So what the heck is going on with the U.S. economy? We’ve been warned about a possible recession for two years now. But the economy is still going strong, and the housing market seems to defy gravity. The contradictions may have left you scratching your head, but the guest in this episode will help clear up any confusion. He’ll also share his thoughts on what and where to invest. Our guest Rick Sharga has more than 20 years of experience in the real estate and mortgage industries. He’s the founder and CEO of market intelligence and advisory firm CJ Patrick Company, and has previously served as EVP of Market Intelligence at ATTOM data, EVP for Carrington Mortgage Holdings, EVP of Marketing at RealtyTrac, and Chief Marketing Officer for Ten-X and Auction.com. Rick is one of the country’s most frequently quoted experts on the U.S. economy, real estate, mortgages, and foreclosures. He’s appeared on all the major news channels, and several times on this podcast. We just co-hosted a 2024 Housing Market Predictions webinar for the Real Wealth Show. You’ll find that webinar at by clicking here. So, if you’re wondering how to invest in real estate this year, you might get a few great ideas from Rick. You’ll also find information about the North Dallas Rental Fund mentioned in the podcast at https://growdevelopments.com. And don’t forget to join RealWealth to help expand your real estate knowledge and take advantage of up-to-date investing opportunities. It’s free! And please be sure you subscribe to this podcast on your favorite platform, like & comment, we want to hear from you! Thanks for watching! Kathy Fettke LINKS: Watch this episode on YouTube: https://www.youtube.com/watch?v=4mf15R6wtj0 Listen & Subscribe to the Real Wealth Show on your favorite platform: https://link.chtbl.com/RWS Join RealWealth: http://tinyurl.com/joinrealwealth970 Rick Sharga's 2024 Housing Market Predictions Webinar: https://realwealth.com/learn/2024-housing-market-predictions/

Do you have a really clear strategy for your real estate portfolio and a clear vision for where you want to go? Most of us know we need this, but maybe we haven't taken the time to figure it out or we just simply don't know how. In today’s episode, you’ll hear from someone who shares some great insights on how to create a strategy that fits your goals. You might recognize the name Dave Meyer. As a real estate investor and VP for Data and Analytics for BiggerPockets, he’s been on the main podcast many times.  He also hosts the new BiggerPockets “On the Market” podcast, for which I also appear as co-host. And he’s the author of “Start with Strategy,” which is just being released, and before that, “By the Numbers.” In this interview, David talks about strategy, vision, deal design, and portfolio management. Dave has done most of his investing in Colorado, but lives in Europe so he's had to learn how to invest from a distance.You can follow Dave on Instagram @thedatadeli And you can learn more about real estate investing as a RealWealth member. It’s free to join and gain access to all that we have to offer including hundreds of webinars, educational articles, news stories, market data, sample rental properties, property teams, and other real estate professionals including our own experienced investment counselors.  As always, please remember to subscribe to this podcast and when you have a minute, leave a review! Thanks for listening! Kathy LINKS: On the Market Podcast: https://link.chtbl.com/OTM Dave's new book, "Start with Strategy": https://store.biggerpockets.com/products/start-with-strategy Dave Meyer's Instagram: @thedatadeli Subscribe to the Real Wealth Show: https://tinyurl.com/RWSsubscribe Join RealWealth as a free member: http://tinyurl.com/joinrealwealth969

Are your real estate investments earning enough profit to make it all worthwhile? Do you know how much money is going out versus how much is coming back in? Do you need a better way of tracking the cash flow that you’re working so hard to create? In this episode, you’ll hear from real estate investor, David Richter, who learned by experience that he was spending too much for the amount of money he was getting from his rental properties. So he created a system for tracking cash flow called “Profit First” to help himself and other investors understand exactly how much they were really making. David has been investing in real estate for more than 10 years and has closed more than 850 deals. That includes wholesale, turnkey, BRRRR, owner finance, rentals, lease options, and other investing strategies. He created his Profit First cash flow system after he realized the need for tracking his cash flow. He’s also the author of: “Profit First for Real Estate Investing,” and he’s the founder of SimpleCFO Solutions to help other investors so they can “stop living from deal to deal.” You can also find out more about how to manage your real estate portfolio, get organized, avoid taxes, and make a profit by signing up for a free RealWealth membership at realwealthshow.com. You’ll have access to hundreds of webinars, property teams in growing markets, real estate professionals to help you with your journey, and our experienced investment counselors.  If you happen to be in the SF Bay area on Jan 20th, I'd love to meet you at our live event. You can get the details at GrowDevelopments.com under the event tab. I'll be giving my 2024 Economic forecast, plus I'll share about our newest syndication - a home development project in Klamath falls, OR, and I'll also be explaining what a syndication is. Thanks for joining me here on the Real Wealth Show. You can also watch this episode on YouTube here, and while you're there be sure to subscribe, like and comment, we love to hear from you! -Kathy Fettke    

It’s the start of a New Year, and we kick it off with a new rental market that we’re very excited to tell you about! We’re always on a mission to find the next up and coming metro for investors – where there’s job growth, population growth, cash flow and appreciation — and we’re happy to say that after a lot of due diligence, we’ve added San Antonio to our list. We’re even more excited that our team in San Antonio has worked out a deal with a local bank to offer an interest rate on loans that’s under 5%!   In this episode, you’ll hear from the CEO for this property team company. He is a longtime developer and home builder who specializes in duplexes and fourplexes for investors who want cash flow, appreciation, and built-in equity. He’s also arranged a property tour for Real Wealth members that’s happening toward the end of January. It will take place on January 20th in San Antonio. You can register for that tour at https://realty.realwealth.com/join/tours/. You’ll need to be a RealWealth member to register but it’s free to join at realwealthshow.com.    By the way, did you know this podcast is also a video podcast on YouTube? You can check it out here. Subscribe to the channel to get more of these episodes in video format when they are released every week!   As always, please remember to subscribe to this podcast and leave us a review! It really helps us.   Thanks for listening, Kathy

We talk a lot about how to build a real estate portfolio so you can have more free time. But what about the process of actually stepping back from your job to capitalize on that promise of free time? When's the right time? Why now? What will you do next? In today’s episode, you’ll hear from someone who’s had his ups and downs with real estate, but has been very successful overall. At the age of 51, he's decided that now is the time to take a break. David Shaw has been one of our Florida property providers for many years and has helped countless RealWealth investors, but the voice in his head says it's now time to move on to new projects and goals. The great thing about his plan? It’s working in his favor! He can afford to do this because he has a cash-flowing investment portfolio!  David is an Irish-born investor and turnkey rental home provider for more than 15 years. After years of personal investment, he’s now financially free to enjoy what we call real wealth – which is having the money and the freedom to live life on your own terms. For David, that means spending more time with his wife and three young children. He’ll also be working on other kinds of real estate projects including one with RealWealth, which you will hear about in this interview. If you’d like to create your own plan for financial freedom, please be sure you sign up for a RealWealth membership. It’s free to join and will provide you with lots of information on how to do that. If you’d like to find out more about international investing, which we mention in the podcast, go to https://www.gatewayinvestors.com. And to help us get noticed, please subscribe to this podcast and submit a review! You can also subscribe to our YouTube channel which features a video version of the Real Wealth Show podcast - you can find the video version of this episode here: https://youtu.be/jRkP6FFOuCA  

It's that time of year when everybody's enthused about closing down the old year and bringing in the new! And who better to help us with that process than my business partner and life partner, Rich Fettke. At the end of each year for many years now, Rich has led a focused investor exercise in two parts – one to assess and close out the old year and the other to set goals for the upcoming year.   In this episode, Rich will give us some background on what it takes to be a focused investor, which, in the most simplified terms, is getting clear, or focused, on what you really want, and then making a commitment to stay on track with your goals. But it isn't just for investing. It's for any kind of goal you'd like to attain. He also talks about doable goals based on what he calls the Rule of Three. And he offers suggestions as to the kinds of goals that will really move your life forward.    This interview coincides with two “Focused Investor” webinars that will actually guide you through the exercises. He’s already done the first one, which you can watch as a replay at realwealthshow.com under the Learn tab. The second one is scheduled for January 4th so you can sign up for that and participate with Rich. We send out emails with a link to register, so be sure you are on our email list. Or, if you miss it, you’ll be able to watch a replay of that as well at realwealthshow.com under the Learn tab/Webinars.   We are also offering a 2024 Goal Setting Retreat at our home in Malibu from January 26th through January 28th. It’s a supercharged version of the “Focused Investor” experience with a maximum of 14 people in the group. You can find out more about that at www.malibumastermind.com.   If you’d like to create your own plan for financial freedom, please be sure you sign up for a RealWealth membership. It’s free to join and will provide you with lots of information on how to do that. And to help us get noticed, please subscribe to this podcast and submit a review! You can also subscribe to our YouTube channel which features a video version of the Real Wealth Show. You can watch this episode on YouTube here. 

Should Wall Street companies be kicked out of the single-family rental market? Would it improve housing affordability if Congress banned institutional landlords from owning rental homes and forced them to sell off what they now own? That’s exactly what U.S. Senator Jeff Merkley of Oregon and U.S. Representative Adam Smith of Washington believe is needed to improve housing affordability. They introduced legislation called “End Hedge Fund Control of American Homes Act” and it’s getting a lot of pushback from people in the real estate industry. I just got back from the IMN Single Family Rental Conference in Scottsdale which was filled with fund managers who’d disagree with the concept. In this episode, you’ll hear from a fund manager with more than 5,000 rental properties in 39 southeast communities. Richard Ross is the CEO of Quinn Residences. He talks about how single-family rentals are filling a badly needed housing gap, why he believes he’s part of the solution (and not the problem), and what he thinks of this legislation. I am also a fund manager focused on the North Dallas area. It’s an area of rapid growth where rentals are in high demand. You can find out how to invest in our North Dallas Rental Fund at growdevelopments.com. We will be accepting accredited investors until the beginning of February.  Please join our network of investors at realwealthshow.com. It’s free to join and will give you full access to realwealth.com. For more information on syndications go to growdevelopments.com. And please subscribe to this podcast and leave a review! In addition to podcast platforms, you will find this interview on YouTube.  Thanks for listening! Kathy  

Finding a good investment opportunity is not as easy today as it was about ten years ago but sometimes it’s a matter of identifying those opportunities with the eyes of an experienced investor. Today, I’d like to share the good fortune I’ve had to work with long-time developer and real estate investor Fred Bates. He’s been my partner for many syndicated deals, and with great success! In this episode, we’ll talk about some of those projects and how they turned out, plus we’ll introduce a new project that we’re launching now in Oregon. Fred has been a developer for more than 40 years. He either focuses on entitling land or building homes depending on which is more profitable for that particular situation. He loves working with us because we’re good at market research and getting investors together for a syndicated deal. And we love working with him because he’s so good at evaluating projects and making them happen!  If you’d like to read more about some of the projects we’ve done together, go to realwealthshow.com. Sign up for free at our realwealth.com website and navigate your way to growdevelopments.com where you’ll find our syndicated deals. Just click on the Investments tab and you’ll see links for past and present projects. Also, please remember to subscribe to this podcast and leave a review! You can also check out the YouTube version of our podcast and subscribe to that channel as well.  Thanks for listening! Kathy Fettke

Imagine if you owned a piece of undeveloped land to build your dream home and you show up one day to find a home under construction by someone who thought they had purchased your land. That sounds somewhat impossible with all the steps you go through to purchase land, but it’s apparently something that has been happening more often. Some industry experts even say it may have become an even bigger problem than wire fraud.   In this episode, you’ll hear from Elizabeth Blosser of the American Land Title Association who calls this kind of fraud “seller impersonation fraud” because the crooks are impersonating the real landowner in order to sell the land to someone else. Elizabeth will talk about how they get away with it and what buyers and sellers can do to protect themselves. You’ll find an ALTA brochure on seller impersonation fraud here.    Elizabeth Blosser is the Vice President of Government Affairs at ALTA. She oversees the association's state legislative efforts including annually monitoring state bills related to the real estate, mortgage and title industries. She also serves on the board of directors for the Property Records Industry Association and has worked for legislators on the federal, state and local levels. She has extensive experience managing political, grassroots and public relations campaigns.    You can also learn more about protecting your properties at RealWealth.com. You'll find hundreds of webinars and articles. It's free to sign up. Just go to realwealthshow.com. We also have a video version of this podcast on YouTube. Please be sure you subscribe to our podcast on whichever platform you choose! And when you have a minute, please leave us a review.    Thanks for listening, Kathy Fettke   ALTA’s seller impersonation fraud brochure:  https://www.alta.org/file.cfm?name=ALTA-Seller-Impersonation-Handout   You can follow ALTA at these social media sites: https://www.instagram.com/altainstagram/ https://www.youtube.com/user/altavideos https://www.linkedin.com/company/american-land-title-association https://www.facebook.com/altaonline/

This episode could change your life! Find out how one real estate investor has built a portfolio that only takes him a few hours each week to maintain! The rest of his time he can do whatever he wants, like living abroad for a year at a time, and he’s earning plenty of passive income to make it happen. Chad “Coach” Carson began his real estate journey 20 years ago, at the age of 23. He had just ended a career as a college football linebacker at Clemson University, and started investing with a friend. There were some lessons learned and some hard work involved but he hit financial independence about 10 years later. He’s now in his 40’s, working just two hours a week to maintain his real estate portfolio, and is thoroughly enjoying a free and flexible lifestyle.  He just published a book called “The Small But Mighty Real Estate Investor” to share his strategy and philosophy on how to create just enough passive income without going overboard. And he offers lots of great tips in this interview.  You will also find great information on how to invest in rental properties as a RealWealth member. If you haven’t signed up already, you can do so at realwealthshow.com. It’s free to join, and free to access all of our great data and to connect with professionals that can help you get going, including our experienced investment counselors. Please be sure to subscribe to this podcast, and when you have a minute, leave us a review! By the way, did you know that the Real Wealth Show is also a video podcast on YouTube? You can check this episode out on our channel here, and we'd love it if you subscribed and left a comment!  Thanks for listening (and watching)! Kathy LINKS for our guest: Twitter: https://twitter.com/CoachChadCarson Instagram: https://www.instagram.com/coachchadcarson/ YouTube: https://www.youtube.com/coachchadcarson Facebook: https://www.facebook.com/coachchadcarson/

Owning your own magnificent beachfront real estate doesn’t have to break the bank. Whether you are looking for a place to vacation or a property for rental income, buying on the beach can be very affordable if you look outside the U.S.   In this episode, you’ll hear from my daughter Krista Fettke and her partner, Alec Denney. They’ve been traveling internationally for a few years and discovered great investment opportunities in Portugal, Spain, and now Mexico! They will talk about a portfolio of luxury condos, townhomes, and hotel rooms that you can purchase for screamingly low prices, and use as a second home or for rental income with all the tax benefits!   They will explain the process for purchasing property in another country, why these areas are up-and-coming, the tax benefits you’ll get, and the options for property management, along with much more. You can also visit their website at www.gatewayinvestors.com and find out how to attend an in-person tour that they have coming up in Tulum, Mexico on December 1st through the 3rd!   Krista Fettke has worked as the Social Media Director, content creator, and copywriter for the real estate investment club, RealWealth for 5 years, and is also Director of Marketing for Gateway Investors. As a travel enthusiast, she spent a year living in Europe, and often travels to Portugal, Spain, and now Mexico, to scout developments and lead property tours for potential investors. She graduated from San Diego State University with a bachelor's degree in Business Entrepreneurship.    Alec Denney graduated from the University of California, Santa Barbara, with a degree in business and organization communication and became a senior business consultant in the real estate software sector. He is now working as Director of Sales for Gateway Investors and travels extensively to Spain, Portugal, and now Mexico, to oversee development projects and lead property tours. He's a Marine Corps veteran who served as a Corporal with 6th Anglico and 2nd Battalion, 23rd Marine Regiment.   If you’d like to learn more about the housing market here in the U.S., go to realwealthshow.com and sign up for a free membership. And please remember to subscribe to our podcast and leave a review!    By the way, did you know that this podcast is also a video podcast on YouTube? If video is more your style, subscribe to the channel and click on the notifications bell so you'll be notified of the newest episodes so you don't miss out on this and future episodes!    Thanks for listening! Kathy  

With the high cost of property damage from recent wildfires, storms, and flooding, many insurance companies are dropping customers in high-risk areas, or moving out of risk-prone areas altogether. That’s created a huge dilemma for people who need insurance to satisfy home loan requirements and property owners, in general, who want the safety net of a reliable insurance policy. In this episode, you’ll hear from United Policyholders founder, Amy Bach, on how this situation is impacting homeowners, what you can do if you can’t get the coverage you need, and how to make sure you get the money to repair or rebuild when something goes wrong. Amy is a well-known expert on insurance trends, claims, coverage, law and public policy matters. She has been a professional insurance consumer advocate since 1985, an attorney since 1989, and a co-founder for the San Francisco-based United Policyholders in 1991. She is a sought-after expert by major media organizations and has authored several books including “The Disaster Recovery Handbook” and “Wise Up: The Savvy Consumer’s Guide to Buying Insurance.” If you are looking for a new insurance company, you will find a few referrals at our website, realwealth.com. You need to be a member to access that part of the site, but it’s free to join at realwealthshow.com. As always, please remember to subscribe to this podcast and leave a review! By the way, did you know that this podcast is also a video podcast? We've got a channel on YouTube where you can watch this episode and more! If you subscribe to the channel you'll get to see the new videos when they are posted! Thanks for listening, Kathy  

If you’ve already bought your first investment property, you may recall the initial fear you had about managing it. And that was just one property. But many investors find out it’s not that tricky, and quickly scale up once they’ve dipped their toes in the water. It can become addicting to feel the success of a good deal that brings you the kind of wealth and free time you can get from a growing investment portfolio. In this episode, you’ll hear from someone who met her Fannie/Freddie loan limit but figured out how to get financing on many more properties. Elaine Stageberg now owns more than 200 single-family rentals with her husband Nick, and many more properties as joint ventures or within privately equity funds. Find out how she does it in this interview! Elaine is a psychiatrist, a mother of four, and the owner of a private equity firm. She reached financial freedom at age 30, and currently manages a portfolio of over one-thousand doors worth more than $300 million. She lives in Rochester, Minnesota, with her husband and four young children. If you would like help getting your real estate portfolio started or learning how to scale it, sign up for a free RealWealth membership at https://tinyurl.com/joinrealwealth958. You'll find hundreds of real estate webinars and articles to help you on your way, along with data on various rental markets, real estate professionals that can support you, and our experienced investment counselors who can answer your questions. And don’t forget to subscribe to this podcast here: https://tinyurl.com/RWSsubscribe and leave a review! Thanks for listening! Links for our guest: Facebook Group, Real Estate at Scale: https://www.facebook.com/groups/reale... Facebook: https://www.facebook.com/blackswanrea... LinkedIn: https://www.linkedin.com/company/8101... Elaine’s Calendly: https://calendly.com/elainestageberg

Every quarter at RealWealth, I do a housing update, and I just did one for Q3. We received a ton of questions during that webinar so our team asked me to do an “Ask Kathy” segment here on the Real Wealth Show to answer some of those questions: 1 - Should I pay off a loan with an interest rate of just 2%? 2 - Is Austin a good place to buy investment property? 3 - Where can you buy new builds for under $250,000? 4 - How do you get a 4.75% rate on an investment property? 5 - What’s the best out-of-state market for a new investor? 6 - One-year lease vs. two-year lease. Which is better? 7 - How sacred is the 1% rule in rental real estate? 8 - Are home warranties worth the money? 9 - What are the loan options for people who’ve reached their ten-loan maximum? I hope you enjoy this episode of “Ask Kathy.” I would love to answer more of your questions during a future episode. If you have a question or questions you’d like me to answer, please send them to podcasts@realwealth.com. Thanks for listening! Kathy About Kathy: Kathy is an active real estate investor and licensed real estate agent with more than 25 years of experience. Kathy co-founded RealWealth with her husband, Rich, to help other people create financial freedom with real estate. Their purpose in educating people about real estate: "So they have the money and the freedom to live life on their own terms." In addition to her RealWealth mission, she runs the syndication side of the business at growdevelopments.com. She is the host of a second podcast, “Real Estate News for Investors,” and the co-host for the Bigger Pockets’ podcast, “On the Market.” Kathy also shares her wealth creation strategies in her newly updated bestseller “Retire Rich with Rentals.” You will also find answers to your questions as a member of RealWealth. You can join for free at realwealthshow.com. And please remember to subscribe to this podcast, and leave us a review! Links: Join RealWealth: https://tinyurl.com/joinrealwealth957 Subscribe to the Real Wealth Show podcast: https://tinyurl.com/RWSsubscribe Kathy's Instagram: https://www.instagram.com/kathyfettke/ Kathy's audiobook 'Retire Rich with Rentals' on Audible: https://tinyurl.com/retirerichaudible Grow Developments (Syndications):  https://growdevelopments.com/

Are you sitting on the fence about a potential real estate investment? What’s holding you back? The high prices? Information overload? Or maybe the fear of doing something out of your comfort zone?    Having the right mindset is crucial to successful investing. It's what helps get you from that stage of due diligence and financial calculations to acting on a buying opportunity. Joining me in this episode is someone who can answer your questions by sharing what she’s doing in today’s environment and telling you when it makes sense to buy.   Christine Suter has experienced massive success as a real estate investor. During the last 30 years, she’s purchased over $50 million in real estate and acquired more than 350 doors. She’s also co-authored the book “You Got This!”, founded the FIBI Pasadena Meetup with over 3,900 members, and provides mentoring to students. You may have also heard her on her Real Estate Breakthrough Podcast.   As a mom to her daughter and successful business owner, Christina offers a unique perspective on expanding your mindset while crafting one's life and investment portfolio to align with your greatest financial freedom.   If you’d like to learn more about the mindset of a real estate investor, sign up for a free RealWealth membership. Our investment counselors can walk you through the process. You’ll also get access to hundreds of webinars and other resources. Just go to realwealthshow.com.   And please remember to subscribe to this podcast and leave a review!   Thanks for listening, Kathy  

Are you a busy parent with a relentless full-time job that leaves you without a moment to breathe and very little quality time for your family? Have you ever asked yourself whether this is the lifestyle you signed up for? Have you found yourself proud of your career success but craving something that gives you more time, more flexibility, and less stress? In this episode, you’ll hear from a husband and wife team who got out of the full-time rat race. Palak Shah and Niti Jamdar had climbed the corporate ladder and were feeling quite successful until they had kids. That's when they suddenly found themselves in the midst of a hectic schedule, dragging kids to daycare, working all day, and then coming home exhausted as they fed the kids and put them to bed. You will find out how they made the difficult decision to quit the corporate world and pursue real estate full-time, and how they scaled their business in just 5 years. They are currently celebrating the launch of their new book: “Accelerate Your Real Estate” for Bigger Pockets Publishing. If you’d like help getting off the treadmill and creating real wealth, sign up for a free RealWealth membership. Our investment counselors can walk you through the process. You’ll also get access to hundreds of webinars and other resources. Just go to realwealthshow.com. And please remember to subscribe to this podcast and leave a review! Thanks for listening, Kathy

When you decide to build a rental portfolio, one of the biggest considerations is how you will manage it. You’ll need to decide who will be screening the tenants, taking calls in the middle of the night, doing emergency repairs, scheduling routine maintenance, cleaning and painting between tenants, and maybe even going to court and initiating an eviction now and then. That’s just the short list. A property manager has many responsibilities which might seem like fun at first, but I think it’s a little like getting a new puppy. You are really excited about the puppy until you realize you have a puppy! That’s what happened to Rich and I. We managed our own properties when we first started but quickly learned that we weren’t cut out for it.  In this episode, you’ll hear from a property manager who provides services to many of our RealWealth investors in the Baltimore area. Sheila is a west coast native who’s been in the Baltimore region for 14 years, and has served in positions that have connected her with the community. She’s now the property management director for one of our turnkey providers. Her focus is to provide consistent, empathetic and accurate support for all clients. You can meet members of the Baltimore property team at our upcoming live event in Los Angeles on October 7th. You can also find out more about that live event here and more about purchasing rental properties in Baltimore here. Be sure to sign up for a free RealWealth membership. And don’t forget to subscribe to this podcast and leave a review!  Thanks for listening, Kathy Fettke Subscribe to the RealWealth Show podcast: https://tinyurl.com/RWSsubscribe Join RealWealth and get access to our Realty Portal: https://tinyurl.com/joinrealwealth954 Connect with our Baltimore Property Team: https://realwealth.com/markets/baltimore-maryland/ Register for the Live Event & 20th Anniversary Party this weekend!: https://realwealth.com/celebrating-20-years-of-realwealth-financial-freedom/

Financial literacy is something we all need but for many women around the world, it’s not a priority or wasn’t an educational opportunity. Modern role models aside, women have typically relied on their spouses to take care of the finances white they take care of the kids. It’s not something they’ve needed to know in many cases, until suddenly they do. And then it’s a desperate process to learn quickly and likely to make some mistakes. Rosalia Gitau is one of those women. She became an orphan at age 14 when her mother died of cancer and had to figure out how to become financially secure. But her mother made one critical investment decision before she died that transformed the lives of her loved ones. You’ll hear about that investment decision in this interview, what that taught Rosalia, and what she’s doing to help educate other women around the world about financial security.  Rosalia is the winner of this year’s Money Awareness and Inclusion Awards. MAIA is an organization dedicated to the problem of weak financial literacy around the world and finding the best solutions to help people make better choices. Rosalia is also the founder and CEO of Bixie which is an app that helps people increase their financial literacy. You can find out more at her website, https://www.mybixie.com.  At RealWealth we are also dedicated to helping people create wealth through real estate. You can learn how to do it as a RealWealth member. It’s free to sign up and will give you full access to our website and information on rental markets, property teams that with inventory, and investment counselors that can answer your questions. As always, please be sure you are subscribed to our podcast, and if you haven’t done so yet, please leave us a review!  Thank you for joining me on the Real Wealth Show! Kathy Fettke Links for our Guest: Rosalia Gitau's social media:    Facebook - https://www.facebook.com/mybixie/?_rdc=2&_rdr    Instagram - https://www.instagram.com/mybixie/    Twitter - https://twitter.com/mybixie/    Linkedin - https://www.linkedin.com/company/mybixie/

We’ve been getting a lot of questions from investors trying to make good decisions in a tough market, so I thought I’d dedicate this episode to questions about Florida. It continues to be a strong market for rental properties, but listeners have expressed concerns about climate change, storms, and flooding, along with higher insurance rates and higher home prices and interest rates.   To answer these questions, I’ve invited a Florida property provider onto the show. Brian is someone we’ve worked with for years and will share some amazing insights about Florida real estate investing. He’ll talk about how you can reduce climate change risks, save money on insurance, and lower your monthly mortgage payment with a special 4.75% loan offered by one of his build-to-rent developers.   I plan on answering more listener questions, so if you have questions about real estate investing that you’d like me to answer, reach out to me on instagram or facebook at kathyfettke. You can also send your questions to hello@realwealth.com, and my assistant will hand them over to me.   You can find out more about our live event on October 7th that I mentioned during the interview at realwealth.com. Just go to the Connect tab and click on live events. And to sign up for free as a RealWealth member, go to realwealthshow.com. I would also like to remind everyone to please subscribe to this podcast, and leave a review!    Thank you for joining me on the Real Wealth Show! Kathy Fettke   Additional Links:   Kathy's Instagram: https://www.instagram.com/kathyfettke/ Kathy's audiobook on Audible: https://tinyurl.com/retirerichaudible Syndications:  https://growdevelopments.com/

What U.S. city is close to the North Texas border with one of the largest employers in its state but no housing for all the employees? It’s probably not a city that’s been on your radar unless you live in North Texas, but keep listening and you’ll hear all about this city and how you can take advantage of an investing opportunity. In this episode, you’ll hear from Leah, who’s a long-time property provider for our RealWealth network, and my partner in a single-family rental fund in the Dallas metro area. She has an amazing track record for predicting which areas are ripe for growth, and is very excited to share her latest prediction in this interview. Leah has a $40 million dollar personal portfolio, and is the co-founder of one of the largest property management residential investment firms in North Texas. If you’d like to find out more about the rental funds I mentioned during the interview, go to https://growdevelopments.com. You’ll find information about our North Dallas single-family rental fund which is closing in November, and a new build-to-rent fund for the secret city that Leah talks about in this interview. You can also get help investing in single-family rentals as a RealWealth member. It’s free to join and free to talk to one of our experienced investment counselors.   As always, please be sure you are subscribed to our podcast, and if you haven’t done so yet, please leave us a review!  Thank you for joining me on the Real Wealth Show! Kathy Fettke Additional Links: Kathy's Instagram: https://www.instagram.com/kathyfettke/ Kathy's audiobook on Audible: https://tinyurl.com/retirerichaudible

Do you have questions about commercial real estate that are keeping you on the sidelines? Questions like:     What’s the difference between office and retail space?     What is a debt service coverage ratio and why does it matter?     What’s involved with a triple net lease?     And most importantly, is now the time to buy commercial real estate or does it make sense to wait until values come down further? In this episode, you’ll hear from a commercial real estate broker who’s helped some of our RealWealth investors. Cedric has more than 30 years of experience in the business world and the commercial real estate industry, with a focus on the retail sector. His expertise includes lease negotiations, site selection, market analysis, and property acquisitions. And he joins me to explain some of the commercial real estate lingo and the current CRE environment to help investors better understand this asset class.  You can get in touch with Cedric on our website under the Invest tab. You can also watch a replay of a recent webinar featuring Cedric with more in-depth information on the CRE market. You need to be a RealWealth member to access that information, but membership is free and it’s really easy to sign up. And please don’t forget to subscribe to this podcast!  Thanks for listening! Kathy Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

Getting an accurate forecast on the economy can be a little like a weather forecast – full of surprises! But it also depends on who’s doing the forecasting. In this episode, you’ll hear from the head of a team that’s won awards for its forecasting accuracy on the economy, housing, and mortgage market activity.   Doug Duncan is Senior Vice President and Chief Economist at Fannie Mae where he is responsible for economic analysis and forecasting. As the head of Fannie Mae’s Economic & Strategic Research (ESR) Group, the team earned the 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy. It’s an award that covers a four-year period that includes the pandemic. Doug and the ESR group also won the NABE Outlook Award two years in a row, in 2015 and 2016, for the most accurate GDP and Treasury note yield forecasts.    Doug is one of Bloomberg/BusinessWeek's 50 Most Powerful People in Real Estate and Inman News’ 100 Most Influential People in Real Estate and he's here with us on the Real Wealth Show!   If you’d like to learn how to build wealth through real estate, be sure to subscribe to this podcast and become a Real Wealth member. It’s free to join and get full access to our website where you’ll find hundreds of webinars, sample pro-formas, referrals to our highly recommended real estate professionals, and a free session with one of our experienced investment counselors.    Thanks for listening, Kathy Fettke   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

RealWealth has been in business for 20 years as of this year and we are celebrating with a special episode featuring three of our earliest employees. Director of Finance Kelley Pecoraro (Director of Finance), Maggie McKinnie (Consultant), and Jill Benes (Digital Editor & Event Support) can share what it was like at Real Wealth back then, before we became a remote company. We worked out of an office in Walnut Creek that felt like home to us all. We don’t have that office anymore because we are a completely remote company now, but there are plenty of memories to share and stories to tell! Please enjoy this lookback at the early days of Real Wealth and come celebrate with us in real time at a live event we’re holding in Los Angeles on October 6th and 7th. We’re planning a cocktail party on Friday night, the 6th, a full day of presentations from our property teams on Saturday, the 7th, and a big celebration party that evening! The event is being held at a hotel near LAX so it will be easy to get to from the airport. You can find out more at realwealthshow.com under the Connect tab. If you haven’t done so already, you should sign up as a RealWealth member. It’s free to join and will give you access to our private investor portal, hundreds of webinars, sample pro-formas, help with the acquisition process, referrals to our highly recommended real estate professionals, and a free session with one of our experienced investment counselors.  And don’t forget to hit the subscribe button for this podcast and leave a review!  Thanks for listening, Kathy Fettke Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

When it comes to a strategy for real estate investing, one of the most important things you can do is to know about the demographics of a particular market, or simply, the people who live there. Investors need to be asking questions like: How many people live there? Is that number growing or shrinking? Are they mostly singles, families, young people or older people?  How will the generational differences impact the kind of housing that’s needed? And what will the market look like 10 years from now?   In this episode, you’ll get answers to those questions and many more from internationally recognized demographer Ken Gronbach, president of KGC Direct, LLC. He’s able to forecast societal, commercial, economic, cultural, and political phenomena with uncanny accuracy and will talk about an astronomical need for homes in the U.S. over the next decade. He also compares the U.S. to other parts of the world, and according to Ken, strong demand for housing in the U.S. will not be going away.   If you’d like to learn more about demographics, check out his two books: “Upside: Profiting from the Profound Demographic Shifts Ahead” and “The Age Curve: How to Profit from the Coming Demographic Storm.”    And to learn more about real estate investing, please join RealWealth and look through our website. You will find data on some of the strongest rental markets in the country and the teams that can help you buy rental properties in those markets.   It’s also important to subscribe to this podcast. It will help our rankings! And we’d appreciate a positive review!    Thanks for listening! Kathy   You can follow Ken at these social media sites: Twitter: @KenGronbach Facebook: @KGCDirect LinkedIn: Kenneth Gronbach   Ken’s Website: www.KGCDirect.com   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

For the past two decades, we have been helping investors across the country to simplify real estate investing and achieve their financial goals. We’ve gone from an idea on a cafe napkin to a network of more than 70,000 members. We’ve helped regular folks create financial security with more than 6,000 rental properties worth more than $1.2 billion dollars. And we’ve donated to charity along the way.   In this episode, my husband, partner, and RealWealth Co-CEO Rich Fettke joins me to talk about our amazing 20-year journey and how we are celebrating this huge milestone with a live event in Los Angeles on October 6th and 7th. It will take place very close to the LAX airport if you are flying into the area, and will feature 10 of our property teams, food, drink, and lots of networking and fun!    If you are an investor who’d like to meet like-minded individuals, learn how they’ve made real estate work for them, and talk to the property teams that can help you create the wealth you’ve dreamed of, please sign up under the Connect tab on the RealWealth website. If you haven’t joined yet, please hit the Join for Free tab, and remember to subscribe to this podcast!    We are thrilled to be hosting this event, and hope to see you all there! Kathy Follow Kathy on Instagram here: https://www.instagram.com/kathyfettke/ Purchase Kathy's book on Audible here: https://tinyurl.com/retirerichaudible   Purchase Rich's book on Audible here: https://tinyurl.com/richfettkewiseinvestor  

When inspecting a home before purchasing, it's obviously very important to check the foundation's integrity. That's why we hire inspectors. But should you rely on your home inspection report to correctly identify the issues? Our guest today says, no, it's not enough. You need to know the tell-tale signs of foundation damage that would signal the need for further inspection, and then you need to know who to call. But how do you make sure you can get it all done within the homebuyers short inspection window of time?   In this episode, you’ll hear from foundation repair expert RK Bob Brown whose mission it is to shed light on what he describes as an “opaque industry.” He joins me on The Real Wealth Show as part of his effort to teach home buyers how to recognize the red flags for foundation problems. He talks about what homeowners should look for, when and who to call for a more accurate and in-depth evaluation, and why you need to pay attention to soil conditions. He earned the nickname “The Dirt Whisperer” because he knows a lot about “dirt.” He is also a real estate investor who shares his rags to riches story with me in this interview.   Bob has more than 35 years of experience. He’s a certified Foundation Repair Specialist by NFRA and is LEED accredited, among other accreditations. He founded Arizona Foundation Solutions in 1989 which he says was one of the only foundation repair companies to use licensed professional engineers. He sold the company last year to focus on speaking and writing, and is publishing a book this fall called Foundation Repair Secrets: Learn How to Protect Yourself and Save Thousands. He has also developed software that helps streamline home foundation investigations. You can learn more at his website: https://www.RKbobBrown.com   To learn more about all the things you need to know about real estate investing, sign up as a RealWealth member. It’s free to join. You can also find out more about the North Dallas Single-Family Rental Fund I mentioned in the podcast at growdevelopments.com.   And don’t forget to hit the subscribe button for this podcast and leave a review!    Thanks for listening, Kathy Fettke   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

Be prepared for an eye-opening interview! In this episode, you’ll hear from a remarkable Gen Z entrepreneur who has an impressive real estate portfolio and is well on his way to early retirement. He has an incredible story for a 23-year-old that will inspire and motivate you to take your next step toward financial freedom.   For Donato Callahan, it all began during the pandemic while he was still in college. He was studying biology but had extra time on his hands and discovered real estate as a way to build wealth. He started off as a house hacker with the purchase of a four-unit building. From there, he leveraged every kind of resource you can imagine to help him with his journey. As he explains in the interview, when you get advice from 10 people who each have 10 years of experience, you are getting insights from 100 years of experience.    He’s now offering to help other investors as the CEO and founder of Bright Investor, which provides data to help you make smart real estate investing decisions. The way it works: Users pay a monthly membership fee for access to tons of data feeds that can help you analyze a deal.    Transparency matters: We've established an affiliate agreement with Bright Investor, offering users exclusive discounts through our referral link. Signing up through our link helps support the show too!   Referral link: https://brightinvestor.com/?ref=owy3mwf Code: REALWEALTH   To learn more about real estate, sign up as a RealWealth member. It’s free to join. You can also find out more about the North Dallas Single-Family Rental Fund I mentioned in the podcast at growdevelopments.com.   And don’t forget to hit the subscribe button for this podcast and leave a review!    Thanks for listening, Kathy Fettke   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

I'm very excited about today's interview with Gary Beasley, CEO & Co-Founder of Roofstock. He was just a regular guy when I met him years ago. Today, he’s a leader in the institutional investment space and a true disrupter within the single-family rental asset class.   In this episode, you’ll hear his thoughts on how the housing market has evolved since the 2008 meltdown, how he has transitioned his own real estate investing strategy over the years, and why he thinks that the single-family rental space is an asset class that will remain in high demand.   Before Roofstock, Gary was CFO of ZipRealty and Co-CEO of Starwood Waypoint Residential Trust which is now part of Invitation Homes, leading both through successful IPOs. In addition, he’s been instrumental in acquiring and integrating more than $800 million in resort properties for KSL Resorts and has served as CEO for boutique hotel management company Joie De Vivre Hospitality.   Gary earned his BA in Economics from Northwestern and holds an MBA from Stanford. He now leads Roofstock with a valuable perspective on the use of technology in the real estate industry and challenges the way things have been done with the question: “What’s next?”   You can follow him at these social media sites: LinkedIn - linkedin.com/in/gary-beasley-956647 Twitter - @garybeas2013   To find out more about how you can benefit from real estate, sign up as a RealWealth member. It’s free to join and will give you access to our private investor portal, hundreds of webinars, sample pro-formas, help with the acquisition process, referrals to our highly recommended real estate professionals, and a free session with one of our experienced investment counselors.    And don’t forget to hit the subscribe button for this podcast and leave a review!    Thanks for listening, Kathy Fettke   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy’s audiobook on Audible at: https://tinyurl.com/retirerichaudible

Have you ever listened to fellow investors brag about how many doors they have as a measure of success? But do the number of doors you have really matter when it comes to how well your portfolio is performing? Honestly, I don’t think so. What really matters is how well those doors are performing. Are they providing enough cash flow so you can live the life of your dreams? Are they appreciating in value to help meet your financial goals? Those are the questions at the top of my list! In this episode, you’ll hear from someone who’s living proof that you don't have to own 5000 units to be successful. Vince Rodriquez is an engineer who began his real estate adventure just four years ago. As a Southern California resident, he started investing in California but is now transitioning to out-of-state rental properties. He’s currently focused on furnished duplexes in the mid-term space and has some great ideas for choosing markets and raising investment capital in a way that also helps family and friends. To find out more about real estate investing in a way that suits your goals, sign up as a RealWealth member. It’s free to join and will give you access to access to hundreds of webinars and other educational material, along with our market data and investment counselors who help get you going. And don’t forget to hit the subscribe button for this podcast! Thanks for listening, Kathy Fettke You can find our guest today on social media at these handles: @anviinvest @vince.capital Follow Kathy on Instagram: https://www.instagram.com/kathyfettke/ Purchase Kathy's book on Audible: https://tinyurl.com/retirerichaudible

Does it still make sense to buy rental property today when mortgage rates are at the 7% level? Should you buy your rate down with points or wait a few months to see if rates come down as many experts are predicting? And what about getting approved for a loan? Is it any harder now to get a loan in this tough credit environment?   In this episode, you’ll hear from one of RealWealth’s preferred lenders, Graham Parham and his business partner Aaron Stelly of Highlands Mortgage. They join me to provide some insights on the lending world as it stands today, along with some good news about inflation and how that is impacting mortgage rates.   Graham W. Parham has been a Mortgage Loan Officer for over 25 years. He has experience in the residential real estate market and has developed a significant following among homebuyers and investors. He currently owns 45 investment properties and is still buying.   Aaron Stelly helps guide clients through the lending process from start to finish. He’s an active investor and recognizes the goals that investors are hoping to achieve as they grow their real estate portfolio.   You can get a hold of Graham at graham@theparhamteam.com. You’ll also find contact information for Graham and his Highland Mortgage team on our website. You need to be a RealWealth member but it’s free to sign up. Once you’ve done that, log in to the portal and look under the Resources tab for Lenders.    If you’d like to find out more about the North Dallas Rental Fund I mentioned during this episode, go to https://growdevelopments.com.   As always, I ask that you subscribe to the Real Wealth Show podcast, and leave a starry-eyed review! Thank you!   And thanks for listening! Kathy Fettke

Will we see home prices go any lower? Will we see a rise in foreclosures? When will mortgage rates come back down to earth? Is it best to keep a bunch of cash on the sidelines so we can scoop up all the good deals when we are hit by recession? Where does it make sense to buy rental property in this economy? In this episode, you’ll hear from someone who can answer those questions and more to help you as an investor make better decisions during these uncertain times. Rick Sharga has more than 20 years of experience in the real estate and mortgage industries and is the Founder & CEO of market intelligence and advisory firm CJ Patrick Company. He has also served as the Executive Vice President of Market Intelligence for ATTOM Data, Carrington Mortgage Holdings, and RealtyTrac’s Marketing Department, as well as Chief Marketing Officer for Ten-X and Auction.com. Over his long and distinguished career, he’s become one of the most frequently quoted experts on real estate, mortgage and foreclosure trends. If you want to expand your real estate investing horizon, and would like a referral to one of our proven property teams in places like Texas, Florida, and the Carolinas, please hit the “Join for Free” button. Once you are a member, you will have access to our investment counselors, and trusted real estate professionals that can help you reach your investment goals. To find out more about our North Dallas Rental Fund, mentioned during this interview, please go to growdevelopments.com.  And please don’t forget to subscribe to this podcast!  Thanks for listening! Kathy Fettke  

We all want our children to be well educated so they can lead successful lives, but some of the most important subject matter for success is missing from school curricula. Financial literacy includes things like checking and savings accounts, budgeting, investing, the use of credit and credit cards, insurance, paying taxes, paying for college, and even the purchase of a home. But there isn’t much in the way of personal finance on the list of classes that kids take in high school.   The guest in this episode is hoping to change that. Yanely Espinal is a millennial financial educator who started her career as a teacher and is now on a mission to convince lawmakers to make personal finance a high school graduation requirement. She serves as the Director of Educational Outreach at Next Gen Personal Finance (NGPF) and has been instrumental in getting legislation passed in several states including Florida (SB1054), Michigan (HB5190), Georgia (SB 220), Rhode Island (H 5491) and North Carolina (HB 924). CNBC called her “the millennial fighting for Gen Z to learn about money in school.”   Yanely, who’s also known on the internet as MissBeHelpful, is also the author of a newly released book on the topic called: “Mind Your Money: Insightful Stories and Strategies to Help You Reach Your #MoneyGoals.” Her new book is available on Amazon. She’s also the host of a podcast called “Financially Inclined from Marketplace” and one of the youngest members of CNBC’s Financial Wellness Council, among other notable accomplishments.    If you’d like to learn more about how real estate can give you financial freedom, we encourage you to visit our website at realwealthshow.com. As always, please remember to subscribe to this podcast if you haven’t already. If you have a few minutes, please leave us one of those starry reviews!    Thanks for listening! Kathy Fettke  

This episode of the Real Wealth Show is a little different! My guest is the winner of an Instagram contest for a free coaching session with me! Courtney Clark won the contest by responding to a promotion on Instagram. Her number then came up in a random number generator, and we booked her for the show! Courtney is an experienced real estate investor. She’s been doing it for many years with her husband, and she offers a very candid view of how that’s worked out, including a few recent losses from flipping that left her feeling unsure of her next steps. We do a deep dive into that fear that’s making her feel like she’s suddenly lost credibility as an investor. It’s a delightful interview with lots of insight into how Courtney is dealing with the ups and downs of her portfolio.  We do offer coaching services at RealWealth. If you’re not already a member, you would need to sign up at realwealthshow.com. It’s free to sign up. Once you’ve done that, log in and go to the Connect tab where you’ll find the coaching information. You’ll also find information on our mastermind retreats here on our website. We just did one for couples who invest together, but we’re planning on doing more, so check back for info. As always, I ask that you please subscribe to our podcast, and leave us as many stars as possible!  Thanks for joining me! Kathy Fettke Follow Kathy on Instagram @kathyfettke and @realwealthnetwork  Follow Courtney on Instagram @heycourtney.clark and @setthestage_

If you follow financial advice on social media, you may already know about “The FI Couple.” They are a husband and wife team in their early 30’s with a huge following on Instagram, Twitter, and other platforms, to help spread the word about financial independence – which is the FI part of their name.   In this episode of The Real Wealth Show, Ali & Josh Lupo talk about their humble beginnings as college students pursuing degrees in social services and a wedding that provided a big wake-up call about their finances. It was bad. They had a whole lot of debt and knew they had to do something about it. They turned to podcasts, and videos, and learned about “passive income” through real estate investing. From there, they mapped out a plan, and within a few short years, they are job optional and expecting a baby girl.   But it wasn’t just the financial part of their relationship that they worked on. They also spent a lot of time on their personal relationship and their skills in communicating with each other to help them envision and align their goals as a couple. They also love to share their experiences with other people as "The FI Couple". Once you are enchanted by them in this interview, you can find out more at their website: theficouple.com, or on social media @theficouple on all major platforms.   My hubby and partner, Rich Fettke, also joins me as co-host for this episode. He is a long-time coach who loves to help people realize their dreams and live their best lives. He recently published a book called “The Wise Investor” about a family man who wants to free up his time with passive income from real estate. Rich's book is available on Amazon.   If you’d like to find out what a coach can do for you, please check out our RealWealth coaching services. You need to be a RealWealth member to access the coaching page inside the Realty Portal, under the “Connect” tab. It doesn’t cost a thing to sign up as a member. Just go to realwealthshow.com. And please remember to subscribe to this podcast!   Thanks for listening! Kathy Fettke  

This episode is dedicated to real estate investing as a couple, and the real life story of two RealWealth members who are making it happen! This is the second time we’ve featured Kevin & Michelle Yu on the Real Wealth Show to find out how far along they’ve gotten with their real estate plans, what’s changed along the way, and how they are dealing with it. Kevin & Michelle are working parents with full-time jobs but their real estate portfolio has made it possible to quit those jobs if they want to. They started investing about ten years ago and have almost reached a goal they set for retirement. They will share stories about where they’ve invested, how they’ve learned to be flexible as the market changes, what’s next, and why they feel it’s so important to create a real estate nest egg for themselves and their two young children. My hubby, Rich, joins me as a co-host for this special episode on couples investing, which we’ve been doing for more than two decades! If you’d like to take the RealWealth assessment that Rich mentions, please go to https://realwealth.com/assessment/. Kevin also mentioned a Netflix series you might be interested in called “How to Get Rich.”  To learn more about real estate investing, please sign up as a RealWealth member. It’s free to join and gives you access to hundreds of webinars and other educational material, along with our investment counselors who can answer any questions and help get you started. And don’t forget to subscribe to this podcast! Thanks for listening, Kathy Fettke LINKS: Join RealWealth: https://tinyurl.com/joinrealwealth Subscribe to the Real Wealth Show podcast:  https://tinyurl.com/RWSsubscribe Take RealWealth Assessment: https://realwealth.com/assessment/ Netflix series "How to Get Rich": https://www.netflix.com/title/81410436

How can you dramatically increase your ability to invest with the money you are currently sending to Uncle Sam? By redirecting those big checks you send to the government into investments that also benefit the government;.. and change your life while you're doing it.   In this episode, you’ll hear from Susan Geist who had a wake up call when she wrote a six-figure check to cover her tax obligations. She analyzed the situation and with strategic investment-related tax deductions, figured out a way to reduce her federal tax bill by more than $100,000 annually!    It’s an incredible story considering her background as someone who grew up in a lower-class family in rural Appalachia. Her story is one of financial hardship as a child and a commitment to attain financial security for herself and help others do the same.   With a salary of just $42,000 a year, she managed to buy her first property in 2008. Today she owns a multi-million-dollar portfolio consisting of long-term rentals, short-term vacation rentals, and limited partnerships in commercial real estate that pay her six figures of passive income annually.    She also helps women working to attain financial freedom with her company Rising Femme Wealth, LLC, out of Austin, Texas. She provides coaching and workshops that teach women strategies for financial freedom, including ways to reduce their tax bills. In her spare time, she likes to travel with her husband and two sons, and create music with her all-female band.   You can get help creating your own financial lifeboat by joining RealWealth at realwealthshow.com. Although Susan created her own investment portfolio, she has gravitated toward RealWealth as an investing opportunity. And she has recommended RealWealth to her coaching clients, which I’d like to thank her for. It doesn’t cost anything to check us out, and it takes just a minute to sign up.   We also appreciate positive comments about our company and the podcast on social media. And please don’t forget to subscribe to our podcast!    Thank you! Kathy Fettke

Working on an investment plan with your spouse can be challenging because money can be a source of tension and conflict. But it can also be a source of strength within your relationship with the right tools and strategies to help align your goals and work as a team.   My husband Rich and I have been investing together for more than two decades, and have experienced a lot of challenges, especially at the beginning. But we’ve come up with ways to foster a better understanding of each other, our visions for the future, and how to get there without damaging the love we have for each other.   In this episode, Rich joins me to talk about three of the things we are doing to unite our unique inspirations, visions, talents, and personalities for a unified approach to couples investing. It’s also a preview into an extraordinary RealWealth Couples Retreat we have planned for next month at our home in Malibu on June 9th, 10th, and 11th.   It’s a mastermind that is designed to help strengthen and deepen the connection between partners while learning and/or practicing tools and strategies for a teamwork approach to investing.   This is what we aim to accomplish with each couple:: 1 - Grow and strengthen relationships 2 - Learn and connect with like-minded couples 3 - Enjoy fun outdoor activities 4 - Create a compelling shared vision for the future 5 - Design a multi-year plan to achieve a shared vision 6 - Enjoy delicious, healthy food 7 - Celebrate together   The event is limited to six couples. At the time of this podcast, there were still two spots left. You can find out more at realwealthcouples.com   You can also find out more about what we are doing at RealWealth by becoming a member. It’s free to join at realwealthshow.com, and gain access to all parts of our website. When you log in to the investor portal, you will find sample properties, rental market data, and recommendations for professionals who can help you reach your goals. You’ll also have access to our experienced investment counselors.   We appreciate your positive comments on social media, and please be sure to subscribe to this podcast!   Thanks for listening, Kathy Fettke

I just got back from being on the road for a week in four different cities and at three different events. A few people asked me what my company, Real Wealth, does. I thought that was funny since we've been around for 20 years and I just assume people know.    But in case you were wondering, it's pretty simple. We help people increase their passive income by helping them acquire a portfolio of cash-flowing rental properties in growing markets nationwide.    We simplify the process by identifying experienced property managers who specialize in working with out-of-state investors. These teams have everything an out-of-state investor needs to purchase rental properties including acquisition teams, renovation teams, property management, and most importantly, experienced professionals with a proven track record of success.    We offer a free mastermind to these teams so they can continue to improve their service and share their best practices and knowledge with each other. Any team on our referral list comes with rave reviews from our RealWealth members. And if they don't, they are removed from our referral list until those issues are resolved.    And, all that we do at RealWealth is free to our members because we get paid from a broker-to-broker referral fee that the buyer would have to pay anyway. It just gets split with us.    In this episode, I'm going to interview one of our newest teams located in Cleveland, Ohio. I love Cleveland and have been investing there for years. But it can be tricky. You really need a good team there because the city regulations can be burdensome and some neighborhoods look good on paper but in reality can be very challenging.  To get in touch with Mike and his team in Cleveland, sign in to the RealWealth website and login to the Investor Portal. If you haven't become a member yet, please click on the "Join for Free" button. It's easy to sign up and will give you complete access to our website where you can see sample properties in more than a dozen markets across the country, our market data, and our list of preferred real estate professionals including our RealWealth investment counselors. And please remember to subscribe to the podcast to help boost our ratings!    Thanks for listening! Kathy Fettke  

How would you like to reach your financial goals in half the time you planned?  Our guests today are doing just that. Sophie bought her first rental property when she was just 23 years old, thanks to having a Mom who encouraged her to buy real estate.  Sophie's husband Ben didn't know much about real estate when they got married, but they both had MBAs, and both worked at Northern California tech companies making a great income. They ended up with two rental properties in the Bay Area that didn't cash flow. In this episode, Sophie and Ben share how they used those negative cash flow properties to build a cash flow machine by investing out-of-state. They say they've reached their financial goals 15 years earlier than they had planned.  You can learn more about doing this for yourself by joining RealWealth. You’ll find plenty of free educational material on our website. Our investment counselors can also refer you to experienced property teams who can help you get started in real estate. And please remember to subscribe to this podcast and leave us a review! Thanks for joining me on The Real Wealth Show! Kathy Fettke

The dream of being a passive investor is turning into a bit of a nightmare for some people who invested in commercial real estate. They are getting bitten by higher interest rates, slow rent growth, and dramatically higher costs for rate caps and insurance. A 229-unit apartment complex recently foreclosed in Houston, making headlines across the country and leaving hundreds of investors at a total loss. How can investors be more prepared moving forward?   In this episode, you’ll hear from Whitney Elkins-Hutten on the eight deal breakers that limited partners should be looking for when they work with an operator or for any kind of real estate deal. Whitney is the Director of Investor Education at PassiveInvesting.com and a partner in $800+ MIllion in real estate. Her investments include over 6500+ units in residential housing (single-family, multi-family, manufactured housing, and assisted living), seven express car washes, and more than 2200+ self-storage units across 11 states. She also has experience flipping more than $5 Million in residential real estate.   The content of this interview is why I love my single family rental fund. We are raising cash, buying with cash, renovating with cash, increasing values, and refinancing if we get a really good rate with a fixed term. All in an area experiencing job and population growth with high demand for housing. You can find out more at GrowDevelopments.com.   Be sure to join RealWealth for full access to our educational material and our investment opportunities. We also encourage all listeners to subscribe to this podcast, and leave one of those sparkly five-star reviews!    Thanks for joining me here on the Real Wealth Show! Kathy Fettke

In Part II of my interview with James Eng, the conversation continues about the commercial real estate correction that we’re already starting to see. In this half of the interview, James will dig in a little deeper into how the foreclosure of a $229 Million multifamily Texas portfolio is just the first domino to fall, and what he expects to see in the coming months. James has more than 17 years of experience in commercial real estate lending, and is currently the National Director for Old Capital. He started his career as an underwriter at GE Capital Real Estate and joined Old Capital in 2014. He has worked with hundreds of investors to help them acquire over $1.5 Billion in multifamily properties totaling over 20,000 units nationwide. In addition to financing multifamily, he has invested in over 10,000 units as a limited partner in nearly 40 properties in Texas. Often called "The Professor" of Multifamily Financing, James has produced hundreds of hours of educational multifamily content on YouTube. He received his finance degree from University of Texas at Austin and resides in Dallas-Fort Worth with his wife and three boys. LINKS Contact James Eng at https://oldcapitallending.com Join RealWealth here. Subscribe to the Real Wealth Show here. For more information on Kathy's Single-Family Rental Fund, go to: GrowDevelopments.com. Follow Kathy Fettke on Instagram.  Purchase Kathy Fettke's book, 'Retire Rich with Rentals' on Audible

A $229 Million multifamily portfolio was just foreclosed on in Houston, Texas. It’s the first of what could be similar foreclosures in the commercial real estate industry. And there's a good chance some of our listeners were invested in that portfolio or another one facing the same fate. If you are a multifamily investor, either passive or active, you'll get some great advice in this episode on how to navigate the current commercial real estate environment.  You’ll hear from Old Capital National Director James Eng. He’ll explain why commercial real estate could be facing a massive reckoning, especially for investors who took out bridge loans. In Part One of this interview, you’ll get his take on interest rates and the impact on commercial lending. In Part Two, you’ll hear more about what he thinks will happen in the months to come.  James has over 17 years of experience in commercial real estate lending. He started his career as an underwriter at GE Capital Real Estate and joined Old Capital in 2014. He has worked with hundreds of investors to help them acquire over $1.5 Billion in multifamily properties totaling over 20,000 units nationwide. In addition to financing multifamily, he has invested in over 10,000 units as a limited partner in nearly 40 properties in Texas. Often called “The Professor” of Multifamily Financing, James has produced hundreds of hours of educational multifamily content on YouTube. He received his finance degree from University of Texas at Austin and resides in Dallas-Fort Worth with his wife and three boys. Don't forget to subscribe to the podcast and if you like the show, please leave a review! Join RealWealth today at www.RealWealthShow.com. And for more information on Kathy's Single-Family Rental Fund, go to www.GrowDevelopments.com  

Why are some people able to reach levels of wealth at a faster pace than others? It may have something to do with their mindset, or their ability to overcome internal blocks.    Normally, I interview people on their journey to creating wealth so that we can learn from their experiences. But today, we are going to dive into the deeper stuff: The subconscious thoughts that often control our decision-making process, which may lead us astray from our wealth-building goals.   In this episode, you’ll hear from Alecia St. Germain. She’s a Certified Immunity to Change Coach and the founder of The Conscious Edge – a leadership and personal development company focused on empowering female entrepreneurs.   She began her real estate journey in her late teens and 20’s wholesaling probate properties with her mother. She then moved on to mobile home investing in the state of Ohio. After seeing so many women in the real estate industry unconsciously sabotage their own success because of inner conflicts about wealth and their role in the business world, she moved into the personal development side of things as a coach.   Alecia has now helped more than 10,000 entrepreneurs with strategies and tactics that help them uncover and transform their unconscious blocks so they can confidently make money, reclaim their time, and step boldly into their role as leaders.   You will find Alecia at the upcoming InvestHER CON 2023. It’s happening May 18 & 19 in Scottsdale, Arizona. You’ll find details at therealestateinvestorher.com/investhercon   If you're interested in joining my mastermind for high-level female entrepreneurs, check out my website kathyfettke.com for details.    If you haven’t yet joined RealWealth, you can become a member for free at realwealthshow.com. And we always ask that you subscribe to our podcast, and please leave a review!    Thanks for listening! Kathy Fettke  Follow me on Instagram!    

We are excited to announce two new markets for rental properties and an investment loan that you may be able to get for under 5%! RealWealth helps investors find and purchase properties in 16 markets that offer a variety of residential rental properties including single-family rentals, short-term rentals, and small multi-families that are both rehabbed and new. In this episode, you’ll hear from the Director of our Real Wealth Realty, Leah Collich. She will share what she’s doing as an investor and what she’s seeing many of our RealWealth members doing. You’ll also hear about our property tours and how that can help you make a decision on where and what to buy.  Leah began investing in real estate in 2010 and became a RealWealth member in 2017 in order to expand her portfolio into five new markets while living overseas. While she enjoys the creative outlet of flipping, she strongly believes buy-and-hold investing is the path to real wealth. As an Investment Counselor, Leah is passionate about discussing real estate investment strategies that create a clear path to real wealth and helping our members realize that retirement might not be as far away as they think. If you’d like to look at sample properties and get details on upcoming tours, please log into RealWealth or click the Join for Free button if you haven’t become a member yet. Members also have access to our experienced investment counselors, including Leah, and a list of recommended real estate professionals for things like deal analysis, investment loans, asset protection, legal services, accounting, self-directed investing, and 1031 exchanges. As always, please be sure you are subscribed to our podcast, and if you haven’t yet, leave us a review!  Thank you for joining me on the Real Wealth Show! Kathy Fettke

It might not sound sexy, but one of the best parts of owning real estate is the amount of money you can save on taxes. There are several amazing deductions you can take as a real estate investor that many CPAs don’t even know about. Some of the tax strategies covered in this interview include cost segregation, carryover loss, and creative ways to depreciate properties. There’s also the 1031 exchange, and you’ll hear about all of them and more in this interview with one of our highly recommended tax attorneys. Toby knows how to “talk taxes” in a way that is so interesting, you’ll probably be as excited as I was by the end of the interview. You can take your enthusiasm to the next level by checking in with Toby or another one of our recommended tax experts, at realwealthshow.com. You need to join RealWealth to access our Investor Portal, but it’s free and easy to join. Once you’re logged in, you’ll find Toby’s company listed under the Resources tab in the Asset Protection and CPA/Accounting/Bookkeeping categories. Please remember to subscribe to the podcast and leave us a review! Thanks for listening! Kathy

It’s easy to assume that the challenges we face in the U.S. real estate market are unique while the rules of the real estate game might be similar in other countries, especially when it comes to our northern neighbor Canada. After all, Canada is dealing with a housing crunch and is experiencing astronomical home price growth just like we are in the U.S.   But you might be surprised at how different we are from Canada when it comes to the rules of the real estate game, especially when it comes to mortgages and investor tools, like the 1031 exchange. (Spoiler: There is no such thing as a 1031 exchange or a 30-year fixed-rate mortgage in Canada.)    That’s just a teaser! In this episode, you’ll get more details from two Canadian real estate investors. Daniel Foch and Nick Hill will explain how the Canadian market differs from the U.S. and what Canadian home buyers and investors are up against.    Daniel is a real estate investor, podcast co-host, and realtor with more than 15 years of experience in the real estate industry. He’s been featured as a real estate expert in the Wall Street Journal, CBC, BNN, Bloomberg, The Globe and Mail, among others. Nick Hill is a real estate investor, podcast co-host, and mortgage agent. Their podcast: “The Canadian Real Estate Investor.”   You can find out more about U.S. real estate at realwealthshow.com. Click on the “Join for Free” button to sign up. It only takes a few minutes and will give you complete access to our real estate market data and resources. Please be sure you are also subscribed to our podcast, and don’t forget to leave a review!   Thanks for listening, Kathy

How do you build a real estate portfolio when you’re already too busy with work, family, and life in general? In this episode, you’ll hear from a busy computer software engineer who’s married with two children. Despite the daily time crunch, he's ventured into real estate, learned a few hard lessons, and is now sharing his story with us on the Real Wealth Show.   Ron Quintos started buying rental properties in 2001 but didn’t really know what he was doing until 2010, after the housing market crashed. He calls himself a “born again investor” because he was able to bring his investments back to life. His investments include single-family properties in Illinois, Alabama, Maryland, Texas, and a property under contract in Florida. He has also invested in mobile home park and apartment syndications, but he’s now realizing that he prefers good ol’ single-family rental homes.   Ron recently attended one of our real estate property tours in Dallas which you’ll hear about in this interview. We have several more tours planned over the next few months. You can see our tour schedule at https://realwealth.com/tours/.   We also had the pleasure of hosting Ron at a recent Mastermind in Malibu, which helped him map out a plan for 2023 and beyond. We are holding several more masterminds this year. You can get details about those at https://kathyfettke.com/masterminds/.   Please be sure to join RealWealth for access to all our data and resources at realwealthshow.com. It’s free to join and takes about two minutes. And please remember to subscribe to our podcast and leave a review!   Thanks for listening! Kathy Fettke

It’s been quite an economic roller coaster this last week with headlines about bank failures in response to the Fed’s inflation-fighting rate hikes. That’s created a lot of fear about the stability of the U.S. financial system and the risk to our personal assets, like bank accounts and even real estate. For years, I’ve advocated for real estate as an asset that can weather an economic downturn and provide long-term wealth, and that hasn’t changed because of recent developments.   In this episode, you’ll hear more about why real estate can help you safeguard your personal financial world and about one particularly good market for real estate investors right now – in North Dallas. Last fall, we launched a single-family rental fund in the North Dallas area. Joining me to talk about why this market is so resilient is my fund partner and experienced real estate investor, Leah. She has a $40 million dollar personal portfolio, and is the co-founder of one of the largest property management residential investment firms in North Texas.   If you’d like to find out more about our single-family rental fund, go to www.growdevelopments.com. You’ll find information about the North Dallas market and the rental fund by clicking on Investments and Current Offerings.   You can become a member for free by joining RealWealth at realwealthshow.com.    As always, please be sure you are subscribed to our podcast, and if you haven’t yet, leave us a review!    Thank you for joining me on the Real Wealth Show! Kathy Fettke

It’s been an amazing conference with more than 1,000 investors, operators, and syndicators at all experience levels! The Best Ever Conference in Salt Lake City is an event that takes place once a year, and provides attendees with economic forecasts, presentations and debates, insights on how to grow your real estate business, and plenty of opportunities for networking.    I’ve been on stage three times at this conference, and have been soaking up a wealth of information from the pros. In this episode, my hubby and business partner Rich joins me for a conversation about what we’ve learned at this event, with an emphasis on multi-families versus single-family rentals. You can also check out the conference agenda to get a better idea of the topics covered, and get information about attending “next” year’s conference at www.besteverconference.com.    If you’d like to learn more about our single-family rental fund, which I mention during this episode, please go to www.growdevelopments.com. You can also sign up for a free RealWealth membership at www.realwealthshow.com and get access to our learning center, our market data for single-family rentals, our experienced investment counselors, our property teams and the opportunities they provide for investors.   As always, we ask that you subscribe to our podcast, and leave us a review!   Thanks for listening! Kathy Fettke  

FIRE is the new buzzword among real estate investors, and it has nothing to do with the fire emoji that everyone uses on instagram to say that “you’re hot.” It’s a movement known as Financial Independence, Retire Early or FIRE! In this episode, you’ll hear from someone who is about to experience FIRE. Adrian Rish started investing in rental properties just a few years ago, and has now created enough passive income to become “work optional.” Adrian is a business owner, husband, father of two young children and financial provider for his mother. He purchased his first property in his hometown of Oakland, California, in 2013. After years as a do-it-yourself investor and property manager, Adrian discovered RealWealth in 2020. Attending some of our live events and real estate tours helped him diversity into other states and connect with like-minded investors. Now, having reached his near-term investment goals, he and his family are planning to make an international move to Portugal to experience life abroad, and potentially expand his portfolio to Europe. If you’d like to learn more about the FIRE! lifestyle, hit the join button at realwealthshow.com. Membership is free. You can tap into our educational material, get access to our investment counselors, see sample properties, and learn about different markets. You'll also find a schedule for upcoming real estate market tours where you can see properties in person and meet with other investors. Please subscribe to our podcast if you haven’t already. If you like what you hear, we’d love a 5-star review! Thanks for listening! Kathy Fettke  

As your portfolio grows, it can become overwhelming to keep track of everything. Even if you have property management, you still need to oversee the property managers, respond to emails, organize your documents, make sure all the bills are paid, and every other little thing related to your investment properties. But how do you find the right person to help you without busting your budget? In this episode, I am joined by my husband, co-founder, and RealWealth CEO, Rich Fettke, and the CEO of a company that’s provided the kind of help that he needed to scale our business, our personal portfolio, and make it easier for us as time goes on. Our special guest is Tricia Sciortino of Belay Solutions. She earned a degree in Business Administration and Management from the University of Hartford. Worked as District Manager for the retail chain Pacific Sunwear for ten years. And the, she decided to take her chances with a startup called Belay, during the recession. Over the next ten years, she’s moved from Director, Vice President, President, and COO to her current position at Belay’s CEO.  Rich discovered Belay more than five years ago. He’s hired two executive assistants, and a couple of bookkeepers from Belay, and they’ve worked out so well that he wanted to share his experience with our listeners and other RealWealth investors. You’ll find out in this interview how Belay chooses only the top 1% of its applicants and how Belay carefully matches them with clients. No worries. You don’t have to hire someone full-time. You can start off slowly as you decide exactly how much help you’ll need. Rich began by hiring an executive assistant for three hours a week. That was expanded to ten hours a week. And now, Rich and I share an executive assistant who’s working for us full time. We also have a personal bookkeeper, and another bookkeeper to help with RealWealth finances. You can also get a discount through RealWealth to help get you started with Belay. Go to belaysolutions.com/realwealth to find out more about that. To find out more about real estate investing, please go to realwealthshow.com and join our network. It’s free and will give you access to all our educational materials and market data. And remember to subscribe to our podcast, and follow me on instagram @kathyfettke. Thanks for listening! Kathy and Rich

Buying rental property requires a lot of math and, for most investors, a lot of spreadsheet analysis as well. The process can be complicated and time-consuming but there is a new state-of-the-art platform that does the work for you, and it’s really slick. We are crazy about it here at RealWealth. It’s called DealCheck by a real estate investor who comes from a software engineering background. Anton Ivanov created this high-tech platform to help investors analyze rental properties, estimate profits and find the best deals before they buy. And he joins me in this episode to tell you all about his platform and the discount you can get if you put in the coupon code, REALWEALTH. You’ll also hear how Anton structures his own investments to avoid the risk of a big downturn, how he does his financing now that he’s met his conventional loan limit, how he finds solid property managers, and what he does to keep tenants happy and to avoid vacancies. Anton is a U.S. Navy veteran, real estate investor, and entrepreneur with a 40-unit rental portfolio spread out across 4 states. His portfolio generates over $15,000 in monthly passive income, and he spends one hour a week managing it. He created DealCheck to quickly analyze and compare rental properties, flips, and commercial buildings, and RentCast to help investors track, grow, and optimize their rental portfolios. Again, you can get a discount on the DealCheck platform by going to https://dealcheck.io/ and using the REALWEALTH coupon code. We also invite you to become a RealWealth member for free at RealWealthShow.com. Membership gives you access to all our data and deals on rental real estate investing.  And please be sure to subscribe to our podcast and follow me on instagram at @kathyfettke for the latest market updates and commentary.

Housing inventory levels continue to drop. In fact, in February, they were back down to 970,000. That's not a lot of housing available for a country with 330 million people. And, as interest rates drop, the number of people who can afford to buy a home increases by the millions.  What does this mean? I take it to mean that we are experiencing a lull in home purchasing. But, if inflation continues to regress, mortgage rates will likely do the same.  And that could mean by summer, we'll find ourselves in another buying frenzy.  Right now we are in a sweet spot for investing opportunities where competition from retail buyers is down. Our guest today, one of RealWealth's preferred lenders, is going to share what he's seeing investors doing and what he believes will happen this year with the housing market and mortgage rates.    Richard Advani is a mortgage lender and real estate investor based out of Southern California at GuaranteedRate.com. He has been in the mortgage industry for over 16 years and specializes in working with real estate investors, including our own Real Wealth investors. He also owns almost 20 rental properties in markets across the country. If you’re a car racing fan, you may have seen him on the track. Richard is a professional race car driver with the Formula Drift organization.   For more about financing your investment properties. Check out Richard’s recent RealWealth webinar under the Learn tab at our website at realwealthshow.com. He’ll also be attending our free live event on February 11th. You’ll hear from 11 property teams and one commercial broker about their markets and the inventory they have for investors. You can also sign up for that at our website and join for free to become a member. We hope to see you there!

Are you looking for cash flowing rental properties with steady appreciation? It may seem like an impossible task in today’s market, but they do exist. And one of them is a place that we’ve been tracking for 10 to 15 years. It’s a market that we have wanted to promote but inventory was so tight when interest rates were low, that there was nothing to buy.   The metro we’ll be talking about in this episode is Indianapolis. You’ll hear why Indianapolis is getting about the same cash flow as it has in past decades and why properties in this market are expected to appreciate.   This property team will also be featured in our virtual live event on Saturday, February 11th from 9am to 4:30pm PT. This very special event will not be recorded so be sure to register and attend the live event as there won't be a replay available! You can sign up for that as a member at realwealthshow.com. It’s free to join RealWealth if you haven’t already. You can also register for a webinar with this same property team on Thursday, February 9th at 12pm PT.   And please remember to subscribe to our podcast and leave a review!   Thanks for listening! Kathy Fettke  

This is our second “Ask Kathy” episode for the Real Wealth Show. Podcast host Kathy Fettke collected several questions about today’s real estate investing environment, and shares what she would do in those situations. Questions that she answers include: 1 - If you had $100k to invest today, how would you invest it? (from Karla) 2 - Is it a bad time to use a HELOC for a down payment? (from Jeff) 3 - Are 30-year fixed-rate loans still preferable? (from Jeff) 4 - What markets would you shy away from and why? (from Andreas) 5 - Does the 1% rule still matter" What's true now? (from Cynthia 6 - You talk about hot markets in Florida. What about cities outside the major metros? Doable? (from Cynthia) 7 - What is your outlook on short-term rentals? (from Karla) Kathy and her husband, Rich, co-founded RealWealth to share what they learned about real estate investing. At first, they did it to educate their friends, but that social circle has now turned into a network of more than 66,000 members! Their mission? "We help you create passive income and ongoing cash flow with real estate... so you can live life on your own terms." Kathy is passionate about helping others, and looks forward to collecting more questions for a future "Ask Kathy" episode. Send as many as you like to podcasts@realwealth.com and we’ll add them to our list! Kathy is an active real estate investor and a licensed real estate agent with more than 25 years of experience. In addition to her mission at RealWealth, she's the CEO of Grow Developments which helps people invest passively in syndicated real estate deals. She’s been doing the "Real Wealth Show" podcast since 2003, and "The Real Estate News for Investors" podcast since 2016. More recently, she was picked to co-host the Bigger Pockets "On the Market" podcast. If you’d like to learn more about how to create passive income with real estate, check out her newly updated bestseller “Retire Rich with Rentals" which you can find here on Audible. You will also find answers to your questions as a member of RealWealth. You can join for free at www.RealWealthShow.com And please remember to subscribe to this podcast and leave us a review!

Are you sitting on the sidelines waiting for lower mortgage rates? Are you wondering whether the Fed is “doing the right thing” to fight inflation? Would you like a clear, simple explanation as to why mortgage rates are so high and when they might come down? The economy has a lot of moving parts that can make it difficult to see the big picture and to know what’s coming next.    In this episode, you’ll hear from mortgage expert Barry Habib who has won the Zillow/Pulsenomics Crystal Ball Award three times in 2017, 2019 and 2020 for the accuracy of his real estate market predictions. He joins me to talk about the inner workings of the mortgage market, how inflation and the Fed's rate hikes are impacting mortgage rates, why Fed strategy failed to prevent inflation in the first place and how it’s attempting to make up for that failure, and most importantly… why we might see rates as low as 5% later this year.    Barry is a housing market and mortgage industry expert, best-selling author, and entrepreneur. He’s the founder and CEO of MBS Highway which helps turn mortgage sales people into advisors. He’s a Certified Mortgage Advisor himself, with more than $2 billion in originations. He’s also bought and sold several businesses including Mortgage Market Guide, CPMS, Certified Mortgage Association, and Healthcare Imaging Solutions. His book “Money in the Streets” is an Amazon best-seller. He’s a frequent guest on CNBC and FOX Business Network. His podcast is called: "Inside Real Estate." If you'd like to learn more about what's happening in real estate this year, please join RealWealth. It's free to join and get access to all our data, sample investment properties, RealWealth investment counselors, and our curated list of real estate professionals.  Please don't forget to subscribe to our podcast and leave a review! Thanks for listening! -Kathy

Podcasts are often filled with experts who make it sound too easy to reach those financial freedom goals. Many are often pushing their own agendas as well, and are trying to sell you something. That might create information overload for new investors who are trying to figure out where they should begin. But even the most successful investors started somewhere, and that’s often the story you don’t hear – what it’s like at the very beginning of the journey. It’s an often untold story that could help new investors feel more confident about taking their own first steps. In today’s episode, you’ll hear from someone like that. Kyle Parker and his wife are both full-time engineers with a healthy income, but after reading Rich Dad, Poor Dad, Kyle realized the value of passive income through real estate investing. He’s now in the midst of taking his first steps with a handful of real estate  syndications but he wants to increase his passive income paycheck so he can become job optional sooner than later. You’ll hear details about how he’s managing his finances right now, and how he’s deciding what he should do next with real estate. You can find out more about getting your own real estate operation off the ground at realwealthshow.com. It’s free to join and get complete access to all our information and services, including our experienced investment counselors and other real estate professionals. Please remember to subscribe to our podcast, and leave a review! Thanks for listening!

Happy New Year and welcome to 2023! It’s time to turn the page on 2022 and look for new real estate investing opportunities! And we have ATTOM’s Rick Sharga to help us do that! He joins me in this interview to talk about his data-based opinions on what the real estate market might do this year. That includes specific markets that are more likely to outperform or underperform other markets, along with the strengths and weaknesses of different asset classes.   If you don't know Rick, you should. He has more than 20 years’ of experience in the real estate and mortgage industries and is currently the Executive Vice President of Market Intelligence for real estate data firm, ATTOM Data. He is also one of the most frequently quoted experts on real estate, mortgage, and foreclosure trends by major media outlets.   Rick has also served as Executive Vice President at RealtyTrac, as an EVP for Carrington Mortgage Holdings and Chief Marketing Officer of the company’s Vylla business unit, and as the Chief Marketing Officer of Ten-X and Auction.com. If you'd like to hear more about what happened in 2022, check out my 2022 year-end review with Rick Sharga.  We discuss the ups and downs of last year's market, and what we think is important for investors to know about 2023. Join RealWealth and enjoy all the benefits of membership at: https://tinyurl.com/joinrealwealth Subscribe to the Real Wealth Show podcast:  https://tinyurl.com/RWSsubscribe  Thanks for listening! Kathy Fettke

We end the year with a special guest who’s transitioning from a long-term career in the Navy to what will be a full-time job in real estate. William Spekhardt has more than ten years of experience leading special military operations in the Navy both as an enlisted operator and a naval officer. He’s now preparing to wrap up his career as a Navy Seal and is applying what he’s learned in the military to his real estate operation. William started investing in real estate as a side hustle by renovating distressed single-family properties. He is now focusing on buy-and-hold residential and commercial rental properties. He has a BA degree and a Master of Science degree in Criminal Justice from West Chester University of Pennsylvania. He also has a Master of Science degree in Defense Analysis from the Naval Postgraduate School. And, he’s a licensed Realtor in the State of California. You can find out more about getting your own real estate operation off the ground at realwealthshow.com. It’s free to join and get complete access to all our information and services, including our experienced investment counselors and other real estate professionals. Please remember to subscribe to our podcast, and leave a review! Thanks for listening!

