollar … and has been pressuring the Fed to make it happen.

Based on the Fed’s recent shift of direction, it seems it’s not just interest rates headed down … but the dollar too. The currency war could be about to escalate.

And remember … the dollar has a 100+ year history of losing purchasing power.

So if you’re betting on the direction of the dollar long term … we think DOWN is the safer bet. And right now it seems that what the Wizards are planning.

This is where real estate REALLY shines.

That’s because an investor can use real estate to acquire enormous sums of dollars TODAY (via a mortgage) which effectively shorts the dollar.

Those dollars are used to buy tangible, tax-advantaged, income-producing, real assets which not only pays back the loans from their own income …

… but unlike debt, grows nominally (in dollars) in both income and price as the purchasing power of the dollar falls (inflation).

That’s why we say, “Equity Happens!”

And when it does, it’s a good idea to consider converting equity into cash using low-cost long-term debt, and then investing the proceeds in acquiring additional income streams and assets.

Of course, you can only do that when the stars of equity, lending, and interest rates all align. Right now, it seems they are.

We think last week signaled an important change of direction. And while the financial system is arguably still weak, it’s working …

… so it might be a good idea to do some portfolio optimization while the wheels are still on.

Until next time … good investing!


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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Finding Turnkey Rentals in Positive Cash-Flow Markets

When it comes to positive cash-flow, there are two things more important than your investment property … your market and your team. 

Our good friend Terry Kerr at Mid South Home Buyers knows this better than anyone. 

Terry and his team have cracked the code for consistent cash-flow from rental homes in one market … and are expanding into another!

We sat down with this world-class investor to find out why, where, and how he is creating positive cash-flows with turnkey rentals. 

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

  • Your cash-flow crazy host, Robert Helms
  • His go-with-the-flow co-host, Russell Gray 
  • Owner and founder of Mid South Home Buyers, Terry Kerr
  • New investor contact at Mid South Home Buyers, Liz Nowlin

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Market, team, and cash-flow

We’re talking about a resilient market that has been a great cash-flow area for YEARS … Memphis, Tennessee. 

When we first looked into the Memphis market it was a little blue-collar town and the bankruptcy capital of the United States. 

Price points were low … and on paper it looked like cash-flow was solid. 

Many investors are suspicious of high cash-flow markets … they often mean high expenses, high turnover, tough demographics, and difficult management. 

But when markets get overheated and financing goes away, what really matters is cash-flow.

You can make money in these types of markets … you just need to have the right team. 

A team that has … for us … stood head and shoulders above the rest has been Terry Kerr and the experts at Mid South Home Buyers. 

Terry and his associate Liz Nowlin run the gold standard investment operation in the Memphis area. They have over 2,500 homes … and a waitlist of eager investors hoping to partner with them. 

So, Mid South Home Buyers is expanding into a new market … and they’re here to share what they’ve learned in Memphis … and their predictions for future opportunities. 

Creating turnkey investments

Terry is Memphis born and Memphis raised. He started buying and flipping properties … and ended up forming a property management business. 

Now, his team at Mid South Home Buyers purchases homes, renovates them, leases them to residents, and sells them to investors. 

Terry and his team have some creative approaches to the process. 

Homes are outfitted with the same fixtures … saving time and purchasing power. 

And they now purchase materials directly from suppliers … basically building their own personal hardware store … opening budgets to more rehab for each property. 

Essentially, they’re creating turnkey investments. They find the property, figure out what needs to be done, do it, and find a tenant. 

Not to mention that they manage about 2,700 houses in Memphis, too!

It’s all about becoming more efficient … and efficiency leads to cash-flow. 

The biggest … and really only … complaint we hear from investors is that Terry and his team only operate in Memphis … but now they’re delving into another market. 

They’re moving to … Little Rock!

Making the move to Little Rock

We’ve had our eyes on Little Rock for a while now. It’s definitely a market on the move. 

Little Rock is about two hours away from Memphis … and it’s a greater population that covers a greater area. 

The Little Rock properties will look just like those in Memphis … the same renovation materials, same fantastic price-to-rent ratios, and the same long warranties and occupancy guarantees. 

“We’re going to be doing the same top of the line rehab with slightly under market rents to give us the best occupancy rate. Right now in Memphis, we’re at 99.4 percent occupancy,” Terry says. 

But in any venture … it’s important to expand to meet investor demand without compromising quality. 

