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.


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

One of the best parts of our job is hearing from our amazing audience … and in this week’s episode we have more great questions from all of you.

That’s right, it’s Ask The Guys!

We’re talking about getting started in real estate investing, analyzing deals, understanding how economic cycles affect real estate investing … and more.

Remember, we are not legal or tax professionals. We don’t give advice … just ideas. Join our quest to answer your questions!

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

  • Your book-smart host, Robert Helms
  • His street-smart co-host, Russell Gray

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Getting started in real estate investing

Our first question comes from Daryl in Boonville, Missouri.

Daryl wants to know the best ways to get started investing in real estate.

Lots of folks find themselves interested in real estate investing … but they don’t really know where to start.

There are so many books, blogs, podcasts, and seminars on the subject. It can be a little overwhelming … yet the basics of real estate are pretty simple.

What’s the best way to get started? Well, it depends on what you have to start with, where you want to go, and what you want to do.

But generally speaking, real estate is done with debt.

The first place to start is to take an assessment of where you’re at in terms of debt. Begin work on preparing yourself to be an efficient, effective borrower.

Go meet with a mortgage professional. Find out what your credit score is as far as real estate is concerned, what your documentable income is, and what types of loan programs you would qualify for.

Figure out what you need to invest.

Typically you need credit, a down payment, and technical advisors … like a football coach, you need to build your team.

Next, think about what you’re trying to accomplish. Most people want to grow … so it really starts with education and understanding your borrowing power.

Education doesn’t have to cost you a lot of money … but it will take your time.

Set aside and budget your time to be serious about investing. Go to a seminar or class. Join a local real estate investment club. Read books about the type of real estate that you’re interested in.

A great way to get started if you don’t have a lot of capital is to offer to help someone who is busy doing the thing that YOU want to be doing.

A lot of folks who are successful in real estate investing have more money than time … you might have more time than money.

The opportunity to lend a hand in exchange for learning can be huge.

You might even consider your first deal as a partnership in some way. One of our favorite ways to partner is through real estate syndication.

Syndication simply means a lot of people putting their money and their time together to do something.

Make sure that the person … or people … you are partnering with honestly know what they are doing.

Analyzing and understanding deals

Chris in Sun Valley, California, wants to know how to better analyze and understand deals.

First of all, there’s no such thing as a bad question … except the one you don’t ask.

Everybody who is at the front of the line was once at the back of the line … everybody who owns real estate today started with their first property.

It’s true that analyzing deals is one of investing’s critical skill sets.

If you’re analyzing deals for income, you need to understand an income statement for a piece of property.

One way to do this is to look at other deals. They’ll come with pro formas. You’ll be able to look at the financials … and then go out and look at other real world deals.

You’ll learn by doing that research … and once you feel like you’ve got the fundamentals down and understand the basics of financial analysis, you can take things to the next level.

The other side of the coin is actually analyzing the market, analyzing the physical construction of the property, and analyzing the condition of the neighborhood.

Like so many things in real estate investing, if you can find somebody who is active in the space and learn by helping them … you’ll pick up a lot.

You can’t get really good at analyzing deals by reading textbooks and taking classes … you will also need hands on experience.

So, start with basic education … and then, find a mentor.

Learning about the economic cycle

Laura in Austin, Texas, is looking to learn more about how real estate plays into the economic cycle … and how it’s affected by ebbs and flows. She wants to know what resources and topics we can recommend.

First up is a book by our dear friend Peter Schiff called How an Economy Grows and Why It Crashes.

It’s a simple book that is done in a way that makes the economy easy for everyone to understand … but it is also super, super powerful.

It has taken us years to wrap our minds around this stuff. The reason we cover broader picture economics and not just real estate is that every real estate investor is first and foremost an investor.

We all swim in the economic sea of the financial system that we are blessed … or cursed … with. So, it is imperative that we understand it.

There is definitely a lot you can learn by listening to people who have different opinions.

The Summit at Seais a great place to do that. We get people who come in with so many different backgrounds and from many different niches and markets all over the world.

We also recommend studying the Federal Reserve and the bond markets … because that is where interest rates derive from.

Study demographics … because that dictates where the people are.

Then, understand the way CEOs think about business … and where they want to be and don’t want to be.

Taxes are another area you’ll want to learn about.

In the United States, we’ve now made real estate arguably the most tax advantaged investment anyone can make … which should attract even more money into real estate going forward.

Like any ecosystem, there are lots and lots of components … and you’re not going to master them all. But if you can understand the relationships between them, then you can get into conversations with the masters in each area.

There are lots of great books, podcasts, and conferences to expand your knowledge. Be sure to check out the resources available on our website. We particularly recommend a video series we did called “The Future of Money and Wealth.”

Brian Tracy says that if you read an hour a day in whatever area of interest you have, in 10 years you’ll become a nationally known expert.

We believe that’s true. It happened to us.

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.


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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Tariffs, Taxes and Trade Wars – Insights for Real Estate Investors

There’s a lot of talk in the media about tariffs, taxes, and trade … what does all of that really mean for real estate investors?

As a real estate investor, you need to understand what is going on economically. What’s happening at an international level can trickle down to your local playing field.

To help you navigate the news, we brought in our good friend Peter Schiff. Peter is an author, stock broker, and financial commentator … and he has some strong ideas to share.

Learn to more successfully sail the economic sea and weather financial storms.

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

  • Your financial seafaring host, Robert Helms
  • His economically seasick co-host, Russell Gray
  • Author, stock broker, and financial commentator, Peter Schiff

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Tariffs and the big picture

If you’re the type of investor who reads the headlines … and you should be … then you’ve probably seen lots of talk about tariffs, taxes, and trade.

But most investors don’t understand what these headlines mean for their money.

What’s the deal with these three big “Ts” … What are they? How do they work? And why do they impact your business?

As a real estate investor, you’ve got to understand the economic and financial sea that you swim in.

You need a basic understanding of all things economic.

Tariffs … in particular … are a great place to start.

Before 1913, the United States didn’t have an income tax. Instead, we funded our federal government through tariffs.

