Get Rich Education

Real Estate Investing with Keith Weinhold

This show has created more financial freedom for busy people like you than nearly any show in the world. Wealthy people's money either starts out or ends up in real estate. But you can't lose your time. Without being a landlord or flipper, you learn about strategic passive real estate investing to create wealth for yourself. I'm Show Host Keith Weinhold. I also serve on the Forbes Real Estate Council and write for Forbes. I serve you ACTIONABLE content for cash flow on a platter. Our bottom line in real estate investing together is: “What’s your Return On Time?” Where traditional personal finance merely helps you avoid losing, you learn how to WIN. Why live below your means when you can expand your means? Since 2002, international real estate investor Keith Weinhold owns multifamily apartment buildings to single family homes to agricultural real estate. New episodes are delivered every Monday.

Start Here
417: Laptop Landlords
4d ago
417: Laptop Landlords
You want to increase your expenses. I reiterate why. All five ways that real estate pays are rarely surging at the same time. In the past year, appreciation has slowed, cash flow rose, principal paydown slowed, tax benefits are roughly the same, and inflation-profiting rose. How do you become a “laptop landlord” and know that you’re buying a good property? I share my favorite resources for real estate due diligence (laptop landlording). They’re all in the “Resources Mentioned” below. One mistake people make is that they tend to overgeneralize. They paint an entire city one color, saying something like: “I read that Memphis has high crime.” Well, where within Memphis? You can contract with an out-of-state stranger to check out a property for you at WeGoLook.com Aundrea Newbern, COO of GRE, MBA, NAR member (the woman with all the letters behind her name) joins me. She discusses her top real estate successes and failures. We discuss floods, old cast iron pipes, partnerships, single-family vs. multifamily, LTRs vs. STRs, and the opportunity cost of waiting to buy property.  At times, if third-party inspectors see an issue, they refer you to specialists like foundation or mechanical inspectors. Resources mentioned: Show Notes: www.GetRichEducation.com/417 Due diligence resources: ATTOM Data Solutions, Redfin, CoreLogic, Zumper, Altos Research, John Burns RE Consulting, Neighborhood Scout, Google Street View, WeGoLook.com, bls.gov, US Census, FRED, GREmarketplace.com  I’d be grateful if you search “how to leave an Apple Podcasts review” and do that for this show. Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
417: Laptop Landlords
4d ago
417: Laptop Landlords
You want to increase your expenses. I reiterate why. All five ways that real estate pays are rarely surging at the same time. In the past year, appreciation has slowed, cash flow rose, principal paydown slowed, tax benefits are roughly the same, and inflation-profiting rose. How do you become a “laptop landlord” and know that you’re buying a good property? I share my favorite resources for real estate due diligence (laptop landlording). They’re all in the “Resources Mentioned” below. One mistake people make is that they tend to overgeneralize. They paint an entire city one color, saying something like: “I read that Memphis has high crime.” Well, where within Memphis? You can contract with an out-of-state stranger to check out a property for you at WeGoLook.com Aundrea Newbern, COO of GRE, MBA, NAR member (the woman with all the letters behind her name) joins me. She discusses her top real estate successes and failures. We discuss floods, old cast iron pipes, partnerships, single-family vs. multifamily, LTRs vs. STRs, and the opportunity cost of waiting to buy property.  At times, if third-party inspectors see an issue, they refer you to specialists like foundation or mechanical inspectors. Resources mentioned: Show Notes: www.GetRichEducation.com/417 Due diligence resources: ATTOM Data Solutions, Redfin, CoreLogic, Zumper, Altos Research, John Burns RE Consulting, Neighborhood Scout, Google Street View, WeGoLook.com, bls.gov, US Census, FRED, GREmarketplace.com  I’d be grateful if you search “how to leave an Apple Podcasts review” and do that for this show. Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
416: War Against STRs, Tenant Retention, Mortgage Lessons
Sep 26 2022
416: War Against STRs, Tenant Retention, Mortgage Lessons
Residential real estate has greater usefulness and is easier to understand than: agricultural, office, retail, industrial, and warehouse real estate sectors. Tenants are staying in both SFRs and apartments longer than before. I discuss three reasons for today’s longer tenant retention trend. Higher mortgage rates correlate with higher home prices. In fact, in the nine times mortgage rates increased 1%+ since 1994, home prices rose seven of those nine. During recessions, mortgage rates typically fall. Both are opposite of what most people think.   Resort communities are almost declaring war against short-term rentals. I explore the depth of the problem and discuss solutions. Are the wealthy at fault?  People that grew up in an area cannot afford housing in these STR hotbeds. Resources mentioned: Show Notes: www.GetRichEducation.com/416 How to Raise The Rent and Keep Tenants Happy (Video): 40-Year Mortgages: debuts-40-year-non-qm-mortgage-product/ Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
415: Car Wash Cashflow with Dave Zook
Sep 19 2022
415: Car Wash Cashflow with Dave Zook
Car washes can be remarkably lucrative. This is enhanced with a franchise model and selling subscriptions to car wash customers. “There is no other operation on a 1-acre site that can do 1 million to 2.5 million in sales and pocket half of that.” -WSJ story Like other real estate, a car wash location is vital. Much like apartment buildings, car washes are valued based on their income stream amount. You can participate yourself. Start here: Must be accredited, minimum $100K investment. Tommy’s Car Wash is an innovative franchise. Customers use a mobile app. Only Panera Bread and Chick-fil-A have higher sales revenue per location. (Wow!) Car washes have high cash flow and tax efficiency. Pro forma returns for individual investors like you have a 1.75x return on investment in five years or less. There is 100% bonus depreciation in year one.  Learn more and get started at: Resources mentioned: Show Notes: www.GetRichEducation.com/415 Get started with car washes: www.GREmarketplace.com/carwash WSJ on car washes: WSJ on laptop landlords: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
414: How To Invest Like A Billionaire (Timber)
Sep 12 2022
414: How To Invest Like A Billionaire (Timber)
Join me live on our St. Louis properties webinar this Wednesday at: GREwebinars.com The Fed is out to crush lingering inflation. Coming rate hikes will likely lead us into a recession, if we’re not there already. Home price gains have stalled. This is worse for sellers and better for buyers.  Landlords are winning in today’s market; renters are losing.  CoreLogic’s Single-Family Rent Index shows a 13.4% YOY national rent gain. Single-family rents are up $500+ over the past six years.  For a long time, investing in hardwood trees was primarily for big money hedge funds and family offices.  You can own the title to quarter-acre parcels with teak trees that grow on top of them for just $6,880. Timber prices are often counter-cyclical to markets. They keep growing through recessions, market collapses, and fluctuating interest rates. Teak hardwood has natural oils that make it fire and rot resistant. In Panama, they thrive where there is about six months of rain and then six months of dryness. The operator that I interview today has been involved with teak plantations since 1999. I first met him in-person six years ago. Learn more. Get the investor report at: www.GREmarketplace.com/Teak It costs $6,880 to own one new teak parcel. Optionally, you can own 16-year-old teak parcels for ~$20K. $6,880 is projected to grow into $94,000 over twenty-five years. Teak appreciates at 5.5% per year, 11% IRR. This is a remarkable way to own timber real estate and invest in another nation with a low cost of entry. They offer in-person teak tours in Panama. You can see your own trees. Resources mentioned: Get started with teak: www.GREmarketplace.com/Teak Show Notes: www.GetRichEducation.com/414 New—Join GRE Webinars: www.GREwebinars.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
413: GRE Listener Grows Her Means
Sep 5 2022
413: GRE Listener Grows Her Means
A GRE listener since 2015, Christian Montalvo and her family are growing their real estate portfolio in the Dallas-Fort Worth area. She has been a food microbiologist. Christian works for a company that cleans food processing plants. Her husband is a W-2 employee too, a financial analyst. After being a renter for about $1,000 / month in a tiny DFW apartment, they began with buying a $200K owner-occupied duplex with a 3.5% down payment. Next, they bought a fourplex. At this point, they have five rent incomes. They kept growing. Today, she and her husband still work their W-2 jobs. But as a young, married couple, they now have the flexibility such that they don’t both have to work. We discuss if they invest in 401(k)s and conventional retirement plans. I give many examples of “growing your means” instead of “living below your means”. Last year, Christian became a real estate agent. She works with investor clients.  Resources mentioned: Show Notes: www.GetRichEducation.com/413 Christian Montalvo’s e-mail address: christian@fraserrealty.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at (use code “GRE” for 10% off): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
412: Housing Crash Imminent? and 18 Life Lessons
Aug 29 2022
412: Housing Crash Imminent? and 18 Life Lessons
“How long are you going to wait until you demand the best from yourself?” -Epictetus I share 18 lessons with my 18-year-old self.  #2 is: Don’t fear being different. That’s your advantage. #4 is: No one cares about your college grades. #14 is: Finding the truth is more important than being right. #17 is: What does life want from you? National median home prices eased from June to July—from $414K to $404K.  Homebuilders are in a recession. However, available housing supply is still low and demand is high. Almost every human is forgotten in four generations. Is a housing price crash imminent? You get a clear “yes” or “no” answer. The NAR says that today’s first-time homebuyer is: 33 years old (oldest ever), $86,500 household income, $252K median purchase price, 7% down payment, and 37% carry student debt. Average size is 1,640 sf. If you’d like to advertise with us, visit: GetRichEducation.com/Contact  Resources mentioned: Show Notes: www.GetRichEducation.com/412 Median sale price eases: Median US house price historic chart: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at: (use code “GRE”): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Today’s episode transcript:   Welcome to GRE! I’m your host, Keith Weinhold. Learn 18 profound life lessons I’ve learned that I wish I could share with my 18-year-old self… and… has the time come?    After the looong & sometimes steep housing price runup, is a housing price crash finally imminent? And what’s the future direction of the housing market? Today, on Get Rich Education. ___________________   Welcome to GRE! From Red Deer, Alberta to Red Rock State Park, AZ and across 188 nations worldwide… I’m Keith Weinhold. THIS is Get Rich Education.   The voice of real estate investing… 412 weeks in a row… since 2014.   I hope that you’re having a great week!   You know, I have seemingly been a late bloomer in almost every way in life that you can conceive.   But as some say, “many people never bloom at all”. Alright, well enough. But look…   I was almost 18 years old when I graduated high school, just like - perhaps you - and many people are. But I looked like I was 13 then.    I was among the very last in my class to experience puberty there at Coudersport High School, Pennsylvania.    This is one reason that I could not attract a high school girlfriend or get a prom date. Even though… I asked a girl to prom and she said “no”.    As underdeveloped and impressionable as I was then, here are 18 lessons that I want to share with my 18-year-old self.   I wish that I could share these lessons that I’ve learned now with my 18-year-old self:   You Know Nothing. But You're Not Alone. You have so much to learn, 18-year-old Keith. So don't act like you know it all. Society actually likes when you're genuinely inquisitive and want to learn.   What about you? Can’t you sense when someone acts like a know-it-all? It’s not something that you want to be around. Back to advising my 18-year-old self.   Don't Fear Being Different. That's Your Advantage. In high school and even college, winners fit in. In the real world, winners stand out. In fact, avoid normalcy. It's a synonym for mediocrity.   Work To Learn. After that, work to earn.   No One Cares About Your College Grades. For your interests, college is optional, not mandatory—regardless of what your friends are doing. Find an energy for learning. Be autodidactic (an autodidact means a self-taught person). Focus on becoming a person of value.   Keep Moving. Health is wealth. Prioritize physical exercise over moneymaking. No matter WHAT you choose to do, you'll be living inside that same body when you're age 100.   Failure Can Be Alright, Even Good. In school, you learned that mistakes are bad and should be avoided. A failure that you recuperate from demonstrates that you tried. You learned a lesson. In fact, DECORATE your failures so much that you should go ahead and tell others how bad you failed; they'll either relate to you or they’ll learn from you.   Don't Follow Paths Others Have Made. Others guide you. But create your own map. If you're soullessly trading your time for dollars at a job, you need to design yourself an escape route so that you can quit as soon as possible. If you’re selling your time that way - stop it. Your life is made up of chapters of time. This is not a dress rehearsal. This is your life.   Research, Commit, Then Be Consistent. Prepare for disappointment. Most people won't be as committed as you. Showing up on time is a commitment, so is marriage.   Learn About Investing In Real Estate. Everyone needs it. It's made more ordinary people wealthy than anything else.   Keep Real Estate And Emotions Separate. Facts trump feelings. It's 99% about: market, management, and income exceeding expenses.   Make Grandma Proud. Pretend that she's watching you. Live a life that's exemplary in what you say and do. You might remember me mentioning my late Grandma Weinhold here on the show.   Be Present. Don't over-anticipate future moments and events. They are less important than the present. Otherwise, you'll miss out on your entire life. Your life will never not be now. Appreciate "now".   Who Your Friends Are Matters. Jim Rohn said: "You are the average of the five people that you spend the most time with." Take the average of your closest five's: values, their athleticism, their ethics, wealth, fashion sense, travel, neighborhood quality, and family structure—that's nearly who you will BECOME.   Finding The Truth Is More Important Than Being Right. People respect you when you say: "I was wrong. Here's why." more than trying to defend some antiquated or faulty belief.   Give. Money is an abundant resource. You will have a great ability to give. Generosity is championed in the Bible. It's Aristotle's third virtue. It will make you feel happy, it's good for your health, contagious, and spurs gratitude. This ossifies your net "value add" to the world.   