In this episode of the Real Wealth Show you will meet two of our newest RealWealth members. Grant and Rebekah Anderson are the husband-wife managers of our property teams! They came on board about five or six months ago, and we’re finally getting a chance to introduce them to you! Grant & Rebekah do a number of things to make sure we are working with property teams who have what it takes to deliver a quality product over the long term. In addition to managing our existing property teams, they are responsible for finding and vetting new property teams, management companies, developers, and builders. That includes background checks and a good look at their track record and future prospects before they put them on our referral list. They come to RealWealth with years of combined real estate experience that includes real estate sales, fix-and-flips, single-family rentals, and short-term rentals. Grant bought his first home in 2001 while he was in college, and rented out rooms. Since then he’s practiced the BRRRR method of investing and manages his own properties. Rebekah worked as a Realtor for several years helping investors buy and sell properties. She is also a Certified Life Coach. Grant & Rebekah have done much of their investing in Indianapolis where they grew up and where they own their primary residence. They often rent out their home however, so they can roam the country in a travel trailer, and look for new markets and property teams for our investors. They come to RealWealth with years of combined real estate experience that includes real estate sales, fix-and-flips, renovations, single-family rentals, and short-term rentals. Grant bought his first home in 2001 while he was in college, and rented out rooms. Since then he’s practiced the BRRRR method of investing and manages his own properties. Rebekah worked as a Realtor for several years helping investors and retail clients buy and sell properties. She is also a Certified Life Coach. Contact Grant Anderson at: Grant@RealWealth.com Contact Rebekah Anderson at: Rebekah@RealWealth.com Join RealWealth and become a member for all of the benefits (it's free!): https://tinyurl.com/joinrealwealth Subscribe to the Real Wealth Show podcast here:  https://tinyurl.com/RWSsubscribe

This is a different kind of "his & her" Real Wealth Show! Kathy Fettke interviews her husband Rich Fettke about his new bestselling book “The Wise Investor,” while he interviews Kathy about the newly released 2022 edition of her 2014 bestseller “Retire Rich with Rentals.” This interview will give you insights on why Kathy and Rich wrote the books, along with a preview of the lessons they share and the personalities behind those titles! Their synergy is contagious along with their enthusiasm for creating passive income and financial freedom so you can live the life that you’ve dreamed about.   Here’s more about their books which are available on Amazon:    Retire Rich with Rentals: How to Enjoy Ongoing Cash Flow from Real Estate So You Don’t Have to Work Forever, by Kathy Fettke   In Retire Rich with Rentals, professional investor Kathy Fettke shows you how to supplement your retirement plans with cash flowing real estate. You’ll learn how to choose the best markets, identify solid deals, and create passive income – without having to fix toilets or get your hands dirty.   In Retire Rich with Rentals, you will learn: How to safely borrow money to finance your portfolio Strategies for reducing your tax burden Asset protection techniques used by the wealthy Hands free property management techniques How to replace your income with rental property   Retire Rich with Rentals is a step by step plan for building and protecting wealth so you have both the money and the freedom to live life on your terms!   The Wise Investor: A Modern Parable About Creating Financial Freedom and Living Your Best Life, by Rich Fettke   The Wise Investor is an inspiring parable about building what author Rich Fettke calls Real Wealth, the foundation of financial freedom. It tells the story of Ryan Brooks, a husband, father, and CaptivSoft’s hard-working lead coder who, with the help of a new friend and mentor, finds a different path to financial security for himself and his family and becomes wealthy in more ways than he thought possible. In it you’ll learn: Why working endless hours to climb the corporate ladder in search of "enough" may never give you the financial security you want. How to shift the limiting beliefs that might be keeping you stuck and blind to what’s possible for your finances and your life. An actionable,  play-by-play guide to transforming your financial situation by taking charge of your habits so you can live your best life now, not in some far-off future. Whether you seek an investment path that allows you to overcome the fear and overwhelm or are struggling just to start, the advice and wisdom in this book will help you get on track to financial freedom. Expand Your Real Estate Education   Join RealWealth to learn more about real estate investing and get free access to all our educational material. Click on RealWealth.com to sign up. In addition to our Learning Center, you’ll have access to our data on individual U.S. rental markets, our experienced investment counselors, and our list of curated real estate professionals.  If you’d like to find out more about the mastermind that Kathy mentioned during the interview, please go to https://www.kathyfettke.com. Also, please remember to subscribe to our Real Wealth Show podcast and leave a review! Thanks for listening!

It’s the 10th Anniversary of the IMN Single Family Rental Forum and my 10th year as an attendee! I’ve been coming to this event every year and watching how the single-family rental industry is growing. There were 2,000 people at this year's conference in Scottsdale, Arizona, including single-family investors, mom-and-pop fix-and-flippers, brokers, bankers, lenders, and dozens of speakers, including myself, who all believe that now is a good time to invest. They know that as so many people sit on the sidelines, afraid to buy in this more difficult market, that there are opportunities for people who are ready. And they are  excited about what they are learning about today's real estate market. I thought I'd share some of the concerns, strategies, and forecasts that I heard while I was at the conference. – Kathy Fettke   You can find out more about the IMN Single Family Rental Forum at this link. You can also find out more about how to invest in single-family rentals by joining RealWealth at realwealthshow.com. We provide educational material for investors at all levels, along with an investor portal with sample properties, experienced investment counselors who can answer questions, and a long list of real estate professionals that can help you with the business side of things.   And please remember to subscribe to our podcast and leave a review! Email questions for "Ask Kathy" to: podcasts@realwealth.com - put "Ask Kathy" in the subject line. For more information on the Single-Family-Rental Fund go to: GrowDevelopments.com  

The majority of single-family rentals, and they are currently about 23 million of them, are owned by small investors, mom and pops. Wall Street landlords, who still get a lot of flack, own only about 350,000 units, or 1.5% according to the National Rental Home Council. But they are looking to invest billions of dollars more. They are probably looking at the same metrics we're studying, which is the massive rental demand due to the current economy, and higher interest rates that are delaying renters from becoming home owners.  This is exactly why we started our second single family rental fund, focusing on growth markets in Texas. You can find out more about that at GrowDevelopments.com. There's still time to invest by the end of the year.    Today’s guest is the Managing Director of Armada ETF Advisors, David Auerbach, who knows how the institutional investors think and operate.   David has more than 23 years of experience in the REIT industry. He’s the publisher of The Daily REITBeat Newsletters and has worked as an institutional trader at World Equity Group, Esposito Securities, and Green Street Advisors.   You can find out more about real estate investing at realwealthshow.com. Hit the join for free link to become a RealWealth member. You can also find out about our single-family rental fund which focuses on growth markets in Texas, by going to growdevelopments.com. There's still time to invest by the end of the year! Also, please leave us a review and subscribe to our podcast if you haven't already done so! Thank you for listening! -- Kathy

Investors are always looking for steep discounts on cash flowing properties in high-growth markets. But what if you could also get health insurance, a college education and an EU passport as part of the investment? And while you're at it, let’s throw in an annual luxury week-long vacation that's included in the purchase price!  Sound too good to be true?  Investors from over the world have discovered it is very true, which is why they are flocking to buy property in Portugal through the country’s "Golden Visa" Program. Similar to America’s “Opportunity Zone” program, Portugal is attracting investor capital by offering incentives to investors. Those incentives are increasing the country’s GDP by improving run-down or underdeveloped neighborhoods -- with the promise of citizenship as a reward. And just like the Opportunity Zone program in the US, areas that receive those investor dollars have become very hip and trendy. I first heard about the program when one of my business partners, who happens to be European, told me that the Euro was on par with the dollar. He said Americans could buy European property at a discount due to the exchange rate. So you can have Plan B in Portugal. With a minimum investment of just $280,000, you will have a property that could provide up to 10% return over five years, a second passport, immediate residency, and free world-class healthcare! You can find out more about this Golden Visa opportunity for investors at www.GatewayPortugal.com. My daughter, Krista Fettke, and her boyfriend, Alec Denney, are both on the Gateway Portugal team and they join me in this interview to fill you in on the details. Krista Fettke graduated from San Diego State University with a bachelor's degree in Business Entrepreneurship. She's part of the RealWealth marketing team as our Social Media Director. She also helps with copywriting and content creation at Real Wealth, is pursuing her real estate license, and is now Director of Marketing for Gateway Portugal. Alec Denney graduated from University of California, Santa Barbara, with a degree in business and organizational communication. After college, he worked in the real estate software sector as a senior business consultant and is now working as Director of Sales for Gateway Portugal. He's also a Marine Corps veteran.  Please visit our Learning Center at realwealthshow.com if you’d like to learn more about the housing market and real estate investing. You’ll find hundreds of articles, webinars, and podcasts to answer your questions, and help you get started. Click on the “Join for Free” button at the top of our website for full access to all of our market data and resources. And please remember to subscribe to our podcast and leave a review! Thanks for listening. I’m Kathy Fettke and this is The Real Wealth Show.

When it comes to buying real estate as an investment, you need to have a game plan. But that often changes when the market fluctuates making yesterday’s game plan obsolete and creating the need for a new one, or modifications. But successful real estate investors know how to pivot and it’s those investors who can teach how to avoid some of the worst pitfalls. In this episode, you’ll hear from someone who calls himself “The Investor Guy.” Omni Casey is a real estate investor, broker, and coach with almost 20 years of experience in real estate. It all started in Hawaii, with a fix-and-flip surfboard business. You’ll hear that story along with the successes and challenges he’s had growing an expansive real estate business and personal portfolio of cash flowing properties. He and his wife, Chara, currently live on the East Coast with their three kids, and are making sure they keep their kids actively involved in the business to help teach them about real estate. Omni also likes sharing what he’s learned as a coach for people who want to take their real estate game to the next level. He recently authored a book called "Cash-Flow Breakfast Club." If you’d like to learn more about real estate investing, you'll find lots of information in our Learning Center. Membership is totally free, but members also have access to the Investor Portal, our experienced investment counselors and our curated list of real estate professionals. Join now by going to www.RealWealthShow.com! Please remember to subscribe to the podcast and leave us a review! Thank you!

This special episode of the Real Wealth Show is the first in our new “Ask Kathy” series where Kathy is the guest on her own show, answering questions from listeners. Her husband, Rich Fettke, joins her in this debut as co-host for a lively conversation about how they got started in real estate, why they founded their company RealWealth, how the company helps investors, how it gets paid, and some thoughts on important decisions that investors need to make about what, where, and when to buy. Rich and Kathy have created real wealth for themselves and the company RealWealth to help others. Their purpose in educating people about real estate: "So they have the money and the freedom to live life on their own terms." We hope you enjoy this episode, and we hope to do more of these Q&A episodes in the future. If you have questions, we'd love to hear from you! Please send your questions to podcasts@realwealth.com Kathy and Rich co-founded the RealWealth company. They are active real estate investors, and licensed as Real Estate Broker (Rich) and Real Estate Agent (Kathy). Kathy’s other podcast is “Real Estate News for Investors.” She’s also the co-host for the Bigger Pockets’ new podcast, “On the Market.” Kathy is the author of “Retire Rich with Rentals.” Rich is the author of “The Wise Investor” and “Extreme Success.” Join RealWealth at: https://tinyurl.com/joinrealwealth (it's Free!) Subscribe to the podcast on Apple Podcasts at: https://tinyurl.com/RWSsubscribe

With high interest rates pouring cold water on the housing market, many people are sitting on the sidelines waiting for a pause in the madness. However, seasoned investors are seeing things a bit differently. Many of them are looking at homebuyer hesitation as an opportunity to get deals without a lot of competition. In this episode, you’ll hear from my partner on our single family rental fund to explain why we are diving into deals when others are backing off. Leah and her husband Michael started a Dallas-based realty 17 years ago and they now manage more than 1,500 properties for themselves and other investors. They are actively working to expand their multimillion dollar portfolio. In fact, they have put their plans into high gear and have bought more than 80 properties so far this year. Born and raised in Dallas, they knew the area was poised for growth when they were just teenagers. If you'd like to get in touch with Leah and find out more about our rental fund, please go to www.growdevelopments.com. You can create an account, declare your accreditation, and invest in our North Dallas Rental Fund at the website. You'll find more of our Real Wealth Show podcasts at realwealthshow.com. You can also join RealWealth for free by clicking on the Join for Free button at our website. And please don't forget to subscribe to our podcast and leave a review! Thank you!

As the Fed continues to raise interest rates to slow down a booming economy and unacceptably high inflation, there are a several questions on the minds of every real estate investor, including: 1 - Are we going into a recession? 2 - Will there be a housing crash? How far will home prices fall? 3 - Will there be more evictions and rent reductions? 4 - Will we see an uptick in foreclosure activity? 5 - Which markets will be more resilient? In this episode, our real estate guest expert will share some ideas on what he thinks will happen, and what investors need to know to be prepared. Rick Sharga has more than 20 years’ experience in the real estate and mortgage industries and is currently the Executive Vice President of Market Intelligence for ATTOM Data Solutions which is a market-leading provider of real estate and property data. Rick has also served as Executive Vice President at RealtyTrac, as an EVP for Carrington Mortgage Holdings and Chief Marketing Officer of the company’s Vylla business unit, and as the Chief Marketing Officer of Ten-X and Auction.com, the leading online real estate marketplace. He is one of the most frequently quoted experts on real estate, mortgage, and foreclosure trends by major media outlets. Join RealWealth here: https://tinyurl.com/joinrealwealth Subscribe to the podcast here (or on your preferred podcast player): https://tinyurl.com/RWSsubscribe For more information, and to listen to more episodes, go to: RealWealthShow.com For information on Syndications go to: GrowDevelopments.com

If long-term rentals aren’t giving you enough cash flow, and short-term rentals seem like too much trouble, there IS a third option. By renting your property as a furnished home for 30-days or more, you can increase your cash flow, avoid local short-term regulations and occupancy tax, simplify your bookkeeping, and use your property as a guest home when it’s not rented. It’s a niche that seems to be growing in popularity and is known as medium-term rentals. In this episode, you’ll hear from Zeona McIntyre who’s been an Airbnb host since 2012, and is now pivoting into medium-term rentals. She co-authored a book on the topic called: “30 Day Stay. An investor’s guide to Mastering the Medium-Term Rental” and is co-host of a podcast called: “Invest2fi.” She is also a RealWealth investor and will share her experience in this interview! Zeona spends half the year in Boulder, Colorado and the other half traveling the world as an international pet and house sitter. You can find out more about Zeona at: https://www.zeonamcintyre.com/.

With real estate headlines forecasting a recession, many investors and potential buyers are sitting on the sidelines. This is creating an opportunity for seasoned investors to acquire better deals with less competition. In this episode, you’ll hear from two rock star real estate investors, who are in rapid acquisition mode, after years of battling over scarce inventory. Find out what and where they are buying great deals that cash flow. Learn how this expert Ohio team can help you acquire and manage renovated rental properties by going to RealWealth.com, and clicking on the Invest button. Join RealWealth: https://tinyurl.com/joinrealwealth Subscribe to the Podcast: https://tinyurl.com/RWSsubscribe

Title insurance is something that many people don’t pay attention to. It’s required by lenders so it’s automatically part of the home-buying process for people taking out home loans. But for people who pay in cash, like many investors, it’s optional. And it’s not something you want to forget or ignore because not having a clear title can mean big trouble down the road. In this episode, you’ll hear from the self-proclaimed “Texas Title Queen” Rachel Luna. She’s turned her business into what she might describe as a “boutique title experience” with a unique, vibrant personality to match. In fact, she is sort of a social media star with more than 13,000 followers on Instagram. And she claims to have the largest woman-owned title company in Texas. Rachel will elaborate on the title insurance process. She’ll talk about why it’s important to have title insurance, problems that might arise getting a clear title, the kind of claims she’s been seeing, and more. She founded the Patriot Title Company as a young woman, and serves clients in Houston, Dallas, San Antonio, and El Paso. She now has more than 20 years of experience in real estate escrow and closing services. Join Real Wealth for free: https://tinyurl.com/joinrealwealth Subscribe to the podcast: https://tinyurl.com/RWSsubscribe Contact Rachel Luna: https://www.patriottitletx.com/ Rachel Luna Instagram: https://www.instagram.com/racheltexastitlequeen/

The Fed raised rates by another 75 basis points in September, bringing the overnight lending rate to a range of 3 to 3.25%. That’s the highest it's been since 2008. In this episode, you’ll hear how the impact these rates hikes are having on the economy and the housing market from John Burns of John Burns Real Estate consulting. John has offices all over the country advising its research subscribers and consulting clients on changes in housing supply, demand, and affordability, as well as consumer, building products and design trends. His firm has developed a number of proprietary tools, including risk and valuation indices, something called the DesignLens™ and the New Home Trends Institute. The firm even trademarked the term surban™ after the release of a best-selling book on demographics called “Big Shifts Ahead: Demographic Clarity for Businesses.” John has a Bachelors in Economics from Stanford University and an MBA from UCLA, and works in his Irvine, California office. He has served on numerous industry boards and more than 750,000 people follow him on LinkedIn. Another 23,000 people subscribe to his free weekly emails. Please visit our Learning Center at realwealthshow.com if you’d like to learn more about the housing market and real estate investing. You’ll find hundreds of articles, webinars, and podcasts to answer your questions, and help you get started. Click on the “Join for Free” button at the top of our website for full access to all of our market data and resources. And please remember to subscribe to our podcast and leave a review! Thanks for listening. I’m Kathy Fettke and this is The Real Wealth Show.

Buying an apartment building might seem a little intimidating to mom & pop investors, but it doesn’t have to be. Like anything, you need to study the topic before you dive in. And that can be done in different ways, including the use of a mentor to teach you the ropes. In today’s episode, you’ll hear from Brad Sumrok who ditched his job, found a mentor, and started investing in multi-family apartment complexes about 20 years ago. He began with a 32-unit building in 2002 and by 2005, he had enough money from rental income to replace his 9-to-5 job and “retire.” Today, Brad and his wife Jen earn 7-figures combined from their real estate holdings and their real estate coaching business. They now have plenty of time to spend doing the things they love which include family, friends, and travel. They are also passionate about donating to charities, and have a goal to contribute $1 million to good causes. You can get in touch with Brad at bradsumrok.com. You may also want to check out his events page. On September 30 through October 2 of this year, he’s holding a conference on multi-family investing in Dallas. I will be one of the speakers at that event. You can find out more and sign up for the event at Brad’s website or go directly to https://www.aimnatcon.com.

How do you transition out of professional football into another wealth-building career? Dean Rogers lived the dream of a pro athlete with a big paycheck, so starting over was not easy. But once he started learning about real estate, he tackled the subject like a pro-football player, and three months later, he did his first deal. That was nine years ago. In this episode, you’ll hear how he launched his real estate career, the kind of deals he’s done, and some of the mistakes he’s made along the way. Dean began his professional life in the NFL with the San Diego Chargers. He backed away from pro-football in 2013, when he realized his health was at risk He transitioned into a 9-to-5 job, but quickly shifted gears into real estate. Since then, he’s flipped hundreds of homes, and built a 10-figure real estate portfolio. He’s passionate about real estate and loves sharing what he’s learned with other new investors. You can connect with him at www.deanrogers.com. Please visit our Learning Center if you’d like to turn your career into a real estate success story. You’ll find hundreds of articles, webinars, and podcasts to answer your questions, and help you get started. Click on the “Join for Free” button at the top of our website for full access to all of our market data and resources. And please remember to subscribe to our podcast and leave a review! Thanks for listening. I’m Kathy Fettke and this is The Real Wealth Show.

When you buy a property insurance policy, do you know what’s covered and what’s excluded? Many of us read the declarations page, but it’s the contract that has all the details. And it’s those details that could surprise us when we are suddenly faced with a crisis, and are expecting our insurance to cover the costs. In this episode, you’ll hear from a public insurance adjuster who says that most property owners have “no” idea what’s in their insurance package because they’ve never read any of it. In fact, he says many don’t even have a copy of their contract. During this interview, he offers insights into the claims process and tips on what you should and should not do or say. That includes why you might want to use a public adjuster as a “go-between” between you and the insurance company. Andy Gurczak is the founder of public adjusting company, AllCity Adjusting. It is based in Chicago, Illinois, but operates in several other states including Indiana, Pennsylvania, Texas, California, Ohio, Michigan, and Colorado. AllCity says that it helps property owners by making sure they have the insurance they need before something happens, and that any claims are settled effectively and efficiently at 100% of the claim value. As his website states: “The insurance companies are not your friends.” This is an important topic for both homeowners and investors who want to protect their assets against unexpected incidents and damage. It’s one of many things that real estate investors should be aware of. If you’re a new or experienced investor, you’ll find more educational material like this at our website (RealWealthShow.com). Please hit the “join for free” button at the top of the page for complete access to our data. And please subscribe to our podcast and leave a review to help us rank on the podcast platforms! Thank you!

In this episode you’ll hear about an amazing journey by someone who wanted to create a more meaningful lifestyle. It began more than 20 years ago, when Jamie Bianchini quit his corporate job, and decided to ride around the world on a bicycle. But it wasn’t any kind of bicycle. It was a tandem bicycle that he shared with the strangers he met along the way. It was an epic 81 country intercultural expedition that he called “Peace Peddlers.” Jamie is now helping businesses “give back” to society with a company he calls Purpose in Expenses. Jamie tested his fund-raising strategy during the pandemic, using our company, RealWealth, as a pilot. He has now partnered with hundreds of vendors and says he has the infrastructure network in place to scale his model worldwide. He hopes to unlock millions of dollars of available capital for nonprofit work and put that money to work solving some of our most difficult social and environmental challenges. Please join RealWealth for full access to our data on real estate markets and investor resources. It’s free to join. Also, please subscribe to our podcast and leave us a review! Thank you!

Wealth is not created by trading time for money. It’s also not created by simply putting your money to work. In this episode, you’ll hear about a third option – the use of other people’s money or OPM to buy income-producing real estate in recession-resilient markets. Our guest, Keith Weinhold, has an investing mantra. He asks himself and others: “What’s your return on time?” He says one doesn’t simply want more income. The ultimate goal is to live a great life as the outcome. Keith began investing in Anchorage, Alaska, with a four-plex. He lived in one unit and rented the other three. That was 20 years ago! Since then, he has owned income-producing real estate in the United States and Latin America as a buy-and-hold investor. His asset classes include Class C multi-family apartments, Class B single-family rentals, and agricultural parcels. Please join RealWealth for full access to our data and resources. It’s free to join. Also, please subscribe to our podcast and leave us a review! Thank you!

When you sell an investment property, you are usually faced with a big capital gains tax bill, if you’ve held the property for more than a year. For properties held for less than a year, you’ll owe ordinary income tax on your gains. Either way, it can be a big tax bill, but there is a way to push that tax bill down the road, and possibly eliminate it altogether with a 1031 Exchange. As you may know, the 1031 Exchange is a wonderful tax break tool that allows you to sell your investment property and buy a replacement property of equal value or more with the same amount of debt on it or more. By doing that, you can postpone the tax you might owe. Under current laws, if you hold it until you die and pass the property on to your heirs, the value of the property will be stepped up to the current market value, and your heirs will owe nothing on your former tax bill In this episode, you’ll hear from long-time 1031 exchange facilitator, Dino Champagne. She’s the Vice President and Division Manager of the Los Angeles office of Asset Preservation, Inc. and has more than 20 years of experience doing more than 15,000 exchanges nationwide. She will explain the three most important rules for a 1031 exchange along with all sorts of other issues that you might encounter and what you can do to deal with them. If you’d like to get in touch with Dino, click here for her bio and contact information at the Asset Preservation, Inc. website. You’ll also find her listed on our website under 1031 Exchange Facilitators. Please join RealWealth for full access to our data and resources. It’s free to join. Also, please subscribe to our podcast and leave us a review! Thank you!

There are three important metrics to consider when you make a decision to buy investment property - job growth, population growth, and affordability. And with more than 400 metros across the U.S., you have lots to choose from but those metrics will vary greatly from metro to metro so it’s important to consider them carefully. In today’s episode, you’ll hear from an experienced investor who talks about those metrics in general, and also specifically for the market that she focuses on, in North Texas. She’ll talk about why the Dallas/Fort Worth area is a strong market for investors right now, how she makes the numbers work, what she looks for in property management, and how she funds her deals. Leah was born and raised in Dallas, and has been a licensed real estate agent/realtor since 2006. She owns a full-service real estate investment and property management company, and has worked with RealWealth for years helping members find rental properties. She and her husband personally own about $35 million in real estate. You can get in touch with Leah by joining RealWealth at realwealthshow.com, and logging in to the investor portal. You can also hear more about the Dallas market in a recent webinar with Leah which you’ll find under the Learn tab. Please remember to subscribe to our podcast and leave us a review! Thank you!

They created a very simple five-year plan that focused on industrial real estate, and some family planning. It went something like this: "property, baby, property, property, baby". And it worked! They were able to ditch their jobs as UCLA professors, and have enough money and time to enjoy their growing family. In this episode, Kim Hopkins joins Kathy Fettke for an animated conversation about a life-changing decision to get into real estate after spending years earning a PhD. But there are no regrets. Kim and her husband, Ben, have now met their five-year goal for “properties and babies” and are working on a plan for the next five years. You’ll hear about what they’ve done with real estate, the kind of lifestyle they’ve created for themselves, and how they are trying to figure out what comes next. You’ll be inspired by Kim’s exuberant personality, and how she has learned to elevate her lifestyle by delegating to other people what she herself would prefer not to do. Kim co-founded an investment company in 2014 called Iron Peak Properties. Kim is in charge of strategic planning and asset acquisitions. Just four year before, she had earned her PhD in Mathematics at the University of Texas in Austin. Although she quit her professorship, she makes use of her math skills for algorithmic number theory and analysis at her company. Iron Peak owns and manages more than 350,000 square feet of real estate in Oregon, Washington, Utah, Texas and Arizona and focuses on multi-tenant industrial properties. A big part of any investment plan is deciding what kind of real estate you want to buy. At RealWealth, we focus on single-family rentals, both rent-ready and build-for-rent. You can find out more about how we can help you by joining RealWealth for free. Qualified members can also speak with our investment counselors. The consultation is free and without obligation. Please remember to subscribe to our podcast and leave us a review! Thank you!

It’s amazing what one person can accomplish in real estate with the right opportunities, knowledge and funding. But there are also a lot of rules to follow, and mistakes can have serious consequences. In the case of a real estate syndicator in charge of other people’s money, a mistake can land you in jail. That’s what happened to the guest in this episode. Mike Morawski is a multi-family syndicator who had a thriving business before the market crashed in 2008. The market turned and he was trying to save his business, but he didn’t let his investors know what he was doing. He ended up going to prison for his lack of transparency. It was a rough lesson, but he spent his time wisely in prison, educating himself, and sharing what he learned with others. He has an amazing story of personal resilience, and a deep desire to help other people live extraordinary lives… and stay out of jail. Mike is an entrepreneur, author, real estate trainer, public speaker and personal coach. He has 30 years of real estate investing experience with more than $285,000,000 in transactions. He created the coaching platform My Core Intentions to help train and coach new multi-family investors. He’s also the host of the “Insider Secrets” podcast and the author of “Exit Plan: Your Complete Guide to Multi-Family Investing and Why You Need an Exit Plan Before You Buy!” Here at RealWealth, transparency is one of our Core Values. It’s something we review each quarter with our employees, and something we go to great lengths to provide to our investors. We do syndicated deals with more of a focus on single-family rentals. We also help investors find individual single-family rental properties. New and experienced investors are welcome. Please join RealWealth. It’s free and will give you access to our investor portal and our network of real estate professionals, including our investment counselors. Qualified members can speak with them for free. There’s no obligation. Also, please remember to subscribe to our podcast and leave a review! Thank you!

We love to hear inspiring real wealth stories and we’ve got one from a woman who immigrated from India at the age of 21. She became a respected environmental engineer but ditched that job for a career in real estate. She is now helping clients find properties and buying real estate for her own portfolio. In this episode, you’ll hear how her engineering background helped build her business as an agent, and also helped her with her own due diligence. Ranjani Ravi is the owner of Ranjani Ravi Realty in Seattle. She has helped more than 250 clients buy more than $200 million worth of real estate in the Seattle area. Previously, she worked as an Environmental Engineer at the EPA, and for other consulting firms. As part of her effort to educate her clients, she likes to make videos about real estate called “Sip and Learn.” You’ll find them on YouTube. Ranjani says she learned a lot about investing from our team at RealWealth. We have hundreds of free webinars, articles, podcasts, and other resources on our website. If you join, you also get access to our investor portal and our network of real estate professionals, including our investment counselors. Members can speak with them for free. There’s no obligation. Also, please remember to subscribe to our podcast and leave a review! Thank you!

Mortgage rates did a big turn-around over the last two weeks. The 30-year fixed-rate mortgage dropped a half a percentage point to an average of 5.3%. That’s not as low as it was this time last year, but the two-week difference in rates is saving homebuyers about $100 dollars in monthly mortgage payments. Will these lower rates last? In today’s episode, you’ll hear from Lending Tree’s Senior Economic Analyst, Jacob Channel. He conducts studies on a wide variety of topics related to the U.S housing market and provides general macroeconomic analysis. He earned a BA and an MA in Economics from The New School for Social Research in New York City and joined Lending Tree in 2019. His work has been featured in major publications including the New York Times, Bloomberg, Forbes, and CNBC. He has also appeared as a guest on Cheddar TV and Yahoo Finance. If you’d like to learn more about how investors are dealing with higher rates, you’ll find a recent webinar on our website called “How to Use Leverage Effectively in Today’s Rising Interest Rate Market.” Just go to the Learn tab at the top of the page for our webinar section, or click here. If you haven’t signed up yet as a member, it’s free to join. You’ll get access to the Investor Portal where you’ll find details about single-family rental markets across the country. You’ll also get access to our network of experienced investment counselors, property teams, lenders, attorneys, CPAs, 1031 exchange facilitators, and other real estate professionals. And please remember to subscribe to our podcast and leave a review! Thank you!

With home prices and interest rates up dramatically over the last year, does it still make sense to buy rental property? Should you invest in a rental when there’s very little cash flow, or even no cash flow at all? Maybe you should wait until home prices come back down a little, to help boost your numbers. Will that happen? Will prices come down? A lot of people think they will but the guest in this episode thinks the opposite will happen. Jimmy Vreeland is not an economist. He’s an investor who believes: “You don’t wait to buy real estate. You buy real estate, and wait.” He’ll explain what that means. Jimmy is a graduate of the U.S. Military Academy at West Point and has served in Iraq and Afghanistan. He’s the founder of Vreeland Capital in St. Louis, an investor who’s owned more than 100 rental properties in the last decade, and the co-host of the “Cashflow Tactics" podcast. He got his start while he was still in the military, and is still investing today. What should “you” do after listening to this podcast? If you haven’t already, please join our RealWealth network at realwealthshow.com. There are investing opportunities in markets across the country, but it’s not always easy to find them. You get the help you need at RealWealth. It’s free to sign up and get access to our network of professionals including our experienced investment counselors who can answer your questions. And please remember to subscribe to our podcast and leave a review! Thank you for listening!

When it comes to real estate investing, there are five basic categories – residential, commercial, industrial, raw land, and special use. You can break those categories down into sub-categories. A few of the more common ones are single-family rentals, apartment buildings, retail properties, and office space but there are many more. In this episode, you’ll hear from serial investor, Kevin Bupp, who’s become an expert on mobile home parks and parking lots. With over $250 million in real estate transactions, his experience also includes single-family rentals, apartment buildings, office buildings, self storage, and build-to-rent homes. He’s the host of a podcast called “Real Estate Investing for Cash Flow” and recently published a book called “The Cash Flow Investor.” My hubby Rich Fettke also just published a book that you might want to check out. It's called "The Wise Investor: A Modern Parable About Creating Financial Freedom and Living Your Best Life." It's an easy-to-read story about a family man who's tired of living paycheck-to-paycheck. He decides to learn more about real estate with the help of a mentor, and eventually becomes wealthy in more ways than one. The kindle book is for sale now on Amazon. The hard cover and audio versions can be pre-ordered. You can also read more about the book here (at realwealth.com/grow). And please remember to subscribe to our podcast and leave a review! Thank you! For a free copy of Kevin's latest book, go to: www.KevinBupp.com/freebook

There are 10-million second homes in the US, yet, on average, they’re only occupied 8 weeks a year. That’s 440 million weeks that vacation homes sit unoccupied, unused, and unloved. But there's a new tech-driven co-ownership option that matches your vacation time with the cost to own that home. And it’s nothing like a timeshare or tenants in common. In this episode, you’ll hear from Jeff Lyman about co-ownership vacation homes as the Chief Experience Officer and Co-Founder of Ember Homes. He explains how you can own a fractional portion of a home and still reap the benefits of homeownership. That includes lower costs to maintain the home, easy transactions to buy or sell into the deal, and the capture of appreciation when it does come time to sell. Prior to Ember, Jeff worked as Chief Product Officer at Weave Communications, CPO & Chief Marketing Officer at Vivint Smart Home, and Senior Director for Mobile and Web Design at Nike+. He has an MBA from the University of Oregon. Ember Homes makes the ownership of vacation homes simple. But is it right for you? Is it something that improves your finances while also contributing to your personal growth? Having a personal vacation retreat might get you to your happy place, but If you’re unsure about your next steps in real estate, you might want to check out Rich Fettke’s new book, “The Wise Investor.” It’s an easy-to-read modern parable about creating financial freedom and living your best life. And it could help you decide if a co-owned vacation home is your best next step. The kindle book is for sale on Amazon. The hard cover and audio versions are coming out in August but you can pre-order them now. You can also read more about the book here. And please remember to subscribe to our podcast and leave a review! Thank you!

As real estate prices continue to climb, you may be wondering whether it’s still a good place to put your money. Are we teetering at the top of the market or Is there further to climb? What about inflation, the inverted yield curve on bond yields, and numerous predictions for a recession next year? What do all these factors tell us about real estate? In this episode, we’ll hear from someone who’s feeling bullish about real estate in the current environment. And, he feels that 2022 might be one of the best years ever to invest. Our guest, Hunter Thompson, is the founder of Asym Capital. He has helped hundreds of investors acquire more than $150,000,000 in assets like mobile home parks, self-storage, retail, office, ATM machines, and cryptocurrency. He’s also the author of Raising Capital for Real Estate, and the host of the Cash Flow Connections Real Estate Podcast. Single-family rentals are a great asset class for real estate investors. You can learn more about that at realwealthshow.com. Please take a moment to sign up. It’s free to join and get access to our network of 62,000 members and real estate resources. As a member, you can visit the Investor Portal where you'll find sample properties. You can also easily connect with experienced investment counselor, property teams, lenders, and more. That's at realwealthshow.com. And please remember to subscribe to our podcast and leave a review! Thank you!

It’s not easy watching mortgage rates move higher when you’re in the market for a loan, but the rates we’re seeing right now are still low compared to what they’ve been historically. And you can’t beat real estate when it comes to building wealth for your retirement. In this episode, you’ll hear from real estate investor and mortgage lender Richard Advani on the lending environment for investors, including life after 10 loans, getting a loan if you are retired or self-employed, where interest rates are going from here, and how to make money despite higher costs and lower ROI’s. Richard is based out of Southern California and has worked in the mortgage industry for more than 16 years. He’s spent most of that time working with real estate investors including RealWealth members. He offers more insights in a recent RealWealth webinar. You’ll find this webinar under the Learn tab on our website. As an investor, he has more than 20 properties in markets across the country. When he’s not making loans or monitoring his own properties, he’s competing in the 2022 Formula Drift Championship at locations around the country as a professional race car driver. If you’re not yet a member of RealWealth, please take a moment to sign up at realwealthshow.com. RealWealth helps educate people on the creation of passive income with single-family rentals in desirable markets around the country. It’s free to join and get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

“That was their dream back then – going places. Traveling the world. Now, twelve years later, he was forced to admit that they hadn’t gone anywhere.” - excerpt from “The Wise Investor” If you’ve longed to improve yourself, to reach greater heights, to have more freedom and more money to pay for it all, this book is for you. “The Wise Investor: A Modern Parable About Creating Financial Freedom and Living Your Best Life" by Rich Fettke is an inspiring parable about building what author Rich calls Real Wealth. It tells the story of Ryan Brooks, a husband, father, and hard-working employee who, with the help of a new friend and mentor, finds a different path to financial security for himself and his family and becomes wealthy in more ways than he thought possible. In this episode, Rich joins his wife, Kathy on The Real Wealth Show, to talk about his new book -- why he wrote it, what it might teach you, why it’s so powerful yet so much fun to read, and what it could potentially do to change your life. Rich oversees the business development at RealWealth. He is passionate about developing the RealWealth team and systems, and is always looking for new ways to bring good people into the RealWealth family. As a licensed real estate broker, experienced investor and Master Certified Business Coach, Rich specializes in helping the team stay aligned and inspired to fulfill the company’s purpose, mission and values. Twenty years ago, he wrote “Extreme Success.” His latest inspiration is a new book and the topic of this episode: “The Wise Investor: A Modern Parable About Creating Financial Freedom and Living Your Best Life." The kindle book is available now at Amazon. The hard cover and audio versions can be pre-ordered and will be available in late August. If you’re not yet a member of RealWealth, please take a moment to sign up at realwealthshow.com. RealWealth helps educate people on the creation of passive income with single-family rentals in desirable markets around the country. It’s free to join and get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you! TRANSCRIPT Kathy Fettke: I'm very excited to interview today's guest on The Real Wealth Show. He is a best-selling author with a new book called "The Wise Investor." And this has come out almost 20 years since his last bestseller called "Extreme Success." I actually know a lot about this book already because the author is my husband Rich Fettke. Rich, welcome back to The Real Wealth Show. Rich Fettke: Thank you, Kathy Fettke. Good to be here. K: A lot of our listeners know who you are, but we have lots of new listeners. So I'm just going to give a little bio on you. You're a master certified coach from the Coach Training Institute. He has coached people in business and in their personal life for years. He has coached us at RealWealth. He has been our Co-CEO and now CEO of RealWealth and I get to just be a Founder, which is awesome. Thank you for taking all those details off my plate, Rich! And, now he's published a new book called "The Wise Investor." So let's talk about that. First of all, why did it take so long? It's been 20 years since your last book. R: Yeah, well, we've been running RealWealth over the last 20 years. 20 years ago, when "Extreme Success" came out, I was touring all over the country and doing morning news shows and radio interviews and books, bookstore signing events, when they used to have bookstores way back then. But then I was diagnosed with melanoma and told I had six months to live, as many of your listeners probably are aware of. That was the impetus for you to say: "I have to find a way to make ends meet if Rich dies so I will learn about real estate investing." And that led to RealWealth being created. So over the last 20 years, we've been really focused on running RealWealth and growing it and building it and helping members acquire investment properties and educating members. So, it's been my coach kind of knocking on my head saying: "When is your next book gonna come out?" It wasn't until about four years ago when we started to apply story branding to RealWealth. It comes from Don Miller who wrote a book called "Building a Story Brand." It's all about seeing the customer as the hero of the story and you, the business, being just the guide. So I really got into this whole thing about the hero's journey and Joseph Campbell and storytelling. I just thought it was fascinating. And so one day I mentioned that to my coach Kenji, and I just said: "You know, If I was going to write another book, I'd probably want to write some type of story and follow the hero's journey. That was the spark, and then I got obsessed with it. It's like, oh man, I could tell, I could tell a parable with powerful lessons and really communicate these lessons emotionally. So that's why it took me 20 years. But it's done. I'm finally finished. K: There are so many things I want to say about what you just said. I'll just start with it's so cool that you have a coach. You are a coach, and yet you have one and you always will have one, and you are religious about that. You look at your coaching journal every morning. So would you mind just kind of telling us a little bit about how you do that, how you do your life? R: Yeah. I mean, just having a coach, it's like having someone else there to ask the questions that we're not asking ourselves. So I'm going to speak for me individually. It's like, I can only ask myself so many questions and it's easy to get stuck. It's easy to get in my own way. So having someone hold up that mirror in front of me and saying, How are you living? Are you being your best self? What's working? What's not working? Where can you improve? Where can you love more? Where can you give more? How can you create more? It just helped me see beyond myself. So that's why I think the coaching process is incredibly, incredibly powerful. It's been amazing for me. And, you know, I've seen it with my clients. I've been coaching clients over the years and seeing people who took years to create a business plan and that still hadn't done it. And then they start coaching and six weeks later, their business plans are done. For example, another client who wanted to be a real estate broker and had put it off for 10 years. Within a year, he was a licensed real estate broker and it was because of the support, accountability, and clarity. That's why I love that process. As for my coaching, I get up every morning and I review what I call my coaching, my master plan. It's my three ring binder that has my goals for the week and my rituals and my success habits that I track. All those little tiny actions that build up to help me be a better me. I need to be reminded of those actions consistently. K: It's so cute. You've got the check boxes for things like, did I compliment my wife today? Did I call my mom? You check them off to make sure they happened. It's in the book. It's all about self-reflection and measurement. Whether I measuring up to what I want to be. Not what somebody else wants me to be, but how I want to be and what I want to be. Such a scary thing to do. I remember when I first started "The Real Wealth Show, I refused to listen to it. I didn't want to hear my voice. I didn't want to hear me mess up. I just wanted to think that it went great and not really analyze it or watch it. And I remember, you would watch every speech you gave. You'd watch it five times to just take notes and see where you can improve. You didn't take it personally. It was more like, I'm going to really see myself and then make adjustments. R: Yeah. Except when I did, sometimes I would take it personally and be like, God, I suck. But yeah, it would just be like, okay, what am I doing there? You know, it's like, I'm talking too fast or I'm coming off preachy. So it's that feedback to be find out how I can improve. K: Why do you think people are so afraid of that self observation? R: Ego. Yeah, I think it's ego. I think it's when we let the ego, that little gremlin come in and say, like, see you suck, see you're not good. That little gremlin is always looking for artillery to hold against us. So I think it's kind of like saying, okay, gremlin, I know you're going to kind of try to berate me here. The gremlin is always there to protect us, to try to make us better, to challenge us. It's not really a bad guy. It's like putting the ego aside and say, okay, gremlin, if you want me to be better, this is what I need to do. And to realize that's how we learn. That's how we grow. It's like watching our little grandson learn to walk. He would walk along and fall. He'd get up again. And he's like, oh, I see what I did there. And he'd go along. So it's that constant feedback. We have to fall down for us to be able to say, okay, what didn't work there so we can get better. K: Now in your book, the wise investor, it's a parable. And I got to just. You decided to do the audio for this and there's, and it's a story. So you actually have to act throughout the whole entire time you read it. And not only that you had to do it in like 10 different voices, several of them being women. So I cannot wait for this audio book to come out. I think you said it's coming out in August. R: Yeah. So the ebook is out now. It's been out for a month now, and I'm really stoked because it's been on the bestseller list every day since it came out. It came out on April 20th and it's still on the bestseller list on Amazon so that's super cool. And then the hardcover and the audio book will come out at the end of August. So they're available for pre-order, but, yeah, we're waiting for that. It's the supply chain issues. We're waiting for the printing presses to get enough paper, just like in real estate, they're waiting for wood to build houses. Right. So yeah, I'm excited about that. Excited to hold the book in my hand. K: I just love that you read it because I mean, acting creates a whole new world of self criticism, right? When your first audio book came out, we were just going to bed, I think we were somewhere in Utah skiing and we were listening to it. And we're both, huh, I don't know if I loved that so you just went back to the studio and rerecorded it. R: Yeah. I just didn't like my pace and my cadence and all that stuff. It was like, yeah, it was a discipline and a practice. And, I think I pulled it off. Let's see what the reviews are like in August, but, I'm pretty happy with it, except when I'm not. Sometimes I'll listen to it and be like, oh, I wish I did that different. So it is a modern parable. I wanted to tell a story. There's so many books on finance and real estate investing and personal development books and everything, and they're great. But a lot of times the statistics are crazy. 86% of people who start a book, don't make it past chapter two. It's insane. So I didn't want to write a book like that. I didn't want to write a book that people would just buy and have it be on their bookshelf. I wanted them to read it, cover to cover, and I love parables. I've read so many great parables that are engaging, that tell a lesson, that share so many lessons when you weave it in. So yeah, that was the purpose of writing a parable. Creating a story that would be compelling, that would connect with people emotionally, that would actually elicit a change in them so they do things different. It's about creating financial freedom, but it's also about, living your best life, becoming your best self. K: Well as a coach, and you're very, very good coach, you simply don't have the time to coach all the people that would love to have you be their coach. And, so the book reads like you're coaching them. I know you didn't write it with you being the wise investor, but it's what it feels like, you know, because it's a younger guy who's just really frustrated with life. Right. Just working too much, not enough time with the family and wants a change and things are kind of falling apart until he meets this older, wiser man who guides him along the way. And it just so happens that older wiser man also does a lot of extreme sports. (laughter) R: Yeah. He says in the beginning, yeah, this wiser mentor... It was powerful writing the book because it was like, what would I do? What would my future self say here? What would my future self coach them like? So I really looked at the mentor as me in the future. If I get wiser, if I get in better shape, if I'm living a better life. So he's like this guy who I aspire to be, but at the same time, that was really powerful because it really got me. I could just close my eyes and think, okay, what would my wisest self, my best, what advice would he give here? Whether it be about investing or money management or being a better husband or being a better dad or being in better shape. So yeah, this mentor, absolutely, he doesn't want it to be these boring mentoring sessions. And that's what he says in the beginning. He's just like, you know, I don't want to be sitting on a phone or sitting on a desk with you. Let's do something fun. Let's get outside and let's play. And he quotes Plato where he says, you can learn more about someone in an hour of play than in a lifetime of conversation. So he learns a lot about Ryan, this guy, this struggling family man who really needs the needs to help. He learns a lot about him. And then Ryan learns about a lot about his mentor as well. K: It seems men are under a lot of pressure these days. I mean, they always have been, men typically were responsible for the finances until, you know, the last generation. =But there's still a lot of pressure on men. What, what do you see as that being and how was that described in the book? R: Well, we create our own pressure. Right? I think it's like, so what I wove into "The Wise Investor" were sort of the best, most important principles that are around wisdom. They came from my mentors. They came from, us interviewing people on The Real Wealth Show together and their real wealth stories. So I kind of wove a lot of those stories in, but there was a book that I read called "The Way of the Superior Man," which you're familiar with Kathy... K: Oh man, I'm so glad you read it. R: And it was really good. It's by David Deida, "The Way of the Superior Man," and in that there are really powerful lessons about showing up as a really good spouse, or man, or partner, to your woman, or to your significant other. It's like really showing up, being more attentive, acknowledging, like you said earlier, I checked that thing off, you know, make sure that we acknowledge Kathy consistently. It's an easy thing for us to forget because like anyone, men or women or anyone, we get overloaded and we get overwhelmed and we start focusing so much on all this stuff we have to do and work and all that, that we often don't stop to step back and say, how am I showing up? How am I living? How am I being? And so some of the huge lessons in "The Wise Investor" is Ryan, the protagonist, learning these lessons. He's really looking at himself and his life and saying, how am I showing up? How am I showing up as a husband? How am I showing up as a dad? What about as an investor? How am I managing my money? You know, he makes a decent income, but that money is going everywhere except for into investing. So he learned some big lessons about where to direct that money so he can not create financial freedom. K: You call it "The Wise Investor" and people would assume that means that you're talking about money and building wealth, but it's much broader for you. So tell me about that. R: Absolutely. "The Wise Investor" is about investing but it's not just about money. It's about investing in assets and the way the mentor describes it as assets are things that bring you income or happiness or health or time. And liabilities are just the opposite. Liabilities are the things that cost you money or health or happiness or time. So it's really about investing in yourself, investing in your life, investing in assets that, whether it be real estate or whether it be working out or whether it be into investing time into your family or investing into your own business, which his wife, the protagonist's wive has her own business, so he learned some really powerful lessons from the mentor's wife, actually. So yeah, there's definitely some girl power in there too. That's cool. K: Yes. I love that. Now on your website, people can download a life wheel. Right? You want to tell people how to find that? R: Sure. So with the book, there's a whole resources center and in the back of the book. It's just realwealth.com/grow. So if people go to realwealth.com/grow, they can see Ryan's "grow" notebook. He takes a notebook throughout the whole thing, all his lessons that he learns. And so that ended up being like 35 pages long, which is just the lessons without the story. There's the life wheel where you can really do an assessment. And this is where, if your listeners have attended a "Focused Investor" that I do every year, we do that life wheel. And it's about looking at these 10 major areas of your life, to really look at how satisfied you are in these areas. And it goes from health to fun and recreation to your significant other and your romance to spirituality, to your career, to your finances, all these different areas. So the mentor actually takes Ryan through this process of assessing. So it's the same thing. It's like, I want the reader of the book to kind of experience being mentored by this wise investor and kind of step into the shoes of Ryan or his wife Carissa, and really learn these lessons. So there's that. He takes him through the future self exercise, which is also on that resource page. People can listen to the future self visualization that I walk people through that the mentor takes the protagonist through as well. Good stuff, but you know that this story kind of connects it all and the resources is more about the doing. So you can do that after. K: Our daughter is traveling Asia right now. And she is partially volunteering and partially just having an amazing time traveling. And one of the things that she keeps telling us about is how happy people are there. She was in Thailand and then Indonesia and the Philippines, and she said, there's such extreme poverty yet she saw so much happiness. Now she grew up in a very wealthy place, right, in Malibu where she saw a lot of money, not necessarily a lot of happiness. So what, what would you say it is about our Western culture, where there's so much focus on this one quadrant of our life, of that circle of life, and you know, that one quadrant where we spend the bulk of our time and energy, just trying to create more money. So, you know, What is that? Why don't we do that? R: I know that's a really good question. That's the big question mark, and then the mentor says that he says, you know, people are so poor. All they have is money. And that's what we see in Malibu. There's people who have a lot of money and they're really happy. There's people who have a lot of money and they're miserable or grumpy which kind of blows my mind. I think the why is because in our capitalistic society, which I believe in capitalism and conscious capitalism when you're focused on making a difference in all these different areas, but when we get too sucked into the how you look and if I just have that, then I'll be happy type thing. And that's one of the huge lessons woven throughout the whole book. You know, the mentor talks about creating real wealth, which is more than just money. It's about having the freedom to be able to do what you want when you want with the people you want to be with. And he says most importantly to enjoy each moment. So this mentor talks about the wealthy people he knows, and the people who have real wealth, where they have that fulfillment and that peace of mind, and they have the abundance in many different areas. He really goes into these lessons about the way wealthy people think and the way poor people think. And it's not just people. Like he said, there's some poor people who have a lot of money, but they're still poor. So it's wealthy people, and what I've seen as wealthy people, the true wealthy people, have a lot of wealth and abundance, they have an abundance of connection with the people they care about. They have an abundance of health because they take care of themselves and they have energy and vitality. They have an abundance of time because they leverage their time and by investing in it. They put their money into it, they hire people who can do the things that they don't want to do, and they can focus on what they're really good at their unique abilities. So it's a shift of mindset that's intentional. It's really about being intentional. It's about like, okay, if I was really feeling abundant and fulfilled and really experiencing real wealth, what would my life look like? So it starts there. It's really about getting clarity about what does your life look like for you to really feel happy? And the bottom line is we really happy when we're moving toward what matters most to us. That's the bottom line and that's scientifically proven -- when we're moving toward what we really care about, what's important to us and we're getting better. That's when we have happiness. So it's not about making the million dollars or the $5 million or the $10 million or 10 X'ing a business. That's not going to create happiness. What's going to create happiness is the journey on the way to making that happen. And knowing that you're on purpose and that you're contributing and your business is doing something, making a difference in the world. K: And it's really, you know, there's this whole 10 X thing, and I'm not trying to put down anyone who came up with that. But, you've never been the 10 X guy. You do it differently. There have been times I'd come to meetings and be like, why aren't we texting? R: That's so funny. You're right. It's so true because, it can feel defeating going for that. I heard a coach many, many years ago. He was keynoting at the International Coach Federation conference. And I remember he said one phrase and it really stuck with me. And it was "for the sake of what?" And he said, whenever you're doing something, anything, a goal, and you're setting it, you say "for the sake of what, why am I really, why am I setting this goal?" So the 10 X thing is like, "for the sake of what, why?" And so I like to look at kind of more of that one X role. So it's like, how can you get 1% better each day? How can you make the business 1% better each day? And then you get the compounding effect and all of a sudden you look and you're like, wow, we have 10 X star business, but the focus isn't on the 10 X, the focus is on a little bit. It's the process. Is a little better each day? How can we serve our members more effectively? How can we, whatever it is, how can you, or how can I get a little better today? And that most important measurement I think is looking backwards. It's like, I'm better than I use to be. You know, how have I grown over this last month? So you'll hear about, becoming the best version of yourself so much. Right. So I, I really look at that and I look at like, okay, what version of I am I right now. I'm at version 58.4. Next month, I'm going to version 58.5, and it's going to be better than I am today. So, when you look into the future and when I'm 60 point, oh, I'm going to be better than I am today. That's my intention. So that brings happiness. That brings improvement. And that will lead you to 10 X or 20 X or a thousand X. K: Well, I can just say personally. I've seen, I've seen all of this in reality. This is not just talk and, and especially over the past year where we both kind of realized we'd been going hard on that business for 20 years. And really most of, a lot of our focus was going there and you can kind of look at each other and go, oh, do I even know you anymore. It's been 20 years, same person, like have I checked? And we've really turned our focus again on each other. Of course we're empty nesters, so it's a little bit easier. And on our family, the things that matter and really made sure that we're balancing that. And just again, people change and it's a constant practice of getting to know the people you love more and more every day. R: People definitely change and they either get better or they get worse. Right. So I think that's the key. And I know that you and I met in a personal development workshop about getting better about being better humans, you know, and improving ourselves. And I think we've stayed on that quest and I think it just takes constant attention. And even in a relationship, you know... just last night we had our Marriage journal out and we had our couple connect cards where we draw a card and we ask each other questions and stuff. So it's things like that, that you just have to do on a regular basis to keep getting better, to keep improving and to keep things fulfilling and connected and all that good stuff. K: All right. So once again, let everyone know where they can get your new. R: So it's on all the major booksellers, but, amazon.com is probably the easiest place to go. It's called "The Wise Investor." It's a modern parable about creating financial freedom and living your best life. That's the subtitle. Robert Kiyosaki wrote the forward for it, which I'm stoked about. So yeah, it's through Rich Dad Advisors Press. They published it. The e-book is out now, so you can get that on Kindle or you can pre-order the hardcover, which will be out in August or the audio book for your own fun entertainment. If people want to learn more about the book, you can just go to thewiseinvestorbook.com. That's got more information about the book. K: It's so amazing that the reason it is not coming out until August is a shortage of paper. R: What a time we're in. Yeah. Yeah. You know, the cool thing on Amazon is you can go in and you can click on the look inside and you can read the introduction, the foreword by Robert Kiyosaki. You can read the first chapter and a half. So you can get a real good feeling of the book and the story. So, that's for free. K: Awesome. All right, Mr. Fettke. Well, thank you for being back here on The Real Wealth Show and for sharing your wisdom. R: Great to be here as always. Looking forward to next time. K: Me too. All right, let's go surf.

One of the big benefits of buy-and-hold real estate investing is the protection you can get from insurance policies. But, most of us have no idea how to interpret the documents to truly understand what's covered, and to be sure we’ve got all the coverage we need. And the last thing any investor wants to hear is that he or she is NOT covered for a particular situation when they go to file a claim. In this episode, you’ll hear from the president of realprotect, Lee Rogers, and realprotect agent Taylor Stowe. They’ve been providing RealWealth members with the insurance they need for their investment properties, and will explain some important points about insurance in this interview. They also go into more depth in a recent webinar which you can access at realwealthshow.com. You'll find this webinar (and more!) under the Learn tab. If you’re not yet a member of RealWealth, please take a moment to sign up at realwealthshow.com. RealWealth helps educate people on the creation of passive income with single-family rentals in desirable markets around the country. It’s free to join and get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

There’s been a lot of talk about potential tax changes under the Biden administration. They haven’t happened yet and it’s possible they won’t happen until after the midterm elections, but it’s good to know about these proposals ahead of time. As they old saying goes: “Being forewarned is being forearmed.” So we have invited a guest onto the Real Wealth Show to talk about the status of tax change proposals including those that seem to have disappeared and those that are still on the table. She also gives her expert opinion on the two best reasons to invest in real estate, from a tax perspective. Our guest is real estate investor and tax strategist Amanda Han of Keystone CPA. Her goal is to help clients supercharge their wealth-building process with money-saving tax strategies. She co-authored a top selling book with her husband, Matt MacFarland, called “Tax Strategies for the Savvy Real Estate Investor.” The husband and wife duo have also been featured guests by prominent media outlets that include Money Magazine, Talks at Google, CNBC’s Smart Money Talk Radio, and the BiggerPockets podcasts. If you’d like to learn more about get those wealth-building assets in place, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can learn about single-family rentals and other investment opportunities in strong housing markets around the country. You’ll also have access to our network of resources, including investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and much more. And please remember to subscribe to our podcast and leave a review! Thank you!

Real estate investors are pivoting once again to keep up with changing market dynamics. There’s so much to consider when evaluating opportunities including inflation, interest rates, energy prices, housing prices, the kind of properties you should be buying, and how you can make a profit in a difficult economic environment. It’s not as easy as it has been, but there is a formula for success, and you’ll hear about it in this episode. Our guest is the National Director of Research at Marcus & Millichap, John Chang. He leads a team of real estate research professionals and is responsible for the production of the firm’s vast array of commercial real estate publications, tools and services. Under his leadership, Marcus & Millichap has become a leading source of market analysis, insight and forecasting, and the firm’s research is regularly quoted throughout the industry and in mainstream business media. Owning single-family rentals is one way you can build wealth in the real estate world. You can find out more about that at realwealthshow.com. Just sign up, for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

The Fed is considering an aggressive rate-hiking plan to keep consumer prices from skyrocketing higher. Some economists feel the Fed’s plan could backfire and do serious harm to the economy, possibly triggering a recession. Should we be concerned now about a worst case scenario? If so, what does this all mean for investors and how do we prepare? In this episode, we’ll hear from a guest with a long history as a financial market writer and editor. Gary Alexander has been Senior Writer at Navellier since 2009. He helped the company’s namesake, analyst Louis Navellier, in launching Navellier’s Blue Chip Growth and Global Growth newsletters and currently edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column. Before that he spent 20 years as the Senior Executive Editor at InvestorPlace Media where he worked with several top analysts including Navellier. He’s also worked as an editor at other financial publications including Wealth Magazine and Gold Newsletter, and he's authored various investment research reports. He earned the nickname “The Elder Statsman” when he was 25 years old because he kept pointing out how numbers were being misused in news reports to his newsroom boss. He says the word “elder” was a play on his youth but he’s truly “elder” now! Let’s call him a “wise elder”! If you’d like to "up your game" in the investment world and learn how to create passive income with single-family rentals, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

How do you scale a multifamily business, build a rockstar team, and then empower other women to live a financially free lifestyle while living a balanced life of your own? Our guest today had a vision at a young age to live a big life. And she offered some great tips in this interview that I can't wait to share with you. After 19 years of interviewing people, you'd think I'd heard it all! Liz Faircloth co-founded the DeRosa Group in 2005 with her husband, Matt. The DeRosa Group, based in Trenton, NJ, is an owner of commercial and residential property with a mission to “transform lives through real estate." She's also the co-founder of The Real Estate InvestHER® community, a platform to empower women to live a financially free and balanced life on their own terms. She does this with more than 50 Meetups across the US and Canada and an on-line community and membership that offers accountability and mentorship for women to take their business to the next level! In addition to some great tips, you'll hear about a conference that she's organized called "InvestHer Con." It's happening on June 23rd and 24th in Charlotte, North Carolina. You can find out more about that at www.therealestateinvesther.com. If you’d like to learn more about how to create your own real estate portfolio with single-family rentals, click on the "Learn" tab at realwealthshow.com. You can also become a member, for free, and get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

It’s okay to earn millions of dollars in the United States and many other parts of the world, but there are also places where that’s not possible, or hasn’t been in the past, like the former communist Romania. Our next guest defected from Romania with her family when she was 10 years old, and wound up in Canada. Juliana Uto’s parents left everything behind to give their daughters a better life in the free world. And Juliana put that effort to good use. She has become a multi-millionaire by the age of thirty, and is now job optional. She says this is a time of unprecedented opportunity to generate a quantum leap in your finances, and she's teaching other women how to do what she has done. Juliana is accomplishing that with an elite mastermind group called “Wealth Bravery”. It’s an invitation-only community to help women build wealth in a safe, supportive and confidential place. If you'd like to know more about the group, write to support@wealthbravery.com with "Access Wealth Bravery" in the subject line. If you’d like to learn more about building wealth with single-family rentals, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can learn about investment opportunities in strong rental markets around the country. You’ll also have access to our network of resources, including investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and much more. And please remember to subscribe to our podcast and leave a review! Thank you!

Having the right focus and determination is often behind great success stories, and that’s certainly the case for the guest in this episode. Abbas Mohammed spent his childhood in Iraq sleeping on concrete floors because his family was so poor. When his family came to the U.S., his goal was to eliminate poverty from his life and he's now become wildly successful at age 24. His story is sure to inspire anyone sitting on the fence about making their financial dreams come true. Abbas started off as a used-car salesman while he was going to college. He didn’t like the job, and decided to try his hand at selling real estate. It’s now taken just a few short years for him to become one of the top real estate agents in the country and to start investing in large multi-family properties. He founded The Abbas Group as a crowdfunding platform to raise money for larger deals, and says his company completed 37 million dollars of acquisitions in 2021. In five years, he hopes to hit the one billion dollar mark. He’s got an amazing story, an amazing amount of energy and lots of great advice. The path to real estate success goes in many directions. If you’d like to learn more about how to build a portfolio of single-family rentals, go to realwealthshow.com. It’s free to join, and visit our Investor Portal where you can see sample properties and connect with our network of real estate professionals. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

Kathy and Rich Fettke take a break from skiing in Park City, Utah, to talk about the risks and rewards of ground-up development projects, including a RealWealth project in Park City. In this episode, Rich interviews Kathy on what investors need to know about these kinds of projects. That includes specific risks that investors need to control or avoid and how profitable these projects can be if you choose well. You’ll also find out more about the RealWealth development and why it could be a good choice for investors as well as a dream-come-true for skiers. (Spoiler Alert: Kathy & Rich LOVE to ski. They just bought one of the townhomes for themselves and a single-family lot.) You can find out more about our project at realwealthshow.com. You need to join to see the details, but it’s free to become a member and talk to one of our investment counselors. You can also contact Kathy directly about the Park City project at kathy@realwealth.com. And please remember to subscribe to our podcast and leave a review! Thank you!

The build-to-rent trend is hot right now, but construction costs are creating major headaches for developers. They are having a difficult time getting materials, of all kinds, from key components of a home, like lumber, to small but necessary pieces like metal truss connectors. The shortages are pushing prices higher, and causing delays in finishing projects, all of which are adding thousands of dollars onto the price of an investment property. But there is a silver lining, and you’ll hear about that in this episode from a build-to-rent developer and property manager in the Jacksonville, Florida, area. Our guest shares his side of the build-to-rent story to help investors understand why it’s been so difficult to get new rental homes on the market, how he’s dealing with supply chain issues and a volatile pricing environment, and how he expects the pricing issues to play out. Chris moved to Florida in 1999 for college and graduated with a business management degree. He launched his career with a dry cleaning business but transitioned into residential real estate rentals after the 2008 recession. Chris and his father bought distressed single family homes that they renovated and turned into rentals. They also provided property management. When the supply of existing homes grew scarce, they transitioned the business into a build-to-rent model. If you’d like to learn more about how to buy newly-built single-family rental properties in Florida, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

There is a lot of uncertainty in the financial markets right now. We’ve had more than two years of COVID-19 and now there are worries about inflation, rate hikes, housing costs, supply chain issues, a labor shortage, and a war in Ukraine. How can investors make good financial decisions when they don't know where our economy is headed? In this episode, you’ll hear from Mike Fratantoni of the Mortgage Bankers Association to help us understand what we may be facing in 2022. As the MBA’s Chief Economist and Senior Vice President of Research and Industry Technology, he’s responsible for overseeing the MBA’s industry and benchmarking surveys, economic and mortgage origination forecasts, and policy development research for both the single-family and commercial/multifamily markets. He has also worked as a senior economist and risk management expert at Washington Mutual and Fannie Mae. If you’d like to learn more about the real estate business and how you can buy cash flowing rentals, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

We spend a lot of time talking about how to build wealth, but protecting it is just as important! In this episode, you’ll get some great tips from asset protection attorney, Clint Coons. He returns to The Real Wealth Show to give us an update on what kind of lawsuits he’s seeing and how we can protect ourselves. He also talks about changes in tax law that could affect your real estate portfolio. Clint is a great story-teller and shares several examples of what can go wrong between landlords and tenants, and how to prevent those kinds of events from happening. The interview expands on the basics of asset protection that we just covered in a webinar. You can listen to a replay of that webinar for free on our website at realwealthshow.com. You can also find out more about cash-flowing rentals at realwealthshow.com. Membership is free, and will give you access to educational materials and the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you! Background on Clint: He is one of the founding law partners at Anderson Business Advisors. The firm helps clients protect their assets with solid entity structuring plans and investor-oriented tax services. He’s also an experienced real estate investor who grew up in a real estate family and has acquired more than 200 properties, from small single-family homes to commercial buildings. So, he speaks as both an attorney and an investor. He’s also a prolific writer and educator who has published hundreds of articles, videos, and workbooks on real estate investing and asset protection. His most recent book is called: “Asset Protection for Real Estate Investors.”

Many people dream of retiring at an early age to spend time pursuing other activities or projects. Creating passive income with real estate can make that happen, but you also need to know how much money you’ll need to pay for it all. In this episode, you’ll hear from an investor with some great advice for people who want to streamline their plans, and make it easier to reach their goals. Kathy Gottberg talks about rightsizing (as opposed to downsizing) your lifestyle and your financial plan so you can do the things you want. Kathy and her husband Thom got rid of the oversized home, the extra cars, and put the money they saved into real estate investments, for decades. The payoff? They have enough passive income to pay for their travels and other pursuits. For Kathy, that includes writing. She doesn’t need the income but she loves doing it. She’s a long-time blogger with a website called www.SMARTLiving365.com. SMART stands for her five topics: Sustainable, Meaningful, Aware, Rightsized, and Thankful. She’s also the author of seven books including one called: "Rightsizing--A SMART Living 365 guide to Reinventing Retirement." You can learn how to create your own cash-flowing real estate portfolio at realwealthshow.com. Sign up for free and get access to our learning center. You will also have access to our Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

It’s not every day that we have a professional football player on our show to talk about real estate investing. But today, you’ll hear from linebacker, Devon Kennard, on financial literacy and how he’s creating long-term wealth with real estate. You don’t have to be a football player to do what he is doing, although a higher paycheck may speed things up a bit. Devon is currently with the Arizona Cardinals. He started out with the New York Giants and played with the Detroit Lions for two years before he signed with the Cardinals. He’s been in the NFL for a total of nine years, which he says is a long time. A football career can end quickly with something like an injury or a contract expiration. The short lifespan of a football career was one of the things that inspired Devon to start building a cash-flowing real estate portfolio. He wants his family to be able to continue the same lifestyle they are living now, after his football career is over. And he’s making very good progress. He’s also passionate about sharing what he’s learned. For more about Devon, check out his website. You can find out more about cash-flowing rentals at realwealthshow.com. Membership is free, and will give you access to educational materials and the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Click here to join! And please remember to subscribe to our podcast and leave a review! Thank you!

This podcast reveals an intriguing real estate success story. But it’s not just about the daughter of immigrants who knew that real estate was the key to wealth, or the steps she took to create a $5,000,000 portfolio from just $10,000. It’s also about how she dealt with the downturns of real estate and the stress and worry that can haunt an investor. Moneeka Sawyer describes herself as a “blissful millionaire” who worked just 5 to 10 hours a month building her real estate wealth. She’s now on a mission to help other women do what she has done with her podcast, “Real Estate Investing for Women.” She’s also a TEDx speaker, has shared the stage with well-known female entrepreneurs, and has appeared on major broadcast channels to share her message about blissful real estate investing. If you’d like to learn more about how you can build real wealth with cash flowing rentals, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

The housing market meltdown in 2007 dealt a rough blow to many developers. In this episode, you’ll hear from someone who lost a lot of money back then, but he managed to stage a successful comeback. He did that by discovering a backdoor into the real estate development business. Instead of developing the land, Cody Bjugan arranged to have it approved or entitled for development, which is often one of the toughest parts of any big project. Cody is now a full-fledged developer with 30 projects and 2,300 residential units under his belt. But he also founded a company called VestRight to teach people how to do entitlements. He says it’s a simple way to create 5- to 7-figure paydays from off-market land deals, without owning or developing the land, without debt, and with very little cash at risk. If you’d like to learn more about the real estate business and how you can buy cash flowing rentals, go to realwealthshow.com and sign up for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

If you like to dream big, you'll love this podcast. In this episode, Kathy and Rich Fettke celebrate their 25th wedding anniversary with a conversation about their marriage and their investing experience. They were supposed to be skiing down some wild terrain in Utah after getting dropped off by helicopter on a snowy mountaintop, but weather conditions delayed those plans. Instead, they are safely inside their hotel room, with some amazing memories and stories about where they’ve been, where they are now, and where they are going next! Rich and Kathy are the co-founders of the real estate investing company RealWealth, as well as the creators of this podcast, The Real Wealth Show! They launched the company in 2003 which currently has almost 63,000 members. It’s free to join and you'll gain access to hundreds of free webinars, articles, and podcasts. You will also get access to the Investor Portal where you can make an appointment with an investment counselor and connect with our network of property teams nationwide. Please join RealWealth at realwealthshow.com, and remember to subscribe to the podcast and please leave us a review! Links: Rich mentions taking a RealWealth Assessment in the podcast, which you can access here. Kathy mentions a Couples’ Adventure Weekend which you can inquire about by emailing her assistant Tonya at: tonya@realwealth.com.

In this episode, you’ll hear the amazing story of a 12-year-old boy who wanted to upgrade his family home, so he called a real estate agent and said: "I want to buy a house!" He did the legwork, and closed on a home that put his family on a path to financial freedom. And today, he's helping others do the same. Our guest, Larry Taylor, has been a real estate investor for more than four decades. He’s now the CEO of a Malibu-based investing company called Christina, which focuses on the Westside region of Los Angeles. He shares his personal story in this interview, along with his experience as an investor who’s lived through various political and economic cycles, and can explain how they relate to investor concerns today – concerns like inflation, asset values, rent growth, where people want to live and work, and finding a good deal as an investor. If you’d like to learn how to invest in cash flow rental properties in the fastest growing metros in the U.S., go to realwealthshow.com and sign up, for free. Once you're there, you can set an appointment with one of our very experienced investment counselors who can help you find the best market and property teams to help you with for your investing goals. And please remember to subscribe to our podcast and leave a review! Thank you!

When I started investing in real estate, I didn't run into a lot of women on the job sites. And, I certainly didn't see very many women doing the renovation work themselves. But that's exactly how today's guest got started and her hard work has paid off because she's now a big-time real estate boss-lady. As a single mom, Kelly Stumphauzer bought a fixer upper for $46,000 and moved in with her three young kids. She was making about $13,000 at the time. Now, just a decade later, she runs a large renovation and property management company and has been featured on the front page of the Wall Street Journal for her success. She shares her story in this episode. If you’d like to learn more about how you can buy cash flowing rentals, go to realwealthshow.com and sign up, for free. As a member, you’ll get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

Some people get stuck in analysis paralysis, meaning no matter how much they study, they just can't take the plunge. Meanwhile, others jump right in. In this episode, you’ll hear from someone who couldn't wait to get started in real estate, so he made his first acquisition while he was in high school! Kyle Nott wasted no time. He attended what he calls “Windshield University” to educate himself about real estate. That’s the time he’s spent driving from one construction job site to another listening to podcasts, and learning from other investors. And here he is now, educating others on my podcast. He shares the ups and downs of his journey in this interview, which is both inspirational and educational. Thank you for joining me here on the Real Wealth show. I want to let you know I'm giving my 2022 Housing Forecast during the first week of January. If you want to get my take on where real estate is headed, considering that rate hikes are on the way, just visit realwealthshow.com. You can join for free and get access to the upcoming webinar, or the replay, along with recordings of all our past webinars. You’ll also have access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

This is a Real Wealth Story about focus, discipline, connection, and working together with your partner! Our guests started off with nothing when they got married, but were determined to get rid of their student debt, and work toward a financial strategy that gave them as much free time as possible. They are now in their early 30’s, own several investment properties, and recently hit the one million dollar net worth milestone. In this episode, Rich and Kathy interview their good friends, Dusty and Cecily Breeding, who share their secrets for a successful marriage and the building of wealth together toward a common goal. They met at Pepperdine University, graduated in 2010, and were married in a village outside of Nairobi, where they spent their first year of marriage working with homeless teenagers. After returning from Kenya, the Breedings spent the last decade paying off their student loan debt. Dusty worked as a minister and Cecily, as a photographer. They bought their first property through RealWealth in January of 2019 and currently own five properties with a total of nine doors in two states. They have both become job optional, and recently launched the Skull and Bones Society, which is a life coaching practice that helps others intentionally live well. Link for Skull and Bones Society: https://www.skullandbonessociety.co Join Real Wealth for free: https://tinyurl.com/joinrealwealth Subscribe to the podcast: https://tinyurl.com/RWSsubscribe

If you’re interested in becoming a landlord and would like to avoid some of the mistakes that other investors have made, you’ll learn a lot from this interview. Our guest became an accidental landlord and found out the hard way that active management of rentals can be a lot of work. He quickly learned that having good property managers that send you checks every month is the way to go. In this episode, Jim Pfeifer tells some interesting stories about the mistakes he’s made so you don’t have to repeat them. Jim is a former financial advisor and stock market investor who has turned his attention to real assets. It wasn’t his choice to become a landlord at first, but after he saw the potential for passive wealth, he was hooked. He’s been involved with single-family and multi-family rental units as a landlord, but is currently focused on syndications. He has more than 45 passive syndications under his belt including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. As the founder of Left Field Investors, he also helps other people get started in passive real estate syndications. And, he’s the host of the podcast: Passive Investing from Left Field. You can learn more about the ins and outs of passive real estate investing with good property management at our website, RealWealthShow.com. Sign up for free, and get access to the Investor Portal where you can see sample properties and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review! Thank you!

Billions of dollars are being poured into build-to-rent communities and the industry is booming! Are developers able to keep up with demand for new rental homes? How long will it take to balance demand with supply? Is “now” the time to invest in this kind of rental property? Or maybe developers are overestimating future demand for this kind of rental and will end up flooding the market? In this episode, you’ll hear from housing market economist Brad Hunter on this mushrooming segment of the real estate industry. Brad has been doing market analysis for 35 years and has conducted hundreds of housing demand studies at national and local levels. His market insights are available for builders, developers, investors, and lenders through his company, Hunter Housing Economics, in West Palm Beach, Florida. His opinions and forecasts are also widely covered in the media. Past positions include chief economist and national director of consulting at Metrostudy, managing director at RCLCO, and chief economist for HomeAdvisor. Brad was recently quoted in the following articles: Building and Renting Single-Family Homes Is Top-Performing Investment - WSJ Built-to-Rent Suburbs Are Poised to Spread Across the U.S. - WSJ This is a piece he wrote as a special contribution to Forbes: Ten Billion Reasons Why There Is A Built-For-Rent Land Rush - Forbes You can also follow him on Twitter: @bradleyhunter Thanks for listening to the Real Wealth Show! Like what you hear? Subscribe to the Real Wealth Show on Apple Podcasts (or all other major platforms) and leave a rating and review, we really appreciate it! And if you haven't yet, join RealWealth for free today at www.realwealthshow.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Congress is tinkering with the rules for IRA accounts. It’s part of a crackdown on individuals with millions in their retirement accounts, tax free. According to the Senate Finance Committee, the number of mega IRAs has grown substantially in the last decade. In 2011, there were about 8,000 taxpayers with $5 million or more in their accounts. In 2019, the data shows more than 28,000 taxpayers had that much in their accounts, and another 500 taxpayers with much more than that. (1) The legislation has set off alarm bells among investors who use self-directed IRAs to buy real estate. In this episode, Kaaren Hall joins me to talk about the proposed legislation and the changes that lawmakers are likely to adopt. She is the founder and CEO of UDirect IRA Services which provides self-directed account management. She started the company in the midst of the Great Recession after the stock market crashed. She's been helping people move their retirement funds into self-directed IRAs since then, so they can invest in things like real estate, land, startups, and more. Before that, she spent 20 years in mortgage banking, real estate, and property management. If you’d like to learn more about self-directed IRAs and real estate investing, you’ll find articles on our website at realwealthshow.com. While you are there, please sign up. It’s free and will give you access to our Investor Portal where you can view sample properties and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you!

