Podcast Summary
Crypto and Real Estate: Interconnected Investments: Brandon Turner sees crypto as a 'lottery ticket' investment due to government stimulus and loss of confidence in the dollar. Alan Corey shares the concept of an 'imaginary lottery ticket' in real estate investing, emphasizing the importance of understanding risk and preparation for potential downsides.
Real estate investing and crypto are two hot topics in the market right now, and they are interconnected in various ways. Brandon Turner and David Greene discussed their thoughts on crypto, with Brandon expressing his belief that the surge in crypto is due to the government's creation of stimulus and the loss of confidence in the dollar. He also mentioned that he made a small investment in crypto as a "lottery ticket" and has seen significant returns. In the main part of the podcast, they welcomed guest Alan Corey, who shared his experiences of making large profits in real estate, and introduced the concept of an "imaginary lottery ticket." This refers to the idea that every investment has an element of risk and uncertainty, and it's essential to be prepared for the potential downsides while focusing on the upside. The episode also touched upon the importance of understanding debt and risk management, as well as the benefits of becoming a real estate agent to invest. To further help investors, Brandon announced a new BiggerPockets Pro perk - an interview with a CPA and an attorney specializing in taxes and asset protection for real estate investors.
Tools for Streamlining Real Estate Investing: DealMachine and Rent to Retirement: Investors can save time, money, and resources by utilizing DealMachine for off-market leads and Rent to Retirement for turnkey rental properties, or by investing in a private real estate fund like PPR Capital Management.
Both DealMachine and Rent to Retirement offer valuable resources for real estate investors looking to streamline their lead generation and investment strategies. DealMachine provides unlimited access to high-quality contact information and phone numbers for off-market deals, while Rent to Retirement offers the opportunity to invest in new construction turnkey rental properties with little to no money down. Additionally, for accredited or high net worth investors, passive income can be achieved through investing in a private real estate fund like PPR Capital Management. Overall, these tools and strategies can help investors save time, money, and resources in their real estate investing journey.
From tech support to real estate investing: Alan Corey's journey to financial independence: Determination, education, and a clear goal led Alan Corey from a tech support job to retiring early through real estate investing. Despite initial challenges, he persisted and turned his passion into a full-time career.
Alan Corey's journey into real estate was fueled by his desire to achieve financial independence and retire early. Starting from his days of working long hours in tech support and performing comedy gigs every night, he became intrigued by the concept of buying properties to generate cash flow. Despite initial challenges, such as buying a first property in a less-than-ideal neighborhood, he persisted and continued to house hack and acquire more properties every year. Eventually, real estate became his full-time focus, and he was able to retire from his day job. Alan's experience shows that with determination and a clear goal, anyone can build wealth through real estate investing. Additionally, Alan shared his unique background in reality TV, having appeared on various shows such as Jerry Springer and Queer Eye for the Straight Guy. While these experiences were not entirely accurate representations of his life, they provided him with valuable experiences and lessons. Overall, Alan's story is a testament to the power of education, persistence, and a well-defined goal in achieving financial freedom.
House Hacking and FIRE for Financial Freedom: Implementing FIRE principles and house hacking can help one retire early with just a few rental properties. Live in a bought property while renting out rooms or the entire place to increase cash flow and eliminate bills for a growing budget and equity.
By implementing the principles of Financial Independence Retire Early (FIRE) and house hacking, one can become a millionaire and retire early, even with just a few rental properties. The speaker's experience of living on a tight budget and investing the rest in real estate, specifically house hacking, allowed him to quit his day job after the second property. House hacking, which involves buying a property and living in it while renting out rooms or the entire property, can significantly increase cash flow and lead to financial freedom. The speaker also emphasizes the importance of making a connection between paying off bills and investing in real estate, creating a rewarding system for the hard work put into the property buying process. By buying a property that covers a specific bill, one can eliminate that bill for the rest of their life and reinvest the cash flow into other bills or properties. This approach, which the speaker calls "House Fire," allows for a growing budget and the potential for increasing equity in homes instead of giving money to car companies or other entities.