Mentors Matter. Others see you in a way that you cannot. You'll simply never be able to see yourself in a way that others can. You’ll meet people smarter than you; ask them for their help.   What Does Life Want From You? As I learned from Eckhart Tolle, don't ask: "What do I want from life?" A more powerful question is: "What does life want from me?" (And you’ll remember that I mentioned this one last week on the show here and took a deeper dive on it.)   And the 18th and final lesson that I’d like to go back and share with my 18-year-old self is… Build. Anthropologists suggest that almost every person is forgotten after three generations. At your trajectory, what will your legacy be? Why and how will you be remembered?   They are the 18 lessons.   The stoic Epictetus said one of the most profound motivational things ever… and it’s in the form of a question. Epictetus said: "How long are you going to wait before you demand the best for yourself?" Yeah, that is his question.   At least here on this Earth, this is your last life ever.    Now, as much as some of those 18 might resonate with you… and maybe you want to share those with someone in your life… I’ve seriously got to ask…   (Laugh) If I had read those as an 18-year-old, knowing that I wrote them a couple decades later, would I have ever listened to those as an 18-year-old?    I don’t know. I probably wouldn’t have changed my behavior on some of them… but a few.   I’ve also got to wonder, in another 20 years, will these change? 20 years from now, would I be advising my 18-year-old self any differently?   Now, I discussed in there how anthropologists suggest that most every human is forgotten in 3 to 4 generations.   Sadly, quite a few people are forgotten 3 to 4 minutes after their death. And many more, within 3 to 4 hours, 3 to 4 days, or 3 to 4 weeks after their death. Of course, your children will remember you longer, and your spouse of, say, 50 years will remember you longer. Realistically, LOTS of people are soon forgotten because they never did anything worth remembering.  Good people are forgotten. People that never caused any trouble or uproar.  They kept their lawns mowed. They kept their cars clean.  But nothing notable worth remembering, like caring for lost animals or handicapped children or always remembering their friends’ birthdays. For a thoughtful person, it is wise to consider from time to time “what have I done recently, that people will want to remember?”. Of course, we should all do every day all those things necessary to be a good neighbor, a good landlord, and a good citizen.  If you don’t do that, you may be remembered because you were such a slob, or took care of your house so badly, or didn’t bother to shave and shower regularly. But assuming you are doing everything so that absolutely no one will be offended or annoyed, then you have to do something special if you are going to be remembered for longer than a few days or a few weeks. Let’s recognize something. Abraham Lincoln died six or seven generations ago. He is remembered with respect and honor.  John Wilkes Booth died just a few days after Lincoln. He is remembered with scorn and despising. So it is a mixed blessing, for you to be remembered. For most people, they would prefer to be forgotten rather than remembered as a deviant or a monster or a social parasite. My own guess is that VERY FEW people are remembered well, for as long as four generations.  They may be listed in a family genealogy, but beyond being a statistical item, the individuals and who they are have been long forgotten. It’s been said that "The greatest waste in the world is the difference between who you are and who you could become." Now, be real with me. Is what I’m telling you making you pensive and even melancholy about your own mortality? How do you feel… in your heart… right now? How do you feel… in your stomach… right now? What’s your mind telling you here?   Cheer up a little. I want you to take some solace in the fact that… I believe there are more important things than for you to be REMEMBERED for decades and for generations.  But doing those more important things — helping other people, making a better world, advancing the store of useful knowledge — will usually lead to YOU being remembered, long after you have passed into your next life. That is probably the person that you strive to be here on Earth… after all. If you’re still feeling like you’re not enough… well… I don’t have all of the answers. But you just got 18 lessons so that you can listen to those again and see which ones fit into your life. I’ll be back with some GRE core content about real estate and a housing price crash. I’m Keith Weinhold. You are listening to Get… Rich… Education. _________________   You’re listening to one of America’s longest-running and most listened-to real estate shows. Welcome back to GRE. I’m your host and my name is Keith Weinhold. I am genuinely grateful for your listenership.    There will only ever be one Episode 412 of Get Rich Education… and you’re listening to it.   If you’d like today’s Show Notes, simply go to GetRichEducation.com/412. It includes not just today’s supplemental resources, but the entire transcript of today’s episode.   Some people like to say: "Housing prices. They don't matter to cash flow investors."   To that, I say. C'mon now.   Price might not be the principal consideration. But price matters. If it didn't, why not just pay triple the asking price on your next property purchase?   Why does every classified ad have a price in it?    Of course, real estate price matters-even to cash flow-centric investors- when you’re buying, you’re selling, or for you to have an adequate equity cushion for refinancings.   US home sales dropped last month. That's nothing new. That just means sales volume.   Housing supply is part of the reason for volume drop. Available supply is still just half - or less - of what's needed and it will be a multi-year problem.   I’ve discussed that before. The dearth of supply is an inelastic condition - it’s difficult to change.    What’s the way out of that undersupplied condition? It’s homebuilding.   Well, many believe that homebuilders are in a recession. Some are building less while they wait for affordability to improve.    This is only going to prolong America’s housing supply problem.   Let’s LOOK at prices.   Since July 2019, which was back before you knew the definition of "pandemic" and the only time that you wore masks were for Halloween, home prices have risen 44.5%.   Yes, 44-and-a-half percent in just 3 years.   Now, if we shorten that up to year-over-year median house price growth in America, it is still 10.8%.    But the median sale price from June to July eased from about $414,000 to $404,000. 414 to 404.   Now, some might say this is hardly a change at all.   No, I think it’s meaningful… because all we’ve seen are both YOY and MOM housing price increases for years now.   Is it an aberration or is it a trend to come? Of course, no one really knows. But I think it's worth paying attention to.   Has the time come? Did real estate prices run up too far, too fast, meaning they must come crashing down to earth in a streaking fireball… that’s going to leave an indelible crater? Puhhh.   Let’s explore that. Well, first of all…   …the definition of the word "crash" is somewhat UH-morphous. But if it's equated to a bear market, it means a 20% price decline.   Well, that's highly unlikely that a decline like this is imminent. Housing values are famously stable. Today's homeowners have oodles of protective equity and their loans are well underwritten. And the supply is staying low.   You’re a smart listener, you listen here every week, and you’re probably apprised of all that.    But did you know that even during the astoundingly irresponsible and toxic Global Financial Crisis and Mortgage Meltdown of 2007-2010, that back then during that cataclysmic event, house prices fell less than 20% nationally?    Yeah, they didn’t even crash 20% then!   Fifteen years ago - those were the days of "liar loans", 105% LTVs, loose appraisals because appraisers were in cahoots with lenders, and we had glut of national housing supply and a foreclosure crisis… and nearly every housing market malady that you can quickly think of.   Housing values didn’t fall 20% amidst THAT apocalyptic environment.    I made sure that chart was put in the show notes for you so that you can see that. That’s the median sale price of houses sold in the United States, sourced by the F.R.E.D. through the US Census and HUD.   Today, homes are still being snapped up quickly. That’s what a lack of supply makes happen. And we’ll still have a lack of supply in 2023 and 2024.   In fact, last month, the NAR tells us that the median home sold in just 14 days in July. It's never been faster than that on record.   That is not something that you would expect amidst stalled PRICE growth. Well, higher mortgage rates will do that.   The American housing market reached a turning point this summer. Price increases haven't just slowed—they've stalled.   Of course, local factors often supersede national ones. So then…   Where are home values least resilient? Areas that were trendy and higher-priced homes.   Where are home values most resilient? Lower-priced and entry-level properties. They're the ones least affected by further losses in affordability. That’s what we’ve talked about on this show from Day 1 - investing in entry-level homes for cash flow in the Midwest and South.   Who do stalled price increases harm: Sellers. Price matters, remember?New owners that hoped to refinance fast.Flippers. Who do stalled price increases help: Buyers. Rent-to-price ratios. If you were wondering when rents will get a chance to catch up to prices? The answer is now. This recent outsized RENT growth has clearly been a boon to us real estate investors - even a windfall if you’re well leveraged. Now… in the workplace, the pandemic spawned “The Great Resignation”.   People either started working from home or quit and stayed at home. They were on their Peleton bike… and on Zoom.    But tons of companies… from Peleton to Zoom - have seen consumers end their pandemic buying patterns.    Now… so has housing.   The pandemic-era frenzy where buyers hotly demanded more space and a Zoom room is what I have called "The Great Reshuffling". It has settled down.   At the point of being overly obvious, compared to just a few months ago, this housing market has become worse for sellers and better for buyers.   Sellers, you might even have to STAGE properties again.   Buyers, let's run a vibe check on how well you’re doing for new purchases. Now you can usually: Not have to pay all-cashYou’ll often have less buyer competitionExpect time for an property inspectionHave an appraisal contingencyAnd avoid an escalation clause on build-to-rents like I’ve discussed with guests here in recent weeks past. You know, a friend just shared something with me. He said: "We are officially back into the 2018 real estate market. I made an offer today on a brand-new flip. I got $10K of seller help and a half page of contingencies." That’s what he said.   Yeah, that really sums up a lot.   The market has normalized - not become totally normal by any stretch, but negotiations between buyers and sellers are more balanced now.   There’s one group that loves higher mortgage rates - and that’s single-family rental owners.    That crimps affordability - pricing out that first-time homebuyer… making them rent from you. That’s continuing to push up rents at faster increases than historic norms.   Fannie Mae expects that home sales will decrease in the next year. That’s nothing new. The volume of existing-home sales has been decreasing for months.    So where does that leave today’s first-time homebuyer, the person - that is becoming more of a rare breed - that DIDN’T have to pay rent to you in your property?   Well, the NAR revealed a profile of today’s first-time homebuyer… and I think it’s particularly interesting. Today’s FTHB is… 33 yo - that is the oldest ever - ever. It might not surprise you since affordability is down so it takes a new homebuyer longer to save & form the capital necessary for a down payment, closing costs, and loan qualification. The FTHB is now age 33.Household income is $86,500Median purchase price is $252K… so… significantly less than today’s median priced $400K home.A 7% down payment. That, on average is what the FTHB puts down… so often paying PMI then.37% of them carry student debt. Typical balance $30,000How about avg sq footage. The average square footage of a FTHB’s home is 1,640.   Now, I’ve largely been discussing either total housing supply or single-family housing supply thus far.   One bright spot is for apartment-dwellers.   420,000 new apartments are forecast to be built in the US this year - that’s according to RentCafe. Coming on top of 2021 - when there was historically high apartment construction, it would mark the first time since 1972 that more than 400k new apartments were completed in each of two straight years. The top spot for new apartments in 2022 is the New York metro area.   Elsewhere, out there in the world…   Netflix is about to launch a “Shark-Tank” like real estate show called “Buy My House”. It’s structured much like Shark Tank… except homeowners pitch their house sale deal to four “sharks”.    That could be interesting to watch.    Here, coming up at GRE, hear from not just me, but, as usual some of the most influential personalities in the real estate and finance space commonly come along for an episode and run alongside me.   Ramit Sethi from “I Will Teach You To Be Rich” is one of those notable names that will join you & I here on an upcoming show.   If you have any questions, comments or concerns about the show, you can always reach out at GetRichEducation.com/Contact. That’s how to get ahold of our team.   One question that we’re really not in need of hearing over there on our Contact Page, is: “How do I become a guest on the show?”   You know, a couple years ago, we had about 20x as many requests to be a feature guest here on the show as there are available appearances.    Well, anymore, it’s about 50X as many requests as weekly shows.   We’re sorry to have to apologize to so many wonderfully bright and credentialed people. I really appreciate them. But we only have one, big weekly show… and that supply is not increasing.   GRE show supply could be even more inelastic than American housing supply then.    I’d like to welcome our newest show sponsor, MyPropertyStats.com. It was developed by Hayden Crabtree. Hayden has been a show guest here before and we expect to have him back here to tell us more about My Property Stats.   It’s a deal analysis tool developed by an active investor - Hayden - to cut the time it takes you to analyze ANY deal by over 90%. -Calculate the EXACT price to pay to hit your cash flow and ROI goals -Build a WORLD CLASS pro forma   In fact, you can go to MyPropertyStats.com/GRE right now and use coupon code GRE to get 10% off your first year. It’s remarkably inexpensive. That’s just $90 A YEAR for a tool that can save 10 hours PER DEAL. No more spreadsheets. No more juggling multiple files. You can use coupon code "GRE" to get 10% off at MyPropertyStats.com/GRE.   Much like the gratefulness I feel for all of the bright guests that are here, we’ve seen quite an influx of advertising inquiries.   This is despite that, we haven’t really pitched for advertisers here - much like guests, fortunately, there are plenty of wonderful resources out there that want to reach you, the listener here.   These are resources that I don’t just endorse, but I often use myself.   If you’d like to make an advertising inquiry here at GRE, you can also reach out at the Contact Page at GetRichEducation.com/Contact   I’m Keith Weinhold. I’ll catch you next Monday, Labor Day. You’ve been listening to Get Rich Education.   Don’t quit your daydream!