The economy exists by and for the benefit of people. Yet so often, even today, many economists miss the mark when it comes to understanding demographics. In this episode of the Real Wealth Show, you’ll hear from an internationally respected demographer who has been able to forecast economic, cultural and political phenomena with uncanny accuracy. Ken Gronbach is president of KGC Direct, LLC and author of “Upside: Profiting from the Profound Demographic Shifts Ahead“ and “The Age Curve: How To Profit from the Coming Demographic Storm.” Every time I do an interview like this, I think, I better get off my behind and buy some more real estate even if the numbers don't pencil as nicely as they did a few years ago. If you feel the same way, and you’d like to find income property in some of the fastest growing areas, consider booking a free consultation with one of our experienced RealWealth investment counselors by joining the network (for free!) at www.RealWealthShow.com. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT Announcement: [00:00:00] You're listening to The Real Wealth Show, with Kathy Fettke, the real estate investors' resource. Kathy Fettke: The economy exists because of people, and yet so many economists have totally missed the mark when it comes to demographics. I'm Kathy Fettke, and welcome to The Real Wealth Show. Our guest today is an internationally-respected demographer, who's been able to forecast economic, cultural and political phenomenon with uncanny accuracy. Ken Gronbach is president of KGC Direct, and author of the current book, Upside: Profiting from the Profound Demographic Shifts Ahead, and The Age Curve: How to Profit from the Coming Demographic Storm. He's here to share his insights with us on the Real Wealth Show. With that, Ken, I want to welcome you to The Real Wealth Show. I got to hear you on Marcus & Millichap, and I was so blown away. I said, "Okay, we've got to get you on this show," and here you are, so thanks for being here today. Kenneth Gronbach: My pleasure. Kathy Fettke: Obviously, demographics play a huge role in economics, right? We know that the baby boomers drove a lot of economics. We're aging now, so we're buying different things than we did 40 years ago. What is the largest demographic group today, and how are they affecting the economy? Kenneth Gronbach: Are you talking about the United States? Kathy Fettke: Yes, let's start with the United States. Kenneth Gronbach: Okay. Well, the largest group is a group born in 1985 to 2004, the current generation Y millennials, and there are 88 million of them, roughly 10 million, give or take more than the boomers. They're the boomers' kids, for the most part, and they're huge. In terms of housing, they don't have any. They're going to live in their cars, and that's the big story. Because unless we step up our building or structure of the housing units, over the course of their generation, really for the [00:02:00] next 15 years. We're about 25 million housing units short. That's a lot of housing. Kathy Fettke: Wow. Okay. There has been so much fear that we're going to have another 2008, there's going to be a housing crash, prices are up. Kenneth Gronbach: That's impossible. Kathy Fettke: That's what I keep telling my daughter who is at the peak age of the millennials, she's 29 years old, and she keeps saying, "I'm just going to wait for home prices to go down," and I'm like, "Okay, you're going to be waiting a long time, honey." Kenneth Gronbach: Yes, tell her to buy now. That's what I tell my kids. I've got a daughter, 26, and a daughter, 29. Kathy Fettke: Okay, yes, she did own in Chico, California, but it was $250,000 to buy a house. She was 24 years old. She just sold it. She made money on it. She has a down payment, she can buy another, but she's like, "Mom, I'm 29 years old. I can't be buying a million-dollar house." What matters is the payment, right? The payment, if she bought that house, would be the same as she's paying in rent. I think so. Kenneth Gronbach: Sure. It's scary. I just spoke in Canada. Oh, you don't want to be in Canada and be a young person, because housing prices up there are-- it's not uncommon for houses to go for a million bucks, a million dollars. Kathy Fettke: Sure. Yes, it's pretty normal here in Southern California too. Kenneth Gronbach: Right, [unintelligible 00:03:18] Kathy Fettke: Yes. Well, she's not buying here, but just over the hill. We were looking at houses for her a few years ago, and there was a really nice one with a view for $750,000. I'm sure it's close to a million now. Kenneth Gronbach: Sure. Kathy Fettke: I think a lot of people are in that boat, just waiting for prices to go down. Why would you-- Okay, besides the fact that we know it's a huge generation, and the largest group of millennials is about 29. People were talking for so many years that the baby boomers and seniors would be moving on, and there would be a glut of housing because of that, but that story has died. [laughs] Kenneth Gronbach: Yes, well, because it's nonsense. Baby boomers, for the most part right now, are 57 to 76, [00:04:00] and they don't have dying on the punch list. If they're not going to die, they have to live some place, and if they have live some place, then we need housing for them. There's roughly 155 million housing units in the United States. Population is 330 million. The combination of the baby boomers is 80 million, and their 88 million kids, is 168 million. Finally, the kids are leaving home. They stretched out the adolescence till 30, and now they're leaving home. They're 17 to 36 years old. We're going to need housing for, and at least the next 15, 20 years. It's not going anywhere. It's only going to go up. It's the only place it can go. Kathy Fettke: You don't foresee a slowdown. I figured there would be a boom from 2020 to 2024 because I knew that's when this large group of millennials would be coming into the home-buying age, but then I thought there might be a slowdown in 2024. You don't see that? Kenneth Gronbach: No. No, not at all. In fact, the peak of our kids' generation was 1990, so, what does that make them? 31? Kathy Fettke: Yes. Kenneth Gronbach: Yes, but we're still producing 4 million plus kids per year in that generation. We've got to house them, and the boomers are not giving up their houses and going to live in tents. We have to build houses. I live in South Florida. You can't believe what's going on down here. It's almost scary. It's almost a vibration of housing. Because multi-family housing is huge. We just did a big research project for a bank capital real estate to that end, and there's no end in sight. There is no end in sight. Kathy Fettke: Yes, we are really bullish on the [00:06:00] Florida area. We see that. We very much see the growth happening there. I hate to say it, but a lot of us Californians are moving out there, so you might see some changes. [laughs] Kenneth Gronbach: Actually, in data-wise, you're moving to Texas. Well, you just lost a house seat, and Texas picked up too. It's going to be interesting to see what happens. The people are escaping from California, might even turn Texas blue. Kathy Fettke: Yes. That'll be an interesting day. In Florida, they're mostly coming down from the northeast? Kenneth Gronbach: Yes, they come down route 75, and route 95. We were just remarking about that last night. I live in South Florida, just above Naples. My wife and I moved here full-time this last summer. We sold our house in Connecticut and moved down here. It's a favorite thing of ours to check out the license plate, where are they coming from, and they come from up north. Kathy Fettke: New Jersey, New York. Kenneth Gronbach: For the most part, the people from the Jersey, New York and the Northeast Pennsylvania, from [unintelligible 00:07:17] Hampshire, Massachusetts, Maine, come down 95, and stay on the east side. The ones that stay on the west side are from, essentially Midwest, but still big cities, but they're moving here, and they're moving here in droves. Kathy Fettke: Wow. All right. Do you think that COVID-19 and the pandemic also accelerated some of these moves? Kenneth Gronbach: Yes. I wouldn't say accelerated. I think what it did is it stalled them for a bit. Once we get on the other side of COVID, which we appear to be doing as soon as people all get vaccinated, you're going to see a baby boomers retire [00:08:00] like lemmings. They're going to bail like you cannot believe. A lot of them stayed in the labor force, which is what really screwed up Generation Y, the millennials, because the baby boomers didn't leave the labor force. Now baby boomers are 57 to 76, so come on, it's time. Let's go. Kathy Fettke: Well, and they've probably made a lot of money in the stock market and in their properties, so they can retire now. Kenneth Gronbach: Yes, how about that? Our latest calculation is they're somewhere around 100 trillion. Kathy Fettke: Oh, my goodness. Kenneth Gronbach: Oh, yes, when you take into consideration the value of their real estate, the value of their stock market holdings, and savings, it's pretty close to 100 trillion. That's a lot of money. Kathy Fettke: Well, it is, when you compare it to 2008, when people who were trying to retire and thought they could suddenly sell their holdings, get wiped out in the stock market and in housing, and maybe had to work another 10 years. People who were able to hold on to those things and onto their assets, really are retiring in a much better position. Kenneth Gronbach: Much better. Kathy Fettke: 12 years later. Kenneth Gronbach: Absolutely. Kathy Fettke: Amazing. You add to it, the quantitative easing, all the money that's been created. We already have a problem with more demand than supply, but then you add that inflation factor, how are people going to be able to afford real estate? Kenneth Gronbach: I don't know. You know what? They'll find a way. We always do. That's who we are. We find a way. I always tell people, I said, "When it comes to the United States, don't target on a superman's cape, because we're the best people from the rest of the world." Clear, and demographically, we are absolutely the best people from the rest of the world, because the rest of the world is in trouble, for the most part, demographically. In the United States, the Americas, Canada, United States, Mexico, Central and South America are not. Canada, to a degree, but we're in good shape, the Americans." Kathy Fettke: What do you mean by that? They're [00:10:00] not having babies? Kenneth Gronbach: Yes. What's going to happen. Obviously, one of the things that's contributing to inflation right now is supply chain. If you can't get stuff, and you don't have enough of it, and you have demand, price goes up. Simple as that. You also have a situation, in China, for instance, where under 40 years old, they're missing a half billion people, 500 million, because of their one-child only policy. What's happened to their labor force? Well, their labor force started to shrink three years ago. What will happen to it? They're not going to have one. If they don't have a labor force, if they don't have a labor force that will work for 25% of what the rest of the world will work for, then they're not going to fill up Walmart with their goods. It's just not going to happen. You're not going to have ships stalled off of [unintelligible 00:10:49] Manufacturing is already coming back to the United States. Why? Because we have labor and they don't. It's all relative to your given population. They're in trouble. Are you following the whole, I can't think of the name of it right now, but there's a development company in China that builds everything. They build all the infrastructure, and they build office buildings, and they build the housing, but it's empty. Why is it empty? It's because they built for a population that doesn't exist. China's big issue is going to be, how are they going to care for their elderly? Are they going to have hundreds of millions of elderly who cannot feed themselves? United States is in good shape, we're fine. Kathy Fettke: Do you think China will take immigrants to cover the labor issue? Kenneth Gronbach: No, they're xenophobic, they don't do it. They don't like immigrants. It's like Japan. Japan doesn't do immigrants. The same thing with South Korea. South Korea is in big trouble because they're just not having babies. They'll have fun for a while, they'll have a demographic dividend because they won't have the dependency [00:12:00] of children, and that does spike an economy. If you don't want kids, you're about 20, 25 years away from not having any labor, and then what? Kathy Fettke: Wow. I remember, one of my best friends went to France and ended up falling in love and marrying a Frenchman. You were paid by the government if you would get pregnant and have a baby. All your childcare, all your health care, everything was paid for because they saw the problem that the French were just not having children. They had everything covered. They were given diapers, because they ended up having twins. I don't know, has Europe improved with their demographics? Kenneth Gronbach: Well, it depends on your perspective. Europe has essentially had a self-imposed one-child only policy for about 30 years, maybe a little bit more. Where'd they pull their labor? Because you needed labor for the people that needed labor in France, let's say. Where did it come from? It came off of North Africa, and it came in the form of folks who were Muslims. The Muslim culture, God bless them, their people, but their culture does not mix with Western culture, it just doesn't. The Muslim culture is having six kids, and the indigenous folks are having one. What do you think's going to happen to Europe? Muammar Qaddafi said the Muslims will overtake Europe without firing a shot, and he was absolutely correct. It's only a matter of time. What we're seeing already is high net worth folks from the EU coming here, and they're coming to Canada, they're coming to the United States, Mexico, Central, and South America. It's just a better place to live, for them. Kathy Fettke: I just came back from a trip to Europe, and I forgot how magical and wonderful it is. It was crowded, but we're certainly seeing some shifts. What is it about America? Why are we so prolific in [00:14:00] making babies? Kenneth Gronbach: 1957 was a record year for us, with 4,300,000 babies, 1957. We broke that record 51 years later in 2007 with 4,316,000 babies, 25% of which were Latino. Latinos are the best thing that's ever happened to the United States, essentially saved the country. I tell folks, I say, "You have a problem with Latinos? Go find Latino, kiss them on the lips and thank them for coming, because without them, we don't have a country in 2050 because we don't have enough people to run it, and we don't have enough taxpayers. We don't have enough labor." You want evidence of that? Come on down to South Florida and look at who's working. We have kids, and we've been cruising a little low right now. Replacement level fertility is 2.2 kids. We've been about 16.17. That's not death, but it's not good. It's not wonderful. What we're seeing happening now, and the thing where all demographers are holding their breath is, are our kids, Generation Y, Millennials going to have children? Now, granted, they've waited late, so their bodies might not cooperate, but we're counting on them having kids, at least two, maybe three. The Latinos that we have here are having kids, and they're wonderful because they assimilate. They're Catholics, they fit right into our western culture. While we don't necessarily feel them yet, and I would say, they could be as many as 20 to 30 million of them in the core of our nation. We don't know. I apologize for that, but the Bureau of labor statistics, census data, and all the rest are very vague on that, on exactly where that is. Kathy Fettke: I remember when I was in high school, many years ago, there was talk that California would have more Hispanic population than [00:16:00] White. I don't know at what point that is supposed to happen or if it has already. Kenneth Gronbach: I think it has happened already. I think you are a minority-majority. I know Texas is a minority-majority. Florida is close, but that will happen. Period. It will happen nationwide, by about 2045. Kathy Fettke: Interesting. Like I said earlier, the economy is based on demographics, what people are buying, and what age groups. What are you seeing? What sectors of the economy will grow based on the current demographics? Kenneth Gronbach: The big ones are housing. The second one, which is probably even bigger, it's healthier. Baby Boomers have money. Baby Boomers don't have dying on their punch list, baby boomers are moving to warmer climates. Florida will be the healthcare capital of the world, hands down. We will beat cancer, we will beat heart disease, we will beat Alzheimer's. How do I know that? Yes, that is subjective, and that's my opinion. When you have mass, and money, and motivation, that's what it takes. I believe that's exactly what we're seeing. Other sectors, anything that people consume. I don't know, your daughters have moved out of your house, right? Kathy Fettke: Yes. Kenneth Gronbach: They're consuming everything. When my daughters moved out, they didn't take our lawnmowers, they didn't take the vacuum cleaner, they didn't take our beds, they left all of that, they went out and consumed their own. What you have is a body of 88 million people, which is the largest generation in history, is going to consume everything. Who buys the most cars in the United States, automobiles? Men and women of 40 to 45. I don't know why that is, but I believe it's because of the size of a family and all the driving that they must do. You have a generation right now that's the largest one in the United States history that is [00:18:00] 17 to 36 years old. Once in five or six years, Detroit's going to get hit, and automobiles are going to get hit like a tsunami. All you have to do is look at the size of the people, the size of the generation in the parade that's moving through a time continuum, and ask yourself the question, if you're selling stuff, "How big is my end-user market? Is my end-user market getting bigger or smaller?" Because if my end-user market is getting bigger, I have an opportunity, and I'm going to prepared for it. If my end-user market is getting smaller, I have a problem. I've got to deal with that. You want a couple of examples? Kathy Fettke: Of course. Kenneth Gronbach: Okay. I get a call from Levi Strauss, Levi Strauss chief marketing officer in 1998. This was when I was shifting gears in my career. I'm very, very familiar with the jean market because I grew a company from $10 million to $400 million selling jeans in the Northeast. Levi's knew that, and I think that's why they called me. Levi Strauss called me and he said, "Ken, we are seeing we can't make our product fast enough. We've been selling our product like hotcakes for 20 years, but all of a sudden, some of our markets are softer, we have a demographic issue." I said, "Who's your customer?" He said, "An 18 to 34-year-old man or woman. I said, "You cut it off at 34. You started at 18, you cut it off at 34." "Yes." "Why do you cut it off?" He said, "Well, basically, it can't fit in the product anymore. No offense, but that's what it is." I said, "You know you're a baby boomer business," and he said, "Of course, we do." I said, "The last baby boomer was born in 1964." He said, "Yes." I said, "Add 34 years to 1964. What year do you come up with?" He thought for a moment, he said, "1998." I said, "What year is it?" He said, "1998. Then we have a problem?" I said, "Yes, you do. This is what will happen?" I said, "You'll see." Well, that went from $8 billion in sales to about $3 billion in about three years. [00:20:00] That was because you can't mess around with this. You asked me if demography affects economics, it's the other way around, economics is precipitated by demographics, period. Without people, you don't have anything, you don't have economics. Demographics invented economics. Kathy Fettke: Well, I do like my sweat pants, now that you mentioned it. Kenneth Gronbach: [unintelligible 00:20:27] Okay, go back, old story, Lee Iacocca. Lee Iacocca went to the Henry Ford II and said, "We're building the wrong car, this is 1960." He said, "We need to build a lightweight, two-door, powerful car that's fun to drive." In 1964-1/2, they came out with the Mustang. Lee Iacocca would have been a hero if he sold 100,000 units in '64-1/2, and then the '65 model year. They sold 700,000. They could have sold about 4 million. This is the power of shifting demography, and that's the story. Kathy, there's evidence of it everywhere. You can pick up multi-family housing now, because of what, because of student loans, and the Generation Y Millennials build it, you're going to need it. You're absolutely positively are going to need it. Kathy Fettke: Wow, that's been tough building though. We're in the building business. The supply chain issues make it a challenge, so it's not going to be quick that we're going to be able to bring on new supply. Kenneth Gronbach: Let me tell you a quick story about that. I'm very tight with the plastics industry, and I'm very tight with the concrete industry. Guess what we're going to build houses out of? Concrete plastic. Kathy Fettke: Wow, okay. Kenneth Gronbach: Yes, we will. Europe has already been doing it for centuries, I don't know. Kathy Fettke: Makes sense, especially in Florida. Kenneth Gronbach: [00:22:00] Especially in Florida. Kathy Fettke: Yes. [chuckles] Or anywhere in the South. We're going to get some demographic lessons here. Let's see, what is a demographic dividend? Kenneth Gronbach: Demographic dividend would be something similar to trying to work with a one-child only policy. All of a sudden, they did not have to worry about a dependency ratio. Dependency ratio is having one person working, who cares for kids and cares for elderly. I grew up in a huge family. My brothers and sisters who didn't have kids had bigger cars, bigger houses, went on longer vacations. That was a demographic dividend. What China did is, they mandated the one-child only policy. The parents left the child with the grandparents, went into the city, and worked for 25% of what the rest of the world would work for. They experienced a huge 6% GDP increases, demographic dividend, but short-term. It's always short-term. You can't mess with nature. A family is a family. When you have no aunties, no uncles, nieces, nephews, no cousins, which is what China did, they erased those categories of people, and they went with four grandparents, two parents, and one child. They destroyed their economy, and it's going to get a lot worse in China, a lot. Kathy Fettke: Fascinating. What country benefited the most from this dividend in the last 20 years? Kenneth Gronbach: United States, cheap stuff. We're calling this inflation now, it's not inflation, it's what things should cost. I'm sorry, but when you go into Walmart and the prices of things keep on going down and they're all made in China, what the heck is that? What is that? Kathy Fettke: Got you. All right, then let's go to another lesson. What is the demographic dependency ratio? Kenneth Gronbach: A dependency ratio, you really can't have more than [00:24:00] a one working person, and a couple of kids, and maybe a parent or two. That's a dependency rate, so it'd be one to four. What's happening in China? In China, there's no one working. If your labor starts to go down and all the people, 40 plus, have participated in a one-child only policy for the last 40 years, what you have is elderly with no family. You know what they do? They find them dead for months- Kathy Fettke: Wow. Kenneth Gronbach: -with no family, there's nobody who checks on them. It's exactly the same thing, it's a little more sophisticated in Japan, but that's what happens in Japan. They have governmental groups whose designation is to go out and find dead elderly. Kathy Fettke: Oh, my goodness. Kenneth Gronbach: [crosstalk] Kathy Fettke: They're living alone and their kids are working, well. Kenneth Gronbach: No, there are no kids. Kathy Fettke: Right. Kenneth Gronbach: Think about it, why does China have 90 million more men under 40 than women? It's because they know that Chinese, if it's a one-child only policy, they cannot depend on a daughter to support them. The daughter supports the husband's parents. She works with the husband's parents, not with her parents. They do gender basis infanticide. 90 million more men than women under 40, that's the population of Mexico. Think about it. Kathy Fettke: Oh, my goodness. Okay, well, for years we've been talking about robots taking people's jobs, and there was a lot of concern about that. Based on everything you're saying, it would be great to have more automation. Do you see that coming online soon, where we won't need as much labor? Kenneth Gronbach: No, we'll always need labor. Robots are fine, and I get a kick out of them. I'm sure they will go a long way to solve the problem, but [00:26:00] they don't solve the problem. Numerically, they just simply don't. When robots can think, really think, then maybe they'll make a difference, but we're not there yet. Kathy Fettke: I appreciate you saying we're smarter than robots, I haven't heard that much lately. [laughter] All right, politics, and I'll just go into this briefly. There was a lot of people who felt that the last election was rigged. You said something really interesting in your presentation with Marcus and Millichap, that, "Hey, it's just demographics." What did you mean by that? Kenneth Gronbach: First of all, there's no data to support the rigging of the election. That would be as difficult as hiding a 747 in a Walmart parking lot to rig an election like that. It didn't happen. No, Biden won. Biden won hands down. It wasn't a huge win, but he won. What we're experiencing right now, and I think that's going to influence politics dramatically, at least for them, and I've calculated out about the next 11 years, is we're losing a conservative every 16 seconds because they're dying, and that number is going up. As time continuum, if you grow from new voter to dying, the new voters tend to be liberal. Remember, wasn't it to what Mr. Churchill said, "I₣ you're not a liberal when you're young, you don't have a heart. If you're not a conservative when you're older, you don't have a brain." That's okay, and I don't care about that, but it's absolutely true. Kathy Fettke: Sure. Kenneth Gronbach: Okay, we have a monster crop of liberals, and they're not even voting age yet, they're still 17 to 36. We're going to be more, and more, and more liberal because they're coming of age to vote every eight seconds. Every eight seconds, we have a new voter who's a liberal. We're losing our conservatives, and the people in between, the people, probably you, but unless you are-- You're not a millennial. Are you born at '35? Kathy Fettke: I am right on the cusp, I'm 1964. Kenneth Gronbach: [00:28:00] '64? Kathy Fettke: Yes. Kenneth Gronbach: Oh, you don't look that, it's very good. Kathy Fettke: All right, thank you. Kenneth Gronbach: You're a boomer. Kathy Fettke: I'm a boomer, don't say it out loud. Kenneth Gronbach: The generation born 1965 to 1984 is called Generation X. Generation X is a diminutive population. It's a small generation, only 69 million people born. Very, very little immigration to support that, except when we started accepting the Latinos. We took in millions of them because Generation X could not supply us with labor. As a political force, they're diminutive. What we have is a huge crop of liberals, dying conservatives, and our moderates are tiny and they're augmented by Latinos who haven't really exercised their political force yet. What's going to happen? We're saying the next two election cycles, presidential election cycles, will be liberal. That's three more years of President Biden, and then two years whoever runs. We'll see. Kathy Fettke: I think it's important for conservatives to understand demographics so they do know what's coming instead of claiming certain things. Kenneth Gronbach: Listen, I speak to mostly very, very right-wing conservative groups. I'm saying, folks, it's numbers. Stop trying to take the mystery out of this, it's math. It's not even trigonometry or algebra, it's math, so roll with it. We live in a republic that is the best one on the planet, and the republic can sustain a hit like you cannot believe. How do I know? Because I grew up with hippies, and [unintelligible 00:29:43] the late '60s and '70s, they wanted a revolution, did they get it? No. What happened to them? The hippies grew up, amassed wealth, and became Republicans. It's all part of the system. Kathy Fettke: That's what people need to understand, these baby boomers were hippies once, they understand you. The beautiful thing about politics, even though it's [00:30:00] hard to find any beauty in it these days, there is the balance. We need each other. Either side given too much power, it's not good. We need each other to balance each other, and right now, for the next, as you said, 11 years, there's going to be more liberal policy. Kenneth Gronbach: Well, look at it this way. President Trump was very, very conservative. Did he get his way on everything? No, he didn't. Don't worry about it. Neither will the Liberals. What we have is a pendulum. It just keeps on going back and forth, and it's the strength of our republic. Kathy Fettke: Let's stop hating our differences and instead recognizing and respecting each other for what each side brings to the table because, as you said, it is what makes us America. Kenneth Gronbach: [unintelligible 00:30:49]. Kathy Fettke: You say that human resource is the new financial resource. What do you mean by that? Kenneth Gronbach: Well, I got to tell you, I don't miss this, but at one point in my life I was very involved in HR. When we hired baby boomers, we would run an ad in the newspaper for help. They'd wrap around our building. Once the baby boomers aged out of that, we went begging. Now what's going to happen is you have three generations in a workplace. You have baby boomers who are still in the workplace, 57 to 76 years old. You have a good 10 million of them in the labor force anyway. Then you have Generation X who are currently 37 to 56, and they're a diminutive population. They're augmented by Latinos. Then you have Generation Y who are 17 to 36, 88 million. These are all culturally very different groups. You're going to have to have all of them work for you. To be able to handle that complexity is going to require some wicked smart people. I tell folks, [00:32:00] "Do not, do not, do not bring in a B player for HR." This is not personnel. This is not where you pick up your forms. This is where you determine your fate demographically for your business. You absolutely have to understand these three generations and how they're going to work because you will literally have a Generation Y millennial who will have a baby boomer working for them. Now, how do you think that's going to go? HR is far more important right now than it will ever be probably again or it has been. Kathy Fettke: That's a really good point. Actually, I interviewed somebody who was brought on as a consultant for Airbnb because the guys that founded Airbnb were so young they felt like they needed an elder to help them, and he called himself the elder, to just bring in things that they don't know. Just like you said, he was in his late 50s and working for these 20-somethings. 20-something billionaires, I might add. [laughs] Kenneth Gronbach: It's not fair. Kathy Fettke: [laughs] Is there anything else that you want to add that I didn't ask about? Kenneth Gronbach: Yes. Can I give you some statistics that are a little scary? Kathy Fettke: Sure. Let's go with a little fear. [laughter] Kenneth Gronbach: Right now we have a labor issue in our country, yes? Kathy Fettke: Yes. Kenneth Gronbach: We have a truck driver shortage. We have a manufacturing shortage. We have a shortage, period. If we checked the number of people that were 25 to 55 in the United States, this is about 120 million of us. Take away the women. Forgive me now. That's not being biased, but I just want to make a point. That leaves 60 million men. True? Kathy Fettke: Yes. Kenneth Gronbach: What percentage of that 60 million men can't work, don't work, won't work because they're felons? Do you want to guess? Kathy Fettke: I have no idea. Kenneth Gronbach: A third. Kathy Fettke: Oh my. Kenneth Gronbach: The reason [00:34:00] they can't work is they're not bondable. You can't insure them. They can't drive trucks. They can't work in the hospitals. They almost can't do anything. We need to address that. If we address that, and my clients and the clients that I encourage to do that, I say, one, negotiate with your insurance company because they will bond these people if you can ensure that you've vetted the people as good as you possibly can and contracted with them for subpar behavior. They'll be the best workers you've ever had. Because what we're doing is we're putting people back to work. We're putting people back into caring for their families. We're creating dads instead of just fathers. It's got to happen, especially for Black Lives Matter, because that's one of their principal issues, because their males don't work, and can't. It's tragic. I'm not making this up. These are real numbers. These are state department numbers. It's what it is, but we don't know about it. Kathy Fettke: That's really interesting. That's a great point. I dated a felon when I was younger. [laughter] Kathy Fettke: That's when I learned a little bit more about the system. He was 13 years old. He ran away from home from an abusive situation and found a family who took them in and they happened to be drug dealers. He was doing the drug running because he was adorable and young and got caught, went to jail, and was a felon. When they let him out, they gave him $100 and a bus ticket and sent him to California. How are these people to get back on their feet? He was able to and has become really a productive person in society. A lot of times, people, like you said, don't give a second chance. I love that. I love that. I hope that there are programs helping. I know here where I live, [00:36:00] you can hire felons for different jobs around the house and stuff, and we do that a lot. Fascinating. All right. Well, that's it. Thank you so much. There's so much more I'd love- Kenneth Gronbach: My pleasure. Kathy Fettke: -to ask, but I'm sure you're busy. I hope to have you back again. Kenneth Gronbach: My pleasure, Kathy. You take care. Kathy Fettke: Thank you for joining me here on the Real Wealth Show. Every time I do an interview like this, it makes me want to just run out the door and buy some more real estate. Even if the numbers don't quite pencil as well as they did a few years ago, they're probably going to look pretty good a few years from now as rents and home prices continue to rise. If you're looking for income property in some of the fastest-growing markets, consider meeting with one of the investment counselors at Real Wealth Network. You can visit them at realwealthshow.com. Announcement: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities, or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:37:11] [END OF AUDIO]

My daughter Krista is living in Barcelona as Part II of a study abroad program that was interrupted last year by the pandemic. She’s doing it all on her own, financially, by her own choice. I'm visiting her right now and am so impressed with her independence at such a young age, I grabbed a mic and asked if I could interview her for The Real Wealth Show! It’s confusing as a parent to know when to give and when to say “no.” We want to be loved by our children, and sometimes think that our constant stream of giving will earn that love. But perhaps it’s not the financial gifting that matters as much as the gift of belief -- that they can have whatever their heart desires -- if they commit to it. In this episode, you’ll hear more about Krista’s experience being raised in our family during a time, initially, when we had very little financial resources but tremendous wealth nonetheless. And how witnessing the growth of Real Wealth Network over the years, from the inside, has had a great impact on her wealth mindset. And please remember to subscribe to our podcast and leave a review if you like what you hear! You can also find out more about improving your financial world through real estate by joining our network at realwealth.com. It's free to join, with free educational materials on real estate investing. As a member, you also get access to the Investor Portal where you can view sample properties and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Virtual real estate isn’t something you can stomp on, but it has become wildly popular among a certain subset of people and investors. Some of these virtual spaces are so desirable, they come with big price tags and are multiplying in value to six-figure amounts. But exactly what is virtual real estate and why should we care. In this episode, Janine Yorio will simplify the idea of virtual real estate and the metaverse where it exists. She’ll explain how it all works, who’s involved, why people are paying top dollar for virtual properties, and what this all means for our future. (Hint: She claims it’ll be intrinsic to our existence as the next step beyond the internet. Janine is the co-president at metaverse innovation and investment platform, Republic Realm. She previously worked as CEO of fintech company Compound, which focused on real estate investing, and was bought by Republic in 2020. She has also worked in private equity for Northstar Capital and in real estate and hotel development at The Standard Hotels. She’s a graduate of Yale University. She can be reached at janine@republicrealm.com. You can also check out new trends in three-dimensional fee simple real estate by joining our network RealWealth, for free, at realwealthshow.com. As a member, you'll have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT [music] [00:00:00] Narrator: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors resource. [silence] Kathy Fettke: I've got some good news for you here today. If you can't afford to buy real real estate, perhaps you could look into virtual real estate. I'm Kathy Fettke and welcome to the Real Wealth Show. Virtual real estate you ask? Apparently, there's a market for it, and it's an expensive one. Our guest today, Janine Yorio is the co-president at Republic Realm, a metaverse, innovation, and investment platform. She previously worked in private equity for Northstar Capital and in real estate and hotel development at the Standard Hotels. She's a graduate of Yale University, and she's here with us on the Real Wealth Show today. Welcome, Janine. Let's start with what is virtual real estate. I cannot seem to grasp this concept. Janine Yorio: Virtual real estate, at its simplest form, is real estate inside a video game. If you've ever played a video game, depending upon your age, maybe it was Super Mario Brothers, maybe if you're younger, it's Fortnite, there are games and there are spaces inside those games where when you're playing them, your avatar moves around and sees different things. Sometimes there are buildings, there are roads, there might be planets and spaceships, it really depends on the theme of the game. The reason why digital real estate is now something we're even talking about or that you and I are talking about is because the digital real estate inside some games today is built on the blockchain, and as a result, the interest in investing in that real estate has achieved new highs, and people are now much more interested in it than they were when it was just traditional space inside a video game. Companies have been buying advertising inside video games for a long time now. You can go play Madden football or FIFA [00:02:00] World Cup, and there are games on the stadiums inside those sports games. I'm sorry, ads on the stadiums. What's different now is that the games are built on the blockchain, and there's this idea that if you buy things in one game, one piece of real estate in one game, you'll be able to move it around or use it or find utility in other games and that has made people more comfortable with investing much higher dollar amounts in this digital real estate than they had been previously. Kathy: Fascinating. Okay. When people did it before it was blockchain, it was more for fun or for bets? Janine: No, it was the companies that were buying it for advertising. Kathy: For advertising, okay. Janine: Yes, for advertising. Kathy: Now when you say that's with blockchain, I'm starting to understand blockchain, but are they buying a coin? Janine: Kind of. Set aside the blockchain conversation because it's critical to understanding what digital real estate is. That's only the reason why it's become very popular. It has very little to do with what it actually is. Digital real estate is the space inside a video game. Generally, it's the space inside a video game that has no stated objective, meaning you're not there just to kill aliens or capture or somebody else's battleship, you're there to build something. You have the freedom to build whatever you want. You can build your own world, you can build your own house, and owning the real estate inside the game gives you carte blanche to build something that's in your imagination that you can now put in this game that other people can walk around and see. That's what digital real estate is. You can use it for advertising. If you're a company, you can make it a billboard, you can make it a store, you can make it an event space, you can host concerts there, you can sell. Say you're an artist or a creator, you can sell your art or creator through a gallery. There's lots of different things you can do with digital real estate, much the same way you can do with real real estate in the real world. Kathy: Wow. Okay. How do I find it? [00:04:00] Janine: That's where it gets harder and that's where a company like ours starts to add a lot of value. There are hundreds of different games that have a digital real estate component. Many of them have not yet launched yet, so, people oftentimes buy the real estate in the game before the game launches, much the same way that people buy homes in the neighborhood before the neighborhood is developed. So, there are groups, people, companies going in and buying the digital real estate before games launch, and that's where a group like ours is able to act as the intermediary and find those opportunities and bring them to investors, and that's what we do at Republic Realm. We create investment vehicles that allow people, funds, family offices to invest in this category because it can be difficult to access as an individual investor who may not be as familiar with this space. Kathy: You're like a real estate agent for virtual real estate. Janine: We're more like a real estate investment manager. We don't broker the deals, we actually principle the investments. We have investment vehicles where we take in third-party capital and go out and buy those assets and manage them on behalf of our investors. Kathy: Would this be considered a higher-risk investment? Janine: This is an extremely high-risk investment. You shouldn't make an investment like this unless you're comfortable losing all of the money you invest. It's not at all like traditional real estate, which is usually where you park your money, when you've made a lot of it and you want to be sure not to lose it. This is incredibly speculative. It's more speculative, even then some more traditional forms of cryptocurrencies, so, it's not something that you should enter into if you are not very, very comfortable with that risk. Kathy: Are you familiar with eXp, the real estate brokerage that's very much online and somewhat virtual? Janine: Yes. I believe during the pandemic they were hosting meetings and conferences for their employees in these virtual spaces, right? Kathy: [00:06:00] Yes, that's exactly-- That's why I can understand it from that perspective because I am an eXp agent and we're actually growing our brokerage. If anybody's interested, give me a shout-out at kathy@realwealth.com. But yes, you meet virtually inside this eXp brokerage in this building and there's different rooms you can go into, you can go into a private room, you can be in public. Everybody has their avatar. It's pretty out there. It was a little bit difficult for me to understand, but for younger people like my daughter who spent a lot of time playing. What was the game where you had little people that you were building families and homes? Janine: Minecraft, Roblox? Kathy: Oh, gosh. I can't think of it. She would design, she would just build her family in her house and play house basically, play dolls with it. I'm sure it'll come to me as soon as we're done, but that's basically what eXp is like. At first, I was very confused by it, but as we live in this world now where more and more people were going virtual, we would see more of this kind of thin. Very fascinating, very fascinating. All right. Can you give me some examples of what some people are doing? I know you said some like art galleries, but do you have any specifics? Janine: Sure. We are not only an investor in digital real estate. We're probably the biggest developer of digital real estate in the world. We've developed about seven different projects. The most notable of them is a shopping mall. It's a shopping mall that exists in a metaverse called Decentraland. It's based around a district in Tokyo called Harajuku, which is where Japanese teenagers go by streetwear. We built a shopping center called Metajuku, which has this Japanese, Tokyo theme to it, and it is hosts to digital wearables companies that sell clothing that can be worn by people's avatars in the metaverse. [00:08:00] So, the tenants and the landlord-tenant relationship are structured very similarly to traditional landlord-tenant relationships. There's a lease. There are two components of the lease, a face rent and a percentage rent based on sales volume from those stores. It looks like a regular shopping mall. There are storefronts, there's a promenade where people can walk around. It becomes much easier to understand what digital real estate is when I start talking about things like a virtual shopping mall, it's a place to go and buy things. In this particular situation, you can buy wearables for your avatar in the metaverse, but in other situations, you can go and buy things that would show up at your house in a box, so, it's not always that you're only able to buy digital goods. You can also buy real-world goods, you're just finding out about them while you're spending time in these digital environments. We're also the developer of a master plan community called Fantasy Islands. It's a series of 100 private islands that were built in a metaverse called The Sandbox. They're each architectural unique and designed by real-world architects. They're meant to be ultra-luxury, so, they're definitely the very high-end. There are three different villa varieties, each of which has different traits. They all have a very large dock suitable for having a private yacht and other maritime vessels and vehicles, and they're expensive. We originally sold the first hundred for $15,000. They were priced in cryptocurrency but they equated to $15,000 each, and now they're trading for upwards of $100,000. These are private islands that can only be found in a video game called The Sandbox where you can go there with your avatar, invite your friends, avatars, have parties, do whatever you want there, and generally show everybody that you are successful and that you're smart enough to have gotten in early and buy one of these private islands, so, those are the kinds of projects we're developing and building. [00:10:00] The dollars that are being made doing it are very real. They're not insignificant by any stretch, and that's what makes this so interesting. It's not just a curiosity, it's not something for kids. The dollar amounts that are being deployed in these metaverses are truly enormous. We actually completed the largest metaverse land sale in Decentraland. We spent $900,000 on a parcel of land in Decentraland. The market cap of land in the largest few video games, we call them metaverses, are well over $1 billion. All the land in those video games and you take it and you add it all up, it's valuable. A lot of people understand that value and believe in that value. When properties inside those metaverses trade, they're paying those prices that support that valuation. A lot of times, real-world real estate people will look at me and they're like, "Well, this isn't real." That depends on your definition of real. If real means real money, making real returns, it's very real. If you mean real like you can go touch it, i's not real, then websites aren't real either. Is your website valuable? Do you need a website? Do you need a URL and a domain name? That's not real, but it's certainly valuable. If you can measure the value of digital real estate, based on the number of people that see your space, whether you're a company or a person, then you can start to understand this stuff isn't real in the traditional sense, you can't kick it, but it definitely has value in the sense that it gives you a space that people can see, people from all over the world. They don't have to fly there or walk there. They can see your space from their computer, and I think that's a really powerful sales tool that we're very quickly going to realize every company needs one. Needs a storefront, needs a presence, needs an activation in these metaverses because that's where the next generation of consumers are going to find things. Kathy: It's always hard to wrap your head around new technology. I think you're probably too young to remember what it was like to have the internet enter our world. just like you said, [00:12:00] there were so many people that were late to the game on just creating a website, not understanding-- Janine: Yes. Were like, "You don't need that. You don't need that for anything." Now, real-world companies, of course they have websites, and internet-only companies are starting to open bricks and mortar stores. It's becoming apparent, you have to meet consumers where they are, whether it's online or in-person, you have to be in both places almost equally. I think the metaverse is going to be the third leg on the stool. Our generation is perfectly content to scroll through a 2D website and just scroll down the page looking for things. Today's children who grew up playing immersive video games like Minecraft, like Fortnite, like Roblox, that's not how they interact with technology. They want video because they grew up on YouTube, they want immersive environments because they grew up on Minecraft, they want audio chat with their friends, they want to hear what people are saying while they're doing these things, and that's how they interact with technology. It's not a curiosity, it's already here, it's just not already here for people of our vintage. It's definitely already here for people who are 10 to 16 years old. Those people inevitably will become adults. This is their expectation of technology. I'm here to build it so that it's ready when they start to grow up, and also when other people who are slightly older start waking up to this reality as well. Kathy: I think that will be the quote I take from today is it's not for people of our vintage, that's such a sweet thing to say. [laughter] I love it. Janine: We are of this vintage and we're talking about it today. It's not so difficult to understand that it's beyond. The same way that Facebook is not for the TikTok generation and TikTok is not for the Facebook generation, every generation and their subgroups within that expect different things from their technology and from their own personal tech stack. The metaverse is definitely going to be a part of the tech stack of Gen Alpha, which is that next generation coming up behind Gen Z. Kathy: Gen alpha. Wow. Gosh, I was going to ask something. [00:14:00] I does remind me a lot, I remember the name of the game, The Sims. Janine: Yes, Sims, exactly. It's exactly like that. The Sims were the first of these world builder games, then there was another very popular game in the early 2000s called Second Life, which was focused more on adults. People build stores, they dated, they did all sorts of social connecting activities in this particular metaverse. They didn't use the word metaverse back then, but it was very much like a metaverse. Yes, SimCity was the original predecessor for all of these things. Kathy: Oh, and my daughters were absolutely obsessed with it. I, with my vintage, did not understand it at all, but it was for them like playing house, but being able to actually build it and create it and make it your own. They loved it. Janine: For this generation, some of them spent 18 months in lockdown. For them, the only way they were able to play house with their friends was through these virtual games. While they've been popular for a while, the pandemic just created a completely different shaped growth curve for these types of experiences because children generally need socialization and they had to find it somewhere, and these games filled a void that was left by the pandemic. Even we have too. This social norm of speaking to friends on zoom has gone from edge case to very, very commonplace. We have birthday parties on zoom, we obviously all do meetings on zoom. This idea of expecting your technology, not to be flat and too deep, but to have audio and video and really command your attention is how now we've all had to come up the curve and learn and how to interact with technology too. The idea of us doing it, right now we're doing it on zoom. I'm looking at your house, you're looking at my fake background. In the metaverse, we'd be sitting next to each other at a conference table or at a bar. That's the difference. We'd still be talking, but it would feel even more real because it wouldn't be through this fake [00:16:00] layer, this lens of a computer screen, it would be like we're sitting there next to each other. Kathy: There's must be a psychological component that has been studied very carefully because I've heard that your subconscious really can only take in what the eyes are bringing in but responds to it. That's why we can watch a movie and sweat and be afraid during a murder scene. We know it's not real, it's just a screen on the wall, but we can have all these reactions to it thinking it's real in the moment that we're watching. I had heard that, that the subconscious can't tell the difference. It just takes in what it's taking in. I'm wondering if you're going to one of these islands, if you really feel like you'd be on vacation. Janine: Well yes and no. I think you might feel you're on vacation in the sense that you feel very vindicated for having bought one of these things since they're so rare and your friends are envious. However, the metaverse it's built in is called The Sandbox. The Sandbox is designed to look exactly like Minecraft. If you've ever seen Minecraft, it looks nothing like the Caribbean, it's these square boxes that stack on top of each other, and it's not the slightest bit photo-real. You'll be on a vacation, but in a video game that looks like Minecraft with square palm trees and square people and square everything. Yes, you'll feel like you're on vacation, but there's no intent to kind of suspend reality and make it feel like we're actually there. It looks very different from the real world. Kathy: Oh, okay. Not really like 3D. Janine: It's 3D, but it looks very specific, like a very specific type of video game. Kathy: Fascinating. Well, thank you so much for enlightening us on what our kids will be doing in the future. [laughter] Thank you so much. We'll have all your contact information in the show notes. Janine: Thank you, Kathy. [00:18:00] Kathy: Thank you for joining me here on the Real Wealth Show. If you're looking for hard assets and real real estate, you can get more information at realwealthshow.com. Once you join, it's free. You'll get access to hundreds of free educational webinars that will teach you the ins and outs of real estate investing. Everything from tax deductions to getting the right loans, and also referrals to property teams across the country who have property management in place to make it a turnkey investment. Again, you can check that out at realwealthshow.com. Narrator: The views in opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:18:57] [END OF AUDIO]

The housing market has been running up against a lot of obstacles, but nothing seems to slow it down. Prices have continued to rise while buyers clamor after a tight supply of homes, and builders struggle with supply chain issues and construction costs. Today’s guest will talk about the crazy demand for housing, and how that might play out in the coming year. Danushka Nanayakkara-Skillington is the Assistant Vice President of Forecasting and Analysis for the National Association of Home Builders. She oversees research into the housing market including industry surveys and various forecasts for national, regional, long-term, and remodeling expenditures. Danushka shares her thoughts on 2022 in this episode. You can also check out new trends for real estate investors by joining our network RealWealth, for free, at realwealthshow.com. As a member, you'll have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT [music] Speaker 1: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors resource. Kathy Fettke: The housing market has been running up against a lot of obstacles, but nothing seems to be slowing this wild real estate market. Prices have continued to rise while buyers clamor after a tight supply of homes. Today's guest will talk about the crazy demand for housing and how that might play out in the coming year. I'm Kathy Fettke and welcome to the Real Wealth Show. Danushka Nanayakkara-Skillington is the assistant vice president of forecasting and analysis for the National Association of Homebuilders. She oversees research into the housing market, including industry surveys and various forecasts for national, regional, long-term, and remodeling expenditures. She's here with us on the Real wealth show to share her insights. Danushka, welcome to the real wealth show. Danushka Nanayakkara-Skillington: Thank you much, Kathy. Thank you for having me. Kathy: What an interesting time to be in the home building business. It's crazy out there. What is going on? We knew that there were lumber shortages, but now it seems there are shortages of all kinds of things. Can you give your input on that, your perspective on what's going on with the supply chain? Danushka: Yes, lumber was a big issue last year, and even this year. I think it peaked in July, and lumber prices were adding, like $36,000 to a single-family home and $10,000 to an apartment. Prices were insane. It went down actually. It's the other stuff that goes into residential construction. Input to residential construction is up 22% year over year. Steel and wood products are driving up the prices. Not only that, the builders are seeing these shortages in appliances, [00:02:00] every type of pretty much building construction, and also, everything that goes into a house. There is so much of wait time, long delivery times. In a nutshell, it's fair to say that the supply chains are a mess. The builders are really feeling it because 2022 was a crazy year with this renewed interest in housing, so the demand skyrocketed. The builders are trying to meet that demand, but the supply side is the biggest obstacle to it right now. Kathy Fettke: Yes. Now we're hearing about all these shipping containers sitting on the ocean not being able to unload, add another issue here. I don't expect you to have the answers to everything. I'm wondering if, you know why are all these shipping containers sitting there with the things that we need? Danushka: I also read that article last week that came out 70-something ships in LA, 20-something ships in Georgia, and they've never seen that happen before. I have no idea why. All I read was that we need to get Christmas shopping done ASAP. [unintelligible 00:03:19] Kathy Fettke: Yes, it says something about the lack of workers or increased demand. We all need to get-- The bottom line is those materials and supplies, it may not be a shortage so much as an ability to get it to who needs it at this time. What a challenging time for builders who have never had much demand. Where are we now in demand? Is demand today as high as it has been over the past year, or is it starting to wane? Danushka: The demand is there. [00:04:00] I think the buyers are pulling back a little bit because of the high house prices. The demand is coming from the demographic shifts that we have seen. The Millennials are in their peak homebuyer years. You know we define peak home-buying years as 25 to 45. They're in the peak home-buying years. Also, the housing deficit. The chronic underbuilding that we've seen in the last decade is also what's contributing to this demand for housing. They are pulling back a little bit right now simply because of the [unintelligible 00:04:40] mentioned the high house price, but there's not a lack of demand right now. Kathy Fettke: That's really a challenge, right, to bring in affordable housing at this time when material costs have gone up so much and labor costs and permit fees and the delay time. When a project is delayed, that is not a free deal for the builder. They usually have debts to pay during that time and the profits margins get squeezed anyway. Then if pricing hits a cap of affordability, people just can't afford the cost of a home because it's become so expensive to build it. What do you do? It's a catch 22. We need more housing. We need it to be affordable, but costs are simply really high. Danushka: Yes, exactly. On the supply side, we covered the building materials, the lack of skilled labor. [unintelligible 00:05:36] is driving up labor cost. Regulatory cost, you just mentioned, makes up almost a quarter of a house price right now. Then, the lending issues, also especially for small builders, that makes the majority of home builders. If the lending conditions are tight, it's hard for them to get financing. Yes, it's a [00:06:00] big-- The lot shortage, too, the availability of lots. When there is a shortage of lots, what happens is the lot value increase. Because of all these, the cost of construction has gone up. Affordability is at the lowest point right now in a decade. At NHB we measure that by the NHB WellsFargo housing opportunity index. That's at 57. What 57 means is only 57% of the new and existing homes are affordable to a typical family, and a typical family makes a median income of $80,000. Affordability is in the forefront for sure. Kathy: Are you seeing builders succeed at supplying affordable housing at this point? Danushka: Entry-level housing is hard to measure. An interesting stat to look at is that a house that the price below $30,000 for new construction. In August, it was around 30% of new home sales were priced below $30,000. Compared to 2019, there were 43% of new home sales were priced below $300,000. You can see that we don't have much affordable stuff right now. Kathy: Which is just going to maybe drive the price of existing homes up even more since new homes can't be built affordably. With all that in mind, the difficulty with builders getting homes complete, they might have some of the materials but not all the materials, and they can't get their CO until they have everything, including the appliances that they can't get. Sometimes the appliances [00:08:00] come and there's one little piece missing, and that's going to be another six weeks before that piece shows up. Delays, delays, delays. Again, builders have holding costs that cuts into their profits. What do you see the inventory situation looking like in 2022? Danushka: We are thinking for this year, single-family start to be around 1.1 million. Currently, existing home sales are only at 2.6 months supply. New home sales are at a balance at 6.1 months supply right now, but we have a deficit, a housing deficit. At NHB were estimated about 1 million. Plus, we calculate the 1.5 million [unintelligible 00:08:47] as well. Then [unintelligible 00:08:51] estimated to be 3.8 million housing deficit. NAR estimated to be 5 million. Regardless, everybody agrees that there is a housing deficit. Inventory is low simply because of that mismatch of the supply and the demand. The issues in the supply side is not going to be fixed right away. There's going to be a mismatch for demand-supply next year, too. Kathy: That could drive prices up further, do you think? Danushka: Yes. This year, we expect the home price is going to be around 15%. It's going to stabilize next year, around 5% growth simply because of the pullback from demand a little bit. Hopefully, there will be more turnover, essentially. Some people like move-up buyers, they're selling their starter homes and going to a bigger home. Hopefully, there'll be a little bit better inventory next [00:10:00] year and that should help stabilize the prices. Kathy: Again, it's so funny because it was just a few years ago that there was headline news that all these Baby Boomers were going to be downsizing and there would be this flood of homes on the market. I remember scratching my head and thinking these Baby Boomers aren't like seniors in the past. They're very athletic. Not all of them, but they have some savings, they want to stay at home. Especially after the last few years, they're not keen on going into nursing homes. We see people living longer. How did economists miss this? In other words, there was this concern that there would be a flood of homes on the market and it's just the opposite. Danushka: I think that shows you that we are not perfect in quantifying human behavior. [chuckles] I think the COVID-19 pandemic was really different to any economic situation that we've seen before. It was really hard to grasp what the economy is going to look like and also what the consumers and then the buyers and home buyers, what we really want, what everybody wants. You're right. Baby Boomers are not downsizing. We are seeing a demand for multi-generational homes now, so bigger homes and people are using their homes for more purposes right now. Young people are living with their parents longer and also on the remodeling expenditure side, I think our surveys are showing too that they demand for aging in place work as well. That shows that the Baby Boomers are actually staying in their houses without selling it and [00:12:00] downsizing it. We were expecting that the 55 plus, like [unintelligible 00:12:05] they would move to the cities or some communities. I think COVID-19 pandemic freaked everyone out. No one wants to live so closely next to each other, to other people. Everybody wants to live in their own house and [chuckles] be at arm's length. Kathy: If you're staying in a luxury condo and you don't get to use the amenities or you're stuck in an elevator with other people and-- Danushka: Yes, exactly. Kathy: There's a lot of changes that took place. Oh my goodness. We know that institutional funds are flooding to build to rent, building communities that are horizontal apartments because that's really what people want. They want a yard for their dogs and for their children and in case we just see variant after variant and we're all stuck at home again, they want to know that they've got a nice place to be. What is the impact of the build to rent? I've heard some people say we're really turning into a renter's nation. Would you agree with that? Danushka: Not really because build-for-rent share is still small. When you look at the single-family market, we think it's around 5% to 7% of single-family starts. [unintelligible 00:13:30] room to grow, for sure. There are larger estimates, but we use the census and the NHB serveys to compute our estimates. The single-family build for rent is a good solution for people who are not ready to buy yet, but who need additional room, more for their housing needs. You hear this on the [00:14:00] news a lot saying that everything's going to be build for rent. I don't think it's that. I don't think we agree with that to that extent. We think it's still a niche market, small market, could be rising but not to the levels, I think, what a lot of other people are estimating it to be. Kathy: Not making such an impact. That makes sense. Now, interest rates. That really could slow down things if prices are going up and then interest rates go up and the cost of a home, or I should say the mortgage becomes that much more, that could have an effect on the market. Do you anticipate that interest rates will rise next year? Danushka: Yes, we do. I think even in the recent weeks also the interest rates have gone up a little bit. We do think because the fed is going to tighten the monetary policy. I think 2018 was a really good example to see what happens when the interest rate rising. We saw a housing soft patch and slack conditions when the interest rates were increasing. Definitely, interest rates will rise, but it's still at historic level when you look at the rates that were in the '90s. We don't anticipate the rates going to those levels at all. Kathy: There was quite a bit of a slowdown for new home builders and that again has me concerned that it will exacerbate the problem. If builders are already squeezed on margins, what's the incentive to build? You're not going to build homes that you lose money on. If interest rates go up and therefore, the market slows down and maybe prices soften, there just won't be incentive to build more unless there's a way to build cheaper and maybe that's coming. Who knows? Maybe once we get past this supply [00:16:00] chain issue, prices will come back down and labor won't be so expensive and they'll be able to build more affordably at that time, but time will tell. Right? Danushka: Time will tell, exactly. [chuckles] I think it will be a good conversation to have next year at this time, to see not things have changed or if it has changed at all. Kathy: Oh, well. Let's see. You are the Assistant Vice President of Forecasting and Analysis. That's quite a job. Wow, that's a big job. Do you think there's any chance that we could be overbuilding? In other words, we do know that there's a really large cohort of Millennials turning home-buying age, but then what after that? Like, let's say 2050. If I went out and bought 20 homes today to rent out, would I be having trouble renting those out in five years? Danushka: I think that a good way to look at that is the population profile in the country. Millennials are the largest living generation. They make up 27% of the population. Then come the Gen Zs. Gen Zs are a smaller cohort compared to the Millennials. I think the Millennials are much like the Baby Boomers. Large cohorts makes big impact and the Gen Zs are something close to probably the Gen Xs. Now they're smack in the middle of large cohorts. I think the fall and also the falling birth rates as well across the country, that could mean lower housing demand in about 10 to 15 years. Not in the next five years, but I think the long-term. 10 to 15 years, we could see a slow down in the demand for housing. Kathy: Fascinating. Are there parts of the country that are [00:18:00] growing faster than others and where housing is needed more desperately than other areas? Danushka: Yes. I think the South is a-- Half of the home building takes place in the South. It's the weather. The retirement communities are a huge attraction for home building. The West has always had high demand for housing. If you think about it, we need more affordable housing on the West Coast. On the Western states, for sure, high population not much housing stock, so the house prices are rising much faster in that area, for sure, so we need housing and maybe even better zoning rules in those states. I think the larger states, the Southern cities like Atlanta, Dallas, Tampa, Phoenix, those are big market that we expect lots of growth in the next couple of years. I think also the telecommuting that people took on last year has also spread immigration to those large markets as well. We will see lots of demand for housing in those markets. Kathy: I don't know if you can speak to this question because it's very local, but I always thought it was strange that just two to three, maybe four hours out of San Francisco, there hasn't been a lot of growth. There's a lot of land in the Chico area in Redding and Oroville and we just haven't seen these retirement communities pop up the way we do in Arizona. Perhaps it's because of the tax laws. Maybe retirees would rather be in Arizona. If they're going to deal with hot weather, let's go to Arizona instead of Redding. I just found that interesting. When you say we should be developing the [00:20:00] West Coast, there's a whole lot of places on the West Coast that have not been developed and that are still pretty affordable, but just not of interest. Do you have any thoughts on that? Danushka: I could speculate a little bit. I would say California has different regulatory land development rules, probably compared to Arizona. That probably is a big factor with zoning rules. That could be a big thing. Also, who knows, maybe Arizona has everything retirees hope for. Kathy: Yes. If you don't have to pay state income tax as a retiree, that's a big bonus if you're on a fixed income, for sure. Danushka: Exactly. Kathy: If you're going to choose, you'd probably just go over the border. Go over to Nevada or-- Okay, Nevada or Arizona? I don't think Arizona has no state income tax, but I think it's lower, at least. Okay, well, that makes a lot of sense. Yes, I agree with you. The cost to build in California is so expensive. With our project in Dublin years ago, I think it was $120,000 just for the school fees and all the permit fees just before you can even get started on development. How do you create affordable housing in that scenario? Well, it's been really a pleasure to have you here on the Real Wealth Show. Any last thoughts for our listeners? They're mostly buy-and-hold investors. They buy properties and rent them out. Danushka: I think we are in a very exciting year. The last couple of-- 2020, 2021, the next couple of years, still very exciting for housing. We've never expected this amount of interest and demand for housing. I think it's just a matter of we sorting out the supply side issues in order to meet this rising demand. I hope we can rise up to the challenge. Kathy: Wonderful. All right. Well, thank you again so much for being here on the Real Wealth Show. I hope to have you back next year. Danushka: Thank you so much, Kathy. Thank you so much for having me. [00:22:00] Kathy: Thank you for joining me here on the Real Wealth Show. You can also check out new trends for real estate investors by joining our network for free at realwealthshow.com. As a member, you'll have access to our investor portal where you can view property proformas, and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, CPAs who specialize in real estate, and much more. When I mean much more, I mean over 500 webinars that are free, that will teach you the ins and outs of being a successful real estate investor. In return, all we ask is that you subscribe to our podcast and leave a review because it makes a huge difference for us in our rankings. I'm Kathy Fettke, and thanks for listening to the Real Wealth Show. [music] Speaker 3: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:23:06] [END OF AUDIO]

What will it take to close the inventory gap for housing? A start-up in Nevada believes it has the answer with a unique, affordable, assembly line approach to housing. The company is manufacturing tiny homes for a tiny price tag that unfold for delivery and are move-in ready in about one hour. And, there are plans to go much bigger than just tiny homes. Hi I’m Kathy Fettke and this is The Real Wealth Show. Thanks for joining me and don’t forget to hit the subscribe button for our podcast. In this episode, you’ll hear from Galiano Tiramani, who’s the Co-Founder of construction technology company Boxabl. He has a bachelor’s degree in Business and has launched a few other successful start-ups, including one for cryptocurrency and one for cannabis. His latest endeavor began with an idea from Dad several years ago, and is now poised to shake up the housing world with a 375 square foot pre-manufactured “casita” that is folded up for delivery. It’s even caught the attention of Elon Musk who reportedly lives in one, although Galiano was “mum” on those details. Check out this interview for a peek into what could be a new trend in residential construction. You can also check out new trends in real estate investing by joining our network RealWealth, for free, at realwealthshow.com. As a member, you'll have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! Disclaimer from Boxabl: BOXABL IS CONSIDERING UNDERTAKING AN OFFERING OF SECURITIES UNDER TIER 2 OF REGULATION A. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT FILED BY THE COMPANY WITH THE SEC HAS BEEN QUALIFIED BY THE SEC. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND. A COPY OF OUR PRELIMINARY OFFERING CIRCULAR MAY BE OBTAINED HERE, https://www.sec.gov/Archives/edgar/data/1816937/000109690621000494/box_1aa.htm TRANSCRIPT Announcer: [00:00:00] You're listening to The Real Wealth Show with Kathy Fettke the real estate investors resource. Kathy: What will it take to close the inventory gap in housing I'm Kathy Fettke and welcome to The Real Wealth Show. Our guest today thinks he's got the solution. In this episode, you'll hear from Galiano Tiramani who's the co-founder of the construction technology company boxabl. He has a bachelor's degree in business and has launched a few other successful startups. His latest endeavor began with an idea from dad several years ago. It even caught the attention of Elon Musk. It's basically a 375 square foot pre-manufactured casita that can fold up for delivery. Galliano welcome to The Real Wealth Show . I can tell you that our team is really excited to hear what you have to say, because I think everybody wants to run out and buy a $50,000 box all. Tell me what boxabl. Galiano: Thank you so much for having me. My name is Galiano Tiramani, I'm one of the founders of boxabl and they are houses. We are setting up a big factory to mass produce a different type of housing. Kathy: Well, and you've already had some really good publicity from one of the best marketers in the world. I did read that Elon Musk is living in a box bowl. Is that true? Galiano: That's the rumor. I cannot comment. Sorry. Kathy: You can't comment. Well, that would be quite a change if true living kept going from a few mansions into-- How much square footage is in a typical boxabl. Galiano: It's been cool. We've gotten so much press on that. A lot of people have become aware of the product. Essentially what it is, the first product [00:02:00] that we're starting with is a 400 square foot house. It's about 20 feet by 20 feet with nine and a half foot high ceilings. It's got a kitchen bathroom, a bedroom, and a couch. We are planning to retail it for $50,000. One of the cool things that everyone notices, if you want to go to boxabl.com, is that the house actually folds up. The reason it folds up is so that it can ship more affordably because that's one of the big reasons why most houses are not built in the factory. Most of them are built on site. It's very slow and expensive and cumbersome to build something on site, by hand in kind of a custom manner, well, versus everything else, all the other modern products that are mass produced in the factory. The reason that, we are still building houses on site instead of on an assembly line is they're just so big, so they're hard to ship. That was like the first problem that we had to solve here to make it compatible with the mass production factory assembly line. Kathy: Basically, someone orders it and it's brought in a truck and you just unfold it. How does that work? Galiano: We spent a lot of time making things really simple. We've got the bulk of the work done for the building in the factory. Really all you need on site is, some type of foundation. Actually, you don't need a foundation, but in most cases like the local government's going to require it. You're going to need a foundation and you're going to need some utilities, connection, water, electric whatever. Essentially, our unit shows up gets, placed on the foundation. It unfolds the floor comes down, the walls come out, they all lock into place. They connect to those utilities that are ready prepared on site in advance, and you're done and you have a house and that means kitchen, bathroom [00:04:00] flooring, electrical air conditioning, all of that's done at our factory before it arrives on site. You go from maybe seven, eight months to build a house to an hour to build a house. Kathy: Oh my gosh, that's incredible. All right. Zoning appears to be changing in California, allowing residents to potentially subdivide their property, and put another property on there. Are you seeing an uptick in phone calls because of this? Galiano: Well, just because of the good marketing we've done from the beginning, we've always had crazy amount of phone calls and interest-- Kathy: Good for you. Love it. Galiano: The way things are going in California is very friendly towards what we're doing. It actually started before-- What you're referencing, I think is a new law that just came into effect like last week that Newsom signed, but there was even some before that, that have all been great for us. The first one was accessory dwelling units. They basically legalized accessory dwelling units in almost every backyard in the whole state. Accessory dwelling unit just means an extra house on the same property. Usually it's like a granny flat, just a small house and people want to do that because, you have a site that's already developed a lot that's already developed. You have a backyard, and if you can just throw down a little apartment, little house there, the numbers really crunch for rentals. Maybe they want to put their family members in there. That's been really big one. That's why we decided to start with the Casita product because our grand vision is a building system where different size room modules will stack and connect. The first one that you see on the website is 20 feet by 20 feet. We can also do 20 by 30, 20 by 40. We can do bigger modules with different configurations inside. Maybe one module would be a kitchen only, one would be a bedroom only. Then you can start stacking and connecting and arranging them [00:06:00] to build, hopefully, almost every building type on the planet, a thousand unit apartment building down to this little Casita. We thought, how do we start? Let's start with the smallest room module targeted towards backyard ADUs, California incredibly friendly towards that. They've done things like prohibited the local governments from blocking people from building these. The state has said to the local governments, you must allow the backyard units, they've reduced setback requirements, a whole bunch of different stuff. Then last week, or so the new rules that they've done now go even further. Now they're letting people, I think subdivide their lots, and do all different stuff. It's pretty good timing for us. Kathy: I'm in the coastal commission area and I think that there's still certain parts of California where it's going to be tough to get this through, but I'm not sure. Have you heard anything about that if you're closer to the coast? Galiano: I don't know too many details on it. All I know from my perspective is there's so much demand for housing all over and so much need for it. Kathy: Yes. Galiano: I'm good to go. I think everything we make in this factory will sell out and we'll just be looking to scale. In general role, the attitude towards increasing housing availability is very positive, people want to do this. They want to open it up and that's why these new laws are happening, not just in California, but elsewhere around the country. Kathy: Does your team work on the permit side of it or does that have to be done by someone else? Galiano: Our goal is just to be the manufacturer of the remodule and to sell that to builders and developers, to speed up and simplify their process, get all the heavy lifting done for them. We will have resources on our website where people can get help with permitting, they can get help with financing and they can get help with finding a contractor to do whatever it is, want to do with the building [00:08:00]. Then we'll just focus on cranking out these remodules and they'll usually be a contractor in between us and the end user who helps with the setup and the permits and all that. Kathy: Okay. Are they customizable? Galiano: Yes and no. Especially early on, we want to be very standardized and have this very repeatable product so that our manufacturing is efficient. You can definitely customize them when they get to the field. Eventually when we have these different modules that connect together at that point, we have endless configurations. If we had 20 different rooms types, and then you start stacking connecting them arranging them, you can get for the most part, a huge range of buildings. Kathy: Okay, so let's say I wanted a bigger window, I could carve that out and do it on my own. Galiano: Yes. The contractors who install the unit should have no problem doing that. One cool thing about the way our actual buildings work is our innovations go beyond the shipping solution. We've also picked all new building materials and manufacturing methods. These are not lumber frame houses like you would see traditionally in North America, They don't use pieces of wood and nails. It's a eliminated panel system, and that has many benefits, but one of the benefits related to what you just said is you can actually just cut a hole anywhere on the wall anywhere you want any shape and not worry about anything. Kathy: That's amazing. Wow. Well, obviously we know that lumber prices have were insane and then they drop back down. Were you seeing those kinds of issues on your materials? Galiano: It's been really crazy time, especially starting a manufacturing startup, all kind of supply chain issues. I think the lumber one was little bit tricky because it was more about like a [00:10:00] future speculation and trading so it was just a spike, it went up and down but overall, everything is going up. There are delays everywhere, now you see manufacturing issues with many major companies. We have been buying all kinds of stuff to build hundreds of houses and had a hard time getting it. A shipping container from China has gone from 2,000 up to 10,000 or maybe even more. Pretty much every single supplier we have has hit us with price increases and it's just total madness. I don't know what happens, but I believe that boxabl is more well-equipped to handle it than others because everyone is buying the same stuff for the most part of it. We enjoy these other efficiencies and benefits by being in the factory and having the simplified product design, we produce components and be able to purchase things because we're building at scale and using automation and using low skilled labor and having an assembly process. We believe that all those principles put us ahead of everyone else who will be still buying the same piece of steel or toilet or piece of wood. Kathy: I know that in LA there's been initiatives to provide housing for the homeless and the first round of houses it's my understating costs hundreds of thousands of dollars. Have you had cities reaching out for that purpose? Galiano: Oh, yes, I heard about those sheds that they put up that were like 200,000 each or something. [laughter] Galiano: That's pretty hilarious. Kathy: Awful. Yes. Galiano: Another story of government waste. We definitely have had a huge amount of inquiries for every use case under the sun. We've had inquiries from many, many different types of governments all over the place. In fact, our first customer is the government for [00:12:00] military-based housing. I think the grand plan for us is a very big scale. This first factory, that I'm sitting in now, it's at 170,000 for building. It should be able to produce several thousand houses per year, but we need to go way past that with a way bigger factory after we approved the concept here and hopefully being able to supply that quantity of houses brings the price down for everyone and makes a big impact. On the homeless side, it's pretty complicated. It's not really about housing, housing is a component there, but there's more issues surrounding mental health and drugs. Kathy: Of course, yes. Well, so you're sitting in your factory in Nevada? Galiano: Yes. We are in City of North Las Vegas. We have a 170,000 feet building. We moved in here maybe a month ago after spending several months, setting it up. Now we're rapidly hiring people. Actually, the first house is just moving down the assembly line right now, so that's a very, very exciting milestone for us. Kathy: Oh my God, it's so exciting, so our audiences, mostly real estate investors, but a lot of business owners too are-- Tell me about how you got here with a concept. There's so many of us who are visionaries, and we got great ideas but man, making those ideas [laughs] come true is a whole another process, so how did that start? Were you all sitting around, having a glass of wine and somebody said I want a folding house, I mean [laughs] whose idea was it? Galiano: Well, it's been a pretty, pretty crazy journey and pretty quick as well, but basically back in 2017, I was actually living in California, my father had just moved to Vegas and there is another guy Kyle. My Father had the idea for the folding house [00:14:00] many years before when he built a traditional modular and experienced problems with the wide load shipping where it was just so ridiculous and didn't work at all, it was not scalable, and so he had the original idea to fold the house up. Then in 2017, I said, "Hey, what about that folding house idea?" Because, as usual, I was just looking for ideas and businesses to start and stuff. Then we just dove in and started developing it again and started exploring what the problems were in the market. We build a little website and started doing research and testing and development and engineering, and it just got more and more attraction and eventually, we got invited to go to the Builders' Show, which is like a trade show, one of the biggest ones. We got invited to bring a house to put outside at what they call show village where they have modular houses outside. We sat down and said, all right, "Well, we haven't built anything yet, we just had a bunch of drawings. Can we do this? Shall we commit to it?" and we said, "Yes, let's do it," and pulled the trigger and agreed to do it and then build the first prototypes, went to the show and from there just kept going and going and now we're sitting in the big factory and it's happening. Kathy: That's just so incredible. That's a whole new learning of okay- you learn how to create the product now you got to learn how to hire people and [laughs] everything that goes into that process. Galiano: Yes, definitely. Kathy: Good for you. Once you went to the Builders' Show, you had an initial investor to help you with that prototype? Galiano: No. Paulo funded it. It was several million dollars, basically getting us through the RND and to the point where we had [00:16:00] a product that we thought was ready to sell and manufacture. That came a year after we got invited to go back to Builders' Show. At the first show, we went with a big house, like a big 1400 square foot house. Then we said, "All right, what is the good, better place to start?" and we came up with, "Let's start with the smallest unit we have." Then next year we went back to the show with those prototypes and said all right, we're ready to do it, Let's do a factory and then started raising money. Really the way I raised money was all through general marketing. Sending web traffic to the website and allowing people, anyone, creditor investors to invest through the website. We've raised all the money to date through that method and it's basically through the last year, we've been raising money and that's got us here to this very big factory. [crosstalk] Kathy: Oh my God. You didn't have to bring in an institutional investor who takes control of things. Galiano: I've had many discussions with guys like that, and I still do, and often exactly you said, they ask for too much. We love the strategy we've used because we're still in full control ca, we're calling all the shots, and we now have an army of supporters, cheerleaders who are our investors and hopefully we'll do very well also. It's a really, really great strategy. I'm sure those institutional investors will come into play eventually and hopefully when they do, I'll have much more leverage to shop around and get a better deal. Kathy: Oh, yes. Good for you. It's like a five or six C kind of offering. Galiano: Exactly. Kathy: Right, I'm curious because do see indications too, is it sort of a note or convertible note, or? Galiano: Well, it is a note, but really, it's a fixed share price.[00:18:00] The reason it's a note was just as a way to discount the share price, and you can read more about it on the website. The plan of the company is just to eventually IPO, so really we're really just selling shares to people and then hopefully we're very successful and then eventually get liquidity at a higher share price when we IPO. Kathy: Wow, wow. I'm so thrilled I got to talk to you before that happens [laughs] It'd be pretty a lot harder to get you on the show afterwards. Galiano Tiramani, it's just such a pleasure to have you on The Real Wealth Show. I'm certain there will be a lot of our investors calling you to figure out how they can get one of these in their backyard or build a whole subdivision of them, who knows, but very exciting. All right, thank you so much. Any last comments, any tips, or places that people should find out more about you? Galiano: Yes, they can definitely go to boxabl.com, B-O-X-A-B-L.com, check out YouTube, we have lots of videos on there, social media, we do a lot of on-going updates. People can also email me directly if they want to, it's g@boxabl.com and also the general inbox hello@boxabl.com and we'll reply pretty fast. Kathy: Great. Once again thank you so much for being here on The Real Wealth Show and we wish you the greatest of success. Galiano: Thank you for having me. Kathy: Thank you for joining me here on The Real Wealth Show. This is an exciting time in history with so much new technology coming down the line and we'll keep you posted here on The Real Wealth Show and on my other podcast will Real Estate News for the investors. Have a great day. I'm Kathy Fettke and thanks for joining me. Announcer: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider [00:20:00] any investments or course of action. For more information go to realwealthshow.com

Low interest rates? Rising rents? Strong appreciation? But still feeling anxious about buying your first rental property? In this episode, you’ll hear from someone who may help reduce that anxiety. Yianni Garcia is a mortgage broker who was aware of the opportunity presented by low interest rates and a strong rental environment. And he knew that he wanted to become somewhat semi-retired in five to 10 years. But spending a large chunk of hard-earned cash is not easy. So he dealt with his investing anxiety by educating himself. He joined RealWealth in 2019, started pouring through webinars, listings, and pro-formas, and bought his first single family rental just last year. In this episode you’ll hear more details about his RealWealth story, including where he’s purchased his properties, why they were such great choices for passive income and appreciation, and what his plans are for the future. As a mortgage broker, he also has lots of great information about loans for investors. You can fast track your own retirement plan by joining RealWealth, for free, at realwealthshow.com. As a member, you'll have access to the same educational material that helped Yianni. That includes the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT [music] Speaker 1: You're listening to the Real Wealth Show with Kathy Fettke, The Real Estate Investor's Resource. [music] Kathy: 3.25% interest rates for investors, rising rents, rising home prices, but you're still feeling anxious about buying investment property? I'm Kathy Fettke. Welcome to the Real Wealth Show. Our guest today is going to share how he was able to get through the anxiety that most people feel when they're about to embark on something new, especially when that something requires a very large amount of cash. Yianni Garcia, like many young people, doesn't really want to work until the typical retirement age of 65. He wants a better plan that allows him to be able to spend more time with his future children. As a mortgage broker, he saw the opportunity to take advantage of today's very low-interest rates and very strong rental environment to buy, refi, and then buy some more in order to build a large portfolio that will speed up the path to be somewhat semi-retired in 5-10 years. Well, Yianni, welcome to the Real Wealth Show. We're so excited to hear your story. Yianni: Thank you for having me. I'm so excited to be here. Kathy: Let's start with what brought you to real estate, to begin with? Yianni: Sure. I am a fairly new investor. I started investing in 2020, and I attended-- Kathy: Wow, what a year to start. Yianni: [chuckles] I know. My timing was very lucky, I would say. I feel very blessed about that. My very good friend Zeona McIntyre invited me to a Real Wealth network event in the fall of 2019 in Jacksonville. That's where we met. I got exposed to so many people in the network. It was like a crash course of 20 plus different markets. That's really where the lightbulb went off. I said, "Okay, I really want to stay tuned in and see where I can find my first investment property." After I did that, [00:02:00] I started just every week, tuning into webinars and reviewing listings that I would get from different agents within the network. I finally settled on a little 100-year-old brick bungalow in the south side of Chicago. It's a section 8 property. Initially, I was-- it was my first investment property so to buy something that was so old, although I had been gut-renovating in 2016, and what attracted me to that property was just the high level of the cash on cash return. When I first got that inspection report, 40 pages on it, I'm like, "No, I can't do this. This is way too much for me." Kathy: You didn't buy it or you did? Yianni: No, I did. I did Kathy: You did? [laughs] Yianni: I did. Kathy: What got you to buy it after seeing the inspection report? Yianni: Well, I spoke to Leah and she's like, "Listen, you're getting the home for an incredible price. A lot of the things in this report are quite cosmetic and you can actually, since you offered asking price, this could be a good position for you to negotiate for those things to be fixed." She coached me through how to have that conversation with the seller. They agreed to have a 95% of everything on that list. Kathy: Wow, amazing. Yianni: We did a second inspection. Everything's cleared. I've been income-producing with that property since August of 2020, it's when we close. It's been great. The returns are incredible. All my cost is about $700 a month, and I make $1,600 a month on that property. Kathy: What? Yianni: Yes. [laughter] Kathy: Leah is a fantastic coach. Wow, that's amazing. Good for you. What a slam dunk. That is a scary first investment because Chicago doesn't have the friendliest landlord laws, their taxes [00:04:00] can be high, they've got some issues with their pension funds. They're in the news a lot. An older home, it's like buying an older car. It's not a new car, so things can break down unless they've been replaced. Even sometimes with an old car, when things have been replaced, they break down still, so that was definitely risky so I'm really glad to hear that it has turned out well for you. Do you think the values have gone up since you bought it considering what's been happening nationwide? Yianni: I think they have. One of the things that attracted me to this property was the rental income. I knew that with such a high level of rental income, my expectations on appreciation were less for this specific property. What I will say is that initially, I was very hesitant about section 8 because you have preconceived notions of what that means and is it going to be difficult tenants or whatever, that bias that I had before I went into it. What I found was that it was actually a brilliant first investment because it's guaranteed income. If the tenant loses their job or gets sick or gets COVID, for whatever reason, they can come up with their portion of the rent payment. The housing voucher kicks up to 100%. Also, I never get a late payment because the housing voucher that they received, whether it is 70% or 80% of the rent, is dependent on them putting their 20% or 30% on time. It's just a recession COVID proof investment. I wish I could say I had the foresight to do that. It was luck, in many ways. That felt really good and safe as an investment. I did for my second property, which I bought a few months later, I bought it in Ocala and it was a new field-- Kathy: That's in Florida, for those who don't know where Ocala is. Yianni: That's in Florida, yes. Ocala, Florida. Kathy: It's a little town in Florida, but it's growing and you probably will learn about it soon enough because it's growing quickly. Yianni: It sure is. [00:06:00] That team calls it the corridor of progress because they refer to all the manufacturing and healthcare systems and all of the blue-collar jobs that are coming into that part of Central Florida. I bought there. The rental income, although was still very attractive, was less, but I had higher expectations for the appreciation. What I've seen in terms of appreciation there has been remarkable. I bought that property for 136, a 3:2, one-car garage. Kathy: $136,000? Yianni: 136. Kathy: I just want to be clear, because some people when you say 136, they don't know what you're actually saying, because that's a very low price for a new home. Yianni: A new home, yes. Kathy: A new home? [laughs] Yianni: I snuck the last of those-- Kathy: You sure did. Wow. Good for you. I'm a little jealous. Yianni: I feel really lucky on that one, too. At a price over $200,000 recently and this is a loose appraiser. I use a tool called Homebot to keep track of the value of my home as the equity grows. Yes, it's around $200,000 now. I closed in February. Kathy: Good for you. Wow. Good for you. Wow. That's amazing. That's amazing. It really comes down to value, right? People will live in fear often, myself included, that "What's coming? What's next? Are we at the peak? Prices have been going up for over 10 years, what's next?" and it can be paralyzing. When you remove that fear, and maybe you didn't have that fear, and you just look at the asset alone and forget about all those distractions, a $136,000 house in Florida and an area that's growing, the chances are pretty good. It's going to be fine, no matter where the market is headed. Yianni: Absolutely. No, I couldn't agree with you more. Listen, I think the money that I have in the market has done really well. [00:08:00] When I talk to investors, I'm a loan officer by trade, and so when I talk to real estate investors who are on the fence about, "Well, do I buy a home or do I keep my money in the market where it's doing so great?" I think both strategies are good. I think having a diversified portfolio where you're doing both, is really where you want to be because now, I have income-producing properties that are appreciating and I also have my portfolio, which is doing great. There's a certain comfort that I get from knowing that I have my hands in different areas and I have things that are building wealth, not just in one bucket. Another thing that I think about, unless you've done-- If you're a new investor, this may not be as obvious, is how you can leverage mortgage financing to scale your real estate. A property that I bought for $136,000 that appreciated so much over the span of less than a year, I can pull equity out of that home to fund my third and fourth real estate investment. Creative ways of using a cash-out refi to then fund future investments is a way that you can start scaling this. For new investors, that doesn't immediately click sometimes, you have to walk them through what that possibility looks like. Kathy: I started in this industry in mortgages too and I will say that is a great place to start. Well, anywhere is a great place to start. If you start in title or as a real estate agent or in mortgages, you learn things that a lot of people just don't know, I certainly didn't know before. When you learn leverage and come in from that angle, and are able to see all the options that most people don't know about, just the one very simple one that you can get 10 investment property loans backed by the US government. At ridiculously low [00:10:00] rates. What kind of rates are we looking at right now on investment properties? Yianni: Rates are still at historic lows. We're starting to hear and feel like there's going to be in the next quarter and two quarters, we're going to see a bit of an uptick, but rates are still in the low 3s for conventional investment properties. Kathy: What? I should know this, but I just can't believe it. Okay, I got to go get some loans. [laughter] Oh my gosh. Yianni: I have clients that perhaps can go the conventional route and get a conventional investment loan. Even non-QM products or unconventional lending products, they may not have their personal income to be able to qualify for investment property, but we can use the future income projections of the property that they're purchasing to qualify them. Those are alternative or non-QM products. Those products typically have higher rates, but even with those types of products, we're seeing low and mid 4s. Kathy: For a fixed rate? Yianni: Fixed-rate, yes. Kathy: Oh, come on people listen to this. This is-- non-QM, again, to just break that down for people who don't know loans, that's a qualified mortgage, so what's a QM versus a non-- what is that? What's the difference? Yianni: Sure. A qualified mortgage or a conventional mortgage would be something like FHA or conventional, which are government-insured. Those loans typically carry lower down payment requirements and they carry lower interest rates. I would say those are the most affordable and most popular ways of investing. Those are the most popular products, but let's say they do require your personal income, so your W-2 income or your tax returns are of a certain amount, you have a debt to income ratio to qualify for those loans. Let's say you don't have that income, but you still want to invest, you have good credit and you have cash, [00:12:00] You can use a non-QM product or an alternative product to buy an investment property. What we use to underwrite that loan is the future projection of income from the property that you're buying. If the bank, if we can project, "Okay, this home is going to make enough to cover the debt," then we can use that to qualify you for that property. The down payments for those, they're dependent on credit score, but we can get them as low as 15% Kathy: 15? Yianni: 15. Yes. Kathy: Wow. Wow. Our investment counselors are just so good. They're the ones who are all over this stuff. When you join Real Wealth and you talk to one of the investment counselors, they are not surprised by this information because they know it. I have been busy with syndications and other things and I haven't honestly paid attention to some of the lending. I still have more loans I can get because we're in mostly commercial loans at this point. Now you've got me fired up. Yianni: It was not common. You typically see the alternative products, they do 20, 25% minimums, so I happen to be with one of the largest independent lenders in the country so our product portfolio is just huge. Kathy: Amazing. Oh, that's so good to know. I'll make sure that our investment counselors know that you can maybe offer some of these services to our members. Let's go back to your investing story. You started in Chicago. You bought an older home in Chicago, a more tenant-friendly city. That's worked out. Then you went bought a new home, complete office. Complete opposite. Brand new home in a more landlord-friendly area of Florida. It's gone up tremendously in value. These are two very, very different products and very diversified. One is high cash flow. One has been very high appreciation. They're probably both appreciating and they're probably both cash flowing. Just one is cash flowing more, one is appreciating [00:14:00] more, very good diversified portfolio so far. Did Leah coach you on that or was that just a gut feel you had? Yianni: No, Leah was instrumental in all of this because as a new investor, I just didn't know what I didn't know. It was just always great to have that objective third party. She'll tell me-- she lays it down how it is. If there's something that doesn't look good, she'll tell me, "Hey, that doesn't look good for this reason." I was able to build trust with her very early on and feel like I had a really solid coach, even when some things went wrong and things were unexpected or whatever the issue was. She was a great partner. Kathy: That so great. If you don't mind me bragging a little bit about our incredible investment counselors, because they are all investors themselves, we have always wanted to make sure that they were coming to their coaching with no strings attached so to say. A real estate agent is looking at commissions for the most part. I didn't want our investment counselors thinking about that. I wanted them to just look for the best investment so they're just on flat salaries. They don't gain or lose anything by referring to different opportunities for you. They just are really looking at what's best for you. I love that. What's next? Yianni: That's a good question. My partner and I, we live in Miami Beach and we have a beautiful condo that we rent. Some people are like, "Why did you rent your primary home and then own investment properties?" That was by design. We just felt for our primary, we want to have something at a much higher price point and so I didn't want to sit on the sidelines until that moment came. I wanted to invest and start building wealth leading up to that. I think for us, the next step may either be, we may want to do another year here because we just love Miami Beach and the condo that we live in and do another investment property [00:16:00] in the meantime. Then in 2022, buy a home here in Miami. Listen, I think for us, for gay parents, it's very expensive to have children. That was a big motivator for us, for investing in real estate. We knew that the service (family planning/adoption) runs for about $150,000 per child. It's a big number and we knew we had to build things now and put them in place so that we could be able to family plan two to three years down the road. That was the motivation behind it as well is, what can we do now? We have our W-2 income, we have our careers, but what can we do with our assets so that two to three years from now when we're ready to have children, we can start that process. That was a big motivator for us. Kathy: Beautiful. I was going to ask what your why is and that's it. If you don't have a clear why, then it's just a process of buying houses and renting them out. You've got to know why you're doing it. Yianni: That's true. That for us. When the kid comes, it's not just the investment that we have to make to get there. I'm very jealous of my straight friends that don't have to think about that. [laughter] I always tell them when they're complaining how they're stressed out about their kids, I'm like, "Well, at least you didn't have to go through that whole process." Kathy: Yes, you might be stressed that your partner is pregnant, but you didn't have to pay for it. [laughter] Yianni: Yes, exactly. It's a whole different-- It's emotionally very intense too. Another part of it was when the kid comes, I want to have the freedom to be able to pick him up or her from school at 2:30 and be able to take a step back from the traditional 9 to 5 and have a little bit more freedom. I do see real estate as a path to that, to be able to be more of a full-time parent and have my business be secondary. Kathy: Awesome. [00:18:00] Do you plan on sticking with Florida or are you going to diversify further? Yianni: I love Florida. For me, my properties I get emotionally attached to them. It's like they're people. I have my old lady in Chicago and I have my baby in Florida. I think Florida would be something I want to explore. I have experience doing short-term rentals. I started doing Airbnb in 2011, so I've been doing it for about 10 years and I switched more to the property management side of it, so I help other people monetize their luxury listings on Airbnb and Vrbo but I want to be able to do that for myself. I'm thinking that's an area that I'm interested in, is figuring out where I could buy more of a luxury property, a single-family home. Or maybe in St. Petersburg or Panama Beach, or some of these areas that have a lot of regional traction year-round for travelers. Kathy: Yes. I love that. I know that some of our teams provide those rarely, but they do come across them. When you go with luxury, you have a bit less competition because generally, the institutional investors aren't looking at those. Yianni: Sure. That's a good point. Kathy: As a final tip, what would you say? You've obviously made some really good decisions. What kind of tips would you give to new investors? Yianni: Well, I would say stay educated, I think it's important to tune in and consume as much of the information that's coming from the network because the information is there. It's up to you to register for those webinars, sign up to receive pro formas and listings, schedule meetings with your investment advisor to ask questions and not be afraid of asking dumb questions because that's the only way you're going to learn. I think, that for me was number one, is just educate yourself, carve out an hour or 2 hours, 3 hours a week to do this because the people who say they're too busy to [00:20:00] learn how to invest or how to find a property, I worry about that because if you're too busy to invest time in something that's going to ultimately afford you your financial freedom and your independence, then you are basically a slave to whoever you're working for or doing. You really have to carve out time to do the things that are going to help you retire early or achieve your dreams, right? I think having that discipline, even if it is an hour a week, doesn't take a lot, but educate yourself and leverage the resources to do that. At the same time, I think not be so afraid to pull the trigger. I think that first investment property is always so scary because so much of your savings are going out the door, and there's so many potential unknowns. Once you do that, you take that first step, you make that first investment, and you get that first rent check, and you see that first proof of income, you're like, "Wow, I have an emerging business. This is something I can scale." That becomes very inspiring, but you have to take that first step. Kathy: Yes. I'll tell you another thing that I've been enjoying is looking at my loan pay-down. Something I hadn't done before because I didn't hold the loans long enough usually, but now I look and I'm like, "Oh, my gosh, look at all this equity we've created" just from paying down that loan, not even including the appreciation and everything else. All right. Well, it has been such a pleasure to have you here. And I think you're going to inspire a lot of people in their acquisition process. Yianni: Thank you. I appreciate that, Kathy, and have a good day. Thank you for having me. Kathy: Thank you for joining me here on the Real Wealth Show. We would so appreciate it if you would subscribe and leave a review, you'd be surprised at how much that helps our rankings. We really, really appreciate it and I read them all. You can do that on iTunes or whatever podcast player you use. Thank you so much in advance. In return, I want to make sure you have access to lots of free education and information that goes beyond the Real Wealth Show. You can get that at realwealthshow.com, where we go much more in-depth on these topics. Just click on the Learn tab [00:22:00] and learn all about the ins and outs of financing, asset protection, tax benefits, and so much more. You can do that at realwealthshow.com. Speaker 1: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:22:31] [END OF AUDIO]

Home prices have been going up, up, up, and there are some worries about whether they might come crashing down, like they did in ‘08. But those “bubble worries” might not be warranted this time around. In today’s episode, you’ll hear from California mortgage broker Michael Ryan. For more than 30 years, he’s provided loans for residential, commercial, and small business clients, and he’s seen it all when it comes to the real estate market. He offers some lively discussion in this interview about home appreciation fundamentals and what to expect in the coming months. Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. You can also read more about why we are not in a housing bubble in a blog post here at realwealth.com And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you!