Investing in Real Estate for Financial Freedom: Real estate investments can help individuals fund their expenses, create cash flow, and snowball their way to financial goals through a growing asset base.
Investing in real estate can help individuals break the cycle of living paycheck to paycheck and fund their desired expenses, even if they struggle with saving. This approach not only allows them to afford bigger ticket items, but also ensures that their assets are generating cash flow, limiting the damage caused by depreciating assets like cars or clothes. By focusing on cash flowing real estate, individuals can create a snowball effect, where each new expense is funded by their growing asset base. This mindset empowers individuals to make progress towards their financial goals and find joy in the process, rather than feeling stuck or overwhelmed by bills.
Living below your means and acquiring assets: Discipline spending, save, acquire assets, focus on assets over liabilities, use leverage wisely to build wealth
Building wealth involves a disciplined approach to spending and investing. Start by living below your means and using that savings to acquire assets, such as real estate or a business. This strategy allows you to rise in wealth and eventually afford the lifestyle you desire. It's important to remember that debts, like student loans or car notes, can be used as opportunities to acquire assets rather than obstacles to be paid off first. Wealthy individuals have this mindset and focus on spending their money on assets, rather than liabilities. Additionally, using leverage, such as mortgages, can help you buy more assets and spread out risk, leading to greater wealth accumulation over time.
Real estate investing advantages: leverage and cash flow: Leverage and cash flow in real estate investing can help mitigate losses and build wealth, but individual goals and risk tolerance should be considered.
Real estate investing offers unique advantages, including leverage and consistent cash flow, which can help mitigate potential losses and build wealth more effectively than other investments, such as stocks. Additionally, the speakers advocated for utilizing debt strategically, as the purchasing power of money decreases over time, and the ability to acquire more assets and "imaginary lottery tickets" increases the potential for significant returns. However, it's essential to consider individual financial goals and risk tolerance when making investment decisions. The idea that paying off a mortgage is a safer option may not be as risk-free as it seems, as it limits the opportunity to acquire more assets and potential appreciation.
Extra costs of owning a property: Property taxes, insurance, management, maintenance, and capex can add up to significant expenses beyond mortgage payments. Paying off high-interest debt first can improve credit and secure better mortgage terms. House hacking eliminates mortgage and saves on taxes.
Owning a property involves more expenses than just the mortgage. Property taxes, insurance, property management, maintenance, and capex are often larger expenses than the mortgage payment itself. Additionally, focusing on paying off high-interest debt, such as credit cards, before investing in real estate can help improve credit scores and secure better mortgage terms. Furthermore, house hacking not only eliminates mortgage payments but also saves money on taxes. It's essential to consider all these factors when comparing different investment vehicles.
Learning financial discipline through credit card debt: Paying off credit card debt can lead to long-term financial benefits, but addressing underlying causes and living within means is crucial.
While paying off credit card debt may seem like a financial necessity, the knowledge and discipline gained from the process can have long-term benefits, particularly in real estate investing. However, credit card debt is often a symptom of larger financial issues, and addressing those underlying causes is crucial. The ability to live within your means and resist the temptation to accrue debt is a valuable skill that can lead to success in various areas of life. It's essential to understand that managing debt is not just a mathematical problem but also a mental one. To help those struggling with living within their means, it can be helpful to visualize future goals and the sacrifices needed to achieve them. By focusing on the long-term benefits and the importance of financial discipline, individuals can make progress towards a debt-free future.
Hiding funds from oneself for effective money management: Limiting access to funds and creating multiple accounts can help prevent impulsive spending and save more efficiently.