411: What Does Life Want From You? Rentflation, Housing Market Normalizes, Available Properties
Aug 22 2022
411: What Does Life Want From You? Rentflation, Housing Market Normalizes, Available Properties
You told yourself you’d change the world, then you let the world change you. Rather than asking yourself, “What do I want out of life?”, a more powerful question is: “What does life want from me?” Almost everyone wants to be “job optional”.  People often use their words to denigrate the importance of money, yet their actions validate its importance. High-flying real estate appreciation rates are mostly over with. The market is normalizing. Through Q2, national median home price appreciation is 14%. But it's quickly slowing. American apartment rent-to-income ratio is 23% for tenants. Zumper tells us there’s about 10.2% national rent appreciation. Highest are TN and NC. We have available properties in the Midwest and South. Naresh & I spotlight Poinciana, FL; Ocklawaha, FL; and Memphis.  For available properties and free coaching, contact Naresh at: naresh@getricheducation.com Resources mentioned: Show Notes: www.GetRichEducation.com/411 E-mail Naresh about cash-flowing properties: naresh@getricheducation.com Zumper’s Rent Report: Rent Is The New Gas: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at: (use code “GRE”): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
410: Are We In A Recession? IRS Audits Increase with Tom Wheelwright
Aug 15 2022
410: Are We In A Recession? IRS Audits Increase with Tom Wheelwright
Is the economy healthy or unhealthy? We’ve had two consecutive quarters of GDP contraction. High inflation and supply problems persist. On the other hand, we have a strong jobs market, low unemployment, and high rent increases. Ultimately, the NBER decides whether or not we’re in a recession. Today’s guest, Tom Wheelwright of Wealthability, tells us why he thinks we’re in a recession.  I share with you the exact rent increase numbers I’ve had on my rental single-family homes. Historically, a recession occurs every five years, on average. Whether we’re there yet or not, I believe there’s a likelihood of a recession soon. Tom thinks whether or not a recession is declared is important; it affects consumer sentiment. He breaks down the new “Inflation Reduction Act”. It does not appear to help reduce inflation.  Rather, it appears that it will: increase union wages, enact climate change policy, add taxes to pharmaceuticals, hurt small business, and increase IRS enforcement. “People who have never seen an IRS audit will see IRS audits.” -Tom Wheelwright Resources mentioned: Show Notes: www.GetRichEducation.com/410 Get started on lowering your taxes with Tom Wheelwright: GetRichEducation.com/Tax All U.S. Employed Persons:  30-Year Mortgage Rate History (gray bars are recessions): Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Analyze your RE portfolio at: (use code “GRE”): MyPropertyStats.com  Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
409: Negotiate As If Your Life Depended On It with Chris Voss
Aug 8 2022
409: Negotiate As If Your Life Depended On It with Chris Voss
Is today’s housing market healthy? “Yes” for rental property owners, existing homeowners, and sellers. “No” for renters, wannabe first-time home buyers. “Unbalanced” is a better word to describe today’s housing market. I bought my first income property 20 years ago today. In negotiation, emotions trump facts. Chris Voss, former FBI hostage negotiator, joins us for real estate negotiation tips.  If you need a decision from someone, get it in the morning before they have decision fatigue. In a negotiation, try to get agreement. Don’t try to get the other party to say “yes”. Chris likes to let the other side talk first. Let “no” out slowly. A great way to say it is, “How am I supposed to do that?” Self-deprecating humor can work in negotiation. Learn how to motivate people to finish projects in a timely fashion for you. Resources mentioned: Show Notes: www.GetRichEducation.com/409 Black Swan Group: www.blackswanltd.com Mike Gundy rant “I’m a man. I’m 40.”: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
408: Every Investment Compared To Real Estate, Safety, Florida New-Builds
Aug 1 2022
408: Every Investment Compared To Real Estate, Safety, Florida New-Builds
We compare the safety of all these investments: cash, savings accounts, treasuries, CDs, gold, cryptocurrency, stocks, mutual funds, ETFs, raw land, a primary residence, and income properties. Listen to a mainstream media video clip about inflation from NBC Nightly News. We get a Florida market update from GREmarketplace.com/Orlando. Overall housing supply is low. It’s even lower for entry-level properties. For renovated properties, Florida insurance premiums have risen dramatically in the past few years. However, for new-builds, premiums are about 70% lower. These particular available properties in Palm Bay, FL are typically: 4 BR, 2 BA, 2-car garage, concrete block, single-family rentals, new-build, vinyl flooring, granite counters, and infill quarter-acre lots. $319,000 is what buyers pay.  Today, these properties appear to appraise for $370,000+. You have $51K+ of built-in equity. For those that select property at GREmarketplace.com/Orlando, your insurance is paid for the first year.  Resources mentioned: New-build Florida income property for $319,000: GREmarketplace.com/Orlando Show Notes: www.GetRichEducation.com/408 NBC Nightly News on Inflation: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre or (904) 677-6777 To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
407: Housing Market Debate with Kathy Fettke
Jul 25 2022
407: Housing Market Debate with Kathy Fettke
When mortgage rates rise, home builders slow down on building. This constrains supply and supports housing prices. A record share of Americans say inflation is their No. 1 concern. The CPI is 9.1%. Property operating expenses are rising with inflation, like insurance and property tax. What helps you pay for it? Rising rent. Philosophically, why should you raise the rent on your tenants?  Besides adjusting it to the market amount, you took time learning, you built your credit, you accumulated a 20% down payment, you originated an 80% loan, your operating expenses are rising, you weathered pandemic uncertainty. If an auto mechanic makes $60 an hour, in ten years, they might make $90 an hour. Where’s the growth in this? Kathy Fettke from Real Wealth joins us.   We disagree on the housing market being “healthy”. I believe a good description of the housing market is: "unbalanced": Healthy for: rental property owners, existing homeowners, sellers. Unhealthy for: renters, homebuyers.  She believes that the Fed has overstimulated the economy, prices are high, and housing is undersupplied. We discuss real estate’s demographic advantage. We agree that it’s a bad market for prospective first-time buyers and renters, and good for those that have rental properties. A housing price crash anytime soon is highly unlikely. She & I each believe that today, it makes sense to add carefully-bought rental properties to rent to others. Resources mentioned: Show Notes: www.GetRichEducation.com/407 Real Wealth with Kathy Fettke: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
406: How The Rich Pay Zero Tax with Tom Wheelwright
Jul 18 2022
406: How The Rich Pay Zero Tax with Tom Wheelwright
National home prices are up 275% since 1991. I break it down state-by-state for you. Slowest? Connecticut with 137%. Fastest? Utah with 599%. Two misleading RE statistics are: real estate sales volume, home price cuts. I tell you where I’m spending my summer. Next, Tom Wheelwright joins us. He authored the new book, “The Win-Win Wealth Strategy”. He tells us about the 7 investments that the government will pay you to make. You don’t pay up to 12.3% Social Security Tax on rental income like you do with your day job. Tax depreciation is explained. Bonus depreciation is being gradually phased out after this year.  Resources mentioned: Show Notes: www.GetRichEducation.com/406 Tom’s New Book: “The Win-Win Wealth Strategy” State-By-State Home Appreciation Since 1991: Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
405: Fixed 12% Income Returns through Real Estate Funds with Dani Lynn Robison
Jul 11 2022
405: Fixed 12% Income Returns through Real Estate Funds with Dani Lynn Robison
Real estate funds invest in multiple properties.  Real estate syndications often invest in just one property. “What is the worst deal that you’ve ever done?” Ask your fund provider that question. I’m willing to share that I invest my personal real estate fund dollars with Flip & Dani Lynn Robison of Freedom Capital Investments. Fund pros: More passive than turnkey, stable returns.  Fund cons: Vet your operator. Learn more or get started at: GREmarketplace.com/funds There are short-term funds for liquidity, and longer-term funds for higher returns. The difference between simple and compound interest weighs in here.  Learn what a “preferred return” is. Fund returns of up to 10-12% are offered. Learn where your return comes from. Fund objectives: safety, certainty, reliability, and growth.  We’re talking about high-yield, fixed income fund. Dani Lynn has been a part of more than 600 multifamily deals. Learn how funds have two audit layers. There are funds for both accredited and non-accredited investors. Learn more or get started at: GREmarketplace.com/funds Resources mentioned: Show Notes: www.GetRichEducation.com/405 Get started with real estate funds. It’s the same place I invest: www.GREmarketplace.com/funds Dani Lynn Robison’s team contact: Phone | (937) 551-2282 Email | invest@freedomcapitalinvestments.com Flip & Dani Lynn Robison’s daily podcast: Freedom Through Passive Income Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB’s available Florida income property: www.jwbrealestate.com/gre To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold
404: Financial Independence Day
Jul 4 2022
404: Financial Independence Day
Your Financial Independence Day happens when your residual income stream amount exceeds your basic monthly expenses. Rental demand is high for three big reasons: rates are rising, stringent mortgage qualification standards, housing undersupply.   I answer three listener questions: Should I make a big down payment? Is borrowing at lower than inflation profitable? What about prepayment penalties? Ridge Lending Group President Caeli Ridge joins us to discuss today’s mortgage lending landscape. Today, are ARMs beginning to make more sense than fixed-rate mortgages? We explore. Learn about the cash-out refinance climate. Second mortgages on income properties are still limited. Does it ever make sense to refinance to a higher mortgage interest rate? We discuss. Caeli Ridge thinks mortgage rates will keep rising. Resources mentioned: Show Notes: www.GetRichEducation.com/404 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Freddie Mac Includes On-Time Rent Payments Into Underwriting: Airbnb Enacts Permanent Party Bans: JWB’s available Florida income property: www.jwbrealestate.com/gre To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold Partial transcript: Welcome to GRE! I’m your host, Keith Weinhold. Happy Financial Independence Day on American Independence Day.   I answer some of your most burning listener questions today.    Shifts in the mortgage market could now change your strategy.    Does a cashout refinance to a higher mortgage rate make sense or not?    Is an adjustable rate mortgage actually feasible for you now and lots more… on Get Rich Education. _____________________   Hey, welcome in to GRE. From San Luis Obispo, CA to Saint Louis, Missouri and across 188 nations worldwide, you’re back in that abundant place.   And you’ve got to lead with an abundance mentality around here. How many places can you do that when the scarcity mentality is abundant and the abundance mentality is scarce.    I’m Keith Weinhold. This is Get Rich Education. Though it’s American Independence Day… is it your financial independence day.    Are you drawing closer to that day… as you add income streams in your life.   With 8.6% government-admitted inflation and stagnant wages and a higher cost of living… has there EVER been a more important time in your entire life to add an income stream through real estate?   You can make the case that this is the most important time for you to do that.   I am about to answer your listener questions here on July 4th. It’s also Episode 404. There’s no chance that this becomes an error 404. Some dorky humor there.   First…   Freddie Mac is going to include on-time rent payments into underwriting. Yes! This starts next week.    This is a good thing for you. This incentivizes renters to make on-time payments to you if they ever want to become homeowners.   …and…   Airbnb enacts a permanent ban on parties. They & VRBO have long struggled with what to do about parties.   I just shared those stories with you in Friday’s newsletter. If you didn’t see them, they’re in the Show Notes of today’s episode.   Be sure to get our free “Don’t Quit Your Daydream” newsletter.   We’ve been really informing you about so much in the real estate world there. We’ve also been telling you about our webinars. I know that some of you enjoyed last week’s Texas properties webinar.   Stay up-to-date with our newsletter at: GetRichEducation.com/Letter   Now, let me tell you. Back in the year 2004, eighteen years ago. Yes, I was an active REI then. My tenants were increasingly leaving. They were vacating my property and I had to find a new renter.   This was increasingly happening for a few reasons:   #1 is that mortgage rates were falling then.   But secondly, and really the big reason is that anyone could qualify for a loan. Mortgage underwriting standards were so lax that nearly any human could get a loan, even if they had zero income. So… loans were too easy to get.   Then the third reason that my tenants seemed to be vacating is that there was ample supply - and an oversupply of properties - first-time homes - for them to move into.   Well, today, all THREE of those criteria are flip-flopped.   First, mortgage rates are rising.   Second, mortgage qualification standards are tough. Tougher than Kevlar.   And thirdly, there’s an undersupply of homes, especially these entry-level homes that make the best FTHB places.   That’s precisely why rental demand is sky high today, tenants are not fleeing to become homeowners, rental occupancy is close to 100% in many markets, and rents are rising multiples faster than historic norms.   These phenomena can move you closer to you financial independence day.    I had a group of financing-themed listener questions come in recently, so I want to get to three of those before we talk more about today’s lending landscape later. ________________   The first question comes from Dave in Bellingham, Washington.    “Keith, I thought it was good to make a big down payment on a property. That way, I’d have not only less debt, but I’d have the benefit of having a smaller mortgage payment over time.   This means I’d pay less interest over the life of the loan too. Can you tell me more about how FF beats DF?”    That’s from Dave.    Good question, Dave. Common question. In fact, there was a time in my life, before I ever owned any real estate where that same line of thinking made complete sense to me.    