“It took us several years to make the jump to Little Rock, because we wanted to make sure that our systems and foundations were built correctly,” Terry says. 

If the rehab is high quality … then the resident is happy. When the property doesn’t break down for the owner … then the owner’s happy … and they buy more properties!

Since Little Rock is so close to Memphis … Mid South Home Buyers can keep central command in the same location.

Arkansas has excellent tenant-landlord law and tons of houses in the “goldilocks construction style” … not too big, not too small. 

“We’ve got a lot of beautiful brick houses between 1,000 and 1,500 square feet, three bedroom, two bath, ranch-style homes built on a slab. It’s a good, low-maintenance construction style,” Liz says. 

And the really great thing? All of these Little Rock properties will be offered straight down the waitlist … music to investors’ ears!

Advantages of a turnkey operation

There are several advantages to considering a turnkey operation … one where everything is done for you. 

First, you have a quality renovation every time. 

When you work with a company like Mid South, which holds every renovation to an identical standard, you know what you’re getting. 

Mid South homes have a brand new 30-year roof, new water heater, new furnace, new air condenser, and everything from door knob handles to ceiling fans with bumper to bumper one-year warranties. 

Second, it’s easier to keep accountability in one place. 

Since Mid South is there from start to finish, they can offer you a lifetime occupancy guarantee … if your property is vacant for more than 90 days, they start paying you rent on day 91. 

“And we’re proud to say we’ve never spent a penny on that. because our properties don’t stay vacant that long,” Liz says. 

Third, you can see what you’re getting … in every phase of the process … before you invest. 

When Mid South clients take advantage of viewing the inventory in person before buying … it pushes their confidence through the roof. 

“I give potential investors a tour of our offices and show them houses in four stages of renovation, so they walk away with a great understanding of our business model,” Liz says. 

And, they get a taste of some world class barbecue … it is Memphis after all. 

Whether it’s your first investment or your 400th … turnkey rentals could be the positive cash-flow solution you’re looking for. 

Listen in to the full episode to learn more!


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Senior Housing and Opportunity Zones – A Winning Formula

The only thing better than one investment opportunity … is two investment opportunities!

We’ve talked about senior housing and opportunity zones before … but what happens when you combine the two?

The combined demographics and tax incentives of these investment niches create exciting possibilities!

We sat down with a successful real estate entrepreneur who is putting senior housing and opportunity zones together into a creative … and profitable … investment play. 

Discover how to ride the wave of demand and capital to create a WINNING investment strategy. 

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

  • Your riding-high host, Robert Helms
  • His here-for-the-ride co-host, Russell Gray 
  • CEO of Sage Oak Assisted Living, Loe Hornbuckle
  • Loe’s partner and construction developer, Austin Good

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Opportunity zones sweeten the deal

We’ve been talking a lot lately about opportunity zones … but today we’re going to focus on taking the idea into the real world. 

You may have heard Loe Hornbuckle on our show before. He specializes in senior housing. 

Loe recently began a new project … and discovered that the land was inside an opportunity zone.  

His team began to pay attention to how they could structure the deal around opportunity zone incentives … and he’s here to share what he has learned from the process so far. 

A word of caution before we dive in … be careful about picking an investment purely for the tax breaks and overlooking the real fundamentals of the deal. 

Loe sought out a location that was a good place to do business, fit in his niche, and gave him a unique selling proposition. The opportunity zone just sweetened the deal. 

Prepare for the silver tsunami

Let’s start with the silver tsunami. In a few years, baby boomers will be looking for assisted living … and the industry needs to be prepared. 

But that’s still a ways off. Loe says his average client is 87 years old. The oldest baby boomers are still about 75. 

That means there is time to get in the game and get prepared. 

A lot of times when people talk about senior housing, they’re really talking about active adult communities, independent living, assisted living, dementia care, and skilled nursing facilities all under one umbrella. 

But it’s important to look at each of these areas as its own asset class. 

The type of person that wants to live with other people 55 and up and play golf with their buddies is totally different than a person who may not be able to walk independently anymore. 

And when the baby boomers come looking for senior housing, they’re going to demand things that their predecessors didn’t.

Baby boomers want smaller, more intimate environments where they are around people that are like-minded in some way. 

Maybe they like the same music … or have the same cultural heritage … or even have the same medical condition. 