Real estate investing can be expensive when you go it alone, but investing with a partner might not save you money if you don’t anticipate what can go wrong, and get it all down on paper. And there’s plenty that can go wrong including very expensive lawsuits. In today’s episode, you’ll hear from a real estate attorney who is passionate about this topic. Jeff Lerman calls himself “The Real Estate Investor’s Lawyer” because he not only understands the legal side of real estate, he also understands the business side as a real estate investor. He’ll explain the difference between joint ventures and syndications, when and why you should talk to an attorney who knows about real estate, and how a well-written agreement can help prevent future problems and preserve relationships. Jeff is co-founder and partner at Lerman Law Partners, which is based in Marin County. He’s listed as one of the “Top Attorneys in Northern California” by San Francisco magazine and helps investors nationwide with their transactions. That includes entity formation, syndications, joint ventures, purchase and sale agreements, and the preparation of loan documents. His credentials also include President of the Marin County Bar Association and Northern California Super Lawyer (top 5% of lawyers). Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you!

Wondering where's the best place to own real estate over the next decade? Follow the demographics. When Rich and I started buying properties out of state in 2004, we chose Dallas, Texas because it was one of the fastest growing metros in the country. We paid between $120,000 to $140,000 for brand new homes in Rockwall, Texas that rented for $1,300 to $1,500 a month. Those homes have since tripled in value. Where can you find that kind of opportunity today? Stick with the same fundamentals and follow the demographics. Economists predict that Florida will add 1.4 million new residents by 2025. Developers are trying to keep up with demand, but can they build fast enough? It's pretty tough these days. As a result, both home prices and rents are on the rise. In this episode, our guest represents a trusted RealWealth property team from the Tampa area, and he's here to give us an update on what's going on in the Sunshine State. You can also take a deeper dive into the Florida market by listening to a webinar with our Florida expert. Simply join RealWealth, for free, at realwealthshow.com and log in to the investor portal to hear the replay. As a member, you can also view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT [00:00:00] [music] Speaker 1: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors in resource. [music] Kathy: Are you wondering where the best place to own real estate is over the next decade? Well, follow the demographics. I'm Kathy Fettke and welcome to the Real Wealth Show. When Rich and I started buying properties out of state in 2004, we chose Dallas, Texas because it was one of the fastest growing metros in the country. We paid between $120 and $140,000 for brand new homes in Rockwell, Texas. The rent in for about $13,000 to $15,000 a month. Those home have since tripled in value. Where can you find that kind of opportunity today? Just stick with the same fundamentals and follow those demographics. Economists predict that Florida will add 1.4 million new residents by 2025. Developers are trying to keep up with that demand but can they build fast enough? It's pretty tough these days. As a result, both home crisis and rents are on the rise. Our guest today is one of Real Wealth's trusted property teams based in the Tampa area. He's here to give us an update on what's going on in the Sunshine State. David, welcome back to the Real Wealth Show. So good to have you here. David: Kathy, it's a pleasure. It was amazing to be added on your amazing house guest quite recently, so it's good to see the recording studio once again. Kathy: For our listeners, once or twice a year, it's usually twice a year, we bring all the property teams that we work with nationwide together in a mastermind. Even though they're technically competitors, they share their best practices and how to find more inventory for our members and they really act like one team, like they're on the same team for the benefit of our Real Wealth members. I'm glad you mentioned that. It was great to see you and be able to see each other in person. David: It's absolutely invaluable. I really love everybody. I mean that sincerely. I just [00:02:00] love each one of these teams. I love their sincerity. I love their professionalism. As we said at the time and I'll say it again, it's always an honor to come out and be part of such an elite group of people. Kathy: Aw, I appreciate that. I don't know when it happened. It seems like it was maybe five years ago when one of our teams said, "I want to be more involved with whoever is part of the Real Wealth Network because whatever they do reflects on me and I want to make sure everyone is at the top of their game." David: That's right. Kathy: We all have solutions and answers. We should be sharing that and not having one team learn the hard way, something we just learned right. David: That sounds vaguely familiar, Kathy. It may even have been me at the time [unintelligible 00:02:42]. Kathy: It might have been you. [laughs] David: It makes life so much easier when the same standards are being upheld to regardless of the market that you're in. Again, creating that standardization across Real Wealth Network groups has been amazing over the years. It's been amazing to watch our great results as well. Kathy: Aw, that's cool. Anyone new to Real Wealth and what we're talking about here, we are an educational company. We teach people the ins and outs of owning rental property. Then we are a referral business as well referring to companies nationwide who help investors build a portfolio by finding them the properties, renovating them if needed, working with builders. Obviously, those properties don't need renovation but they better be in good areas and they better be good builders. There's not always good builders out there. Then offering the on-going property management to really take care of people who are buying investment property out of state. We have about 15 teams. Everybody's standards were different 10 years ago. Tampa is going to have different standards than, say, a property in Ohio because of different weather, you have different different laws. Some of the basics need to be standardized across the board, and that's what you guys created together. You were demanding excellence from each other, that [00:04:00] took the pressure off of us. It's kind of like being a parent saying, "All right, brothers and sisters. [laughs] You make sure you're all behaving." David: You are exactly right though. We wanted and we still hope to create an environment where the buyer's experience is similar no matter what market they buy in. All of these teams are incredible in their own way. To create a standard buying experience and a standard buying expectations, it allows buyers then to build up their portfolio with a bit more confidence. If they have experience A in market A and they have experience Z in market B, it's kind of hard to build up your portfolio. Here in my group and here in my city and what is it that we try and achieve is it's very important that investors have the confidence to build their portfolio beyond that first house or two or three or four. Anyone whoever talks to me, Kathy, knows I preach all day long the fundamentals of real estate investing. You cannot create really meaningful wealth in real estate investing by doing one or two houses. If you have a terrible experience on your first or second house and decide not to do it again and say, "Well, that's it for real estate. I'm not going to invest in it again." That's awful because you've just closed off one of the most productive channels for creating wealth in your life just because you had a bad experience with a swere in Cincinnati. Sorry, Cincinnati. Kathy: Right. It's kind of like Rich. He proposed to two girls before he got to me. If he gave up, we would never have this 25-year awesome marriage. David: That's right. Poor old Rich, I didn't quite understand he was trying so hard. Kathy: He just hadn't met me yet though. Tampa has had its ups and downs, right. Tampa got hit so [00:06:00] hard in 2008, 2009 because it was kind of a speculative place before that. People all over the world were just buying property expecting it to go up in value and maybe not having the fundamentals in place. Were you in the Tampa market during that time? David: Yes. In 2008, '09 and '10, we were all over the Florida market. We were buying at that time broken condominium communities. Basically, these developers who were doing condo conversions and they couldn't tell them because finance buddies were not funding on them. They were not lending on them. There's nobody literally in the United States that wanted to buy that type of product. These are typically two-bedroom and three-bedroom condominiums that would rent for $1,000. While the builders and these condo conversion guys were trying to sell them in 2005 and 2006 at, let's say, $200,000, we were picking them up at $90 and $100,000 in 2009 and 2010. There was one thing that was static and that was the rent. When I look back at that time, yet Tampa, Florida in general was hit, various markets were hit very, very differently. The Orlando market, if you have experience in the Orlando market, it's very different from the Fort Myers market. Different neighborhoods in the same city. A-class neighborhood, really high quality A-class neighborhoods where your doctors and your lawyers and that type of folk live. Their experience of the downturn, the neighborhood experience, was much different than the lower-income neighborhoods. The lower-income neighborhoods, that downturn went on for an awful lot longer than it did for the A-class neighborhoods. It really boils down to just the neighborhood you're in, the product that you're in. Were you in single family, were you in multi-family, what type of products you're in. The one thing that stayed constant and I created right through it, Kathy. [00:08:00] This is the most important thing that any real estate investor should know and learn is that my experience of the last downturn was that rents stayed constant. I really don't know why people were selling when rents stayed reasonably constant throughout the last downturn. If rents stayed constant and you take a long-term view on real estate investing, which we're going to talk about today, you're going to do very well. That was my experience of it. Tampa had a fair share of problems in 2009, '10, and '11 with the financial crisis. Kathy: I can tell you probably why they sold. They probably paid too much for the property and it never cashed flowed from the outset. If they did spend $200,000 on a condo and they were getting $1,000 in rent, plus the condo fees, plus the taxes and everything, they were negative cash flow from the start. David: That's just it, Kathy. Real estate investing starts with sound underwriting. If you're underwriting in sound from the get-go, you should be able to navigate your way through any real downturns. Always remember that. I think that they're very wise words. Coming in and "investing" where you're underwriting doesn't pencil out and it's really just on the speculation basis that prices would go up. If you can't weather a few years of lower cash flow, you examine why you're really investing. If you're investing just because you hope prices will go up, that's a really, really unsound way to approach real estate investing in general. Kathy: If we just go back to that time because a lot of our listeners maybe weren't investing at that time or if they were, they didn't understand investment. David: That's right. Kathy: It was so easy to get a loan. You could get a 100% financing. I could go to Florida and buy five of those condos, I could buy 10 of those condos with a no-money down loan. In some cases get a teaser rate where maybe it did cash flow for [00:10:00] a minute until the rate adjusted to where now all of a sudden you're negative cash flow and you're trying to carry 10 of those properties that are all negative cash flow. That adds up and then now add to it that the value of those properties is cut in half. That's why people couldn't hold. If they had bought right, you're right, why would it matter? One more thing, the interest rate was 6% to 8%. It was easy to get loans but the rate was much higher. Today, it's half that or a third of what it was and it cash flows, for the most part. Not everything cash flows anymore, but you can get that. Let's say you bought a $200,000 property today, what would that rent for today? David: We all remember the days of the 2% rule and then the 1% rule. I still work along the basic premise that if a property rents for about 1% a month, on the outset, it can be .9, it could be .8, it rents possibly, so a $200,000 home can rent for about $1,700. You're right there. You're in the zone where it's starting to make sense. That would be just like 0.8% of the value of the home, of the purchase price of the home and that's day one. Now, remember, inflation and anybody who's been to the store recently or doing anything else, anybody who's dealing with inflation right now will notice that rents are rising and the cost of everything else and the ecosystem is rising with more dollars in the economy right now. Usually, the day that you buy a home from a rental perspective, that's probably about the tightest it ever will be. Over time, your rents are going to rise and, over time, inflation is going to lift the value of the home and lift all the aspects of the home and your tenants is going to pay off your amortized mortgage. [00:12:00] If you look at all of these numbers and you pre-look at them, you're probably going to be reasonably okay. The issue I have is when I'm out there and I'm working with realtors. I was just out in Phoenix this week. I was looking at potential Airbnbs for myself and my family. I like to diversify as well. I was out in the Sedona area and it struck me how few realtors knew how to underwrite. I met a bunch of realtors last week out in the Arizona area. It struck me just how few of them knew how to actually underwrite. They were like, "Oh, this is 1.1 million. Can we get the taxes on this? What's the monthly rent on it? What's the long-term rent? What's the short-term rent? What are the fundamental backstops to the underwriting?" Very few realtors knew how to answer any of my questions. That's one thing I love about about Real Wealth Network. Everything in your organization is underwritten with a sound basis and numbers, facts, and data. That's how you protect yourself. Kathy: Yes, and that's one of my dreams is to educate these real estate agents so they really know how to sell properly because clients are expecting them to be able to do it. Although there are some DRE rules around that that licensed real estate agents are not necessarily supposed to be giving investment advice. Anyway, you need to know numbers. [laughs] You need to know numbers and understand a proforma. David: Exactly. It's sound underwriting because as they say, there is one thing that's reasonably constant in real estate and that is that the demand for rental housing will remain reasonably constant and the rents will remain reasonably constant. That is my big takeaway. Quite frankly, it's how I invest right now and how I look at the market. People like, "Oh, do you think about this? What do you think about that? Where's the top of this, that, or the other? I know I traded through the last downturn on the basis of well underwritten rents. I could see what those rents were before the downturn, I could see what they were now, and I could see [00:14:00] what they were after. Rents stayed reasonably constant. I'm not saying that nobody out there has said, "Well, in my market, rents are down a little bit," but it's my experience rents that they stayed reasonably constant. That's very important to understand. Kathy: Yes, absolutely. That was a look back at the past and why Florida got a bad rap for being not a great place to invest because so many people were coming in speculatively, buying stuff that never made sense at the outset. It was purely based on appreciation and it did work for a little while. If you bought between 2002 and 2006 and got out, you made money. David: Yes, that's right. Kathy: If you didn't, you had to sit and hold those properties for 10 years or just let them go. Wow, have things changed. Fast forward, 12 years, and what we're seeing right now, I've got a few data points here that the Tampa area came in as one of the top places for rental increases. I think it was, what was it, 11.5% nationwide is the increase in rents in the past year. There are parts of Florida where it actually went up 31%. I don't know where those areas are, maybe you do- David: I do. Kathy: -but rents have gone up significantly. Have you seen that personally? David: Yes, I have. I've had to re-analyze even my own personal portfolio copy. I think it's in the denser urban course where you're going to see it, but even out in the outer suburbs. I think the reason being is Tampa and Florida is very, very, very different place now than it was in 2004 and 2005. The economy here has changed dramatically in that time. It's a much more tech financial corporate-based economy than it was. The Tampa market is not a tourist market at all. I've got some really cool slides that show just quite how diversified the Tampa market is. Florida, in general, whilst everybody knows we have quite a large inputs of [00:16:00] retirees and the like, and if people traditionally think of Florida back in the '70s and '80s and '90s, it's almost like an agricultural retirement place. That's how older people visualized it. But it's not like that anymore. People are moving down here from all over this nation because it's dynamic. It's much younger than it used to be. Most of us can work somewhat remotely now, so it's still reasonably inexpensive on a national level. It's a really, really super high quality of life. Florida has an awful lot more going for it now. It's just the economy has changed. So many of us can work from home. So many of us are almost job optional. I think that's had a massive, massive effect on just who considers moving here. I think our rents have increased top level just simply because given the option, people would rather live here than in a cold northern state, in my view. I know I do. Kathy: Yes, and those cold northern states are far more expensive. Even if rents went up 30% in Florida terms, for many of those people from those northern cold states, it's still probably a bargain. David: That's right. Think about it like a $1,000 rent going to $1,300. That's what it is. It's not eye-popping because that's not really were rents should come from. Rents should come from like, I always said, $1,000 to about $1,500 is your average rent here. I think now, it's somewhere probably between $1,300 and $1,900. It's not that much and it still pops out at about $2,000 across the market. Say that to somebody living in San Francisco or Los Angeles or New York, and it sounds positively bargain-like. Kathy: Oh, yes. I just talked to my friend who visited yesterday and her daughter's renting a room, just a room, for $1,200 in LA with three other roommates who are also renting rooms, so [00:18:00] yes, to be able to get your own place and pay about the same with more space, right? David: Yes. I live in downtown St. Petersburg and anyone who has been here, I know you already know, but it's just so beautiful here, really genuinely. My quality of life is insane, 20 minutes to airport, I get to live in an amazing place right downtown. Like I've heard all you Californians, downtown St. Petersburg is kind of a waterfront city, kind of like La Jolla in a little bit of a way, in that it's like college, great bars, great restaurants, beaches, amazing lifestyle for a fraction of the price, so why wouldn't they come? Kathy: Well, listen, David, I really should have listened to you a lot more and I'm going to just smack my head a little bit because you're still been bringing so many opportunities to me. We are ready to jump, but I would say, when I did visit you in St. Petersburg and I did ended up buying a house. At least I did. I wish I bought 10. Bought one at least. David: Yes, you did. Kathy: We had the Opportunity Zone opportunity and you showed this whole area where we could buy lots for almost nothing. I waited and all of a sudden they went up 10 times in the time that I had to figure out the Opportunity Zone. Did anyone end up buying those? David: Yes, they did. I don't know if you want to hear the next minute of what I have to say. Kathy: Of my tragic story of not listening to you? David: Yes. We were picking up lots at that time. This is right at the start of the Opportunity Zone opportunity and we were picking up lots of between $9 and $13,000 and everything lot there now is between $30 and $80,000. You know what it is, is that if you go into this Opportunity Zone program was really, really powerful. I didn't quite appreciate just how. I knew there was an opportunity, but I didn't understand quite how. You visit those neighborhoods now and they're right by downtown. People were buying these rundown homes in really troubled neighborhoods. [00:20:00] They were buying these homes for like $100,000. Well, guess what. Enough people come in and buy those homes and they built like seven, eight, $900,000 neighborhoods in these neighborhoods. Now, it's just taking so much velocity that the neighborhood itself now is highly desirable. Kathy: Oh, yes, but you knew that. You knew that? David: I could see it happening. I could see it happening, for sure. Kathy: Yes. I mean, because it was too close to all the awesomeness you just talked about, all the nice restaurants, and the waterfront, and the little bike path, and the boats, and the beaches. David: That's right. That's right. The little are going to run down homes. It went against everything that I do because I'm a B Class operator. I think you know that I like the concrete block homes. In my investments that I own myself, they're upper B, they're what I call vanilla ice cream. They don't offend anybody. They just do what they say on the tin. They're very functional. People like them. It's very uniform product. If you go into these older neighborhoods with rundown homes and more questionable when you're driving around, just more questionable dynamics, and you say to somebody, "Hey, this neighborhood is changing." I don't like to bring somebody from California and drive them in and say, "Hey, if you speculate in this neighborhood," because I'm not a speculator. I like to bring people in and say, "If you do this over the long-term, you will do well. If you do this, and you do enough of them and you hold them long-term, you could create meaningful, meaningful financial wealth for yourself." I'm not a speculator. Don't feel bad about it, Kathy, I'm not a speculator either, I'm more of a sound underwriter. Kathy: It was just simply a matter of just not getting around to it. Sometimes that happens. You know what? On certain opportunities, you don't have that privilege to wait and be lazy. David: You don't. You did plenty of other things- Kathy: I did. David: -so you can't do 'em all. Right. I wouldn't go [00:22:00] and lick your wounds too much. You did amazing things over the last few years. Kudos to you. Kathy: Thank you. All right. We have a webinar at Real Wealth with you on Thursday. That's this week. David: That's right. Kathy: If someone's listening to this podcast past this date of September 21st, then you just go to realwealthnetwork.com and you'll find the webinar there recorded. If you want to hear it live, you would go to realwealthnetwork.com. Join, it's free, and you'll get to hear a much more in-depth webinar with you on what kind of opportunities exist. Listen, opportunities are changing all the time. When I first came to Tampa, I was there during the whole boom, the whole mortgage boom, so we were looking only at new homes because that's all there was. Then, of course, in 2009 we were only looking at foreclosures. That's all that there was. Now fast-forward to today, everybody's chasing stuff in Florida, specifically Tampa, super hard, super competitive to find inventory. What's the opportunity today? David: I've just come back from a big seminar with all of the top hedge funds and institutional people in this country. I know what they're talking about. They have much better data than me. They've much better data than any of us. I know where they are looking. I know what their plans are for the next three, and four, and five years. Basically, it's a Sunbelt. This is the biggest institutional buyers in the nation. They currently own about 82% or 83%, I believe, of the commercial world. They own about 3% of the single-family home wealth, and that is where they are going to be chasing yield for the next decade. They are going to try and create a situation where they own vastly more residential real estate than they currently do. Their attention is all in the Southeast and the Southwest, so to a degree in the Texas area but largely in the Florida, Georgia [00:24:00] states. That's where they're going to be targeting. I'm happy to be in there right now. In terms of where the opportunities are in Florida, there are a very, very certain pockets, very defined pockets, some densely urban and some suburban, some suburban cities throughout the nation. Suburban cities, in general, are growing exponentially because the inner, the downtown cores of a lot of these cities become too expensive or they don't have the right type of inventory. A family looking for a good school with a three bedroom, two bath, for under $200,000 is not going to find that in Tampa at all, just in the entire metroplex of Tampa. Where those work, who's looking for what, where. One of the things I also have noticed over the last number of years, certainly in the last year-and-a-half, is there's no finished inventory. Everybody's selling new. There's a lot of supply chain issues around the world. Permits are getting delayed. Construction is slower than we'd all like it to be. There's a lot of investors out there right now who want to buy their 1031 exchange, or they want to lock in their cheap interest rates now and they want to get their investments going now. Well, on Thursday, I'm going to launch 10 in construction, single-family home, renovated home. They're already there. They're already built. I already own them. We're just finishing off roofs. We're putting the last touches of paint and kitchens into these 10 homes. Anybody with a 1031 exchange right now, who wants to look at the Florida market, I would tune in on Thursday. It's not very often you're going to see anybody that has any inventory that's available uniquely for Real Wealth Network buyers. Thursday, tune in, and I'll give you the skinny on these 10 homes. They're ready to go, and I look forward to working with anybody who's got a tight timeline. Kathy: Very exciting. All right. I always want to jump in and be one of the buyers, too, but of course, we let our members go first. [laughs] David: Please. When they're scarce, [00:26:00] please let the members get in front of you on that one. Kathy: Yes, exactly. All right. That's wonderful. People can go to realwealthnetwork.com. If you are not a member, you join, it's free. If you're already a member, then you'll already know about this about event on Thursday. All right. Well, thank you so much for all your knowledge. You have so much more input and insight on how to build wealth, which I hope you'll be sharing a bit on the webinar. David: I really do, Kathy. It's one thing to have real estate, it's one thing to be an expert in one market, but it's quite another thing to really understand why. I'm trying to teach my kids right now why they should do their homework. I'm looking at myself as a child, and I say, "Well, what was it that was missing for me?" Or, "What is it that I got?" Whenever I'm going to do anything, anything in life, that I'm going to do it to completion. I need to know why I'm doing it and I need to know the incentive for doing it. Why and the incentive. I'm very passionate about those two things. I think that there's quite a big disconnect in investors really understanding the why and the incentive of how it actually works out. I will definitely be touching on how to build wealth with real estate on the webinar. I look forward to that. Kathy: The why. Yes, the why. Why this over, say, a stock, something like that. David: Yes, and how to avoid short-term thinking, short-term narratives, how to get your head out of your social media that's scaring the pants off you about this, that, or the other. How do we keep our heads over the long-term when there's just so much noise out there? How do we achieve that? As I get older and I become a more successful investor, it's one of my core tenets of my belief is, "How do we just put all that to the side and invest for ourselves and for the long-term?" Kathy: Great. Yes, especially if you did make a bunch of money in Bitcoin, well, maybe it's time to cash that in and put it to work. All right. Well, so great to have you here on the Real Wealth Show. David: Thank you. Kathy: I look forward to your webinar on Thursday, and I look even more forward to seeing you somewhere in the world. [00:28:00] We still have ice cream in our freezer from the last time you were here, and we have it. [laughter] David: Thank you so much, Kathy. I really appreciate your time, and I look forward to Thursday. Kathy: Thank you for joining me here on the Real Wealth Show. If you'd like to become job-optional with rental property income, join Real Wealth Network for free and log into the website. As a member, you have access to the investor portal, where you can view sample property performance and connect with our network of resources, including experienced investment counselors, property teams, nationwide; lenders, 1031 exchange facilitators, attorneys, CPAs and more, and they've all been highly recommended by over 56,000 members in Real Wealth Network. To join, go to realwealthshow.com. Speaker 1: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities, or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:28:29] [00:29:05] [END OF AUDIO]

They were very well employed in the tech industry. She worked at Amazon. He worked at eBay. But they felt their jobs were not just high tech but high stress, to the point of being “soul-crushing.” That’s when they decided that something had to change, and started investigating real estate and the single-family rental business. Lily and Shane Yong timed it right, during the housing crisis. They’d buy a home and then turn it into a rental when they upgraded. One thing led to another, including some RealWealth networking, and they were soon investing their money out-of-state. The portfolio they’ve built has made it possible to get out of the rat race, and “live life on their own terms.” In this episode, they share their Real Wealth Story with both Kathy and Rich Fettke. That includes how they got started in California and expanded elsewhere, how long it took them to be able to quit their jobs, their decision-making process, their first 1031 exchange, and challenges they have faced and overcome. If you’d like to “live life on your own terms,” Join RealWealth today at www.realwealthshow.com. Membership is free, and will give you access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! Go to www.RealWealthShow.com for the full transcript or to listen to past episodes. TRANSCRIPT [music] Rich: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors' resource. Kathy: Welcome back to the Real Wealth Show, we're going to do another Real Wealth story with Rich Fettke- Rich: -and Shane and Lily. Kathy: Who have been Real Wealth members but they started their journey years ago on their own and have both been able to quit their high-tech jobs that they say were soul-crushing. We're going to find out why and how they've been able to achieve that. Shane and Lilly, thank you so much for being on the Real Wealth Show today. Shane: Oh, you're welcome. Thank you for inviting us. Rich: We're excited to hear your story. We know a little bit about it, very inspiring. Going from the tech industry and corporate to being financially independent on your own now, so I can't wait to hear about this. Kathy: I want to jump in and say, when you're starting out in life, getting a job at a big tech firm, that's a really big deal and people are generally pretty excited. Then that starts to wane and I'm wondering why? Why did it suddenly become more of a soul-crushing experience? Shane: It depends on the company. Some companies, of course, they treat their employees like they're dispensable. [unintelligible 00:01:20] names here. It can be tough. I started on engineering, but then I moved to management. I had to move up the ladder of management. Over time, I don't know if you have experience in corporate management, it becomes pretty soul-crushing. I remember-- [chuckles] Rich: Got it. Kathy: Demanding your heart and soul, but maybe not giving it back. Shane: I'll give you an anecdote. I was given the task of laying off a third of my team. They gave me a spreadsheet, and I couldn't talk to anybody. [crosstalk] Rich: That is soul-crushing. Shane: It's hard. I lost sleep [00:02:00] for days because I was making decisions with people's lives. I just had to go by gut and based on historical data and all that stuff, I couldn't talk to anybody. Rich: Why did you guys choose real estate? It seems that there's so many people that put their focus on investing in stocks, or you get your 401k with a company. Why real estate? Shane: A lot of the real estate stuff was her influence. Our first investment actually was the property in North Carolina, where she was going to seminars, and she heard about this one provider. We got hooked up with the provider. We said, "Oh, okay, let's try it." We purchased our first rental, actually the first rental out of state. Rich: Out of state, got it. Didn't you sell the residence and then move to a new one and turn the old one into a rental in California? Shane: Yes, we did that 14 years ago. Lily: I bought my first place and then you bought your first place. Then later on, I moved into your place and so that we sold that place, and then-- Oh, what do we do with the money? I use it to buy another rental. We bought that one and then we bought that other state property. Then later on, we moved from the place that we lived together that we changed that into another rental. Shane: Then we had kids. That put a damper on things for a while because babies, man, they're a lot of work. [laughter] Rich: They're a lot of work. Puts a damper on something, but also highlights others. Shane: I was in Vegas. On the way back to the airport, there was a taxi guy who was driving, and he was striking up a conversation with me. I was of telling him different things. Then he brought up what he claimed was the fact that he told me never invest in real estate because you will always lose money. Because during- Rich: The genius taxi driver. [laughter] Shane: I came home and I told her, [00:04:00] "Lily, we have to buy more properties because the taxi guy just told me not to do it." Rich: Oh, good. [laughs] Shane: You know it's the best time to invest when taxi guys and grandmas tell you not to go invest. Rich: Oh, that's so funny. I love that. Shane: That's when actually we started to look for more investment properties. During that time, it was difficult because with two babies. I remember we were driving to properties. I would sit in the car with the babies and Lily would run in and look at the house and then she'll come back out and then go, "Your turn." I'll run inside while she deals with the babies. It was tough. Eventually, we looked for help. That's when we found a six-unit property in Hayward. Kathy: Oh, wow. Rich: Nice. Shane: That was our first and only foray into commercial properties which brought in a whole new set of challenges. I'm sure- Kathy: Like what? Shane: Commercial properties the loan process is- Kathy: I was going to ask about the loan process. Shane: -very intrusive. I wasn't used to it. The types of things that they want and need is very different. After that, we maybe bought one more property in the Bay Area. That's when Lily went to more- Lily: More meetups- Shane: -meetups and things. Lily: -to learn more about how other people's strategies are. I came across your community. Shane: RWN. [laughter] Rich: Excellent. Shane: Real estate was something that we already had some-- we dabbled in it already and we felt like we saw some benefits, like tax benefits that you don't get with the other equities, for example. Lily: Also, we saw different characteristics. We do still have our stock investment. I feel like the volatility is different, and it is something that I can work on and it's something in our control. Rich: That's a really good point. [00:06:00] I know a lot of our members like the whole having a hard asset too, it's going to be there, it doesn't vaporize. That's great for you. Shane: Managing rentals is work. A lot of times people will say, "Oh, you're doing rentals so you sit around doing nothing, right?" You got to manage the property managers too. A lot of times they send questions and/or they don't do something. We had experiences with bad property managers. We have all kinds of horror stories. Lily: Even sometimes with a good property manager, they can only do so much. There's still things that you need to manage. Rich: Absolutely. Kathy: Got to buy, right? Rich: Yes, because all of a sudden you're dealing with sometimes the city can be a challenge. Sometimes it's the permitting process. Then let's continue on your journey here. Now you've got your multifamily that was at how many units in that? The ones in Hayward? Lily: Six. Rich: Six in that. Okay. That's when you went out of state? Shane: Yes, we already had one out of state at that point, the one in North Carolina. Lily then decided to quit and my deal with her was that okay, since you're quitting, you're going to have a little bit more time besides dealing with children, which, again, that's a lot. Don't get me wrong, that part is a huge part right now. She was able to spend more time doing more research and she came across RWN. That's when she attended more seminars, and we started to purchase our properties through your help. You guys can agree on that. Rich: You went to a Real Wealth live event? Is that what you did? Lily: One of the event, yes, probably. One of the-- in there. Before, our approach was ad hoc. What we have then, maybe we'll turn into rental and stuff. I guess at that point, we're thinking we should have a more holistic view of our portfolio and see does this number really work better? Is there a really better number, a better appreciation over time? We did some calculation. We also want to diversify not just between different asset class, but also location only where we want. [00:08:00] Not just everything in the Bay Area, or not everything in one state. We went to one of the events that you guys usually host in San Mateo. I was going to your events for quite a while before we're able to talk to people. I think what I like about it-- it's like besides just how you guys seem to be so on top of it, and due diligence and have a great team. Also, there's a community so you were able to kind of bounce off idea and see what you're doing. Sometimes, if you just do it by yourself and other people don't really know what you're doing, is you by yourself, too. It's nice to be able to have people to talk to. Rich: That's important. Shane: At the end of the day, we trust you guys. It's the biggest factor for us to work with you. Of course, we trust that you and your team to help us navigate and connecting us to the right set of folks who hopefully will help us with not just buying but also managing the property. That's actually a bigger thing than buying it. I can go and buy, no problem, is the dealing with all the stuff for years later. Rich: Learn the lessons. Lily: It's the decision point. Each time we work with a team like you guys specifically, on some [unintelligible 00:09:23] or with the provider that you guys have vetted for, each decision point and I can see something may be more risky and then would that be a good thing for the investor? I really appreciate that a lot. Some people may ask us, so we already have a property out of state in North Carolina that we work with some other team. The experience with that was also very just transactional. We buy and then-- Shane: You're on your own. [laughs] Lily: Yes.I don't feel like we got a lot of support afterwards but with RWN, [00:10:00] I feel like we have this ongoing relationship. I feel like at the long term, it's something that we can work together. Rich: Where are you now? Do you have a good amount of out-of-state properties? Shane: Yes. Well, the majority of our properties are for sure. Out-of-state. Lily: In terms of units. Shane: Yes, in terms of units. Katy: Yes, and what states? Lily: Florida. Ohio, Michigan, Alabama, Shane: Yes. Kathy: Wow. Shane: Now we just added the couple in Nevada. Lily: Yes and north-- Shane: We are buying another one in North Carolina. Kathy: You have a pretty good portfolio when you can't remember what state they're in [laughs]. Rich: I know. That's happened to us too. Shane: When you have to do all the state taxes and one is different and crazy. Kathy: That's fun too. Rich: That's how you remember the filing system. Kathy: That's when you get the CPA to handle all that. Rich: What's the future goal and plans for you guys? Shane: We're going to keep expanding our portfolio. The whole point is to get cash flow so that we can continue supporting our lifestyle. Rich: Okay. Shane: Going back to that journey, when Lily starts searching for more properties to buy, the goal was to eventually help get me out of my soul-crushing job too and so the good news is about a couple of years ago I left the industry and I have to tell you a lot of people I worked with were shocked. Rich: Yes. Shane: They thought I was doing relatively well and doing, and they go, "What? You're going to leave this?" Especially, younger folks. You mentioned younger folks, there were engineers who just started and they thought this was it. They go to the tech industry and they die in the tech industry, whatever. When I told them that, actually, a few of them came and talked to me and they told me that I opened their eyes to the fact that there are alternatives, that there are other ways of making a living. [00:12:00] We got there and now we're continuing to expand. We're actually in the middle of a 1031 exchange. This is our first one ever. Rich: Wow. Shane: We learned quite a few things not to do until we did it and a bunch of last-minute things, but we were still going through it and hopefully we can get it all closed in the next couple of months because I'll definitely feel better when we can get there. Rich: 1031 out of California? Is that one of your California properties into something else? Shane: Yes. We, we sold one and we were buying multiple in other states. Rich: Excellent. Lily: I was saying I wasn't in management and it was a different soul-crushing I guess, but I actually still love tech. I feel like now I'm not in the big machinery that it freed me up more time to actually do the tech project or whatever other project that I'm interested in. Kathy: As a freelancer or just for yourself. Lily: Projects or-- yes, I just call them projects for now. Shane: For fun. Kathy: I love that. Shane: She's definitely more techy than I am now. Kathy: You could turn this into what you originally went into your career for, which was your love for technology and that's what more and more people are realizing is that you can become more of a contractor and only take projects that you want and be your own boss. You did all this while living in the San Francisco Bay Area, right? Shane: Yes. Kathy: I'm curious because it's so expensive to live in the San Francisco Bay Area. Even if you have two people working with good salaries, it's so easy and then add two kids right into the mix. It can be very difficult to set aside the money needed to invest. How did you do it? Did you sit down and have a financial plan? Where did you get the money? Shane: [00:14:00] The money came from our jobs and our equity in the companies that we worked at. We worked at relatively large successful companies, so that helped. That is a big part of where it came from but the other magic to this was Lily spreadsheets so she is the magic. She loves spreadsheets. I hate anything that has to do with forms and spreadsheets. I'm so happy that she-- Lily: I think it's the essence that you attach it, what it means to you, right? For me, it's a discovery. I love to remember is what I discover, what I can do, and what the possibilities. Shane: The other part of the deal with her was that she would put everything in the spreadsheets and she'll try to figure out, okay, what are expenses? What are things that we need to plan for? How much money do we need to come in every month before we can get to the point where both of us can do something else. Lily: I think another thing was also that we just started. We started early so that if we were to wait till later, to wait for more down payment, to wait for more then is getting even harder. We started early, then we set money aside to do whatever to, so that then later property increase value. Then we can do that to roll up, to buy other stuff too. Shane: I was not from that Hong Kong mindset. I didn't know anything about real estate. I just go, "Oh, you buy a house and you live in it." I never really thought of it as a real estate investment thing, but look at us now. Kathy: Yes, so you did have a financial plan, then it does help to have someone who understands and loves spreadsheets. Shane: For sure. Kathy: If you don't have someone in the family, you can certainly have your CPA do that with you or even a bookkeeper. All right. I know it's not all easy rainbows and unicorns. What have been some of the challenges along the [00:16:00] way? Shane: Challenges. [chuckles] Shane: The lessons learned for our listeners and viewers. Kathy: Yes, lessons learned. Shane: Some of the bigger challenges I would say is that when you're renting homes out, there's people involved. It's not a computer, it's not a machine. Kathy: It's not all the same algorithm. Shane: Yes, so you can't just write another routine to make it faster or make it smoother. The problem is that when it comes to dealing with people, there's always going to be emotions and people not doing what they're supposed to or what they promised and things. Then you end up having to deal with the consequences. I would say one of the biggest things sometimes is just not to panic because a lot of times I tell my friends who say who are interested, I say, "If you're going to do this make sure that not only you can sleep at night, but your spouse can sleep at night when someone doesn't [unintelligible 00:17:02]." Rich: Yes, good advice. That's really good advice. Shane: If you are perfectly cool, but your wife is losing sleep every night. It's not worth it. Don't do this. Rich: Yes, got to be partners. Shane: Going back to this. There are things like obviously like sometimes people don't pay rent or whatever and you have to go through eviction processes. I'm sure lots of people deal with that already, but there's things happen on your property. We have one where even the police was involved, but we didn't panic. We had a very good property manager who helped us deal with it and it all worked out. We may be lost a little bit of money there, but then we regain it once we got it all fixed up and repaired and rented out. It'll recover, it's just that sometimes it can be a little scary. It's because you're dealing with people and hopefully folks buy properties in all A neighborhoods all the time, but we don't because we're looking for cash flow [00:18:00] but even A neighborhoods have problems too. Kathy: We had a beautiful brand new house, lakefront, that we rented out and they painted it purple inside the whole thing. You do never know but that's why we have contingency plans. You got to have great insurance to cover things and also reserves, I'm sure you put that in your calculations. Shane: Yes, and the big thing that we tend to tell folks is get umbrella insurance. Get as much as you can. Especially, folks who think that they can just put an LLC and they'll protect them, it doesn't. Lily: There's always more money to be made. There's always a better investment, but you never know ahead of time. If I bought more at that time, then I would have a bigger portfolio that is more cash, whatever but there are a lot of things that you don't know ahead of time and as good enough. [laughter] Shane: What's good enough? Like any business there's risks and sometimes, like I said, if you can't sleep because of the risks you're taking, don't do it. It's not for everyone to be honest and it'd be very tough on certain people I know who, fortunately, knowning enough about themselves that they, after I told them this thing, they go, it's not for me. Kathy: It's not me. It's important to know that. Rich: It's very important. Investment means risk right. Investing in anything means risk. Lily: I guess like you said just have a good medication plan. Kathy: I'm curious, Lily when you quit your job and then Shane when you quit yours, but let's start with Lily, did you notice a difference in your income? Because at that point you were probably able to collect even more tax benefits by becoming a real estate professional. Did you experience that, any change in income when you quit? Lily: Well obviously the W-2 is gone [00:20:00] so I've noticed that. [laughter] Tax-wise, there are different kinds of tax write off because with W-2 we're not able to take a lot of deductions, and they all have to be deferred. Rich: Got it and then you turn your trips out to your rental properties as family vacations, right? Didn't you say that? Shane: Yes, part of it was, we wanted to go to some of these places to meet the providers who [unintelligible 00:20:29] a place and yes when my friends were going to Hawaii, whatever, for vacation, we went to Ohio. Rich: I know. [crosstalk] Different vacations [crosstalk] Lily: Interestingly, if we asked our kids what they remember, they remember the swimming pool in the Ohio hotel more than Disney or [crosstalk] Kathy: Isn't that amazing and room service, sometimes it's all our kids wanted was to sit and watch a movie in a hotel and get room service. [laughter] Shane: Disney world was overwhelming but the swimming pool at the Ohio Hotel in the middle of I don't know-- Rich: Oh that's funny. Lily: Have so much screen time. [laughter] Kathy: That is great. Rich: You guys get to do Disney World and right off that trip, right? Shane: Yes, yes when we went to look at properties in Florida, we did go to Disney World, so that was really good, maybe we should buy properties in Hawaii. Rich: There you go. [laughter] Lily: [unintelligible 00:21:29] to oversees [unintelligible 00:21:30] Kathy: I believe and talk to your CPA, but as long as you are looking for property, that might count. All right, or going to an event that's related to real estate. Shane: The other thing that about not having a W-2 is that we can no longer do the type of loans that we could before, which makes things complicated. Actually, we went through the learning process of that-- Kathy: You would have kept your job longer and gotten all the loans before you quit maybe? Shane: Well, two things, one is I wish [00:22:00] we put the properties first all in her name, and then all in my name so that we get 20 because we didn't, we hit the 10-limit already, so even if I kept my job I wouldn't have been able to unless we start selling or whatever but then after not having W-2, we had to do the non-conventional loans and that was a whole lot of beeswax, yes. Lily: I look at my friends who have W-2 their interest rate and that is just high and [unintelligible 00:22:31] Shane: They don't know how good they got it yes. Kathy: Rich, I want to say we but it was really Rich just finished a commercial loan that took him only like three or four months maybe six. Rich: Oh man, we got a bottle of champagne after it was all done. We put it aside and be like when this is done this is getting open. Shane: When I say intrusive, people don't really know what that means sometimes. Lily: [unintelligible 00:22:57] okay I will do it. [laughter] Rich: Well thanks so much for being here you guys, really appreciate it. Kathy: Thank you for sharing your experience and your wisdom and congratulations on continuing to create your dream life, we'll talk to you soon. Lily: Thank you. Kathy: Thank you for joining us here on The Real Wealth Show, it's always good to have you here, Rich. Rich: Good to be here. Kathy: We're going to have to do another interview soon and this interview was so much like your book that is coming out soon. Rich: Very similar, yes. Kathy: I hope we get that published very soon, probably this fall, it's extremely inspiring. For more information, free webinars, and conversations with our investment counselors who all own lots of real estate and more referrals to teams nationwide who can help you find property and manage them, you can go to realwealthshow.com. It's free to join and you'll get access to so much information to help you on your journey. Rich: See you. Kathy: Bye-bye. [music] Rich: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information go to realwealthshow.com [00:24:10] [END OF AUDIO]

The housing market has never been so competitive. Buyers are going head to head in bidding wars and trying to out-do one another with concessions. But when it comes to buyers that need financing and ones who offer cash, sellers often choose cash because it's quick and easy. In this episode, you'll hear from NerdWallet's Holden Lewis who talks about what borrowers can do to give themselves a fighting chance against cash buyers. Holden has reported on mortgages since 2001, working through a housing boom, the Great Recession, and the long recovery. He's also NerdWallet's authority on mortgages and real estate, and the former president of the National Association of Real Estate Editors. He's won various writing awards, and is rehabbing his Mom's house! He'll share some of his tips for people with loans and what they can do to make their offers more attractive to sellers. Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT: [music] Rich Fettke: [00:00:00] You're listening to The Real Wealth Show with Kathy Fettke, the real estate investor's resource. Kathy Fettke: The US housing market may never have been quite as competitive as it is today. Buyers are going head to head in bidding wars and trying to outdo one another with concessions, but when it comes to a buyer that needs financing and those who offer cash, sellers often choose cash because it's quick and easy. In this episode of The Real Wealth Show, you'll hear from NerdWallet's Holden Lewis, who talks about what borrowers can do to give themselves a fighting chance against cash buyers. I'm Kathy Fettke and welcome to The Real Wealth Show. Holden has reported on mortgages since 2001, working through a housing boom, the great recession, and the long recovery. He's also NerdWallet's authority on mortgages and real estate. On today's show, he's going to share some of his tips for people with loans and what they can do to make their offers more attractive to sellers. Holden, welcome to The Real Wealth Show. Holden Lewis: Hey, nice to be here. Kathy: I think we've heard your company's name in the news quite a lot, so it's really an honor to have you here. Let's talk a little bit about the, first of all, what your company does. What is NerdWallet? Holden: NerdWallet, well, it's a financial marketplace where you can go to find mortgages, credit cards, that kind of thing, plus lots and lots of personal finance information from dozens of reporters. I'm one of them. Kathy: Okay, wonderful. It's interesting because there's a lot of talk about not going into debt. There are authorities out there, Dave Ramsey for one, that says don't go in debt. What are your thoughts on that? Holden: There are some kinds of debt that are just perfectly fine to go into. Student loans, mortgages, I think that those are fine. I think a lot of times credit cards are [00:02:00] a perfectly good way to spend your money. I think about when I was in my early 20s and if I had an $800 car repair, I didn't have that kind of cash. I had to put it on a credit card. Well, there's nothing wrong with going into debt to fix your car so you can drive it to work. I think there's a lot of places where debt has a place. Kathy: Sure. I know I lived in Switzerland as an exchange student when I was, oh my goodness, 17 years old. My Swiss mom basically said, oh, no, we never use debt. We just save for everything. If we're going to buy a new car, we just save now and buy it with all cash. It's a little bit of a different mentality maybe today in Switzerland, but certainly in the US that if you can borrow at low-interest rates, it might make more sense, especially if whatever it is you're buying, can you money. Let's take that example. Let's say you get a car loan and buy a car, but you use that car for work. Maybe you're even an Uber driver or something and you make more money than the payment. Well, then that's a positive cash flow, right? Holden: That's right. That's right, and you can expand that to all sorts of things. When people have the opportunity to pay off their mortgage quickly, like make double payments or something like that, one of the things that they have to consider is this, like what if they're paying 3% interest on that mortgage and they can invest the money and make say, a 5% return. That's not a whole lot more than that 3% they're paying on the mortgage. Well, maybe you don't want to make extra payments on your mortgage if, instead of getting that 3% return forgetting taxes, on paying your mortgage early, you can make a 5% return on an investment. [00:04:00] Kathy: I just saw a Facebook post, somebody saying, "I'm so proud of myself, I just finally paid off my home," and I understand that's a great feeling I'm sure for people to feel like I live in this home, I have no payments. I basically live here for free besides taxes and insurance and repairs which are still costly, right? It still costs to live in a home even if you've got it paid off, but let's say that home is $200,000. That's $200,000 that could be borrowed against at super-low interest rates and reinvested for more. Some people, again, possibly Dave Ramsey, would say that that would be irresponsible to get a loan against your primary. Again, that would be, if you're going to just go spend it on non-assets, on a vacation, or something, but if you're investing it for more than you're paying to borrow it, it could accelerate the payoff in a way, right? Holden: That's exactly right. I think about what happened in the run-up to the housing crisis in my neighborhood, there were people who kept refinancing their homes and borrowing more and more and more and buying. Like I had a neighbor who bought a Volkswagen Tiguan and a Harley Davidson. Well, neither one of those is really going to appreciate value. If you're using your home equity to pay for those things and the price of the house is inflated and eventually falls, you're in real trouble if you lose your job. The way I look at it is this, there's a psychological wage to being in debt. When you can pay off [00:06:00] your student loans and your mortgage and your car loan, and it just makes you sleep better at night. Perhaps it's worth it, perhaps it's better to just not have those debts rather than say, get a HELOC and invest the proceeds of the HELOC. You might feel like you're walking on a tight rope when you do something like that and you just want to maybe simplify. I totally understand. There's a lot of things I disagree with Dave Ramsey on, but sometimes I end up in the same place where he is when I just think in terms of peace of mind. Not having debt gives you peace of mind. Kathy: Sure, sure. The bottom line is if you know how to invest and you're savvy at it, and you could get a loan for 3% and you are 99.9% sure that you can get an 8% return elsewhere or 10% or 15% or 20% then, by all means, you would get that money and borrow as much as you could. You would borrow millions upon millions upon millions beyond your home. You'd use credit cards and so forth because you would know how to make a nice return on that money. It's like if you didn't know how to do that, then it would be like the idea of walking into a casino and saying, okay, I've got a $100. I'm going to gamble and maybe I will make another $100 and keep the $100 I started with and only play with the house money, but what if you don't? What if you lose $100 completely? It doesn't work. If you're going to gamble, you need to know how. You need to know that you're going to walk out of that casino winning. With real estate or with other investments that you understand, It's not so risky if you really get it, if you really understand it. If you know how to buy a house, understand what it [00:08:00] takes to renovate that house, what the after repair value will be, what the market is asking for, and the demand, and if you've done it before or working with someone who has, you have a pretty good chance of making that work. If somebody wanted to pay off their debts or just be sitting in cash, what advantage do they have as a cash buyer? Holden: There's a lot of advantages to being a cash buyer and really, first, you have to think in terms of the mentality of the seller. Why would the seller want to sell to a cash buyer? Among those things are as a seller, you don't have to wait for the buyer's mortgage lenders' approval or their timing. You don't have to worry about the appraisal, and you're just simply more likely to go to closing. When you turn that around, you think, okay, as a cash buyer, those are some of my advantages. It's a more sure closing because as a cash buyer, I'm not having to depend upon a mortgage lender's approval or quirks of timing where suddenly, oh, they have to put the closing off for a week. Don't need an appraisal and you're just simply more likely to go to closing. Kathy: That happened to us with our daughter when she was 24 and she had had a two-year work experience so she could qualify for a loan. I've talked about this before on the show. She was going to go buy a car because she finally had good credit. Well, she had great credit and showing income. I said, no, no, no, before you get that payment and throw off [00:10:00] your debt to income ratios, look at buying a house first. She was like, a house, how can I do that? How can I afford that? Just talk to a lender and find out if you can qualify. It turns out she could qualify for about a $300,000 house. She lived in Chico, California where $300,000 houses were actually available. It's pretty tough to do- Holden: Oh, really? Kathy: -out in California, but she could. She started shopping and was able to find houses that were three-bedroom homes that were cheaper than the apartment she was renting that was a two-bedroom with no yard. The light bulb went on and she got it. She found a really good deal on a beautiful house next to Bidwell Park, looking over the park and just riding bike distance to downtown and to her job. It was a former rehab that the person couldn't finish, so one of the bathrooms wasn't done and a bank wouldn't lend on it. The only people who could buy that property would have to come in with cash. Well, that obviously lowers the value. We said, fine, you can borrow from our retirement savings, it's going to cost you 6%. Then you can refi, we'll buy it all cash and then you fixed the bathroom and refi, that's what she did. That was an example of why having cash or someone who has cash can really help you get a great deal. She got that property for at least $50,000 under market because of the unfinished bathroom. She fixed the bathroom for about $5,000 and lived in that property for a couple of years, just sold it, and after paying us back and all the interest, she made over $100,000. That's pretty good to live for free basically as a 24-year-old and make money at it at the same time. Holden: That's a happy story for her. It sounds like a horror story for that seller. It's like, all they had to do was [00:12:00] invest $5,000 to essentially get a $50,000 return and they didn't do it. Kathy: They didn't do it. Oh, that is a really good point I hadn't thought about that. This was somebody who just, maybe hadn't calculated the cost of repairs and literally spent all their money and didn't finish the project. This is not uncommon and that's why, when you try to do a flip, you better make sure you know the cost and have reserves in place because there's always surprises with old properties. There could be things that you can't see until you start digging into that property and making those changes. Unfortunately, I do believe they just ran out of money because they had spent everything they had trying to do the repairs and probably couldn't get any loans. They did walk away from that probably at a big loss. Very, very important. The same thing I've seen that even with big syndications where you could syndicate, expect that the repairs on the apartment will be say $500,000, it's a much bigger deal. What if there's more to it and you need an extra million or something. If you're syndicating something big, you sure better have big reserves. You can always give investors their money back if those reserves aren't needed, but make sure you have it so you're not in a situation like that where you can't finish the renovation. With the crazy market out there, there's still a lot of people coming in with cash. What are some of the best ways to win that bid? Holden: All right. Let's say you need to get a mortgage and you're competing with these cash buyers. That can be really intimidating. Really one of the first things to do is in that intimidating situation is to present yourself as a really easygoing person, to be a not intimidating buyer. Someone who's a pleasure to work with, [00:14:00] someone whose offer is easy to accept. That's the number one thing, and then there's like elements of that. For example, when you say, make the offer easy to accept, what I mean is, keep it short and sweet and simple. Don't have a bunch of clauses in there like escalator clauses, just make it really short. Don't demand a response like within two hours, that just makes you seem like, oh, okay this person's going to be a real hard to deal with. Really just keep things really simple. Another thing is just make your best price offer right off the bat. Don't be counting on some back and forth where you're eventually going to pay more than your offer price. If it looks like there's a lot of competition for the house, you're going to have to get a mortgage, you think that there's going to be people offering cash, just make your best offer right then. Because one of the reasons is a lot of cash buyers, if they are looking to buy it as an investment to rent out, they might have a top price that is below what you're willing to pay for it if you want to live in that house. You can waive the appraisal contingency if you have enough money in reserve to pay the difference between the prices you're going to pay and the appraised value. Sometimes if you're going to get to mortgage, you can have some more flexibility, you can offer the seller a rent back. This is an important thing in today's market because it's really easy to sell a house, it's quick to sell a house. It's hard to find a house to buy [00:16:00] when you have all this competition. What happens is, people can sell a house quickly and then they might want to continue living in that house for a while while they're waiting to make an offer or close on another house. If you can offer to let them rent that house back for up to 60 days, that really might give you an edge. You can offer to buy as is and you can still have the house inspected, but you can tell the seller, look, this inspection, I'm not going to ask you to pay for anything. I'm not going to ask you to allow workers into your home to repair things and supervise them. I'm only getting an inspection to give me a yes or no, a go or no go thing. If the inspection uncovers problems that I don't want to deal with, then we'll just cancel the whole contract. If it uncovers problems that I'm willing to deal with, then we'll proceed and I'm not going to ask you to lower your price. Those are some of the strategies that mortgage borrowers can use to compete against cash buyers. Kathy: That's good information. I've read that maybe these multiple offers and multiple bids are slowing down, but I would say it's just slowing down, they're not gone and it certainly depends on the market. It's still really important to know that you're working with the right agent and that you are making the right offer because there's probably going to be some other good ones right alongside yours. Very good, all right. Any other tips in the time that you've been reporting on mortgages since 2001? Obviously mortgages are really, really cheap, right now it's cheap money. Do you see that changing? Holden: Well, they're going to continue to be low. My guess [00:18:00] is that mortgage rates are going to go up from here on. I would say, look, when you look at mortgage rates and when you make a prediction, you can predict that they're going to go up, they're going to stay about the same, or you can go down. If you can predict better than 33% of the time, you're doing pretty well and I'd say, I probably am right half the time. How sure am I that mortgage rates are going to be higher at the end of this year than they are now? Not really positive about that, but I think that that is the direction that we're going to see. The thing that could knock mortgage rates down or just keep them the same would be if the pandemic gets even worse and really drags down the economy domestically and internationally. If it's affecting supply chains even worse than they are now and shipping, you could see mortgage rates go down, I just have a hunch that that's not going to happen. That mortgage rates are going to rise but not by much. They're a little bit under 3% right now. I don't think they're going to be above 3.25% at the end of this year. I just think it's really fascinating is appraisal gaps. I mention that in passing but it's really a problem that a lot of people are dealing with, people getting mortgages. Essentially, let's say you offer $110,000 for a house and the appraiser says it's worth $100,000. Well, if you're going to buy 95% of the value of the house, suddenly you can only borrow $95,000. Instead out of putting 5% down on a $110,000 [00:20:00] house which should be $5,500, now, you're faced with putting $15,000 down. I'm throwing numbers around that might sound really confusing. Essentially, with the appraisal gap, you have to come up with cash to make up the difference between the price you're paying and the appraised value. In a normal market, what often happens is, if the appraisal comes in for less than you've offered to pay, then you'll negotiate with the seller to get a lower price. In today's market, that's just not happening. You're paying that price that you offered to pay, and you're going to somehow have to come up with that difference in cash. When you're making an offer and you need to get a mortgage, it really does help, especially if you want to waive the appraisal contingency, to have plenty of cash in reserve or easily liquidatable assets in reserve to make up that difference. Kathy: Yes. That's the challenge in a bidding war scenario. Yes, the price is going to be higher than what it would appraise for and most people who are overbidding have that cash set aside, which makes it harder for people who don't. Holden: That's right, and if you're going to waive that appraisal contingency to actually show some bank records and some brokerage records saying, look, I really can make up a difference of say $20,000 easily, if the appraisal falls short. Then just to let that seller know that, yes, you're not just blowing smoke, you really, really can make up that difference. Kathy: Yes. [00:22:00] All right. Anything else you want to let our listeners know? Holden: I think that's about all. Just to reiterate, the appraisal, not the appraisal, the flexibility about the closing date I think is really a key thing in today's market where there's just a lot of sellers out there who need to hang out in that house a little longer so they can close on the house that they're buying. [music] Kathy: Yes. Great advice. All right, Holden Lewis, thank you so much for joining me here on The Real Wealth Show and sharing your knowledge. Holden: All right, thank you. Kathy: Thank you for joining me here on The Real Wealth Show. If you'd like to get access to more free education just go to realwealthshow.com. Rich Fettke: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:23:06] [END OF AUDIO]

She’s a mother of 6, grandmother of 19, and says her claim to fame isn’t just all the green smoothies she’s made, but a real estate empire that helps pay for it all. She started investing seven years ago and says: “If a stay-at-home mom of six can do it -- so can you!” Kim Bosler says she always had a passion for real estate but lacked the confidence to do it on her own. She finally got going by networking with other real estate investors who were doing what she wanted to do. And now her adult children are following suit. They are all investing in real estate. Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT Rich Fettke: [00:00:00] You're listening to The Real Wealth Show with Kathy Fettke, the real estate investor's resource. [music] Kathy Fettke: If you've been listening to me for a while, and I've been doing this a long time, you know I've interviewed some really interesting people. You might be surprised to hear me say that today is one of my all-time favorite interviews. I'm Kathy Fettke and welcome to The Real Wealth Show. Our guest today prides herself on making more green smoothies than she can even count because she has 6 kids, and 19 grandkids. She's going to share today how she's built a real estate empire, made lots of mistakes, but made even better choices over the years, and is going to share how she's done that, how she's financially free, and how she's now getting her kids investing in real estate, and wouldn't change a thing. Kim, welcome to The Real Wealth Show. I'm so excited to have you here. Kim Bosler: It's so great to see you, Kathy. I just love, really, honestly, it's because of Real Wealth Network that's given me so much. It's all because of you that I got involved in real estate, and I really can't thank you enough. Kathy: Thank you. It hasn't been all rosy, has it? You started investing with us, seven, eight years ago, something like that. Kim: Seven years ago. Kathy: It was kind of the Wild Wild West back then. There were a lot of foreclosures, the property management systems weren't really in place and we've learned a lot since then, but oh, boy. You've had ups and downs. I received a lot of emails of you being frustrated, but here you sit, in 2021 ahead, right? Tell me a little bit about that. Kim: Right. I just want to thank you for your just patience and perseverance with me, too, because we were-- I think in some ways we were learning together. [00:02:00] There was some things you just can't predict in real estate but all in all, it was just a phenomenal, it has been a phenomenal experience. It started seven years ago, really. Actually, was about 10 and I was on the plane and a friend of mine, her husband had just passed, and she had nine children, very large family. She said, "The greatest gift that Gordon gave me was, he owns five properties outright, and that allows me to go see my grandkids." She was just saying what a gift that was. I thought about that for a long time and I thought, I came home that day and I really believe in vision boards. I thought, "That's exactly what I want to create too, somehow." Her husband was also professional, but you don't have the built-in pension. You don't know how long you're going to live. There's just so many variables. I already knew that having a hard asset was something that couldn't be stolen, and it could only grow in equity. I put down on my vision board, "I would like to own six homes." [laughs] She had five, so I thought maybe six would be good and I actually started laughing. I laughed out loud when I put that down and I thought, first of all, my husband was very against real estate. We'd done some earlier in life and had not done well. We didn't really have the money to invest at that time. We still had kids at home. We have a large family, lots of grandkids like you said. Even though he owns his own dental practice in California, it's really expensive to run a practice and there's a lot of overhead. Anyway, so I put that down and we started going. I had a really good friend at the gym, and he was always talking about his investments. It was so exciting. Then one day he said, "You know Kim, I think the best thing you could do would be to just hook up with Real Wealth Network." I didn't have a pad and paper and so I was running on the treadmill next to them and I was thinking, [00:04:00] Real Wealth Network, Kathy Fettke. Okay, I went home, I looked you up, we started going to live events. It was so thrilling. One time, I got my husband to go and it was properties in Texas. At the time, she was selling she had a package of six. I said, "This is it, Bruce, let's buy these six." He said, "Are you crazy?" I said, "No, they're $120,000." Now, remember, when people hear that I bought homes for $120,000, that was seven years ago, but seven years from now is going to be seven years ago. Kathy: That's a very good way to put it. Kim: It's just never too late and even then I knew those homes had just been $80,000 and so I still thought it was paying high, but it was still at the 1%. They were renting it for $1,200, which is hard to find now even, and so we did. Kathy: You bought all six? Kim: We did, and you know what? He said, "This is your deal, because I think real estate is really risky and this is going to be your thing." I had to take out a HELOC to do it. Think about that. For $25,000 down, I only had to take out $150,000 to buy six homes. Now, where else can you get a bank? I think someday we're going to tell grandkids about this. There was a time when you could buy a home for $120,000. The bank actually will take the risk of 80%. All you have to do is 20%. It's still cash flowing, at least $500. In fact, it was a little more than because it was on land-only for a year, and they weren't taking into consideration there was a building on it yet. They guaranteed the rents too, for one year. That's when property management did things like that. They don't do that anymore. For $150,000 we owned six homes and those homes now today are worth about $250,000. That was a really, really good investment but that [00:06:00] also taught me about doing the 1031 exchanges. I didn't know what those were. She said you own the property for, try to get new builds for four to five years, and then turn it around, and you don't have to pay on the capital gains. I just thought, "You're kidding. This is--" Kathy: How can that be? Kim: Yes, just the whole thing about real estate, there just really isn't anything I have found where you can take an average American, who's not a doctor or not anything special, and you can start investing, and pretty soon, over a lifetime, you can really grow your wealth. Now, I started late, I started at age 56 and still, within this short six or seven years, I've been able to grow a very large portfolio. It started with those homes in Texas, it started actually with Real Wealth Network, because you were able to vet these people, and get the best of the best. We had a network, we had people that we could talk to, friends, we could mingle and associate, "What are you doing? What's working for you?" In fact, I have the best CPA ever, and I also found him through a podcast that you did with Real Worth Network. It's just a lot of benefits to being involved in your group Kathy, and I don't know, I wrote down the many benefits of real estate right here this top 10 reasons, and maybe I can share those, but I am so grateful. Kathy: I would love to hear that. Are you still buying? Because I think you might be. Kim: You know what, the thing is, is that once you get started, if you're doing this plan of 1031 exchanges, you actually have to keep going. That's what's exciting about it. You can stop of course, but the opportunities are just always so prevalent. It's addicting actually, and it's a lot of fun. You start getting to know different people, and they bring offers to you. I don't know, it's really exciting. Yes, the places that I'm enjoying the most [00:08:00] are thanks to Ben, he was my counselor and told me last year, to do a couple of 1031 exchanges, which I did, and bought a lot of properties in Florida. Last year was such a sweet time. I didn't even know what I was doing and I just did it. In fact, they seemed too good to be true, so I didn't really trust it. If I had known what was going to happen this last year with real estate, I would have bought a lot more of it. Kathy: How many did you buy? Kim: Everybody would have. We bought eight in Florida. Kathy: Oh my gosh. That's amazing. Then there were some areas that were more difficult and some that you-- which is again, the nice thing about real estate, especially one to four unit homes that can be sold fairly easily if you're in the right area. There were a couple in Chicago that were more difficult. Why is that? There's a lot to it, but maybe just a couple of things you would have done differently. Kim: Well, just really briefly, I actually went on a home tour that Real Wealth put out. I went with Ben actually and we-- it was an incredible company, Mack was, and they just happened to go bankrupt. I don't know why but I know- Kathy: I think they over-leveraged. Kim: Probably, and we saw that. I was actually the one that noticed it because we weren't getting paid for four months. I looked up online and the news had just broken that day, I think. I emailed all my friends in Real Wealth and that was a little bit of a challenge, but it was something that was overcome, we could overcome, for sure. As I mentioned before, each one of those properties has still gone up in value. I actually made a lot of money on the home that I just sold in Chicago, and I have just three more to go, but I've got great tenants. They're all paying rent and one of them I had to put some money into. That was probably my [00:10:00] only bad property, was one in Chicago, where a tenant pretty much destroyed the place. Interestingly, if you've got a large portfolio, that's the advantage of it, because you've got other properties that nothing's really coming out of your own pocket, so to say. Kathy: If you really go into it like a business, and with any business, if you're going to be hiring employees, you need to have reserves, because what if you have a bad month? The employees don't get paid and you don't have a business. Any business, you've got to have enough reserves, usually 6 months, maybe 12 months. When you know these things can happen, and you've got the reserve set aside, it's just a business expense, and it's non-emotional. Kim: It feels non-emotional to me. What it feels like to me, because we don't really spend the money right now, is it feels like a giant Monopoly game. That was my favorite game when I was a kid. We used to stay up for hours and play it all night and sleepovers. I just loved Monopoly. That's what it feels like. Sometimes, there's something bad that'll happen and you go, "Okay, well, I've got this thing. I'm going to pass Go pretty soon." Go is payday when you're-- it automatically goes into your account if you've got good property management. That's really key is great property management, which I have really been blessed to have in areas. Chicago, I go through a few, but I don't regret anything. In fact, I have to tell a story about you, Kathy, that just shows your integrity. When I first got involved with Real Wealth, I know you already know what's coming, but there was a guy on your site that was only on there for maybe five days, until you realize, "Wait, this is--" Kathy: Until I bought a property from him, and realized it was a mistake. Kim: He sold me a property for $54,000 in Philadelphia and it was cash. I was so excited [00:12:00] about my first property. We went out there and he said, "You don't need to do an appraisal, anything like that. It's all great. You don't need to do an inspection." I was just really too trustworthy. Anyway, we went out and found out that it was a real disaster. Kathy, I still can't believe this, but you bought the property from me. Kathy: I still have that thing. Kim: I don't want to advertise that, because I know that that's not something-- Kathy: I don't do it every day. It was $50,000. Kim: I think you just looked at me and went, "This poor girl is so dumb that I'm going to help her out." Kathy: No, no, this was a long time ago, and our systems have changed a lot since then. It's because of this horrible experience, where this guy, and we didn't know he was doing this, but he was just telling people, "Don't worry about it. I'll vouch for. You don't need an inspection and you don't need an appraisal, so let's just stop right there." You never. If you're an out-of-state investor, you always get a third-party appraisal and you always get a third-party inspection. Get several. Get it for everything. It's going to be cheaper than buying a problem. Kim: Even on real properties, still, our new builds get an inspection and an appraisal always. Kathy: Absolutely. The wonderful thing about doing it on a new build is if they miss something, they fix it. Especially, if you do it right before the warranty is over, like you've owned it for a year, and then right before the warranty is over, get that inspection, and get them to fix it. Kim: It's so great and they're so good. The builders, they care about their reputation, and they want to fix it, make it right. The tenants want it right, too. It's really great. I cannot, honestly, Kathy, think of-- real estate just has so many benefits. I know that there can be some things that go wrong, but honestly, when you've got hard assets, like I said, it's [00:14:00] something no one can steal from you. Even if it burns down, you've got homeowners insurance. It's something that can be leveraged with 80/20. If you go into stocks, it's 100% your money, and then even that, it's not a hard asset. Kathy: If you think about it, granted we've had a really good 10 years, but that house that I bought from you, in retrospect, it was only about $5,000 to fix, but with you as a new investor, that was terrible. You're like, "No way." That house has doubled in value and it stayed rented, so it's actually been a pretty good deal. Kim: Oh, I'm so glad. Kathy: Isn't that funny? Then your Chicago properties, again, there was some real difficulty there, but you're walking away with more money. Kim: Absolutely. I'm thrilled with my purchases in Chicago in the long run. That's with any home I've decided. In the long run, real estate is always your best deal. That's number three. You've got a tenant that's paying off this 80%, and the bank is taking that risk. You've also got appreciation. This last year has been incredible. Every year can't be like that, but still, think 30 years down the line, even grandkids, it's just going to be amazing. You've also got upfront depreciation, and I didn't realize you can take all of that now. They've got this thing. If you've got a high income year, you can really help reduce taxes with the upfront depreciation. I think some of it can be up to like $25,000 off your taxes in a year, which is nice for home. Then you've got expenses you can write off. You've got great property management. You've got 1031 exchanges you can do. Also, I think besides it being fun, is number 10, and the most important, is you can teach your kids how to do it. It just gives them a lifetime of such security [00:16:00] that they can feel like they can do, too. When they see just me, a mom, doing it, they're like, "I can do that then." Kathy: It's really full circle, isn't it? It was 10 years ago that you met this woman who was so happy, she inherited-- not inherited, but was left with six homes to be able to live on. Here you are, now showing other people how to do it, here on the podcast, teaching other people. It's so awesome to see. You have six kids. What are they doing? Are they all investing now? Kim: Five are married, and the one we're taking to college, BYU, in just a couple of days. He did return from a mission in Korea. All of them do invest, and they've all seen it, and they want to do it. They're excited. They all have other careers, but it's something that they want to do on the side. I think most of them are right now. One is just getting out of the Air Force. He's a orthopedic surgeon. He said, "Mom, I really, literally can't wait until I start making money so I can start buying real estate." Kathy: Oh, with a VA loan, right? Kim: "I thought you were excited to cut bones." He says, "No, I am that, too, but--" Kathy: To cut bones. Oh my goodness. That's funny. Kim: It's nice to be able to just see them excited about that, because it's the American dream really, I think, is being involved in real estate. Kathy: I agree. Now there's two syndications, and I didn't really want to talk about this, but I also totally believe in transparency. In 2014, I syndicated two-- we had been doing a lot of land acquisition and building homes with experienced developers. Then the word got out, and our 40-year veteran real estate attorney said, "Oh, you should really look at this thing. [00:18:00] It's a wine village and the rent will be much higher because it's direct-to-consumer sales. There'll be tasting rooms and you could charge more." Anyway, we ended up syndicating. You invested in that, and then in another ground-up project. In the projects where we have bought land and we're just building houses and it's a simple plan, it's almost never on time and there's always challenges, but it's fairly simple, and banks understand it. With something like a wine village, as cool as it sounded, as excited as we all were, and what an amazing thing to be able to showcase these different wineries that could have visibility from the freeway, lenders just didn't understand it. Then of course, the fires, then COVID, and it just has been extremely difficult. In retrospect, I think for both of us, in this process of growing, I would never do that deal today because it's too different. It's just too different. Kim: I still think it sounds amazing. I look at some of the syndications on CrowdStreet, and things like that, and they look like they're trying to do the same kinds of things and big multi-family things, but we didn't know. What were you going to ask? Kathy: I was just going to say that we've learned both of us. It's been extremely hard for me. I'm still dealing with it. If there's anyone listening who can help us get financing to build this thing, or do something else with it, I think it actually would make an amazing RV park because you could have all the RVs around the already approved events center for weddings, so you could be little RV weddings with little tasting rooms around. There's so many things we could do for so much cheaper, we just need that creative financing person. I'm actually glad I'm talking [00:20:00] about it because who knows maybe that person will find us. It's right off Highway 5. Kim: I know, it's such a perfect location. It is. It's just, everything looks good to me. Kathy: What did you learn from it, Kim? Kim: Well, one thing I've learned is that we don't worry about it. If you make a bad investment, you move on. Of course, I have to complain to you first. Kathy: As you should. Kim: What are we going to do Kathy, and then you always have this yogi type of, just this beautiful way of responding and I'm like, "She's so mature and kind." Anyway, no, but you just move on and it's just like life. Life is life and there's nothing that ever goes just perfectly. Things happen and go wrong. Even when we have a big family reunion, and we all get together, there's little things that happen, and if you stopped and over analyzed everything, you'd be unhappy. You just have to say, "Okay, this wasn't a good investment, but look at all these," and focus on the ones that are so good, and then that catapults you to more good investments, but there's not a single person who's ever done real estate that's done everything perfectly and that I can testify to. If you're going to do this shoulda, coulda, woulda game, then there's not a single investor anywhere that can't say I shouldn't have. They look back and there's things they could have done differently to make more profit or do differently. You just can't worry about it. Kathy: I love that. Rich tells me that all the time, he reminds me because it's easy to go down that road. I just think, "Oh my gosh, if I just stuck with what I know, which is single family, and we did a fund back in 2009, I would have my private jet," which I don't really even want, so it doesn't matter. [laughter] Kim: Well, it's [00:22:00] all part of the game. When something doesn't go-- really, I'm glad I played Monopoly as a child because, there's no Monopoly game that goes perfectly either. It's just one of those little bumps and hopefully you make enough in the other investments that it makes it okay. I'm just so grateful that I bought the properties last year that I did in Florida. I wouldn't change anything really. It's just been a real blessing, all of it. Kathy: Oh, I love that. I do have one more question that I just got to ask, because I think it's so important. With your husband being a dentist and a high income earner, although I know there's also a ton of expenses there and that's a difficult business, my dad was a dentist, but you have been able to really offset his income with tax deductions by becoming this real estate professional. Tell me a little bit more about that. Kim: Well, I met Ryan Shellhouse through your podcast and he's phenomenal. I think that guy is just a walking brain, but he said, "Kim, you should become a real estate professional." I said, "What's that?" He said, "At least 17 hours a week, if you can dedicate to real estate, then you've got all these benefits. You get the upfront depreciation, you can write off all your travel." There's just so many tax benefits to it. I said, I want to be a real estate professional and so that was cool. He gave me that, but I thought at the beginning that I would be trying to fudge to get 17 hours, but I really do spend at least 17 hours a week now in real estate. It's passive. When you're doing active 1031 exchanges and taking care of your properties, there's just things you need to do. Part of it is looking for other properties and things like that, and listening to podcasts, and all those things count towards the hours. Reading real estate books. I have learned so much [00:24:00] about real estate, I just love it. Your book's amazing, Kathy. I do spend at least 17 hours a week doing real estate, but it's fun. I love it. It even includes the travel part. I go to see my grandkids and I'm writing that trip off, and none of them live by me anymore. I would die without being a real estate professional, I think now, because now, I can just go and it's all written off. Kathy: There's a lot of detail on that. We have webinars on our website at realwealthnetwork.com that will explain that further, and give you resources and referrals to these accountants and these teams nationwide. Kim: You have to log your hours. It's really important. It's not something you're just called and then that's it. Kathy: Yes, you got to do it right. You don't need a license, so you don't have to run out and get your real estate license. It's the amount of time that you spend on your properties, or learning about your properties, or researching, or traveling to them or any of that. You need to have enough, and certainly you do, to have it count, to make it believable that you work that much and you do, and you can't have any other job that you work more at. For many people who maybe don't have that job, but can feel like you have a job because the write-offs can be so enormous, that the amount of tax deduction you get is the same as what a salary would be. Kim: It's such a perfect husband-wife situation. If your husband wants you to be doing real estate and he's got the big 8-to-5 job, you can definitely be a real estate professional with your 17 hours a week. It's just a perfect combination for that type of thing. Yes, I've loved it. I've loved it. I'm so glad. I love to fly to Florida and I can write it off, too. Kathy: You're going to need a hotel to stay in to look at your properties and maybe then your kids also join you in that hotel. Kim: Exactly. Yes, they might be potentially looking as well. Kathy: Yes, that's true. Kim: It really is [00:26:00] a great family business. I've loved it so much. Thank you, Kathy. Kathy: That's really great. Kim: I wouldn't have known about it. See, if it wasn't for Ryan, I met Ryan's through the podcast. Every time I listen to a podcast of yours, I learn so much, Kathy. It's just amazing. Loved it. Kathy: Oh my gosh. Thank you so much. Any final words? What are you focusing on now and maybe it's just enjoying your family and your free time. Kim: I'm actually going to try to slow down a little and just get everything paid off. That is the goal. You start people out with say, 10 properties, because the Freddie Fannie gives you 10 per person. Bruce and I can each get 10, and we've fulfilled that now. I just want to pay those off and have something that our family can have in our portfolio. My kids aren't really going to need it. That's the nice thing. They're very independent, and smart, and able to invest on their own, but there's things that I want to, special causes that I want to donate to. I think that's what really makes it exciting. I don't think there's any real joy after a while in just accumulation. It's a very empty feeling, unless you have something that you specifically want to do for the good of others with that money. That's what brings you real joy. There really is not-- if that's all it is, is accumulation, then it's nothing more than a Monopoly game. I think when you set real intentions, God helps you. I don't ever say the universe, because I want to give credit to me, where credit is due. I think God helps you with those goals and He knows when your intention is good and He wants His children to be successful so that [00:28:00] they can contribute. There's a lot of people in a lot of organizations who need help financially, and that's what really makes life exciting, I think, to be able to help most days. Kathy: I can't wait to have you back on to hear about all the good you're doing in the world. Kim: Well, I just want to thank you Kathy, because honestly, it was Real Wealth, it was having that. Honestly, the organization just gives you courage. I had no idea what I was doing. I didn't know. You teach in your course, and you tutor, and you provide what's necessary, and there just couldn't be a better organization, and it's never too late, and you're never too old. Just remember, five years from now, it's going to be five years ago. Just start, it's always a good time to invest in real estate. Always. People used to tell me that and now I really know that. Kathy: I love that. All you have to do is pull out, just Google FRED, because that's the Federal Reserve and existing home prices, and go back 40 years, and you'll see this trajectory. All you have to do is ask yourself, do you think that's still going to continue based on the massive amount of money printing, the de-valuing of the dollar that increases hard assets? Yes. It's hard for you and me to sit here and say, is your $200,000 house in Florida going to be worth $400,000 in 10 years? Yes, maybe five years. I do hope more people can really get that message and protect themselves from inflation. Kim: Well, that's the great thing about inflation. I hate that the government's always messing with the dollar and now we are going to see, especially with all these taxes and everything, and just so much going on in the world, there will be definitely inflation, but you've got a 30-year fixed loan. Your [00:30:00] payment is not going to change. Even though everything else is going up you've got that permanent low payment, low interest rate, and still interest rates are historically low. I think they're going to stay low for a while, because just one tiny change with all the debt that we've gotten America, is going to be huge for our country. I think they're going to try to keep it low for awhile, so it's just not too late. I think now's a great time to still invest. Even though the 1% is harder to find now, you can still find places in Florida that are cash flowing. If you put 25% down, there's still places that are $500 or $600 cashflow. Kathy: I think you mentioned too, that you had done your underwriting, not really calculating for rents to go up, and I think that's a smart thing to do, but they have gone up and now you're way beyond the 1% rule. Kim: I never did that. I mapped it all out and I kept it at $1,200 in Texas and now they're $1,800 from five, six years ago, and that's just average. They've just gone up so much. It's crazy and it will continue to do that too, so that what else people can take into consideration when they're planning their portfolio. Kathy: Kim, it's been such a pleasure to have you here and you're just my favorite interview so far, so fun. It's so fun talking to you. I think people are going to really get a lot out of this. Kim: Love you and Rich so much. Thank you, and anybody thinking about it, just your first step is to sign up for Real Wealth Network. Start listening to the podcast and just do it. Just jump in. It's so doable. If I can do it, anyone can. Kathy: I love it. I love it. Take care and squeeze those little what, six one-year-olds that you've got. Kim: Can you believe it? All my daughters have babies in one year. [00:32:00] It's so great. Kathy: I'm so proud of my one grandbaby and I look at your picture, I'm like, "I wouldn't even remember each of their names." (laughter) All right. Take care. We'll talk to you soon. Kim: All right. Thanks, Kathy. Kathy: Thank you for joining me here on The Real Wealth Show. You can go to realwealthshow.com to get access to those in-depth webinars on how to really save taxes by owning real estate, becoming a real estate professional, which markets to buy in for more cashflow or potentially growth, which teams have the highest ratings from our over 56,000 members, property managers, and property teams who can find you really good properties which is hard to find in some of the fastest growing markets. You can get all that information at realwealthshow.com Rich Fettke: Views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities, or to make or consider any investment or course of action. For more information go to realwealthshow.com.