I even thought, “If I could be mortgage-free and own a property, I’d have it made.”   Dave, let me answer this in a somewhat different way than I’ve answered it before for other listeners’ benefit.  If you can borrow at a 6 or 7% mortgage interest rate, which, after tax deductions might be an effective 5% interest rate, many think that they can beat that in the market over time.   One probably can.   The riskiest thing that a lot of people do by making a big down payment is now they don’t have much liquidity. If the cash is already in the home, then that borrower might worry about not having much cash for other disruptions or expenses that come up in life.   The worst one could be, “What if you lose your job and your job was, say, 70 to 100% of your income?”   Now that cash is trapped in the home as equity… and you can better believe that today, banks aren’t going to let you access your equity if you don’t have a job.   The best way to keep equity separated from your home is to make sure it never goes in there.   The other reality too, is that the more than you borrow, the more you make use of OPM.    So the great question to ask yourself, Dave, is “How big of a real estate portfolio could I ever build if I limit myself to only using my own money… and NOT other people’s money?”   We’re going to discuss this more later in the show today… but that should provide some sufficient context and food for thought to your question, Dave. Thanks for writing in.   You, the listener, can always contact us with any questions at GetRichEducation.com/Contact ________________   Andrew from New York state had a question through our Contact Page.    Andrew’s been an avid listener for quite a while. I remember your name, Andrew. You’re a veterinarian from New York state. I hope that we can meet sometime in the future. Andrew asks:   “Is it a true statement to think that even in today's High "er" interest rate environment   any mortgage rate under the rate of inflation roughly 8% is a bargain??   Today ..I am not getting great cash flow...$100/month or break even..on new builds...but still see the upside in RE investing due to its inflationary hedge.” Alright, thanks for that Andrew.   With the first question, is any mortgage rate under the 8% inflation rate a bargain. Well, it could be. Many think that the real rate of inflation - the true diminished PP of the dollar is 15%.    But let’s just stick with 8%. Yes, if you get a mortgage at 6 or 7% today, you are effectively being paid to borrow.   That is because with the money that you’ve borrowed from the bank, over time, you get to repay the bank with dollars that debase on the bank faster than THEIR interest can accrue on you.    That’s how it can stealthily build wealth.   The risk associated with that is - besides being most attentive to your personal cash flows, Andrew - is that at some point over your loan term, there’s a good chance that inflation will duck back below mortgage interest rates.   We’re in this inversion now where the opposite is true. So, enjoy it while it lasts. I’d think of your interest rate being lower than inflation as a short-to-medium term tailwind.   Your second question was about how today, you’re not getting great cash flow when you buy a new-build rental property. It might be positive $100 or just a break even. But you still like investing in RE for the inflation hedge.   First, I think of RE as more of an inflation-profiting center than a mere inflation-hedging vehicle. I take you point though… and then…   Yeah, a lower $100 positive cash flow or less on new-builds is lower than what we’ve all been used to in recent years.   There’s a chance that this will widen - certainly no guarantee.   It like how I described a couple weeks ago that we think of the housing market in two waves. First the housing price increase wave hit hard, then there’s a trough, then later the rent increase wave hits. The trough between waves is when cash flow is lowest.   Though you can’t absolutely count on it, rents are increasing torridly. Andrew, I can tell that you’re a close listener just by the words and concepts that you’re thinking over in your questions. I love that. Thanks for you longtime following. ________________   The third question comes from JW. This question came from our YouTube Channel so I don’t know where you’re from JW. But you ask:   Keith, what are your views on PPPs on commercial loans?    On my current 8-unit property I am pursuing, I am getting financing offers that all have PPPs.   OK, thanks for the question JW. I think one reason that I chose your question is because I, myself, have owned an 8-unit apartment building that had a 5-year PPP attached to it.   First of all, let me tell you what a PPP is. And it’s funny. I have been at RE meeting in the past and some people that have never heard of them seem incredulous that a PPP even exists.   A prepayment penalty is a fee that some lenders charge if you pay off all or part of your mortgage early. If you have a prepayment penalty, you would have agreed to this when you closed on your home.   Now, in my experience, you don’t often see these on loans for 1-4 unit properties.   I commonly see PPPs on 5+ unit apartment buildings and other commercial loan types.   The way that it often works is that your penalty is less severe as each of the five years transpires. It fades.   For example, you’d have a higher penalty if you pay it off in 2 years than the lower penalty would be if you pay it off in 4 years.   Then with a 5-year PPP, that means that your penalty disappears completely if you pay it off AFTER five years.   PPP loans can obviously be a poor choice if you, say, want to add value to a distressed apartment building and do a cash-out refinance in, say two years.   So, therefore, for long-term buy-and-hold strategies, 5-year PPPs often fit.   I’ve had 5-year PPPs on numerous occasions on my own apartment buildings, and I have never paid any penalty because I have only accepted those penalty conditions when I plan to hold for more than 5 years.   Now that you know about cases when you do and don’t want these as part of your loan, maybe you’re wondering why banks have PPPs at all.   Lenders charge prepayment penalties to provide a borrower with a disincentive for paying off a loan ahead of time… because that causes lenders to lose out on interest income. Lenders have to commit considerable time to evaluate a borrower and underwrite the loan in the first place.   That’s how PPPs work. Thanks for the question, JW.   Stay up-to-date with our newsletter. You can sign up free at: GetRichEducation.com/Letter   We also make sure that you get the 5-part video course where I’m your instructor. It’s one video on each of the 5 Ways Real Estate Pays.   What would it look like if I wrote a short letter about weekly… written by me… sent directly to you… that supplemented this show about real estate and personal finance trends and opportunities.   It can help bring you closer to your financial independence day.   Get it & my free video course all in one place at GetRichEducation.com/Letter _________________   Yeah, concise, updated intell from Caeli, as always.   All these markets are constantly changing: The market for housing pricesThe market for rentsThe market for mortgages   Working within them can help get you closer to your Financial Independence Day - that day that your real estate income meets or exceeds all of your basic living expenses.   Underwriting guidelines are staying tight, just like they have for more than 10 years now. Dodd-Frank and consumers proving that they have the ability to repay a loan has really helped with that. That’s a big reason that the mortgage delinquency rate has fallen to ALL-TIME lows.   In fact, that update on second mortgages on rental properties demonstrates that the market still has a pretty limited appetite for that product.   You might want it but it still comes with low LTVs if you can get them at all.   Some brighter new is that ARMs - Adjustable Rate Mortgages - are making more sense than they used to - when compared to your more typical long-term FRM.   There are both risks and rewards to compare there. I like that the good people over there at Ridge help you with decisions like those.   So many great & important shows coming up here on GRE - the return of Tax Advisor Tom Wheelwright, a 2-person housing market panel comprised of Kathy Fettke and I… and… oh geez, the return of Chris Voss - the hostage negotiator from Masterclass.    Remember when I mock negotiated him for a fourplex building last year right here on the show & I lost… to perhaps the world’s top negotiator?   Well, here we go, Chris Voss is returning here to discuss how to negotiate in a housing market when the odds are against you.    What do you think? Should I mock negotiate him again… I don’t know. That’s awfully entertaining for you but I don’t know how many losses I can take publicly like that.    Big thanks to Caeli Ridge today. It’s where I go for my own income property loans. You can too, I’m happy to share that with you at RidgeLendingGroup.com   Until next week, I’m your host, Keith Weinhold. Happy Financial Independence Day! Though you might quit your day job, don’t quit your day dream!
403: How To Build Your Personal Brand with Steve Sims
Jun 27 2022
403: How To Build Your Personal Brand with Steve Sims
“You DO care about what others think of you. That’s your reputation.” -Keith Weinhold People care about your brand when you create value for them. Next, you must reach people. A construction worker in London decided that he wasn’t where he was meant to be in life. He’s our guest, Steve D. Sims. He started asking others why they were wealthy but he wasn’t. A personal branding expert, Steve tells us why the right brand for you is the “authentic you”. When you meet someone, ask them about themselves. They are their own favorite subject. “A brand is what people say about you when you’ve left the room.” -Steve Sims Brands are either solution-based or aspirational. Every person has a brand. Donald Trump was well-branded because he had clear slogans like “Make America Great Again” and “Build A Wall”. The lesson? Be clear about who you are or what you stand for. It’s OK to know what you’re “not”. For example, I didn’t know how to hire a COO for GRE and still don’t have experience managing people. Resources mentioned: Show Notes: www.GetRichEducation.com/403 Steve Sims’ website: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Partial transcript:Welcome to GRE! I’m your host, Keith Weinhold. There’s so much to pack into one show today - inflation at its highest rate in over 40 years, the Fed raising interest rates the most in 28 years, rents are going up fast, then GRE’s COO Aundrea Newbern & I on our favorite REI resources. Today, on Get Rich Education.   _______________________   Welcome to GRE! I’m your host, Keith Weinhold.   When it comes to developing your personal brand to it’s highest potential, what are those traps you might be falling into that have prevented you from doing so. And…   There was once a construction worker in London and one day he realized that this just wasn’t where he was meant to be in life.    He contributes to the personal brand discussion today too… on this week’s episode of Get Rich Education. ______________   Welcome to GRE! From Franklin, MA to Franklin, TN and across 188 nations worldwide… I’m Keith Weinhold.    With more than 4 million listens, though you’re tuned into one of America’s longest-running and most listened-to real estate shows, today, it’s about how to develop your personal brand which applies most anywhere.   There are a few definitions of a brand. A more strict one is that a brand is an intangible marketing or business concept that helps people identify a company, product, or individual.   OK, I guess that’s pretty good. Another definition of a brand I’ve heard that I like is: “Your unique promise kept over time.” That’s what a brand is.   A big part of keeping promises is doing what you say you’re going to do. Therefore, it’s a commitment.   In my mind, a big part of that is keeping your appointments.    If I’m going to collaborate with someone and we have a pre-determined date & time, I put that on my calendar and I would not change that commitment unless some inordinate or unusual circumstance came up.   That person trusted me with their time and I trusted them with my time. If someone tells me later that they’d like to re-schedule with me, well, often I don’t do it.    With all the choices I have for spending my time, their wavering commitment doesn’t really reflect so well on their personal brand.   Also, other people would have liked to have that time with me & they couldn’t get it because I already committed it to that person that wanted to cancel or postpone.   People that have their act together, well-branded people, commit and show up on time.   I’ll give you an example of a well-branded person that keeps commitments - whether you like him or not, in my experience, that is, yep, Rich Dad, Poor Dad author Robert Kiyosaki.   Robert & I have done a bunch of collaborations in the past, I used to be a writer for the Rich Dad Advisors, he’s been a guest right here with us on the GRE Podcast four times.   Not once have we tried to re-schedule or cancel an appointment on each other.    Even if we plan something a month in advance, we keep it. We don’t have to send each other reminders. It was put on our calendar at the time we made the appointment, so what more do you need?   And you wonder why that guy is so successful. Well, one reason could be that he keeps commitments.    Now, when it comes to your personal brand - which includes your belief systems, your values, commitment levels, there’s one thing that some people need to “get over” - and I think that Hal Elrod & I touched on this here on the show 3 weeks ago.   It’s this myth. There are people that brashly say, “Hey, I don’t care about what other people think of me.”    Oh, that’s wrong. You do too care about what other people think. Because that’s your reputation.    It can be interesting to see the person that says they didn’t care about what other people think, say, have a fake social media account made up impersonating their likeness and embarrassing them.   You had better believe that person that said they don’t care about what other people think… frantically tries to point out that, “Hey, I don’t want you thinking that was me over there spamming you.” Someone is impersonating my account.    “Oh, well didn’t you just say that you don’t care about what other people think?” See you did care… and you should. That’s your reputation.   What if you own a restaurant & people leave negative reviews about your business & you as a businessperson, you care.   DO CARE… about what others think. That’s honesty. But yeah, don’t care too much.    People will care about your brand when they know that you can bring them value. When you start with creating value first, second is how are you going to reach people, and then thirdly, it’s how are you going to create income.   It’s value, reach, then income. 1-2-3   I’m reaching you right now with this show. In fact, there was a time, between 5 & 10 years ago, that even by having a show like this, one could create value, reach, and income.   