Effective money management often involves hiding funds from oneself to prevent impulsive spending. The speaker shared his personal experience of setting up multiple bank accounts and limiting his access to them, only withdrawing the money once a year. This strategy helped him save for major purchases and avoid the temptation of spending the money elsewhere. The government also employs a similar tactic by taking taxes directly from paychecks before people have a chance to spend the money. The speaker emphasized that by limiting the size of one's financial container, one can control their spending and save more efficiently. He also shared a personal anecdote about discovering a forgotten account with $25,000 in it, highlighting the importance of being aware of all one's financial resources.
Setting constraints and deadlines boost productivity and creativity in real estate investing: Imposing self-imposed deadlines and limiting time for tasks can lead to increased productivity, improved time management, and better financial outcomes in real estate investing
Setting constraints and deadlines can significantly boost productivity and creativity in various aspects of life, including real estate investing. This concept, often referred to as Parkinson's law, suggests that people tend to expand their tasks to fill the time allotted. By imposing self-imposed deadlines and limiting the time available for completing tasks, individuals can focus their efforts and make faster, more effective decisions. This approach can lead to increased productivity, improved time management, and better financial outcomes. For instance, investors can use this strategy to buy properties more quickly, leading to immediate cash flow and potential for higher returns. Additionally, modern solutions like Steadily.com offer fast and affordable landlord insurance with quick turnaround times, allowing investors to save time and money while protecting their investments.
Identifying hidden value in imperfect properties: Be proactive and open-minded to find unique opportunities, like double lots or landlocked land, for value-add projects. Consider seller financing to buy properties without traditional bank loans and keep transactions off public record.
Successful real estate investing often involves recognizing hidden value in properties that others may overlook. The speaker shares his experience of identifying such opportunities by buying imperfect properties with unique features, like double lots or landlocked land, which can offer significant potential for value-add projects. He emphasizes the importance of being proactive and open-minded in the search for these opportunities. Seller financing is another strategy discussed, which involves the seller acting as the lender for the buyer. This arrangement can be beneficial for buyers who may not qualify for traditional bank loans or who want to keep their transactions off the public record. The seller benefits by getting cash upfront and the potential for a higher selling price over time. This strategy was successfully employed in a deal where the speaker and his client purchased a portfolio of 40 homes for $1,300,000, which is now worth $2,500,000.
Leveraging Seller Financing for Real Estate Investing with No Money Down: Seller financing allows investors to acquire properties with no money down, earn income for sellers, and often be cheaper than alternative financing options. Look for retiring sellers with large portfolios to find opportunities.
Seller financing is a valuable tool for real estate investors looking to get started with little to no money down. By partnering with sellers who own properties outright, investors can acquire properties and make payments over time. This approach offers benefits for both parties, including the possibility for the seller to earn income through installment sales and the separation of the transaction from the investor's credit score. Additionally, seller financing can often be cheaper than alternative financing options like hard money loans. To find these opportunities, investors can look for retiring sellers with large portfolios and a willingness to offload their properties. By expanding their knowledge of seller financing and utilizing various resources to identify potential sellers, investors can unlock the door to real estate investing despite having limited funds.
Triple net lease properties: Minimal management and tax benefits: Triple net lease properties offer significant tax savings, future cash flow, and potential for a paid-off property in 25 years. Management responsibilities can be outsourced, making it an attractive option for real estate investors.
Investing in triple net lease properties, which require minimal management and can be purchased with a small down payment, can provide significant tax benefits and future cash flow for real estate professionals. These properties, where the tenant pays off the mortgage, can result in a paid-off property in 20 years, allowing for substantial cash flow. Although there is no initial cash flow, the potential tax savings and future gains make it an attractive option for those looking to grow their wealth in real estate. Management responsibilities can be outsourced to property management companies, allowing investors to focus on acquiring new properties. While having a real estate license is not necessary for investing, it can be beneficial for agents who help other investors and have access to exclusive listings.
Leveraging expertise for successful real estate investing: Success in real estate investing requires a combination of knowledge, skills, and the ability to leverage resources and relationships effectively. Be open-minded, curious, and willing to learn from others.