A tariff is a tax on people that want to sell in our markets … and today, President Trump is using tariffs as leverage in negotiations to level the international playing field.

You may agree or disagree with these politics … but whatever your personal opinions, you still need to know what such action really means for you.

Any kind of tax or tariff affects how much things cost in our economy … and it can also affect where jobs are created … which affects where people live.

By instituting tariffs, the federal government hopes to bring more manufacturing jobs back to the United States … potentially resurrecting manufacturing ghost towns.

Real estate investors need to look out at the horizon and see the bigger picture. You want to be riding the wave … not chasing the trend.

That’s why we asked our good friend Peter Schiff to share his knowledge and experience with us.

The US-China trade relationship

Peter says a great place to start increasing your understanding of the current economy is to look at the US relationship with China.

According to Peter, China does TWO big things for the US … they supply us with real goods, and they lend us money.

We get everything from China. It’s all manufactured products that make our lives better.

People go to Walmart and buy cheap stuff … and where is it coming from? China, of course.

China is also the biggest buyer of US bonds … which means they are our lender. They are lending us money that we would otherwise not have.

While the federal government talks about losing $500 billion a year to China, Peter thinks the US is still getting the better end of the deal.

China supplies us with real goods … and in exchange the US gives them a stack of paper that is arguably worth less every day that they hang on to it.

So, if the US places tariffs on China and enters a trade war, who is worse off in the end?

Peter says the Chinese will still have all their stuff … and we’ll just have a stack of paper.

The US government hopes that by instituting tariffs, companies will make their products in the US instead. Peter says that is easier said than done.

Pulling together the infrastructure, raw goods, and man power to manufacture these products in the US could take years … and it will cost businesses more money … not to mention a major shortage of goods in the meantime.

Peter explains that switching the US back over to a more manufacturing-based economy would require tremendous changes … and most likely result in a huge depression until the new economic flow was established.

“When we were a big manufacturer in the past, we had limited government, lower taxes, fewer regulations, a lot of savings, and a skilled workforce. We don’t have that stuff now,” Peter says.

Peter does mention that the US is probably going to have to make some of these changes eventually … but proposed tariffs and trade wars would accelerate the timeline in a painful way.

And the United States doesn’t realize how painful it will be.

If tariffs make it harder for the Chinese to sell stuff to America … they’ll sell it domestically instead.

As the Americans get poorer … the Chinese would be getting richer.

Right now, the Chinese labor, and we get the fruits. Suddenly, they would get both.

And what about our intellectual property?

“They’re going to keep ripping off our intellectual property because we can’t stop it, but now they’re not going to be giving us this big subsidy by loaning us money and supplying us with goods,” Peter says.

Preparing for a drop in the dollar with gold

Another notable headline today … the Chinese and Russian governments are buying gold and putting it away.

Peter says that the Chinese and Russian governments recognize that the dollar’s day as the reserve currency are numbered.

Nobody knows when the dollar’s time will be up … but if it loses its role as the primary reserve asset for central banks, what will take its place?

Right now, what gives a currency value are the foreign reserves … we’ve got this huge pile of US dollars that gives currency value.

Before central banks used other currencies as their reserves, everybody used gold. That’s what backed up your paper.

Originally, the transition from the gold standard to the dollar standard happened because the dollar was as good as gold.

US Federal Reserve notes were obligations of the Federal Reserve to pay. So, foreign central banks held Federal Reserve notes, which were redeemable on demand in gold.

Then, in 1971 the US said it would not give other countries gold for these reserves. The value of the dollar went down … and the value of gold went up.

All the central banks kept holding the dollar as a reserve even though it wasn’t backed by gold anymore.

Peter says that the US has borrowed so much money … and printed so much money … that it is heading for a currency crisis.

“In that environment, central banks are going to have to show that their currency is backed by something,” Peter says.

Some banks are buying more of other currencies … like the euro or the yen … but if people lose confidence in the dollar, the same could go for other currencies.

“I think that central banks are thinking they better have actual money in gold, because in the future, gold could be a much more important component of their reserves,” Peter says.

And if the price of gold continues to rise, the appreciation alone is going to increase the percentage of their reserves that are in gold.

Preparing yourself for the future

So what’s an investor to do?

Peter recommends getting out of US stocks in general … and bonds are way over-priced right now.

“If you’ve been fortunate enough to have invested in US stocks and seen a big gain, you need to cash in. Take that gain before the market takes it away from you,” Peter says.

That doesn’t mean you shouldn’t own stocks … Peter says it just means to think about moving out of dollar-dominated US stocks.

Consider taking a look at foreign stocks … emerging markets and developed markets are looking really good right now.

These stocks are international and derive their revenues outside of the US. If the dollar crashes … these stocks will rise in proportion to that decline.

Peter also believes that investors should have some sort of gold in their portfolio. It’s a good way to get diversified.

There’s no sure way to know what will happen in the future. We can only do our due diligence and make an educated guess.

Remember that not every strategy works for every investor. Find what works best for you. Always talk to an expert that understands your financial needs and situation.


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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Opportunity Zones Update – Defer, Reduce, and Even Eliminate Taxes

Everybody is talking about Opportunity Zones … and they should be. They can be a great opportunity (just like the name says)!

But many investors have found themselves scratching their heads. How exactly does someone take full advantage of Opportunity Zones?

Recently released guidelines are giving investors and syndicators much needed clarity for moving forward … and making the most of their Opportunity Zone investments.

We sat down with attorney Mauricio Rauld to discuss how Opportunity Zones can help investors like you defer, reduce, or even completely eliminate capital gains taxes.

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

  • Your zoned-in host, Robert Helms
  • His zoned-out co-host, Russell Gray
  • The “Anti Lawyer” attorney, Mauricio Rauld

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Zoning in on Opportunity Zones

The wait is finally over.

The rules for investing in Opportunity Zones … and the potential tax breaks that come from it … are out.

In case you haven’t heard, Opportunity Zones are basically a capitalist version of wealth redistribution. They provide tax incentives to get rich people to voluntarily put their money where the government wants it to be.