For new entrants, those days are gone. The podcast landscape became saturated a few years ago and it’s almost impossible to get substantial reach today.    For startups today, a podcast is a lot like a website was 20 years ago.   Neither one stands out just by virtue of having one.    You can have a website just like you can have a podcast, but anymore, how would you ever get enough website visitors to make a difference or how would you attract enough podcast listeners to make a difference.   Even celebrities that have name brand recognition that have crossed over and started podcasts usually don’t get much traction anymore. They are drowned out in a saturated field.   So if you want your brand to reach people today, well, that’s a really long discussion and this isn’t a marketing show. So I’d start with just two pieces of guidance:   #1 - Look for that new media source that isn’t crowded today. It might be that “next” media type. For a while, people thought that it might be voice-activated media like Alexa or Siri. I don’t really know that that’s getting traction like some thought. But that’s the way to be thinking. “What’s next?”   Secondly, if you know of a thought leader that wants to get their message out with a podcast today, rather than starting their own show and entering a crowded field… gosh, starting your own show, you could spin your wheels with many episodes and unlike a website that doesn’t need to be constantly updated…   … a podcast takes regular releases, and production, advertising, sound engineering and marketing, transcription, and a support network of complimentary resources from video to social media and more.   Well, I’ve got a great shortcut to that… in the podcasting world that will save you a lot of time, money, and frustration.   If you know someone that wants to get their message out through a podcast today, the big shortcut is to be a guest on another show that already has a big following.   That way, you’ve outsourced all of the production and marketing and everything else to a proven channel. That can save you hundreds or thousands of hours in your life.   Rather than starting a podcast, be a guest on a few big name shows.   Now that you know how you’re going to provide value to the world, you’ve got your reach too.   Hey, I’ve got more thoughts like this for you on building your personal brand. Before I share those, let’s talk to today’s remarkable guest on how to build your personal brand. ___________   Oh, yeah, a really interesting interview with Steve Sims today.   One thing we discussed is that you can’t snap your fingers and instantly make yourself someone that you’re not. It’s about gradually being who you are becoming.   Now, here at GRE, our show keeps growing and about two years ago, I needed to make a new key hire to run the internal operations here so that I could have enough time clear to make the best content for you every week.   But, gosh, I really didn’t know how to make a quality hire here - like, to bring in an experienced pro.   Realizing I didn’t even know how to hire someone, I looked around my network of people… and I knew that Ken McElroy had employed a Hiring Manager, Jennifer, to help him and I tapped her so that Jennifer could find a COO for GRE.    Jennifer & I worked on the position advertisement, she interviewed the top candidates, narrowed it down to three, and Aundrea was selected.   Then I got Garrett Sutton to help me write the work contract.   So, I had acknowledged that hiring a top pro was beyond my skillset.   And Aundrea is such a professional here - she has her MBA too - that when GRE added more staff later, she’s the one that does the interviewing - not me.   And then… continuing in this vein of, “Don’t pretend to be someone you’re not.”   When we make a new hire here at GRE, I don’t pretend like I have some lofty corporate experience at knowing how to run things around here.   When I first talk to that new hire here, I simply tell them the truth. I say something like:   “I found myself with a show here that a lot of people seem to like to listen to… but don’t have any experience managing people. So I really want you to feel comfortable in speaking up when you think I could be doing something better.” Yeah, I tell everyone something like that.   Alright, well, what did that just do when I told them this?    First, it’s honesty.It makes me more comfortableIt made the new hire more comfortableAnd finally, I’m not pretending to be someone that I’m not. When I was in the working world, I didn’t climb up the corporate ladder. I didn’t get that corporate experience. Instead, I decided to leave that world behind.   Steve made a terrific point at the end about brand clarity - being clear on what your brand stands for - whether that’s your personal brand or your company’s brand.   I told you near the start of the show that commitment & respecting other people’s time is a big part of my personal brand. Certainly, attention to detail too.   GRE’s brand clarity is in four words: Real Estate Financial Freedom. Those four words tell you where you & I are going together & how you’re getting there too.   Once you’re in the GRE world and tribe, then we can get more nuanced, for example, with our strategy and brand of “FF beats DF”. And with that, you see how “RE FF” is achieved faster.   I sign off each show with “Don’t Quit Your Daydream” and it’s a trademark that we own here at GRE.   So the point is, be clear and memorable in order to have a successful brand for yourself.   This doesn’t have to be that well-developed and you don’t have to have terms trademarked to have a strong brand.   Juan, my landscaper wacks all the weeds along my fence and doesn’t leave any clippings behind. I can see that his brand was there - imprinted in my backyard.   Speaking of some other well-branded real estate figures, if you want to listen to Grant Cardone & I together here on the show, where we 10X your wealth together, he was with us on Episode 264.   Robert Kiyosaki’s latest appearance here on GRE was last year. You will find he & I together most recently on Episode 358.    As far as today’s chat, you might be interested in SEEING Steve Sims & I’s chat from today other than just listening to the audio here. It might help reinforce some of these branding concept for you.   He’s also just a really interesting figure to see and listen to. You can do that on your YouTube Channel… which is really easy to find and remember… because we’re - I suppose - consistently-branded - ha!   That’s because our YouTube Channel is called “Get Rich Education”. I’d expect that video to be published there by about now.   Personal branding means that there is… perhaps… a better investment than leveraged income property.   That investment… is YOU.   Until next week, I’m your host, Keith Weinhold. Don’t Quit Your Daydream!
402: Rents Surging Faster Than Home Prices, Inflation & Interest Rates Soar, Investor Resources
Jun 20 2022
402: Rents Surging Faster Than Home Prices, Inflation & Interest Rates Soar, Investor Resources
For many, it’s become a scary world with $5-$6 gas, soaring food prices, spiking rents, the medical system is still a mess, and wages aren’t keeping up with inflation. Inflation is at a 40-year high of 8.6%. The Fed raised rates ¾%, the biggest jump in 28 years. For every $1M in real estate debt that you have, you’re benefiting $86,000 each year due to your debt debasement. Affordability has become so bad for wannabe first-time home buyers that increasingly, they’re becoming your renter. Many project rent growth to exceed home price growth this year. Rent.com’s Rent Report shows a 26% annual rent increase nationally. Every 1% in a mortgage rate increase decreases a buyer’s purchasing power by 12%. GRE’s COO Aundrea Newbern, MBA joins me. We discuss our favorite RE information sources. Aundrea expects to diversify her RE portfolio into more markets. She’s been focused on southeast Georgia. Some RE resources we use: www.city-data.com, US Census Bureau data, CNBC.com, HousingWire.com, FRED data, the MLS, AirDNA.co, GREmarketplace.com. When considering adding to your RE portfolio, simply talking to a Property Manager can be more valuable than the best website. Aundrea sees a balanced market at prices $250K+, and a sellers’ market at prices below $250K in southeast Georgia. Days On Market (DOM), Sale-To-List Price Ratio discussed. LTRs are in high demand and low supply. STRs are saturated in many markets. Resources mentioned: Show Notes: www.GetRichEducation.com/402 Rent.com’s Rent Report: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Partial transcript: Welcome to GRE! I’m your host, Keith Weinhold. There’s so much to pack into one show today - inflation at its highest rate in over 40 years, the Fed raising interest rates the most in 28 years, rents are going up fast, then GRE’s COO Aundrea Newbern & I on our favorite REI resources. Today, on Get Rich Education.   _______________________   Welcome to GRE! From Auckland, NZ to Oakland, CA and across 188 nations worldwide. This is Get Rich Education. I’m your host, Keith Weinhold.   Before I discuss real estate, what’s happening with inflation & interest rates is so exceptional that I want to cover this first.   When the latest inflation reading came in at 8.6%, it dashed hopes that it's peaked. We have no evidence that it’s peaked.   And as I like to say, that 8.6% is just the level that the government is willing to admit to. It's really higher.   It's the third month in a row that it has exceeded 8%.   Treasury Secretary Janet "Grandma" Yellen has already warned of what she calls "unacceptable levels of inflation".   And Yellen looks like my late Grandma Weinhold. Yeah, they look a lot alike. One difference though, is that Grandma was not wrong about inflation.    Another difference between my grandmother and Yellen is that… Janet Yellen never gave me Star Wars action figures on Christmas like my Grandma did.   Well, for many people, especially in the lower middle class, it's become a scary world with devastating $5-6 gas, soaring food prices and spiking rents. (I’ll get to that shortly). The medical system is still a mess. Wages are up perhaps only 5%.   Their quality of life is really suffering now.   Libertarians point out that fiat inflation is theft of one's private property. You earned a dollar. Now your prosperity has been stolen.   Sneaky shrinkflation is stealing from you too. Yeah, you're not imagining it,    Gatorade has trimmed its 32 ounce bottles down to 28 ounces. A small box of Kleenex has shrunk from 65 tissues down to 60.    Package sizes are shrinking faster than Lake Mead, all while producers charge the same price or more. That’s what shrinkflation means.   It's become an awful economic malady for consumers.   So, let’s talk about higher interest rates since that’s what can keep inflation from soaring.   Many interest rate types are based off of the Federal Funds Rate.   Now, I like to look at history to see what typically happens in like scenarios. History doesn’t tell you everything, but many people don’t look at it.   Rewinding three years, this rate was hiked up to 2.5% by early 2019… and the stock market was freaking out by then. Trump even demanded a rate cut. He got it and that, turned stocks around.   Yes, Presidents are supposed to stay independent of the Fed, but, in any case…   Just last week, the Fed Funds Rate was raised up to 1.75%... and the stock and crypto markets have already taken a swan dive off the high board.   Everyone thinks that rates are going to be raised again at the next Fed meeting next month.   So how do you think that equity markets are going to like that? History shows us that they don’t.   But see, history shows us that even when the Fed Funds Rate is raised to 10%, it can take years to quell inflation.   Commodities like housing, food, and energy, often excel in either inflationary times or recessionary times.   That’s where you want to be. Buy & own what people need, not what they want.   These things have a finite supply. Bringing them into existence takes "proof of work".    Proof of work means that it takes real world resources to extract or produce something—like framing roof trusses, growing timber for lumber, mining gold, extracting oil, or growing wheat.    If you held any of these commodities individually, you might merely hedge inflation.   But if you can control an entire commodity by only putting one-quarter or one-fifth of your "skin in the same", then you get to short the dollar too.   "Shorting" means that you're betting that something is going to fall in value—the dollar in this case.   Now you're creating leverage and arbitrage. You're really profiteering from inflation ehre.   Real estate is like a basket of commodities. It is made of: lumber and copper and glass and all kinds of commodities.   So, if you have $1M in real estate debt, it's now being debased at a rate of 8.6%. Great.   This effect alone has increased your prosperity by $86,000 this year—$86,000 this year alone, and that’s besides appreciation, income, tax benefits, and amortization.   Yeah, you’ve got an $86K tailwind.   Do you remember back in 2019 when I did the podcast episode called The Debt Decamillionaire? It was Episode 260. You might remember that episode.   That's when I touted the counterintuitive merits of taking out $10M in real estate debt... with the payments outsourced to tenants.   Now, I know that not everyone has the wherewithal to do that. But if you were able to implement that plan, it has now created an extra $860,000 of annual wealth for you.   Yes, as one of just five ways you’re paid.   If you think that sounds scary - or unconventional - it’s definitely unconventional. Because being conventional gets one nowhere.   So, though you might have not been able to amass that much good debt, I was ahead of the inflation, helping you get out in front of it to take advantage of it. Of course, I talked about it well before 2019 too.   And, no, I sure didn’t know that a pandemic was coming in 2020 and it was going to bring all this inflation this quickly… but that is how things worked out.   Now, if you’re uninitiated on this, if you originate $10M in loans, understand something. Your net worth didn’t just decrease by $10M on the day that you got the loan.    The day that you originate the loan, what happens is that you’ve now got $10M in your asset column and $10M in your debt column.   Leverage amplifies the $10M in your asset column… and then your debt column erodes through both tenant-made principal paydown - and this higher inflation.   Maybe I’m stretching your thinking just merely by discussing 8-figure debt like that.   So why is someone really compelled to be a real estate investor today?   One big reason is that soaring inflation is going to be around for a while.   So last Wednesday, when the Fed raised interest rates three-quarters of 1% - their highest daily increase since 1994.   Understand that higher interest rates decrease demand. There's another name for substantially decreased demand. That is called a recession. I don’t know if we’ll get that far.   Now, capitalism is not inherently inflationary.   Sure, as employers' demand for labor rises, that's inflationary.   But as businesses compete to offer goods and services at the lowest price - which is capitalism - that's deflationary.   