In Loe’s case, he began Sage Oak Assisted Living and Memory Care in 2015. It’s basically a boutique assisted living and memory care company. 

“What we do is focus on small facilities that are designed to make people feel more comfortable in a homelike environment,” Loe says. 

When most people think of assisted living, they picture a nursing home. But Sage Oak’s facilities are light, airy homes designed for anywhere from 8 to 16 people. 

Loe currently operates five of these locations in Dallas. 

But with the silver tsunami on the horizon, Loe is looking to expand his idea … more beds but preserving the intimate setting. 

For Loe and his team, the answer is raw land development into planned care communities. 

Think of it like a residential neighborhood … but instead of 3000 square foot homes that house single families, these are 9,000 square foot homes designed for 16 seniors. 

These independently owned houses operate as independently licensed facilities … some as assisted living and luxury assisted living and others as dementia care.  

And these houses can be tailored and changed over time to provide the personalized environment residents are looking for … allowing you to operate in any niche you feel the market is lacking. 

Obviously you would never exclude anyone, but you could help them find a house that they are most interested in. 

“One house might be for people with diabetes. Another might be kosher, with a kosher chef and visits from the local rabbi. The house next-door to that one could have a Korean chef and Korean newspapers delivered daily,” Loe says. 

Sage Oak has two such projects underway right now … one in Texas and one in Louisiana. 

A natural partnership

Loe’s partner, Austin Good, hails from the construction development side of real estate. 

Austin is a single family, build-to-rent developer … and that’s essentially what Loe and his team are creating. 

Starting from the ground up in building these campuses offers the advantage of control … controlling the process of creating the campus and controlling the end experience offered to residents. 

And now, the Texas development has the added advantage of being in an opportunity zone. 

“We selected a piece of land in Denton, Texas, to build a campus and discovered it was in an opportunity zone,” Austin says. “So, we had to rework our model a bit.

For example, Austin says they weren’t necessarily looking at a 10 year hold period at the start … but now they are making changes to gain the biggest tax advantages. 

An opportunity zone location also gives Loe and Austin the ability to offer investors a chance at making some money tax free … quite the incentive to come on board!

Senior housing is a natural companion to the opportunity zone structure for a lot of reasons. 

Since opportunity zones are typically in lower income or rural areas, you probably aren’t going to build a luxury hotel there. 

But if you create a reputation as the “go-to” place for senior housing, most people won’t mind driving a bit further … because the outcomes are so much better at your location!

“Our Denton project is about 10 minutes away from the luxury assisted living facilities in the area, so it’s not a difficult pitch for us to say, ‘Drive a few more minutes and be in a more intimate environment with a better caregiver ratio,’” Austin says. 

Another major opportunity zone benefit … access to an untapped workforce of caregivers. 

The number one problem CEOs in the senior housing space are facing is access to good caregivers. 

Opportunity zones located in lower income or more rural areas tap into a workforce that may live too far away to work at other facilities.

Find your winning opportunity

For people who are concerned about taxes and wanting to maximize their return, investing in a niche opportunity zone project can be … well … a great opportunity. 

You still get all the advantages of real estate … like bonus depreciation … and now you can get your capital back. 

It essentially allows you to make a better return on a post tax basis. 

As always, check with your tax professional to find out what will work best for your portfolio. 

And listen in to the full episode for more on how senior housing and opportunity zones can be a winning formula!


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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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Simple Passive Income through Self-Storage Investing

Self-storage. It’s simple. It’s proven. For many investors, it’s the dream. 

Investing in self-storage gives you the best parts of income property investing without the hassle … life can be breezy when your tenants are boxes. 

But all investments have pros and cons. 

We invited Dave Zook … successful business owner and experienced real estate investor … to share his insights and experience in the self-storage sector.

Get ready for high yields and low drama!

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

  • Your hassle-free host, Robert Helms
  • His hassling co-host, Russell Gray 
  • Founder and CEO of The Real Asset Investor, Dave Zook

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The skinny on self-storage

Some of the best tenants in the world are boxes. 

Self-storage is one of the coolest niches in real estate. We’re all familiar with the concept … at some point, we all have more stuff than we have space. 

What can we say … we’re sentimental people.

Maybe it’s Baby Boomers downsizing … or maybe it’s corporations that would rather store documents off-site than pay more for premium office space. 

The importance of the stuff in boxes is in the eye of the beholder … but the potential income from the boxes is golden in the eye of the investor.