How do you find a trustworthy financial planner? And, if you're into real estate, how do you find one who understands real estate and can add value to your specific strategy? In this episode, our guest Kyle Mast, is just that. He's a certified financial planner and a real estate investor who understands that kind of investing strategy. Kyle is the owner of Clarity Financial which is a fee-only, fiduciary firm with a focus on helping pre-retirees, real estate investors, and people pursuing early financial independence, but he's not taking new clients at this time. He loves helping people get their financial lives in order, however, and does that by doing interviews, like this one. Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! TRANSCRIPT [music] Speaker: [00:00:00] You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors resource. [music] Kathy Fettke: How do you find a trustworthy financial planner? If you're really into real estate, how do you find a financial planner who understands your strategy and supports it and can help you with it? I'm Kathy Fettke and welcome to the Real Wealth Show. Our guest today is just that. Kyle Mast is a financial planner, and he's also a real estate investor. He's a CFP and the owner of Clarity Financial, but I just want to warn you, he is not taking new clients at this time, but he's happy to give us guidance here on the Real Wealth Show for free. Kyle, welcome to the Real Wealth Show. Kyle Mast: Thanks for having me, Kathy. Kathy: Do you agree that it's important for your financial planner to understand real estate if you are also investing in real estate? Kyle: Well, that's a very loaded question. Yes, very easy question. If you're not interested in real estate at all, then you probably don't need a planner that knows very much about it, but if that's a big piece of your portfolio, especially if it's the majority of your portfolio, you need to make sure your financial planner, depending on what you mean by financial planner, does understand real estate just as much as maybe stocks and bonds or something that's maybe more typically thought of in that area. Kathy: I am so glad you mentioned that because I thought a financial planner technically should be someone who looks at your entire financial plan that would include real estate, but generally, it doesn't at all. It's just mainly for stocks. Kyle: It depends on who. When you go to look for a financial advisor or a financial planner, there's a couple of things that you maybe want to look for when you're looking to work with someone. Some people are very focused on investment management, getting a portfolio of investments that include stocks and bonds, maybe some alternatives in there that could include real estate. Sadly, our industry, a lot of the training is really focused on stocks [00:02:00] and a portfolio and how to allocate it according to someone's age. Those things are all important, but it misses a broader picture of, if you own a primary residence, should you consider refinancing at some point? A lot of times the incentives, maybe, aren't aligned when you work with a financial advisor. If you want to pay off your house, that's less money for a financial advisor to manage and make fees on. That doesn't mean that a good financial advisor or planner can't overlook that conflict of interest and give you good advice one way or the other, depending on your situation. Those are things you have to be aware of. If they're getting paid on a certain product or investment, that's a conflict of interest that dictates how they may offer you advice. Kathy: Sure. Always follow the money, right? That's the problem is we don't know often how to follow the money. I was a mortgage broker for so long. Back when I started, you didn't really even have to disclose how much you were making. It was just backend commissions that would be made, sometimes 3% of a $1-million loan in California, $30,000 to push some paper, but the client really never even knew that we were making that much. Is it the same with financial planning? Is there secret fees behind the scenes? Kyle: Yes, there's different. Maybe I'll try to use an illustration to give people an idea. When you're looking for a financial planner, I'm what's called a fee-only fiduciary. I'm a certified financial planner, but I'm also fee-only. That means I don't earn commission for selling an investment product, I earn fees from the clients, either if that's for managing something for them, whether it's a portfolio of investments or a lot of the times, it's an hourly fee for just advice or an annual retainer fee is actually what I do with a lot of my clients. That type of model is maybe likened to if you were going to shop for a car and you went to Kathy's Fiduciary Car Advising, and you don't work for Toyota, you don't work for Honda, Ford, any of these [00:04:00] companies. Someone comes to you and pays you $300 and says, "I have a family of four, what's the best minivan I should buy?" That, you have no dog in the hunt. You're making your fee for giving the advice, and you could send them to the Toyota Sienna. I'm talking about minivans. We just had twins, so these minivans are on my mind, but you'll send them wherever is best for that person. That's a fee-only advisor or a fee-only financial planner. If you think about, say, a Toyota dealership if you go into there and you say, "What's the best car that I should buy for my family?" they're not going to send you to the Honda Odyssey. It makes sense. They work there, they know their cars really well. There's nothing wrong with that. It's just something that you need to keep in mind. In the financial world, there are advisors that may work for a larger company, I won't mention company names, but larger companies that have proprietary products or investments that a financial advisor may earn a little bit more or a commission or be incentivized in some other way, like with trips or things like that, to sell a product into a portfolio, and there's nothing wrong with that. I know a lot of really good advisors and good planners that are in that model of the industry, but that's a conflict of interest that you just need to be aware of when you're going to work with someone. If you're looking for someone and you want complete objectivity and you want as little conflict of interest as possible, you want to look for someone that's fee-only and that is going to charge you an hourly rate or even an annual retainer. A lot of times people don't want to pay for that. An hourly rate might be-- For a really good one, it's going to probably be closer to the $400 an hour range. That's probably the highest end. You might even get higher than that for one that does a retainer on someone who has a larger portfolio of real estate or investments. Depending on what you have going on, you could pay $10,000 a year and even more. Then there's others if your situation is not as complicated, it might be worth just paying an hour of time of a financial planner. If you pay [00:06:00] $400 and they give you advice on some tax planning situation and a portfolio allocation that saves you $20,000 every year for the next 30 years, it's not a bad investment. [crosstalk] That's the model. If people are looking for something completely objective and if you currently have a financial advisor, that's something to maybe do a little bit of research and see what their model is. A lot of people don't know how they pay their financial advisor. That's the first question to ask, how they get paid, and they should be able to answer it, no problem. They should get paid, and they should get paid well if they do a good job, but you as a customer or client deserve to know how that's happening. Kathy: Which are the highest-paid commission investments, in other words, the ones that a financial planner might benefit the most from putting you into? Kyle: That's a very good question. It changes over the years. Thankfully, there's more regulation than there used to be on some of this stuff, so that does [unintelligible 00:06:57] like you were talking about the mortgage industry, things have to be disclosed more. Some of the higher-commission products these days would be things like variable annuities, which is like an insurance investment product hybrid to really simplify it. That doesn't mean it's a bad product. It means that there's a certain incentive there, and there are situations where that makes sense to have a product like that. Life insurance, some insurance sales, that's part of the industry that there really isn't a non-commissioned product out there. It's pretty much anytime you buy life insurance, there's going to be some sort of commission. Some financial advisors and I have to be careful, I hesitate to call them advisors sometimes if you're just, I would say, an insurance advisor, if someone is just an insurance salesman, they know a lot about insurance. [crosstalk] They know a lot about insurance. I refer clients to an insurance advisor or salesman to advise them on what insurance they should get and then bring it back to me so that I can look over it and make sure there was no incentive. [00:08:00] Whole life insurance has a very high commission. It's a very high-commission product. There's a place for that. For most people, it does not fit. For higher-net-worth people, it can fit in certain areas. Kathy: How high-net-worth, I'm curious? Kyle: Oh, it depends. Kathy: It depends, yes. Kyle: I would say $5 million and above of net worth, you could probably make a pretty good case for it. Below that, you can make cases for it. I shouldn't even put a number out there, but that popped into my mind, but you could go-- Kathy: I'm just curious because we got calls all the time from people wanting us to promote it, and I didn't understand it enough, so I didn't want to do it. I just knew that there were huge commissions, and I didn't really understand the benefit, but I keep hearing how great it is, but I'm not sure if that's coming from the salespeople or from the client. Kyle: Well, to go in a little more detail, in the real estate arena, your listeners, there's a little bit more benefit to a whole life insurance product if it's structured correctly. The reason for that is, if it's someone with higher net worth or higher income and higher income bracket, it allows you to access funds tax-free by taking loans on an insurance product. It's too much detail to go into on this podcast, but there is more of a case to be made there, but you do have to understand it. It is not easy to understand. A lot of times, that that starts to get even higher-net-worth. You get to where you're really structuring a whole strategy around your-- There's an infinite banking concept out there that several people are proponents of. It's a very good thing for someone who has a very high net worth and they're building a team, they have a financial planner, a CPA, an insurance expert, an attorney. It's this family office type setup where you're really building out something that is a generational thing, and your taxes [00:10:00] are just eating you alive, then you add this product in. For the average higher-net worth person from the $1 to $5-million range, I would say it's the minority that you'd need a product like that because you can get the insurance. If you're looking for life insurance, term insurance, which means you pay for it every year for a certain number of years, either it's 20 or 30 years, you get a $1-million policy. For me, a $1-million policy, a guy in the 30s, it's $60 a month, and after 30 years it's done. I don't get any money back, but if I die, my family gets $1 million. You can invest that, put in real estate, whatever, just to take care of your family. It's not an investment product, it's not meant to be a cash management product. For the most part, that's going to be the best bang for the buck. Those extra dollars that you would have paid for a whole life product or strategy can be used to pay down debt or to pay the mortgage on a rental property, invest in some other way. Dave Ramsey often pushes the "Buy term, invest the difference." That, as opposed to whole life, is not quite that simple, but for most people, that's probably a good fit. Kathy: No, I just figured that it was circulating among regular folks and that probably the people benefiting the most were selling, but everybody's got to make a living, right? Kyle: Oh, yes, definitely. Kathy: I find it fascinating to meet someone like you because I was just talking to Rich thinking this is what we need, we need that person who can look at everything we're doing and let us know if we've got the right insurance, or maybe we're not diversified enough. We're definitely not diversified enough. We're barely in the stock market, we played a little bit when it tanked last year but not my expertise. We just didn't want to put too much into it, I have a little bit in gold. I don't know if that's a good thing, but to have a service like that, where somebody is just being paid by the hour, it [00:12:00] sounds amazing. I know that I want to preface this with letting our audience know that you are retired. You are not taking-- I think you're retired or you're not taking new clients. Let's just get that clear. You're not promoting yourself. How does someone find someone like you who is taking clients? Kyle: That's a good question. I'm not officially retired. I guess I could if I want. I enjoy my job a lot. I've really dialed it back. Like I said, we have twins that are here now, so family's really important to me. Financial independence is a big thing for me, too. To find somebody that is that hourly model, there's a couple of organizations out there. I'll throw those out there. That's actually probably a good place for listeners to head to. One is the XY Planning Network, it's called. Because I'm a member of the organization, it's a professional organization that we do continuing education through. It's only fee-only certified financial planners. There's no commission product or financial plan as a part of that organization, and they have a website. You can search for someone by geography, you can search by for someone by expertise. If you want someone who's real-estate-focused, it's a very good place to go for that. The other organization is NAPFA, N-A-P-F-A, the National Association of Personal Financial Advisors. That's also a fee-only certified financial planner, CFP-only organization. It's a similar place to go to find someone that works on that model. What you will find is you will find people like in any industry, people that have less experience, they might still be really good at their job. There's people who have less experience than me that are way smarter than me and do a way better job than I do, for sure. What you'll find is that people that have 5 to 10 years of experience, it's going to be more like me. At least in this industry, there's such a demand for the fee-only financial planner [00:14:00] that has the 10 years of experience already that a lot of us are very busy or we've really dialed it back to not be taking on clients or take on people that we just really like. It's less about growing the business anymore, as opposed to working with people that we can really provide value to. Those would be the good places to start. If you go to either one of those websites, they'll have a description of what that person looks like. I should say, your certified financial planner, not every financial advisor out there has that credential. There's CPAs, you have these other professional designations out there, and that certified financial planner-- Let's see. When I took it, it was seven separate exams that you have to pass and then a 10-hour, two-day exam that you have to pass. You have to have three years of experience to hold the credential that you have to do under another CFP. Those requirements might've changed just slightly, currently, but that's what you're looking at. Their work is in insurance, estate planning, investments. There's several other different courses that you have to go through, but that's the person that you're wanting to look for. You want someone that's looking at everything. Then, honestly, if you're talking to somebody like you started off right at the beginning, to find someone that if you're very real-estate-focused, you don't want someone that says, "Sell all your real estate and put it into Tesla." Kathy: [laughs] That's right, yes. Kyle: That just doesn't make sense. You also want a CFP. If you think of a CFP as the quarterback of a football team, there's a wide receiver that knows his job and is way better at it than the quarterback, but the quarterback knows about what he's supposed to be doing. He's doing something out of line. If I refer to an attorney for estate planning and I see something that's not quite right, I'm not an attorney and I can't give specific legal advice, but I can at least tell the client, "You need to get another opinion. "This is incorrect." That's how a financial planner works. It's that broad [00:16:00] stroke over the entire situation. If you're more real-estate-focused, where I was going with that is the tax implications. A lot of financial advisors don't even look at if you're starting to draw income in retirement, you need to look where you're going to draw it from. Do you draw from a capital gains with a lower tax bracket? Do you draw rental income? Do you pull? Do you get a home equity line of credit to do income for one year because your taxes are too high and then you pay it off next year? There's all these little pieces, and when do you take social security? They all balance each other out, whereas if you have someone who's just investments or someone that's just insurance, they can give really good advice in those areas, but they've got to meet together. If you're getting a 10% return in one investment but your taxes are hitting you at 45% because you took it out of the wrong account or in the wrong strategy, you're really negating a lot of the value that's provided there. Does that answer the question? Kathy: Yes, yes, it does. I'm wondering when we're going to get an AI that we can just put everything in and it spits out what we need to do, [laughs] then the government would get involved and not give you this test. [laughter] Kyle: That's right. Yes. The problem is people don't fit into a box good enough for AI. If we were all robots, then I think they could create an AI for it. [crosstalk] I have a client that he's losing his job, but they saved really well for retirement, and he's going to be retiring next month, but his situation is way different. He's able to do that because his living expenses were really low. I have another client that's a very similar situation and that it's going to be tough for them because their strategy could be the same if their lifestyle was different. You really have to have someone that really wants to look at your whole situation and make recommendations specific to you and your family, the goals that you have. Do you have kids, do you do not have kids? Are you going to get- Kathy: Do you have goals? Kyle: -inheritance at some point? Do you have goals? Kathy: Right. We've got to start there. Kyle: Yes. I shouldn't assume that. Yes. Kathy: A lot of people haven't sat down or you have to keep revisiting them [00:18:00] because life changes. That's something that you would want to do, ideally, with a coach or an advisor. I'm curious why a financial planner would choose one over the other. It seems like you would make more money, and maybe it's the same thing, but in a situation where it's assets under management or commissions or both versus just a flat fee. Kyle: I'll be very transparent in how I operate my business. I do a lot of assets under management, and I also do one-time fee-only hourly stuff and then retainer, where you charge a certain amount a year and the client has access to you. Initially, to get into the industry, it's a lot easier to do commissioned products. You can sell a product. It's like you said, everyone needs to make a living. I want to make sure that we're not-- Sometimes I tend to talk down on that type of the industry, and I really need to be careful not to because these are good people that are trying to make a living and really believe in the product that they're selling, they're just not looking at the whole picture sometimes. Usually, early on in a career, that type of commission product makes more sense because if you're doing assets under management, if you're selling a $100,000 product and you make a 5% commission on it, you make $5,000 just like that. If you're going to manage assets for clients, you're advising them on real estate and investments and it's $100,000 worth but you're going to charge 1%, which is maybe an industry standard, that's $1,000 a year for five years that you have to wait to get that $5,000 if you would've just sold them a product. That's the temptation, it's a delayed gratification type of business. The first two years that I started my firm, I bought a few little clients from an old firm and started my firm. I made $13,000 the first year, $19,000, the next year, super-small, but I was building the [00:20:00] model of retainer clients only, long-term. That's why an advisor might choose one or the other. Apart from the objectivity, I chose this model because I want to make sure that my conflicts of interest are as clean as possible for clients and that they know that when they're coming to me, too. Kathy: [crosstalk] Yes, I'm sure. It makes sense. It's the same for me at RealWealth. I could be selling $5-million homes in Malibu, but that's just not where my heart's at. I want to help the average person build a portfolio of $100,000 homes that pay us barely anything. Kyle: Yes. Thank you for doing that. Thank you for not [unintelligible 00:20:37] and doing the real wealth instead. I appreciate that. For everyone listening, I have a couple of homes that I'm going through in Florida through RealWealth. I was telling Kathy before we got on that I wish I would have found them earlier because I tried to do my own vetting ahead of time in the market and that it's working out, but it was a lot of work, and it has been nice to work with a team. Kathy: That means so much. I was so surprised when you said that in our pre-interview, I had no idea. I should've known, but thank you for saying that. Tell me, if you don't mind, what was difficult about trying to do it yourself because you live in Oregon, and you were trying to buy in Ohio. What did you learn in that process of doing it yourself? Kyle: It's just hard to know where to start. I just booked a ticket to Dayton, Ohio, and met with five agents and three property managers, and a couple of local lenders in the area. You come away thinking it's just a whirlwind because you haven't actually worked with these people. You've interviewed them. Do they interview really well? They don't do a really good job. I've gone through one property management company there, I'm on the second one, and they're doing okay, it's not amazing. It was very tough. I tried to diversify out of Oregon, so that was the reason that I went there, and I'm looking at Florida and some other markets, too. [00:22:00] I'd rather spend my time analyzing deals or getting the financial stuff that I'm really good at, rather than the boots on the ground, vetting property managers and builders, which I love that you guys do that. It's really nice. Kathy: You don't have to do that. I Love what you said in, again, the pre-interview, just like, "What an interesting model to have crowd-based real estate?" Was that what you said? Kyle: Yes. Kathy: That, I had never really thought about it that way, but that's what it is because these teams that we refer people to, if we get poor reviews from our members, well, they're not going to be on our list anymore. It forces them to be great and to take care of our members. I really appreciate that perspective. They work so hard at doing that. I sometimes very rarely because I need to be in a really good mood and feel really strong, but sometimes I'll do a Google search on myself. Recently, I saw something on Reddit that was about us, and someone was like, "Oh, I met them, I'm not impressed." I'm like, "Oh my gosh, I wonder why, what did I do?" They also said, "What do you need them for, anyway? Just go do it yourself." I still wanted to respond and say, "Yes, do it yourself and also know that there's this group of people who have a great track record, that's the benefit." Anyway, it's hard to understand that until you've done it. There's a lot of do-it-yourselfers. Do-it-yourselfers are just that. They're good at that. There's people like you and me that would rather not, rather have to pay someone else to do it. Just like I'd rather pay you to look at my portfolio and help me, it's the same kind of idea. Kyle: Yes, that's a really good point. That's not just in real estate, that's a decision we always have to make, whether we do something ourself or whether it makes sense for us to hire it out, pay someone else to do it. [00:24:00] If it's the lifestyle that you want, that you love going into a home and Chip and Joanna Gaines'ing it to death, really renovating the place, burst strategy, bringing in tenants, if that's what you enjoy doing, don't use ReealWealth. Why would you do that? Because that's what you enjoy. I enjoy financial planning, I enjoy time with my family, I enjoy investing a lot, but that's at a high level. I don't enjoy getting down into the weeds, at least not anymore. When I first started, I was helping to renovate our duplexes and things like that. You move past that, and I didn't enjoy it. That was to learn what I needed to know. Some people enjoy it. That's in anything. If you're going to fix your own car if you really like fixing your own car, go for it. I don't like that, so I would have somebody else do it. I'm putting solar panels at our house. I'm really enjoying it. Kathy: By yourself? Wow. Kyle: I'm not going to hire someone else to do it. I'm doing it myself, yes. Kathy: Oh my gosh. Kyle: It's one of the best, I'm having a blast doing it, which I wouldn't have told you that I'd be up for doing something like that, but that's what people have to decide. That reviewer on Reddit, that's great for them. Don't hire them if you can save money or you think you can do a better job, but if you have hundreds or thousands of investors that are vetting these providers, it might be hard to do a better job than that. Kathy: Yes, agreed. Oh, so, so good. I know we're just about out of time. I'm just going to look at my list of questions to see what I might have missed. Let's talk about this. This is a question that comes up a lot. Is there an age limit to investing in real estate because I know that that's been a thing for financial planners saying, "Oh, by the time you're 60, you really need to be in conservative investments," maybe even younger? I'm not sure. We have a lot of people that come to us later in life because they are maybe liquidating a property that they had in California that can sell for a million dollars and they can get into five brand new rentals [00:26:00] in Florida or something like that. Maybe they're 65. We've had people in their 70s and 80s even doing that and increasing their cash flow. What are your thoughts on that? Kyle: I would say, definitely, no age limit. Real estate, just like a lot of other investments, you can dial up the risk or dial down the risk just as pretty easily within that asset class. It's real estate and this depends on how you look at risk, too. Maybe you put 75% down on a property and you only take a 25% loan because you just want to have this little tiny mortgage payment that is not a big deal. You're 70 and if something happens where there's a tenant out for a few months and you have some cash reserves that you can pay that, it's not a big deal, or you can just pay it with your social security check to cover that mortgage, or you pay all cash for the property, to reduce the risk. Now, I will say you have to be careful when thinking about risk. What I've seen, especially in this market, is if you pay all cash for a property, I would say there's actually some more risk there than you might realize. I think you've talked about this on this show with other guests before, too, but the fact that you can get a 30-year mortgage for 2.9% right now or as an investor, 3.5%, maybe on a single-family home, and you can take that $150,000 that you would have put to pay cash for it and keep that in reserves or maybe get another one like you said, if you sell a property in California and you get a few nice loans on a few other properties, that cash flow, you're paying down the mortgage, getting depreciation, I would argue that having all of your cash locked up in that property, there is a different kind of risk to that that you do need to be careful of. You might not want to do that with all your properties. Even if you're 70, even if you're 80, it's okay to have a mortgage. If you have a big chunk in the bank of reserves that you can pay that mortgage off for 20 more years and you're 80, I think you're going to be okay. [00:28:00] [unintelligible 00:28:00] Yes, it is. Kathy: It's all about reserves, right? It's good property management and reserves. Even in our own single-family rental fund that we have, I was really nervous about getting leverage on that because you got to make those payments. When you're talking about a $5-million loan, it's different than a $100,000 one. You got to be able to make those payments. We just did what you said. We kept plenty in reserves, but we also had some of the portfolio in cash so that if anything happened, we could just sell that one property and we got the cash or invest it in short-term lending or something like that. I do agree that regardless of age, you could be 30 and it's a huge risk for you if you don't have the reserves but you bought a property and it's vacant for a couple of months and then there's repairs that are needed, which there always are, don't think that there won't be, and you don't have that money. It doesn't matter how old you are. It's a horrible situation. Kyle: Yes. Definitely, the reserves will make or break a real estate portfolio. That's a big deal. We're at a weird time now where inflation is outpacing these loans that you can get on properties. That's not always a typical scenario where you can get a loan with a lower interest rate than what the actual inflation numbers are coming out with. If you want to look at what inflation might really be, you're probably doing even better, but if you can get a loan for 3% and inflation's at 5% right now, the bank is paying you to have that loan. It becomes an asset to you in the long run. Kathy: I'm glad you, again, brought that up because so many financial planners and just conservative investors believe you should pay off your primary residence when, in fact, that's where you can get your cheapest money. If you refi your primary and get that 2% loan or whatever and re-invest that, of course, you need to know how to reinvest that properly, that could be a really good use of money. Do you see any issues with cash-out refinancing your primary? Kyle: It really depends [00:30:00] on someone's situation. I don't. Personally or for a client that's very responsible with money, has good savings, has good reserves, there, I don't think there's anything wrong with that. It is the cheapest money that you can get, it's incredibly cheap. We're the only country in the world that has these 30-year loans that you can get at these low interest rates. It might not always be the case. The other thing that I should say is that it's not always that way. You look at different decades, it doesn't always make sense. What I'm advising clients to do now, 10 years from now, it might change, depending on if interest rates are a lot higher, if they need to refinance for some other reason, or say they are buying a house and interest rates start at 8%. Now, it might make sense to pay that loan down faster because you're getting a guaranteed 8% return on paying that debt off and say inflation is about the same. It's not a blanket statement for all times, but where would we sit now, with these just historically low-rate loans that are available with inflation outpacing it, is very unique. If you have the reserves, it's actually a very good hedge against inflation, which reduces your risk because if you have too much cash not working enough for you, inflation's going to eat away at the value of it. If you could put a loan on a property that cash flows very well, this is not speculation, these are investments that cashflow, then it helps hedge against inflation, which is a very big risk to retirees especially if you have fixed income, [crosstalk] yes, you can really be hurt if the cost of food doubles in the next five years and your retirement income does not. Kathy: The cost of everything doubles or triples, it's accelerating. Finally, is there a point where one might be not diversified enough and just own too much real estate? Kyle: Yes. Real estate, it depends on the person, whether you can say you have too much real estate or not enough real estate. I would say if someone's very heavy-real-estate-focused, you understand the industry, that's what you want to be invested in, I would say it's more about making sure you're diversified within markets because if you are too heavy in one market, that can really hurt you. I would also say that there's benefit to the liquidity of other types of investments. If you're investing in a 401(k) or Roth IRA, a traditional IRA, even precious metals like gold and silver, there's different benefits to those. It is good to have some of those other vehicles, especially like Roth accounts that you pay the tax now and you never pay tax again. I think that's an account that's going to go away, eventually. If you can take advantage of those accounts, max those out, I would definitely recommend doing that. If you're really getting into real estate investing and buying more properties, it's not too much trouble to max out your Roth IRAs, too. I've seen where clients that future investment liquidity from those accounts affords them the ability to buy a property and pull it out tax-free, whereas if you pull it out of a 401(k) or a pre-tax account or sell an investment, you might have to pay tax on it without 1031 exchange, but a Roth IRA account if you've got $100,000 thousand in there, you can pull it out, and it doesn't mess with your taxes at all. Kathy: Fascinating. I'm sure if we could take live questions, we would get a lot of them, but we've already taken so much of your time. Thank you, Kyle, so much for being here on the Real Wealth Show. It's been really enlightening. Kyle: It's an honor, Kathy. Thanks for having me, I appreciate it. Kathy: Thank you for joining me here on the Real Wealth Show. You can go to realwealthshow.com to get access to webinars. There's over 500 that go much, much deeper into the mechanics of real estate investing, including interviews with CPAs, who can really help you structure things and save you a ton of money. We have property managers, who will teach you what to look for in property management. They teach those courses and those webinars. We have mortgage brokers, who will show you what to really look for and alone, especially when it comes to investment property. Then we have teams across the country that are over 57,000 members that RealWealth have been working with and can give us great feedback on how they're doing, and they're on our list because they're doing great, and they can help you acquire investment property with property management in place in really hot growing markets like Florida and Texas and North Carolina, and then, of course, great cashflow markets like Ohio. Again, you can go to realwealthshow.com. It's free to join, and you'll get access to all of those in-depth webinars. Thanks so much for joining me here on the Real Wealth Show, and we'll see you next time. Bye-bye. Speaker: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:35:11] [END OF AUDIO]

Getting your financial world in shape isn’t only about numbers. It’s also about discovering your lifelong goals, the milestones you need to get there, and what you are doing right now to support that journey. Our guest today says that many people stumble around when it comes to their financial future because they haven’t really figured out what they are trying to accomplish, over the long term. As an example, a college education may groom a student to be a good employee, and not someone who might go beyond employee status to start their own business. Jonathan Satovsky is the CEO and Chief Behavioral Coach of Satovsky Asset Management, or SAM. He takes a mindful approach to financial planning by helping clients figure out what they really want and the investment strategies they'll need to accomplish their goals. In this podcast, he shares some of his thoughts on how to get in touch with your financial muse in order to map out a plan for financial freedom and flexibility. If you’d like to become job optional by investing in rental property, join RealWealth for free by visiting RealWealthShow.com. As as a member, you'll have access to the Investor Portal where you can speak with one of our experienced investment counselors, view sample property pro formas, and connect with our network of resources, including property teams, CPAs, attorneys, lenders, 1031 exchange facilitators, and more. Subscribe to the show on Apple Podcasts and get the latest episodes uploaded to your device as soon as they are released. Like what you hear? Throw some stars our way and leave us a review! We appreciate you! Go to www.RealWealthShow.com for the transcript or to listen to past episodes. Transcript: [00:00:00] [music] Announcer: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investor's resource. Kathy Fettke: Getting your financial world in shape isn't only about numbers. It's also about discovering your lifelong goals, the milestones you need to get there, and what you're doing right now to support that journey. I'm Kathy Fettke and welcome to the Real Wealth Show. Our guest today says that many people stumble around when it comes to their financial future because they haven't really figured out what they're trying to accomplish over the long term. As an example, a college education may groom a student to be a good employee but not someone who might go beyond that employee status to start their own business. Jonathan Satovsky is the CEO and Chief Behavioral Coach at Satovsky Asset Management or SAM. He takes a mindful approach to financial planning by helping clients figure out what they really want and the investment strategies they'll need to accomplish their goal. In this podcast, he shares some of his thoughts on how to get in touch with your financial muse in order to map out a plan for financial freedom and flexibility. Jonathan, welcome to the Real Wealth Show. You specialize in some of the topics that we don't mention very much and that is financial intelligence and really emotional intelligence. Let's talk a little bit more about that. What does it mean to have emotional intelligence and specifically financial intelligence? Jonathan Satovsky: I think I stumbled into the field of financial planning and wealth management as a by-product to the fact that they don't teach it formally in high school and college. Most people learn by rumbling, bumbling, and stumbling. At a young age, most people aren't thinking about the lifespan of their financial journey. It takes a tremendous amount of emotional intelligence to not only know what you want, but to start mapping out a game plan of how to execute and make decisions that are going to give you [00:02:00] the financial freedom and flexibility throughout the course of your life. Whether you're investing in real estate or the stock market or whatever it is that your plans are, to give yourself that autonomy and freedom, everyone ultimately is going to reach at some stage of their life intentionally or unintentionally. Kathy: That's interesting. My daughter just graduated from San Diego State and she said, "You know, I feel like I've been really well trained to work for someone else." Even though she had a degree in business, but I think they would still think it should be in business administration or marketing for someone else. Very interesting. We're really not taught to think about the future, where we want to be, and get clear on what's most important, and then what are the financial steps to get there? Jonathan: Well, it's no different than your daughter that's graduating. People are asked at 17 years of age, "What do you want to do the rest of your life? Pick a major, pick a career, pick a path." People can idealize what it is to pick any profession. Law, medicine, being in real estate, being in finance. Kathy: I believe you said you're in Italy right now. Is that right? Jonathan: I am in Milan. Yes. Kathy: Okay. Somehow you found a parking spot. That's wonderful. Thanks for taking the time for us here. Now, you specialize in behavioral coaching and specifically behavioral finance. What does that mean? Jonathan: Trying to help people align their idea of how they want to live and their goals and dreams with what they're actually doing, like a financial doctor, where we try to help people, hold them accountable to what it is they say is most important, and aligning their actions to what it is that are their priorities to keep them on track. Behavioral finances, as my friend says, "You can be Einstein for others but Mr. Magoo for yourself and everyone needs a coach to be able to help keep them in line when people fall off track. Kathy: Okay. Would you say that people even have a track [00:04:00] when it comes to their finances? Like I had said earlier, my daughter just graduated from San Diego State. She said, "Wow mom, now I have a degree where they really taught me to be a very good employee," and to work for somebody else even though she has a business degree. Are we taught happiness and how to create a life of happiness and a career that surrounds that or not so much? Jonathan: Not so much. There's a famous book by Thomas Campbell, Hero of a Thousand Faces, if you've ever heard of it. The concept of every hero's journey is the pursuit of self-discovery and pursuit of joy or bliss. It's easy to say to a 21-year old graduate in college, "Go pursue your bliss." Then they're just like, "Wait a second. I need a job to be able to pay the bills." They're not thinking on a deeper level of understanding to know what brings them joy. It is not something taught, it's something that is learned through experimentation and degree of self-awareness of trying to balance competing priorities in life. Kathy: Sure. I mean, I never-- Jonathan: I think that having someone to pull it out of you, having a financial coach or therapist or just observing life and experiences to feel through what works, what doesn't work, what feels right, what doesn't feel right, ideally, people would start foundationally with some financial literacy in good habits, to be able to give themselves the flexibility to take risks, to experiment with things that are going to light them up and unlock their unique abilities and talents to shine in the world, whatever that means. Kathy: When you're working with a client, what are the powerful questions that you ask them to dive into that part of themselves that, maybe, they haven't paid any attention to? Jonathan: First, where can we help? Then you just probe with open-ended questions. People become [unintelligible 00:05:48], "Well, I'm thinking about doing this, this and this and this. How can you help?" You just take it one step at a time. There isn't a silver bullet. The answer always is, it depends. One question leads to the next [00:06:00] to really dig deeper and I think a lot of it has to do with what they witnessed from their parents' or grandparents' experience, friends, community. There's a book called The Excellent Sheep that was written by a Yale student who became a Yale professor that said a third of the kids go to school with a creative ambition, and by the time they're juniors and seniors, because of peer pressure from their teachers, parents, friends, they end up going into what is the safe route of management consulting or doctor, lawyer and they give up on their passions or creative pursuits because they figure, "I'll make money and then I'll pursue the creative pursuits." We try to find a way to challenge people in a carefrontational way, in a provocative way to say, "What is it deep down that really is going to bring you joy? Let's pursue it. Let's not waste any time in your life." Kathy: Let's say it's music. Let's take that. I'm here in the Los Angeles area and there's lots of people pursuing their joy of music and not really making money from it. We just hired some young 24-year-old musicians for a private party and they were so talented. There's no reason why they weren't mega superstars, but they're not. What do you say for people who really are pursuing what they love but not getting anywhere financially? Jonathan: How do you apply that skillset to option B, C, D? Everything is about optionality. People want to go all in and say, "Okay, I'm going to be the next queen, or [unintelligible 00:07:32] or whatever. I'm going to be a megastar robust." From what I understand, the little background I understand in doing a little digging, I think Will Ferrell was living in his mom's home working at Target for eight years or something like that while he was pursuing his acting career. You got to make some sacrifices and challenge yourself to bring that creative spirit into some practical day job that [00:08:00] can bridge the gap between the dream and some other alternative reality so that you have some in-between that you aren't boom-bust. Some people like to live with boom-bust but they have some in-between that is sustainable and practical. Kathy: How do you know if somebody is financially healthy? Jonathan: Your daughter just graduated from school. Most people are used to the vernacular of getting a report card. People go for an annual checkup with a doctor and they get blood work and they see how their personal health is. We apply the same concept in finance is where if you take a look at someone's balance sheet and someone's cash flow, you can ascertain the equivalent of a report card for someone's financial health and wellness. That's the gauge of someone's financial health and progress that takes time. It's a building block. You start at one place. Rome wasn't built in a day. It takes time but it's a starting point to be able to show the progress. It's not uncommon. It's hard to imagine but it's not uncommon to see tenfold growth of someone's balance sheet in a 10-year period of time if they get into good habits, particularly starting through from the beginning. You can see exponential change in someone's financial health and wellness, if they have that mindset in place. Kathy: What are those basic habits? Jonathan: Well, give you a simple idea of pay yourself first. I met a woman who was 50 years old that had accumulated millions of dollars with a simple concept of paying yourself first. She had a paper route at 15 and she was taught to save a dime of every dollar that she made and by saving a dime of every dollar and investing at a very young age and thinking about a lifetime of investing, she didn't sweat the short-term, she didn't get caught up in the minutia day-to-day, week-to-week, quarter-to-quarter. She was thinking about a lifespan of investing habits. By carving out a dime of every dollar for her future self, you accidentally create [00:10:00] financial independence. Kathy: That's great. If you do more it goes even faster. If you did 20% you just doubled it. Jonathan: I guess there's other vices that people can get addicted to. Drugs, alcohol, sex whatever it is. I think the addiction of seeing your money accumulate is pretty good. It's pretty fun. Kathy: It's a good one. Some women have addictions to buying fancy Italian bags like where you are now, but I would prefer to buy a little rundown house somewhere or it fixed up one. Jonathan: Exactly. Kathy: Very good. Number one, basic step is to save that 10%. Again when we first started, we were doing as much as 30%. It was like 10% for investment, 10% for savings, and 10% for emergencies. If we didn't have an emergency that got to go into the long term, so you do have to have great discipline and just stay within that budget, but still, find great ways to live even within that budget. We did a lot of vacations. They were camping at free campsites and we had a blast. I would beg to say that our kids probably liked those little lakefront camping trips more than well, I don't know about more than that oceanfront Hawaii place, but when they were young they loved it and it was free. Jonathan: Those trade-offs though at a young age and even at different stages of life, it's a sacrifice of prioritizing your values in a way that ultimately has given you the freedom to be at the Hawaii beachfront place that you wouldn't have had if you weren't establishing those habits young and doing it without any guilt. You're able to do it with a lot of pleasure now. Kathy: Yes, especially if that income is being generated from assets that you own and that you're going to spend that money this month but there's going to be more coming next month. Yes it's a completely different mindset [00:12:00] I am going to look at this list to make sure I did not miss anything. First of all, what are you doing in Italy? Are you on vacation or do you live there? Jonathan: In the realm of COVID and Zoom, I have managed to experiment for now what's coming about a month of designing a life that I can-- initially what was intended to be a vacation. I've visited some clients here in Italy and ended up meeting prospective clients, being referred several people still staying on the New York timezone of actually working 3:00 to midnight and vacationing from 6:00 AM to 3:00 AM and then 12:00 PM after. The only thing that's gotten changed in this last month is sleep, but other than that it's been fantastic. Kathy: Sleep when you die. That's what they say. All right. It has been truly a pleasure to have you here. I would consider that living real wealth. That's what we teach here, is find out what brings you bliss and work towards that, and find out how much that will cost. It may not cost as much as you think, and then create the passive income that will support that. What are your investments of choice? Where do you put your money? Jonathan: I know you teach a lot about real estate investing and direct real estate investing. Philosophically the ideas that you share the principles are universal. In order for me to travel, in order for me to unplug and turn off my phone for 24 hours or even a week theoretically, the way that we approach it is by investing in the cheapest most profitable businesses in the world, predominantly on the equity market. In the real estate market, the same principles apply. We can invest in the most profitable real estate in the world. It's not for me to judge in the last year or two for example it happened to be warehouses and cell towers. Other times it might be shopping centers [00:14:00] or multifamily houses. What we do is use technology and computers to be able to curate that portfolio in a tax-efficient way so that people can relax and enjoy their lives without stress and benefit by the labor and efforts by others. Kathy: Indeed. Very good. Okay, Jonathan. Well, I'm sure you've got plenty to do and to sight-see while you're in Europe. I do thank you so much for being here and sharing your wisdom with us here on the Real Wealth Show. Jonathan: Thank you for having me. Kathy: Thank you for joining me here on the Real Wealth Show. Join Real Wealth Network today to find out how to build wealth with new and renovated single-family rentals. Membership is free and we'll give you access to our investor portal where you can view sample property proformas, and then connect with our network of resources nationwide, including experienced investment counselors, property teams, lenders 1031 exchange facilitators, attorneys, CPAs, and more. These professionals come highly recommended by our over 56,000 members. To join, go to realwealthshow.com. Announcer: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:15:26] [END OF AUDIO]

Will home prices continue to rise at this furious pace, or will they plummet back to earth like they did during the housing meltdown? Or maybe something in the middle? In this episode, we’ll hear from an expert on the housing market, the impact of the pandemic on buyer demand, home prices and migration patterns, and what the data shows us about the future. Dr. Frank Nothaft is the chief economist for CoreLogic and leads an economics team that’s responsible for analysis, commentary and forecasting for the global real estate, insurance, and mortgage markets. The Southern California-based company tracks, gathers, and analyzes massive amounts of property, financial, and consumer data and provides reports for the real estate and mortgage industry along with customized business intelligence reports for clients. Join RealWealth today at realwealthshow.com to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to subscribe to our podcast and leave a review if you like what you hear! Thank you! Transcript: [00:00:00] [music] Speaker 1: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors' resource. [music] Kathy: Will home prices continue to rise at this furious pace, or do we have a housing crash in our future or just a slowdown in price growth? Our guest today has got a lot of information on that so I'm excited to share it with you. I'm Kathy Fettke and welcome to the Real Wealth Show. Frank Nothaft holds the position of executive, chief economist for CoreLogic. He leads the office of the chief economist and is responsible for analysis, commentary, and forecasting trends in global real estate insurance and mortgage markets. He's here with us today on the Real Wealth Show. Frank, welcome to the Real Wealth Show. I've been really looking forward to this interview. I can't believe that I almost had to do it out of a salon when we had a rolling blackout, [laughs] but here we are. Thanks for your patience. Frank: Oh, absolutely. Thanks for having me today, Kathy. Kathy: So honored really, truly so honored to have you here. A lot of people are extremely confused about what's going on and even more confused about what they should do. Should they buy? Should they sell? Should they buy investment property, apartments, single-family? Our listeners are mainly investors in one to four-unit buildings nationwide. Are we looking at a continuation of what we've been seeing with home prices going up with no end in sight? What's happening? Frank: Kathy, this summer has been hot. It's not just the temperatures, it's the housing market as well. As you know, when I look around the country, there are a number of markets where, of course, they have triple-digit temperatures, but they got double-digit home price growth and double-digit rent growth. The market is just exceptional right now. Of course, partly that's fueled by the very low [00:02:00] record low level of mortgage rates that's really driving demand. It's also fueled by a shortage of inventory for sale on the marketplace. Between both those forces, one driving up demand one curtailing supply, we've got just a crazy amount of home price growth. Now, it's not just home price growth. As I mentioned, we see some real pickup in rents, rents on single-family homes. I think that's an artifact of this change in need for space as a result of the pandemic because what we've seen is that so many families, they're looking for more space inside their home, and also more space outside their home. The corollary of this pandemic is that it's severed the need of many workers to be co-located or located near where their employer is, they can work remotely. That's enabled many of them to pick up and maybe move a little further out, or move a lot further out, and be able to afford more space, more house, more shelter to either buy or to rent. Kathy: They don't have to try to find something in a major city or just on the outskirts of a major city where everybody else wants to live and it's been difficult to get in and very expensive, they can go anywhere. That's amazing. We've understood this concept at Real Wealth for 10 years, we've been a remote company, and we wanted our employees to be happy and live anywhere they want and be able to own property. We understand the power of that. What I found is that I was more effective, because as a CEO, how many times do people come into your office and want something? If I wanted to communicate even if the person was in the office next door, I'd send an email or a text. I wasn't necessarily going in there. We [00:04:00] discovered that without the interruptions and with more focus, we were far more productive working remotely. Do you think more companies have learned that and will continue to stay remote? Frank: I think some definitely have and that's really the million-dollar question, how many of the workers who had previously been working in an office environment, working with their employer, how many now will be working remotely, either remotely full time, or some type of hybrid model where maybe they're working remotely, whatever, two days, three days, maybe four days a week, or something like that? I'll tell you a really interesting study that the McKinsey Global Institute put out earlier this year. They surveyed a whole bunch of occupations in different industries, actually in different countries too. What they concluded was that here in the US, their estimate was that as many as 20 to 25% of US workers who previously had worked in an office environment, could longer-term work remotely, three to five days a week. Wow, that's going to be a big sea change if that does come into play. Again, that's the big question; how many of those jobs that have moved remotely over the last year, how many will remain remotely? How many might switch to a hybrid model? Of course, how many will be back in the office five days a week? That's the big question. I do think we're going to see that there'll be some jobs that do remain remote permanent and/or follow a hybrid model, allowing workers to work remotely, maybe three days a week, maybe more. Kathy: What I've been telling people and again, it's such an honor to have you on the show, because, my dawg, data is so powerful. [00:06:00] I imagine you were already seeing these trends and these demographic shifts of people in high-priced markets moving to more affordable markets where they could have bigger homes and a better lifestyle, that was already happening. Would you say that the pandemic has sped that up or is it just on track with what's already been going on? Frank: Oh, that's such a great question, Kathy. Absolutely, it's accelerated these trends. We have seen these shifts more gradual prior to the pandemic but the pandemic really changes the rules of the game. I'll give you a really good example. For example, what we saw is that in a lot of the really big cities, which tend to be densely populated, high-cost markets, we've seen some movement out of them over the years for people who are looking to buy just for affordability. That really accelerated during the course of the pandemic, accelerated in places like Manhattan, but also in the Los Angeles Metro area. Downtown Los Angeles, you do have some high rises, you got greater population density, consumers revealed a preference to move out of buildings and properties like that, and move further out. With the ability to work remotely, someone who had been working for an office in downtown LA, they could pick up a move to Riverside, San Bernardino, and maybe further out. There, the cost of shelter is so much lower than it is in downtown LA. That's really provided that opportunity for many families that just pick up and move further out, obtain more space, more shelter, but also shelter that's at a lower cost. Now, they didn't just stop at Riverside and San Bernardino. If you believe you can work remotely [00:08:00] longer-term permanently, maybe pick up and move to Las Vegas, or move to Phoenix or Tucson or maybe up to Boise. Boise has been booming over the last year. We've seen prices up better than 20% in the Boise market over the last year. Kathy: Then you get places like Cincinnati, Ohio, where prices have gone up even more than that. Why? Why Cincinnati? I understand Boise, there's fishing, there's skiing, but what's in Cincinnati? Why are prices going up so much in those types of tertiary markets? Frank: Sometimes it's lifestyle. The prices aren't going quite as robustly in downtown Cincinnati but when you look at the outskirts of the city, in the metropolitan area, that's very much more suburban and you're close to a lot of amenities. Amenities, if you like the cultural events in downtown Cincinnati, but if you like the outdoors, you got a lot of amenities, both in Ohio and Kentucky as well. I think that's been very attractive for many families who are looking for just that more space and the opportunity to also be out near the outdoors. Kathy: And affordability. We've taken investors from California on buses and driven them through Ohio and Georgia and Tennessee and these areas where home prices are so, so low. Being in California, some of the cars I see on the road are [laughs] more expensive than these houses-- not anymore but it was. We saw a lot of California members go on these tours and buy investment property but they also moved because when you live somewhere, you don't have to be there all the time. We have friends who [00:10:00] actually work in San Francisco, big tech guy, but he wanted to live in San Diego. San Diego, believe it or not, was much cheaper than San Francisco. He moved his family to San Diego. He'd fly every morning, a Monday morning spend a few days in San Francisco. He'd get Friday off to work remotely. He begun Monday through Thursday, go back to San Diego to live. I think we might see more of that, of people living where they want, and then just going into where if they need to go in the office going in a couple of days a week. Frank: Absolutely. I agree with that, Kathy. We've really seen a shift here during the course of the pandemic and I think some of that's going to be permanent too. I'm really glad you mentioned affordability. Certainly, Marcus likes Cincinnati. That's one of the big attractions. That's an attraction in Riverside, San Bernardino, and some of the mountain communities and the Rocky Mountains, but also the center part of the United States. That's a big attraction of a lot of those cities, especially some of the older cities. They look a lot more affordable than a lot of the cities along the two coasts. Kathy: Now I'm hearing some people say that the cities are going to have a comeback because we know we obviously saw people leaving and going to the suburbs. There are investors who are still buying in the big cities and really believe that once things open up more people will come back. Do you agree with that? Frank: What's so interesting. It's a lot of the young people, the ones who are just entering the labor market, they're the ones who still want that excitement, that energy of being in the downtown city area, partly for cultural events, partly for socializing and things like that. The big change during the pandemic has been that for young people just coming out of school and starting their careers, they didn't need to go into the city. In fact, in a lot of places, they couldn't go into the city [laughs] because of the pandemic. [00:12:00] Many of them ended up staying at home and living with their parents rather than renting a house or an apartment with roommates or colleagues from college or from work or whatever. That was one of the reasons why we saw some weakness in rent and prices and some of these high costs downtown urban markets during the last year because the young people didn't come that normally they come when they graduate school and they start their jobs, they come into the center city, they want that activity, that social scene and all that. Well, they didn't, or they couldn't because of the pandemic. Now as the pandemic wanes, hopefully, it wanes, [laughs] continues to wane. As that happens, I think we'll see more of the young workers who are coming into the workplace, which that'd be the younger millennials and now the Gen Z as they're coming out of college, I think we'll see them return to the downtown, to the center city, to where the action is. We will see that, maybe not till next year, we'll see more of a resurgence back into the city, but I think that's where-- that'll be the leading edge that'll drive a comeback into the downtown area. Kathy: That makes sense. I do have some concerns about these cities that are starting to see these massive changes in home prices due to people coming in from other areas where suddenly everything looks cheap. For the locals now, everything looks expensive right there. The locals aren't going to be able to afford what's happening in their cities. What are your thoughts on that? Are they going to have to move out to another area that's cheaper? How's that going to work or they're just [00:14:00] going to be renters? Frank: Oh, I tell you that is a real challenge in a number of markets especially in some of these markets where they have a lot of additional outdoor amenities and are maybe attracting a lot of tech workers or other workers who really have that ability to work remotely longer term. When I look at some markets like Denver, like Salt Lake City, Boise, Dallas Austin, Texas, that's exactly what we've seen. We've seen a migration, especially some tech workers into these markets and they come with higher salaries, higher income, they're able to afford to buy a bigger home. They're able to outbid the locals who live in those communities, but don't have a tech jobs or not earning the same income, the same salaries as some of these workers who are moving into the metropolitan area are earning. As a consequence, that's pricing out some of the locals who have grown up in that marketplace and that they're finding it very challenging on the affordability dimension. It means that they may have to move further out or maybe they have to relocate to an area that's got a lower cost of living. Kathy: Well, Californians have been doing that to Oregon and to all the nearby states for a long time. I don't think the locals appreciate it unless they own real estate before [laughs] the Californians came, then they were happy. If they were trying to get into the market, it's been an issue for a long time, is that that big-city money spreads out? I am curious about apartments. You said that single-family home rents have gone up dramatically. What about apartments? Frank: Apartment are beginning to come back. It's so [00:16:00] interesting with consumers revealing their preferences for space and ultimately for structured time. What we saw in 2020, in the early parts of the pandemic, is that many tenants, but also people who were buying homes, they had a distinct preference for single-family detached housing because the more living area inside the home, and you got some green space around the home. If they couldn't afford a single-family detached, the next preference was single-family attached. The townhomes, condos, row houses. Least favorite was high-rise apartment buildings or rental, or for sale condominiums as well. That was the structure type that was least in favor. An in-between single-family attached and the high rise apartment buildings was the low rise garden-style apartments in suburban neighborhoods. That was in favor as well, a bit more favor than high-rise apartment buildings and less favor than single-family detached. When we look across that spectrum of structured type single-family detached, big demand, double-digit home price growth over the last year. In fact, in our latest CoreLogic home price index for single-family detached through the month of May, we recorded 17% appreciation in one year in our national index for single-family detached. Single-family attached, doing pretty well, we measured about 9% appreciation, but you can see that difference between 9% and 17%, a real revealing strong preference for detached housing. Some of the weakest valuation performance, if we were looking at first quarter of 2020 pre-pandemic to first quarter of [00:18:00] 2021 was for a high-rise multi-family rental buildings in downtown markets. Their prices were kind of flat to down a bit. Now, in the latest data through the second quarter, we're beginning to see some improvement. The apartment market has really picked up even for the multifamily properties in downtown areas. Comparing Q2 to Q2, and again, Q2 2020 was a lousy quarter [laughs] for the housing market. If we compare Q2 2020, first quarter of the pandemic to second quarter of 2021, we have seen a pickup in demand and activity even in high-rise buildings. Again, a real shift in consumer preferences for single-family detached, next for single-family attached, next for garden-style apartments and suburban communities, and then least for high-rise apartment buildings in the urban core. Kathy: Which must be why so many institutional funds are really looking at the build-to-rent scenario that build-to-rent communities where people can live in a single-family home, community horizontal apartment, basically. Do you think there could be overbuilding in that sector? Frank: It's a little too early to tell. I don't think so. I think there's going to be a good degree of appetite for a single-family rental homes going forward. Partly because of the work remotely. Partly, because of some lingering or concerns about the pandemic. I think we're going to see some pretty strong demand for single-family rental in the next couple of years, for sure. I'm not worried about overbuilding in that build-to-rent scheme. I think that's actually a really good [00:20:00] opportunity for investors and builders to develop that market further. Kathy: Is there any asset class that's been overbuilt in your opinion at this point? Frank: In residential? Kathy: Just in general. I mean-- Frank: I have some concerns on the non-residential space because one thing we've seen with the pandemic is some question about, "Well, how much office space will we need longer-term especially if a large number of workers continue to work remotely either full-time or in some type of hybrid model?" With a hybrid model, we may see even greater use of the hoteling option in an office environment, again, to use the space much more productively. We also may see some curtailing of need for office space among companies just because of that working remotely. Of course, the retail sector is a big question mark, especially given the pandemic and the growth of online sales. I think a lot of consumers really accelerated their use of online shopping and got used to it. Some people come back to the stores absolutely but I think that might be something where the return to in-person shopping to the extent that we had it pre-pandemic, I think that'll be much slower to come back if it does come back to that level. The warehouse is doing great. Kathy: Yeah, right. Frank: Industrial space is doing great and that's partly because of all the online purchasing and that's really supported the [00:22:00] warehouse sector so [inaudible 00:22:04] are up very strongly there. Kathy: It just seems like there's so much negative news about last year 2020 it was a tough year. There was also a lot of really big positive changes that I think could come from it long term. Another is just realizing that in the past, people used to come to the office sick, they'd take some Sudafed to cover it up, they didn't want to take a sick day, they wanted to go on a vacation instead. Then the whole office would get sick and productivity would go down. Now it wouldn't be so terrible to say, "Hey, I'm sick, can I work from home, not spread it. I'll be just as effective." It just seems like people didn't really get sick as much. I didn't get a cold or you know the things that you normally get over the winter because we were all just isolated. Frank: I tell you, it's so true, Kathy, that was the case for me as well. I didn't get sick at all this past winter and usually, I come down with something and partly because I'm on the road traveling [crosstalk] different events and meeting with clients and industry groups but everything was virtual. I stayed home and I had a healthier winter as a result. I think that's a really good point about how it could have positive effects for productivity because people are staying a little healthier too. Kathy: Then just like anything, when we have change, there's opportunity and that's what we need to focus on. Not look at what we're losing so much as what we're gaining. My daughter is only 28 years old and she's got an email marketing business and it has just absolutely exploded because more and more companies are realizing they can sell online. They don't need that retail space. They don't need all those salespeople standing around asking people if they need help and the people that walk in the store don't want help. [00:24:00] Now, you can just go online. There's going to be a lot of opportunity, a lot of new jobs that just didn't exist before. There's exciting times but the big question that I think I know our audience has is, what does the future look like? That's hard to predict but when you've got access to the kind of data you have, you might have an idea where that's headed. Let's talk inflation. Is the supply-demand imbalance enough that it will last over the next few years or could that wane? Frank: I think the increase that we've seen in inflation and the broad inflation metrics is just temporary. We've got a lot of supply chain bottlenecks that are causing disruptions and that's adding to why we're seeing a spike in prices on lots of different goods. When we look at the housing market, one of the big issues is the big spike and lumber costs and other materials but especially lumber. Some of the shortages and delays in getting appliances and other tech equipment that builders would like to put into homes. That's all part of that supply chain disruption that's contributing to these delays- contributing to the delays but also adding the costs of building new homes. I think that's probably going to be temporary and still temporary. It means it could last for a few more months. As we get toward the end of this year, I think we'll see some of those supply chain disruptions wane. We'll see inflation measures start to come down once again. Longer-term, I'm thinking we're probably going to see, at the high side, two and a half percent annual inflation in the out years. Out years would be [00:26:00] 2022-2023-2024. I do think we'll return to that level. Now, that's kind of like the upper bound range that the federal reserve says it's comfortable with. If we return back to that level, I think the fed will continue to keep a very accommodative monetary policy which is just fancy language for keeping low-interest rates. If we do see inflation remain elevated for a longer period of time, there's no question the fed's going to have to clamp down and push up interest rates more quickly than they had planned and probably to a higher level than it had planned. Kathy: That's been the debate. There's so many people that want the clicks online so they start with negative news. The fed is saying that it's transitory right? That this inflation is transitory, it won't be forever. We'll see. Frank: That's what the fed is saying. Kathy: That's what the fed is saying but it also has never printed so much money in one year. It seems that whenever that happens that extra money ends up in stocks and real estate. Even if inflation across the board starts to level out, will it in stocks and real estate? I don't know. Frank: We're expecting home prices to continue rising. As you know they've been cooking pretty good double-digit annual increase our national CoreLogic home price index recorded a 15% increase in prices in May compared to the prior May. I think we're going to see real big-time double-digit home price growth numbers on an annual basis. Not only through the end of the summer but into the fall. Then we'll start to see gradual moderation in home [00:28:00] price growth. A moderation, not a decline in home prices but in moderation. Right now, we're expecting about 5% home price growth in our CoreLogic US index for 2022. That's a lot slower than today but it's still pretty good and still better than inflation. I'll tell you why we're expecting a moderation in-home price growth. It's basically two factors, it comes back to demand and supply. Mortgage rates which are record low right now, I do think they'll creep up and be a little bit higher as we get into 2022, maybe a quarter-point, maybe half a point. That will choke off some of the demand and affordability pressures because with home prices rising even higher over the next several months that's just going to make it very challenging for anyone who's been in the market shopping for a home to be able to afford the down payment, closing costs, as well as monthly payment. Between mortgage rates going a little higher and home prices going up impacting affordability, we'll see a moderation in demand. On the supply side, as the pandemic wanes, I think we'll see more homeowners being receptive to listing their home for sale. Here's an interesting factoid Kathy, the median age of an owner-occupant in the US, in a single-family home, 57 years of age. That means you know basically half of the owner-occupants are baby boomers. We know that the older population was much more at risk from the pandemic virus and as a consequence, many of those baby boomers who otherwise had been planning to list their home [00:30:00] and sale, either to downsize or maybe to relocate maybe to their retirement home, their second home or close to grandkids or whatever it may be. Many of them said, "Whoa, I'm not going to list in the middle of a pandemic, I'll wait. I'll postpone my listing until the pandemic is over." I think that's what has happened over the last 12, 15 months for that cohort. They may have been ready to sell but they said, "Whoop, I'm postponing until the pandemic is over." I got my fingers crossed but I'm hoping that when we get to 2022, pandemic will be in the history books and a lot of these older homeowners they will come on the market, list their home for sale and we'll see and increase in existing home inventory. I also think that with some of the supply bottlenecks being worked through that we're going to see more single-family home construction in early 2022. We'll see more of inventory response, more supply in the market, a little bit less demand. That's what translates into slowing of home price growth in 2022. Kathy: No home price crash in sight? Frank: No, I don't see a crash, no. That's not to say that there might be some packets, some communities, some urban markets that will see home price decline probably related to local economic conditions. Overall, in terms of the national scope, I don't see any price declines. The market is very different this time around compared to what we had seen in the last time during a great recession when prices fell. It's a very different market. Our market today is under built in terms of the housing market with low vacancy rates. Back in 2006, we had an over-built [00:32:00] housing market with high vacancy rate. It's really very different marketplace that way. It's very different too in terms of housing finance, mortgages. Back in 2006, we had all those high-risk mortgages, sub-prime, no doc loans. They're all absent from the marketplace today. Today, we have very prudent sound underwriting guidelines. That's an important difference as well. Kathy: All right. Well, Frank, it has been a really, again an honor to have you here. Thank you so much for sharing all your great wisdom. Frank: Thanks so much for having me today, Kathy. Kathy: All right. I think that was all the questions. Anything that you would say that you didn't? Frank: Yes, I think it's a good opportunity for investors who are looking to buying into residential market. I'll mention one thing, we've got a report coming out shortly on a single-family investors in the marketplace. What's so interesting during the course of 2020 was that the number of single-family homeowners bought by investors as a percent share of total sales actually was down compared to 2019. It was down because the number of first-time buyers who participated in the market in 2020 was up so much. We look at just the total number of homes bought by single-family investors in 2020. That was about the same in 2019. The [unintelligible 00:33:37] steady but that's a percent of total homes bought, it actually came down in 2020 in part because the first time home buyers and some Gen X'ers who were looking to trade up coming into the marketplace during 2020. It's also interesting if you look at it over the course of 2020. Strong investor activity in the first quarter [00:34:00] boom, pandemic hits, eviction moratorium go into place. Investors pulled back from the home purchase market in the second quarter of 2020, not knowing how the economy was going to shake out, what the federal government's response was going to be. They pulled back a bit but as the economy started to rebound pretty quickly by the end of the year, single-family investors were back in the market looking to buy homes. That's continued here in 2021. Kathy: Yes absolutely. One last thing. I've heard economists, I think Doug Duncan at Fannie Mae said there's a shortage of five million homes or eight million homes and there was another report saying we would need to build two million homes a year for the next 10 years to keep up with demand. Do you agree with that given what you said about certain people putting their house on the market maybe? I don't know, do you agree with that sentiment? Frank: I do think we have an under-built market and it really depends on the part of the country that you are looking at. For many decades now, for a long time the population in the United States, most of the growth has been in the South and in the West. For example, the latest data from the Census Bureau shows that the State with the largest net population gain in the past year was Texas and Texas has been top of the charts in terms of net population gain for the last several years, it's nothing new. Number one is Texas, number two is Florida, number three is Arizona. Those have been States that have been registering big population gains for a while, not just last year but for many, many years. I think those trends are going to continue in general for this Southern part of the US and the Western part of the US. [00:36:00] So that's in particular where we need to see more building of homes in order to meet that demand increase. When I look across different market, one market that's just booming is Phoenix. Home prices are up in Phoenix at a double-digit pace over the last year. Interesting, single-family rents in Phoenix are up at double-digit pace over the last year too. That's from Corelogic single-family rent index. That's a market that there's a lot of demand, a lot of population moving there and a lot of building going on. We need more building there as well. I do agree with the studies that have come out that conclude that the market is under-built right now. We do need to have more housing built and in particular, we need more housing built where people are moving too in those locations where there's much more population growth. Kathy: Sure. How can investors learn more from you and CoreLogic? What are your services? Frank: We've got a lot of information we put up on our website corelogic.com. Look for our intelligence pages. On the intelligence web page, we've got our recurring blogs that I and my team members write that provide our latest insights and trends on the housing and mortgage market. Also, include our reports that we put out. CoreLogic has a lot of data and products that we release such as the home price index that I've mentioned, the single-family rent index, our report on loan performance indicators such [00:38:00] as delinquency and foreclosure rate. Of course, we produce the Case-Shiller Home Price Index as well. Those are some of the recurring reports that go up there. We have a home equity report that we do once a quarter. We'll have a new home equity report coming out soon. Of course, with double-digit home price growth that means home equity wealth is rising at a pretty good clip as well. Kathy: I don't know if you know this but I got to debate Robert Shiller on Fox News in 2012 and it was very interesting because at the time, he thought it was maybe not a great to-- the headline was- his side of the debate was, it's not a great time to buy and my side was, "What do you mean? Home price have hit bottom and interest rates are low, it's the best time ever." By the end of that interview, he agreed with me. I'm going to say I won that debate. That was really fun. All right was such a pleasure to have you here on the Real Wealth Show, hope to have you back soon with more great news about what's happening in 2022. Frank: Sure, thanks for having, Kathy. Kathy: Thank you for joining us here on the Real Wealth Show. If you would like to get a little bit more data on different markets around the country that are seeing double-digit growth both in prices and rents and where there's still great opportunity to get cash flow and appreciation, you can visit realwealthshow.com for the list of cities where we have teams that find the properties, renovate them to rent condition or better and also offer ongoing property management. Many of these teams also build brand new homes for investors to buy as rental properties to meet that strong, strong demand for our rental property across the country and to help investors create an ongoing passive income for retirement. Again, at realwealthshow.com, get a list of the cities and a list of teams in those markets who can help you find rental [00:40:00] property. You'll also get referrals to insurance companies, mortgage brokers, 1031 exchange people. All kinds of resources for investors at realwealthshow.com. I'm Kathy Fettke, thanks for joining me today, we'll see you next time. Operator: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information go to realwealthshow.com.