Libertarians are quick to point out that America has too much government intervention to be considered a truly capitalist economy anymore. That’s a different conversation.   But some have speculated that politicians are plotting another stimulus check drop on American citizens so that they can deal with inflation.   I really hope that they do not do that. Sheesh, this would be a policy blunder. This would be like shooting a man that's already dead.   This absurd approach of "printing up currency" would be to help people deal with the consequences of... "printing up currency".   If you think that’s preposterous, well…   Quebec is actually doing this. They're issuing $500 stimulus checks to help the Canadian province's residents deal with inflation.   Yeah, that’s really happening.    Soaring gas prices aren’t just painful for summer road-trippers. Because fuel is a critical input for so many goods and services, higher costs are causing havoc across the economy in a lot of places that you wouldn’t expect it… Aviation: Airfares in the US skyrocketed 19% in April from a month earlier, an increase that is almost exclusively driven by a jump in jet fuel prices, United CEO Scott Kirby said. Now, you might have expected that one. But get this… Law enforcement: A sheriff’s department in Michigan instructed its deputies to cut back on visits for non-urgent calls because it had blasted through its fuel budget with months remaining until a new one kicks in. (Yeah, inflation affecting law enforcement!) Emergency services: An ambulance crew in Pittsburgh said it was limiting its service outside of 911 calls after facing a similar budget crunch. Its fuel expense for the full year is typically $50,000, and it’s already got close to that entering June. Landscaping: Lawnmowers and trimmers use gas to make your front yard the envy of the neighborhood. But after absorbing all of the cost increases they can, some landscapers have slapped a surcharge on customers, and others are even looking into electric mowers and propane as an alternative fuel. In any case, a look at history tells us that we could be in for high inflation for a full decade.   So make financial decisions accordingly.   Risk assets are typically really sensitive to big moves in inflation and interest rates.   Major stock indices are down, down, down.   And cryptocurrencies are in an all-out historic meltdown. They’re more volatile than stocks, and many have lost 50%-60%+ of their value just this year.  Crypto trading platforms have halted withdrawals Companies cut jobs Panicked investors dumped their holdings The public is finally dismissing promoters' claims of "Hey, I made $50k on doodoo coin. So you can you!". You don’t really hear that lately.   Let's Go Brandon Coin, now worth $0.00. And “Let’s Go Brandon” coin makes Dogecoin look like some sort of respectable family heirloom.   I actually still think bitcoin could have some potential, but…   So then where to look? Where do you go for yield today?   Some feel that the "true rate of inflation" is 15% today. Then that's how much prosperity you lose by storing cash.   (I believe it's wise to hold at least 3-5% of your real estate portfolio's value in cash.)   One place could be oil if you think there’s still a runup to be had there. But oil has performed well so far this year. Gold still hasn’t really awakened despite inflation.   What you can do… is…   Follow the money. Big institutional buyers like American Homes 4 Rent keep plowing money into real estate, especially single-family rental homes.   That’s historically the place to be in times of either high inflation or a recession.   Though the institutional share is increasing, the overwhelming majority of homes are still bought by individuals just like you.   In the fourth quarter of 2021, institutional buyers only comprised 18% of home purchases.    As affordability clamps down on wannabe first-time homebuyers, unfortunately, many of these fine people never make it to the closing table.   Every 1% in a mortgage rate increase decreases a buyer’s PP by 12%.   Mortgage interest rates are now 6%+ on OOs, about 7% on rentals. I believe that the only way houses are going to get more affordable anytime soon is if mortgage rates come down. That’s because home prices aren’t coming down anytime soon.   So what do these priced-out people do? Increasingly, they become your renter.    Rent price growth is predicted to outpace home price growth this year.   Though some measures are lower, Rent.com's Rent Report shows an astounding 26% annual national rent increase.   While a lot of major markets are struggling with a streak of Fed rate hikes that could drag on longer than the final two minutes of an NBA game...   ...for real estate investors, the rent just keeps flowing in.    And here’s what it comes down to. Picture this. Like I’ve discussed before, first home prices rise, and then rents follow later.   Picture two waves. Say that these two waves are 18 months apart. The first wave is home prices. Today, prices are still climbing but the wave has likely crested.   That second wave that’s coming in now are the torrid rent price increases.   The trough between the two waves is where the cash flow is worst on new purchases.   And now the second wave - that rent increase wave - is building.    That’s the ah… seafaring here in the rental housing market ocean if you will.    Hey, In the past, I’ve discussed where I’ve invested and what RE types I like to own. Why don’t we hear from GRE’s own COO Aundrea Newbern, MBA about how she’s positioning her portfolio in this environment of normalizing prices & spiking rents.  Also, she & I will discuss some of our favorite resources & websites for real estate info. That’s straight ahead. I’m Keith Weinhold. You’re listening to Episode 402 of Get Rich Education! __________________ Yeah, great stuff from Aundrea, as always.  We discussed markets. Of course, it’s about the submarket too. As an example, maybe you don’t feel like Erie, PA or Toledo, OH or Grand Rapids, MI are fast-growing markets.  Actually, I think Grand Rapids, for one, is growing, but the point is, that even if a metro has a stable population but it’s, say, medical district is booming - like a lot of cities’ medical districts are… you may very well be better off in an OK metro with a booming medical SUBmarket than you are elsewhere. It’s often about that SUBmarket within a metro that really matters to you. There aren’t too many places that you can invest & get yield today. But high inflation is the motivator to do so.  Create one login, one time, it’s free & get access to all of our provider at GREmarketplace.com For everyone here… COO Aundrea Newbern, MBA, Content Manager Matthew Blunt, Producer - me &, Sound Engineer, Investment Coach Naresh Vissa, Website Marvin Diaz Jr, Advertising Jake Madoff, I’m your host Keith Weinhold.  Don’t Quit Your Daydream!
401: A Greater Depression Is Ahead with Doug Casey
Jun 13 2022
401: A Greater Depression Is Ahead with Doug Casey
The housing market has calmed, but it’s still strong. The homeownership rate of 65% is poised to fall these next few years. People must live somewhere. This should make for more renters. Mortgage delinquencies have fallen for seven straight quarters. The forbearance program kept people in their homes. “The Great Reshuffling” describes the US housing market since 2020. Inflation flips money upside-down. Focus on prudent borrowing, not saving. International Man Doug Casey joins us. He calls for a “Greater Depression” ahead. For consumers, the costs of energy, food, and housing have become crippling.  Doug thinks that the decline of world economies will continue. World cities have more people living on the streets.  He thinks that the Fed can’t hike rates very high. It will result in too many debt defaults. Then how will inflation be curbed? Doug thinks you should save, but don’t save in dollars. Are price controls coming? That’s when the government tells companies that there’s a ceiling on the price they can charge for their goods and services. We discuss what you can do to prevent being wiped out in a crisis. I discuss living well vs. austerity. Resources mentioned: Show Notes: www.GetRichEducation.com/401 More on Doug Casey: Current US debt level is over $30T: www.usdebtclock.org Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Partial transcript:   Welcome to GRE! I’m your host, Keith Weinhold. While much of America & the world keeps getting crushed by inflation, you’re profiting from it.   I provide you with a housing market update… then, as higher inflation reduces the quality of life for so many WORLD residents, today’s guest gives both us a global and national perspective on the prospects for a DEpression, today on Get Rich Education.   __________________   Welcome to GRE! From NYC’s Brooklyn Bridge to Bainbridge Island, WA and across 188 nations worldwide, I’m Keith Weinhold. This is GRE!   And it’s Episode 401. Now, no, it’s definitely not episode 401(k). No life deferral plans here! Uh, oh excuse me… they’e called… uh, tax deferral plans. Though life-deferral plans would be a more apropos moniker.   I’m grateful that you’re here for another wealth-building week.   Now… asking an angry spouse to calm down is not exactly a tactic that's... effective.   By now, Jerome Powell has been effective at raising interest rates to help America's housing market calm down.   Though mortgage rates have inched lower in recent weeks, they're still 2% higher now than they were a year ago today.   In fact, the rate rise from early March to early May was the swiftest that I've seen in my entire life.   Rates scaled a wall. Clearly, this impacts affordability.    The rate of property sales is a little lower now… off its peak.   It's getting more Darwinian out there. The NAR estimates that 15% of wannabe first-time homebuyers will be priced out of the market this year.    People have to live somewhere. If they can't own, they'll have to rent... or keep living in their parents' basement… that’s an option for some people too.   Right now, the homeownership rate is 65%... and that is pretty close to the average of the past few American generations.   I’ll tell you… that 65% homeownership rate is poised to fall faster than dogecoin.    Well, what this likely falling home ownership rate means is that the renter pool should swell, putting more upward pressure on rents.   That’s what happens. If home ownership goes from 65% to 60%, then America’s renter proportion basically goes from 35% up to 40%.   You know how I've talked about how home prices rise first, then rent increases lag behind? Well, this is it. This is the place and time where rents catch up.   With housing prices, are we set up for a recipe of "housing crash" or is it more like "housing calm"?   Looking at purchase applications, demand is probably past its peak. But housing demand still drastically exceeds supply.    Normal housing supply is about 1.5 million units. We've come up from a jaw-dropping paucity of 376,000 homes back in February. And it's still just 516,000 now (chart).   We're only up a tad from famine-like levels.   America still needs about 300% more inventory just to bring the market back into supply-demand balance.   Housing supply is inelastic; it cannot be increased quickly. It'll take several years to reach balance.   How else can we measure this balance? One way is with days on market (DOM).   Pre-pandemic it was 45 days. Now, despite higher interest rates, it's under 30 days & under 20 days in a lot of markets.   Mortgage delinquencies have fallen for seven straight quarters. The forbearance program worked. One can critique its morality. But it kept people from losing their homes.   As the market entropy - with wild bidding wars & a “free for all”, couldn't last forever - nor was it good that that condition persist - it's still a strong housing market.    Expect a gradual return to a calmer, more normalized condition. Yes, “calmer” market conditions are poised to emerge here.   Hey, pretty soon, you might not have to offer more than the list price for a property.   Expect less competition from all-cash buyers. Sheesh, “all-cash buyers”. What are those zero-leverage psychos doing anyway?   Hey, property inspections are coming back. Imagine that you can ask a seller to fix some things for you and not fear that they'll reject your offer.   So what is the bottom line with today’s housing market?   Rents should keep rising faster than historic norms.   Supply is so low that housing price crash prospects are near zero, probably even through 2023.   20%+ annual price increases still exist in many markets. Nationally, this is calming now.   By the end of the year, home price appreciation should still be higher than the historic norm of 5%.   And you know…   Back on December 1st of last year, I published GRE's 2022 National Median Housing Price Forecast and I also announced it on this show at that time that I expected a 9% to 10% rate of home price appreciation this year.   We’re nearly at mid-year here, and I still like how that forecast looks.   In America, you’ve heard of the Great Resignation or the Great Migration but I think that the term that best encapsulates what’s gone on in American housing since the start of this decade is “The Great Reshuffling”.   Working from home was a significant driver of this "Great Reshuffling" and accounted for more than half of the steep increases in home prices seen during the pandemic. That’s what new research has found by the Nat’l Bureau Of Economic Research.   By now, you’ve got more Americans that are shuffled into place. That found that long-term home with the realities of their new life.   That’s the bottom line. There is a Great Reshuffling, and now people are settling into place so we’re kind of seeing this welcome “calming” of the housing market as we move toward eventually settling into more normal conditions.   Well, hey. Thank you for the “Instant Reaction” from so many of you after last week’s milestone Episode 400 where Hal Elrod & I discuss how to improve relationships and be a person of value.   Greg from the United States remarked: “Two of my favorite people were together in one episode. I’ve been following Keith since the beginning of his podcast and journey… and I love “The Miracle Morning” and practice it habitually.   Roxana from Romania said, This was just phenomenal! A terrific talk that I listened to three times already. Thank you for all the good that you do through GRE! Congratulations for 400 episodes.”   I appreciate the remarks there, thanks.   You know, I want to hear from you, the listener.    If you’ve been following along here and you’ve acted by putting income property into your portfolio and you’re now the beneficiary of inflation & you’re profiting from this inflation… with the Inflation Triple Crown… from time-to-time, we like to have a listener on the show.   If that interests you, reach out to us through: GetRichEducation.com/Contact   There’s no guarantee that we can get you on the show here. We have 50x as many requests to appear on the show as available slots.   But if you’ve had your life impacted, we want to hear from you. You don’t need to be a big name.    In fact, if you’re just sort of salary or wage-earning person that’s had their life impacted by taking GRE principles and putting them into action, I want to hear from you.   Again, get started there at: GetRichEducation.com/Contact   Inflation flips money upside-down.   