Opportunity Zones exist in every state and in Puerto Rico. These areas tend to be blighted with some issues … they need some gentrification.

Each governor in the United States was taxed with the job of figuring out what areas in their states needed the most help … and where private enterprise could step up, do the work, and get benefits.

We’re not legal experts … but we know someone who is.

Mauricio Rauld is known around here as the “Anti Lawyer” … but he is actually a practicing lawyer who helps people primarily with syndications.

Since we first learned about Opportunity Zones last year, Mauricio has spent his time discovering the good, the bad, and the ugly sides of these types of investments.

The good side of Opportunity Zones

Let’s start with the good.

Opportunity Zones offer huge tax benefits … four in particular.

The first is that you get to defer the tax from whatever capital gains you’re investment is coming out of.

For example, if you have a piece of real estate … or any other asset, like precious metals, stocks, bonds, even your collectible car … you can take those gains and reinvest within 180 days into a qualified Opportunity Zone fund and defer the tax.

You aren’t deferring the tax indefinitely like a 1031 … but you will get to defer for at least the next seven years … until December 31, 2026.

The second benefit is that if you hold onto your new investment for a period of five years, you get a 10 percent discount on the capital gains you would have paid on the original investment.

Benefit number three kicks in if you hold onto your investment for seven years. Now, you’ll qualify for a 15 percent discount on your capital gains.

The biggest benefit of all … number four on our list … applies after holding your asset for a decade. After 10 years or more, the entire gain from your investment is tax free.

It’s all about taking an appreciated asset, putting it into an Opportunity Zone fund, and not paying taxes right away. The longer you wait … the less tax you pay.

One important thing to highlight once again is that the money you place into these Opportunity Zones doesn’t have to be in real estate to begin with.

A lot of the money we foresee coming into Opportunity Zones hasn’t historically been in real estate. They’re in other types of investments where there are big gains to be paid … like the stock market or precious metals.

As always, talk to your tax professional before making any decisions … but if you are sitting on a big tax gain, Opportunity Zones could be an attractive option.

Another positive … there is very little government interference and regulation on this project.

It’s a self-certification … meaning that whoever is putting together the fund simply checks a box on the first year tax returns to certify that it qualifies as an Opportunity Zone.

During your holding period, the government will check with you every so often to ensure you comply with program … but it won’t be dealing with the SCC or going through an approval and registration process.

The bad side of Opportunity Zones

There are some downsides … the bad … of getting into Opportunity Zones … and really it isn’t so much “bad” as it is things to consider fully before diving in.

The first is a rush for time.

In order to fully gain the benefits … to get seven years under your belt before December 31, 2026 … you need to make the investment before the end of 2019.

That means you will need to liquidate your asset and invest in a fund pretty quickly to get the 15 percent discount.

If you don’t make that deadline, you can always go for the 10 percent … and either way you should want to hold the investment for 10 years or more to make it tax free. If that’s your plan, there is less of a rush.

The other important consideration is the substantial improvement requirement.

This requirement means that if you buy a price of property you must put the same amount of money that you purchased the property for into renovations. The government wants you to improve the property.

This requirement only applies to vertical construction … meaning the buildings, not the land.

So, if you buy a property for $1 million and 20 percent of that is in the land with 80 percent in the building … then you only need to invest $800,000 in improvements.

There are a few exceptions to this rule. If you purchase a piece of property that has been vacant for the last five years … the substantial improvement requirement doesn’t apply.

Remember, the whole idea behind Opportunity Zones is for folks to put private capital to work in revitalizing these areas.

The other important requirement for your property to qualify is that it must involve an active trade or business. This is still a bit of a gray area … but we expect more guidance from the Treasury Department soon.

The ugly side of Opportunity Zones

Mauricio says that when it comes to “the ugly” of Opportunity Zones … a lot of personal opinion comes into play.

Much of the work Mauricio does is with syndicators, and there are pros and cons for them in this type of investment

Syndicators can promote Opportunity Zones as a great chance for investors because of the extensive tax benefits.

But syndicators themselves don’t get the tax benefit for the carried interest.

If this is a traditional syndication, the syndicator will get a cut for sweat equity … let’s say 20 percent.

The investors get 80 percent AND all the tax benefits … but the syndicator will have to pay taxes on the 20 percent they made. They can’t defer that.

This could be ugly … because as a passive investor you want an incentive for your syndicator who is running the project to be excited about the deal.

But on the other hand, most syndicators aren’t going after these deals for tax benefits for themselves. Instead they see them as an opportunity to court capital from a completely new and different source.

Someone who has been in the stock market or private equity or in precious metals that has avoided selling because they didn’t want to pay tax can now work with syndicators in real estate and find a win-win situation.

Another ugly truth … you can’t get into Opportunity Zones alone.

You have to put together a fund … some kind of entity. It doesn’t have to be a syndication … but it has to be a partnership. You need at least two people to get started.

Mauricio also cautions investors to be aware of artificial demand.

Opportunity Zones are designed so that people are investing in areas that they wouldn’t have originally invested in. You’ve got to make sure the investment still stands on its own merits.

Because it is an artificial demand, you could be potentially overpaying for the property in the long run. At some point you could be paying so much more that the tax benefits may not make sense.

Talk to an expert

Think Opportunity Zones might be the right opportunity for you? Talk to your tax professional.

At the end of the day, it’s a tax matter. There are forms to check and rules to follow. You want a tax expert to keep you on track.

And you’ll need an attorney to help you put together a fund, make sure it is structured properly, and ensure the investment itself is eligible.

There are no guarantees in investing … but doing your due diligence gives you the best chance at success.


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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Ask The Guys – Infinite Returns, Gold, Cap Rates, and Cash Flow

It’s your questions and our answers.

That’s right. It’s time for another segment of Ask The Guys … when we hear about the real-world challenges investors like YOU face every day.

We have another great collection of questions from our loyal listeners … covering everything from infinite returns to gold, proper reserves, compressed cap rates, and cash flow.