Having a real estate license doesn't automatically make one an expert in all aspects of real estate investing. The speaker shared his experience as a real estate agent and investor, explaining that dealing with other real estate investors can be more challenging than working with clients or professionals in related fields. He emphasized the importance of leveraging other people's skills and expertise to maximize success in real estate investing. The speaker also shared an anecdote about discovering a potential investment opportunity by being curious and nosy while walking in a new neighborhood. He negotiated a good deal on a property by building rapport with the seller and demonstrating a solid understanding of the market. Overall, the key takeaway is that being successful in real estate investing requires a combination of knowledge, skills, and the ability to leverage resources and relationships effectively. It's not just about having a license or being an expert in one area; it's about being open-minded, curious, and willing to learn from others.
The psychological impact of reaching $1,000,000 in real estate deals: Reaching the $1,000,000 mark in real estate transactions can be a powerful negotiating tool. A successful deal can lead to bigger opportunities, creating a 'stack' of properties and increasing both cash flow and equity.
The psychological significance of the $1,000,000 mark in real estate transactions can be a powerful negotiating tool. In this particular case, a buyer was able to close a deal by offering a $1,000,000 asking price and asking for a $40,000 credit. The seller, who had previously been unable to find a buyer, agreed to the terms. The buyer funded the purchase through a HELOC on another property, allowing for a 100% financed deal. The property, located under an interstate, was not the most desirable, but it provided a steady cash flow of $2,000 per month. After four years, the buyer sold the duplex and used the proceeds to purchase three quadruplexes in Atlanta through a 1031 exchange. This experience demonstrated how one successful real estate deal can lead to even bigger opportunities, creating a "stack" of properties and increasing both cash flow and equity.
Real Estate Investing: More Than Luxury Cars and Trips: Build wealth, create income, persevere, unexpected profits, long-term strategy, learn from diverse perspectives, read 'Evicted' and 'The Color of Law'
Real estate investing is not just about buying luxury cars or going on extravagant trips. It's about building wealth and creating opportunities for future financial gains. The speaker shares his experience of buying a property with the intention of generating a monthly income and unexpectedly making a significant profit due to external factors. He emphasizes the importance of perseverance and not giving up, even when faced with obstacles. Additionally, he recommends the books "Evicted" by Matthew Desmond and "The Color of Law" to gain a deeper understanding of the real estate industry and the experiences of tenants and the history of housing segregation. Overall, the speaker encourages listeners to approach real estate investing as a long-term investment strategy and to be open to learning from various perspectives.
Systemic discrimination in housing policies and its impact on real estate investing for marginalized communities: Successful real estate investors prioritize their goals over distractions and are willing to learn from their mistakes.
Systemic discrimination in housing policies has hindered wealth generation for marginalized communities, putting them at a significant disadvantage in real estate investing for decades. This issue is explored in detail in Richard Rothstein's book, "The Color of Law." On a lighter note, successful real estate investors prioritize their dreams and goals over distractions, such as hobbies or TV shows. They face their fears of failure and are willing to try and learn from their mistakes. To learn more about Alan's experiences, insights, and resources, visit his website, the House of AC, or tune in to his podcasts, House Fire and Agent Upgrade.
Find the right real estate agent for successful investing: Consistent action and a knowledgeable agent are key to real estate investing success. Use BiggerPockets Agent Finder to simplify the process of finding the right agent based on location and investment goals.
For those interested in real estate investing, the key to success lies in taking consistent action over a long period of time, rather than trying to time the market. With the help of an investor-friendly agent, navigating the process and making informed decisions becomes easier. BiggerPockets Agent Finder is a free resource that can help investors find the right agent based on location and investment goals. This tool simplifies the process of finding a knowledgeable local expert to guide investors through the real estate market and bring them closer to financial freedom. Remember, investing in real estate involves risk, and it's essential to consult with qualified advisors before making any investment decisions.
