Retire Rich With Real Estate

I Bought This House Sight Unseen! Property prices have increased so fast that many houses we used to buy for deep discounts are selling at premium prices. I know a great deal when I see one and this property was just what we have been looking for. http://www.retirerichwithrealestate.com/ #RentalProperty #BuyingSightUnseen #Cashflow

How to play Rich Dad's Cash Flow online for Free! I think it is a very good educational tool for learning how to invest in real life!

How we recently expanded our storage facility with prefabricated buildings! http://www.retirerichwithrealestate.com #selfstorage #selfstorageinvesting #retirerich

In this video, we go through three separate tenant move-outs over three consecutive years. Showing any damages and the condition of the property after each tenant. #TenantDamages #MoveOutDamage #RentalTurnoverCondition HTTP://retirerichwithrealestate.com

Buying a condemned property, what a nightmare! Learn some of the pitfalls of buying a condemned property. #CondemnedPropertyNightmare #CondemnationRenovation #Catch22Condemnation http://retirerichwithrealestate.com

When I started in real estate I didn’t have a mentor or anyone helping me navigate the minefield that is investing in real estate. Here are five things I wish someone had told me when I was starting out. 1. Start small – My first property was a duplex. I know, a duplex is not exactly a huge property, but owning a multi-family property is a different animal and comes with many more potential problems. For example, I found out after I purchased the property, that here in Tennessee, any rental property with 2 or more rented units is considered a commercial property for property tax purposes. Of course, the commercial tax rate is 15% higher than the standard residential rate. When I researched the property the taxes were calculated at the residential rate. A previous owner (not the one I purchased from), several years earlier, had apparently lived in one side and rented the other making the property qualify for residential tax rate status. The state had apparently missed the fact that it was no longer owner-occupied and both units were being rented until my sales transaction was recorded. During my pre-purchase property analysis, I had based my cash flow numbers on previous tax bills which were now going to be considerably higher. I was concerned because I financed the property and my numbers were tight. Fortunately, when the dust settled, it still cash flowed and soon thereafter, I was able to raise rents to the current market rates. Thus increasing my cash flow. 2. Screen all tenants – In 2002, when I start investing, tenant screening wasn’t as easy or as common as it is today. After I got burned by a bad tenant, I learned quickly not to trust what people say and to verify everything. Back then we had to use paper applications that were physically signed by the tenant. Then fax them to a screening company and wait for up to 24 hours to get a reply. Now we use electronic applications and can get a response in a few minutes. These screenings cost me a few bucks but are worth every penny. I used to not charge an application fee, but I realized some people would fill out applications knowing they have a bad history (credit, criminal, or rental) because they had nothing to lose. I got tired of paying for bad reports. Charging a fee, and shifting the cost to the prospect, weeded out a lot of these bad applicants. 3. Cash flow is king – Never buy a property that doesn’t cash flow well. In the beginning, I was using a 1% rule for gross income to find a deal. This means that if I paid $100,000 for a property then it should rent for $1000 (1% of $100k) per month. Now, I wouldn’t even look at a deal lesson with less than a 1.5% gross rent per month. This comes from experience, as you get better at finding deals you also should get better at analyzing and negotiating deals. Once I did a little research, I found that my first property was rented under market rate. So as soon as the tenants turned, which wasn’t very long, I raised the rent. Which raised my return. 4. Pay Cash – This may not be an option for you, especially in the beginning, but having the ability to pay cash for a property gives you a huge edge in the negotiation stage. While other investors make offers with financing contingencies your offers can be cash with a quick close. The cash does not have to be your cash, it could come from a hard money lender, a friend, a relative, or a Home Equity Line of Credit (HELOC). Taking the contingencies out of the deal is the key. The best deals are almost always purchased by a cash buyer! 5. Be prepared to move quickly – When I was looking for my first property, I couldn’t afford to pay cash for it. I knew I would have to finance the property. This meant every time I submitted an offer I had to make it contingent on financing. I also did not know how to properly inspect a property, so I also included a contingency for a property inspection with all my offers. This caused me to miss many deals, early on. Contingencies slow down the deal process and make your offer less attractive to the seller. Most of the truly good deals on properties sell quickly and many times have multiple offers. This means the seller can often choose the best offer from those submitted. If you have another investor making a competitive offer consisting of all-cash with a quick close, that is very appealing to a seller. I wasted a lot of time chasing deals I had no chance of ever getting, only because of my contingencies. http://www.retirerichwithrealestate.com #StartSmall #ScreenTenants #PayCash Chapters 0:00 Start 0:39 Start Small 6:56 Screen All Tenants 15:29 Cash Flow is King! 18:44 Paying Cash 21:56 Be Prepared to Move Quickly 23:52 Conclusion 24:10 Outro

2021 was a year much like 2020, with the rising real estate prices we had a difficult time finding rental properties for sale that make sense for us to buy. We were able to pick up one rental house back in the spring. Shortly after we bought that one we had lunch with a wholesaler friend of ours. He was telling us how he and his brother had just bought a small self-storage facility. After telling us about how he found and structured the deal, he said they really liked the business model and they were trying to find another, possibly larger one, to purchase. We told him we had also looked into investing in the storage business and would be interested if he found any storage facilities that he wasn’t interested in buying, to let us know. Well probably about two weeks later, he called us and said he had found a small storage facility that might be for sale off-market. We told him we were definitely interested.