Self-storage comes in many forms. Some investors go for climate-controlled self-storage units. Others specialize in space for vehicles like boats and RVs. 

No matter what route an investor takes, the self-storage model is really pretty simple. 

And there are few people who know as much about this particular business model as our good friend Dave Zook. 

Dave is a successful business owner who started in syndication and has done all kinds of different real estate deals including … you guessed it … self-storage. 

And boy does Dave have stories to tell. 

Dave first got interested in self-storage about 20 years ago. He delivered modular buildings from his family business to a dealer who had a self-storage business. 

“I would ask him questions about how this works, and he told me it was the easiest way to make money ever,” Dave says. 

Pros, cons, and strategy

When you invest in self-storage, who are your tenants?

Dave says he has seen a flow of people moving to the apartment space. 

When you move from a home to an apartment, you don’t have as much space for storage … most apartments don’t have a backyard shed. 

People feel comfortable keeping their stuff in self-storage spaces … many facilities are guarded, gated, and secure … some are even climate-controlled. Some keep their stuff in storage for a very long time. 

Dave says many people enter into self-storage planning to use it short term … but the pain from the monthly fee isn’t great enough to spur action to move the stuff out immediately. 

Some tenants move stuff in thinking it will be there for three to six months … and end up being a tenant for three to six years. 

Dave shares that another big benefit of self-storage is that tenant-landlord law is a lot different. 

When you’re dealing with boxes instead of people, everything becomes a lot easier. 

“The government isn’t as concerned about how our boxes get treated as how people get treated,” Dave says. 

But like any investment, self-storage does have its downsides

One of those is size and scale. 

Most self-storage facilities tend to be bigger. Smaller sites do exist, but they are much rarer. Dave says he typically goes after sites with 400 to500 units. 

Sometimes, Dave and his partners buy an existing facility and then expand it to add more units or add climate-controlled units to up the value and cash flow of the property. 

This strategy takes time and additional money … but it can pay off well. 

The process of taking an existing property and turning it into an attractive storage facility usually takes about a year. 

“It depends on the market and the time that it takes to get permits, but typically we can go in and 12 months later have a certificate of occupancy, and we’re in business,” Dave says. 

Making the most of the market

Are there markets that make more sense for self-storage than others?

Dave says he and his partners focus on secondary and tertiary markets. Right now, they really like the Southeast. 

“We’re in places like Tennessee, Alabama, and Florida, because that’s where the growth is going,” Dave says. 

Boosting your occupancy means boosting your income. 

Dave says that when it comes to self-storage, 100 percent occupancy isn’t a good thing … that means your rent is too low. 

If you’re in the 85 percent occupancy range, on the other hand … you’re doing really well. 

Historically, self-storage has been a very recession-resistant asset class. It handles disruption very well. 

Looking back on 2008, 2009, and 2010, self-storage as an asset class outperformed any other commercial real estate asset class. 

Dave says he feels like we are at a high point in the cycle … which means we’re due for a recession. Self-storage may be a good asset class over the next several years. 

“Think about it. If I have to move or lose my job, I don’t want to get rid of my stuff. I’ll store it for a couple of years instead,” Dave says. 

Learn more, earn more

If you think self-storage may be the asset class for you, you need to find a team. 

“I would say that 50 percent of the success of self-storage is based on your operator and your management team,” Dave says. 

When you have someone who is going to be in charge of the investment, you want to make sure that this type of investment is something they have done. 

Your operator and management team should be so dedicated to self-storage that they are unconsciously competent. 

Like any investment … relationships matter. Find someone who knows more than you do and get educated. 

There’s always more to learn … and more money to be made. 


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

What goes up, must come down. 

It’s true in gravity … elevators … and the real estate market. 

The constant ups and downs can give investors anxiety. It’s hard to enjoy a boom when you’re always wondering … is it all about to come crashing back down?

The good news is that markets rise and fall in cyclical motion. 

History repeats itself … and there are signs and patterns to look for that signal when you need to move and when it is best to sit back and wait it out. 

Listen in as we discuss where we are in this infamous cycle … and what you can do about it.

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

  • Your upstanding host, Robert Helms
  • His downright delightful co-host, Russell Gray 

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Riding and driving the cycle

Real estate markets work in cycles … we’re either at the bottom, in the middle, or at the top. 