It’s easy to make mistakes when you’re buying your first income property. But there are plenty of things you can do to avoid those rookie moves that new investors often make. Educating yourself is a good place to start, which is what this podcast is all about. And listening to stories about other challenges that other investors have had to deal with. In this episode, you’ll hear from Brandon Pritzl who works a full-time job in the aerospace industry, and just bought his first rental income property. He had his first big challenge right away, but he saw his way through that rough patch. He’s now planning on growing his portfolio to provide financial flexibility for his growing family, and he will share what he’s learned, so far, in this interview. If you’d like to become job optional with rental property income, join RealWealth for free. As a member, you'll have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Go to realwealthshow.com to join. Transcript [00:00:00] [music] Voiceover: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors' resource. [music] Kathy Fettke: What are some rookie moves that new investors make that you could avoid by listening to The Real Wealth Show? I am Kathy Fettke, and thanks so much for joining me here. Our guest today, Brandon, just bought his first property and learned a lot of things along the way that I thought were really, really valuable to share with you here on today's show. Brandon, welcome to The Real Wealth Show. Brandon Pritzl: Well, thanks for having me on the show. I'm happy to be here. Kathy: Let me start by saying, what inspired you to choose real estate over the stock market? You may be also invested there, but what inspired you to choose real estate? Brandon: I think a few people, I started reading that purple book, Rich Dad Poor Dad, a few years ago. My dad had been trying to get me to read that for a couple of years, and I finally got around to it and wish I would have done it a few years ago. That started my journey into self-education. I started listening to podcasts, including your show. I even read your book as well and a bunch of other books as well, as I was trying to start to build up the funds for an initial downpayment on my first property. Kathy: Tell me the things that really stood out in that process of learning, with real estate versus investments. Brandon: I think just the five ways that you can grow your wealth. It's not just dependent on people buying or selling or any whimsical changes in the stock market, you can actually be very planful and methodical, and real estate moves very slowly, comparatively. I liked the fact that [00:02:00] you could educate yourself, really hone in on what your strategy would be, which markets you want to target. Me being on the younger side, I wanted a healthy mix of a cash-flowing market with appreciation potential, knowing that I want to buy and hold for the long-term. I think real estate provided that monthly cash flow. You've got your appreciation potential, you've got your inflation hedging, you've got your tax benefits. You can do cash-out refinances down the road, you can do 1031 exchanges to defer any tax. I just thought there's a lot more advantages, going this route than maybe some other investment vehicles. Kathy: I agree. It is amazing that you can lock in these low interest rates for 30 years, while we're seeing rents go up and home prices go up. You got someone paying down your mortgage for you, you got tax benefits. That saves you even more money and then somebody else paying off your debt and creating that growth, the equity there. If you just look at fundamentals, you don't have to worry so much about markets going up or down. You just pay down the loan, or I should let someone else pay down for you and pay less in April to the IRS. Okay, good. I know when I bought my first property, there felt like so many unknowns. It just felt like this overwhelming thing, how do you even get a loan and read all those documents and look at an inspection report and so forth? I know you said Leah, our Investment Counselor at Real Wealth Network, is really helpful. What did you learn from-- Let's just start with the loan application process. Brandon: [00:04:00] I think throughout the whole process, I learned the incredible value about building a team around you. Leah being one part of that team, I found a lender that I really liked after speaking. I went and did my rounds and interviewed different vendors that I'd like to work with, and I know that you guys have your preferred list of vendors, I'm working with one of those. On the tax side, working with CPA, making sure that your property management is solid since they're the boots on the ground in that area. I think just initially coming into it, it can be a little bit overwhelming, but I think you just got to get out there and start talking to people. I think the more property management companies you talked to, the more lenders you talk to, the more well-informed you become. You can pick their brain about different questions to be asked, to be asking them. Then you start to develop different criteria that you'd be looking for as you become more exposed to it. My advice to any new person starting out would just be just to jump in and do it. Obviously, do your groundwork and some homework and a little bit of research. Kathy: You did watch a lot of webinars and listened to podcasts. There was learning that happened before you started making those phone calls. [00:05:32] Were you surprised at all at what the mortgage broker came back with, as far as what you could qualify for and how many? Brandon: Yes. I was surprised by the quantity and the rate I ended up getting. In all of my cash flow projections, I'd budgeted for a certain amount, and it came in well below, and I think that's the icing on the cake [00:06:00] for that particular deal. I think I definitely want to utilize-- I'm married as well, so utilize the 10 loans in my name and then in my wife's name so we get those 20 and then get and plan next steps after there, after that point. Kathy: I was going to ask you. Was that your ultimate goals, to get 10 each? Brandon: I think so. I'm relying on this property to be my proof of concept for my wife to get her to buy in. I think she's trusted me thus far, knowing that I've done my due diligence and research along the way. I think showing her the monthly mailbox money in the account, I've been including her on any updates from property management or any repairs that might be needed, talking through different things. She has some good gut instincts on different questions to be asking folks that I didn't even think of, so she's definitely been a great partner, in that regard. Kathy: Wonderful. It sounded like maybe now that you're having a family and starting a family of one child, do you intend to have one of you stop working at some point with the help of the cash flow? Brandon: Yes. I think that's the ultimate goal there to use real estate as a vehicle for one of us first to be job-optional and then hopefully down the road, we can both be job-optional and maybe do some passion project work. The main thing is just to be able to have flexibility to be able to set up a comfortable life for my little baby girl and any more that might follow. I think [00:08:00] that's the goal for now as I see it, that might grow and evolve and change, but right now, definitely, just to give us a little bit of flexibility. Kathy: When you look at the tax benefits you'd get from owning these 20 properties, you would just save, right off the bat, enough money that the second person wouldn't even have to work because the tax savings would cover it. The question is who quits their job first, right? Brandon: Exactly. Kathy: What did you learn? What surprised you about the kind of tax benefits you can get? Brandon: I think the more I learned about both the cash-out refinance options, being able to basically use your home as an ATM to pull cash out and redistribute that equity for other properties that will be income-producing, that and also learning about different tax exchange, two different vehicles to grow your portfolio. I think initially, what might make sense for me is probably first looking at cash-out refis, depending on how the market goes over the next few years. I probably only want to put my own money into a down payment and into one more investment and then hopefully be able to use the income generated from those income properties and any appreciation games there to get the snowball rolling, making other people's money work for me. I think those were the two standout things on the tech side that are like, "Oh, that's an aha moment." Kathy: Now, you said when you actually went to [00:10:00] acquire your first property, there were some challenges. You were working with another group and you felt like just a number. It wasn't going the way you wanted to, so you found RealWealth and started working with Leah, who was able to really look at the whole picture, and you're more than a number. She really wants to see you succeed. When you came into some issues with the inspection report on that property, what did you notice? Inspection reports never come back perfect, but what was on that report that had you walk away? Brandon: I think it was just the volume of things that were wrong. Then when going back to the seller with my list of everything that I wanted to get repaired and have them cover and deal with, I did a re-inspection after they said that they had done the work, and still, issues came back. I just had that gut feeling that this probably wasn't a team that was up to the standards of what I'm looking for. I would have hoped that I wouldn't have to do different rounds of re-inspection and that they would make the fixes to everything the first go-round. Ultimately, I just didn't feel comfortable having to go through multiple rounds and a little bit of lapses in communication there, and lack of transparencies. Kathy: Oh, I love, love, love that you're saying this. I don't know which team this is, and we didn't have to bad-mouth anybody here. Brandon: No, of course. Kathy: It is the investor's job to do their job. We can't just go and just [00:12:00] hope that something comes back. This is real estate, it has issues. The inspection report will tell you what those issues are. First and foremost, so many people skip that step. Never ever skip the step of getting a third-party expert to look, from roof to basement, what's going on in that property? Now, if you're buying a renovated property, a turnkey property, there are so many definitions for turnkey. There's probably 50 different companies who call themselves turnkey, but they all have different standards. One might think, "Oh, I just changed the carpet, now it's turnkey." Another might say, "I have completely rebuilt it with all new electrical, all new plumbing, all new everything, HVAC, and so forth." At RealWealth, we have standards that any teams that we refer people to, they're supposed to meet our real income property standards, but it's really hard for them to find those properties. Sometimes they just resell. They're called rental resells. They just resell a rental that hasn't been updated, or they provide brand new homes. There's this whole spectrum of brand new to renovated to not renovated at all. It's the investor's job to find out the condition of the property because, at the end of the day, you're the one buying it and owning it. Now it's yours, you got to deal with it. Never skip the inspection. Then what I love that you did is you went back to the seller and said, "Hey, these are issues. Which ones will you fix?" A lot of times they'll come back and say, "Oh, I'll do all of them," or some of them, or none of them. It's up to the seller. At the end of the day, it's their company. They said they fixed them and then you got a second inspection report. Did you have the inspector just go back, or did you have to pay for a full, completely new inspection? Brandon: Yes, I had to pay for a re-inspection, which was a lower price for him to go out and look at those [00:14:00] repaired items specifically. He still had findings, and stuff looked like it hadn't been fixed. If I were to go one other round, I would have asked the seller to pay for the third inspection, but I think at that point, I had just had a little bit of a bad taste in my mouth, so I ended up walking away. Kathy: Yes, that's the third point I wanted to make, is that you've already lost trust. You said there was problems with communication. They said they fixed things, they didn't. Why on earth would you go through and purchase that property? I'm going to tell you, we see, out of the thousands of people who invest, there are people who would still move forward. The reason is, "Oh," they think, "I don't want to go through that all again. I have to find a new property and get a new inspection. I already spent all this money on the inspection report. Maybe these people will get better." They go through with it, even though in their gut, they know they shouldn't. I really want to say I admire you for moving on. Was that hard for you to do? Brandon: Yes, because I was ready to pull the trigger, ready to get going, ready to get the monthly rent checks. I think it was frustrating but ultimately a great learning experience for me in sticking to my guns and what I'm looking for and my standards and ensuring that I'm working with teams that I'm comfortable with, that I trust, teams that have good communication, that follow through on what they say they're going to do because that's the kind of service that I would deliver to someone if I were in their position, so that's what I expect. I would want to only surround myself with a team that is able to follow through on that. Kathy: 100%. It's a long-term relationship. You would not want to pursue [00:16:00] a personal relationship if, at the very outset, someone is letting you down and breaking trust. Then you tried again. Where did you end up? Which city did you end up buying in? Brandon: In Cleveland, I found a great deal right in the price point, I reserved it as quickly as I could. I did my due diligence quickly and proceeded with getting it under contract. The clause was a little bit drawn out only because of delays with COVID, difficulty in getting technicians out in the middle of winter. I had identified this property in late November, and I think that was right during the height of all the bad outbreaks during COVID, so they're a little bit apprehensive letting people into the property for inspections and repairs and then having to deal with snow on the roof and all those things that the California boy doesn't really know firsthand how to deal with, I think, ultimately, it was a very good process. The team over there and the property management in place is solid. It's been a good experience for me thus far and a good market as well, meeting the needs of what I was targeting, like the mix of that cash flow and appreciation. Yes, I think, for now, I have my eye on that Cleveland market and the Cincinnati market. I know you have a great team based in Cincinnati Dayton. Kathy: We do. The problem is it's just been so hard for them to find inventory, the prices. Brandon: I know. Kathy: Cincinnati was one of the areas where prices went up the most, I think 17% since last year. It's really hard for our team to find those [00:18:00] deals, but if they can, then grab them while you can because I think with those tertiary markets, those outlying markets, national builders weren't flocking to them. There wasn't a whole lot of new inventory being brought in, yet demand is so strong. We're seeing areas that are typically flat, just skyrocketing price and making the whole narrative of cash-flow market go away right now. I'm glad you were able to find something. What was the price point in Cleveland? Brandon: Around $120,000, I think just slightly over. Kathy: Oh, that's amazing. It's amazing you can still get that today. [crosstalk] Wonderful. What's some final advice you would give to our listeners who are new to investing or just thinking that it's just a horrible, terrible headache and they don't want to do it? Brandon: I'd say, do your research, read, listen to podcasts, watch videos. I would say it's very helpful to work with an investment counselor like you have on your team. They'll really help you be able to narrow in and zero in on markets that fit your goals because no two investors' goals are the same. What might work for me might not be the best fit for someone else. Doing your research, identifying what's important to you, what your goals are, and then talking with the investment counselor to zero in on those markets that meet those needs. I think now it's just a waiting game and got to act fast once some inventory becomes available. I'm hoping later this year, as things start to open up, we start to see a little bit more inventory become available. [00:20:00] I think those would be my pieces of advice and also just sticking to your guns in what your standards are and not really compromising on that because it's a long-term game, it's a marathon, not a sprint. You want to have good partnerships and team members in place that will have your back for the long haul. Kathy: Oh, I love that. You want to be in a good-- You need to be well-prepared for a marathon, and you need to be well-prepared for building your portfolio in real estate, absolutely. All right. It's been such a pleasure to have you here on The Real Wealth Show, and thank you so much for sharing the ups and the downs in the whole process of investing and getting started. I really appreciate it. Brandon: Of course. I appreciate you taking the time. Thank you. Kathy: Well, we hope to have you back when you're up to 10. Brandon: I'd love to. All right, thank you. Kathy: All right, take care. Thank you for joining me here on The Real Wealth Show. You can get access to hundreds of educational webinars for free at our website at realwealthshow.com. You'll also get access to different property teams across the country, really highly recommended by our members, who can help you buy an investment property that's been already renovated or is brand new with property management in place and sometimes tenants already in the properties for a kind of done-for-you investment property. You can get access to that information again at realwealthshow.com. All you have to do is join, and it's free to join. All right, have a wonderful rest of your day. Lets's see you next time, bye-bye. Voiceover: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:21:58] [END OF AUDIO]

There’s a lot of talk about mortgage rates and whether they are heading higher. But they’ve actually gone down for several weeks, and some experts see that downward trend continuing, for at least two years. There’s even better news about refinancing loans, that we’ll hear more about in this episode. Our guest today is Caeli Ridge. She’s president and CEO of Ridge Lending Group which is focused on helping homeowners and investors realize their dreams of homeownership. She’s been an established real estate investor herself for more than 20 years with as many as 42 investment properties at one time, and she’s dedicated to helping others do the same. Join RealWealth today to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. To join, go to realwealthshow.com. Go to www.RealWealthShow.com for more information or to listen to past episodes. Transcript [00:00:00] [music] Voice Over: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors resource. Kathy Fettke: Are interest rates going to go up? If so, how would that affect the housing market? I'm Kathy Fettke and welcome to The Real Wealth Show. Our guest today, Caeli Ridge, is an expert in these things. She is president and CEO of Ridge Lending Group and has been an established real estate investor for over 20 years, holding as many as 42 investment properties across the United States, and is helping other investors do the same. Caeli, it's so great to have you back here on The Real Wealth Show. Welcome. Caeli Ridge: Thank you, Kathy. I love being here. It's my pleasure. Hopefully, I'll be able to impart some valuable insight today. Kathy: I'm sure you will and you're so cute because you're like, "Oh, is this video today? Because I just got back from the gym." [laughs] Caeli: It is what it is. Kathy: I said, I don't know, somehow over the last year it became video and I also just finished yoga. Here we are. That's the beauty of working from home. Let's talk about interest rates there. There are a lot of experts saying that they probably will creep up, but not too much, but eventually, they might. There's a lot of unknowns here. What are your thoughts on it? Caeli: A couple of things. Actually, there's some great news that we just got last week, but I'll come to that at the end. That'll be my hook for everybody. We've actually been seeing since somewhere around February of this year, rates start to increase, creep up a little bit, largely initially due to inflationary concerns. We were seeing some of that and then specific for non-owner occupied, our investors, and second home occupancy, there was an announcement back in March, March 10th, I think, to be specific. Fannie and Freddie released that-- This gets a little technical. I'm going to try and abbreviate, that they were going to be increasing [00:02:00] their risk layer for the non-owner-occupied properties. They have a senior preferred stock agreement with the treasury, which by the way, is purchasing or has been purchasing mortgage-backed securities for the last 18 months at the tune of $40 billion per week. The treasury has quite a bit of weight that they can throw around and for those two-- Kathy: [unintelligible 00:02:26] $40 billion dollars these days? Come on. [chuckles] Caeli: I was writing a check a week, mind you, a week. With all of that and thank God for it. The treasury has actually really been helping throughout the pandemic, et cetera, to keep the interest rates as low as possible so that the affordability is better for homeowners, potential home buyers, et cetera, refi cash out, yadda, yadda. They released this announcement. The Treasury wants to limit some exposure and some risk. They are maxing out the purchase per aggregator. That means that I let's say I've got $10 million worth of mortgage-backed securities or loans that I'm going to resell on the secondary market, we have dozens of aggregators that we will sell these bundles of loans to on a per aggregator per cell basis. The maximum of that bundle of loans for non-owner occupied and second home can not exceed 7%. That news created a flurry of activity on the secondary markets and increased rates for non-owner and second home. From February to now, we've really seen some significant increase rates. Rates increased, I'd say by about a full percentage point, we were at 3.5% back in February, we've been running at about 4.5% for the last five-ish months now. Here's that hit or hook rather. This is good news. Anybody that's been paying attention to interest rates remembers last year, the FHFA had added an adverse marketing [00:04:00] fee for all refinances. Do you remember hearing about that? It was a 0.5% fee for refinances back in June, I think it was. The Biden administration just canceled that. That's gone. It's effective August 1st. We're expecting to see any time. I think they just announced this Thursday or Friday last week. That removal of the adverse marketing fee for refinances should improve rates. Now, by how much? It will be a TBD, but I would expect-- Again, if you're at 4.5% on a cash-out refinance, somewhere in August or early later this month, maybe we'll be at 4%, 4.25%. See that? Some good news. We might see some additional refi boom pick back up over the course of the next few months. Kathy: Could You just summarize that for somebody who's new to the concept? What does this mean for the real estate investor? Caeli: This means that interest rates, at least for refinance, are going to be reducing, I think, by a substantial click, maybe a 0.25%, 0.375% in the next coming weeks. We will see some improvement for refinance transactions on the 30 year fixed mortgage rate. I think that in general for purchases, as rates are concerned, as herd immunity continues to become more prevalent and servicing chains and things start to open back up, supply chains, et cetera, rates are going to come back down a little bit as well on purchases. For the next couple of years, while we're getting through this recovery, I do think rates are going to remain on this low end. They are up a little bit now, but let's put that into perspective. We're still in some 5% interest rates on investment properties for 30 year fixed mortgages. In summation, rates are low. I think they're going to get a little bit lower over the next weeks, months, depending on the transaction type. They're going to stay low for the next of years. Kathy: If somebody did get a higher rate [00:06:00] recently, when can they refi into a low rate? Caeli: Excellent. Typically speaking, you want to see-- `It really depends on how long they're going to keep the property. The math to figure out your breakeven is, figure out the monthly payment difference between the rate that you're paying now and what the refinance rate would be. Take that monthly payment difference and divide it by the cost of the loan. Let's say it's a hundred dollars a month, divide that by 5,000 in closing costs, just for example, that's 50 months recapture. If you're going to keep the property for at least 50 months, it probably makes sense to go ahead and refinance. Now, keeping in mind too, that you'll have some tax advantage rate points that you might pay so that probably should work into the equation, but that's the math that you should use. You have to figure out how long you're going to keep the property, and then you can decide if it makes sense or not based on the savings and costs. Kathy: I've been getting phone calls from lenders who would like to refi and offer really low rates. We came really close [00:07:00] to doing one of them until I took a deeper dive into the fees and then the reset of the 30 year fixed. It basically brought us back to paying a lot more of the interest, whereas the loan I was currently and we were paying more of the principal. It actually ended up being a horrible deal for us, even though it looked good. It was a lower rate, too high a fees. It restarts that loan where you're paying more interest and debt. How does that work with a 30 year fixed? That's how it works. In the first 5, 10 years, you're paying primarily interest. Caeli: Correct, yes. The first 10 even plus 90% plus of what your payment is going is going to be for interest. It's not until the back end of that loan that you start really plunking down on the principal. This might be a good segue into a fun statistic and depending [00:08:00] on the circumstances, it's very circumstantial and it depends on the property, what their plans are, et cetera.That can be a fluid thing. When we talk about 30 year fixed mortgages, especially for investors, I think it would be important to mention to your listeners that the life cycle, the average life span rather of a 30 year fixed mortgage for investment property is probably five or six years. The percentage of investors that start on day one with a 30 year fixed mortgage and keep that loan for 360 months is less than 1%. Depending on the circumstances, I would just be aware of some of those details too, when making a decision. There's a psychology about that 30 year fixed that I think makes people warm and fuzzy and it helps them sleep better at night. I can get it. I have some of it myself, but the reality is that pay attention to the intent of what that investment is meant to be. If it's your primary residence, probably a different conversation, but in any case, that would be my response. Kathy: That is a conversation rich and I have all the time. He likes the comfort of that 30 year fixed. He just doesn't want to regret it in the future if interest rates are much higher. Then we have to refi at that time. He'll pay more for that [chuckles] comfort. What is it that you recommend? I think you just said. Caeli: Sure. First of all, I wouldn't say, for investors-- We're going to just focus on the investor. I would say away from a shorter amortization loan, always. Let me get into that first. I get a lot of questions about what are 15 year interest rates? They're going to be lower than a 30 year fixed rate. However, there's no need. Even if you want to accelerate the payoff early, there's no need to look at a shorter-term amortization because you can do exactly the same thing on a 30 year amortization. Even though the interest rate is higher by simply calculating that payment difference between the lower 15-year rate and the higher 30-year rate. Let's just [00:10:00] say it's $300 a month, whatever the number is, take that monthly payment difference and apply it with your 30 year fixed payment every month, you'll cross the finish line in about 15.4 years, I think, is the average calculation. Most importantly, and the reason I bring this up, is that the 30 year amortized loan is going to maximize or optimize the individual's qualification in their DTI. That 15 year payment is going to be significantly higher. In turn, it's going to affect a debt to income ratio, DTI. There's no reason to look at a 15 year. I definitely advise my clients, always take a 30 year. Whether you accelerate the payoff quicker or not is entirely up to you. You never pay the higher interest if you're doing that because you pay off so quickly. That would be the first thing. The other thing I would say is, usually speaking, I like to see a recapture when we're talking about refinance. I think that's the question. I'd like to see the recap rate somewhere in that three to five-year window of breakeven, cost versus savings. Again, depending on what their, if they know what their long-term plans are. If they know that they're going to sell this thing in a year or two years, then probably doesn't make sense to refinance, but if they just refinance and they know they're going to have it in five years from now. I'd say, look at the numbers at least and do the math. Kathy: That's just great. That's so many questions when it comes to loans. All right. Where do you see rates going with your crystal ball? I know you get asked that all the time, but let's say by the end of this year, by the end of next year, and five years from now. [chuckles] Caeli: Again, come fall early fall, mid-fall, I think that we'll start to see rates come down a little bit from where they are now. We already talked about the adverse refi fee is going to be going away in August. That just in and of itself is going to create some reduced interest rates. We can feel pretty comfortable and confident that rates are still going to be in the mid-threes, [00:12:00] high-threes, mid-fours range at least for this year. Beyond that, I really hate predicting even past a week. There are so many different variables that can create-- Kathy: [chuckles] It's really hard. Caeli: Totally. Here's my overall consensus. If you think about the amount of debt as a company or as a country we have amassed over the last 18 months, the servicing of that debt in and of itself is going to make it very, very difficult for the feds to increase rates. It's just not going to happen. If you think about trillions of dollars and the payment on that debt, a blip, an increase in interest rates would make millions of dollars in interest. Rates are going to stay low during recovery is what I'm going to say to that question. Kathy: It sure seems that way. All right. Now, another question of course we have is the forbearance and that is ending in September, correct? Do you see that increasing inventory at that time? Caeli: I did a webinar not too long ago. When this topic came up, initially, I thought, yes, maybe. It's just an unfortunate casualty of the pandemic and the forbearance, in particular, we will see some foreclosures. However, I don't think it's going to be as much as people originally maybe thought. I don't think that the Biden administration is going to allow that. I think that there'll be provisions that will try to remove as much of that as possible. I would not expect a huge flurry of extra inventory on the market. I do think that as lumber prices, whoever's following that, they just took a huge nosedive recently. Quick numbers, last year, I want to say March, something, the cost per square board, I think, is how it's measured was $333. Up until a couple of weeks ago, I think it was $1600, right? It was insane. It took a big dip. Those supply chains [00:14:00] are going to opening up. For those reasons and in several others, I think we'll start to see a little bit more inventory. I'm hoping that some of these factors will help lighten the frenzy, the marketplace, so that it's a little bit less competitive and prices start to just-- We always want to see an upward trajectory, but I'm sure you'll agree, Cathy, with the way in which they're going right now, it's a steep climb, it's not going to be sustainable long-term. I think the market will correct though. Kathy: All right. Let's see, what else? Eviction moratorium too. I know that you, as a lender, focus mainly on investor properties. I would think this is something that you're looking at. You don't want to see a bunch of landlords who have borrowed money from you or from the banks you work with, suddenly not have income. Are you concerned about that? Caeli: I feel like a lot of what has come across my desk anyway has been relatively well handled. I think that landlords have been forced to get pretty creative. We haven't seen too much of that. When things were really at their hairiest, they were finding ways to equal compromises, maybe pay a portion of the rents. Give them instructions on where to find unemployments in their areas. I mean, job listings, right? They were really getting super creative in how to help their tenants make sure that they could pay their rent. I think that most people have done a pretty decent job of avoiding that thing. Kathy: What about cash-out refi? Are you seeing demand for that? If so, are you concerned or is it a good thing? [00:16:00] Caeli: No, I loved the cash-out refinance and we've been talking about rates. Rates are still incredibly low. Most people are aware, but for those that are not, a cash-out refinance of an investment property is non-taxable. Borrowed funds are non-taxable. Taking some of the equity with the appreciation that we're seeing right now and utilizing it to deploy for further purchases, I love the idea. Yes, 100% go cash-out refi. We think that rates are going to get a little bit better in the coming weeks too. By all means, I think cash-out refi as a general rule is going to start to get some more steam. Kathy: How much more expensive is it from just a regular refi to a cash-out? Caeli: In interest rate, probably about 0.375%. Kathy: Not too much more to be able to, like you said, deploy those funds and purchase more properties. Now, once you sell that property, it's at that time that the government will want their money unless you do a 1031. Hopefully, that 1031 stays in play. Even with the way that the Biden administration is looking at it, it seems to affect just higher-cost properties versus the ones that our members are looking at. I haven't been too worried about it, but time will tell. It takes a long time to change the tax law. It's not easy. What about adjustable-rate mortgages? I know, we mentioned that, but do you see a comeback there? Caeli: I like an adjustable-rate mortgage, to be honest with you on it. For reasons that we talked about earlier, there's a psychology to 30 year fixed versus the adjustable rate, but statistics tell us again that the lifespan of a 30 year fixed, especially for the non-owner occupied, is in that five or six range window. right now, today, as we're talking, the secondary markets for interest rates are on what we call an inverted yield. That means in simple terms that a 30 year fixed [00:18:00] mortgage has a lower interest rate than an adjustable-rate. It's lopsided, it's inverted. Under normal circumstances, the only reason to take an adjustable is if the interest rate is lower. Usually, by about a percentage point is what we tend to see. Right now, adjusted rate mortgages, no, there's no incentive to do that. I do believe that we will see that shift at some point probably once they really figure out what to do with the conservatorship of Fannie, Freddie. Again, this gets into the weeds so I'll abbreviate, but '08, '09 crash. Dodd-Frank all of those elements is when we saw that inverted yield, adjusted rate mortgages, interest rates went up, 30 year fixed low, don't even look at the adjustable. Once we start to really look at how to release Fannie, Freddie from its conservatorship that they were put in back in 2010, I think it was, I think that we'll start to see those adjustable rate mortgages make a play again in the open market to where it does make sense to consider if the interest rates are that 0.375% to 1% plus lower than a 30 year fixed counterpart. Kathy: Now, I had read, and I think we did a story on it that there was less funding available through Fannie and Freddie or the requirements were getting stricter for investment properties. Is that correct? Caeli: Not that I'm aware of. As a [unintelligible 00:19:25] you mean? Not really. Kathy: No, it was at banks had a maximum number of investor loans they could do, something like that. Caeli: There's probably something, maybe if you've heard, there's are things called overlays. Overlay is just an added requirement or risk to what the already predisposed guideline, Fannie, Freddie guidelines says, There's something called the seller's guide that Fannie, Freddie published. This is a 1400 page document that, within crazy detail, told us [00:20:00] exactly what the loan has to meet in order for it to be insurable by the United States government. Ridge, because we're so investor-friendly, we go straight by the seller's guide. A lot of banks out there are going to impose these overlays that add into, for layers of risk, a maximum number that they'll finance for one individual, maybe it's 4. The rule is 10. Fannie Freddie will allow up to 10 finance properties per qualified individual. For husband and wife, for example, one of the things that we coach or counsel is that if they can, we want to qualify them separately from each other independent so now we have 10 golden tickets, we call them golden tickets, highest leverage lowest interest rate, so that they can maximize those spots. I think that's one of the things value-add wise that that Ridge does for its clients is it's looking for education and teaching them how to optimize qualifications and what to look for. Tennis is what Fannie, Freddie says. We don't stop at 10. We've got a whole diverse menu of loan products for investors that go well beyond, but that's what the actual guideline says and we don't impose those overlays. Kathy: That's fascinating. Let's say a family, maxes there 10, the wife and the husband have now maxed out. They have 10 each or it's a single person who's reached their 10 limit. What are their options today and are they expensive? Caeli: There are several. Two, to be specific. There's something called non-QM. Fannie Mae and Freddie Mac are defined as QM, qualified mortgages. Everything outside of that box is now non-QM. Non-QM in it of itself is very diverse. It's not just for investors. It's for anybody, really, that just doesn't fit into that box. There are no limits to the number of finance properties an individual can have using non-QM terms. Just specific to this piece, non-QM has a whole variety of things for investors, [00:22:00] but this one just as it means that you have maxed out your Fannie, Freddie 10. Guidelines are pretty much the same. Qualifying guidelines, if it's full doc, income debt to income ratio, assets credit, very similar, leverage is pretty similar. 75%, 80% leverage, 30 year fixed. The difference is going to be rate. The costs are going to be the same. It's really going to boil down to rate. Right now it's about a point difference between Fannie, Freddie and, let's say, a non-QM. If you're 4.25% on a Fannie Freddie loan, you can expect the non-QM to be somewhere around 5.25%. Otherwise, it's the same. Kathy: Which is really helpful. I know you've helped a lot of our members who are in the middle of a 1031 and they forgot about this detail. They have to get another loan on the replacement property and maybe they've already maxed out with Fannie and Freddie. They come to you and you fix that problem. You get them the loans they need. Caeli: Yes. That's true. Kathy: That can be stressful. Plan ahead if you're doing a 1031. [chuckles] Any other tips for investors when it comes to leverage? Caeli: I would say plan ahead is a great segue to close out the conversation. Planning ahead, make sure you get pre-qualified in advance of getting out there and starting to make offers. You want to get your financial debts in a row. Again, Ridge is really going to focus on educating you and teaching you, not from, real in-depth levels, but baseline stuff so that you understand the mechanics. What's going on in the black box of underwriting guidelines, how it applies to you, and certainly the goals and taking all of that and understanding what moves not to make. Because you don't know what you don't know and having some of that baseline information, I think, is crucial to your overall success. I want to leave people with that and we really focus a lot of our attention on [00:24:00] that education. That's why I like your platform too, Kathy, because you guys are educators and it's just so important. Somebody getting into real estate investing just on its own without even the financing part added in, they're drinking through a firehose. That's the analogy that I give. There are a lot of moving parts. Just taking some time to educate yourself and aligning yourself with educators is just so, so important. I'm grateful for you and that platform and Ridge follow suit. Kathy: Absolutely. I see too often people who have a toe in the water, maybe a real estate agent that just works very, very part-time and they think they know everything [chuckles] and they may be talking about something that was true 10 years ago. We really want to get the education from somebody who's active. Who's very, very involved with what's going on today and has been doing it a long time. That would be you for sure. It's a family business, right? Your dad did it before you, so you grew up in it. Caeli: That's right. Second generation. Dad is retired now in Southern Florida, Santa Rosa Beach, the panhandle, and living life. I took over. Kathy: You're still in Oregon. Caeli: Yes, our corporate offices are in Oregon, but for those that maybe don't know, we're licensed nationwide. Kathy: Yes, that's right. You can help people get loans definitely in all the markets that Real Wealth network has been involved in. Caeli, always a pleasure to speak with you. It's so great to connect. It almost feels like we're in the same room. Thank you so much and have a wonderful rest of your day. Caeli: You too. Kathy: Thank you for joining me here on The Real Wealth Show. You can find out more about the various lenders that we work with and resources under our resources tab under our invest tab at realwealthshow.com. There you'll get referrals to people with the kind of experience that you saw with Caeli today and also property teams in some of those strongest, fastest-[00:26:00] growing markets who acquire the investment properties, get them to rent-ready condition, or build them brand new and provide ongoing property management for our members who want to own rental property out of state. Again, you can get more information@realwealthshow.com. I'm Kathy Fettke. Thanks so much for joining me. We'll see you next time. Bye-bye [music] Voice Over: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com.

In this episode of the Real Wealth show, we'll peek behind the curtain to see the reality of buy and hold investing. Our guest will talk about the good, the bad, and the ugly of being a landlord, and how patience and perseverance can really pay off. Brent Palmer lives with his wife in the San Francisco Bay Area. His investing story begins with a full-time job as an engineer, two side jobs, and a desire to get off the work treadmill. After listening to the Real Wealth Show, joining as a member, and attending live events, he pulled the trigger and bought three properties in Kansas City. Those first investments came with challenges however, but he stuck with it, bought more single-family rentals in a different market, and has been able to quit those two side jobs. You'll hear his Real Wealth story in this interview. If you’d like to become job optional by investing in rental property, join RealWealth for free by visiting RealWealthShow.com. As as a member, you'll have access to the Investor Portal where you can speak with one of our experienced investment counselors, view sample property pro formas, and connect with our network of resources, including property teams, CPAs, attorneys, lenders, 1031 exchange facilitators, and more. Subscribe to the show on Apple Podcasts and get the latest episodes uploaded to your device as soon as they are released. Like what you hear? Throw some stars our way and leave us a review! We appreciate you! Transcript: [00:00:00] [music] Announcer: You're listening to The RealWealth Show, with Kathy Fettke, the real estate investor's resource. [music] Kathy Fettke: On today's RealWealth Show, we're going to peek behind the curtain to see the reality of buy-and-hold real estate investing; the good, the bad, and the ugly and how, when you stick with it, it really can turn out very well in the end. I'm Kathy Fettke, and welcome to The RealWealth Show. Our guest today was feeling overworked, on a treadmill. Even with an electrical engineering degree, he was having trouble keeping up with the very expensive San Francisco Bay Area and he didn't see a way off of that treadmill. Then he listened to The RealWealth Show and joined as a member at RealWealth Network, and started attending our live events. At that time, he pulled the trigger, and bought three properties in Kansas City. Even though those first properties have come with their share of challenges, Brent is still on a mission to build his real estate portfolio. So far, it's allowed him to quit his two side jobs. Brent, welcome to The RealWealth Show. Let's talk about when and why you started looking at real estate as a vehicle for retirement and investing. Brent Palmer: Well, I was aware of you, Kathy. I had heard you on KSFO, talking of one of the financial gurus, maybe about 10 years ago. I was so touched. Kathy: That was so long ago. Oh, my gosh, that's funny. KSFO, yes. Brent: Right. That buzzed around in my head for a time. I was here in the Bay Area. I had graduated from Cal Poly San Luis Obispo in 2006. We were quite fortunate, my wife and I, to land a house during the recession. Kathy: Wow. Brent: Right. We got a really great deal on our place. Impossible now, of course, but that was a huge help as far as having that. Upon graduating with my engineering degree, I had this crazy notion, [00:02:00] "Well, wife, you can go ahead and stay at home, and I'll be the breadwinner." She was able to stay at home with our children for a while. That was really great, but I was a little naïve as far as Bay Area cost of living. Thankfully, we got the house, but still, I was having to work multiple jobs. In addition to my main engineering job, I was working for a couple of tutoring firms on the side, doing statistics and math tutoring for high school students. I was staying pretty busy with that. It was just not an ideal situation, financially. I was looking for a way to get out from that, and really just be able to have one main job. I was aware of you and so I started looking into the RealWealth Network. I signed up as a member and looked at your material, started attending live events. That was maybe about six or seven years ago, and attended live events for a period of time, maybe. Not a hugely long period of time, but perhaps, maybe over the course of a year, I attended several events. It just got really comfortable. Then I talked with my advisor, Aristotle. It just felt really like a comparable thing, to go ahead and land that first property and try to transition out of working so much. I met with an affiliate provider in the Kansas City area. I know currently, from what I understand, RealWealth doesn't have a provider in that area, but anyway. At the time, there was somebody so I flew out there, got the lay of the land, was shown around of what rehabs looked like, what completed properties looked like. I went ahead, and this was in 2016, in the span of about nine months, acquired three [00:04:00] properties. Then I set up-- Kathy: Wow. All in Kansas City. That was probably a big learning curve there. Brent: That was a big learning curve. I had stayed, of course, quite busy with my jobs, but I ended up making the transition with my main day job to another employer and so I had some company stock. That helped me then to go ahead and be able to get the funds for procuring those properties, because I was just busy. It was like, "How are you going to get the funds here to go ahead and procure a property?" That just helped. It definitely made it possible for me to get those properties. I know that's not for everybody, but I'll admit I had listened to some Keith Weinhold as well and that influenced me, where if you're in a rough situation, just go ahead and take the tax hit. I was young enough. I felt my risk tolerance was high enough, that I was comfortable going ahead and using those funds that were for the company's stock, and going ahead and using those as down payments for my three properties in the Kansas City area. Kathy: Yes, as you mentioned, we're not working in Kansas City anymore. I think it's a great place. We just didn't have luck with property management there. We had difficulty with the older homes. It was a tough market, even though there's a lot of growth there, at least for us. I know that you experience some of that. What's the ugly side of real estate, and investing out-of-state that people need to hear. Brent: Right. That's true. That was a challenging market. I was definitely gung-ho because I wanted so much to be able to quit my side jobs, [00:06:00] and just have more time. I grabbed those three properties. Unfortunately, one of them did get placed with a bad tenant. I can't recall. It might have been actually the second tenant on one of those. She looked good on paper. She passed the background check, looked good. She had a job with Kansas City Medical Center even. That Kansas City affiliate actually had brought in and developed a property management company in-house. I was with that property management company. At the time this tenant was giving me grief was about the same time that that property manager actually folded. I wasn't aware. She had actually left town, and left the bathtub faucet on and at full blast. Kathy: Oh my gosh. What a-- Brent: Yes, I was faced with an astronomical water in utility bill. [chuckles] Kathy: What about damage to the house? Brent: I was fortunate in that the rehab had been done well enough to where-- the tub didn't overflow, the piping was good. Kathy: It was just water loss. Oh, my gosh. That would be a real crime. You'd get arrested for that in California. We can't waste water like that. [laughs] Oh, my gosh. Brent: Right, pretty hard. Kathy: Do you think she just forgot? Brent: I'm sorry. Kathy: Do you think she just forgot to turn it off, or intentionally--? Brent: No because, let's say, I had photos of some other parts of the house that definitely would indicate no. There was, I think, some intention with that [chuckles]. I don't know. She didn't know me from Adam, but anyway. Kathy: You're "the greedy landlord", I guess. I don't know. Oh, I'm so sorry. You had water bills. [00:08:00] Sometimes, in certain states, there is a lesson there, that if the tenant doesn't pay the water bill, it's stuck with the landlord, right? Brent: That's true. That's a good point. Right. I was hit with all the utilities. Then, just of course, I did an expensive make-ready to prepare for the next tenant on that, and transition with the new property manager. It was definitely an eye-opening experience. It's good that we stress this here. It's not always going to be a smooth experience. This was early on for me. It was definitely rough sailing for a bit of time there, to get the safe-- Kathy: Did you doubt yourself at that point? Like, "Oh my gosh. Here, I thought this was going to be my answer and instead, it's just more stress and more headache." Brent: [chuckles] To be honest with you, I didn't immediately quit my side jobs. I was still really busy and, thankfully, I had the funds to deal with it. That's why it's so important to have your reserve funds. When you're working with your lender and they want to see that, that's why you have reserve funds. I just ate it. Of course, I undertook legal proceedings with her, but nothing. We weren't able to track her. She just skipped town. To me, I was just so busy, it's like, "I'll just deal with that." I wasn't pleased about it, but I just felt it would work itself out over time. I was willing to be patient because I had heard enough people say real estate is not a get-rich-quick type of scheme so I was-- Kathy: That's a great attitude. That's a great attitude because things do happen and the odds are, eventually, it does happened to you, but that is why the reserves are in place. I'd recommend at least $5,000, set aside for property, or six months to 12 months of the rent, set aside. If you just have it in your [00:10:00] head, "This is for times like this, so I don't have to worry about it. I'm not going to be upset about it. It's just part of the cost of doing business." We have that in our actual business. We have emergency funds and a fund for legal in case that comes up. Then when it comes up, you don't stress about it. Brent: Exactly, because I think the water alone because of the tiered system, the water I think it was over $2,000 digitally. Kathy: Oh gosh, please. How are those properties doing now? Brent: Of course, as you said, RealWealth doesn't have an affiliate in that area, but there was a property manager who overtook the properties for RealWealth Network members who were in that situation with that particular previous property manager folding. I stayed with that particular provider over time and developed a trust with them there. It hasn't been totally smooth as far as tenants. Maybe that's why you folks aren't in that area right now, but I actually I'm currently dealing with another tenant right now who's, this is very recent, he's trying to squat on a property. We will see how that goes. Kathy: I know other people who have done really well in Kansas City, but we just have not. We tried probably four different providers and couldn't make it work, even though I think it's a great city. It's a growing city. There's a lot of positives. I'm sorry that you're dealing with that. It could happen anywhere, but it does sometimes. Sometimes in situations like that, I just sell the house and say, "This is just bad luck," [laughs] and I go get something else. Brent: Yes, I'm actually considering that. We'll see how things go. I think partly might be due to the COVID situation and people's [00:12:00] finances is that he qualified for a property, now he doesn't want top up the funds for rent. We'll see how it goes. Kathy: Oh, boy. What are some of the lessons you've learned and how are things going now in general? Do you still believe in real estate? Brent: Absolutely. Again, it's not a get-rich-quick scheme. I haven't quantized it. Here I'm an engineer but I haven't quantized exactly what I'm netting per month. I have seen it improve my finances. Even in the worst-case scenario, you're still building wealth in the sense that you're making payments or your tenant is making payments on a property and over time, you're going to own that property and you'll see rents go up over time. There's still a benefit there. That's definitely one thing I've learned is just be patient and be content. As far as how are things going on, I actually have diversified. I've got two properties in Indianapolis as well. I am currently, as we speak, working on acquiring a third. In addition, I mentioned I spent some funds to acquire downs, which I think for a lot of people might be a challenge. People look and think, "How am I ever going to acquire real estate?" The downs are not huge of course relative to California real estate. I was able additionally because we got our house here in the Bay Area, I was able to use a couple of cash-out refis. I think both of those were for the Indianapolis properties. Now one of the properties I've had for about three years in Indianapolis. We are using the equity in that house [00:14:00] now to tap in and acquire a third property in Indianapolis. It's rewarding because we got in, rates were higher at the time, interest rates were higher. We've seen them come down and now, we're going to cash in on the equity and acquire an additional property in Indianapolis. That's been a much better market for me, has been very smooth sailing. I'm staying in Indianapolis for the time being and keep adding on one or maybe two properties this year, and we'll see how things go. Kathy: Great. What's your ultimate goal in terms of real estate and in life? [chuckles] Brent: [chuckles] Initially, it was simply to acquire-- The immediate need after meeting with Aristotle was simply to acquire three properties. We figured that would be enough for me to be able to quit the side jobs and focus on the day job and then real estate on the side. It's really a blessing to be able to go beyond that. At first, I didn't have any hopes. I was having trouble seeing how am I going to go beyond three? Now, we've been able to look at other means of financing these properties for the downs. We're continuing to go forward. I think I have other cash reserves or other equity in other properties that I can tap into as well so I'm not eating up cash on my end to try to fund the downs for these properties. I'm just going to keep going, probably try to add maybe one a year for the time being. This will be six for me, and then I also structured my primary residence so that that loan is all under my name. I'll be at 7 then of the golden 10 as you call them for the golden parachutes for my real estate number, and then we'll probably try to focus on my life and structure it that way. We've definitely tried to hear and listen to [00:16:00] your advice, Kathy, for structuring our portfolio. Then as well over time, there are processes I need to get more efficient on as far as probably work on developing spreadsheets, keeping better track of things. Then the legal end we're working on. I got some paperwork I'm probably going to be doing this week for the RealWealth Network's recommended legal provider. Because I have had some bleeding with property, just trying to shore up the bleeding as I go along and get more disciplined and more structured. Kathy: What would more disciplined look like? Would your acquisition process be different? Brent: I think it's just developing a better tracking program of costs. My property manager does a good job of all of that. As far as the asset protection, I know there's a recommendation to have I think separate possibly banking accounts for each properties, you develop the LLCs. I haven't gone to that level of detail. I need to work on that more. It's just trying to have bulletproof, I guess, asset protection and be more disciplined. I'm trying to develop this as I'm running along the way. Obviously, I got three children, family needs and so it's definitely busy trying to get all the stuff in. Kathy: Everybody has different opinions on how much asset protection they need. I personally don't have separate bank accounts for my properties. If they're highly leveraged properties, then I put them together in one LLC, but again, that's just me. I just figure there's not enough in them that someone would try to go after [00:18:00] properties that are highly leveraged within one LLC. Again, that's a discussion you have with your attorney. I love that you're looking at how can I run this more like a business? What's my criteria for acquisition? What do I need to be looking for? Is it a certain amount of cash flow? Is it a certain amount of growth in the area, jobs, population, age of the house, renovation, brand new? What's your criteria? Then having the discipline to stick with that because sometimes you can't find it. Brent: Definitely. Kathy: Sometimes it takes a while to find exactly what's going to fit that. I'm happy to say that we do have a new marketplace at RealWealth where you can plug a lot of that in. I don't know if you've used that yet. It's brand new. We're just coming out with it, but you can put your properties in there and analyze them a little bit more easily, so check that out for sure. Brent: Right, good point. Kathy: Rich and I got a bookkeeper finally because it was just like, "It's so much detail in managing the properties once you get a lot of them." It's nice because then he presents us with a spreadsheet and we can see how our properties are really doing. I do recommend if you're too busy just get a bookkeeper. [chuckles] Brent: [chuckles] That's a good way of doing it. I had the sense of just hitting the ground running with this stuff. Of course, it was for a time just I don't want to say overwhelming but working multiple jobs and it was more than I could keep track of. Now that things have settled down a little more, just trying to refine the process. Definitely take a look at that resource. Kathy: Obviously, you all have good sense about things to be able to buy in the down market. That said, a lot of people weren't able to do that. I imagine there's a lot of equity in your primary. Have you refi that and lowered your payment there or potentially taking cash out for investing? [00:20:00] Brent: Right, we have. We've actually refinanced two or three times. I don't remember, it's either two or three of our properties we are able to use the cash-out refi proceeds and able to land those, so, yes, definitely. We may do that again. Kathy: Awesome. Yes, I know, with the [laughs] way prices have gone up. Have you noticed or even paid attention to whether the properties in Kansas City or Indianapolis have increased in value? Those tend to be markets that are linear, they don't tend to go up in value that much, but the last year has been phenomenal. Have you noticed any equity growth, Brent: Right, it has. Right now we're refinancing one of our properties in Indianapolis and we're waiting to see the inspection report and see the appraisal, and see what we get for that. I do believe has gone up, but we're just waiting to see on that pretty sure. Then we may look into the Kansas City market. With that, I mentioned I've got a tenant that we're dealing with, squatting tenants, we may possibly try to sell that property. I looked into those. I'm pretty sure Indianapolis, because those are better quality properties, has done a higher versus Kansas City. Kathy: Okay. It seems like you're at the level, almost at least, at the level of owning properties that potentially if your wife did most of the managing of it and could show 750 hours spent learning and managing your properties, she could qualify as a real estate professional if she's not working right now and help offset the taxes you're paying. Brent: Right now [00:22:00] my youngest child is eight years old. She's pretty busy with the children and she is working right now. She's supportive of this, so maybe eventually. Kathy: When a spouse doesn't have a W2 job, and they're able to show that they would spend more time on real estate, which again is 750 hours a year, then they can qualify as a real estate professional just from managing the properties, meaning taking over the bookkeeping and making sure the insurances is good and so forth. There's ways to document that. All right. Well, any other suggestions for new listeners or anybody who's thinking about getting started or investing? Some of the things you said are pretty scary. Again, I think you already said it, but what advice would you give to new investors? Brent: Be patient and don't give up. Overall, I think it's a winning proposition and I've seen things improve over time. I think real estate is really good also in the sense, for employers as well because what this has done for me is it's enabled me now that I'm not having to work the side jobs, I'm more dedicated to my primary employer. When you're able to do that-- I'm not looking to quit my day job anytime soon. I think a lot of times employers look and have their 401(k) package and all of that, but I think what we do as real estate investors is actually really good for employees when you're still working a day job because it just makes you a better asset to that employer. Kathy: Oh, that's a great point. You mentioned earlier too, you're feeling less stressed because again, you're not having that second job. How would you say on a scale of 1 to 10, [00:24:00] you've been able to create real wealth, meaning having the time and money to live life on your own terms? Brent: It was definitely at a one or a zero probably, to begin with, where I was just being pulled by the necessities of life to I have to work so much. It's improved. I'm not to the point where I'm just living off the funds of my investment properties, but I'd say it's probably up there to seven or eight. It's definitely at the higher end of the scale. Kathy: Oh my gosh. That's incredible. I love hearing that. All right, Brent, well, thank you so much for joining me here on the The RealWealth Show and inspiring our audience and showing what's behind the curtain. It's not always easy, but if you look over the long run, that $2,000 hit one day, but maybe you made that much in appreciation or in tax benefits. It's a long haul and you got people paying off the debt for you. You're going to look back, it'll just be a blip. Brent: Thank you so much. I appreciate the advice and mentoring you've given over time to those of us in the RealWealth Network. Thank you, Kathy. Kathy: Thank you so much. Brent: Definitely. Kathy: Thank you for joining me here on the The RealWealth Show. If you'd like to hear more RealWealth stories or get access to over 500 free educational webinars on everything, from asset protection to getting good insurance on your properties, to getting really good financing, you can get up to 10 investor loans that are backed by the US government with just 20% and 25% down. Then referrals to companies across the country who've helped our members at RealWealth acquire investment properties for the long-term with property management in place. You can do that at realwealthshow.com and it's free to join. I'm Kathy Fettke and we'll see you next time. Announcer: The views and opinions expressed in this podcast are provided for [00:26:00] informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:26:14] [END OF AUDIO]

Have you thought about buying a vacation property and putting it on the short-term rental market, but weren't quite sure how to manage the process? Our guests, Bryan Marks and Jimmy Woodard, have known each other since 2010 when they met as students at UC Berkeley. Since then they’ve built over a decade of experience in the tech industry, and have put their tech know-how to good use in the launch of a short-term rental business. They bought their first short-term rental just 6 months ago at Lake Tahoe and are working on a second one across the country in Miami. In this interview, they join us with some tech tips on what they've learned, so far. If you’d like to find out more about owning rental properties, including short-term rentals, join RealWealth for free by visiting RealWealthShow.com. As as a member, you'll have access to the Investor Portal where you can speak with one of our experienced investment counselors, view sample property pro formas, and connect with our network of resources, including property teams, CPAs, attorneys, lenders, 1031 exchange facilitators, and more. Go to www.RealWealthShow.com for more information or to listen to past episodes. TRANSCRIPT [00:00:00] [music] Announcer: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investor's resource. [music] Kathy Fettke: Have you thought about buying a vacation property and putting it on the short-term rental market but aren't quite sure how to go about that? I'm Kathy Fettke, and welcome to the Real Wealth Show. Our guests today, Bryan Marks and Jimmy Woodard, bought their first short-term rental property just six months ago. It's been so successful that they're doing it again, but this time across the country in Miami. They're here to give us some tips on what they've learned. Hey, Jimmy and Bryan, welcome to the Real Wealth Show. Jimmy Woodard: Thank you. Thank you for hosting us. Kathy: Just first talk about the short-term rental business, a year ago, there was a lot of concern that Airbnb wasn't even going to make it, now I don't know if those were just scary headlines. Today, I think it's been busier than ever for Airbnbs and short-term rentals and Vrbos and everything else out there. How did you guys get started? Let's just start with that. How did you get started in short-term rentals? Jimmy: Bryan, you want to take it away? Bryan Marks: Yes, thank you, Kathy, for the question. Great to be on the show. Jimmy and I actually met a long time ago, 10 years ago in college. We actually started doing short-term rentals before Airbnb was a thing. I know some people don't remember that far back, but we went to Tahoe a lot, Lake Tahoe in California, and we loved it. We had a great experience. We always had aspirations to have our own that we could use in our spare time and, then ultimately, make that into a revenue vehicle for us to generate income, passive income, which is our opinion some of the best kinds of income. Ultimately, we talked about it for years, and then recently, we made the plunge late last year. Kathy: Late last year? Okay. Jimmy: Yes, we're still new. We started back in December of last year where everything came full circle and we got our first property in Tahoe to help other people also [00:02:00] invest in short-term rentals because we want to spread wealth as far as we can through our business model. Kathy: You didn't exactly pick the cheapest market, and you also didn't exactly pick a down market. [laughs] I think that could've been the hardest time to buy vacation property in a place like Lake Tahoe. How did you get that first property? Jimmy: Actually, it's funny you mentioned that because there were multiple properties that we bid on that we got outbid. It was a very frustrating process, but what ended up happening was we came across this company called Flyhomes. I don't know if your audience are familiar with them, but they help you convert your conventional offer into an all-cash offer. They at the time didn't even exist in the Tahoe market, so we had to cold email the CEO and beg him, "Can you help us get a property?" because we kept getting outbid. It worked out where the very first time that we worked with Flyhomes, our offer, even though it wasn't the most money that was offered because it was an all-cash offer, we were able to purchase the property. I would definitely recommend them to all of your listeners. For anyone that going through that same frustrating process, keeps getting outbid, Flyhomes is a great partner that we worked with. Kathy: Oh, that's wonderful. You had to have the downpayment, or they put up the rest of the money for you so that it's cash and then you finance it after? Jimmy: Correct. Kathy: Are you guys from the San Francisco Bay Area? Jimmy: Yes. Kathy: It's just like this tech hub of awesomeness where there's just something new happening, [chuckles] something coming online all the time. I don't know if you know, but I won this award with Goldman Sachs of top 100 most intriguing entrepreneurs, which was really cool. Jimmy: Oh, nice. Kathy: I sat at a table in 2012 with these two young guys [00:04:00] who were telling me about this new business they had. It was basically they were so tired of trying to get a taxi, and I think you know where I'm going. I don't know if you remember days before Uber. Fine, I do. In San Francisco, if you were at a bar at 2:00 AM and you needed a taxi because you did need a taxi because you shouldn't be driving from a bar at 2:00 AM after drinking, you'd wait hours. These guys were literally standing on the corner watching these cars go by thinking, "I just want to jump in one of those." As they were standing on the corner, they come up with the concept for Uber. Jimmy: Got to love that. Kathy: I got to meet them at the very beginning, I didn't even know what it was. It's just really cool to see that ridesharing, and now, house-sharing, which I think is what you guys are doing now. It's only been about six months, but how's that vacation rental performing? Bryan: It's been doing great. Back to that tech story, we do have a lot of tech background, both Jimmy and I, myself being more on the engineering technical side and Jimmy being more on the sales. We did lean a lot into that. One thing that was really helpful and just for your listeners or viewers out there, there's plenty of tools called machine-learning tools where, basically, they're really good at predicting how much a home will do on these short-term rentals, whether it's Vrbo or Airbnb. We knew pretty definitively that we can build a pro forma right out the gate and actually hit really good numbers and really feel confident that we're going to get a great ROI from the property. We jumped in there and did that initially. It's been doing great. It's actually exceeded it. We've added a lot of the amenities that have proven to improve the outcome of the home and have a great experience. Something ultimately that we wanted, two things that come to mind are, one, we added a hot tub to the property. It's always great to be in the snow and then just be in the hot tub. It's really nice to [00:06:00] have. Kathy: It's a must. Jimmy: [crosstalk] Oh, yes. Bryan: It's a must. Then we added a little movie theater room, too, with very comfortable sitting and a bar area because I know, especially during COVID, people just want to be with their bubble and with their friends and family and they don't really necessarily want to go out, so we did have a bar, lounge area into the house so it felt like you could stay home and be safe while still having a good time. We added a lot of those amenities, and they paid off quite a bit. Kathy: Do you think that's going to continue because I think a lot of people forgot there was a COVID? [laughs] It's crazy out there. My daughter was showing me pictures of San Diego, and there was no sign of anyone staying home. Jimmy: Yes, they were binge spending, right? In full force right now. Kathy: Yes, [chuckles] exactly. I imagine no matter what's going on, people like having hot tubs and bars in a vacation home. One of the sites you mentioned or one of the technologies, is it AirDNA? Is that the one you use? Jimmy: Yes. Kathy: You can become a member there and get a lot of data on vacancy rates and what the average house is getting, right? We've used that before, that was really helpful. Jimmy: Yes, very helpful tool because you don't want to go in blind thinking that you buy a property here, it's going to do so well because it's in a popular city, but it's not near any attraction or it's just in a bad zone and you waste all your money because you didn't do the research upfront. We made sure to do the right homework before we invested in our first property, and we did the same thing for our second property, which we're going to launch in Miami pretty soon. Kathy: That's so cool. I had the founder of AirDNA on the show, and I didn't really-- hadn't heard of it and I didn't understand the value of it at the time. I was confused, but I think it's really taken off since then. All right, let's talk about Miami then because we started Airbnb business during COVID too, [00:08:00] and it has been really successful. Jimmy: Nice. Kathy: It's just a little guesthouse right on our property. If my house cleaner doesn't show up, I can change the sheets, I can take care of it. Not that that happens very much. There's something really scary to me about owning a rental property, a vacation rental so far away, although I'm sure there's all kinds of [chuckles] management companies there for that. Rich and I are really seriously thinking about doing it in a ski area so we can use it when we want and other people can pay for it when we're not using. How do you manage it when it's across the country like that? Bryan: Back to technology, everything to hammer is to nail type of situation, we use quite a little bit. Ultimately, it comes down to having a really good team in place of folks that you trust. The two most important components are your maid service, having a really good relationship with them and trusting them a lot. Then also having a really good-- a couple of handy people on a deck. The maids act as the eyes and ears a little bit, they do their job. We cycled through a few, so it took a little bit. It was a little bit like a relationship, we were dating for a little bit, and ultimately, it didn't work out. Then we found a really great company that we work with in Tahoe. That's been super fruitful for us and really automated a lot of the process. Beyond that, we do use some little gadgets here and there. Our biggest concern is making sure the neighbors have also a good experience because that's probably the hardest part about owning a short-term rental is, honestly, what the neighborhood takes into that and what's your impression in the community there? You really don't want to be-- you're negative area in the community, so you really want to treat those neighbors well, and that's something we really strive to do. Another part of that is noise sensors. We have noise sensors throughout the property, so we can tell if they are being a little bit loud. We can just ping them or let them know, "Hey, we did pick up that you guys might [00:10:00] get a complaint soon if you're going to keep it up. Beyond that, we have some outdoor bell cameras to make sure that trash is accounted for in the right place. Tahoe, for example, has a lot of wildlife, and you don't want any bears coming out at your trash, which is-- Being a city person, you wouldn't think that that's a major thing, but in Tahoe, they take it very seriously, and we do as well, to have everything in the bear box locked away so no bears are at your front door. [laughs] Kathy: Not just at your front door. My sister lived in Incline for many years. There was one morning she was-- turned around, there was a bear in her living room, and she jumped up on the counter and like- [crosstalk] Jimmy: Oh. Kathy: -[unintelligible 00:10:38] away. Jimmy: Live to tell the tale, right? Kathy: Yes, that's right. She also went out into the refrigerator in the garage and all the chocolates that she handmade were gone, and the lasagna, because they do like our food. [laughs] Jimmy: Oh, yes. [laughter] Kathy: That's really that's super helpful. I don't know if you know, but there was really just a horrible tragedy in Malibu where a woman-- There's very, very strict short-term rental laws in Malibu where you actually have to live there, that's why I'm allowed to do it. Let's start with the first question, is part of the research finding a place where you don't have to live there to own it? Jimmy: Correct. Kathy: Yes, okay. [laughs] Jimmy: We do that research. It's pretty simple, you can just type in "city" plus "Airbnb laws" and then you'll see a bunch of references that come up to make sure that you're following the rules because our job is not to put up illegal properties, it's to make sure that we're complying with the local rules around short-term rentals and things of that nature. Kathy: Yes. They'd passed this ordinance, at least, I believe this is what it is in LA County that you can rent something on your property but you got to be there. A woman in Malibu rented out her home for the weekend. In the summer, you can make so much money, so a lot of people [00:12:00] have done that for years, the short-term rentals over the summer, and that pays for their living in Malibu for the rest of the year- Jimmy: Oh, yes. That's right. Kathy: -because it's so expensive. She rented it out. Well, these young kids rented it, they said there was just six of them, they ended up being about 40, and the neighbors called her and said, "Hey, there's 40 people at the house, and they're on the balcony," and she was on the phone with them for hours. Well, the balcony collapsed. I don't know if you saw that. Nobody died, which is great, but young people were hurt, and now she's got lots and lots and lots of lawsuits. That's another thing that really scares me about-- At least, if it's where I live and I say on the description, "We're here, no parties," because we'll know. My daughter who's-- I won't say it was my daughter but her friends very, very regularly tell a different story to the Airbnb hosts to say they're- Jimmy: Of course. Kathy: -a Bible study group, and then it's the fraternity and then there's a hundred kids. Again, you said the sound monitoring, can they turn that off? What about cameras, can you have cameras? I know you can't probably inside but-- Jimmy: Well, the Ring, so that's another tool that we put to use. We have a Ring doorbell camera, so that's the easy way for us to monitor who comes in and who comes out, and in a way, that's not invasive because we're not trying to invade people's privacies here. Then the other thing is, on Airbnb, and I know we do the same on Vrbo as well, you can select what type of guests that you want. If somebody has zero reviews is something that we recently talked about because of 4th of July. If someone has zero reviews, you can actually screen that out in terms of guests that are allowed in your property. There are different ways that [00:14:00] we try to get around it. Then, of course, the last one is having short-term rental insurance, separate from homeowners insurance, because you need a little bit more to some of these points that you're making to make sure that you cover your bases in having an Airbnb. Kathy: You just call your insurance company and let them know you're doing short-term rentals? Jimmy: There are actually specific insurance companies, so Proper and CBIZ are two in the space. Then you don't necessarily need both. If you are solely using it as a short-term rental like we are in our case, so we just go with-- CBIZ is the company that we work with currently. Kathy: Okay. I was told that Airbnb offers a million-dollar policy, do you know much about that and if it's any good? Jimmy: We know about it. If it's good, we haven't-- Thankfully, we haven't had [crosstalk] to take advantage of that. Kathy: [laughs] Haven't tested it. Jimmy: Exactly, we haven't tested out. We just want to cover our bases too just in case there are things that Airbnb doesn't cover. Kathy: All right. Then you mentioned that there's ways to save on rehab costs by doing it yourself. I'm sure I wouldn't be qualified to do it myself, but what kind of tips do you have? Bryan: Rehab costs, yes, that can be a huge cost to the business. If you're setting up your own Airbnb, that can be almost the majority cost of getting a house ready. You have to know when to pick your battles as far as with doing the work yourself. My recommendation is to get a lot of price quotes from folks but try to be almost a general contractor in a way if you have time, especially if it's very much a transactional nature. For example, let's say you're insulating a room, you can go and try to tear apart part of the drywall and do yourself and put insulation in there to make better heating. There's also plenty of services that will charge you $1,000 to go through and drill holes and then they pump [00:16:00] this special material in there and they walk you through it, and it's very much transactional in nature, it's commodity. You can definitely find subcontractors that will do a really good job for a very affordable price, but it really depends on what it is. Some like painting, for example, it's going to be very expensive because it's just the man-hours that you can only paint so fast, and that's something that almost anyone can do. You can even have a painting party with some friends and order some pizza and you guys can all paint together if you guys are really close friends and they're maybe staying at your house for free. There's lots of fun ways to approach it. For the most part, anything in the interior that's not going to be very sophisticated like patching some drywall or potentially putting together some furniture is something you can definitely do yourself. You might want to start to look at contractors if it's getting more and more sophisticated on the inside. Kathy: Okay. Well, my goal would be to not-- [chuckles] just have it be completely hands-off. What do you think about property management companies for short-term rentals? How do you find a good one? Jimmy: The great thing is, we actually do it ourselves. One of the things that we tell everyone is that if you have the time, which honestly it's 5, 10 hours per week, so not a huge commitment, if you have the time, you can do it. If you want to completely get rid of that responsibility, then you should be prepared to give away a huge chunk of your money because, for the most part, property management companies are going to charge you anywhere from 15% to 25% of your top line. Not profits, just everything that you gross, they're taking 15% to 25%. There are a lot of good ones in the space, you can google and find a lot of options. Just make sure that you're not just paying for someone to [00:18:00] essentially help you with answering people on all these different platforms because you could do that yourself. Methodism-- [crosstalk] Kathy: That's not too hard. Jimmy: Exactly. There has to be some value add, whether that's increased bookings or consultation to help you increase your revenue with different amenities that you can add to your property. We do that ourselves, but you can easily find someone if you are looking to just completely offload that time to somebody else. Kathy: You can definitely do it yourself, and I agree with that, it's not too time-consuming, although you can get an assistant too, that would be much cheaper. I know J. Martin, I think he's got assistants in the Philippines. I'm not sure, I could be making that up. There are ways to get people to handle that for you, although, like you said, it doesn't take a lot of time. Would it make sense to maybe hire a cleaning company so that if your housekeeper's sick, they somebody else? That seems like it would make sense. Jimmy: Correct. Kathy: Yes. Then screening, I think you said something about if they don't have a profile, they don't have reviews, they don't have a photo, how do you pass on somebody? Are there fair housing laws around that? You just say, "No, [laughs] you can't rent it."? Jimmy: It's your property, right? At least for Airbnb, we do Instant Booking, but they have a feature where they have to request a book prior to being able to Instant Book. We understand we're running a business and money is money, but we want to make sure that we're responsible with the guests that we take onto our property. Bryan: Another thing, on that point real quick, is that it's a very seasonal business, so you have peak seasons and you have your slow seasons. You can be much pickier during peak seasons, and it's also when a lot of the parties tend to be and a lot of the people tend to-- cutting loose, so to speak, over the holiday weekends, so you can be much pickier [00:20:00] about who you let into the house and for how much during that time. One really effective strategy is during peak season, you have set very high pricing and you try to maximize those days the most and you be very selective about who you let in the house. During the slow season, there's going to be less issues and, a lot of times, there's also less people too. You should be much more competitive during the slow season, lower your rates a little bit, maybe have Instant Booking. You really have to play to the seasons because you will generate the majority of your income during peak seasons. Kathy: I see. What you're saying is if I want to break the rules and have a massive party, I should do it offseason. [laughter] Jimmy: Just not in our place, not in our place. Bryan: As long as it's your party, yes. Anyone else's party, no. Kathy: Okay, perfect. I'll invite you guys. Jimmy: That's right, only a Kathy party. Kathy: All right. Any last tips? I know you guys started a business. Jimmy: The tool that I recommend to everyone for pricing, you can do either Beyond Pricing or Wheelhouse. Make sure you utilize one of these tools, they only take 1% of your revenue, so it's next to nothing. Otherwise, you're leaving money on the table if you try to price yourself. I would highly, highly recommend if you get into the short-term rental space, utilize a pricing tool because you're leaving money on the table otherwise. Bryan: Yes, and the pricing tool's super effective for us because it's going to look at everyone else in the market, everyone else in the area and set a very reasonable rate. You should still double-check those. I work with a lot of machine learning engineers, and they're smart guys and girls, but they don't have the final say all the time. Definitely check the data. It's a great tool for really knowing where the market should be and how to really maximize your income. Occupancy doesn't necessarily translate to more revenue. You could have 100% occupancy, but you could be leaving money on the table in a lot of cases, and so you want to optimize for even lower. Especially, lower occupancy rate for higher revenue. Definitely, you'll want to check out some of these tools that Jimmy mentioned. Kathy: All right. Thank you [00:22:00] so much, Bryan and Jimmy, for being here on the Real Wealth Show. I love inspiring other people, showing that, "You can do this," you can do this. Jimmy: That's right. Thank you for hosting us, Kathy. Bryan: Thanks so much, bye. Kathy: Thank you for joining me here on the Real Wealth Show. If you don't know already, at realwealthshow.com, we have a list of property providers nationwide in the hottest markets in the [music] country who offer long-term rental properties with property management in place and also short-term rentals in the Florida area mostly. You can get referrals to those teams, just like thousands of our members at Real Wealth Network, and get lots and lots of information, free webinars at realwealthshow.com. Have a great rest of your day and we'll see you next time, bye-bye. Announcer: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com

The key to buying real estate may no longer be “location, location, location.” According to one long-time real estate investor, it’s now “property management, property management, property management.” That’s just one piece of sage advice you’ll get from this interview with Myron Schroer. He’s had a real estate license since the 1970’s, has purchased real estate in several parts of the country, and is teaching his kids and grandkids about the business with a family corporation. You’ll find out how he and his wife got started, how they got the whole family involved, how they choose their markets, and where they have invested. Be sure to join RealWealth for access to the kind of information that has helped Myron become a successful real estate investor. Go to realwealthshow.com and sign up for free. It’s also free to speak with one of our investment counselors who can answer questions and put you in touch with experienced property teams across the U.S. AUDIO TRANSCRIPT: [00:00:00] [music] Speaker 1: You're listening to the Real Wealth Show with Kathy Fettke, the real estate investors resource. Kathy Fettke: The key to buying real estate may no longer be location, location, location. According to our guest today, it's more about property management and I agree. I'm Kathy Fettke and welcome to the Real Wealth Show. As I said, this is just one piece of advice that we'll get from today's interview with Myron Schroer. He's had a real estate license since the 1970s, has purchased real estate in several parts of the country, is teaching his kids and grandkids about the business with a family corporation and that is so cool. You'll find out how he and his wife got started, how they got the whole family involved, and how they choose their markets, and what they're doing today. Myron, welcome to the Real Wealth Show. Myron Schroer: Oh, thank you. It's great to be here. Kathy: I'm excited to hear about how your family has created a family legacy with real estate knowledge and wisdom passed on to the kids. That's not always easy to do. How has that worked for your family? Starting with you, was your father in real estate? Myron: Correct. We bought our first house a couple years after we had been married. We moved out here from Indiana, and I grew up on a dairy farm. My father started in real estate and like I said, we bought our first house. He was instrumental in us doing that. Over the years, we continued to purchase additional homes, as it became available. In about 1991, he started doing condo conversions. We had some apartments, and we're trying to convert them to condominiums. In 1991, that, unfortunately, went south. [00:02:00] We had a problem. Actually, the builder went bankrupt. My father was the money partner of it and he almost went bankrupt. Unfortunately, it took us about seven years to pay everybody back that was owed. At about that time, unfortunately, he passed away of a sudden heart attack. In the interim there, he had formed a corporation and put most of the real estate into that corporation. In doing so, he actually gifted part of that to myself and to my sister. After he passed away, the corporation wasn't doing well, obviously. We just paid everybody back that we had owned from the previous problem that we had had. In the course of the next couple of years, we actually was able to turn things around, sell a few things get the cash flow going in a positive direction. At that point, the corporation actually started doing well. My mom was actually the owner at that point or the major shareholder. At that point, we decided that, from an estate standpoint, it made sense to start gifting part of the corporation away. We did that to the kids and the grandkids. We started having yearly corporate meetings, which was really a blessing because it forced us all to get together. Sometimes that's not the easiest things to do. Again, we wanted to do things right from a corporate standpoint. We started having our yearly meetings. [00:04:00] People started getting more and more involved. Really over the course of the years, it's been a real blessing. Kathy: How I bet? How did those family corporate meetings go? What was [crosstalk] Myron: Well, initially, we didn't really know what we were doing. It was a lot of questions. I think most of the folks trusted my wife and I pretty much run it. In the meetings, we obviously have questions about where we're going, what are we doing, what do they invest in? Dividend is a big thing. This is a philosophy thing, but we never wanted the good corporation to give off more to the individuals or to give off enough that would change their lives. In other words, we learned a long time ago that you can't give somebody something for nothing, because it will change who they are and it's just not a good thing. We never wanted the corporation to give off a large sum, the intent was to help the kids, the grandkids, for example, playing sports is relatively expensive in school now. If the kids want to play sports, it can cost as you probably know, a pretty good chunk. We're able to help with that if the kids want to play sports, if they want to do extra things. I have six grandkids, and four of them are currently in college. It's been able to help with them. One of my grandsons is getting his [00:06:00] aerospace engineer degree, and he just became a pilot. That's extremely expensive. It's been able to not pay for all that but to help him to achieve that goal. In fact, he had his first solo here about two weeks ago. Kathy: How exciting. Myron: We're very fortunate to be able to do that. Kathy: I agree with you that when things are handed to others for free, it's maybe not appreciated, or doesn't necessarily go in the right direction. How do you keep it equitable with your kids? Is there any kind of expectation that, yes, these funds will go towards the sports or the college, as long as you hold up a certain GPA or, or you show up at a practices? Are there any requirements? Myron: We're really, really, really fortunately blessed. Our kids and grandkids, they're great kids. They understand what it means to work to achieve things. We've been very, very fortunate in that area. What we do is we give out shares and the shares give the dividends, and then it's up to the individuals to do with those as they please. One other thing that we've done, we've been able to take in and actually use a corporation as a bank, in a sense for the kids and the grandkids. If they have additional funds, they can invest in the corp, and we pay a 6% [unintelligible 00:07:41]. It's like putting in the bank only, it's the corp. It helps a corp give us money to go out and purchase additional things, but also it gives them a little bit higher return than they would get in the bank. Then we can coach them [00:08:00] on what to do with those funds eventually also. Kathy: Are any of your grandkids invested in it? Myron: They are. Kathy: With their savings? Myron: We have a couple that have shares at this point. They come to the meetings. We've tried to come up with guidelines that make sense. You have to be a certain age, in order to take and to buy in. You have to have a certain number of shares to be able to vote so that investing-- Also, we try to take advantage of the tax advantages of having a corporation and having a meeting. We pay the individuals to come to the meeting. Again, like I tell people, and I tell our accountant, we want to take advantage of every tax opportunity that is there but we don't want to take and do anything that's questionable. If the line is in the sand, we want to be a foot away from the line. The corporate meeting allows us, to take advantage of some of those, tax opportunities. Kathy: For example, the family could meet in a reunion-type setting and have that meeting and a couple of nights might be covered by the Corporation, the cost, and the food. Myron: We have not done that yet. We will. Our corp meetings, we have them local and the food and then the travel expense and the attending the meeting, those are all paid for. We've talked about the remote location and having a meeting. We haven't done that as of yet. Kathy: It seems like it would be really important for your meeting to be somewhere like Hawaii where you [00:10:00] can really relax and create. [laughs] Myron: I agree. Kathy: That might be too close to the line, but I don't know, conversations with URCPA. That is really cool. I haven't heard of that kind of scenario besides the billionaire families who do that, I don't know how far you are and your net worth, but I love that the family and the children and the grandchildren are all a part of this family corporation. That's really fascinating. Where are your properties? You live in California? Myron: We do. We're about an hour out of the San Francisco Bay Area. We actually have properties in Oregon, of course, California, Arizona. We were fortunate that about 15 years ago to go into Texas fairly large. We've got a number of homes in the Dallas Fort Worth area. We just recently went into the Florida market, and those are doing quite well as you know. Then Indianapolis really liked the Indianapolis market. In fact, we're in the process of doing some stuff in Evansville with [crosstalk] Kathy: Oh, yes. We like that area, too. Myron: That's pretty much it. We have stuff in Utah also. Kathy: What role do the kids play in the management of all these properties? Myron: At this point, not a lot. When we have a meeting, for example, we talk about using a family bank, and so a couple of the individuals were tasked with doing the research on that. What does that mean to take advantage of the corp? The intent was if someone were to maybe want to purchase a home, or if they wanted to start a business, and they needed funds for that, obviously, it's [00:12:00] a little bit difficult to get that from a bank, maybe the corp can help them out. How would we set that up to be equitable? Who would control that? Those type of things. We're looking to diversify because everything we have right now is real estate, so we're looking to diversify a little bit, and maybe it'll go some into the stock market a little bit. A couple of individuals looking into that to see what does that looks like? What's a good plan to do on that? Those are the kinds of things. We've gone through trying to set up the bylaws as far as who can be in the corp? Who can't? Things come up, people get divorced and [crosstalk] how do you handle that? If that will happen or when it happens, how do you handle it? Those are the kinds of things that we've tried to look through or work through if you will and look down the road and say, "Right now, it's not an issue, but those things are going to come up. How do we handle it? What do we do? When they do?" Those are the kinds of things that we have tried to work through and talked about. Kathy: Really incredible. There will be a lot of inheritance coming to younger people over the next decade. I wonder how many of those children are going to know what to do with what they inherit. That's why there's always opportunity for real estate investors because people inherit property, they're like, "I don't want this," and get rid of it. How brilliant to bring them in on the business years in advance where they really understand it and start to take on different positions and leadership roles within that company, so when that transition happens, it's fluid. Myron: [00:14:00] That's eventually, obviously where we'd like to get. Having the corp also allows them if, at some point in time, they want to sell their shares, they want to get out because it's not for everybody. Some people like it, some people don't. If they want to get out, they'll have that opportunity to take and do that. I believe and have always believed that real estate is just the way for the average person to create long-term wealth. If you stay with it, and if you don't get undercapitalized, that's another key. Don't get undercapitalized long-term, you're going to do fine on the tax advantages, and stuff in real estate is just that-- I don't know of anything else that is close to it. Kathy: You've been in real estate for how many years now? Myron: Actually selling real estate and I got real estate license in 1973. I did it part-time most of my life. I guess it's been, do the math, 50 years. Kathy: That's why we wanted you on the show to give us your sage advice that starting young is worth it because we're going to be living longer and longer, and a 30-year fixed-rate loan seems like so far away in the future, and it's not that far away. Over the years, I know back in the '70s, there were people saying that real estate was expensive in those dollars. From that perspective, it wasn't really that much easier than it is today. What do you think? Myron: We bought our first house and I had alluded to [00:16:00] that earlier. I wrote to work with four other people and we would talk about real estate. I had it, but the first listing that I got was actually worked out to be a really good rental. I said, "I'd love to buy that house," but we just didn't have the money. We'd only have been married a couple of years, we didn't have any money. One of the guys I wrote this, "I'd really liked to buy a house too, but I don't have a lot of money either." We bought the house together, we still own that house, that same amount today. Now, before you say, "Hey, it's already depreciated and you're a fool for still having it." From an investment standpoint, you're absolutely right, but that house, it's symbolized for us what real estate investing is? It's at this point, obviously a cash cow. Is it hurting us tax-wise? Of course, it is. In fact, we're probably going to take and sell it here before long on 1031. You're right, it was tough to get started then, it's tough to get started now. I would just encourage everyone to do what they can do to get into real estate. I know that can be difficult, but again, long term, it's going to pay off, it just is. Kathy: There is a belief even back in the '70s that how could prices go much higher. My dad bought a home, a primary residence in Atherton for $99,000, and he was a dentist. It was hard, it was a big purchase. $99,000, those homes are 10 million now today. You couldn't fathom that a $99,000 house, it was already expensive, could [00:18:00] ever be worth a million, or 2 million, or 10 million? It's not in our ability to understand that. Yet, it happens every decade, right? What did you pay for that house and what do you think it's worth today? Myron: We paid $21,500, we'll probably sell it for $700. Let's wait, it'll probably go over 700. Kathy: Back then, you couldn't fathom that much money. Myron: No, it was no. You asked about the prices and getting into real estate and one of the things that I'm sure your viewers are probably thinking, "Prices are high right now. Should I invest now or should I wait?" I tell people, "It really doesn't matter." Don't stop watching this podcast because I said that. If you step back and look at it, you need to get in the game. It doesn't matter when you get in as long as you can afford it. For example, right now, you buy a house for $500,000. Interest rates are extremely low. If that house, let's say a year from now, or two years from now, it's 20% less, and it goes down to 400,000, people say, "Hey, I should have waited." Chances are a year from now or two years from now when that house is $400,000, interest rates are not going to be at three and a half, or three and a quarter. They're going to be up at four and a half and five. Run the numbers, what you'll find out is your payment will be higher than if you bought the home today. Long term, it doesn't matter when you get in but the key is to get in, and once you get in then it's a little bit different story, but the key is to get started. Purchase your first property, learn the ins and outs. Kathy: Especially today [00:20:00] when we have the kind of inflation that we have, and what was it just at 6%. If you're sitting in cash, you lost 6% of your money by doing nothing with it, whereas with real estate it usually increases with inflation while you're sitting with the same debt position. Myron: Another concern that I found with folks is, "Well, I'm afraid if I buy that $500,000 house, I could lose everything." Well, that's not really true. As long as you're not undercapitalized to begin with, as long as you can afford it, if you can stay in at long term, you're not going to lose because of-- In real estate, worst case scenario if it goes down to $400,000, you'd lose a 100,000. That's a lot of money but if you're in the stock market, the stock market can lose 50% in a matter of a week or two weeks. In theory, you could lose-- If the company goes bankrupt, you could lose everything. Your chance of losing everything in real estate, again as long as you're not undercapitalized-- It's not zero because I guess in the theory it could go to zero but land or real estate it's not going to go to zero [unintelligible 00:21:17]. Kathy: Typically it's worth something. Myron: Absolutely. Kathy: You only lose money if you sell. If you're able to use the property for other things like renting it out, then it doesn't matter because you haven't sold it. Myron: Exactly. Again like I said initially, long-term real estate it is a way for the average person to create long-term wealth. I can give you another real quick story. My son here 15 years ago, we were able to purchase the duplex in Texas and where we get in with nothing down on the whole thing. We financed the whole deal. He put all the money back into it with the intent of [00:22:00] using it to finance his daughter's college education. Well, it was paid off here quite some time ago and as it turned out he didn't need to use it for the college education. Those are the kind of things that people don't really understand or nobody really tells them. If you're a young person, you have kids and you want them to go to college, it's tough to save for that, but you can take them. Buy a piece of property. Yes, it does take a little bit but there's ways to do it. Hang on to that property, put the money back into it that you're making on it, and then 10-15 years now when your children get ready to go to college, you've got the funds available to do that. Those are the kind of things I like to talk to people about and encourage them, and help them to help set them up to be able to do that. Kathy: It can be done tax-deferred, so all the equity gain, there's-- All you have to do is look at the charts and look at history to see that prices are going up. Chances are it will be worth more in 15 years, in which case you just refinance at that time take the cash out and you're not taxed on it. Until you sell-- Of course, the tax situation can always change but that's how it is currently, and has been for a long time. What else do we need to know with your years of experience? What are some of the most important lessons that you learned? Myron: I learned that if you ask an individual what the three most important things about real estate are, they'll say location, location, location. I tell people, "Take that, write it down on a piece of paper, wad it up and throw it away if you're investing in real estate." The reason being that most of the real estate that you invest in is not going to be local. You're going to have to hire a property manager. The three most important things in real estate [00:24:00] if you're an investor is a property manager, property manager, property manager. You can take a good house and a good location and a bad property manager, and you'll lose your shots. You can take a bad house in a bad location with a good property manager, and you'll still make money. That's a lesson that we learned the hard way, but I would just tell folks, "Boy, it's so important to have a good property manager." That's-- Kathy: Well, have you seen a difference because I sure have. In the '70s I wasn't investing then but I don't imagine there weren't computers. It was a very different world, you were probably just investing locally. Then even when I started 20 years ago, it was not very organized but it's come a long way. What have you noticed over the years? Myron: Well, like you say in the '70s it was a totally, totally different ball game. It was really the individual, that was the key. Finding an individual who was a jack-of-all-trades, who was very organized, who communicated well in-- What was I saying? Was a jack of all trades, definitely. That was key, and we didn't have-- At least I wasn't aware of the management companies that had two, three, four, 100 doors. They were smaller mom-and-pop type deals. Now the mom and pop guys, they're not there anymore. It's a 2, 3, 4, 100, 500-door companies. You're right. It's the computer, it's the organization. Communication to me is key. It's just critical to have someone that you can contact or that can contact you. Who does contact you [00:26:00] on a regular basis, maybe that stems from the fact that old school I like the contact, I like to find out what's going on? Computers have made things a lot different. Going in video, the video tours, that's a big change and it's helped a lot. Kathy: absolutely. For our young listeners, for our millennials, and maybe gen X and gen Z, tell me what the world was like in the-- I don't know if you were selling real estate in the 70s but you were buying it. There wasn't internet, there weren't cell phones, no one had a car phone. How did you buy real estate? Myron: if I would get a client, I would have to go out. Actually every Friday the multiple listing service would send out a book and it was a book with all the listings in it printed. Well, it was obviously outdated before we ever got it, but you would go out. If I would have a client looking for a house in a specific area, I would go out two or three days before just searching going through, looking at the different houses in order to be able to show them. It was quite different. You built up your clientele, so if you knew that a house was coming on the market and it was something that you wanted to be able to purchase, you had an end prior to the house coming on the market. That's changed a little bit. Obviously with the computer and MLS and with the millennials now, really they do most of the searching that from a real estate standpoint, [00:28:00] and I still deal in real estate, a client will call me up and say, "Hey, I saw this. It just came on five minutes ago and--" Kathy: "Can you help me?" It's a lot different. What a world? Oh, my gosh. I will say as much as people complain about the technology age, it's a lot easier than back in those days when even just trying to find the property, you had to use a map, you had to go to the grocery store and figure out how to get a physical map and try to find your way to the property. Boy, those were tough times. Realtors really earned their money then, really earned their money back. It was hard. Myron: You take Thomas Brothers Maps to people right now, they probably don't know what it is. Kathy: They don't know what it is. Myron: It was a nickel back then. Kathy: You got your client in the car and you're trying to shuffle through these maps to find the property? Myron: Yes. Kathy: Oh, my goodness. It's really been a pleasure to have you here. I'm curious, how did you find Real Wealth and with all your experience and knowledge? What do you gain from an investment company, an educational company when you already know so much? Myron: Well, this is a weird deal. What we used to do, I learned a long time ago enough to try and reinvent the wheel. What I mean by that is we would take and invest in different areas, but it was through contacts of other people, other realtors, other investors that they had grown to know over the years. They had already gone to a certain area in Oregon for example. We were there only because of a friend that I had that had already been there and then vetted out several property managers. He was doing quite well, so we followed and went there. As far as getting into real-- Well, one more quick story. What we used to do is-- and you're going to laugh at this one, but we would go into a market. For example, after the hurricane down south, we went into Biloxi, Mississippi because of the opportunity. We wanted to find out what was going, had no contacts, went down, and spent a week. We always spend time in Walmart, talking to people and I know that sounds crazy. If you want to find out what's going on in an area, go to the Walmart, and people will talk. They'll tell you what's going on. Kathy: Just walk down the neighborhood and talk to people who are walking their dogs or go to the closest coffee shop, they will talk. Absolutely. Myron: You will learn what the employment situation is. More than that, you'll learn what the attitude of the people is. Different parts of the country, people's mentality, it's just different. The way they look at things, the way they look at personal responsibility, it's different. You'll feel that, you'll learn that real quick. With Real Wealth, we don't do that anymore, because you guys have pretty much gone in and really looked at the areas, you've already bedded the property managers, the realtors that you're involved with. That's pretty much done. It's made it so much easier if you will especially for the person that doesn't really have any experience. You probably don't remember this but back in 2007, I actually wound up calling and talking to you about trying to save individuals' homes, who were upside down during that period. You actually referred me to some folks up in Sacramento, to try to get some funds to purchase loans from banks. [00:32:00] That's how I first found out about you and Real Wealth, and you were extremely, extremely helpful. We weren't able to put anything together to do that but anyway, that's how I got into to hear about Real Wealth. Then we did do some things, at least 2007, 2008, 2009 for a while. Then, we've been utilizing you guys. We've been, I think very, very fortunate to have found you. I love the seminars that you do, the education that Real Wealth provides. It's great having the vendors come in and talking. I love the deal where they come in, and you go to lunch with them, and you can have all your questions answered. I think that's a great thing to do. Hopefully, now that COVID is lifting, you guys would be able to just start doing those again. That's the deal. Kathy: Oh, that's great. Wow. Well, we are really excited to get our next live event scheduled. We hope to do that soon. For any new listeners, who might be surprised the membership is free, and the information and education is free because early on, there was not a lot of information for new people and you had to pay a lot of money for it. You go to these real estate groups, and they'd have some slickster on the stage, get you all excited, run to the back of the room, and pay thousands and thousands of dollars to get the knowledge. That just upset me at the time and we made a commitment to not do that. Not that there's not good education out there that deserves to be paid for but that's just been our commitment to make it free. If you're new to the network, there's nothing to lose. You just [00:34:00] join. You get access to hundreds of webinars. I'm so glad you've been a member for so long and maybe we can get you to be an educator too. Myron: I'd love to help. One of the things you learn too is in this whole thing, and I know you guys I just saw recently you're doing a webinar on the giving back. That's the other thing that that's so important. As we are blessed, we're really-- I would just encourage everyone to make part of giving back part of their life also because it's just so important. That doesn't necessarily mean financially because sometimes when you're first starting out, you think that's pretty tough to do. You can give your time and help others also. I think what you're doing as far as giving back is a huge plus also. Kathy: Thank you so much. Myron: I can also say that every one of the individuals that we've dealt with in the different cities, the representatives that you have there, they've all been extremely helpful. In this business sometimes you get individuals that do apply or maybe they don't mean to apply pressure, but they do. That's another thing that I think of a plus for the whole Real Wealth network. There doesn't appear to be any pressure. Real Wealth is not there, too-- Obviously, you're making money but the important thing is not the money. It's not about the money. That's another way of putting it and I appreciate that. Kathy: Oh, thank you. We've always figured that if we can educate and present-- Well, first and foremost, educate and then [00:36:00] present opportunities, the investors will know if it's a good one or not. If it's a good one, they'll flock to it and if it's not, then that's our bad. We didn't do a good job. There's absolutely no pressure. That's a comfortable situation, too because I've been pressured into so many things, lots of pressure these days. We're adults, we should be able to make up our own decisions, make up our own minds. Well, we are out of time. It has been so great to have you here. I do mean that we should have you as one of our educators on this topic of how to create a family corporation. I just love that. Beautiful. Thank you so much, and have a wonderful rest of your day. Myron: You as well. Thanks. Bye-bye. Kathy: Thank you for joining me here on the Real Wealth Show. If you'd like to find out some of the things that really helped Myron be so successful and his children and grandchildren, go check out realwealthshow.com where you'll get access to hundreds of free webinars. It's free to join free webinars, all on things like asset protection and how to improve your credit and how to get the best insurance for your properties and what to look for in a property management company, what to look for in different markets. Then you also get a referral to teams across the country who help our investors find the properties, get them under good management, and help oversee that process to make it a little less intimidating when you're investing out of state. They wouldn't be on our referral list if they didn't come with rave reviews from our members. If they don't get those rave reviews they're not on the list. Again, you can check that out at realwealthshow.com. I'm Kathy Fettke. We'll see you next time. Bye-bye. Speaker 1: The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy [00:38:00] or sell any securities or to make or consider any investment or course of action. For more information go to realwealthshow.com [00:38:10] [END OF AUDIO]

If you put in the time and the effort, you can build wealth through real estate. But there are always surprises along the way, even for experienced investors. In this episode, we hear from a California couple who got started decades ago with rental properties in the San Francisco Bay Area, independently of each other. After they were married fourteen years ago, they continued to invest together, but over the last six months, they’ve almost completely reworked their portfolio. It’s all thanks to a few revelations, and challenges, during the pandemic that inspired them to buy properties in other states. You’ll hear their story, along with some great advice about the 1031 exchange, the benefits of an “escalation clause” when you are competing against other buyers, and what inspired them to invest in real estate in the first place. You can learn more about doing this for yourself by joining RealWealth. You’ll find plenty of free educational material on our website. Our investment counselors can also refer you to experienced property teams who can help you get started in real estate. Go to www.RealWealthShow.com for more information or to listen to past episodes.