How Leverage works, the benefits of using leverage, and the potential pitfalls. Leverage is the use of financing to borrow capital for investment, with the expectation that multiplying the risk-reward relationship of the investment will create more potential profit. In other words, the more money you invest, the more risk you have and the larger the reward (profits) you receive, if all goes as well with your investment. The difference between paying cash and financing Let us assume you have $100,000 to invest and want to purchase a rental property. You find a rental property for $100,000 and you decide to finance that property with a 20% down payment at 5% interest. If that property rents for $1,000 per month, it is making a 12% gross annual return. After you deduct the mortgage interest you are making a net of 7%. That’s a pretty good return and you didn't have to spend the full $100,000 to get it either. You only spent $20,000 out of pocket for the down payment. Thus leaving you with $80,000 cash left to invest in other properties. Assuming you could repeat the example above you could purchase 5 properties using financing and your $100,000 cash. Giving you a gross income of $60,000 per year and a net income of $35,000 after mortgage interest. If you pay cash to buy one property you’ll have to spend all of your $100,000 and you’ll make 5% more profit per year because you don’t have a mortgage. Now here is where the leverage kicks in, on the cash deal you have a $12,000 per year rental income, which is a 12% return vs. 7% per house in the 5 house deal. But financing 5 houses using the $100,000 as a down payment (5 x $20k) gives you a $35,000 per year rental income or 35% return. So using leverage in the scenario gives you almost 300% more income! Mortgages are usually some of the cheapest money you can borrow because the loans are backed by the asset of real estate. Mortgage rates are currently at historically low rates. If you choose to finance, I would only finance properties with a fixed-rate mortgage. The advantage of financing real estate with a fixed-rate mortgage is the rate is locked in and cannot be raised for the term of the mortgage. Another great advantage is you also have the ability to refinance if the interest rates go down or keep the lower rate if rates increase. So they are win-win. Variable-rate and interest-only mortgages might be available at slightly cheaper rates, but the risk of the rate increasing as the loan matures is much higher. For that reason, I would avoid these types of mortgages. #HowLeverageWorks #UsingLeverage #LeverageVsPayingCash HTTP://www.retirerichwithrealestate.com Chapters: 0:00 - Start 0:34 - Intro 1:00 - Using Leverage Vs Cash 2:40 - Mortgage Rates 3:34 - Appreciation 4:15 - Leverage Example 4:40 - Leverage Chart 1 Finance vs 1 Cash Deal 6:33 - Leverage Chart 5 Finance Deals vs 1 Cash Deal 8:50 - Cash Flow is King 9:32 - Most People Don't Have the Cash 10:26 - The Benefits of Using Leverage 10:48 - Negatives of Using Leverage 11:20 - Conclusion 12:26 - Outro

Kiyosaki vs Ramsey Who is Right About Using Debt? Robert Kiyosaki and Dave Ramsey are probably two of the biggest names in personal finance today. But they have almost polar opposite views on financing and investing. For those not familiar with these two, Robert Kiyosaki is the author of the best-selling book Rich Dad Poor Dad, which he has now turned into a series of books, and a brand of educational games and other media. Dave Ramsey is a best-selling author, a nationally syndicated radio host, and owner of Ramsey Solutions, an educational company that sells personal finance training programs. Robert Kiyosaki became famous for teaching such unconventional notions as “Your home is not an asset”. Here’s how he defines assets and liabilities, “ An asset is anything that puts money in your pocket every month, and liability is something that takes money out of your pocket every month”. He also believes you should “never say, ‘you cannot afford something’. That is a poor man’s attitude. Instead ask yourself, ‘How can you afford it?’”. These unusual concepts are what made him popular and helped him take the personal finance world by storm. His philosophy on debt is that it should only be used to finance assets like rental properties, not liabilities like cars, boats, and as he says, “doodads”. He believes the key to investing is to leverage your assets to maximize your ability to purchase more assets. Which on some level makes sense because you can grow your investment portfolio much quicker. But this is not without risk! #DaveRamsey #RobertKiyosaki #BestAdvice How I Use Real Estate to Pay for My Truck https://www.youtube.com/watch?v=G6_UDWoelCY HTTP://www.retirerichwithrealestate.com

10 Reasons Why You Should Use Real Estate to Building Wealth! What other investment offers you all these benefits? Monthly Income, Appreciation, Tax Deductions, Real Asset, Control, Financing, and more! Find out why real estate is the best investment for building wealth and creating passive income! http://www.retirerichwithrealestate.com