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 in-the-know host, Robert Helms
  • His go-with-the-flow co-host, Russell Gray

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The ins and outs of infinite returns

Our first question comes from Sean in Durango, Colorado, who wants to know more about the ins and outs of infinite returns.

This is a topic we are pretty passionate about … it was even the theme of this year’s Investors Summit at Sea.

The idea of an infinite return is pretty simple. It means that you’re investing on the house’s money.

In other words, you put up some money for a deal … to buy a property or be in syndication or grow crops … and at some point the deal has paid you back … and you’re still making money.

Maybe that takes a year or five years … but once you get all of your initial capital off the table, everything else that comes in is an infinite return.

Infinite returns are easy to do in real estate … but it DOES take time.

There are lots of different ways to chase an infinite return, like getting creative with financing and syndication … but the core concept remains the same.

You’re earning a return on no money at risk.

Purchasing real estate with other people’s money

Teresa in Claremont, California, wants to know more about using other people’s money to leverage the purchase of real estate.

Does it only work with people who have lots of money for a downpayment? Are there any lenders willing to finance 100 percent of a deal for a buy and hold?

Using someone else’s money doesn’t mean breaking into their house in the middle of the night or stealing from their bank account.

It means showing them the opportunity.

One of the primary sources of other people’s money are lenders. They’re in the business of putting capital to work for their depositors, for their shareholders, and sometimes for themselves.

Lenders put up some of the money for a deal in exchange for some portion of the return or a predictable income stream, like an interest payment.

You can also leverage other people’s money through syndication. If you need $1 million to do a deal, you can raise $100,000 from 10 different people.

There are lots of legal and ethical implications to a syndicated route like this … but it can be a great way to get started passively or if you’re interested in being a full-time real estate practitioner.

A lot of people think they have to have some sort of money to start with to do a deal. It helps … but you don’t have to.

What you do have to have is a deal that makes sense … because it’s going to end up being the collateral or the investment that your equity partners come to.

No matter what, you’re going to have debt … and you’re going to have equity.

The key is to look at how much profit is in the deal and figure out how much of that you can give away to different people for their participation.

And when all of that is done … is there enough leftover for you?

Finding a lender who will cover 100 percent of deal through a loan is tough … and the ones that do will usually be for a primary residence.

Protect your cash flow with reserves

Gary in Scottsdale, Arizona, owns four single-family rental properties.

The question on Gary’s mind is how to deal with the reality of net cash flow … one major expense can wipe out your entire annual cash flow.

It’s real and it happens. It has even happened to us.

We always … always … put contingencies and reserves in our pro formas.

A pro forma is your plan for the property … what you think the income and expenses are going to be.

There are two major places where you will need reserves.

When you buy the property, you can’t put 100 percent of your cash into the down payment and the property. You need to have some in reserve.

Most lenders require this. When you close escrow, they’ll want to make sure that you still have money in your bank account.

We also recommend that you take some reserve capital out of every month’s payment as the rent comes in.

Perform your vital functions … and then put a little bit aside. That amount depends on your projected plan for your property and what needs you anticipate.

The cause and effect of cap rates and interest rates

With cap rates compressing across the country, it has been said that investors should be careful to still maintain a good spread between the cap rate and the interest rate.

Drew in Chicago, Illinois, wants to know if there is a direct correlation between these two factors or if it’s just a general rule of thumb to indicate when a market might be overpriced.

We think this is a great question.

Capitalization rate … or cap rate … is determined using net operating income.

Cap rate doesn’t include anything to do with leverage or your loan … so there is zero correlation between cap rate and the interest rate.

But there CAN be cause and effect.

If interest rates are low and you can borrow money for cheap … you want to borrow more.

And if you want to go out and find a property, you’re going to find a lot of competition because rates are low.

So, you’ll bid up the price for the same amount of income … making the cap rate go down.

Leveraging from gold and real estate

Debra in Alpharetta, Georgia, wants some further insight into leveraging from gold and real estate combined.

Assets like gold and oil are basically proxies for the dollar.

We borrow in dollars. We lend in dollars. We invest in dollars.

When you start looking at the dollar, you see a long-term trend in loss of purchasing power … it’s called inflation.

Real estate investors use inflation to get rich by borrowing money from the future and bringing it into the present when it’s worth more.

So when you borrow … you have effectively shorted the dollar.

You can accelerate that process with gold.

If you look at the history of gold relative to the dollar, it basically stays the same as the purchasing power of the dollar declines.

Gold gives you the opportunity to hold some liquid wealth outside of the banking system and hedge against the falling currency.

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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Agriculture Investing – An Opportunity to Diversify Globally

Everyone needs a place to live … and everyone needs to eat.

Food is the original wealth. The world’s population is growing … and there are more mouths to feed every day!

Investors don’t have to limit themselves to properties with assets like houses, commercial buildings, or shopping malls.

You can harvest dollars from land that doesn’t have anything to do with tenants … and has everything to do with crops.

Agriculture investing is one of the most enduring and common sense investments there is.

Learn firsthand how money CAN grow on trees from a well-seasoned expert in international agricultural investing.

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

  • Your food-for-thought host, Robert Helms
  • His food-loving co-host, Russell Gray
  • Expert agricultural investor, David Smith

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Digging into agriculture investing

We live in a big world with lots of mouths to feed … that means lots of crops … and lots of ways to profit.

In the past, agriculture investing was a difficult business to get in to on a small scale. If you didn’t have huge capital to buy huge plots of land … you were hugely out of luck.

But in the last several years, we’ve seen lots of folks who have figured out a way to let mom and pop play alongside them.

When it comes to investing in agriculture real estate, the pizza theory comes into play … fitting since we’re focusing on food.

Someone buys a large pizza. They take it to a party, cut it into slices, and sell each slice for a little bit of a markup.

At the end of the day, the person who brought the pizza makes a little bit of profit for their effort … and everybody gets to have a slice of something they might not be able to afford on their own.  

In agriculture, somebody buys a large parcel of farmland and puts all the operations and distribution channels in place.

Then, they divvy up a slice of the deal for a small markup to give many small investors the chance to play in that space. We see this as a great opportunity.