Sometimes we are too busy to realize that we are too busy! It’s all too often that we look back and wonder what took us so long to do the things we really want to do. Having a serious health issue isn’t the wake-up call we want to get, but for some people, it’s been the catalyst needed to make a big change. In this episode, you’ll hear from a couple who experienced this kind of life-changing moment. Ryan Dixon had a near-death experience, so he and his wife, Christina, decided their lives had to change. Life is too precious, and you never know how long it will last. They started researching ways to create passive income so they could take a year off to go sailing and travel through Europe with their two boys. In a matter of months, they had a cash flowing real estate portfolio, and an entirely different kind of lifestyle -- and, they share their story in this interview. If you’d like to live life on your own terms with rental property income, become a member of RealWealth for free, and log in to the website. You’ll find a wealth of free educational webinars, articles, podcasts, and market research. You can also schedule a free session with an investment counselor who will answer any questions you might have, and help put you in touch with our property teams. www.RealWealthShow.com

In this episode, you'll hear from a member of our RealWealth team. He spent 20-years as a marketing data analyst for Silicon Valley tech companies, and started investing as a side job. Today, he is a full-time investor with 16 years of experience, and helps RealWealth members as one of our investment counselors. Joe Torre is also one of those people who made the most of a challenging 2020. He took some time to write a book called "Real Estate Due Diligence: The Investor's Guide to Avoiding Costly Mistakes" which you can buy on Amazon. He shares some of his due diligence insights in this interview. If you want to talk to Joe or one of our other investment counselors, join RealWealth and sign up for a strategy session. It's free to join, and free to speak with our investment counselors. Additional link: https://coast.noaa.gov/slr/ Disclaimer: The strategies mentioned in the interview may not be appropriate for everyone; other options not mentioned may be more suitable for your specific circumstances. Consult your personal accountant, tax advisor, and/or attorneys to discuss your specific situation. Past performance is no guarantee of future results. Real estate purchases are subject to investment risks, including the possible loss of amounts invested. While every effort is made to maintain accurate and current information, the possibility of errors and/or updates always exists.

She had Mom telling her to buy real estate. He married into the real estate mentality. They both had MBAs, worked at Northern California tech companies, and ended up with two rental properties in the Bay Area. But they couldn’t cash flow. In this episode, you’ll hear how Sophie and Ben turned those properties into a cash flow machine by investing out-of-state, and created real wealth about 15 years earlier than they had planned. You can learn more about doing this for yourself by joining RealWealth. You’ll find plenty of free educational material on our website. Our investment counselors can also refer you to experienced property teams who can help you get started in real estate. Click here to get started, it's free!

You may recall that, back in 2012, Warren Buffet said on a CNBC interview that he would buy a few hundred thousand homes if he could figure out how to manage them. Well, some companies did figure out how to do that, and 9 years later, they are transforming what has been an exclusive mom and pop industry for centuries. It’s an honor to have Dallas Tanner on the Real Wealth show today. He is President and CEO of Invitation Homes and is also a member of the company’s board of directors. Mr. Tanner has 20 years of experience establishing real estate platforms and, as a founder of Invitation Homes, he has been at the forefront of creating the single-family rental industry. In this episode, he shares some insight on what it’s like to manage more than 80,000 homes in 16 different markets. He also talks about how landlords of all sizes are coming together with the help of the National Rental Home Council. The Council held a virtual conference last month and is planning an in-person conference for this fall. It will be held September 29th to October 1st in Washington, D.C. Founder David Howard says of the summit: “It will bring together leading executives within the single-family rental home market to discuss, through panel presentations and conversations, the future of the industry. The housing market, and single-family rental housing in particular, has been moving at full speed to accommodate a surge in demand over the past year or so. Our intent with the summit is to address the key issues emerging from this critical period of time, and by doing so, better understand where the industry is heading and how it will get there.” You can get more information about the upcoming conference, when it’s available, at www.rentalhomecouncil.org. For information on how you can contribute to the industry as an individual investor, please login or signup here. It's free to be a member of RealWealth and free to speak with an investment counselor who can answer any questions. www.RealWealthShow.com

If you've tried to buy real estate recently, you know you have to move quickly. But you may also be wondering how other investors are dealing with this crazy real estate market. In this episode, you'll hear from a RealWealth investor who's now working for us as an investment counselor. She's seen how the market has changed over the last few years, and knows what it's like to buy investment property in today's market. Leah Collich started building her portfolio in 2010 when it was a very different market. Demand was low, supply was high, and prices were cheap. In 2017, she became a RealWealth member and expanded her portfolio into five new markets while living overseas. She now owns over a dozen properties in Texas, Florida, Ohio and Alabama. When we invited her to share her experience on an investor panel, we were so impressed that we offered her a job. And she shares some of her inside knowledge in this interview. If you'd like to talk to Leah or one of our other investment counselors about available investment properties, you can do so for free, as a member. It's also free to join our network by clicking here to join. Links: https://www.RealWealthShow.com https://tinyurl.com/joinrealwealth Audio Transcript: [00:00:00] [music] Speaker 1: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investor's resource. Kathy Fettke: What are experienced investors doing in this crazy wild real estate market? I'm Kathy Fettke and welcome to The Real Wealth Show. Who better to ask than one of RealWealth network's own investment counselors. Leah Collich began investing in real estate in 2010 when it was a very different market. Demand was low, supply was high and prices were cheap. In 2017, she became a RealWealth member and expanded her portfolio into five new markets while living overseas. She owns a dozen properties in Texas, Florida, Ohio, and Alabama. Several years ago, we invited her to be on an investor panel to share with other RealWealth members what she's doing. We were so impressed that we were lucky enough to be able to hire her as an investment counselor helping others today. She knows a lot about what's going on out there and is going to share it with us here on The Real Wealth Show. Leah, welcome back. Leah Collich: Thanks for having me. I was just saying, we either need to do this more often or I need to move less. I'm on the Eve of another relocation here very soon. [chuckles] Kathy: Oh my goodness. That's because your husband is in the military. Leah: Right. They keep us moving. We were in Boston for a quick bit and now we're headed to Texas which is our home state. Kathy: Before that in Columbia. Leah: Right. Bogota, Columbia, before that, California, we've been all over. Kathy: It sounds like maybe a good time to not be in Columbia. Sounds like a tough time there right now. Leah: Yes, it's been hard to watch. Kathy: Thank you for taking this time when you're trying to move. I know you're probably a real pro at it now. Let's just talk about that process. You are a real estate investor. You are an investment counselor at RealWealth and you just tried to buy a house in San Antonio for a primary residence since you're now going to be there. [00:02:00] He's being positioned. What would you call it, transitioned? There's a word for it. Leah: Assigned. Kathy: Assigned, yes. He's being assigned to San Antonio for about three years. What was the process like to try to buy your primary residence in San Antonio today? Leah: I have a lot more practice buying investment properties than primary. I was in a really bad way for a while because I'm so pragmatic about purchases and looking at the numbers and being very logical through things. Unfortunately, the market in San Antonio is like many places in the country, there's no room for that. [chuckles] It was stressful. I think we made offers on six different homes, all above asking all the day they came on the market waving appraisal contingencies. We were one of a dozen offers. What we eventually started looking at to make it more numerical, we started looking at what is the average annual appreciation? Let's look at every quarter in these areas, homes are going up 4%. You start looking at if we wait until the fall or the winter months when things slow down, if they slow down, if there's fewer buyers in the space, we will probably be at 4%, at least maybe 8% higher prices. We might as well come in strong with those offers now. That's what we did and we got one and feel really good about it. It was counter to so many of the rules that we do when we're buying investment property. Kathy: It's different when it's your primary but I am curious how do you know how much more to offer over asking price and what to let go of? No contingencies is really scary too. Leah: I know. I think that is the delicate dance and I think I'm a little bit messed up too because everyone talks about you can bring a California bias into these other [00:04:00] markets and everything looks cheap. You can just throw money that you don't think about. We haven't lived in Texas for over a decade. During that decade, home values have clearly gone up in Texas. We've lived in California, we're living in Boston. We've had some of that influence I think of like how high housing prices can get. I think it was trying to tamper that. It was really just after losing out on a couple of offers that we thought were strong offers to begin with that we just started getting progressively and progressively more aggressive. The irony though is that the house appraised after it. Kathy: That's amazing in itself because that's been an issue too where people do get the winning bid but then they can't get the appraisal. Did you also do no contingency on inspection or did you--? Leah: No. Kathy: No. Oh, good. Leah: We did do an inspection contingency. That was what's crazy because we gave them an offer that I felt like was incredible and nervous about for a sick to my stomach about how much we'd offered on this home. They came back to the offer with a counteroffer wanting us to adjust our terms even so it said to us that our offer wasn't that much better than the other offers. Kathy: Wow. Leah: It was nuts but I'm thrilled to know that we have a landing place on the other end. We'll move right in when we get there. Kathy: Oh, that's great. I'm glad you get to settle in for a bit. Let's talk about what you're hearing at RealWealth. I know you're talking to investors every day about what they're trying to buy. What are you hearing from them? How hard is trying to close on a property for an investor these days? Leah: It's competitive. Deals are moving so fast that it's completely opposite than it was when I joined the network back in 2016. When I joined, every team would maybe have 10 or 12 deals available at a time, [00:06:00] you could think about the deals, you could get on a phone call and talk about it. You had time. [chuckles] Kathy: Time, yes. [chuckles] Leah: Now, we did a property showcase webinar with our Indianapolis team last week and they featured four or five properties. I heard from the team about a half-hour after the webinar, they had 50 email inquiries and 20 requests for contracts. From our members only. Kathy: For what five properties? Leah: Right. Kathy: Oh, wow. Leah: It's intense. What I've been telling everybody is you've got to get yourself positioned where you understand what you're looking for, your financing needs to be like, ready to go. Don't put an offer on a property or even talk about putting an offer on a property before you've talked with the lender to make sure that this is even possible for you. It's really just in the preparation. Then I think also managing expectations, that's been a lot of my conversations is just helping everybody understand that you might need to be a little bit patient. If you have one market that you really want to be in, you can get it. It will happen eventually but you might have to just be the squeaky wheel for a little while to get the deal that meets your criteria. Kathy: What's the case for new builds? Is it the same? Is there a waitlist for those? Leah: Some markets do have waitlists for new builds but I think there's still tremendous opportunity with the new builds because you have the ability to get something under contract today. Anybody that I talked to who wants to get something under contract, we have markets who have contracts ready to ready to sign. They're not to be delivered for another six to sometimes eight months. Kathy: Or longer maybe. Who knows, right? Leah: Or longer, yes. People who want to close on something really quick, [00:08:00] we do have a couple of teams that have partnered with regional level builders and those larger regional builders that are building for owner-occupants, they're tending not to market their inventory for sale until it's already a house, until it's got walls and maybe it's got a roof on and there may be 30 to 90 days from closing. We do have some teams that have that pretty frequently but it's competitive. You just got to be ready to move quickly. I have also noticed, I think a real sense of urgency with the investors that I'm speaking with. This has been quite a year or two years, going on two years now. I think real estate is in every headline news article out there, what's happening. I think there's a lot of people wanting to now get into the space. There's this sense of urgency. Like, "I need to get into this now before the market changes." It's an exciting place to be, that's for sure. Kathy: For all the people who bought properties for the past 18 years that RealWealth network's been around, I hope you all held onto your properties because they're worth gold today. It's amazing. I guess the question is how much longer is this going to last? We do know that, I should say in the past, it was exciting to get in contract on a new build in a rising market because chances were that the property would be worth more by the time you close on it. There's also a chance it could be worth less. That was one of the concerns I had with you when you bought that fourplex several years ago. I thought, "Well, that's kind of expensive for Florida. I wonder if you're paying too much and what if it doesn't appraise?" and our cash flow. That turned out to really work in your favor, right? I think you've just [00:10:00] closed on that in March. Leah: Yes, we contracted that property in August of 2018. It was a long time ago and then we just closed this past March and you're right. It scares me that that made you nervous back then. Maybe you should have warned me or maybe not by how it ended. [laughs] Kathy: Well, it was just an uncertain time. It was the end of 2018, the real estate was slowing down a little bit because rates were going up. Typically, in the past, the federal reserve raises rates when they want to slow down a booming economy and typically they've done that too fast. I don't know if you remember but during the Trump administration, there was a big argument between the fed and President Trump and he was like, "No, no, stop raising and lower rates," and they did. That stopped what would have been a slowdown in real estate and then the opposite happened, it happened even further with lower rates that has further fueled real estate. It really is rate-dependent. Leah: Oh, yes. I went back and reviewed our very first fee sheet on that deal just so I could refresh what lens I was looking through at that time and our lender had projected a rate of 5.625. The deal made sense fundamentally and I think that's why-- We are fundamental investors. I'm not chasing appreciation. I like it just as much as everybody else but for a deal to work, I want to see sustainability and I plan to hold it for a very long time. What the property values were doing, that wasn't the trigger to go for a deal like this. Then of course having no knowledge of what would happen over the next two years-- When we contracted that property, we knew that it was going to be a longer delivery [00:12:00] time, just the nature of that project. It's a quad development so it's got I think 30 something other quads all next to it. Someone who's driving by might think it was an apartment complex. [unintelligible 00:12:11] quad is owned by a separate investor. We knew it was going to be a long time horizon and we talked a lot about everything that could happen in that period of time. Never once did we think pandemic- Kathy: Right. Leah: -but we did play through some scenarios. There was mutual risk taken on behalf of the builder. The builder doesn't know what the market's going to do and I think- Kathy: That's right. Leah: -today is a perfect example of that. Construction costs going sky high and they've got contracts on 36 quads at one price. They could leave a lot of money on the table or they could be losing money in developments like this. Kathy: That's right. Leah: Fortunately, in the end, everything worked out in our favor. Rents were higher than they were, interest rates were lower than they were by over two percentage points. Kathy: That ended up being an incredible deal. What was their purchase price? Leah: It was mid-five, about 530. Kathy: That was the only reason I was like, well that's a big purchase. Leah: It was. Kathy: It's a four-plex. It's great but it's not our typical $100,000 or $150,000 house. That's all. I didn't think it was particularly risky, it just was bigger than some of the other things that we've done. I'm just really glad it worked in your favor. Now, what we're seeing is builders struggling to get and get appliances, to get lumber, to get roofing even. I think on our Reno project, our builder couldn't even get the tiles. They wanted the tiles for the roofs. This is unprecedented. A lot of builders are having to reprice and investors are having to pay more [00:14:00] because many of the contracts that were written allow for that, a clawback if prices are unusually-- I should say the cost of materials is really- if there's a big variance from what was originally expected. Builders do have the right to raise prices because they can't finish the project if they can't afford to complete it. Investors are finding out that they're paying more for the finished products than they thought. What are you seeing? Are people okay with it? [chuckles] I know it's a surprise. Leah: I think it's come as a surprise to many. Though I don't feel like anybody wasn't aware of what construction was experiencing right now. Everybody is hearing about the surge in the cost of lumber and other materials. I think people understand it and that's what I love about the investors that we work with. I feel like we work with very pragmatic people who understand that we're not pitching some get-rich-quick scheme. This is about a free market, that's what makes this work. Our builders are subject to the free market just like we are as investors. I think most people seem to be very understanding of the fact that I can't ask a builder to take a loss on a property. This is the irony is that while some of our builders were having trouble making money on these deals as these costs have gone up, they were closing these properties and the investors were getting appraisals back with $40,000 of instant equity. I don't want to say that's not fair but it really is problematic. Builders will go out of business doing that and we as investors, we need the inventory. Kathy: We need builders to be building, that's right. Leah: I think most people have been really able to look at the bigger picture. The good news is that rents have also gone up, a lot of them still are closing with some equity, and most of the builders who did have to come back and adjust pricing, they were willing to split the difference with the investor. They know, [00:16:00] "Hey, on the retail market, I could sell this for way more. I'll split the difference with you so that this is fair, so there's still some potentially some meat on the bone for you." By and large, no one likes to hear that they're going to have to cough up a little bit more money but I think the fundamentals are still there and it still makes sense. Kathy: Rents are going up as well, right? The cash flows aren't necessarily much worse or worse at all. Leah: I have noticed the cash flows are a little thinner just in looking enterprise-level all the performance. The cash flow is a little bit thinner now, certainly than it was two years ago but that's always the case especially in these growth markets. What makes it a growth market is why there's a lot of new construction there. There's a housing shortage. Kathy: It takes a long time to get the properties up and running and when you've got an area growing so quickly and not enough supply and builders struggling to even get the materials that they need, you're going to see prices go up, and then, of course, cash flows tend to go down. We're seeing more and more people flocking to real estate because of the fear that that's going to continue. If you listen to my last interview, Logan was pretty sure it's going to continue for a while. This is not over yet. Leah: Yes, he said like a 4 million house deficit that our nation has. My situation being a perfect example, it took two and a half years to build that quadplex. The supply isn't created overnight and I was thinking about-- I love macroeconomics and that's why I love real estate but I was thinking about just the construction cost. If we didn't have this surging demand that we do, think about how many builders-- That is ultimately what's creating this hike in the prices, but there's also some supply chain issues. [00:18:00] Under different circumstances, there would be nobody building to help offset this challenge that we have. We just don't have enough housing in this country. Kathy: Even though we didn't have as many births, I thought there'd be a baby boom this past year. It turns out I think people were maybe afraid to have babies with so much uncertainty. There was less than expected but our population is still growing. Again, it's not as easy as people think to get new supply online. It can take-- For example, in Little Lane, in Carson City Nevada, we bought land a couple of years ago, and then COVID hit. Our team literally couldn't even get an appointment with the city planners because the offices were shut down. That delayed that project by about nine months and it's an area that's in desperate need of housing. On the one hand, the area really needs it but the builders can't build it. They literally could not even get the appointment, get the approvals to go. Leah: We've seen that in Florida too. The city offices are backlogged with permitting, they're all working from home so they're slower to respond. I have another new build under contract in southwest Florida and it was getting delayed, delayed, delayed, and we were going, what is the reason? Help us just understand where it's at and the builder came back to us and said that the subcontractors that they used to clear the lots were so backlogged for just clearing that they were on a three-month waitlist to have guys to come and knock down trees so that they could even start [chuckles] to build. At every turn, it seems like. Kathy: That's right. All right. What advice are you giving to investors and what are you seeing? Are you seeing mostly first-time real estate investors that call or is it repeat buyers? Leah: I'm glad you mentioned that because I was just thinking about that in my last response. [00:20:00] I have noticed a lot of 1031 buyers because it's such a great time to sell property. [chuckles] Clearly, hearing my story about selling or buying a primary, you have buyers who are lining up to waive contingencies and give you cash. It's a great time to sell and so the number of 1031 exchange buyers exchanging out of California, getting top dollar, and offers same day, I have noticed that increase significantly. Those are hard investors to help too because they don't just need one property. They're not just trying to get into the game, they're selling a $1.5 million home and in LA and they need a portfolio of homes. They need four or five homes or six homes. That is definitely exciting and I shared a success story with some of our colleagues last week that we had a 1031 exchange buyer this exact scenario. She sold a $1.4 million home in Southern California. Through our network and through our providers, she bought eight homes in Florida and even new construction in Charlotte, rehabs in Florida. She took her cash flow. That $1.4 million home in LA, cash flow for her about $800 a month, she had some small loans on it. Now, this portfolio of eight homes cash flows $6400 a month for her. Kathy: Wow. Leah: She really got to experience the power of want a great seller's market in California but then this repositioning in these more stable markets still high growth arguably but where there's fundamentals and where there's really great cash flow. Kathy: That's incredible. I'm so proud of you and our teams for being able to complete that exchange because it's not that easy to find the replacement property. I'd be kind of scared to sell something today and hope I can find something [00:22:00] in 45 days but you're seeing that our teams are able to get it done still? Leah: Yes. No, they are. I think her success is due in part-- I mean a lot to her grit. She was just very persistent in her approach but we also started having this conversation about her exchange well in advance of her putting the property in California on the market. It was a scary time to be prolonging a sale. We were in an election year, there was a lot of uncertainty at the end of 2020, and kind of preparing for this. She was wondering, "Am I making a mistake by waiting to list this property until I have this 1031 plan at least lightly ironed out?" but I think that is what is contributing to a lot of people's success is just knowing that the market is raging to sell. Let's work over here on the after scenario, on the replacement properties, and try to get that plan and at least those relationships with the teams really well established so that it's feasible. It is. We've seen lots of people be able to successfully do it. Kathy: Yes, we've got-- I don't know if it would appeal to a lot of people but we do have lots in our Park City project. I think we've got five of them that can be sold to 1031 buyers but they don't cash flow. I think they're going to see some pretty incredible appreciation because you could barely get anything permitted in Park City. Have you come across anybody who just needs an exchange to get something soon, we do have lots available. I believe what people can do is they can 1031 into the lot, finish the exchange, and then get a construction loan on that lot and build and create a rental which is another thing that we didn't really see coming. A lot of people who own homes and in vacation areas, they maybe have a second home or investment property [00:24:00] in a vacation area. They moved there during 2020 because all of a sudden they could. They could leave the big cities and go live in Park City. They found out that it wasn't just a great place to ski, there's also beautiful summers and beautiful springs and there's fishing and there's biking and hiking and stuff in the summer. Many of those rentals are now owner-occupied in these vacation areas. The demand for rentals is enormous. It is an opportunity for somebody who doesn't necessarily need the cash flow right now, they've got an exchange, they need to buy something right now, we do have those lots available. Leah: Yes, every time you mention that Park City's project, Kathy, my phone rings with people interested to know about it. I do appreciate that and that has been another I think key to being really successful and honestly, a great plug for the network and just being connected to where the flow of these opportunities is passing through. We've had several situations where we learn about a particular opportunity that could work last minute. Two weeks ago, I had a- in an internal meeting, I learned about a brand new construction duplex that was going to work with an exchange timeline. I immediately went, "I know the perfect buyer." Got on the phone, called them and he contracted it the same day. It's being connected to kind of where these opportunities pass through is I think extremely-- It's the way that it works now. [chuckles] Kathy: That's great, Leah, that you're able to connect the dots there. That's- Leah: It's fun. Kathy: -awesome. I had said to Nick, I don't know if he told you this but I said we need to- for people who are in that situation, we need to get a text system going. [chuckles] It's like if you know you're in the middle of an exchange and we know there's some property available, we can text you right away. Again, it sells so fast, I think so quickly. All right. Well, is there any last advice that you would give to our [00:26:00] listeners? Leah: Yes. My biggest advice for people is always like you can analyze this thing to death. The idea of real estate and what market and what property, you can analyze it to death and many people do. I myself I'm guilty of it, but I think the sense of urgency, you should not hastily buy things but really realize like what these fundamentals are and why they work. Then look at the demographic shift, look at what's happening in the market and see that there's opportunity and the opportunities now. I think the tendency for a lot of people is to kind of wonder, are we about to come up to a cliff and it's going to drop off and property values are just going to plummet and everything about the timing is wrong? As you know and as so many of your guests have said on the show, that's not what we think is happening. It's a good time to be doing this. I think the action part of your process, the emphasis should definitely be there. Kathy: That's great. Love that. How close are you to your goals and what are your goals? What's your endgame? [chuckles] Leah: You and Rich would be mad at me for saying this, but I feel like our goalposts are moving a little bit just because you enjoy this. [laughs] Kathy: That the way it goes, they're always moving. Leah: We got into it with this idea of financial freedom. Okay, let's focus first on my income and get the cash flow to a place where it can replace your income. Then we'll start working on my husband's income so that it aligns with his military retirement but now we're just having so much fun. This was clearly before I came to join the RealWealth team too. Our goal right now, I think in the short term is to max out those Fannie-Freddie loans. We're getting close [00:28:00] to that. I've kind of been in the penalty box if you will with getting loans because I did have a career shift and changing industries. I've had two years of timeout. [chuckles] Kathy: Right. Leah: Meanwhile, we've been focusing on my husband's loan slots and getting those maxed out. He's almost there. Then I'm in the go spot again so now, it's just max out my 10. Our goal is to have tapped Fannie Freddie for all it's worth by the end of our time in Texas. Three years, that's the short-term goal. [chuckles] Kathy: I love it. I love that it's clear. Wonderful. Well, I have no doubt you'll get there. Leah: Yes. [chuckles] Kathy: All right, Leah, thank you so much for coming back on The Real Wealth Show. Thank you for all you do for our many many members at RealWealth and all that great investment counseling that you give them. [chuckles] Leah: You bet, we'll talk soon. Kathy: Thank you for joining me here on The Real Wealth Show. If you'd like to find out about the markets today where you can still get cash flow, where you can still find properties, where there's a great potential for appreciation, just go to realwealthshow.com and click on the invest tab. You'll see a whole dropdown of I think 15 different cities and all the data on those cities along with teams in those areas that can help you find that property. Again, that's realwealthshow.com. [music] Speaker 1: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:29:48] [END OF AUDIO]

She had an exciting career as an engineer who traveled the world to meet with top executives at important companies. But after the birth of her two children, she wanted more time to raise a family. It didn’t take her long to accomplish her goals. She applied her project management skills to a real estate investing plan. In two years, she had a $4 million portfolio that has now grown to $5 million. She calls it her supercharged BRRRR strategy which stands for buy, renovate, rent, refinance, and repeat. Palak Shah is the founder and owner of Open Spaces Capital. She's also co-author of a book, The Only Woman in the Room, along with several other women in real estate, including Kathy Fettke. In this episode, you’ll hear how she accomplished her task with two babies under her arms, and how she also helps other women get past their initial fear of the first deal. To learn how you can find and purchase income properties out of state where cash flow is much better than in high cost states, schedule a meeting with one of our experienced investment counselors. You need to be a Real Wealth member but it's free and easy to join here! Links: https://tinyurl.com/joinrealwealth www.RealWealthShow.com https://www.openspacescapital.com/

Real estate prices have are rising so fast in some areas, they've increased by double digits in just the past few months! Sellers are getting multiple offers and buyers are battling it out with bidding wars. Is the housing market setting itself up for a massive housing crash? This episode might surprise you because you're about to find out why the housing market is expected to continue on a very different track from 2020 through 2024. You'll also get a better understanding for why the housing market recovery has outpaced the overall economic recovery. Our guest is HousingWire Lead Analyst, Logan Mohtashami. He's also a financial writer who's frequently quoted by BankRate.com and Bloomberg financial. Now retired, he was a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. He's known as "the chart guy" and the "housing guru" by people in the industry, and has earned respect for his astute analysis of economic data and years of direct lending experience. It allows him to present a unique, informed and unbiased perspective on the financial markets. Become a member of RealWealth today to find out how you can invest in single-family or 2-4 unit multi-family rental properties in markets around the country, including desirable sunbelt states like Florida, Georgia, and Texas. Membership is 100% free and signing up takes less than five minutes. Click here to join!

Sometimes the real estate industry grabs you quickly, and sometimes it grabs you over time. For one California woman, it began with a job in the mortgage industry and slowly grew into much more than that. Joanne Mendoza was a mortgage lender in the 90’s and 2000’s. At some point she began working more with both buyers and lenders and started putting the real estate pieces together. She’s now a real estate broker helping people find properties, and is also building an out-of-state portfolio of rental properties for herself. In this episode, she talks about the ups and downs of her real estate journey, how she’s funding her deals, where she’s investing, and how it is giving her financial freedom. Joanne has also published a new book called: “The Power of Real Estate Investing for Women: A Step-by-Step Guide to Investing, Buying, and Selling Real Estate.” You’ll find it on Amazon. To learn more about how you can find and purchase income properties, schedule a free consultation with one of our experienced investment counselors. You need to be a Real Wealth member but it's free to join and easy to sign up at: join.realwealth.com

The printing of trillions of dollars seems to be the new normal. But is it? And does it have to be paid back, and if so, how and by whom? And if it can't be repaid, then what? These are some of the questions nobody really wants to answer, except one guy, who's been asking this question for over a decade when quantitative easing became the way to avoid recessions. Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast. He is the Chief Economist & Global Strategist of Euro Pacific Capital, Chairman of SchiffGold, and Founder of Euro Pacific Asset Management and Euro Pacific Bank. And he's here with us in this episode. If you'd like to hear more about Kathy's thoughts on the housing market and where it's heading in 2021, watch her recent webinar at: www.realwealthshow.com/2021 Click here to join the network for free Link: https://europacificfunds.com/

It’s a story of romance and financial freedom. Rachael Visconte and Patrick Julian both worked in the entertainment industry and met each other on-the-job in Los Angeles. When the pandemic hit, the feverish pace of their work world suddenly turned into a more tranquil work-from-home scenario. They had time to slow down and reflect on what they wanted out of life. It was during that time that they decided to build a real estate portfolio to secure their financial future. With the help of RealWealth and lots of their own investigating, they bought their first investment property last summer and there’s no stopping them now. In this episode, they join both Kathy and Rich to talk about their goals for financial freedom, and their future plans to become parents as Rachael and Patrick Julian. For more information, go to: www.RealWealthShow.com Click here to join the network for free

Many investors work their way up from single-family rentals to larger multi-families, but in today’s episode, you’ll hear from someone who’s taking the opposite approach. Richard Woolley launched his personal investing career with the purchase of two triplexes but decided that single-family homes were the way to go. Richard has a Bachelor of Science in Construction Management and has worked as VP of Preconstruction for a New York multi-family developer. Among his projects are a 40-story building in New York City and a 30-story building in nearby Westchester. He’s now building a portfolio of single-family rentals and has some inspiring advice for new investors. www.RealWealthShow.com Click here to join the network for free

Building a portfolio of rental properties can be your ticket to financial freedom. But it also exposes you to risks and the need for asset protection. One way to do this is by transferring your investment properties into an LLC, or another kind of legal entity, like a land trust. That topic inspires many questions among new investors including where they should set up their LLCs. In this episode, we hear from tax and asset protection attorney, Clint Coons, who will answer that question and many more with easy to understand explanations. Among the topics he’ll cover are the where, the why, and the how you might want to set up your LLC along with the difference between LLCs and other entities. You can schedule a free session with someone at Clint's firm or watch the replay of a recent webinar by Clint on our website. You need to be a Real Wealth member to access the webinar replay inside our investor portal, but joining is easy and free at www.realwealthshow.com. Audio Transcript: [music] [00:00:00] Announcer: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors resource. Kathy Fettke: A common question we get from our Real Wealth members is where should I set up my LLC for the best asset protection? Well, it's not that simple. I'm Kathy Fettke. Welcome to The Real Wealth Show. Today's guest is full of information on how to protect your assets from lawsuits. I learned so much from this interview, and I'm so glad I don't have to figure this stuff out on my own. We've got an expert here to do that for us. Clint, welcome back to The Real Wealth Show. Clint Coons: Thanks for having me. Kathy: I got an email recently from somebody saying is it illegal to have an entity in another state from where you live? Thinking that you're tricking the IRS into thinking that you live in that state if you have an entity there. What's your response to that? Clint: That's incorrect. Obviously, you can set up a business entity wherever you want. If you're going to own real estate in another state, take, for example, Florida, then you're legally required to have an LLC set up there or registered to do business there. For example, if you lived in California, and you had property in Florida, you take your California LLC, and you would register it in Florida to conduct business. It is doing business there. It doesn't matter where you sit, where you live, and where the entity is located. In the eyes of the IRS, it all flows back to you, and you're going to pay taxes on that money, regardless. They don't care where it's set up. Kathy: What you don't want to do is say open up a Nevada LLC, and say you live there when you really live in California or something like that. That would not be okay. Clint: That's a different strategy. That is basically tax avoidance where people will-- This was [00:02:00] really popular back in the early 2000s. There'll be a lot of advertising, "Hey, set up an entity in tax-free Nevada and pay zero tax." People would do that with the thinking that if they had an entity there, they wouldn't be subject to federal income tax or state income tax on their business that is derived from a particular state. What we found back in those times that you'd have a lot of Californians would set up Nevada entities, run an active business through their Nevada entity that's actually taking place in California and try to avoid all California state tax. Some people even think that they didn't have to pay federal tax. Those people ended up wearing orange jumpsuits out of them or else having a lot of fines when they were caught. Kathy: You don't want to lie about where you live. In our case, our business is in all kinds of states, but we live in California. No matter what, we got to pay California tax unless we moved. In that case, if we moved, you have to live at least more than six months of the year somewhere else. Is that right? Clint: Yes. If you wanted to change your domicile out of a particular state to a different state, then you would have to establish residency, and that would typically require that you register to vote there, you get a driver's license in that state, and more importantly, the way they track it as well as on utility bills. They would look at your utility bills that are in your name, and they would determine whether or not you actually reside in that property for six months if they wanted to be aggressive. I've seen this happen before with individuals who claim residency in Nevada when in reality, they were not residents there and the home state would request their utility bills for that time, the six months they said they lived there. They would find there was no water usage, no electricity usage. They're like, "You weren't really living there. You were just stating you are." That can get you in trouble. What you have to do is put your mother-in-law or somebody in your property during that time. Kathy: [00:04:00] I don't know if it's true, but I've heard that they can even see where your phone is. These days your phone can tell you where you are. I don't know if they go that far. Clint: No. It's one of the things that-- People go to so much trouble trying to avoid state taxes. I just don't think the stress is worth it at the end of the day. Pay your taxes, if you don't want to live in that state then move and just visit it every once in a while, or set up a secondary home. Kathy: Exactly. That's the thing is you can live somewhere else and just visit a lot, travel a lot. Anyway, let's explain, I know I've used the word entity and for some of our listeners, they might not really understand what that is. What am I talking about when I say entities? Clint: You're talking about a limited liability company, land trust, corporation. It's just something that is formed under state law or not that is used for a specific purpose. We talk about real estate a lot. We're looking at a title-holding entity, something that is going to hold your real estate for a few different purposes. One, it's typically in the asset protection. If anything happens with the property, you're not going to be personally liable. If you get sued individually, your property would be removed from that potential claim. That's per our judgment that would be entered against you. Then there's tax motivations as well that you're looking to control how your tax returns look from the real estate when it hits your 1040. There's lots of reasons why we focus on using entities for real estate investors. Kathy: Most investors, most real estate investors use LLCs. Why is that versus anything else, an S Corp, or a C Corp, or something like that? Clint: It really comes down to the tax benefits the LLC offers an individual who's a passive real estate investor. You want to have flexibility number one in order to move property [00:06:00] in and out and not be hit with a transfer tax, or basically, actually, income tax is what can happen when you have a C or an S Corp. Take the example of I have three properties in an S Corporation, and I decided that I want to pull two of them out and move them to a different company. Those properties have appreciated in value over the last 10 years, and there's $400,000 in gain there. Just by deeding that property out to myself, I'll have to pay tax on that built-in gain even though I didn't sell it. An LLC, you don't have that concern, because you're typically going to set them up to be either disregarded, which means the IRS just looks through it and you're considered to be the owner, or a partnership, which, again, it looks through, and you're going to pay the taxes on the income and you put that income on your 1040. It's treated a lot different than an S or a C Corp from being able to move assets in and out and not having to recognize tax on that built-in gain. That's why they tend to gravitate towards an LLC versus a Corp and more importantly, the asset protection. They're easy to set up. It doesn't require a lot of maintenance from you or as a corporation, you got to have these annual meetings, possibly even quarterly meetings. LLC, set it up, forget it, set a bank account, collect your rents inside of there, and you're off to the races. Kathy: Do the S Corp, C Corp, and LLC has the same asset protection? Clint: When you talk about S and C Corp, what you're really referring to is federal taxation unless you're thinking about the actual form of a corporation. From a tax standpoint, an LLC can be treated as a C or an S Corp. From the physical attributes of the entity, if I were to say set up an entity in Texas, and I chose to set up a traditional Corporation Inc versus a limited liability company, for surely that if something were to happen with the asset [00:08:00] held inside of there, let's say I had an LLC and a corporation, I put a property into each of them, if my Corporation was sued, I'm protected as a shareholder. If my LLC is sued, I'm protected as the member of the LLC. That's the distinction between the two. Owners in LLC are members, owners in corporations are shareholders. What's different is when you yourself, let's say you're driving down the street and you clip somebody that's on a bicycle, and the bicyclist sues you individually and they obtain a judgment against you for $300,000 for dental work and face reconstruction. What can they take in that judgment? What can they do with it? They can levy on any assets you hold in your own name. If you held that rental real estate in your own name, then they would just record the judgment in the county where the property is located. It just sits there; it grows its 10% rate of interest. When you sell, they get paid or you refinance, they get paid. If you didn't have any property in your own name, and all you had was a Texas LLC and a Texas Corporation, they have some other ways to recover against you. On your shares of your corporation, they can levy on them and take them because shares are not protected from creditors, whereas the LLC is a different animal. They could not levy on your LLC membership interest and take it from you and thereby owning your property like they couldn't with a corp. All they can do is put a charging order, which means that they're not entitled to anything unless you want to give them something. It's because of that outside protection that makes the LLC such a unique and favorite entity amongst a lot of real estate investors. Kathy: Wow. After all these years, I've never really heard it put that way, or maybe I have when you were teaching and I wasn't paying attention. Clint: Or maybe I didn't put it as succinctly when I was teaching. Kathy: Maybe. Let's say I buy some properties in Florida. What would be the best state to [00:10:00] hold the LLC in? Clint: Well, it really depends. What happens when you're buying properties, you have to look at the state itself and determine what is the best structure for that investment. You bring up Florida. It might be that if I was setting up a structure for a Florida investor, I would choose to use land trust rather than LLCs because land trusts in Florida provide protection from what we refer to as inside creditors, meaning your tenants. If something happens with the property and you have a Florida land trust, they can't sue you as the owner of the trust. They can only sue the trust. Now where the trust doesn't protect you is that if you get sued individually, they can take the trust and the property from you. For a Florida investor, I'm probably going to recommend if you have debt on the property, because now you've got to worry about doc stamps in Florida. Hey, let's set up some Florida land trust, transfer the property and it's exempt from the doc stamp in Florida. Then we got these Florida land trust there then have the Florida land trust owned by a separate LLC, maybe a Delaware series, LLC, and create separate cells for each of the land trust. If you do get sued, they can't take your land trust from you. If you were to flip that structure say look at Tennessee, then it's going to be different. Then I'm going to use a series LLC, in Tennessee when you're owning each of the cells, because they're, they have a franchise tax that you have to be aware of. You have to apply for the fonts exemption, it's set up in a very specific manner, so you don't run into a problem like a client I've started working with where a CPA structured them, and he was paying $45,000 a year in taxes that he didn't have to pay because the CPA, this client is from Florida didn't understand the way taxes worked in Tennessee. By just creating the structure, you can really screw it up for someone. It would depend on where you're owning the property, what type of structure we're going to use and that's why people get confused many times. They think, my buddy set up an LLC. [00:12:00] [inaudible 00:12:01] It depends. If you're in California, I might use a Wyoming statutory trust to avoid the franchise tax there and it'll be at 10 properties. I can save $8,000 a year. Again, it depends. Kathy: Don't try to do this on your own. Clint: Well, you could. You probably pay more in the long run. I always tell people, when somebody starts working with an attorney or even with Anderson, they see the entity set up as a cost and they don't look at it as an investment. I tell them, this is an investment into your property. You're protecting it. You're making sure it's set up the right way so you're not going to run into these problems down the road. If you get caught up on cost, you're going to be tripping over yourself and three years down the road when you're involved in that lawsuit and you're looking back and saying, "Wow, I wish I would have invested the $1,500 because now I'm staring down a judgment of $600,000 and I'm going to lose everything." That's when it comes back into perspective for a lot of individuals. Kathy: Now, at what point do you need that kind of Bulletproof proof type of asset protection? Let's just say you're buying your first property. You don't have a lot of savings in the bank or equity in your home. You don't make a lot of money. How much do you need at that point? Clint: You see, this is where I tend to disagree with a lot of professionals, when it comes to asset protection. Take two individuals, you and me. I have worked hard, saved up my down payment. Now, I have my first house. I have about $25,000 in equity in this property and I have a personal residence that has maybe $50,000 in equity and I got some money in savings. You on the other hand have a hundred properties. Most people are going to look at us and they're going to say, you need more protection than me because you have more to lose. [00:14:00] Granted, there's some truth to that. You have 100 properties, I only have one. I tend to look at it as follows. When it comes to protecting my assets, the new investor needs asset protection more than the experienced investor. It's counter-intuitive for so many people when I say that. They're like, "No, Kathy has so much more to risk than you Clint. You don't need protection there." The way I like to explain it as follows. I've got one or two properties. I'm going to tell you to set up one LLC per property. Whereas Kathy, I might tell you to put 5 properties per LLC, or maybe you want to do 10 properties per LLC. The reason why is that if something happens to me and I'm involved in a lawsuit and I have these two properties that I've saved for the last five years to get into those properties so they're going to produce cashflow for me in the future, is going to be my retirement. One lawsuit, what does it do to me? Wipes me out. Now I've lost everything. All the work and effort I've put in the last five years, I have zero cashflow coming in. Assume those two properties generated a combined income of $15,000 each on an annual basis. I just lost $30,000. You on the other hand, you set up your LLC where you put 10 properties per LLC so you have 10 limited liability companies, each generating the same amount of money. Each generating 150 K a year. Well, you lose one LLC with 10 properties, you just lost 150 grand, but you have nine of the other property still producing income for you. Yes, it sucks, but your lifestyle is not changing. You're still going to Hawaii. You're still doing the things that you like to do because that one lawsuit didn't wipe you out. Whereas the new investor that's worked so hard to finally get some purchasing power, finally grasp the concept of rental real estate. What it can do for you, they're back at square one or worse yet, they're behind because they have a judgment that's been recorded against them and they have to pay off before they're ever going to be [00:16:00] able to qualify for another loan. [unintelligible 00:16:04] with my own investing. I was more concerned about asset protection when I had 50 properties. Now that I have close to 200 properties, I do things differently because I don't have the same issues any longer. I can afford to lose 10 properties. It would suck, but it's not going to change my investing or my lifestyle at all. Maybe it's one less case of wine I buy on a monthly basis, but it ain't that bad. For the new investors, I would say, think of it in those terms. Kathy: Well, that's one of the reasons I love to listen to your advice is that you are a real estate investor yourself. You own a lot of properties. You talk a lot about asset protection and tell people you own properties so they know, that you probably have a high net worth and so you've got to be extra protected and you're a tax attorney. Is that right? Yes and a CPA? Clint: No. I have a personality [unintelligible 00:17:02]. Kathy: [laughs] Okay. What kind of personality would you need for that? Clint: In my experience, getting on something like this would probably take a Xanax or two to calm my nerves down and then you would have to drag all the information out of me. I like to talk too much. That's what I'm getting at. Kathy: All right. What are some of the typical questions that people ask at your live events and now I guess Zoom events? Clint: Everybody gets concerned when you set up an entity, for example, an LLC, that if they transfer their property into the LLC, that it's going to accelerate their mortgage and they can't do it because of the nuance sale clause. That's probably the number one question I receive. Vigil investors is pushback to putting properties into entities and so they forgo asset protection because there's this myth that if [00:18:00] you transfer real estate into an LLC, you've got a lender in the back room who's going to catch it and say, "Oh, you move property. You got to pay that mortgage off or we're going to foreclose." The reality is is that most people who perpetuate this myth or continue to perpetuate, it used to be concerned probably 15 years ago is that you have to look at the loans out there. Most investors are working with a broker to obtain a loan to buy a piece of property and those are always going to be, or 90% of the time, I would say, they're Freddie Fannie conforming loans. They're writing them so they can sell them to [unintelligible 00:18:34], that's what we mean by conforming. They're going through all the guidelines that [unintelligible 00:18:39] put out as if they were writing the loan themselves, underwriting. Now, when you use one of those types of products, you're allowed to transfer title into an LLC and it will not violate the due on sale clause. You can look at their servicing manuals. Both of them have it stated in there, black and white, as long as the member of the LLC is still the borrower or as long as the manager of the LLC is still the borrower, you're good to go. This notion that you can't transfer real estate into a limited liability company for fear that the lender is going to accelerate is just nonsense. On top of that, the only time it actually really comes up as if it was a personal residence, then you have to season it for a year before you can move it in so you have to live in it for a year, treat as your personal residence, because that was a different type of loan, but most people don't know the questions to ask and so they make these assumptions because of a lot of misinformation that permeates the internet, unfortunately. They don't put the right types of protection in place. Kathy: If you've lived in your primary for over a year you could transfer your primary into an LLC? Clint: No. Which probably it is because it's been bought up by them. You can transfer in after one year. That's the one exception you got to see. [00:20:00] The only other types of exceptions you're going to have is if you buy A property and then you're looking to do a cash-out refi. Then you have a six-month seasoning requirement on that before you can do a cash-out refi. Which is different than just doing a straight-up refi. I mean I always talk, not always. I've told people when I first got started investing I think it was maybe I had put down $5,000 for my first property. This was in Memphis. I funded it with a hard money loan where they did it not only the purchase but the rehab. They gave me all the money for it. Then after I bought it it was anticipated that there would be X amount of equity in there so I could go in and do a refi on that property, convert it into traditional loan, and cash out the underlying hard money lender. It took me three months and I got into this property. It was about $105,000 property at the time for a little under $5,000 if I recall. I did a few of those that way where I would use hard money to pay for the property and the rehab and then I would go in because I knew would have enough equity in the property afterwards to cash it out with the traditional loan. Those you don't have a seasoning requirement because I wasn't taking any cash out. If you understand how the way lending work there's a lot of opportunities for people. Kathy: Absolutely. Are you seeing those opportunities today with the [unintelligible 00:21:26] properties out there? Clint: I don't look for those anymore. Everything I do now is I buy for cash because we're at a point now in the things that we do in the markets that we're in. They're more low-income housing so I'm picking up homes for $15,000 and I'm putting in maybe 10-15 grand and then it's producing 500 bucks a month on average, $600 a month. Those types of deals you're not getting a loan on. Kathy: You're still finding those? Clint: Yes, more than I can handle. Kathy: Wow, good for you. Clint: I can't tell you where are though. Kathy: No. [00:22:00] I was going to say-- Clint: I can tell you that. We build up a pretty big network in this area. It's in North Carolina, we'll give you that. Those types of deals a problem that you're going to-- I think you could still find those deals that I was just referring to because the market is appreciating. When I started buying those deals in Tennessee that was back in 2005. You had a strong market. What worked for me is that you had appreciation. You knew when you got done with this rehab, you were typically going to have 20%-30% equity in that property. That's what allowed me to do that. When you're in those types of market, in that type of real estate market, I think you can still do those deals. They're still out there if you can find them. Kathy: That's great. Yes, if you can find them. All right. A common question we get and that we've discussed on this show is the single-member LLC and if that still offers the same kind of protection? Clint: It depends on the state. Everything comes down to state law. In some states such as Florida, they do not provide protection for single-member limited liability companies. When you say protection, it has nothing to do with the LLC being sued. If you have a tenant in the property and the tenant is injured and they sue, the LLC is going to protect you. This notion that if it's a single-member LLC it doesn't offer asset protection. Only pertains to this what we call a charging order that is if you're sued individually, they can take your limited liability company from you. A place like Colorado or as I used Florida, they do not protect the LLC from your personal creditors whereas if you flipped it, you put it in Texas and you're one owner in a limited liability company and you're sued individually and they get a judgment against you, in the example that I used earlier, they couldn't take it there because Texas law prohibits a creditor from taking [00:24:00] a single member's interest in a limited liability company. Kathy: Wow. Again, don't try this on your own unless you've spent-- How many years have you been studying this? [laughter] Clint: Oh my gosh, you're going to make me feel old now. I got to back into it. It's probably 25 years. Kathy: It's just amazing how every state is different. If you owned properties in Texas, would you want to just get a Texas LLC? Clint: If I had properties in Texas, which I do, I have a bunch in Houston, I would use a texas series limited liability company and I would set up a separate sale for each of those properties. The reason I would do this is that for each sale that you set up it's treated like a separate limited liability company, but you don't have to file it. You escape all of the additional filing fees and legal costs associated with setting up multiple LLCs and you get the same baked-in protection for those deals. That's the structure I would recommend for a texas investor that's buying single-family homes. Again, it's also going to be based on how you're buying. If you're buying onesies and twosies, yes, that's the way it's going to work, but if you're buying in bulk and you're using may be institutional financing then it's going to be a different structure on how you're going to go about putting that one together. Kathy: It sounds there isn't really one answer to my next question which is how many properties should you have in one LLC? [laughs] Clint: It depends on-- All right. I always look to the finance inside of it. If you're dealing with an institutional lender and you're going to be packaging up, say it's a 10 pack or 20 pack of properties, you're looking at one limited liability company for all those. They're not going to allow you to separate them out. Many times what I'll do is I'll start in Delaware and then I'll foreign file it in the state where the property is being acquired because those [00:26:00] types of lenders prefer Delaware LLCs. They think that they have more protection for the lender from a fiduciary standpoint. If you're not and you're just a new investor, you're buying single-family homes here and there. If it was in Texas I would set up one Texas LLC. If you want anonymity I might have a second Wyoming LLC to own that Texas LLC so people don't associate the company back to you. Then I would just create sales for each of my properties. I would recommend when you're starting out I would do one property per LLC because if something goes wrong like we were talking about and you took the approach, I'm going to save a little money because of the cost. I'm going to put four properties in one LLC. That's fine. The likelihood of being sued is probably pretty small but if you're the one that gets sued, you'll be the next story at my future event when you call me up and say, "Man, I wish I would have followed your advice. I lost all four of my properties and I'm having to start over. My income just dropped by $37,000 a year because of that mistake." Focus on the cash flow as well. It's not only about equity which a lot of people-- I used to make that mistake when I first started practicing and buying property. I would focus on the equity, not on the cash flow. For many of us, we buy for cash. Kathy: Which again leads to my next question. We've had Real Wealth Network almost 18 years now, speaking of aging and feeling it. I don't know if I've heard of one of our members. We have 54,000 now. I don't think I've heard of one single lawsuit. Which is great news and yet, here I live in California where we have fires and it's very strange how the fires jump from house to house. The house that we own, the fire seem to just jump over it. It's been there [00:28:00] 100 years and it's never burned but the house next to it does. We still have fire insurance and it's expensive in California. It's just an interesting question of the chances of getting sued are pretty small but you don't want to be that one especially with the more properties you have I guess the more your chances increase. Clint: Correct. All right. I've never been sued on my properties. I use the same protection I tell my clients they should set up. I've had some scares. I had a tree fall through a house during a wind storm and narrowly missed the occupant right through the master bedroom. Had it been another four feet one way it would have killed the individual. That could have been a horrendous lawsuit. It potentially happens. I run into people all the time who have stories where they've lost everything and they're 55 years old and they're starting over. The reason why I set up LLCs is for the same reason you buy fire insurance although your houses never burn because that one time there's no going back. You can't put that hose back in the barn at that point and there's nothing we can do for you. The other benefit of using the limited liability companies and structuring the right way which transcends just asset protection is the fact that real estate investing is a business. I tell individuals LLCs can help you do more if you understand that and you set them up the right way so your tax returns appeal to lenders, underwriters. A lot of people don't understand that other side of it, the ability to borrow that you can really massage a tax return so it is more appealing to an underwriter when they're going through and they're trying to determine whether or not you qualify for this loan. I see a lot of investors they'll have their properties, they'll show up in their 10-40 scheduling page one and then they get up to this point where they're struggling [00:30:00] with their debt to income ratios and trying to close on that next deal. They're having difficulty. They're looking at the lender and they're seeing what the lender is doing like, "This is BS. I make more money than you're giving me credit for." Again, because they're Freddie, Mannie typically conforming loans they have to put you through an underwriting procedure that limits how much of your rental income they can count. If you change your tax return and you use entities in a different manner, you can get 100% of them. It's amazing. All you have to do is put the information in a different box on your return because the entities allow you to do this and it then gives credit for 100% of your income. Kathy: Once again. Clint: I just found that from working with underwriters. We used to have our own mortgage business I set up back in 2002. It was just little tricks you started learning from doing it. Kathy: Oh, I didn't realize that. How hard is it to get a loan? Let's say you own 10 properties within an LLC, how difficult is it to get commercial financing for that? Clint: I don't think it's going to be difficult if you can find the right lender. We have clients that do it all the time so you're going to cross-collateralize all those assets at that point in time. The best thing to do in those situations is work with a community bank and get them to take that loan on. Then, when you close one of the conversations you should have is I would rather not have 10 assets in one entity. I'd like to spread those out amongst other LLCs even though you cross-collateralize them all. You'll find that a community lender many times is going to be open to that. I just did one for a client that has a bunch of property in Maine. He was refinancing 15 properties that were formerly in one LLC. Now, we've broken them up and the lender accepted it on the refi even though we cross-collateralized. [00:32:00] It's good. The thing is too when you're negotiating those types of loans you want to make sure that you always seek the ability to substitute assets because if you're going down that road you'll find in many of the loan docs that the lender will require as you sell properties to pay back down the loan. You want to write a substitution which gives you the ability then to escrow the funds, to take those funds and use them to acquire replacement property without having to pay the loan off. That's just an aside. I went down a little rabbit hole there but if you're going to do it you should at least know that. That's an option you should be looking for that in the loan docs. Write a substitution. Kathy: There are so many more questions I have but I know that you do ongoing education that's very in-depth and you also have consultants. I believe if people just click the link in the show notes they can get a free consultation. Is that right? Clint: Yes, we'll definitely set up a free strategy session for them. Look at their individual situation and then because they come through Real Network we have some special offers for you as well. Kathy: Okay, great. Again, that link will be in our show notes. All right, Clint. Well, thank you so much for being with us here today on The Real Wealth Show. Wishing you a happy 2021. Clint: Thank you. Likewise. Kathy: Thank you for joining me here on The Real Wealth Show. You can go to realwealthshow.com for more information. Announcer: The views and opinions expressed in this Podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:33:51] [END OF AUDIO]

One of the best things about investing in real estate is the use of “other people’s money” or OPM. You can use OPM to pay for your deal while you get all the cash flow, appreciation and tax benefits. What do we need to know about the lending environment today? In this episode, we’ll hear from private real estate lender Brian Stark. Brian has more than 20 years experience as a lender and is currently VP of Originations at real estate lender Icecap Group in New York City. He has actively invested in single-family, multi-family, and commercial real estate. He’s bought and sold hundreds of properties, wholesaled many more, and originated more than 1,400 real estate loans totalling well over $150 million. www.RealWealthShow.com Click here to join the network for free Transcript: [00:00:00] [music] Presenter: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors resource. [music] Kathy Fettke: One of the best things about investing in real estate is the ability to use OPM, other people's money, to fund your deal. Yet you get all the tax benefits, the appreciation, and the cashflow from that deal while somebody else pays your loan off for you. What is the lending environment today? I'm Kathy Fettke and welcome to The Real Wealth Show. Our guest today has been a private real estate lender for about 20 years. Brian Stark is VP of originations at IceCap Group, a direct private lender in New York City, making loans to real estate investors nationwide. He's wholesaled hundreds of properties, bought and sold hundreds of properties, and originated over 1,400 real estate loans, and he's here with us today on The Real Wealth Show. Brian, welcome. Brian Stark: How wonderful to be with you, Kathy. How are you today? Kathy: I am doing wonderful. I'm glad to have you on because we're seeing some changes a bit in lending, and I would love to get some understanding of it. We're seeing interest rates go up, how much have they gone up, and do you think that will continue? Brian: Not to be contrarian, but the truth is, in the investment side, we still see rates pretty well depressed. Not in a negative way, we see them held pretty low. In some areas, they're even going down a tiny bit because there's so much investment activity and there's a lot of, you would call it competition among lenders, like the company that we run and others like us. Everybody's feeding for the borrowers and depressing rates a little bit. While there's a little interest rate bump for consumers, I think investment rates are staying stable, or maybe reducing a tiny bit. Kathy: [00:02:00] That is really good news. Brian: It's great news. Kathy: I could see that because there's so much money out there chasing some kind of yield and not able to get it, but lending provides that. I'm not surprised, but I just haven't really heard that. Is it more private lenders and not so much the Fannie, Freddie lenders, the conventional? Brian: Yes. For the purpose of this discussion, Kathy, there's two buckets, if you will. One bucket would be government-backed money like Fannie, Freddie banks, the people with the big fancy buildings downtown. Then the other bucket would be all the private lenders. When we say private lenders, we're not just talking about the nice guy that you sit next to in church who's got a couple of hundred thousand in their IRA, I'm talking about what have now become, in the last five, six years, multi-billion-dollar companies that have raised huge rounds of capital raises. Hedge funds, private equity funds are in this business, our company has own fund, family offices. We're talking about very substantial private institutions that are in the business of making loans to real estate investors for fix and flips, buy and holds, and those companies are very competitive. We're not governed by United States government regulations, in most cases, we're not governed by stockholders. We're basically governed by the owners of the company, who on a given morning might say, "Hey, let's get into this business. Hey, let's lower rates. Hey, let's do higher LTVs. Let's go compete with this company or that company. I want 50 more borrowers this month. Let's do another 50 million this month." Just that fast, they can lower their rates because it's their money. Kathy: They must fall under some kind of regulation, I imagine it's pretty strict stuff. Brian: To the extent that you and I are both regulated, we're not allowed to drive past a certain speed or steal somebody's car, we're regulated to that degree, but there's very little regulation of business-to-business lending. [00:04:00] Very little in most states. There are half a dozen states in the country where there's a lot of regulation and most of us stay out of those states actually. Kathy: Which states are those. I assume New Jersey, California? Brian: Actually, California's one, New Jersey is not. Arizona, Nevada, North and South Dakota, Utah, most of us are not too active in Alaska. The territories are tough because just it's a whole different business, like Puerto Rico and stuff. Kathy: Interesting Brian: Lower cost of money comes in a lot of forms. One form is, "Hey, our rates are low, we're charging 5%. Oh, now, we're charging 4.75. Oh, we can do it for 4.5." Another lower cost of money is lowering fees, closing faster, raising what we call leverage. So, "We'll lend 80%. Oh, we'll lend 85%. Oh, we'll end 80%. We'll lend 100%." All those things are coming together to make more money available at a lower rate. It's been said by the way, that there's over $2 trillion, with a T, looking for a home. Liquid money that's literally sitting in investors' bank accounts. Kathy: I'm not surprised since $ 5 trillion was just created in the past year. It has to go somewhere and it likes to go to real estate. Brian: It sure does, absolutely. [crosstalk[ You were going to say? Kathy: I was going to say that we know that there were eviction moratoriums, there were all kinds of mandates this past year that was confusing, but it mainly applied to government-backed loans. If there was a private lender, they didn't necessarily fall under that regulation, or did they? Brian: Eviction mandates are different from foreclosure mandates. I think any property owner wasn't allowed to evict a residential tenant. I think there were some, I don't know this law perfectly, but it's different in every state, first of all. I think if the tenant was in default before [00:06:00] the pandemic began, then an eviction was allowed to continue, but I think it's fair to say very, very, very few evictions have taken place in the last year. I think it's also fair to point out that, by and large, residential tenants have paid their rent. I think you don't see large apartment buildings, large apartment communities with 60% unpaid rents. I'm sure there's landlords that have felt some pain, but by and large, people did pay their rent. Because not a whole lot of people at the upper and middle levels lost their jobs. Remember, people still worked, they just worked from home. There's definitely a strata of people that were feeling a lot of pain and we feel for them, but even many of those people paid rent. They had savings, they had other ways to get money. Anyway, private lenders were affected to the extent that we looked at residential assets, and are still looking at residential assets, with a little greater level of concern than we may have a year or two ago. Before this virus came along, it was an automatic assumption, just like it would be for you that, "Oh, it's a house. It can rent for $1,300 a month. We can definitely get $9,000 a month for this," or whatever the number is, "We can get it." Now, suddenly everybody has to say, "Well, wait a minute now, people are moving out of that neighborhood to get out of the city and out to the country. People aren't renting in that area too much anymore. That's a tough area, there's a lot of non-pay in that part of the city or part of the region or whatever it is." Suddenly, we're looking at residential assets not quite as solidly as we did maybe a year ago. That's all gonna stabilize out, it's all going to play its way out over the next six or eight months. I think we're going to see that settle out, but definitely, it's affected us in that way, but I don't think any lender has been affected by eviction. Foreclosure is a different matter. When we know we can't foreclose, we're definitely a little reluctant to lend. [00:08:00] That's definitely been a thought. Kathy: Absolutely there are certain states I would not want to be a lender in, and [unintelligible 00:08:07] judicial states where the foreclosure has to go through the courts. Brian: Absolutely. We all love Texas, you can foreclose in 30 days. Kathy: California is surprisingly pretty easy too, isn't it? Brian: Is it? We don't do very much business at all in California, so I'm not as familiar there. You have all the sunshine and golden gate bridges and Rice-A-Roni and all that stuff, we don't get that. Kathy: Oh, I'm sorry to hear that. We have [unintelligible 00:08:34] too. Brian: That's true. Sand. Kathy: Okay, sand. Brian: Fabulous people with tans. Kathy: Mountain skiing. YOu know what, everyone's leaving, no they're not. I just found out it's only 2% more than normal are leaving the state, but that's having a big effect on other areas. Brian: Of course. It's funny, you mentioned 2%, and we don't think of 2% as very much, but 1% or 2% or 3% change in any industry, but especially in the mortgage industry and housing, those numbers add up to be hundreds of billions of dollars worth of results in a big industry like the housing industry across the country. If you hear something like, "The apartment community has a 2% rise in vacancy," that's a big number. That's a lot. Kathy: As a lender, I'm curious what your thoughts are about the future. Do you think there will be a lot of foreclosures as the more moratorium lifts? Brian: I'd love to be one of those guys that gets a lot of attention by saying how awful everything's going to be, but I like to tell you what I really think is going to happen, Kathy, and I don't think there will be. First of all, I think most residential lenders, most consumer lenders will put unpaid balances on the backend of mortgages and will work with homebuyers, homeowners. I think homeowners that are really in trouble, many of them have an exit right now because the market is so hot [00:10:00] that in some cases people will sell and become renters for a while. If they're finding that, "Look, I've lost my job. I worked in the theater, I worked in restaurants, I worked someplace where my job's not coming back. I worked in some industry that's scaled down because of the pandemic and that's not going to come back." They're going to have so many options to sell. If they've got a little equity they'll probably do that. I think there's going to be a very, very small uptick in foreclosures and I do not think people are going to lose their homes at record rates and suddenly there's going to be an avalanche of residential opportunities. Not so much in the commercial world, that's a whole different business that we could discuss. If you'd like to buy a large office building, now's a good time to be looking. Kathy: Is it? Because I haven't really seen the impact yet, but are there starting to be defaults in commercial? Brian: Well, there definitely are a lot of discussions and there are a lot of lawsuits already beginning, and there certainly are a lot of defaults in hospitality. Those are definitely areas where if you're interested, that's a good place to look. I think also retail. Those are not areas where I lend, but we see the trades and all that stuff and there's definitely a huge uptick in defaults and in lates. On the residential side, I don't think so. I think most people will keep their homes, who want to keep their homes, and I think lenders are going to be, "This is a different thing from a mortgage industry collapsing because of financial reasons". First of all, the mortgage industry is not collapsing. Second of all, this is a non-manmade thing that everybody understands, including every company in the world. They have to work with people, and they are. Kathy: I don't think any bank wants to go through that foreclosure crisis again. Brian: No. Just think of the awful press if a large company would be found to be taking on a large amount of foreclosures against people. Kathy: When people weren't allowed to work. Brian: [00:12:00] No bank could tolerate that. Kathy: It would be canceled. Brian: It sure would, it certainly would. [laughs] By the way, foreclosures, even at the height of the pandemic, and I don't remember the exact statistic, but we never reached anything like 20% of all mortgages going into default, it was maybe 6% or 7% or 8%, something like that. It's a big number. Like I said, a little percentage like that is a big number. Sure it was hundreds of thousands a month or whatever, but the banks, by and large, could support that, it's built into their loss ratios. Sure it was extraordinary but it's not going to put a large bank out of business. Kathy: What about with the eviction moratorium lifting, are lenders concerned that landlords will run into trouble because they haven't been able to collect rent? Or like you said, has that not really been an issue that you've seen. Brian: Not an issue that I've seen. It's not quite in our space, but as I look at how that piece of the puzzle plays out, I really don't think lenders are going to be too worried about it for open loans because landlords will need to make an adjustment. A landlord has to make a decision, "Okay. Mrs. Johnson in unit two hasn't paid for three months and now I'm allowed to evict and I got to get rid of her because I need the unit back. Do I have the money to pay for the legal, can I afford the clean-up and unit prep? Do I have the cash to hold the unit and pay my mortgage for another two, three months while I wait for a new tenant?" If the answer's yes, they're going to keep paying their mortgage, there'll be no effect on the lender whatsoever. If the answer's no, then they're going to have to get creative and figure out a solution. I suppose there might be a little uptick as some mortgagees decide they're going to walk away from their properties, but I just don't see that as being a big deal right now. Kathy: Even if it does happen, there's such a lack of inventory that those rentals would turn into primary residences. Brian: Right away [00:14:00] or rentals for somebody else. I think you're going to see shake out at the lowest end, that's where there's going to be problems, and maybe at the very, very, very highest end. If you have a $4 million house and you're trying to rent it and you found that, "Gee, there's not a lot of people paying $50,000 a month right now, maybe that's going to be a problem." Or if you have a $39,000 house and you're having trouble finding a $650 tenant, that's not too surprising either. Everything else should be fine I think generally. Don't have a $39,000 house, that's rule number one. Kathy: Good advice. Thanks. [laughter] Kathy: For somebody who is preparing to buy property and get more investments, what do they need to know? How do they become a very good borrower? Brian: Well, that's a great, great question and I wish more people would ask you that question long before they call my telephone number. Kathy: [laughs] Brian: First thing we want to see, and I think every lender wants to see, is that you have decent credit. We understand that you could have a 580 credit score and be a good person. We're not saying that you're not a good person if you have "Poor" credit, but we make loans, and all lenders make loans, based on specific numerical criteria. We need to be able to sell our loans either to our own fund, to our own cash management structure, or to Wallstreet or other institutions that will buy our loan so that we can turn around and use that money and make more loans. That's the business that we're all in as lenders. No lender, very few lenders hold all their loans, lend all the money, and then just wait for people to pay back. Number one, got to have decent credit. I would say don't even settle for 650, get that credit up to 700, 720 as a mid-credit score [00:16:00] before you come to a private lender to be in this business. If you're going to work with a formalized private lender, if you're going to go to raise private capital from private individuals, credit's not as important and it's definitely true that you can do that in that way. Speaking from the perspective of somebody who's working in the private lending industry, that's number one. Number two, you got to have some cash. It's true that there are many ways to do this business without money. It's true. No money down, all these things, you can definitely do all that stuff, but from the perspective of somebody running a private lending company, we want to deal with people that have liquidity. We want to deal with somebody who can show us that they have in the bank enough money to make their payments for six months, enough money to pay your closing costs, your origination fees, and a little bit more. Because we don't want to make a loan to somebody who is going to be out of cash by month number two. Have some capital, have some credit, have some liquidity. If you don't have any experience at all, definitely get some knowledge. Take a course, go through a workshop, get a partner, give up some equity. It's okay. Get a partner who's done 10 deals, done 5 deals. To jump into this business, or any business, all alone, knowing nothing, having done nothing, with nothing, you're just asking for trouble. It's so easy to make a wrong decision. It's great to do the first 6, 8, 10 deals with someone who knows what they're doing. Those are three pieces of advice I could share with you. Kathy: That's great. Your suggestions for helping people improve their credit. I know we've worked with a credit repair company forever, and they help keep our scores really high- Brian: Very important. Kathy: - but any other tips that people should know about how to improve their credit? Brian: Yes. I have had a couple of excellent credit repair professionals on my shows and we work with them as well. What we hear all the time is utilization. Keep it low, keep it under 30%. [00:18:00] One way to keep your utilization under 30% is to get a little more credit and use a little bit of it. In other words, some people think, "Oh, I pay all my bills off." That's wonderful, great to pay all your bills off, but if you only have two bills, and you only have $3,000 worth of credit limit, you're not going to have much of a credit score. Get another couple, three, credit cards or credit accounts with a couple of $3,000, $5,000 limits. Use 22% of those credit limits so that your utilization rate stays low, but your available credit grows. Keep your utilization low, number one. Pay everything on time, everything. There's no such thing as making one late payment, it can't exist. Pay on time, always. Pay a day early if you have to, set it up [inaudible 00:18:48]. [crosstalk] Kathy: Get it automated. Get it automated EFT. Just get it because that one late will really your credit. Brian: It really does. Avoid letting anybody pool your credit, unless you absolutely need to. Definitely, definitely, definitely avoid letting anybody have access to using your credit. Don't give your kids a credit card that can affect your credit score unless you're paying the bill. Don't get a credit card with your-- Kathy: Don't get a credit card with your new boyfriend. Brian: I was just about to say, boyfriend, girlfriend, whatever, definitely dangerous. Just be very-- You got to guard your credit like you guard your life, you really do. It's an ongoing process to build it and manage it and maintain it. Check it all the time. Once a week go in those accounts, make sure everything's cool. If it's not, set aside time and fix it. Kathy: It's a really good advice. We're doing a refi to these incredibly low rates. We missed the super, super low, but we're still getting a good rate. We almost didn't get funded because I didn't have enough credit cards. I have two credit cards and one I never use and actually couldn't even find it. The other one, I just buy a cup of coffee [00:20:00] every now and then. I don't use them and they didn't like that I didn't use them and didn't have more, who would have thought. Brian: I will say it's a little different once you become truly wealthy, and I don't know your actual net worth I know you're successful. Once you become truly wealthy it's a little different because you can do different things when you're in the high sevens, low eights credit score, 800 credit score area, and you have assets and you have substantial income, you can operate a little differently. You might not need to follow those rules that I've just described for somebody getting started. Kathy: Got it. We're just about out of time, but is there anything else that our audience needs to know? Brian: I will say this, first of all, the best time to get started investing in real estate was yesterday. Whatever day you're thinking about starting, don't let any time go by. Just get started. Jump in, figure it out, get going. Real estate takes time. It's a building thing. It takes time to build equity, it takes time to put deals together, it takes time for deals to happen. Get started as soon as you possibly can, get all the education that you possibly can, learn everything. Become like a sponge, learn as much as you possibly can. Balance that knowledge against people who are trying to sell you courses that may or may not have good information. Spend as much time as you can with people who are truly successful in the business, not people who act successful, but people who are successful. What kind of a watch they wear or shoes they wear or car they drive, which may or may not be paid for, doesn't matter. What assets they own is what you want to look for. I know a guy who's worth easily $1001 million, he wears mostly t-shirts, sandals, and shorts now. You'd never know he's got all that stuff. In fact, most of the guys in this business, I say guys because I really mean men, that I know, who are very, very, very successful, you'd never know. If you look at their assets, [00:22:00] those are the guys you want to hang out with. You're going to learn a lot in 10 minutes from those people. Spend your time with people who are where you want to be. Kathy: That's our favorite game where I live, is trying to figure out, "Are they a billionaire or a homeless person" Because in the streets sometimes you can't tell. [laughter] Kathy: It seems like the one reason why somebody wouldn't do it you just said is fear that the economy is going to collapse, that prices have been going up for too long, that we're going to see another 2008. What are your thoughts on that? Brian: The economy is going to collapse, yes. We don't know when but it will happen. The economy is cyclical, it always happens. The economy will collapse sometime. Who cares? There's always good deals to be had. Just learn to watch, be careful, don't borrow too much, don't leverage yourself too heavily. Always have cash, keep your credit strong. When the economy collapses, great, go buy more. Kathy: I knew lots of people wrote about it in my book Retire Rich With Rentals. My mom's pastor had 10 rental properties during the downturn, they most certainly lost value, those properties, but he didn't serve them. He didn't sell them. He was collecting the rent and he was living off of the rental income. During that time, actually, rents went up because more and more people had lost their homes and were renting. He didn't actually feel the recession, and now those homes have gone up dramatically in value. If you're holding for rental income, you don't need to worry so much about the value of the property. Brian: That's just right. This is a long game. 10, 20, 30, 40, 50 years you're going to be in this business. Kathy: All right, Brian. It was really a pleasure to have you here. Thank you so much for joining me here on the Real Wealth Show. Brian: Pleasure is mine, Kathy. Thank you very much and make it a fantastic day. Kathy: Thank you for joining me here on the Real Wealth Show. You can get [00:24:00] a whole list of resources on our website which includes lenders and property managers and teams who can help you find the property, they'd renovate it for you, and have that property management in place. Insurance agents, inspectors, all kinds of information, and resources again at our website realwealthshow.com. Just click on the Invest tab. Have a wonderful rest of your day. Thanks so much for joining me here on the Real Wealth Show. Presenter: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information go to realwealthshow.com. [music] [00:24:53] [END OF AUDIO]

This past year, we learned a lot about which states are more business-friendly than others. Some had mandatory shut downs, like California. The rules were particularly strict in Los Angeles where the city would turn the water and electricity off at businesses that defied the shut down order. On the other side of the country in Florida, the economy and businesses have been mostly open for the entire year. It was certainly a risk for Florida, but the state gave people the opportunity to make choices for themselves. And now we can see the results of that decision. CDC statistics show that the Covid-19 case rates and death rates since the beginning of the pandemic are nearly identical in both states. As an aside, Florida’s death rate is 40% lower than in the State of New York, along with dozens of other states. But even though Florida and California had nearly identical public health outcomes, their diverging strategies have had an enormous economic impact. You'll hear more about that in this episode along with an update on the Florida real estate market right now from someone who's been in the business for 25 years. He's from New Jersey but has flipped homes in California and moved back to Florida where he is now, and specializes in locating great rental income properties for investors. www.RealWealthShow.com

In March of last year, the WHO officially announced COVID-19 as a global pandemic. And here we are, one year later. How has the pandemic has impacted the commercial real estate industry? And where we might be going from here? In this episode, we'll hear from John Boyd, Jr. of corporate site selection firm The Boyd Company. John's expert perspectives on corporate site selection, economic development and the real estate industry are routinely featured in the global news media. The Boyd Company clients include Boeing, Chevron, PepsiCo, Visa International, Shell, Honda Motor Company, Hewlett-Packard, JP Morgan Chase, Sanofi, Royal Caribbean Cruises, Dell, and TD Canada Trust. www.RealWealthShow.com theBoydCompany.com

What happens when you dream of being a pilot but, after years of work in pursuit of that goal, you are told you don’t qualify? For one entrepreneurial woman, you take the skills that you’ve already developed and dedicate them to a new passion -- in this case, it was real estate. During her time with the U.S. Navy, Beka Shea earned her mechanical engineering degree. When she crossed “pilot” off her list, she worked as an engineer until her third pregnancy which made her realize she didn’t want to travel as much. That’s when she decided to try her hand at real estate and took on her first fix-and-flip. From there, she turned her skills into an amazing real estate career rehabbing dozens of homes, wholesaling many more, and buying several rental properties along the way. She attributes her success to a certain kind of mindset which you’ll hear more about in this episode! Currently, she works full-time helping other investors reach their real estate goals or what she calls “Freedom Dreams.” You’ll find her at: https://www.7figureflipping.com For this episode and more, go to www.RealWealthShow.com If you like our show, please subscribe and leave us a 5 star review and comment!