Though inflation isn’t a new story, most experts believe that inflation is going to stay elevated for a longer period of time here.   I think that some people - everyday people - let themselves be coerced by inflation. So they cut back on grocery spending & complain about car gasoline prices & lament that their 401(k) is plummeting & live small and maybe even live miserable.   Then there’s this increasingly popular narrative that seems to enforce that - you’ll do with less & you’ll be happy about it.    And you hear more about buzzy terms, like, well “Reducing your standard of living is what “sustainable” looks like. Don’t you want to live sustainably?”   And people will try to conserve gasoline consumption by biking in the rain and having a muddy streak up their back.   Now, all things equal. I think that doing this for the environment can be good. That’s fine.   Rather than sustainability, some try to mask the quality of life degradation (from inflation)... justifying it with… well, I’m practicing “minimalism”.    Minimalism. Yeah, I don’t need to go on vacations. Translation = I’m too fearful of my financial security to even get out and see the very world that I live in.   Whoever said that less is more never had more… and why have more when you can “have it all”? I kid a little bit here…   But… if you keep your quality of life because you invested in real assets with good debt… then go ahead and recycle some more consumable items in your household if you want to help the environment.   You don’t get to recycle your life. You’ve only got one of those… at least here on this earth.   Today’s guest believes that the prospect of a Greater Depression lies ahead. Let’s explore this together, today. _________________   Yeah, it’s good to get the bigger-picture perspective sometimes.   Doug feels that future RE price increases could be in question. Well, even if appreciation completely stopped in the future, today you can still lock in low mortgage interest rates & rent that property to others… with persistently high inflation debasing your debt all along.   I brought up price controls in our chat today, which is when the government steps in & says something like, no, gas station, you absolutely cannot charge more than $6 per gallon for gasoline, or no, leaf lettuce grower, you cannot charge more than $4 for a one pound bunch of leaf lettuce.    That ceiling - that price control - has often led to disastrous consequences for economies.   Prices often got high in the first place because there’s a relative scarcity of those goods.   Then if you put a price control on, say, leaf lettuce, then producers are less incentivized to produce. They won’t produce at a loss.    When producers stop producing, then there’s even less reason for anyone to produce the item, making it more scarce, making your consumer choices more narrow & making your life worse.   Price controls can turn out to be a form of austerity.    Then there’s more direct austerity - which is analogous to saying that you cannot run your air conditioner below 80 degrees in order to conserve electricity.    Well, that DIRECT austerity measure also reduces your quality of life… and it’s politically unpopular. A President doesn’t want to institute a direct austerity measure like electricity conservation.   So a price control has more political expediency than austerity but it can have the same drastic result - reducing your consumer choice and quality of life.   If you picked up on what Doug was saying, he said that you can save. But don’t save in dollars. Saving in dollars guarantees a diminishment of your purchasing power.   My take is that saving in dollars guarantees a loss in you & your family’s standard of living. So the best way to avoid a “Greater Depression” at home, is to be vigilant that…   Inflation flips money upside-down. Get out of dollars. Get into real assets & debt.    We’ve built a resource here to help you do exactly that. Get out of dollars, get into real assets & good debt at GREmarketplace.com   You’ve got the best markets & proven providers of income property. Create one login one time and connect with providers right there at GREmarketplace.com   Until next week, I’m your host, Keith Weinhold. DQYD!
400: How To Be A Person Of Value & Build Relationships with Hal Elrod
Jun 6 2022
400: How To Be A Person Of Value & Build Relationships with Hal Elrod
You often relate to other people when you show yourself as vulnerable and fallible. In many contexts, this is even better than acting professionally. Today’s guest, “Miracle Morning” author Hal Elrod, tells us that people spend too much effort trying to impress others. When you give the most, it’s liberating. “You SHOULD care about what others think of you. That’s your reputation.” -Keith Weinhold Once, Hal e-mailed friends, ex-girlfriends and colleagues to seek criticism about himself. That feedback hurt. Everyone wants change, but no one wants to change. Generosity, selflessness, and contribution foster meaningful relationships. I share that viewers were recently critical of my YouTube video. Hal admits that he believes that he’s not a great listener. Hal strives to add value to every single person that he meets. Aundrea Newbern, GRE Operations Lead, joins us for milestone Episode 400.  Resources mentioned: Show Notes: www.GetRichEducation.com/400 Hal Elrod’s books and movie: www.MiracleMorning.com Hal’s friend John Ruhlin’s book “Giftology”: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Partial transcript: Welcome to GRE! I’m your host, Keith Weinhold. Being a person of value and building lasting relationships often comes down to self disinterest, empathy, and connection. You’re going to build not just your wealth mindset, but your skillset.   It’s milestone Episode 400, today, on Get Rich Education!   Welcome to GRE! From Cherry Hill, NJ to Cherry Springs Dark Skies Park, PA and across 188 nations worldwide, you’re listening to one of America’s longest-running and most-listened to shows on real estate investing.    That’s our major so to speak… with minors in economics and wealth mindset. I’m your host, Keith Weinhold. You probably know that after 400 episodes.    Today’s guest doesn’t often do podcast conversations like this. But GRE’s Operations Lead, Aundrea introduced me to “Miracle Morning” author Hal Elrod last year.    So Hal is standing by, and then, a bonus, as Aundrea joins me near the end of the show today as well.   Yeah, so here on milestone Episode 400, there aren’t any balloons falling out of the sky or anything. It’s an opportunity to expand your thoughts & mindset & skillset in a different direction that should benefit you both within real estate investing & your broader life outside of it - from relationships with your real estate agent to your spouse.   In human relations, more than ever, people relate more to you as a vulnerable and even fallible person than they do as one that acts strictly like a professional in a lot of circumstances.   The best way to show others in a business relationship (that you don’t know very well) that you’re a real human being & that loosens up both of you & make you laugh is when you go out of your way to point out that when you left home this morning… you’ve got mismatched socks on… and you make some joke about it… something innocuous yet relatable like that.   Then there’s handling ego and criticism in a way that makes you endearing and empathetic.    And by the way, the definition of empathy is “the ability to understand and share the feelings of another person.”   Now, we get overwhelmingly positive feedback and comments about the show here… and I am grateful to you for that, whether it’s through Apple Podcasts reviews, or where you can always reach out if you’ve got a question or concern or suggestion at GetRichEducation.com/Contact… or increasingly, we get more & more comments from you on our Get Rich Education YouTube Channel.   There is a rather robust comments section there…   … and there’s one popular video that we have over there. It has more than 100,000 views and a lot of “Likes” and “Comments”. And I was rather criticized for how I handled this video - it was an interview.    Now, it was the type of video that crossed over, it didn’t bring in our usual real estate investor crowd. It was kind of a hybrid crowd of geography & real estate.   And, again, we get overwhelmingly positive feedback here. But the nice remarks aren’t where you get the lessons, so… I got dozens of critical comments on this video… and these commenters were clearly critical of the way that I handled the interview. It wasn’t the guest.   Comments were rather disparate. Some said that I brought no value to that interview - I was the host with a fairly prominent guest. Others said that I talked too much, some said I talked too little, it just seemed like I couldn’t do anything right with that crowd.   Now, one way that I could have handled it is set a policy here that any negative comments have to be deleted. We could have just deleted them all.   Well, I don’t want to do that. You can disagree. In fact, some say that a disagreement is actually the start of a great conversation.   We could go in there & reply and tell the commenter that they’re being dumb or say something else disparaging.   Here’s how I handled it once I learned about this. I went into the YouTube comments myself, read a bunch of the criticism, and made individual responses to a bunch of them. My response was something like:   Hey, thanks for the feedback. Others seem to take exception to this material too. It is probably in my best interest to read all of these comments, see what I can learn from this, and I’ve got to do better next time. I have clearly disappointed a lot of people.   That was my response. Something like that.   Well, what did that do… it appeared to engender… empathy, really. Some of the detracting commenters then came back to me & said, “Aw, you know, that wasn’t so bad. I don’t think there’s much that you need to change. I still learned a lot from your video.”   See, when I showed the world that I’m listening and that I’m a fallible human being, just like we all are, sometimes it makes the critic come back and sort of repent or even reconsider.     Next week, here on the show, “International Man” Doug Casey & I are going to discuss economics and what he thinks the prospects of entering what he calls “The Greater Depression” are.   Today, Hal Elrod & I on how you can be a person of value and build meaningful relationships…
399: Why Stocks Don't Create Wealth, STRs, Build-To-Rent
May 30 2022
399: Why Stocks Don't Create Wealth, STRs, Build-To-Rent
Have you ever met anyone that created wealth with stocks? I haven’t. Why not?  Inflation, emotion, taxes, fees and volatility are the reasons. I break this down. The Rule of 72 is what traditional advisers cite as a wealth-builder. I describe why this does not work. Learn why returns from stock and mutual funds are often less than zero. What really creates wealth? Leverage. Learn trade-offs between long-term rentals and short-term rentals. Zach Lemaster joins us. A licensed optometrist and captain for the US Air Force, he’s become financially-free through real estate.  We discuss the pros and cons of owning “Build-To-Rent” new construction income properties. It takes patience during the build process. Find Build-To-Rent income properties by e-mailing GRE’s Investment Coach: naresh@getricheducation.com Resources mentioned: Show Notes: www.GetRichEducation.com/399 Get income properties by e-mailing GRE’s Investment Coach: naresh@getricheducation.com When I interviewed the 401(k) inventor: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold Partial transcript:   Welcome to GRE! Why Don’t Stocks Create Wealth? After answering that, learn about some tradeoffs between LTRs and STRs, and the pros & cons of getting a construction loan and new-build rental properties. Today, on Get Rich Education. ____________________   Welcome to GRE! From Hialeah, FL to Haleakala, HI and across 188 nations worldwide - that’s almost all of them - I’m Keith Weinhold. This is Get Rich Education.   I find it interesting that there are still smart people out there who think that stocks create wealth.   Everyday people could create wealth just by investing in stocks or mutual funds or ETFs?   I’ll tell ya. I have never met anyone in my entire life that has become wealthy from investing in these vehicles.   Now, that’s something that shouldn’t offend stock adherents. That has been my personal experience.    Just asking around here at GRE a bit, I found that our Content Manager, Matthew… he said that he once knew just one person that did get wealthy with stocks… and that is because that person’s company IPO’ed.   OK, well that’s worth knowing. But as for everyday investors, what one might call a retail investor that buys and owns Apple stock or Amazon stock or bought the S&P 500 Index fund from a big mutual fund company… I mean… do you know anyone that ever created wealth from stocks? Or do you even know anyone that ever knew someone that created wealth with stocks.   I'm talking about creating wealth. For example, someone that started at a level of either "just getting by" or starting at a level of "middle class" and then transitioned to "wealthy", simply through shrewd and savvy stock investing.   I think a lot of people invest in stocks just because that’s what the herd does.   But they never ask themselves at all… "Have I actually met anyone that's ever created wealth from stocks?"   And if you run with the herd, you don’t get ahead.   So why is this? How come virtually no one gets wealthy with stocks?   Well, look. We all learn and understand the world through different lenses. I'm about to share the thought paradigm that shifted my own personal journey… and why I have not personally - or through an LLC - or in any way, owned any stock, or mutual fund, or ETF since the year 2014.   Right now, major stock indices are flirting with bear market territory. This means a value loss of 20% from a recent peak.    Recently, the Dow Jones posted its eighth straight weekly loss. That's its longest weekly losing streak since 1923.   Could we say that misery loves companies? Big Tech has shrunk to Medium Tech. Even staid reliables like Apple, Target, and Walmart are tanking.     Other than a one-month virus "flash crash" in March of 2020, many Millennials and Gen Zers have zero experience with a sustained bear market.     None have occurred for thirteen years, which is an unusually long time frame.   Perhaps these investors will "sell low"; maybe they'll stay the course.   Now, investing in the stock market is so common - and so herdlike - that if you’re talking in a general conversation and say: “the market” - people just assume that you mean the stock market.   Well, shouldn’t “the market” be creating wealth for people.    After all, the S&P 500 has averaged a 10% annual return over time. In order to emphasize compounded returns, something that traditional, old school advisers often cite is "The Rule of 72".   You've probably heard of it.   What you do is take the number 72, divide it by your annual percent return (10), and that's how many years it takes your money to double.    Therefore, an S&P 500 investor should double their money every 7.2 years. Well, that sounds pretty good to most people..   