So, where are we at? And what can investors do about it?

First off, it’s important to remember that real estate isn’t an asset class itself … there are so many different categories. 

Each of those categories operates in its own market … and the cycles don’t always align. 

Office buildings could be up while residential is down … and agricultural could be sitting right in the middle … ALL AT THE SAME TIME. 

So, when you think about where you are in a cycle, you need to think of both macro and micro levels. 

Part of what’s going on will be influenced by the macro … like interest rates, what’s going on with the Fed, tax breaks, and Opportunity Zones. 

The other part deals with the micro … what’s going on in a particular industry and the demographics it serves.

The challenge for a real estate investor is that there is no one key indicator for where the market is heading. In fact, it’s so confusing that nobody gets it completely right. 

But there are things you can look for … and things you can do … to set yourself up for the best chance of success. 

Understanding the big picture

One of the big picture items to look for, understand, and act on is interest rates. 

When we talk about real estate investing, it’s really all a derivative of income … of cash flow. 

Someone can only afford to pay a price for a house based on their income and how much income that will mortgage into the purchase price of a house. 

If you take a look at the major inputs going into a mortgage, you’ll find interest rates and tax consequences. 

So, if you can lower interest rates and lower taxes … the same amount of income will buy more houses. 

With the new tax code and incentives like Opportunity Zones, there is a good chance that the upside of the cycle will be extended for a few more years … but is it sustainable?

Understand that every day we’re closer to the next market top. 

So, what can you do as we get near the top?

Don’t sit on the sidelines

What you don’t want to do is sit on the sidelines. You do need to act. 

If you take prudent moves to protect yourself in the case of a downturn … and there isn’t one … you aren’t any worse off. 

The good news is that real estate investors and markets move slowly … we’re not flash traders. 

Your tenants don’t look at the newspaper, see a headline, and move the next day. 

As investors, it’s a balance of being aware of those macro events and keeping specific trends in mind. 

Right now, mortgage rates are low, and the dollar is relatively strong. Interest rates are dropping in treasuries … and people are buying there looking for a safe place to ride out market dips. 

This gives real estate investors the opportunity to go into the market and lock that low pricing and low interest rate long term. It’s like having a sale on money. 

And if you buy a property that has good cash flow with that low interest locked in, you’re putting yourself in a great spot to hold through any downturn in the cycle. 

People who sit on the sidelines are guaranteed to make zero return. Instead, look at the idea of recession resistant price points. 

Recession resistant means you are renting to a clientele that is likely to always be there … and the price point is typically something just below the median home price. 

Many of these recession resistant price points work great in a good economy AND they’ll also be a little more protective in a down cycle. 

This is a time to be super prudent when it comes to underwriting … both the analysis of the market and the performance of the property. 

When it comes to the performance of the property, there are a couple of big picture things to keep in mind. 

You want to live in a landlord friendly state. If there’s a problem, you want laws that favor a landlord and can help you get a tenant out quickly. 

You’ll also want to talk to your property manager about rental trends. 

What have people been paying in rent recently? How many people are applying for leases now compared to other years? Have they had to change the kind of tenant they accept?

Another way you can make the most of the market cycle is to focus on top markets. 

There are lots of investment funds and real estate investment trusts that focus only on the top 50 metropolitan statistical areas (MSAs). 

These are the top cities in the U.S. where there is always real estate movement and a depth of demand. 

When you go into a market that has already proven itself with solid infrastructure, there’s a greater probability that in tough times people will gravitate there. 

Changing your strategy for success

We’re certainly proponents of continuing to invest through cycles … just change your strategy a bit. 

It makes a lot of sense to have some cash when you are nearing the top of a market cycle for a lot of reasons. 

If you end up having problems with properties that perform differently than you expect during a downturn, you want to be prepared for that. 

But downturns are also often where opportunities are … opportunities to buy. 

As real estate investors, we make our money when we buy … so it is good to keep some cash in reserves if the right opportunity presents itself to invest in a property with promise.

One last idea to consider when it comes to being at the top of the market is that there are certain demographics that don’t suffer as much in a downturn. 

Generally, this is affluent groups of people. When times get bad … they get bad for the middle and bottom part of the socioeconomic ladder. 

So, it’s always an interesting strategy to market to the affluent. One of the ways we love to market to this demographic is through residential assisted living. 