Everyone needs to eat

Crops come in all sizes, shapes, and degrees of durability … not to mention that different regions of the world have different opportunities.

In real estate, we often talk about getting the market right. Buying an investment property in the wrong market can get you into trouble.

But with crops, it’s not exactly the same.

It doesn’t really matter where the hungry mouths are … and it doesn’t matter where the food is grown.

Wherever the best farmland is … that’s where you want to buy. With today’s shipping technologies, you can get the food wherever it needs to go.

Another perk of agricultural investment? It is a staple. It meets a basic human need … just like housing.

Everyone needs a place to live … and everyone needs to eat.

And the population … the number of consumers demanding food … is steadily GROWING.

Crops and cash flow in Paraguay

David Smith is an experienced investor. He started in real estate, and for the last several years, he has been involved in agriculture in Latin America.  

After many years living and working in real estate in Latin America, David knew he needed to diversify.

After some due diligence, David decided to invest in agriculture.

“I was so interested in the business model,” David says. “It was a passive, turnkey investment not subject to the whims of the market. I really liked the security of it.”

David landed in Paraguay … a big farming country a bit off the radar … and invested in oranges.

Why oranges?

David says one of the biggest things that struck him about this particular crop was its durability. It also has a great distribution area.

Paraguay imports about 85 percent of all the citrus products consumed in the country.

“We can’t even meet the demand in Paraguay, let alone try to export yet,” David says.

Today, David is expanding to new segments of citrus fruits like lemons, limes, and sweet limes … ingredients that are important in the local diet.

Paraguay is traditionally a row crop producer … foods like soybeans, wheat, corn, and chia. It imports citrus from Brazil and buys greenhouse vegetables from Argentina.

Looking for ways to provide foods locally that are traditionally imported can open up lucrative niche opportunities in agriculture.

By providing a local alternative to imported foods, David provides a cheaper option for local grocers while creating income for his investors.

Going bigger with greenhouses

Like any investment niche, creative solutions can pay off … literally.

In Paraguay, one of the biggest challenges to growing vegetable is the heat.

“Paraguay gets very hot … and when I say very hot, I’m talking Tucson hot. It can be 120, 130, even 140 degrees in many locations,” David says.

The vegetables grown locally under normal farming conditions don’t grow very well. Their growth is stunted, their colors aren’t as bright, and they don’t taste as good as imported vegetables.

That’s where GREENHOUSES come into play.

By growing high-use … and typically high-priced … vegetables in greenhouses, David and his team can provide a local, tasty, and affordable solution to consumers.

This also provides a unique opportunity for investors. Instead of investing in land, individuals can purchase a greenhouse.

Each greenhouse is approximately 26,000 square feet … that’s a good amount of space for growing some green.

Greenhouses are also a popular investment because of their quick returns. Most investors will receive a return after just one year of making their investment.

“It’s a very stable business that runs 24/7,” David says.

And it’s a business that you don’t have to worry about managing. David and his team employ expert staff members that specialize in growing each crop.

These employees are even more motivated to provide extra levels of care, because they share in the profits.

“We offer them bonuses based upon produce amount, not net profit. In turn, they really put a loving touch into their work,” David says.

Determine if agriculture investment is right for you

Most Americans haven’t invested overseas.

There are a lot of reasons for this … but one of the biggest is not understanding how things operate on the ground in a different country.

That’s why having a local team managing the day-to-day of your investment is so powerful … especially in a niche like agriculture.

Just like any other investment opportunity, it’s important to do your due diligence.

David and his team help investors get a feel for agriculture by providing informative tours of their operation in Paraguay … and he also prepared a new, informative special report Citrus Fruits in Paraguay Investments that Grow Naturally.

Whether or not this particular opportunity is right for you, expanding your thinking to a bigger picture of real estate than just houses and hotels is important … and can yield lucrative results!


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Live from the 17th Annual Summit at Sea

Ten amazing days … over 200 people … studying, sharing, learning, growing, and partying … that’s the Investor Summit at Sea!

For 17 years, the Summit at Sea has been the highlight of our year … and we’re excited to share a piece of it with YOU.

We’ve gathered some of real estate’s most successful investors, entrepreneurs, niche experts, and thought leaders to share their insights and key takeaways from the 2019 Summit.

Listen in and learn what these pros discovered … and how it could help you make smarter investment decisions.

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

  • Your sailing host, Robert Helms
  • His flailing co-host, Russell Gray
  • Author and seasteading expert, Joe Quirk
  • Rich Dad, Poor Dad best-selling author, Robert Kiyosaki
  • The Apartment King, Brad Sumrok
  • Marketing mastermind, Kyle Wilson
  • The Godfather of Real Estate, Bob Helms
  • And SO MANY MORE!

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This is the Investor Summit at Sea

The annual Investor Summit at Sea is always a highlight of our year.

It’s a concentrated amount of time with some of real estate’s smartest people … all from different walks of life, different perspectives, and even different countries.

Every year, we learn to ask better questions … clarify our thinking … and do things differently.

Opportunities like the Summit at Sea are rare. In a short time frame, investors become friends, work out problems, and do some business.

We’d love EVERY one of our listeners to join us on the high seas … but we’d need a bigger boat!

So, we’ve brought together some of our fabulous faculty members to share their insights and key takeaways from the 2019 Summit at Sea.

A first glimpse at seasteading

Joe Quirk was a last minute addition to our faculty this year … and we’re so glad he came.

Joe’s real estate niche is seasteading … that’s right … homesteading the high seas.

It’s a novel idea. Joe says that … considering nearly half the world’s surface is unclaimed by any existing nation state … the technology is at hand to create startup countries on the ocean.

“It’s sort of a Silicon Valley sensibility brought to the problem of governance,” Joe says.

Instead of trying to change things from the inside, you create startups and do things better.

The first seastead has been floating off the coast of Thailand since early 2019 … and living there costs less than the average American home.

Joe and his team are ready to scale up … and scale up quickly. But he needs partners with real estate smarts to make it happen.