Financial Advice for 20 Yr Olds - Do This Now! 12 things all young adults should be doing to secure their future financial success! Investing and Compound Interest https://youtu.be/t6KjAQ8Kh68 Using Real Estate to Pay for College https://youtu.be/nVH1jyl6Ipk http://retirerichwithrealestate.com

Why Low Inventory is Killing the Rental Market. The current low levels of housing inventory are drastically driving up house prices. Which in turn, means the buy and hold investors, who fix and rent properties, are now finding it hard to afford to buy distressed properties. This means fewer rentals are being added to the market and when they are added the rents are going to be higher! #lowinventory #buyandhold #rentals https://www.retirerichwithrealestate.com

How to Find a Good Tenant. #RealEstate #Investing #FindingGoodTenants #RetireRich For more info: http://www.retirerichwithrealestate.com

Renovation of Ontario Ave Property in January 2011. #RealEstate #Investing #CreateCashFlow #Renovation #RentalProperty For more info: http://www.retirerichwithrealestate.com

I purchased a house for 33% of After Repair Value (ARV) & now rent it to make a 30% Annual Return on Investment (ROI)! How I use real estate to generate wealth and income! Real Estate is the best investment for retirement! #RealEstate #Investing #BuyingBelowMarket #CreateWealth #CreateCashFlow For more info: http://www.retirerichwithrealestate.com

Mulberry Rehab Project 2016 -- Video showing before and after photos of rehab to a house purchased in early 2016. #RealEstate #Investing #Renovation #CreateCashFlow For more info: http://www.retirerichwithrealestate.com

6 Reasons to Use Real Estate to Save for College If you have young children you probably have thought about the constantly increasing cost of a college education and how you’re going to be able to afford to send your children to college. After my first child was born I began to seriously think about this problem, I looked into stock plans, college savings plans, and other investments but here’s what I did. When my oldest daughter was almost 2 years old, I decided to take a couple of thousand dollars and use it as a downpayment to buy a rental property. I was able to find a great deal on a duplex that would cash flow well. The duplex made enough every month to make the mortgage payments and other expenses. It actually netted a couple of hundred dollars a month in profit, which I set aside for larger expenses. This property completely paid for itself. My oldest daughter just turned 18 and while I had intended to keep this property and continue to use the cash flow to help pay for her college tuition. It had greatly increased in value over the last 15 yrs and about a year ago someone made an offer to buy the property for a good profit. So, I sold it! I now have a large cash profit in the bank. This money will be there when she graduates from high school this spring. Ready to be used for upcoming college expenses. Why did I choose Real Estate? Leverage - Simply put, the ability to finance real estate gives you great leverage. I could not borrow money from a bank to buy stocks. Cashflow - Monthly spendable (or saveable) cashflow. While some stocks pay cash dividends, and you can have the dividends reinvested (used to buy more shares), that is not guaranteed nor is the price of your stocks. 529 College Savings Plans have some tax advantages but they are usually invested in stocks or mutual funds. If the market was to crash close to your target date, it might take years to recover. Having lived through and lost money in the tech bubble of the late ’90s. I didn’t feel like stocks were a safe option anymore. Pays for itself - After the initial downpayment and closing cost, I never invested another dime of my money into the property. Real estate made sense to me because I knew if I found the right property it would pay for itself. Appreciation - Real Estate has a great potential for appreciation. While it is not guaranteed, (remember the 2007 real estate bubble) over a long period of time it is highly likely to appreciate. Control - If you invest in mutual funds or stocks you have no control over the businesses that you are invested in. You are only along for the ride. Owning real estate allows you to control your investment. You decide whether or not to personally manage your property or hire it done, how much to charge for rent, and how to handle repairs, etc. Options - In my situation, I knew the property would be paid off in 15 to 20 years. Just in time for college, and with no mortgage payment the cash flow would increase, giving me a spendable income to use towards her college expenses. Of course, the other option would be to sell the property and cash out. Which is what I did. I was so convinced this was such a good idea when my second child was born a few years later, I bought another duplex with the same plan in mind. I still own that property for now. I was able to take a couple of thousand in cash and turn it into tens of thousands of dollars in profit. Unlike a savings plan or mutual funds, this was not a hands-off, set it and forget investment. It did take some work, time and effort to manage and maintain the property over the years. This small amount of time and effort was well worth the reward. I don’t think I could have made as much profit with any other investment. Especially when you consider how small the risk of loss was. If you have a little bit of cash and want a safe profitable investment, consider investing in real estate. #College #Tuition #PayingforCollege #SavingforCollege #StudentLoans #StudentDebt #StudentLoanDebt #CollegeDebt #StudentLoanCrisis #GirlDad #FinancialIndependenceRetireEarly http://www.retirerichwithrealestate.com