Then over the decades, several doublings should ensure a fantastic retirement and perhaps even a taste of wealth.   But why doesn't it?   Why doesn’t it provide a fantastic retirement most times? And why doesn’t it put people on that wealthy echelon… ever?    This is due to five chief drags—inflation, emotion, taxes, fees, and volatility. I’ve glossed over that before. But lets see how this all negates what so many investors think is some kind of good return.     Let's subtract each one from this 10% unadjusted stock return.   Inflation Many experts agree that the CPI, currently 8%+, understates the true rate of inflation. It could be 15% now.   But let’s just say that long-term, true inflation averages 5%.   Yes, you could make the case that it’s more. But let’s just use 5% inflation. Well then...   …your long-term 10% stock return minus 5% inflation = 5% inflation-adjusted return.   Emotion Everyone knows you're supposed to "buy low" and "sell high". But many do the opposite.   Why?   One has difficulty buying low because prices have often fallen for a long period of time before the dip. The predominant emotion is discouragement.   When stock prices have gone down, down, down, like they have this year, so many people get emotional and sell low… and they justify that by saying… I’m sick of losing money… and if I sell, I guarantee that I’ll stop losing money. So many sell low.   But on the flip side, why isn't everyone selling high? It's because prices have grown. It's hard to sell out of upward momentum. Up, up, up, up, up, friends are making money. You’ve got FOMO. This emotion is euphoria. This makes people buy - maybe not at the peak - buy they often buy higher that what they sold for.   But despite all this, most people believe that they're above-average investors—despite the statistical impossibility. This effect is called illusory superiority.   It's like how 7 out of 10 people believe that they are above-average drivers.   People often sell lower & buy higher.   We'll just say this takes one's 5% inflation-adjusted stock return down to 4%. That's being kind.   Taxes & Fees Long-term capital gains taxes start at 15%. The highest ordinary income tax rate is 37%, which is the short-term capital gains tax equivalent.   Those percentages are what get taken out of your profit - that’s what eats into the entire 10% return that we started out with here.   Even if your funds are sheltered in a 401(k) or many retirement account types, yes, you could get tax-deferred growth. But you must begin paying taxes in retirement.   Fees are something that vary quite widely.   So… an S&P 500 investor's return adjusted for: inflation, emotion, taxes, and fees is often below 2%. Maybe far below 2%.   We're not done.   Volatility So many people miss this.   The Rule of 72 and other projections are based on a fixed annual rate of interest.   It's called the compound annual growth rate (CAGR).   Our example… with this Rule Of 72 assumed a smooth, exact 10% return every single year.   This is irresponsibly quixotic. The real world doesn't work this way.   Let's say that a price falls 20%—which again is a bear market. Now, you must gain 25% to get back to "even". That's just math.   Now, if it falls 40%, it must gain 66.7% just to return to sea level.   Using a smoothed CAGR diminishes the damaging effect of return volatility.   So let's take our 2% return that's already been adjusted for: inflation, emotion, taxes, fees. Now subtract out this volatility.   And now, you can see why real rates of return are often less than 0% for stock, mutual fund, and ETF investors. Maybe they’re minus 3%. Maybe they’re minus 12%.   Real stock returns often crumble faster than a Nature Valley granola bar. They're not good for you either—full of sugar and canola oil.   Note that I even used what many consider "good times" in my example—where we started with a 10% unadjusted return.   This is an audio format here on GRE Podcast Episode #399 so my analysis wasn't deeply technical nor replete with formulas for pinpoint accuracy.   You might remember when we had Garrett Gunderson here on the show a few times. He really goes deep on how stock & mutual fund investors typically lose prosperity year-after-year and Garrett thinks that I’m being kind when I say that a stock investor’s real return is “0”.   It helps you begin to understand why you rarely—if ever—met anyone that acquired wealth with these vehicles.   About ten years ago, while working at the state Department of Transportation in an 8' x 10' blue cubicle, I began to realize some things: Investing in retirement plans makes me safe and normal. I don't want a life that's safe and normal. That’s not extraordinary at all.Every dollar invested in stocks and mutual funds is a dollar that cannot leverage other people's money.Retirement plans provide zero income until I'm old.I won't get ahead by following the herd. Later, I interviewed the actual man that invented the 401(k) plan, Ted Benna.   Benna told me directly that the plans don't serve people the way they were intended. This helped complete my catharsis.   And my interview with Ted Benna is recorded. You might remember that episode. That was GRE Podcast Episode 197… if you haven’t heard it.    Yeah, the guy that actually invented the 401(k) in the late 1970s. That’s here on Episode 197.   So, now you understand much of why I haven't owned any stock, mutual fund, or ETF-based investment at all since 2014.   This show is called “Get Rich Education”. So I could talk about anything related to wealth-building and stay on-point.    But now you understand why I don’t discuss stocks.    Real estate has some drags too. For example, investors often underestimate their maintenance and repair costs.   Ultimately, the fact that Real Estate Pays 5 Ways™ is why it's superior. It's how anything less than a 20% to 25% fully-adjusted rate of return is disappointing (learn more).    Because real estate is an illiquid asset, this acts as a healthy barrier against "panic" buying or selling. Illiquidity diminishes the deleterious effects of emotion and volatility.   I do know investors who have created financial freedom through real estate, a lot of them, and I'm one.   If I can distill it down into one word for you, the short story about why I've met countless people that have graduated from middle class to wealthy through real estate is leverage.   Some of this is natural bias because I hang out in real estate circles, so I just tend to meet more of these people.   To stock investors, leverage is only available to more sophisticated types. Even then, it often comes with margin call risk. It's in a more limited measure than its wide availability in real estate.   Bear markets… like we have right now in stocks make people re-evaluate things.   To a younger investor that's potentially experiencing their first sustained stock bear market now, it's important to understand that...   ...generally, stocks are not a game designed to build wealth for everyday people anyway.    Times like these make people revert to fundamentals.   Ultimately, your success as an investor hinges upon your ability to provide others with value. Be a person of value in the world.   There have been few times in modern history when owning real estate demonstrates more intrinsic value than it does today.   You're providing others with what has increased in usefulness and is historically scarce in supply… at the same time.   Wealth comes down to your ability to be valuable.   When it comes to residential real estate, there are so many ways that we can segment it. Later on today, we’ll discuss new-build properties vs. existing properties and what’s going on in those markets today.   We can also parse the space with LTRs vs. STRs.   When we define that, of course, as the name would allude to, it is based on the duration of resident stay.   Depending on the jurisdiction and more, a rental period of under 30 days could be considered a STR (some people refer to these as AirBNBs or VRBOs)… or even up to lease periods of less than 6 months could be considered STR.   LTRs have more predictable long-term income… because a tenant often signs on for a lease period of one year or more… and LTRs are also more recession-resilient.   STRs have lower occupancy - but because the daily rate is so much higher, they can be more profitable than LTRs.   When you look at any investment, it’s so fundamental to understand who you serve. Back to my point about stocks, it helps you understand how you can be a person of value.   In LTRs, you serve families, roommates, and everyday mom & pops.   Until just five years ago, STRs principally served two groups of people -  Vacationers & business travelers.  With what happened in the world starting in 2020 with the virus, the STR community was concerned that the business traveler would go away & not come back.   But it didn’t seem to matter, because increasingly, over the last 5+ year, you have more & more digital nomads and WFA-types that rent STRs.   LTRs - Midwest & South, away from city center STR Location - resorts, beach communities, ski resorts   HOA limits are something that you have more of with STRs.     STR lodging or rental tax to the resident, you also get to charge the resident with the cleaning fee   Property Mgmt. costs tend to be 8-10% of each month’s for the owner of LTRs. For STRs, you’ll often pay 20% or more since there are more resident turns & more advertising & listings to manage.    When it comes to financing, you’ll often find LTRs to have more availability than STRs. This is huge… since leverage is what really creates wealth.  Damages: STRs tenants pay upfront and usually place a CC on file to cover any damages. So there is some more protection that way.   One great piece of REI guidance is that the best STRs are the property types where if that market dried up, you could fall back onto them and use that same property as a viable LTRs.   To summarize what you’ve learned so far today…   The definition of a bear market is when a market has lost 20% or more of its value from a recent high.   Stocks don’t create wealth due to inflation, emotion, taxes, fees, and volatility. A lot of people miss that until it’s too late and it’s nearly retirement time - or when they thought they could retire.   LTRs and STRs have a lot of trade-offs. LTRs are easier to finance and have more recession resistance. STRs can provide more income when its dialed in just right. LTRs have the longer track record.   Coming up, a guest & I are going to discuss today’s opportunity on brand new construction rental property.    That’s straight ahead. I’m Keith Weinhold. This is Get Rich Education. ______________________   Oh, yeah. Some good content from our guest on the pros and cons of using a construction loan with these new-build rental properties. You sure don’t have to go that route if you don’t want to.   For this batch of properties, and it is an ongoing batch of constantly refreshing properties, if you want to get to the front of the line, go ahead and e-mail our investment coach Naresh.   You not only get access to available properties - SFHs up to four-plex & sometimes larger, existing build & new-build, some properties conducive to STRs at times - though most are LTRs… some really inexpensive properties, at times less than $150K - they would tend to be existing, renovated properties, not new ones.    For access to all those property types and free coaching, contact Naresh here.   You can do that at: naresh@getricheducation.com   Coming up here on the show… next week, for milestone episode 400 - it is Miracle Morning author Hal Elrod & I, discussing investor mindset and relationship-building in real estate. Yes, it look longer than I expected to get Hal & I together at the same time. That finally happens next week. Our Operations Lead here at GRE, Aundrea, is expected to be here with you & I for that show next week too.   The week after Hal Elrod, the “International Man”, Doug Casey joins us. Last time he was here, we discussed ideals like liberty & freedom. This time, it’s going to be about economics & it’s usually pretty gloomy commentary with Doug… but he keeps it real.   Then, down the road, Rich Dad Tax Advisor Tom Wheelwright is back on the show with us yet again to help you cut your taxes toward zero.   So with Hal Elrod, Doug Casey, and Tom Wheelwright coming up… I’d say that one inspires you, one depresses you, and one informs you.    Hal being the inspiration Doug being the source of the depression - he knows that I kid, I was joking with Doug Casey about that last time And then, Tom Wheelwright being informative with… seemingly… some new tax plan that he has to tell you about.   Then after that, negotiation expert Chris Voss returns to the show. You might have seen his masterclass course.    So… GRE is so stacked with great shows in the near future here.   In inflationary times, there is no better place to invest than in real estate.   I mean, even if you bought a property with no loan & with no tenant in it, real estate would be an inflation hedge just based on that alone… just based on it’s capital price tracking inflation.   But then you get the leverage where you can 4X or 5X inflation… while also having your debt debased… while also having your cash flow OUTPACE inflation since your biggest expense - the mortgage - stays fixed.   This is just one of so many reasons why real estate is what’s made more ordinary people wealthy than anything else.    I really encourage you to get started… not only do we have this new coaching service steeped in GRE principles… but it’s also free… and we also have available properties.   I encourage you to reach out to our friendly GRE Investment Coach, Naresh at   naresh@getricheducation.com    Until next week for Episode 400, I’m your host, Keith Weinhold. DQYD!
398: Recession Fears, Fate Of The Housing Market, What Really Matters
May 23 2022
398: Recession Fears, Fate Of The Housing Market, What Really Matters
Are “coffin homes” coming to the United States? This is concerning. Housing is so expensive that people live in cocoons. A new Biden plan makes efforts to increase American housing supply. Finally! We need help on the supply side, not the demand side. I explore recession prospects with you.  During 7 of America’s 8 recessions (over the last sixty years), home prices only fell once. What Really Matters: “If you had invested $1,000 in JP Morgan in 1882, you’d be dead today.” You can borrow against your RE portfolio’s value with a cash-out refinance, tax-free. It’s like “lump sum cash flow”. Add properties to your portfolio through our international network at GREmarketplace.com Resources mentioned: Show Notes: www.GetRichEducation.com/398 GRE Video: What Really Matters California’s Cocoon-Like Pods: Biden’s plan to increase American housing supply: American Median Home Price Since 1963: Get mortgage loans for investment property: RidgeLendingGroup.com or call 877-74-RIDGE JWB’s available Florida income property: CashFlowAndGrowth.com To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co By texting “GRE” to 307-213-3475 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. Make passive income with apartment and other syndications: www.imaccredited.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don’t Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold