Real estate gives you bigger pockets

By | October 29, 2014

Real estate. I am an real estate investor. I have rental properties. Something on the side, something my wife and I do on the weekends. I am a firm believe in real estate as an asset class for many reasons:

  • Everyone needs housing
  • Real estate gives you leverage because banks will loan you money
  • Real estate values tend to increase with inflation
  • Interest rates are at a multi-decade low
  • If done correctly it is passive income
  • It is tax advantages because of depreciation
  • It is an imperfect market (unlike stocks), so  you can find good deals
  • It is a people business; real estate people are willing to share
  • From our experience, it is a solid way to get 8% annually

Real estate can teach you. From real estate you can learn so many things – negotiations, sales, marketing, accounting, and finance. Many of the wealthiest people invested in real estate. No surprise. It works. Time helps your money grow.

Bigger Pockets.com. This is a website, forum where thousands of investors share their experiences and wisdom. There are also 80+ podcasts where successful investors share their stories – good, bad, and ugly. You can learn an enormous amount on these podcasts. This is the type of learning that will help you retire 10 years earlier.

There are numerous real estate books, but don’t overlook this website, forum, and podcasts. It is a free resource and excellent. Some good podcasts to get you started.

Podcast #2: Karen Rittenhouse. Great blog: http://www.karensperspective.com/

  • Real estate investing can start out small.  You have to try it.
  • Always be “above board” and honest with people
  • Continually learn.  Karen went from 5 houses to 100+
  • Use outsourcing; her favorite direct mail – postcardmania

Podcast #10: Jay Scott. Great blog: http://www.123flip.com/

  • You don’t have to be an extrovert to succeed at real estate
  • To create passive income, you have to set up systems; cannot do it all yourself
  • If you create a good business model, investors will find you and give you money
  • The best way to find a contractor is to go to Home Depot at 730 in the morning – those guys are dedicated, planning the day’s work ahead of time, are busy
  • “Always have 2, 3, or 4 exit strategies as a backup on your house flips”
  • “Those who do best in this industry are those who work ON their business, not IN their business”

Podcast #13: Leon Yang

  • Leon decided not to get an MBA because he saw so many good real estate deal.  He move to Las Vegas because it had the best investment profile
  • Believes now is the best time to leverage up on real estate: interest rates low, lots of potential inflation (“Bernanke is just throwing money out of helicopters”), banks are lending again, many houses are below replacement costs
  • “Inflation is a borrower’s friend.”
  • Do what you enjoy . . .even if you don’t succeed, at least you had a good time

Podcast #49: Amanda Han

  • Great intro to depreciation, 1031, and other tax considerations
  • How to find a good real estate-focused CPA

Podcast #56: Ankit Duggal

  • Fascinating, but not for everyone – investing in tax liens
  • Incredibly strategic and thoughtful guy
  • Capital-intensive, but hugely profitable, finance-side approach to real estate

Podcast #92: Brandon Turner

  • Podcast of Brandon – cohost of the show
  • How he started from basically nothing
  • Link in with Kurt Cobain, Nirvana

Podcast #108: Grant Cardone

  • Powerhouse of a speaker and personality
  • Aims to be a billionaire through real estate; currently at $350M
  • “What makes you think happiness is even on my radar?”

Podcast #113: Jay Papasan

  • Co-author of multiple books with Gary Keller (Keller Williams)
  • Power of focus and compound (great domino example)

Podcast #135: Brian Adams

  • From CPA to real estate investor / financer
  • From 2 to 276 units
  • Working with partners, syndication; big league

Podcast #155: Sharad Mehta

  • Plowing $$ from savings into buy and hold
  • Learning how to be MORE efficient with out-of-state rentals
  • Being smart and running numbers

Podcast #170:  Andrew Cushman

  • Engineer by training, 24 flips in 6 years then. . .
  • Syndicating loans for out-of-state apartment building buy-fix up
  • Huge testament to hard-work, willingness to stick with a system
  • Monster ROI numbers; $1.7M (purchase and fix up) of 92 unit apartment in Macon, GA.  Listed at $3.1M.  Rents originally at $8K a month / now $30K+

Podcast #180: Devin McClish

  • 28 deals by age 23
  • Currently building 17 houses
  • Huge focus – so much to learn from this guy 1/2 my age

For all the consultants out there. Remember, always look for ways to scale your work, your business, your income. Most of us are time = money. Time is precious, and we all need way to diversify our income. Ways to have your money work for you.  Even if it is not real estate, find ways to create more passive income. Best of luck.

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4 thoughts on “Real estate gives you bigger pockets

    1. consultantsmind Post author

      I am not a financial advisor, but that seems like a bad idea for a few reasons: 1) margin % fluctuates 2) you will get a margin “call” if your leverage gets too high 3) the margin rate is higher than most typical mortgages 4) the loan amount they will give you for margin will be <50%, less than what a bank would loan you for leverage on a property 5) stocks have volatility, beta, which could create a margin call 6) looks like REIT yields are 3-6% right now, which is not worth the stock risk 7) your profits are taxed as a dividend rate. . not tax advantaged like a rental property might. My opinion only,

  1. sandeep

    Are you a genius or what? I am going to only eat what you eat from now on.

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