“We have marine engineers, economists, scientists, and medical experts. We have almost everyone we need, but we don’t have people that know how to structure and sell these things,” Joe says.

We view seasteading as a fascinating new frontier in real estate … and we’ll have more with Joe in the coming weeks.

Look at deals through a new lens

It’s Robert Kiyosaki’s sixth Summit at Sea … and we couldn’t be happier to welcome him back.

“I come to learn as well as to teach,” Robert says. “The Summit at Sea is basically immersion learning for real estate.”

Our port excursion this year was Grand Cayman. This area has undergone an interesting transition over the last few years.

Typically, people think of Grand Cayman as the place where rich people want to hide their money … but it is so much more!

Robert says he learned that how you look at a deal can really change the opportunities you see.

In the case of Grand Cayman, Robert had always looked at the market from the point of view of an investor … but he learned that sometimes it pays to try looking at a market from a developer’s point of view instead.

Through this lens, he could see that Grand Cayman is becoming a target for families. As the economic gap between rich and poor widens on other islands … crime rates are rising.

But Grand Cayman has the lowest crime rate in the Caribbean.

That fact coupled with high standards of living make it attractive to a new housing demographic … not just people looking for a tax shelter.

“There’s a deal of a lifetime every minute if you can see it,” Robert says.

Expand your team, increase your success

The Apartment King, Brad Sumrok, joins us for his third Summit at Sea.

Brad has made apartments his bread and butter … but that doesn’t mean he is done learning and growing.

“I keep expanding my team every time I’m here,” Brad says.

There’s no better way to grow your team than by spending a week and a half on a ship with 200 other people who specialize in a variety of asset classes.

So much of investment success is leveraging other people’s experience.

Last year, Brad says he connected with our good friend CPA Tom Wheelwright … and this year Tom saved Brad seven figures in taxes!

That’s a take away Brad took directly to the bank … and by surrounding yourself with smart people, you can do the same.

Master your marketing one step at a time

We’ve known Kyle Wilson for many years. He is a familiar face on the Summit at Sea … and always has great ideas for how to better market your real estate business.

“So many people are in the real estate business. They’re good at real estate. They’re good at finding markets and putting together teams, but not always solid in their marketing position,” Kyle says.

It’s easy to overcomplicate marketing. At the end of the day, marketing is simply connecting the dots for your customers.

Kyle says the key for real estate investors is to act in a strategic way. Don’t just throw a bunch of stuff at the wall and hope it sticks.

And remember that so much of real estate investing is built on relationships. Never let what seems like a good tactic get in the way of a good relationship.

Kyle is leaving the Summit with a list of ideas and action items … but cautions investors to take things one step at a time.

“You can’t do it all. Pick the one thing that’s screaming at you that will make the biggest difference and start there,” Kyle says.

A wealth of amazing opportunities

If anyone understands the benefits of an opportunity like the Investor Summit at Sea, it’s the Godfather of Real Estate himself … Bob Helms!

We’ve been hosting these cruise ship conferences for 17 years … and Bob has been with us every time.

With 40 years of real estate experience, Bob has seen amazing changes in the way investors make money and grow their opportunities.

“As I look at the group that is here with us today and the diversity of things they are involved in, I can’t help but have a big grin on my face,” Bob says. “The opportunities out there are amazing.”

Bob says his advice to investors is to educate themselves on different locations and asset classes. Find the niche that is right for you … and start building a winning team!

Get on the advance notice list for next year’s Summit at Sea by visiting our website … and listen in to the full episode to hear from even more experts and ideas from our week on the waves.


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Getting Started in Commercial Real Estate Investing

Expanding your portfolio from single-family homes to multi-family deals is a great step … but there are other paths to an even bigger deal!

Commercial real estate investing means bigger properties and bigger opportunities … and it could yield BIG benefits for savvy investors.

From retail storefronts to office space to industrial warehouses … commercial property is full of options … each with their own pros and cons.

We’re excited to welcome to the show a seasoned investor who’s found success in single-family homes, multi-family apartments, and commercial properties. (He really knows his stuff.)

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

  • Your host, Robert Helms
  • His co-host, Russell Gray
  • Founder and CEO of Wilson Investment Properties, Tom K. Wilson

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Considering commercial

Real estate is a resilient product … that’s why so many people are eager to get in the game.

There are tons of ways to invest in real estate. Most investors start with what they know … single family homes. But that’s not the only way!

We see commercial real estate as a great opportunity for beginning investors … and for experienced investors too.

But commercial real estate deals are not all created equally

There are different product types, different lease lengths, and different landlord laws. And then you have to choose between existing properties and new construction.

Tom K. Wilson has done half a billion dollars in real estate with thousands of units in many different places … and he knows the perks of commercial real estate.

Like many investors, Tom started his real estate career in the single family marketplace.

We promote the value of surrounding yourself with smart people …. and that’s exactly what Tom did. He soon realized an interesting pattern.

Most of the successful investors Tom knew were investing in areas away from where they lived. By investing several states away, investors found better deals and growing markets.

So, Tom started looking elsewhere. He found the Dallas market … and his first commercial deal.

Dallas was more landlord friendly than Tom’s resident Bay Area. It also offered more consistent cash flow and held up well during the recession.

Tom noted that there were some serious benefits to owning a commercial property as opposed to single-family homes or multi-family deals.

After the 2008 crash, these types of commercial deals were performing better than their residential cousins … and they tended to come with a higher level of professional management.

Typically when we talk about commercial property, we’re talking about leasing your property to a business rather than a person.

It could be a retail establishment, a strip mall, an office, a restaurant, a gas station, a bowling alley, or a manufacturing facility … it’s all commercial!

Like every asset class, there are pros and cons to investing in each type of commercial property.

Investing in industrial

Industrial properties can include warehouses, operation centers, distribution centers, and manufacturing sites.

Professional tenants that pay for a long time are one of the best things about industrial assets.

They’re also very versatile … a variety of businesses can use a property with wide open space, offices, and loading docks.

When searching for an industrial property, note rooftop expansion and passing traffic. Can the site offer prominent enough visibility to attract major brands?