Remember, your customer is not the person staying in the facility. It’s the family members who look out for them and place them there. 

Another strategic investment is hospitality. In downturns … the rich still go on vacation. 

Many times in an economic slump, entertainment does well because people are trying to get away from the doom and gloom. 

If you believe we’re at the top of the market, there are proven things to think through. 

Analyze your portfolio and ask yourself, “What happens if pricing and demand were to go down?” Take a look at your financing. Are you getting the best, lowest rates?

If you take proven steps now, when the market cycle starts heading downward … you’ll be glad you did.

Tune in over the next several weeks as we dive into more strategies you can take to thrive even when the market isn’t doing the same.


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How to Find a Mentor and Make It Work

If we’ve said it once, we’ve said it a thousand times … a mentor makes a difference.

Finding, vetting, and thriving, with a mentor is one of the quickest shortcuts to success.

Talk to a successful real estate investor, and chances are that they can point to one or more people whose example and encouragement helped them along their way.

But finding a great mentor … and making the relationship work through real world challenges … isn’t always easy. We’re here to share our tips with you!

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

  • Your master mentor host, Robert Helms
  • His mental co-host, Russell Gray

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What makes a mentor

Your success in real estate is going to come down to a few critical things … and one of those things is your relationships.

We never would have had the success that we’ve had in our lives … in business and personally … without input from the people we consider mentors.

Real estate investing is a people business.

Yes, you need to know numbers, property, and markets … but you also need a team. One of the most critical members of that team is a mentor.

A mentor is an experienced and trusted advisor … a guide, a confidant, and a counselor. And a mentor is different than a coach.

Coaching relationships are finite. They’re focused on specific behaviors and needs.

A mentor is a long-term relationship that supports you in your development. They’re interested … but not financially tied necessarily … to your results.

If you do it right, you’re going to have a lot of mentors in your career. You should always have people in your life who are further down the path.

A mentor doesn’t have to be older than you … but they do need to have more experience and more success in the area you are interested in.

A lot of people think of a mentor as a technical teacher … but that’s not necessarily true.

If you really think about what investing is, it comes down to exercising good judgment.

Judgment is something you learn by being in close proximity to someone … seeing why they make the decisions they make and absorbing what they’ve gleaned from their life experience.

Your mentor should be an example … a role model … of what you aspire to be.

What you bring to a mentoring relationship

There are lots of people that believe they can learn everything they need to learn from the internet, webinars, books, and podcasts … but that’s not our experience.

Those types of learning are a great starting point … but you’ve got to get into conversations with people that have been there, done that … in the REAL WORLD.

It’s very tempting to align yourself with people who are just like you … but you actually want to align with people who are a little bit different than you.

Take a look at yourself and ask, “What is it about my personality that’s holding me back? Where am I not being effective?”

You know what your weaknesses are. Your mentor can be someone who is strong in areas where you struggle.

By being around people with attributes that don’t come as easily for you … you will improve!

You also want to consider your strengths. The best mentor relationships are equitable … each side brings something to the party.

Brainstorm ways that you can be a value add to the mentor you have in mind.

Mentoring is also a cyclical relationship. You may be green around the ears today … but a few years from now you could be a mentor yourself.

Finding a mentor in the real world

One way to get a mentor is to hire one. There ARE organized mentor programs … we have one ourselves.

Before you pay money for a mentor relationship, check out the reviews. Just remember that the results people get have a lot more to do with how they react to the advice their mentor gives.

Paying for a mentor collapses the timeframe it takes to find one … but often … in our experience … the best mentor relationships happen organically.

This type of strategy DOES take more time and effort. You have to be in the right environment to meet the right person … that’s a lot of trips, events, and social engagements.

Beyond that, your mentor relationship is really what you make of it. You have to have the mindset that you are going to be one of the top people out there when you’re done.

If you’re looking to be average and ordinary … to just go with the flow … you might get a trophy for being on the team, but you’re not going to get the paycheck.

So, keep asking yourself, “What are the people at the TOP doing? How can I be more like them?”

Begin to think the way they think … and you’ll begin to do what they do. And ultimately, you can find yourself producing the same results.

A great mentor knows exactly what you need and what you have to go through to get there … and they create an environment for that to play out.

You mentor can’t make your success happen for you. You have to make it happen.

Our motto has always been, “Education for effective action.” Finding a mentor is one of the most educational … and effective … paths you can pursue.


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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