Determine the path of progress for the community … this can signal if the area has the breadth of economy to support a big business.

Tom comments that manufacturing sites in particular could offer great opportunities for future returns as manufacturing makes a comeback in the United States.

The downside of industrial sites … they tend to be a single tenant product. If your tenant goes bankrupt, you’re left searching for a new source of cash flow.

“The odds of that happening are very low if you’ve done your due diligence during vetting,” Tom says, “so all in all I tend to consider the right industrial property a very good product.”

The details on retail

If you think everything is bought online … think again.

You can’t get a haircut online. You can’t meet your buddy for a drink online. You can’t take your dog to the vet online.

Everyone needs a place to live … and they often pick where they live based on where they can access essential services.  

“Retail has become a four-letter word for many investors,” Tom says. “I prefer to call these types of assets ‘neighborhood service centers’ because that is the key.”

Many large retailers are expanding their brick and mortar stores despite the online shopping craze … and online retailers like Amazon are investing in brick and mortar locations to build their brand.

Like any asset class, there’s the good, the bad, and the ugly … but don’t discount retail without the proper research.

Operating in office space

Every day, people wake up and go to work.

It’s true that more and more people are working from home … but there are still daily needs for human interaction in business.

“I don’t think it is realistic to believe we’re going to see the day where everybody’s working from home,” Tom says.

Both single and multi-tenant office spaces offer excellent opportunities for commercial deals.

Tom recommends looking for office spaces that combine work centers with service centers as the demand for more office space near entertainment venues and amenities rises.

Having an experienced team or partner on the ground that knows the area is especially important when buying office spaces. Locals will have the best read on where people want to spend their nine to five.

Commercial success through syndication

You don’t have to have a lot of money to get started in commercial real estate.

Tom has built his commercial real estate portfolio through the power of syndication.

At some point, you run out of your own purchasing power … you’re out of dollars and cents but not out of enthusiasm, passion, or expertise.

“Syndication is the law of compounding,” Tom says, “not just in numbers but in education, wisdom, and relationships.”

Partnering with those that have a proven track record, established credibility, and integrity sets you up for investment success.

And by combining financial assets, you can do bigger deals and see bigger returns together than you ever could alone … especially in the commercial space.

Like any investment, education is key.

Learn how to leverage experts through syndication and tips for successful commercial deals in Tom’s special report Commercial Real Estate – The Best Investment Secret.

Whether it’s your first deal or your first step into a new market, consider taking a look at commercial real estate investments to make equity happen.


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Resort Rehab Riches

Houses aren’t the only properties in need of a little facelift. Hotels often need their own dose of tender loving care.

Like any investment property, resorts come in all shapes and sizes … and some have major management issues.

When a hotel is poorly the managed the result isn’t pretty … it’s often downright ugly. But that means YOU have an opportunity to add value, improve cash flow, and build equity.

Listen in as we visit with two hospitality investors who find fun and profit as they renovate resort properties.

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

  • Your resourceful host, Robert Helms
  • His relaxed co-host, Russell Gray
  • Accountable Equity’s professional resort investors, Josh and Melanie McCallen

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Resort rehab done right

Resort properties offer some of the highest returns on investment of any asset class. They are an attractive real estate deal … but one that can easily be mismanaged.

When our guests, Josh and Melanie McCallen, see an ugly, non-performing resort property, they don’t see a failure … they see an opportunity.

Josh and Melanie’s team at Accountable Equity renovates and revitalizes resorts. By creating higher-quality resorts, they create more income … and more value.

But to correctly rehab a resort, you need a deep understanding of AND passion for the hospitality industry.

Most of us don’t have that. So, partner with someone who does.

The beauty of Josh and Melanie’s business model is syndication. You can be a passive partner with an active investment and see phenomenal returns.

Resort rehab done right means everyone wins … investors, staff, and guests.

Finding a home in hospitality

When they graduated from college, Josh begged Melanie to buy a duplex as an investment. They’d live in one home and rent out the other.

“I had to let go of the three-bedroom, white picket fence idea in my mind, but right away I knew what I got into,” Melanie says.

Over their real estate career, Josh and Melanie found themselves taking part in resort experiences across the globe and partnering with developers of specialty properties.

Then the recession of ’08 happened. Suddenly, Josh and Melanie were sitting on a beat-up 1970s beachfront hotel.

It was too risky to tear it down and start new development … so they decided to rehab the property instead.

“That first project was 18 months of getting our teeth kicked in, but we learned that hospitality isn’t just about the building,” Josh says. “It’s a living, breathing guest experience.”

The couple realized that they LOVED interacting with guests and putting smiles on their faces. They fell in love with hospitality … and decided to make it their life’s mission.

The benefits of a resort investment

A rehabbed resort is one real estate investment where the person paying the rent doesn’t begrudge writing a check at all.

When you’re on vacation, you want to splurge. You want to enjoy yourself and your experience … and you’ll gladly pay more to do so.

Hospitality professionals know that the happier you make guests, the more enjoyable the visit will be.

As an investor, YOU know that happy guests mean high returns.

Resorts also offer a unique opportunity to increase revenue.

There are two ways to make more money … find more people to sell the same thing to or find more things to sell to the same people.

The hospitality business allows investors to do both with relative ease.

And when you invest in a resort property, you have the added benefit of being able to enjoy your own investment … by taking a vacation.

The success of a syndicated approach

Josh and Melanie started Accountable Equity as a syndicated approach to resort rehab.

“The first thing you must do when thinking about buying one of these properties is find great investor partners,” Josh says.

Each month, Josh and Melanie host an investor summit. They bring together current investors, new investors, and prospects to tour the property and get a firsthand look at hospitality in action.

These summits are an invaluable time to help investors see how revenue from different parts of the resort build off each other.

When a party arrives for a wedding, they’ll book rooms. Since they’re staying on site, they might want to play a round of golf or spend time at the spa. They’ll need to eat, so they’ll hit up the restaurant and tasting room.

“We call it a cascade of revenue,” Josh says.

Syndication is a powerful approach to every aspect of hospitality. Beyond investment, the syndication spirit encourages team members to seek out experts in every field.

“In our current project, we’re bringing in a top winemaker for the winery. We found a golf executive on his 111th course to help with ours. It’s all syndication,” Josh says.

Teaming up for transformation

Accountable Equity’s current project, Renault Winery Resort, shows just how powerful … and profitable … revitalizing resorts can be.

As the third federally registered winery in America, the property has been in the hospitality business for 155 years.

The former owner managed the resort for 40 years, but over time began to let standards deteriorate under stress.

“We found this amazing property that needed some TLC. But we were willing to take a fresh approach, look at it differently, consider its legacy, and see its next chapter,” Josh says.

The team also studied market drivers in hospitality to determine if the resort could evolve to meet current and future needs.

With a millennial movement toward authentic experiences, a historic property … complete with a Prohibition-era speakeasy … spells out attraction.

And with nearly half of weddings taking place at a destination over the course of three days, a resort that caters to making happy couples’ special day extra special can generate big business.

It’s no small undertaking. Managing and rehabbing 120,000 square feet of buildings and 242 acres of vineyards, a golf course, and a spa requires a winning team.

“Our staff and our investors are our family. We all depend on each other, and honestly, it’s an honor to be a part of,” Melanie says.

Take part in a unique real estate niche with resort rehab investment. Learn tips and valuable lessons for getting started in a special report from Accountable Equity, 10 Steps to Resort Rehab Riches.

No matter your market of interest or area of expertise, consider what you can learn from the rehab-and-syndicate model of luxury hospitality investing.

What value can you add to your properties … and how can you leverage others’ expertise to increase YOUR bottom line?


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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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Market Spotlight – Markets on the Move

People, businesses, and their money move around for lots of reasons. New jobs, better opportunities, tax incentives, high returns … the list goes on and on.

Savvy investors monitor these constant migrations. They look for patterns and take action to capitalize on opportunities and avoid risks.

All this movement affects supply and demand … especially for real estate. So today, we’re taking a look at some of the many factors moving markets today.

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

  • Your savvy host, Robert Helms
  • His sassy co-host, Russell Gray

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Read the signs in moving markets

We talk a lot about specific markets that are providing great opportunities for investors right now … but what about a year from now? Five years? Ten?

If you want to stay ahead of the game, you need to know how to read the signs of a market on the move.

It’s important to remember that it isn’t the property that makes you money … it’s the people.

A market is made up of people and businesses that have a relationship with real estate. That’s what makes it valuable.

The more tenants you have in properties that you own, the more positive CASHFLOW comes in … and the richer you become.

When you look at markets, the main thing you are looking at is supply and demand. Are people leaving? Are people coming in?

Then, you need to ask why people are moving in or moving out. There are always underlying factors that affect where and when people move.

As you work to identify these factors, you’ll begin to recognize patterns and principles … information that will enable you to spot emerging trends in other markets and get ahead of the pack.

The power of politics and trade

An article in Bloomberg Business Week points out the upside of a global downturn … juicy real estate deals.

Worldwide, many high-end home prices are being slashed by as much as 30 percent. This market information gives us some interesting clues.

These price cuts could indicate future opportunities … these markets could move!

If you’re looking to flip properties, you could purchase real estate now and have a good chance of selling it in the future for more … and not just because of the equity you put into it to add value.

Take a market like London, for example.

London has a reputation for being super expensive. But sellers of high-end homes are slashing their price tags.

When you do your research, you can discover some of the underlying factors contributing to this lower asking price. Recent changes to tax codes, Brexit, and a surge in populist thinking are just a few.

So, people with the means and ability to move to a more friendly jurisdiction will do it.

But London has a historically great real estate market … when things settle down, there’s a predictable chance prices and demand will shoot right back up.

Sydney, Australia, finds itself in a similar situation. The median home price is down 6 percent year over year since last year.

Australia has an economy that is largely driven by supplying commodities to China. But China is experiencing a slowdown, and Australian markets are feeling the impact.

When you’re looking at markets, you’re looking for clues … and international politics and trade can be powerful factors.

Hong Kong has been a strong real estate market … but like many parts of the world, real estate there is tied to U.S. dollars.

The market is down 10 percent since August of last year and is predicted to be down another 10 percent by 2020.

When you’re looking at moving markets, that’s not necessarily a bad thing.

Populous markets have a lot of drivers … and in Hong Kong those drivers have caused prices to go down quickly. That doesn’t mean they won’t go back up.

Hong Kong is generally considered to be very safe for property rights, personal liberty, and financial stability. It’s an economic capital in that part of the world.

All of these factors are clues that tell the smart real estate investor it might be worth digging deeper to determine whether a market has a good chance of turning upward.

If it does, a temporary downturn can be a lasting opportunity.

Clue in on taxes

There are plenty of markets on the move within the United States … and a lot of that has to do with taxes.

Any time you have changes in the tax code, you will see changes in the way people invest their money. It’s an essential clue in identifying market trends.

New York City is the perfect example.

For the first time in a long time, the median price of condominiums in Manhattan has dropped below $1 million. That’s DOWN 6 percent from a year ago.

Under the previous tax code, you could deduct your state and local taxes from your federal income tax.

If you lived in a high-tax state like New York, you could mitigate a lot of those high taxes by simply deducting them from your federal liabilities. You can’t anymore.

As a result, markets like New York City and California’s Silicon Valley are moving down … and low-tax jurisdictions like Las Vegas, Phoenix, and Florida are moving up.

Learn from moving markets

You might never invest in London, Sydney, Hong Kong, or New York … but you CAN learn a lot by looking at why those markets are moving.

Markets move in different direction for different reasons. The more you understand, the more easily you can identify patterns in the trends occurring in your market of choice.

Studying markets on the move is an invitation for you to do the research. A market that works for one investor doesn’t necessarily work for another.

Markets have personalities … just like people.

You wouldn’t marry somebody just because they were the first person you talked to or because your best friend thinks they’re interesting.

You decide on your own investment life … where you want to be, and what you want to be doing.


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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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