Today’s real estate market is worlds different than it was ten or so years ago. Back then, it was easy to find great deals on homes you could fix-and-flip or buy-and-hold as rental property. Now, home buyers and investors are competing for a record-low inventory. That’s pushing homebuyers and investors toward the new construction market. In today’s episode, RealWealth investment counselor Ben Erik Smith will talk about how his investment strategy has changed, and why he’s so enthused about newly built rental properties. Spoiler Alert: He just closed on a brand new four-plex in Florida. Ben owns 18 doors in Florida, Ohio, and Pennsylvania, and is looking to buy two more for a total of 20. All of his properties are older renovated homes, except his new four-plex. He has worked for RealWealth since July 2014 helping other investors build their portfolio. In this episode, he will talk about the positives and the negatives of buying new construction rental homes, along with some of the markets where you can find them. Markets mentioned in this episode include: Jacksonville, Orlando, Palm Bay (Space Coast), Charlotte, Atlanta, Houston. If you’d like to learn more our new-build markets, and the purchase of new construction rental homes, please join RealWealth and log in to the Investor Portal. You’ll find market data by clicking on New Construction Rentals under the Invest tab. www.RealWealthShow.com

Building wealth is something that we do for ourselves and our family, and for some, it’s also a way to “give back” to people in need. In today’s episode, we’ll hear from someone who started his real estate career so he could raise enough money to help orphans around the world, as well as his family. He’s truly a good, good soul. If you think investors are more self-serving than that, this interview might change your mind. Our guest, Whitney Sewell, became a federal agent after serving in the military at a very young age. When he got married, he and his wife, Chelsea, decided to adopt at-risk children but realized they needed more time and money to fulfill their charitable dreams. Whitney had heard that other people could build wealth through real estate, so he thought he could too. He and his wife bought two triplexes. They also lost a lot of money on those initial investments but learned a lot, as well. Today, they personally own more than 250 units and their company, Life Bridge Capital, has invested in more than 900 doors worth more than $120 million. Inspired by their desire to help orphans and their families, the Sewells founded the Life Bridge Foundation, and donate 50% of their profits to the foundation. Whitney is also the host of the Real Estate Syndication Show. Links: www.RealWealthShow.com https://lifebridgecapital.com/ https://lifebridgecapital.com/podcast/

It takes imagination and courage to break out of the financial safety net we create for ourselves with a 9-to-5 job. Many of us dream about doing it, and few of us actually go through with it, especially when it comes to giving up a cushy high-paying job for a career field we know little about. Leka Devatha took that chance about 7 years ago. She quit her job at Nordstrom to try her hand at fixing and flipping homes. After a string of successful flips, she obtained her broker's license in 2017 and became one of the top-producing agents in her office. She has now flipped over 50 homes and has expanded her focus to include land development, additions, acquiring long-term rentals both in-state and out-of-state. She also serves as an advisor on the board of Certain Lending, a FinTech company based in San Francisco. She enjoys inspiring and motivating other entrepreneurs to build successful businesses and for this reason hosts a monthly meetup, “Real Estate at Work” to bring new and seasoned investors together. www.RealWealthShow.com

One of the best ways to protect your real estate assets is through good insurance policies. But how many of us really know what to look for in the massive policies we pay for and depend on for protection? On today's show, Beth Boisseau-Coots will break it all down for us. She's been an insurance broker at J.B. Lloyd & Associates for 15 years, and serves as Vice President with a focus on real estate investors. She has had a leading role in the development of insurance programs for investors at JBL, and is continually refining them. In 2015, she earned the title of Certified Insurance Counselor (CIC) from the National Alliance for Insurance Research and Education. If you'd like to hear more from Beth about insurance options, she's done a recent webinar with us on insurance policies for investors. You can access a replay of that webinar as a member of RealWealth. If you haven't joined, it's 100% free and takes less than 5 minutes to sign up. Go to www.RealWealthShow.com Beth's contact info is listed under the Resources tab in our member's only investor portal on our website. Click here to join for free (or to login if you are already a member).

What started off as a dream to own their own home, turned into a passion for real estate investing and plans to retire by the age of 40. They got their start in their early twenties in the midst of the housing market crash of 2008. Now, with just a few years left until their 40th birthdays, they are on track to become job optional. Ryan and MaryAnne are the children of immigrants, who grew up with visions of opportunity and the goal of financial freedom. In today’s interview, both Kathy and Rich Fettke will be asking them about their Real Wealth Story: How they got started in real estate, and how they have collaborated in the purchase of rental properties many miles from home. Their answers are not only educational, but inspiring to others who would like to do the same. www.RealWealthShow.com

In this episode, I have the honor of interviewing the man named as one of the 50 Most Powerful People in Real Estate by Bloomberg/BusinessWeek. Doug Duncan is Senior Vice President and Chief Economist at Fannie Mae where he is responsible for forecasts and analyses for the economy, housing and mortgage markets. He leads the Fannie Mae Corporate House Price Forecast Working Group which reports to the Finance Committee. Under his leadership, Fannie Mae’s Economic & Strategic Research Group (ESR) won the NABE Outlook Award, presented annually for the most accurate GDP and Treasury note yield forecasts, in both 2015 and 2016. He was the first recipient in the award's history to capture the honor two years in a row. In addition, ESR was awarded by Pulsenomics for best home price forecast. Prior to joining Fannie Mae, Duncan was Senior Vice President and Chief Economist at the Mortgage Bankers Association. And he's here with us in this episode of the Real Wealth Show. www.RealWealthShow.com  

The pandemic has caused a lot of pain in this country, but it has also jolted some people into a new reality. For many, that’s the ability to work remotely and all the benefits that come with that, including a less expensive place to live, more free time, and more money to save or invest in things like real estate. Will Pleskow is one of the people living this kind of newly discovered reality. The 29-year-old tech worker moved from an expensive apartment in San Francisco to a sunny, less expensive place in Palm Beach, Florida. And that's given him tremendous personal and financial freedom. In today’s episode, he talks about the simple steps he took that are making such a big difference in his life, and what he’s planning on doing next. www.RealWealthShow.com  

The real estate roadmap is changing. We have a new administration that will implement new policies at a time when the economy is also recovering from the pandemic. We can expect change, but it doesn’t have to be scary. In fact, today’s guest says there’s plenty that consumers and real estate investors can look forward to, in terms of real estate, and she's here to share some of her ideas about what she sees as opportunities.   Kathleen Kramer has been in the real estate business for more than a quarter century. She’s worked as a mortgage originator and real estate broker, and has closed over 2,500 transactions for more than $1 billion in volume. She’s currently a note investor, and tracks economic issues for real estate investors in Southern California. She and her husband, Michael have also personally invested in many kinds of real estate deals, including single- and multi-family rentals, commercial property, land development, and other real estate investment vehicles. Her website: https://libertyre.net/   www.RealWealthShow.com  

How do you go from a small fishing village in Ireland to coming to the U.S. and flipping over 350 homes, keeping some as rentals and retiring in your early 40’s. Well, our guest today is going to tell us how he did that. Colin has been investing in the U.S. since 2009. During that time, he’s bought and sold more than $100 million worth of real estate in the Tampa Bay area. He’s an expert in foreclosure auctions, along with wholesaling, tax investing, note investing, private lending, and more. www.RealWealthShow.com  

This is another installment of our Real Wealth Story interview series, and an update on one we’ve done before! Maggie is a long-time Real Wealth employee who hit the road with her hubby Marc a few years ago, and took her job with her. Maggie is one of the reasons that Real Wealth went totally remote because it worked so well with Maggie. Their story is inspiring. They don’t own a home or a lot of possessions, but that's given them the freedom to travel, and the funds to buy investment property. In this episode, Maggie and Marc join Kathy and Rich Fettke for an update on how they turned a lifestyle vision into a reality, what they’ve learned along the way, how the pandemic has impacted their plans, and their thoughts on the meaning of "real wealth." www.RealWealthShow.com  

In this episode, we bring you another Real Wealth Story with both Kathy and Rich Fettke as hosts. Our guest is someone who came to the United States as a refugee from the Soviet Union. He emigrated here with his mother out of fear for their lives, and has worked hard to rebuild his life in a free society -- first in the information technology field, and currently as a real estate investor and fund manager.   Mike Zlotnik joined Tempo Funding, LLC in 2009 as a managing partner, and Vice President of funding operations. Also known as “Big Mike”, he assumed the responsibility of CEO in 2014 and has since founded the TF Management Group and three new investment funds. He holds a Bachelor’s degree in mathematics, participates in various real estate and mastermind investor groups, and hosts a podcast for investors called “Big Mike Fund Podcast.”   www.RealWealthShow.com

This is the first in a new series called Real Wealth Stories with both Kathy and Rich Fettke as hosts. They have been fascinated by the life-changing stories they’ve heard from our network members and investors, so they thought it would be inspiring to share some of these stories on the Real Wealth Show. As you may know, we define Real Wealth as having the money and the freedom to live life on your own terms. Today’s guest is taking action on that idea, and is on track, with his wife, for early retirement. Kevin and Michelle Yu are two 30-somethings with W2 jobs in the Sacramento area, but are also passionate about passively investing in real estate. They see it as an avenue that will lead to a more secure retirement in a shorter amount of time, hopefully. Michelle couldn’t make it for the interview after a sleepless night with their one-year-old, but Kevin fills us in on how they got started, what they’ve bought so far, and what they are planning for the future to realize their real estate goals. www.RealWealthShow.com  

While 2020 has been a difficult year for many people, the CARES Act has provided some unique tax deductions. But they won't last forever so it's important to take advantage of them now. Today's guest will talk about these one-time tax strategies, and how investors can use them to save thousands of dollars. Toby is a nationally-renowned tax attorney who agreed to come on the Real Wealth Show as a preview to a webinar he's hosting with us this Thursday, December 17th. It's called "Last-Minute Tax Strategies for 2020" and it's free for RealWealth members. If you're not yet a member, it's easy to sign up, for free. Just go to www.join.realwealth.com. www.RealWealthShow.com    

Becoming a doctor is certainly a difficult goal to achieve, but one that comes with big rewards in terms of helping people become healthy and earning a healthy paycheck. But it can be high stress and very demanding. Our guest today has been down that road and decided that she wanted more free time for her family, friends, personal pursuits, and adventure. That's why she switched careers from practicing medicine to investing in real estate. Dr. Patricia Red Hawk was born and raised in the San Francisco Bay Area. She attended Temple University School of Medicine in Philadelphia to become a family physician. And, she currently lives with her wife and kids in the Pacific Northwest. She’s the CEO of the Red Hawk Property Group and the Welliott Investment Group, is a frequent public speaker, and loves to swim, ride motorcycles, race sailboats, and teach people about investing and building wealth. www.RealWealthShow.com  

Today’s guest is a true inspiration for both men and women around the globe. She’s always felt confident enough to speak up for herself and others, and she’s used that talent to build an impressive real estate empire.   Ashley Wilson has more than ten years of experience as a real estate investor. It started with renting out rooms in her home, and turned into a full-time real estate investing business. She’s now been involved with more than $60 million worth of real estate transactions for both single- and multi-family properties. Ashley co-founded Bar Down Investments (www.bardowninvestments.com) with her husband, Kyle, and authored a newly-released book about women in real estate called “The Only Woman in the Room.” She's also an active member of The Real Estate InvestHER Community.   www.RealWealthShow.com  

2020 has been a tough year, and one that probably everyone in the world could say: “I’m happy that it’s almost over!” In this episode, Rich Fettke will talk about how to practice gratefulness and create a positive mindset in time for Thanksgiving, and the New Year! www.RealWealthShow.com  

Erica Marston went from stay-at-home mom to real estate pro with a little inspiration from Robert Kiyosaki and Real Wealth Network. She started investing about four years ago, and she now owns ten properties in three states. You'll find out how she did it and what's next in this episode. www.RealWealthShow.com  

Today's guest started off as a pharmacist who wanted to create passive income so he decided to invest in rental properties. Ketan Patel didn't have a lot of money, but discovered that a shift in mindset would help him get rid of the fears and beliefs that held him back. He now helps other real estate entrepreneurs as a transformational coach. www.RealWealthShow.com  

With the stock market and real estate at record highs, and now a change in U.S. leadership, a lot of people are concerned about a potential correction. Today’s guest has been studying these things for a long time and he’s got some insights and predictions for the real estate market in this episode of the Real Wealth Show. Bruce Norris of the Norris Group is known for his ability to forecast long-term market trends and timing. He is an active investor, hard money lender, and real estate educator with over 35 years experience. He’s been involved in more than 2,000 real estate transactions as a buyer, seller, builder, and money partner. www.RealWealthShow.com  

Our guest today sent me a very sweet note. In it he said, "Having been a listener of your podcast for several years, I have learned about replacing my W-2 income with passive income from real estate investing." Well, that got my attention, so I invited David Vernich onto the Real Wealth Show to tell us how he's created a passive income stream, while working full time. David is a commercial loan officer who specializes in investor loans for the purchase of single-family rentals. He's also a long-time investor who started buying rental properties in 2007 and now co-owns more than 120 rental units www.RealWealthShow.com  

Getting started in real estate doesn’t have to be a difficult process. It just requires getting started. And the more you learn, the faster you'll want to get on it. Today's guest was working for a tech startup just 3 years ago - and it happened to be a real estate platform. And he was required to learn about real estate investing as part of the job.  Well, like many of us, he got hooked, and thirty days later he bought his first four-plex as a house hack. Over the next two-and-a-half years, he grew his portfolio to 22 units, all in the St. Louis area where he lives.  He’s with me today, to share his story and offer some rock-solid advice for people wanting to get into the real estate rental business.   www.RealWealthShow.com

Do you have a particular market where you’d like to own some rental property? Is it a market that you don’t find listed on our website or haven’t been able to get help with as an investor? Are you looking to purchase an investment property that may or may not be turnkey with property management? Maybe you'd prefer to renovate the property yourself? Or buy a home that you live in now and rent later? If you answered “yes” to any of these questions, you will love what we’re unveiling at RealWealth. We are creating a network of RealWealth Certified Agents in markets outside our 18 core metros to give investors more options. Today, our Director of Investor Relations and Investment Counselor, Ben Erik Smith is with me to talk about this new national brokerage, and what it means for people interested in buying investment properties outside our established areas, and possibly in your own backyard! Ben has helped our members find hundreds of rental properties as an investment counselor. He’s now in charge of launching our national brokerage. Welcome, Ben! www.RealWealthShow.com  

The housing market is red hot. The national median home price rose 13% year-over-year in September. Active listings fell 28% to an all-time low. Sales of new U.S. homes accelerated by 4.8% in August, to an annual rate of one-million units. That’s the highest since 2006. New home inventory fell to a 3.3 months of supply lowest level on records that go back to 1963. Will this home buying frenzy last? Or maybe we’re in a new kind of COVID-influenced bubble?   Who better to give us an update on the new home market than Robert D. Dietz, Ph.D. He’s the chief economist for the National Association of Home Builders, with a focus on housing and economic trends, the home building industry, survey research, and policy analysis.   www.RealWealthShow.com  

Demand for single-family homes is skyrocketing in some markets, and the new build-to-rent trend is on fire to help meet that demand. Today on the Real Wealth Show, we’ll hear from a property manager in Florida who's in the middle of this new rental strategy. He says demand is so strong, there’s no shortage of tenants and that investors are lining up for newly available homes. Today’s interview is also a preview of a virtual live event that we’re hosting tomorrow. We’ll have a panel of investors comparing their experiences with both turnkey and new rental homes, along with builders and property managers who can talk about what’s available. The event is free. You need to be a RealWealth member, but it’s free to sign up at realwealthshow.com, and free to attend the event. Here's Chris, with some very valuable information on several hot build-to-rent markets in Florida as well as Atlanta.

In this episode of the Real Wealth Show, you'll hear from a cash flow expert who retired "twice" by the age of 39. Chris Miles worked as a traditional financial advisor and stock coach for years, but now calls himself an anti-financial advisor who teaches people how to quickly get their money working for them (hint: he's big on real estate and not so big on 401k's.) He's also the author of "Beyond Rice & Beans," the host of "The Chris Miles Money Show" podcast, and he's been featured in U.S. News, CNN Money, Bankrate.com, and EOFire. His website: www.moneyripples.com www.RealWealthShow.com  

It used to feel like real estate investing was a man’s world. Not that long ago, you’d see just a few women in a roomful of men at a real estate event. But that dynamic is changing. I have personally witnessed the transformation, and have met some amazing women who are closing that real estate gender gap.   My guest today is Monick Halm. She is one of those amazing women with an incredible story of success. It started with the purchase of a first home, and progressed from there. She abandoned her career as an attorney, and now has more than 14 years of experience as a real estate investor, syndicator, and developer. Today Monick and her husband, Peter, own more than 1300 rental units in six states. That includes some commercial properties that she says are pandemic-proof. Monick is also the founder of a group called Real Estate Investor Goddesses to help other women achieve financial freedom through real estate -- and, she’s a best-selling author, podcast host, real estate strategy mentor, interior designer, world traveler (when there isn’t a pandemic), and the mother of three kids. If you'd like to learn more about how to be a savvy real estate investor, you can get lots of information right here at www.RealWealthShow.com. It's free to join, and free to access a wealth of information.

The pandemic has dealt a painful blow to individuals, companies, and local governments across the nation. The economic losses hit every state, but we’re now seeing an uneven recovery from market to market. Somehow, real estate is an overall winner with home sales surging in most markets.  And while that may be pent up demand from a spring buying season that never happened, or a rush to get out of cities and into suburbs, over the long term, real estate investors need to pay attention to which metro areas will recover their job base the fastest.    With me today is John Boyd of The Boyd Company. His company provides real estate and management counsel to major North American companies like Boeing, Chevron, JP Morgan Chase, and Visa International. He’s here to explain how the U.S. business environment is changing because of COVID-19, and why that will turn some markets into winners, and some into losers. At RealWealth.com we have a list of metro areas that we think will rebound the fastest - and where housing will continue to be in demand - even during recessions. Visit RealWealth.com for details.  

Sometimes a parent’s financial advice may be annoying at the time it's given, but wise children who listen to it and follow the advice can skip many years of struggle. That's what happened to a former Silicon Valley technology expert.  Our guest today listened to his dad, and agreed to buy a piece of property in San Jose back in the 1990s. Well, you can probably guess where that led him. With the appreciation from that one investment, he was able to launch a full-time real estate career, and, he has some stories to tell. Paul Fogarty is here to share the ups and downs of owning various kinds of properties from single-family homes and condos to multi-family and commercial properties, here in California and out-of-state. www.RealWealthShow.com  

Imagine moving to a new country where you can't even speak the language and don't really know the culture, and still trying to stake your claim and become a successful, contributing citizen. Our guest today did just that. Alex Kholodenko immigrated to the U.S. from the Ukraine 20 years ago, barely speaking English and with very little money.  Today, he has a successful full-time career working as a technology professional in the Silicon Valley. On the side, he's also built an impressive passive income real estate portfolio that he hopes will guarantee that his family will never go hungry. In today's interview, he'll share the ups and downs of his real estate story, with plenty of tips for people just getting started. www.RealWealthShow.com  

What if you could own a rental property and the government paid the rent every single month? The program is historically known as “Section 8” but has evolved over the years into something called the “Housing Choice Voucher Program.” That means that tenants who qualify for the subsidy can use their vouchers to rent from any landlord that accepts them. That’s turned into a pandemic goldmine for investors who already have these tenants in place. They don’t have to worry about collecting the rent.    Our guest today knows all about the voucher program in Chicago. He provides renovated properties and management to investors and most of his business involves tenants with subsidized housing. You’ll hear details on how the program works along with a wealth of information for investors wanting to know more about the Chicago rental market.   www.RealWealthShow.com  

We’re living through an unusual time right now. We've been thrown out of our normal routines into a pandemic survival mode while a cultural and political war rages around us. The situation has put many of us into a state of uncertainty over our physical health, our finances, our cultural heritage, and our political future. And when uncertainty strikes, it's time to ask questions which is the heart of my interview today.    Mark Victor Hansen changed the world with his Chicken Soup for the Soul series. And today he's back with more wisdom, along with his wife Crystal Hansen. They have co-authored a new book called “Ask! The Bridge from Your Dreams to Your Destiny.” It’s all about asking the right questions as a guide toward the discovery of your dreams and the creation of your best self. And, it's something that we all might need to do as we re-establish ourselves in a post-COVID-19 world.   www.RealWealthShow.com  

Many people wait to invest in real estate until they have a bucket of money. But sometimes filling that bucket takes longer than expected. The good news is, you don’t have to own a property to make money from it. Our guest today is short-term rental entrepreneur, who’s built his business on something called “rental arbitrage.” This strategy entails leasing a property and then getting permission to re-lease it as a short term rental. Jon Bell started master leasing properties and renting them out on Airbnb just a few years ago, and is now bringing in about $40,000 a year “net” as a side hustle to his full-time job. And this is the bucket of money he's using to buy long-term rentals. In today’s podcast, he’ll talk about how he did it, and why he feels it’s a relatively “risk free” investing strategy.You can learn more about Jon Bell and rental arbitrage at www.ShortTermSage.com www.RealWealthShow.com  

California is not considered a landlord-friendly state. That means laws lean toward the tenant rights, not so much the property owner's rights - which means it may be difficult to evict a non-paying tenant. Additionally, property prices are high. And even though rents are also high, they are not in line with the property price. For example, in some states, you can buy a brand new home for $200,000 that rents for $1600 per month. In California, the property might be twice that price for the same amount of rent, which translates to low cap rates. Our guest today has figured out a way to address both those issues and turn his California rentals into passive cash flow machines. And the most impressive part of this story -- he’s only 27 years old. Ryan Chaw is a pharmacist by profession who began investing just four years ago. He also likes to teach other people how to do what he’s doing, and he’s here to share that strategy. www.RealWealthShow.com  

Life is full of risk. And the risk helps us be smarter, and more strategic in the things we do. Unfortunately, the fear of failure can keep people from ever even trying. And then when we do try and fail, then going for it again can be terrifying. But I assure you, anyone who is a pro at anything took a lot of falls. Our guest today knew real estate was risky, but he was willing to jump in anyway. He learned some tough lessons, but he pulled himself back up and jumped back in. Now he's doing some really cool things with tax liens that I can't wait to share with you. and he's using those profits to buy cash flow rentals in growing markets. Darnell Randall was born and raised in Los Angeles, where owning real estate can be pretty cost prohibitive. So he's found other options. And while some didn't work out as expected, he didn't give up. Today he's here to share what's working and what his plans are next. He's a regular member at our RealWealth events, and we're so happy to have him here on the Real Wealth Show! www.RealWealthShow.com  

Real estate in California is often unattainable goal for many people, and as prices continue go up, so do the down payments. Yet, so many Californians know that real estate is what builds long-term wealth, especially now that the Fed has printed trillions of dollars to stimulate the economy. Increasing the money supply generally drives up asset values further. That's great if you already own real estate but makes it even more difficult to get in if you're just starting out.  Today's guests knew they couldn't afford a home in the San Francisco Bay Area but they wanted to get into real estate anyway. So three years ago, Erik and Jodie Carlson dove into the learning process, reading lots of books and listening to podcasts. After about a year, they jumped in and started buying single-family rentals located no where near their home in the Bay Area, a home they rent by the way. They are going to tell us how they did it on today's Real Wealth Show.   www.RealWealthShow.com  

If you’re hoping to enjoy your golden years with enough money to retire, you might find today's episode very enlightening. Today’s guest hit his 65th birthday with a nest egg that just wasn’t big enough, and decided to try real estate investing. He’s now seven years into his investing plan, owns several single family rentals, and plans to buy some more.  David Jackson is with me today to tell us how he got started, and is hoping his story will inspire other seniors without enough retirement funds to invest in real estate.   www.RealWealthShow.com  

There’s a lot of talk about fake news out there. There’s a lot of confusion about who to believe. There’s a massive communication breakdown, in general, not just within our country, but between countries, organizations, friends, and families. I thought it would be a great time to invite my husband, Co-CEO and Co-Founder of Real Wealth, Rich Fettke, onto the Real Wealth Show to talk about how he helped his clients when he was a business and personal coach, and also me, as my partner in life, to be a better communicator. I thought he could bring us some really great insights.    www.RealWealthShow.com  

They’ve come a long way -- from high school sweethearts to long-time spouses who've  reached financial independence. And, they have made it happen with real estate.   Today’s guests are Scott and Caroline Ceniza-Levine. They built a real estate portfolio and hit their financial goal in their late 40’s. Scott was able to retire from his IT job three years ago, and Caroline says she only works on “passion projects” because she is now job optional. They are from New York but spend much of their time at their current primary home in Northeast Florida. So what did it take to accomplish this task? What did they buy and where? Hint: They have a few rentals in Costa Rica. And, what tips would they like to share for other aspiring real estate investors?    I’m pleased to have Scott and Caroline with me today to share their story.   www.RealWealthShow.com  

Are we looking at another foreclosure crisis? Or is all this government stimulus going to save the economy? Will the jobs come back? Will demand grow for rental housing? What's the upside for real estate investors? Our guest today is a leading economist and recognized authority on personal finance, U.S. housing, and economic trends. Cristian deRitis is Deputy Chief Economist at Moody’s Analytics and was named on two U.S. patents for credit modeling. He created loss forecasting and stress testing systems for financial institutions. He joined Moody’s in 2008, after serving as a director with Fannie Mae. He was also an adjunct professor of economics at Johns Hopkins University.   www.RealWealthShow.com  

How would you like a little good news on real estate today? Goodness knows we're inundated with plenty of bad news these days. And it's not surprising. We’re navigating through a very unusual situation right now. And the "unknown" is generating a lot of fear and creating a lot of questions about when we’ll bounce back economically, and how the COVID-19 bug will change the way we do business and lead our personal lives. As real estate investors, we must also be prepared for changes in the housing industry and the lives of our tenants. Will the economy recover quickly? Will the housing market hold up? Will the jobs come back? What will tenants want and need in a work-from-home world? What about single-family rentals, Airbnb, and housing for students and seniors?   There are a lot of moving parts, but our guest today joins me with years of experience in real estate and business strategy. Rick Sharga is the founder of consulting firm CJ Patrick. He’s also had high-profile positions at Auction.com, RealtyTrac, Ten-X, and Carrington Mortgage Holdings, and is frequently quoted by major media outlets. Today, he’ll share some valuable insights on how this pandemic will likely play out, and it’s not all bad news. Rick sees light at the end of the tunnel. Welcome, Rick. If you'd like to see which metros we think will recover the quickest, visit www.RealWealthShow.com.There you'll find detailed market data along with a list of rental property providers and property management companies highly rated by our members.

The Federal government's $2 trillion CARES Act rescue package has something for just about everyone, but it's not always obvious what applies and what doesn't. There may be several ways that each person can benefit, and today, our guest will talk about how the CARES Act impacts people with self-directed retirement accounts. Kaaren Hall is the founder and CEO of UDirect IRA Services in Irvine, California. She started the company in the midst of the Great Recession after the stock market crashed. She's been helping people move their retirement funds into self-directed IRAs since then, so they can invest in things like real estate, land, startups, and more. Before that, she spent 20 years in mortgage banking, real estate, and property management.  www.RealWealthShow.com  

Today's guest works in a much-needed but highly-challenged industry -- residential assisted living homes. He was very early to see the impact the coronavirus could have on his business and the economy in general -- even when most people, including world leaders, called it a hoax or a bad flu. Where did he find the information he needed to make critical business decisions when so many others couldn't see it, and fought hard against the bad news? Loe Hornbuckle was making good money running a car dealership, but was not fulfilled. He started to learn about real estate investing as a business, and eventually chose residential assisted living as his asset class of choice. He is now CEO and founder of Sage Oak Assisted Living and Memory Care which he calls“the boutique assisted living company” with 5 locations in Dallas and a total of 40 beds. Has has two developments in TX and Louisiana, totaling 300 beds and an estimated value of $45M. I've personally been very impressed with how quickly he learned about this pandemic, and has helped many others understand the implications -- if they're willing to listen.    www.RealWealthShow.com  

On Thursday, March 12, 2020, the S&P 500 and the Dow Jones Industrial Average had the biggest one-day percentage drops since October of 1987 — and the Nasdaq joined the Dow in bear-market territory, which is commonly defined as a drop of at least 20% -- as fears of the coronavirus grow, coupled with oil wars and uncertainties around the 2020 Presidential election. Friday, March 13th, President Donald Trump declared a national emergency due to the rapid spread of the coronavirus in the US. Soon after, stocks started to rally in late trading. These are scary, volatile times. What does it mean for real estate investors?  The record-setting 11-year bull run for stocks has come to a screeching halt. Is the party over or is this just a temporary hiccup? Or cough? Today's guest has been on the Real Wealth Show before sharing his insights on the strongest U.S. markets for residential and commercial real estate. John Boyd is Principal of The Boyd Company, which was founded in 1975,  and provides real estate and management counsel to leading North American banking and financial services companies. Clients include  Boeing, Chevron, JP Morgan Chase,  Visa International, Pratt & Whitney, PepsiCo, UPS, and other Fortune 500 firms.   www.RealWealthShow.com

"What's all this nonsense about? People are freaking out over nothing. More people die from the flu and no one freaks out about getting the flu. I'm hosting my event anyway. The strong can attend, the weak can stay home. I'm going to live my life as normal. I'm definitely still taking that trip." These are a just a few of the things people are talking about on Facebook. There's a lot of talk out there. A lot of confusion. A lot of people spreading false information. False cures. False conspiracy theories. Like the idea that COVID-19 was made in a lab, that it was created as a political attack against Trump to bring down the economy and wipe out his voter base, and that the powers that be wanted an excuse to reset the economy... I was one of those people in denial about 2 weeks ago.  I was flying across the country, going to large events with 700+ people, shaking hands, sharing food and drinks... and now I don't want to even leave my house. In fact, this morning, Friday the 13th, I woke up like I was in a horror movie. My daughter is in Prague for her semester abroad. She has a few friends there and thought it would be OK to stay and travel Europe while everything is on sale. She wasn't worried because she's 20 and not really the demographic for a coronavirus zombie attack. But she woke me up on Facetime in tears because all borders are about to shut down, everyone has to stay inside, and she wasn't sure if she could get home. We booked a flight immediately to leave first thing in the morning, and are hoping it won't be cancelled. These are scary times. Today's show is going to address what's really going on and whether or not we should be concerned. Whether it's just a bad flu, or a hoax. A couple of weeks ago I started to listen to my friend and colleague Chris Martenson. Chris is a PhD from Duke, and MBA from Cornell and spends his time geeking out as an economic researcher and futurist specializing in energy and resource depletion. He is co-founder of PeakProsperity.com (along with Adam Taggart). As one of the early econo-bloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar: The Crash Course which has also been published in book form (Wiley, March 2011).  Over the last month, he's been obsessively tracking the coronavirus, and has been helping the rest of us understand what's really going on. Definitely go listen to his YouTube videos. Just search Chris Martenson, Peak Prosperity, and you will be more informed than most politicians. And definitely ahead of the curve in protecting yourself, your family and your assets. www.RealWealthShow.com  

Analyzing the housing market can be complicated. There are so many opinions on issues that impact investors including which are the best markets, single-family versus multi-family investing, housing inventory, demographic shifts, renter preferences, mortgage rates, the strength of the U.S. economy, and so much more. Today’s guest is an expert on housing data and will help answer a lot of these questions.    Our guest today is CoreLogic’s chief economist, Frank Nothaft. He leads a team of economists who analyze and forecast trends in global real estate, insurance, and mortgage markets. He’s also held leadership positions at Freddie Mac and the Federal Reserve. He recently received the NABE Outlook Award for the most accurate macroeconomic forecast for 2018. He has also earned the Certified Business Economist designation from NABE, and holds a PhD from Columbia University.    www.RealWealthShow.com

If you are preparing for battle, your strategic plan better be solid. It's a life or death situation. What if you could have such a well-thought-out plan for your real estate investments? Our guest today has used the lessons and skills he learned in the military to build an extensive due diligence plan for his properties. And he's here to share all that wisdom with us here on the Real Wealth Show. We are honored to be interviewing Scott Lewis of Spartan Investment Group on the Real Wealth Show. www.RealWealthShow.com  

What will the new year bring for the housing market and real estate investors? Who will be buying and who will be renting? What changes will we see for single-family rentals and the build-to-rent market? What can investors expect from the economy in the coming year?   Today’s guest is real estate consultant John Burns. John and his team offer research and market analysis for building industry executives and their investors. They help clients make informed decisions based on homebuyer and renter demands. John is the co-founder and CEO of John Burns Real Estate Consulting and co-author of “Big Shifts Ahead: Demographic Clarity for Businesses.” He has a B.A. in economics from Stanford University and an MBA from UCLA. 

Social media has become a hotbed for real estate investors who want to promote themselves and their deals. Facebook feeds are filled with posts by people who appear to know everything. But just because they are good at marketing does not mean they are good at investing.  It’s important to separate facts from fiction when it comes to real estate professionals, and who you can trust with your money.   Today’s guest is a real estate investor who is sick and tired of seeing people boast on Facebook when in reality, they don't have the experience to back it up. And in some cases, are flat out breaking SEC law. Tim Bratz knows how to spot the storytellers because he really does have the experience you’d need to do that. He’s focused on multi-family deals right now, but he also has a background in the wholesaling of rehabs, single-family rentals, and turnkey properties. Tim founded Legacy Wealth Holdings in 2009, which currently owns more than 3,700 rental units in nine states. So he has something real to boast about! He is with me today to talk about who you can trust and who you can’t in real estate. He’ll also share his formula for success. I’m excited to welcome Tim to the Real Wealth Show.   www.RealWealthShow.com

Real estate can be a gold mine if you dig in the right places and you don’t get caught off-guard by something like the Great Recession. Many people didn't see that coming and lost everything. However, some people did see it coming, and positioned themselves properly for it. How did they do it? Today’s guest was one of those people who didn't see it coming and got hit hard. He was ready to exit real estate forever, and didn’t even want to have a mortgage on his primary residence. Thinking that the stock market could provide a good investing alternative, he started listening to investment podcasts to educate himself and stumbled on The Real Wealth Show. He avoided it for a while because it was real estate related, but once he started listening, he says he realized that “real estate stands head and shoulders above any other kind of investment.” He’s now well on his way to the gold mine he hoped to find more than 10 years ago now that he's armed with information on how to buy the right properties in the right areas. I’m delighted to welcome David Prevo onto the show to share his story..   www.RealWealthShow.com

Today’s guest started his real estate journey in 2003 when his boss asked him to build a custom office campus. He was terrified at the time, but it was the project that launched a lifetime passion for real estate investing and passive income. Neal Bawa now controls properties in 10 states worth more than $200 million and is the CEO of Grocapitus Investments. And he's here on the Real Wealth Show to share his experience and the lessons learned from both success and failure. www.RealWealthShow.com  

Today’s guest has worked quickly to build a portfolio of single-family rentals. She works a full-time job as a nurse, and bought 21 homes in less than a year. But she isn’t just motivated by the thought of a secure future for herself. She is specializing in Section 8 homes that house single moms and their kids to be sure they have safe and affordable housing. She is also a former Dale Carnegie instructor, a group leader for InvestHER of South Florida, a member of Real Wealth Network and Bigger Pockets, and is mom to two millennial entrepreneurs. I’m delighted to have Rita Medeiros on our show today to tell us more about what she’s doing with real estate and how that’s helping her and those around her. www.RealWealthShow.com  

Today’s guest ditched his 9-to-5 job 15 years ago, to became a full-time real estate investor. Augustino Pintus says the standard 40-hour-a-week job gave him a false sense of security about long-term wealth, and by giving that up, he’s been able to take control of his time, and his finances.  His motto: “Decide, Commit, Succeed.” He is currently in charge of strategic partnerships, capital development, and deal sourcing for multifamily investment firm Realty Dynamic Equity Parties.    www.RealWealthShow.com  

What better way to kick off the new year than with our annual “Focused Investor” workshop with Rich Fettke, Co-CEO of Real Wealth Network taking place via this Thursday's Webinar (January 9th) and our upcoming live event in San Mateo on January 11th, and Los Angeles on January 12th. This topic has been a crowd pleaser for 14 consecutive years, and is sure to “WOW” anyone looking to have a focused, productive, successful year. You’ll leave with a solid plan for the year and a vision for the next 10 years. Rich Fettke and Kathy Fettke share a sneak peek and some key take-aways of what he will be presenting later this week in this podcast episode. www.RealWealthShow.com  

Today’s guest is a successful dance coach, choreographer and competitor and he's also managed to build a rental portfolio of 11 properties nationwide. Let's find out how he did it. Kurt Senser is a long-time member of the Real Wealth Network. He joined in 2008 so I've personally known him for over a decade now! Kurt had already started building his real estate portfolio before we met, starting in 2004. And since he saved pennies for every down payment, he spent a lot of time researching before plopping any money down. His five-year goal is to have a total of 20 residential properties. I am delighted to have Kurt Senser on today’s show to share his real estate investing story. www.RealWealthShow.com  

Call it dumb luck or brilliant market timing. Our guest today bailed out of the stock market right before the Great Recession, and gravitated toward real estate in 2009 with a pile of cash. Since then, he’s invested in single-family, multi-family, and vacation rentals. He has also invested in fix-and-flips, and more than 25 syndicated deals. He is currently part of the Investor Relations Team at Ashcroft Capital and has made it his mission to share what he’s learned with others. One of his favorite topics is how to create more time in your life or what he calls “time freedom.” I am delighted to welcome Travis Watts to the Real Wealth Show.   www.RealWealthShow.com  

If you're a podcast fan, then you've probably heard of today's guest. Rod Khleif has personally owned and managed over 2000 properties and has built over 23 businesses in a 40 year business career. And while that is all quite impressive, he came from very humble beginnings as an impoverished, young Dutch immigrant, and created incredible success in what he calls a rags-to-riches-to-rags-to-riches story, He has built several successful multi-million dollar businesses. But ask him what he is most proud of, and he will tell you about his work as a community philanthropist. Giving back to the community is a major passion for Rod. He is founder and long-serving president of the Tiny Hands Foundation which helps children from low income families. And today, he's back with us on the Real Wealth Show. www.RealWealthShow.com  

This Family is On a Mission! We talk a lot about building wealth through real estate here on the Real Wealth Show. But there are lots of ways of defining wealth.  We define Real Wealth at Real Wealth Network as having both the time and the money to live life the way you want to, with the people you want to be with. Our guests today have their own definition of wealth.  Suzanne and Joel want to become financially free so that they can do what they loved to do the most -- to support a mission they love and to add value to the lives of others.  Their goal is to have 10 properties by 2023, and they are well on their way.   If you DESIRE to have income producing real estate, do your due diligence with FAITH, and take ACTION.   www.RealWealthShow.com  

Real Estate Investing: Five Benefits of Owning Rental Homes Our guest today is a former athlete and family man who built a career on the corporate side of the solar industry. Along the way, he saw the value of owning rental property, and now owns 16 single-family rentals in seven states. Nate O'Neil is a true believer in the financial power of long-term rentals and is here to tell his story on the Real Wealth Show. Show Notes: There are five really great benefits to holding financed properties over time: 1) Cash flow 2) Appreciation 3) Tax Shelter: $300 of monthly rental cash flow is like $460 of W2 income because W2 income is heavily taxed. This is significant over time, and with a number of properties. You can also depreciate the home over 27.5 years, which offsets taxable gains. 4) Mortgage Pay Down:   A rental home owner's net worth is credited every single month by the amount of principle their loan is paid. I look at is how much principle was paid down by the rent and how much my net worth increased from owning the asset. Again, the payoff grows over time and an expanding portfolio. 5) Inflation Hedge: People underestimate the power of a 30-year mortgage.  Due to inflation, a $600 monthly payment today, will actually go DOWN over time.  The value of that $600 in 10 years will be less, so therefore, in essence, the payment goes down.  Furthermore, with inflation, both rents and property values will increase.   Bonus: Over time, equity grows as the loan is paid down and appreciation grows.  This is money in the bank for further investing. For example, if you own an asset that is worth $200K and is paid off, you can do a cash-out refinance at 75% LTV, meaning you can take out $150K.  That $150K is TAX FREE.  I would have to earn $230K at my W2 job to take home $150K. And the original loan, at least in part, is paid back, not by me, but by the rent!  Current tax law allows my kids to inherit the property, at which point, the property steps up to market value.  Overall message: Owning long term rentals is POWERFUL well beyond those first two big benefits of cash flow and appreciation!   www.RealWealthShow.com

Some people are afraid to buy their first investment property. While others dive in. I was one of those people who dove head first, but only after I'd read a bunch of books, attended dozens of seminars and spoken with many others who had done it already. So I guess you could say I dove in cautiously and aware. I would say that's the case for today's guest. Mark is a business owner, so he already knows how to hire people to get things done that you don't know how to do or don't want to do. He also knows how to do the research necessarily to feel comfortable diving in. He's here with us today to share how he's building a real estate portfolio, one property at a time in just a year. www.RealWealthShow.com  

I was honored to be the keynote speaker at five different conferences this month, all over the country -- from San Francisco and Los Angeles to Denver and Philadelphia, and I just got back from New York. And, what I noticed at all of these events and previous ones during the past few years, is that I've seen a lot more Millennials attending real estate events. It's been incredible to see how quickly some of these young people can build a business. For some, it seems like their energy and tech savvy creates companies overnight. And while these brilliant people know technology better than perhaps other generations, what they don't have necessarily is life experience. What would happen if you could merge wisdom with fresh ideas? Our guest today is Chip Conley, the founder of Joie de Vivre Hospitality which he began in 1987 at age 26. In 2010, after having created and managed 50 boutique hotels that are mostly in California, he sold his company. A few years later, he was asked by the three co-founders of Airbnb if he could help evolve the company into a hospitality company with more than one million hosts in 191 countries. He accepted the challenge and became the Head of Global Hospitality and Strategy for Airbnb, working closely with CEO Brian Chesky as a mentor. www.RealWealthShow.com  

I've had a lot of people ask me if they should use their savings to buy a primary residence or a rental property. As usual, the answer is "it depends." And in this case, maybe the answer is "do both!" At a recent event, a young couple came up to me and told me they had saved $200,000 to buy a home. First of all, I was so impressed! Few people save money today. Then I asked if they had started house shopping yet and if they could afford a home they'd want to live in for a long time. They told me it wouldn't be their dream home. It would just be a condo. Here was my response: If you want to live in a home for a long time for something like raising a family, buying can make a lot of sense if you find a nice community with good schools. The mortgage payments may be a little more than what you'd pay for rent, but when you include the tax benefits, that home loan can be cheaper than rent. Plus, if you have a fixed-rate loan, you don't have to worry about your rent going up. It will remain the same for the life of the loan. However, what if you could buy the home you want to live in with a smaller 3% down payment and use the rest of the funds to buy rental property? The cash flow would offset the difference in your mortgage payment, and you'd be building a bigger portfolio. Lindsey Johnson, President of US Mortgage Insurers, will take a deep dive into mortgage and home financing options, and give us some insights on current public policy on housing and its ramifications on home buyers and investors. www.RealWealthShow.com  

OPM is the key to building wealth quickly. Understanding how to "use other people's money" will help you acquire more than you could just using you own cash.  But you have to do it right. Unfortunately, lots of people are trying to take investor money when they don't really have the experience to do so. My guest today has been putting on events to help people raise money properly. In fact, I'll be speaking at his Raising Money Summit in Denver this weekend. www.RealWealthShow.com For tickets to the Raising Money Summit in Denver this weekend go to: https://www.westword.com/event/raising-money-summit-2019-general-admission-11339043  

Many tech experts are predicting big changes with the new 5G cellular signal. They say 5G will make data connections instantaneous, and will revolutionize many up-and-coming technologies including driverless cars, remote healthcare, emergency services, augmented reality, and many more. Exactly what is 5G? Why are so many people predicting a major transformation? And how will it impact our lifestyles and real estate in particular? Our guest today, Samantha Radocchia, is an emerging Tech and Innovation Expert with Singularity University and  Author of Bitcoin Pizza: The No Bullshit Guide to Blockchain. In this interview, she will share: A user-friendly definition of 5G. Why so many people are predicting a major 5G tech transformation. How it will impact our lifestyles with 10 real-world examples. How it will Impact real estate, in particular. The 5G roll-out timeline, which is already underway. When we should jump in and buy a 5G phone. The downside and obstacles to 5G. www.RealWealthShow.com  

I’m excited for today’s interview with the one and only Ken McElroy. Ken has experienced massive success in the real estate, with over 10,000 doors and over $750 million investment dollars in his projects. He’s the author of best-selling books: "The ABC’s of Real Estate Investing," "The Advanced Guide to Real Estate Investing," "The ABC’s of Property Management," and his most recent title, "The Sleeping Giant," on entrepreneurship. www.RealWealthShow.com  

August has been a volatile month for the global economy and for stock investors. Nearly every news channel is screaming that a recession is around the corner, and some European investors are accepting negative returns for bonds. Should real estate investors be panicking? Should we be mining for gold? Today's guest has been predicting a financial reckoning for some time now. He has been recently associated as the voice of doom and gloom, but I think he's really pointing out the inevitable — that people can't go into debt forever and expect a positive outcome. www.RealWealthShow.com  

I'm not a very good golfer, and I'm even worse at Topgolf because there's an audience and alcohol involved. But I am excited to introduce today's guest, who came up with the wild idea of turning a  high rise bar into a driving range. It's the epitome of cool, and has been quite a success. This interview was done live at Singularity University's Global Summit in San Francisco last month. You may have heard about Singularity through it's famous founders, Peter Diamandis and Ray Kurzweil. SU is located in the Silicon Valley and it's not only a business incubator, it's a global community that uses cutting edge "exponential" technologies to tackle the world’s biggest challenges. I am happy to have as our guest today the Executive Chairman of Singularity University. Erik Anderson. Erik is the Founder and Chief Executive Officer of WestRiver Group (WRG) since 2002. WRG is a collaboration of leading investment firms providing integrated capital solutions to the global innovation economy.  Anderson is also the Executive Chairman of Topgolf Entertainment Group, a global sports entertainment company. In this role, he has received numerous honors, including the Ernst & Young Entrepreneur of the Year Award.  In 2018 and 2017 he was honored by Goldman Sachs as one of their Top 100 Most Intriguing Entrepreneurs. In 2018 he was ranked by Golf Inc.as the No. 3 most powerful person in the golf industry after being ranked No. 8 the previous year. Anderson is Vice-Chairman of ONEHOPE, a cause-centric consumer brand and technology company, most commonly known for their award-winning wine and world-class vineyard in Napa, Calif. Additionally,Anderson is the founder of America’s Foundation for Chess, currently serving 160,000 children in the United States with its First Move curriculum.     www.RealWealthShow.com    

Today we're going to talk about how one of our Real Wealth Network employees is living the dream of "real wealth" on a budget. 10 years ago we put out an ad on Craigslist for a receptionist. It was 2009, smack dab in the middle of the Global Financial Crisis. Not too many real estate companies were hiring at that time, but Real Wealth Network was booming. The unemployment rate was massive, so we had thousands of applicants for the receptionist position. I was so overwhelmed I just asked people to show up at our next event to meet in person. Only 3 people showed up and Maggie Pike was one of them. She has been with us ever since in many roles, from receptionist, to event planner, to my assistant, to Director of our Real Wealth Academy, and now as our Director of Syndications. And, as of Saturday, she is now Mrs. McKinnie. Maggie and her new husband Marc are building a real estate portfolio while living their dream of traveling the world. They are such an inspiration, I decided to interview them for this week's Real Wealth Show. Enjoy!   www.RealWealthShow.com      

Buying your first rental property may seem like a monumental task. You have to work outside your comfort zone, to try something new and learn as you go. It's even more difficult if your first properties are out-of-state. So what does it take to pull the trigger on a plan to buy rentals many miles from where you live? How do you manage your properties if you don't live nearby? How do you protect yourself from bad tenants? How do you deal with local issues like storms and flooding? What kind of insurance and back-up reserves should you have for unexpected events? Our guest today is based in California. He took took the leap and has become a long-distance landlord with properties in four different markets. He's here to share his story and some of the things that he's learned. It's a great way to help potential investors make that first move, so let's find out how it's going for Alek Mukherji and his portfolio of single-family rentals. www.RealWealthShow.com  

What were you doing during the 2008 financial meltdown? Perhaps you weren't invested in real estate so you weren't affected. Or maybe you got started buying real estate right after the crash and took advantage of record low home prices due to all the foreclosures. Or maybe you got hit hard like millions of Americans, handing the keys to your property back to the bank. Either way, it's important that we don't forget what happened just 10 years ago. Just like me, today's guest was in mortgage lending during the financial crisis. She had helped her family invest in homes in her own name and when they couldn’t pay during the crisis she was hit really hard, and just like me, she learned some tough lessons. But after the crisis she became a realtor because she knew how to do short sales and she became very successful at that. During this time she was helping her relatives Craig and Arlene Turner invest in a duplex in Stockton, and they told her to listen to the Real Wealth Show. Now, she’s been investing her realtor income through Real Wealth Network for the past four years and has learned a lot of lessons but considers it all a blessing. So let's find out the ups and down of her journey. www.RealWealthShow.com  

There's been a lot of headline news about Detroit, specifically that you can buy a home there for $1,000. The Detroit Land Bank Authority is trying to put run-down and vacant properties to productive use. As such, it is now auctioning off thousands of publicly owned properties through its public platform Auction— and the bidding starts at $1,000.  To put that price into context, as of June 2019, the median home price in the Detroit metro area is $163,100. And as of April 2019, the city's median household income is $30,344. So is this a good idea?  I thought it would be a good idea to bring in our Detroit full service property provider /property manager to tell us what's going on.   www.RealWealthShow.com  

Our guest today was already retired when he found Real Wealth Network. He lives in California and had one rental property in Texas that he was managing himself. That was putting a damper on his fun years so he decided to exchange that one property for three rental homes in Ohio that he doesn't have to manage. What was a burden suddenly became an asset with a handsome cash flow. Find out how he did it on today's episode. You'll also find more information on how to do a 1031 exchange here (link). https://www.realwealthnetwork.com/learn/how-to-do-a-1031-exchange-rules-definitions/ www.RealWealthShow.com  

It seems pretty straightforward. You want to make a little extra money, so you put your home up for rent on Airbnb while you're on vacation. But what liabilities do you face in doing so, and how can you protect yourself with one easy phone call? It also seems like a simple process to self-direct your IRA and place your rental property in a checkbook LLC. It's a good way to protect yourself as a landlord, but there are things you must not do if you don't want to put your entire IRA at risk. We'll be discussing these and more on today's show. Eric Nixdorf is one of the few real estate attorneys in the country who specializes in tax law, bankruptcy, and real estate. He's also a real estate broker and an investor himself.  It's been a long time since we spoke, and since I love getting free legal advice, I thought I'd invite him back as a guest. Short-term rentals Long-Term rentals Landlord liabilities Airbnb liabilities How to rent your home Airbnb tips for hosts How to Airbnb your home Airbnb safety for landlords Legal tips for Airbnb hosts

Understanding your market is the first place one should start when vetting  a real estate deal. If a metro area is not growing, neither will the value of your real estate. Our guest today is a leading, internationally-recognized expert on the topic. John Boyd founded The Boyd Company to help big companies like PepsiCo, Boeing, Hewlett-Packard, and JP Morgan Chase with their corporate site selection. With five decades of experience, he's gained deep knowledge of markets across the nation. He's a popular speaker on topics pertaining to business relocation, the economy, and the direction of new corporate development and jobs. And, he's here with us on the Real Wealth Show! Click here to learn about the best places to buy rental property in 2019 www.RealWealthShow.com  

A few years ago, I went on one of Real Wealth Network's real estate tours to look at rental property in Detroit. And on that trip, I was surprised to meet a man who had flown all the way in from Sweden to join us! We have members from all over the world, but meeting a visitor from Sweden was a first for me. After I started talking to Magnus, I realized he was not just on the tour to see a few properties. He was building a full U.S. real estate portfolio.   Several years later I saw him at another Real Wealth event and wanted to see how he was doing. He told me he'd learned a lot on his journey -- like the importance of not buying in flood zones, how to do a smooth 1031 exchange and why it's so important to screen tenants carefully.  He's planning on joining us at our next event in Cleveland on August 10th, when all 15 property providers from around the country will be joining us. You can get the details here. www.RealWealthShow.com  

We've got a real smartie on today's show. Daniel Kraft is a Stanford and Harvard trained physician-scientist, inventor, entrepreneur, and innovator. With over 25 years of experience in clinical practice, biomedical research and healthcare innovation, Kraft has served as Faculty Chair for Medicine at Singularity University since its inception, and founded and is chair of Exponential Medicine, a program that explores convergent, rapidly developing technologies and their potential in biomedicine and healthcare. What does this have to do with real estate investing? Well, as we learn more about how artificial intelligence is being used for healthcare and other technological advancements, there most certainly will be an affect on real estate. If people are living longer, they won't be moving out of their houses as quickly. There may not be as much need for hospitals or assisted living facilities. People also would likely outlive their money. Daniel Kraft has multiple medical device, immunology and stem cell related patents through faculty positions with Stanford University School of Medicine and as clinical faculty for the pediatric bone marrow transplantation service at University of California, San Francisco. www.RealWealthShow.com  

Our guest today is 30 years old, and about to get married. Three months ago, he took the big leap from his full-time job and is now a full-time real estate investor and the owner of Shane Adams Real Estate. He has six flips and seven doors under his belt, and is looking to do a lot more. He's here to tell us how he did it. Shane, welcome to the Real Wealth Show! www.RealWealthShow.com  

Our guest today probably broke her financial planners advice. Right at retirement age, she took her money out of the market and invested it in cash flowing real estate out of state. Some would call this extremely risky. Real estate investors might say it's a way to secure one's wealth to hard assets during the golden years. Let's see what Irene says, Welcome! www.RealWealthShow.com  

On today's show, I interview my sister, Danielle, who's faith has kept her alive and thriving -- even through some of life's greatest challenges. Her perseverance is an inspiration for anyone who's fighting an illness, or having major doubts about their own self worth and happiness. If you are interested in donating to Danielle's cancer treatment, visit: https://www.gofundme.com/help-danielle-live www.RealWealthShow.com  

Our guest today spent a lot of time helping other real estate investors get rich. She is a home renovation designer. One day she realized that she was a large reason why properties were selling for higher prices and owners were making a killing, but she was only getting her hourly rate.  And that hourly rate was not going to help her and her husband retire in time. So she found  a solution. George and Sue realized that being the owner of property was the way they could accelerate the growth of their retirement plans, so they started looking into how they could do it. They began to search the country for the best areas for investing in flips. But then they heard me talk about buy & hold investments on another podcast - and realized that with their busy schedule, this might be a better way. They were nervous because they had owned property in the past, but with poor property management. So before buying anything else, they had a whole lot of questions. And these questions I thought would be really helpful to our audience.    Sue and George, welcome!

U.S. long-term mortgage rates fell again this week, marking an entire month of declines. This will likely lead to a robust Spring buying season. For real estate investors, low rates increase cash flow, especially when rents are on the rise. It's a great time for real estate investors to lock in low interest rate loans that increase cash flow, all the while rents are increasing. Our guest today has helped real estate investors since 1997 to get the loans they need to build a robust real estate portfolio. He's not just a loan broker. Aaron Chapman finances about 700 transactions per year for real estate investors and gets to see where they are successful and where they are failing. And he uses that experience to coach others. And he's here with us today on the Real Wealth Show. www.RealWealthShow.com  

10,000 baby boomers are turning 65 every day for the next 10 years. How many will be able to actually retire? Baby boomers are defined as the generation born between 1946 and 1964 — in the United States, according to the Pew Research Center. Some reports say only 1/3rd of this population, estimated to be around 70 million people, have enough money saved to get them through what could be 30 more years of life. In fact approximately $1M in investments is what is needed to do that. And a majority of those Boomers have invested their savings in the stock market, which has done very well for them over the past decade. But historically, stocks don't always go up. You don't want to face retirement and suddenly be in the midst of a recession, watching your 30 years of investment wash away overnight - like just 10 years ago. Our guest today found another way. He's been following our "10 properties, 12 year" program and was able to “retire” last year and live off “some” of the rental income and use the balance to pay down the remaining mortgages. He's been on our show before and he's back. Walt, welcome back to the Real Wealth Show! www.RealWealthShow.com  

Busy professionals may not have the time to buy, renovate and manage their rental properties. And if they live in expensive metros, they may not be able to find properties that cash flow nearby. This often leaves them no choice but to buy property out-of-state that is already renovated and managed, which is also known as "turnkey" rental property. But does turnkey mean problem free? Unfortunately, it does not. Rental properties are never truly turnkey in the sense that you can just buy them and forget about them because they magically create checks that show up in your mailbox or inbox. Properties are not like stocks. If you buy an Apple stock, and your neighbor buys and Apple stock, you are basically buying the same thing -- maybe just at a different price. With real estate, every single property is different. And therefore, turnkey or not, they all require a buyer's due diligence. Our guest today was in that exact situation. He wanted to build a rental portfolio but couldn't do it locally. So he researched the turnkey model, and created systems that he'll share with us on the Real Wealth Show. www.RealWealthShow.com  

Home sales slowed in the second half of 2018, so much so that new home builders in many areas had to offer price reductions and add-on incentives. As you may know, Real Wealth Network partners with experienced developers to build out subdivisions nationwide. We have projects in Reno, Tampa, Park City, and Bozeman. On today's show, we'll hear from 40-year veteran developer, Fred Bates, on how those projects are doing, and whether or not it's still a good time to build new homes. Fred also acts as my advisor. Whenever another developer brings us a project, I first send it to Fred for review. 90% of the time, Fred gives the project a thumbs down because it's too risky, often because it's dependent on too much leverage with tight margins. Let's find out what he looks for in a good deal. You can also meet Fred, along with five rental property providers from seven different markets at www.RealWealthShow.com

So often people ask me where I think the best place to buy rental property is today. So I thought I'd bring on someone who has access to real time  information from lots of investors on which areas are cash flowing best, and which areas are appreciating the most. Our guest today is Ben Smith, and you may have heard his name because he hosts most of our weekly webinars . He's been an investor for a couple decades, was a member of Real Wealth Network for many years, and was hired in 2014 as an investment counselor to help other Real Wealth Network members get their questions answered and help them set up a plan. Meet Ben at our upcoming event on May 4/5th! You can register at: www.RealWealthNetwork.com/live-events/  

The long-awaited Opportunity Zone Regulations were released on Wednesday, April 17th! But unless you're a seasoned tax attorney, you might not totally understand what's written in those 162 pages. But fret not! Our guest today will help us decipher this secret language of the IRS. Clint Coons is an attorney, real estate investor and is the Manager of Anderson Business Advisors and Law Group. He helps investors and business owners with very high level asset protection and business planning services. He also recorded a webinar for us to better explain this new tax incentive, which you can find on our website at www.RealWealthShow.com. Just log in to the the Investor Portal and look under the Invest Tab under Opportunity Zones for the link to Clint's Webinar, "Setting Up Your Opportunity Zone Fund". And he's here with us today on the Real Wealth Show. Welcome Clint!

Warning, warning! This will be one of my more cautionary shows. So only listen if you want a dose of reality. Or if you want to better understand my mission here. Even though we've seen asset values and stock prices going up, there are some real threats to our country today. I think the biggest threat is our addiction to debt. The national debt continues to balloon out of control, to the point where our government can't even barely afford the interest payments on that debt. The same is true for many corporations, who borrowed way too much money when interest rates were at near zero levels. The Federal Reserve is in a pickle. If they continue to raise interest rates, it will be even more difficult to pay off debt.  So it essentially loses it's power to regulate the economy by raising rates - if things get too heated. It also has lost the power to lower rates because they are already so low. What does this have to do with real estate investors? As you'll see in the following interview, real estate is a hard asset - and one that people need.  It is not flimsy like fiat currency - like the dollar - that is really tied to nothing anywhere and only has value because the US. government says it does. If the value of the dollar declines, there's a good chance the value of hard assets increases - because you need more dollars to pay for the asset. Our guest today outlines these ideas in his book,  How To Press America’s Reset Button which can be found on Amazon. Sean Burke also has a radio show called the Sean Burke Show, which  focuses on national politics, coming economic disruptions and national news, as well as interviewing and highlighting changemakers in our society – people who are making a positive difference in the world at levels both small and large.   www.RealWealthShow.com  

Clarity on the New 20% Deduction If you have an S Corporation, a multi-member LLC, rental portfolio or Schedule C business, there is finally more clarity on how to take your 20% deduction. In this show, find out: How a business can be part eligible and part not How pension contributions affect qualified business income ("QBI") When health insurance reduces QBI and when it doesn't Why QBI must be adjusted for prior-year passive losses New safe-harbor rule for qualifying rentals as a trade or business (and why it may be a business even if the taxpayer does not meet the safe harbor) Clarification on 1099 filing requirements for landlords What to do if a K-1 received includes some income that is from a specified service business and some that is not (and what info is required to be on the K-1) Clarification of what a "specified service business" that is ineligible for the 20% deduction (there are many fewer than you thought!) How income from the sale of business property affects the 20% deduction How businesses with losses affect businesses with income (and why you might not want a rental to be a business) How to identify REIT dividends so you can take the 20% deduction Self-rentals that must be reclassified as specified service businesses www.RealWealthShow.com  

Rich and Kathy Fettke talk about the past 20 years of co-creating real wealth together and what they've learned about life, business and real estate investing along the way. www.RealWealthShow.com  

It’s time to go back to the basics of real estate investing - for buy & hold investors.   This is part 7 of a 7 part series on how to build a portfolio of rental properties that feed you for life.   It’s been a long time since I talked about the fundamentals of real estate investing. Real estate investing has proven to be the #1 wealth builder in history. In fact, well-located property has been the desire of wealthy families and business owners for centuries. Battles over land have existed for as long as we’ve had the ability to record events.    Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it.   www.RealWealthShow.com

It’s time to go back to the basics of real estate investing - for buy & hold investors.. This is part 6 of a 7 part series on how to build a portfolio of rental properties that feed you for life.   It’s been a long time since I talked about the fundamentals of real estate investing. Real estate investing has proven to be the #1 wealth builder in history. In fact, well-located property has been the desire of wealthy families and business owners for centuries. Battles over land have existed for as long as we’ve had the ability to record events.    Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it.   www.RealWealthShow.com

It’s time to go back to the basics of real estate investing - for buy & hold investors.. This is part 5 of a 7 part series on how to build a portfolio of rental properties that feed you for life.   Step Five - Determine your Purchasing Strategy   www.RealWealthShow.com

I just bought my ticket to San Jose Costa Rica for March 28th. I'll be touring our eco resort with some of our Real Wealth members. And there is still room on the tour, if you're interested in a last minute trip to Paradise! If you're looking for diversification, this may be a great way to learn more about investing outside the U.S. We know we're at the top of an economic expansion in the U.S. and we also know that the national, corporate and consumer debt are at all time highs. This will play out at some point. So why not take just a small amount of your portfolio and invest it out of the country, especially when the returns could be in the double digits? So here's a little bit about the project: We partnered with an experienced NYC developer to acquire 800 lush acres of land just about 20 minutes from one of the fastest growing cities in Costa Rica - where a new international airport is expected to be built. In the meantime, there is actually an airstrip on our land, which we'll be flying into by charter from the San Jose airport.  The vision of Rise Costa Rica is to create a unique spa/retreat center, to build a community of ex-pats looking for a more peaceful, relaxed, healthy way of life and to grow organic food for the community and for export. The land has already been entitled for a resort community, and a highly successful spa developer is on board. We are also working with one of the leading green architects in the United States who is known for developing Net Zero buildings. Phase 1 of this project has already wrapped up and we are moving on to Phase 2 to develop the residences. Go to our tour page for more info: https://investor.realwealthnetwork.com/connect/tours/   www.RealWealthShow.com  

It’s time to go back to the basics of real estate investing - for buy & hold investors.   This is part 4 of a 7 part series on how to build a portfolio of rental properties that feed you for life.   It’s been a long time since I talked about the fundamentals of real estate investing. Real estate investing has proven to be the #1 wealth builder in history. In fact, well-located property has been the desire of wealthy families and business owners for centuries. Battles over land have existed for as long as we’ve had the ability to record events.    Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it.   www.RealWealthShow.com

It’s time to go back to the basics of real estate investing - for buy & hold investors. This is part 3 of a 7 part series on how to build a portfolio of rental properties that feed you for life.   It’s been a long time since I talked about the fundamentals of real estate investing. Real estate investing has proven to be the #1 wealth builder in history. In fact, well-located property has been the desire of wealthy families and business owners for centuries. Battles over land have existed for as long as we’ve had the ability to record events.    Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it.   www.RealWealthShow.com

It’s time to go back to the basics of real estate investing - for buy & hold investors. This is part 2 of a 7 part series on how to build a portfolio of rental properties that feed you for life. Real estate investing has proven to be the #1 wealth builder in history. Battles over land have existed for as long as we’ve had the ability to record events. Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it. www.RealWealthShow.com  

It’s time to go back to the basics of real estate investing - for buy & hold investors. This is part 1 of a 7 part series on how to build a portfolio of rental properties that feed you for life. It’s been a long time since I talked about the fundamentals of real estate investing. Real estate investing has proven to be the #1 wealth builder in history. In fact, well-located property has been the desire of wealthy families and business owners for centuries. Battles over land have existed for as long as we’ve had the ability to record events. Thanks to U.S. law, we don’t have to fight for property anymore. We just have to know how to buy it right, leverage it and earn cash flow from it. www.RealWealthShow.com  

What’s it like to work with Real Wealth Network? We hear from our Columbus, Ohio, affiliate in this podcast about his experience with our network, our employees, our members, and our best practices. He pulls back the curtain on the process of finding and rehabbing properties, making them “rent ready” for investors, and how the team effort can benefit everyone involved. Listen for his “fish bowl” analogy on the kind of business environment and relationships we like to create! If you are an investor looking for fully renovated, cash-flowing rental property, join the network at www.realwealthnetwork.com for more information on the best markets and the best teams in those markets. If you are a turnkey rental provider and would like to work with Real Wealth Network, please email Tim Horvath at Real Wealth Network dot com.

Some people start with just one rental property. Others dive in and buy dozens, all at once! Our guest today had some real set backs in Chicago, but that didn't stop her from continuing to build her rental portfolio. Lots to learn from this spontaneous interview at Real Wealth Network's East Coast Income Property Showcase in Tampa on Feb 9, 2019. www.RealWealthShow.com  

13 of the nation's best Turnkey Rental Property Providers are gathered together in Tampa, Florida to share best practices and to increase the quality of their product and service. In this podcast, we'll find out the key take-aways from this break through event.  If you are a turnkey rental provider and would like to be a part of our network, reach out to Tim Horvath at Real Wealth Network dot com. If you are an investor looking for fully renovated, cash flowing rental property, join the network at www.RealWealthNetwork.com for more information on best markets and best teams in those markets.

Preventing family squabbles over an inheritance may be next to impossible, but there’s plenty you can do ahead of time to minimize the disagreements.   Today, I welcome estate planning attorney Jules Haas who has some advice for those bequeathing their assets, and for those inheriting them.   www.RealWealthShow.com  

Rent growth came to a halt in September at a national level, according to RentCafe, marking the first period of negative growth M-o-M since February. However, the $1,412 national average is still 3% higher than this time last year. As landlords, should we be concerned? On today's show, we'll look at where rents are headed in 2019 and beyond.  Are we overbuilt at the high end? Where is the most demand? Should we be concerned about an economic slowdown? Our guest today, Doug Ressler, is Senior Analyst and Director of Business Intelligence at Yardi Matrix, and RENTCafé.com is a nationwide apartment search website and a part of Yardi. The website provides research, insights, and in-depth analysis of the real estate market. www.RealWealthShow.com  

Rich Fettke, my Co-CEO at Real Wealth Network, joins us today to share highlights from his Focused Investor talk at our 2019 Kick Off Event. Links for downloading the Life Balance Wheel and the full Focused Investor presentation can be found in the blog for this podcast at: www.RealWealthShow.com    

We've got some exciting news regarding our Costa Rica Spa Retreat and Residential Community that I can't wait to share with you today. You may have heard that about two years ago, we raised almost $5M to acquire 800 acres of fertile land near the fastest growing city in Costa Rica. And you may be wondering whatever happened to it. In short, we got our entitlements very quickly, and were able to start Phase II earlier this year with another $4M raise. Just this week, we sealed the deal with a big time Wall Street investor who plans to fund the entire spa resort for Phase III! So if you were hoping to get involved with this syndication, the time is now - before it is fully funded by the big money boys. Please note, this particular investment allows only accredited investors, per SEC rules. Though we sure wish we could open it up to the many people who have expressed interest. www.RealWealthCrowd.com  

While I've been a huge fan of single family rental property for years, there are some advantages to multi-family and commercial property. So I'm very happy to announce our new team member, Adam Whitmire, who will be assisting our listeners and members with finding commercial properties nationwide. On today's show, we'll discuss some of the major differences between SFR investments vs commercial real estate. And which asset class might make more sense for you. www.RealWealthShow.com  

It's that time again when economists announce their forecasts for the coming year, and get to be held accountable for last year's predictions. On today's Real Wealth Show, Fannie Mae Chief Economist Doug Duncan will share whether his 2018 Economic Forecasting was accurate, and what he expects for 2019. www.RealWealthShow.com  

The Millennial generation is the largest population group today, and GenZ is the large generation right behind them. These are your future tenants so you better be able to speak their language. And their language is communicated largely on their iPhones. It's never too late to get with the times. In fact, old dogs better learn new tricks or they won't be getting new tenants. Our guest today specializes in helping busy real estate and property investors manage their real estate portfolios through the use of technological breakthroughs. Linda Liberator is the founder and president of My Landlord Helper, a unique virtual assistant solution for DIY real estate investors. She claimed she can turn landlording headaches into happiness! www.RealWealthShow.com  

Interest rates have been on the rise all year, and real estate sales have slowed down. Is there a correlation? My guest today has been helping clients over the last 20 years with their investments, mortgages and insurance needs. Debbie Boyd is CEO of DLB Financial Services, and has also hosted a radio show on the topic for over a decade, Money Strategies with Debbie. www.RealWealthShow.com  

Are you concerned about the volatile stock market? Wondering if it's time to buy or sell? Our guest today, John Grace, founded Investor’s Advantage Corporation in 1979 in Westlake Village, California. He prides himself on not taking the same old Investment Approach as many companies in the “Financial Planning” industry. Instead, his company performs independent research as one of the cornerstones of their Investment Strategy so that investors can see the larger picture to make appropriate and informed decisions.  www.RealWealthShow.com  

Recent fires in California are a reminder for everyone to make sure you have the right insurance in place. United Policyholders (UP) is a non-profit 501(c)(3) whose mission is to be a trustworthy and useful information resource and a respected voice for consumers of all types of insurance in all 50 states. We don't take money from insurance companies. We give you the straight scoop. Guide you on buying insurance and navigating claims. Fight for your rights. www.RealWealthShow.com  

Rich and Kathy Fettke wish you a very happy Thanksgiving! In this episode we discuss some of the many things we are thankful for and some of our plans for the coming year.   www.RealWealthShow.com  

Live update with Kathy Fettke and her daughter Karina and the best way to help fire victims. www.RealWealthShow.com  

  These past few years, real estate media headlines have been filled with a word that is probably familiar to most investors:  syndications, and its cousin, crowdfunding. While syndications have been around for decades, crowdfunding is a more recent phenomenon, introduced by the Jumpstart Our Business Startups (JOBS) Act in 2012.  Both syndications and crowdfunding are a way for companies to raise private money for their projects, while offering investors a way to passively participate in deals they might not be a able to do on their own.  With so much money flowing, it’s become increasingly important that you know what you’re doing, so you don’t lose your money (or worse, someone else’s!) I have been to many events lately where I’ve met brand new investors who are now syndicating deals. One man had only been investing in real estate for 3 years and had already raised over $8 million for his latest multifamily project. He was just about to syndicate another one and asked if we could partner. When I asked a few basic questions about the pro forma, it became very clear that he was only using “blue sky” projections. He clearly has not looked at history to see that rents never rise forever, as nice as it looks on paper. He also hadn’t accounted for rising property taxes and interest rates, that would dramatically affect NOI. It’s vitally important for the syndicator and investors to keep in mind that we are at the late stage of this real estate cycle. The massive growth we’ve seen in real estate over the past 10 years won’t likely be the same over the next 10 years. Pro-formas need to reflect that.  Hunter Thompson is the Managing Principal of Cash Flow Connections a private equity firm that has helped more than 250 accredited investors diversify into recession-resistant real estate.  Find out:   What Major Questions Investors Should Ask When Conducting Due Diligence on any Passive Real Estate Investment Why the Loan of a CRE Investment Deserves a TON of Attention  What Causes CRE Investments to Go Wrong and What You Can Do About It How to Underwrite Opportunities For Achievable Results  www.RealWealthShow.com  

Rich and I were evacuated today. We are sitting in a cafe in Venice, wondering if we have a home. Here's how we prepared. www.RealWealthShow.com  

Thousands of investors are flocking to multifamily investments in search of high cash flow and high profits from increased rents. While some investors are net-sellers, putting all their holdings on the market for sale at top dollar. Is it a buyer's market or a seller's market? The answer is, as always, which market? Our guest today is invested in many cities across the nation and has his finger on the pulse of the multifamily industry. Robert Bollhoffer is Managing Principal of 29th Street Capital (Real Estate Investments) based in Chicago. www.RealWealthShow.com  

Investors, flippers, landlords and real-estate developers, listen up! The opportunity of a lifetime - the one you've been waiting for - is here! You have the chance to make a lot of money, and pay no capital gains tax on that money, if you invest in and improve certain select neighborhoods! And there are nearly 8,000 of these areas in the U.S.., plus all of Puerto Rico. www.RealWealthShow.com  

Ever wondered how to better motivate your kids? Or your employees? Or your spouse? Or maybe you just want to have a deeper connection with your loved ones, and get a long much better with others. If so, you are about to learn a very powerful secret that can transform relationships. I'm Kathy Fettke and welcome to the Real Wealth Show! We are going to get some life changing tips from one of America's top coaches today - that will surely make you a better business owner, investor, negotiator, parent, friend and spouse. Cynthia Loy Darst is a Master Certified Coach, and was actually my husband Rich Fettke's very first coach. And very first coach trainer back when he was getting certified. And while everyone really should have a personal coach, wouldn't it be cool if we could learn to also coach ourselves? Cynthia's new book, Meet Your Inside Team, How to turn Internal Conflict into Clarity and Move Forward With Your Life may help us do just that. And I'm so excited to share it with you! www.RealWealthShow.com  

No one wants to get sued, but if you plan to build a real estate empire, the question is not so much ‘if’ but ‘when.’ At least according to our guest exert today.    Scott Royal Smith is a real estate investor and asset protection attorney in Austin, TX. He graduated from Albany Law School and began his career in high-stakes corporate litigation. It was then he learned the key secret he now uses to defeat lawsuits: that they are a business. Through his defense work, he targets defeating lawsuits before they are even filed by making sure the business part of a lawsuit no longer makes financial sense for a plaintiff to proceed. Scott founded Royal Legal Solutions to offer tax, business, and legal strategies to real estate investors. He has spent the past 8 years of his career diving through case law, reading the ever-changing tax code, and analyzing real estate investment so that you don’t have to. He works with clients all over the United States and Canada who want to grow their businesses and protect their hard-earned assets. For reasons only he may know, he gets a particular thrill out of sharing the secrets he studied and worked very hard to learn with ordinary investors. He is a regular expert contributor to BiggerPockets.com and other real investment communities, and is currently writing an eBook on asset protection strategies to help educate the public. If you text "ebook" to (512) 607-9848 you will receive a free ebook from Scott!   www.RealWealthShow.com

How do you go from full-time techie to professional real estate investor? I know we've got a lot of Silicon Valley listeners, and I know how hard you work - sometimes 80 hours a week. I don't know how you do that, by the way! And unfortunately, even with all those hours with very high pay, many people are still struggling to get by day to day financially, since the cost of living in the San Francisco Bay Area is so high.  So how do you get out of the rat race? Our guest today did it and is here to tell us how. JC Castillo, welcome! You can join us at NorCal's AIN's event by visiting: https://www.facebook.com/events/261798161132167/   www.RealWealthShow.com

With home prices on the rise and politics not to everyone's taste, many Americans are looking to buy land overseas. But what should they know before they pull out their wallets? Our guest today is an expert in global real estate, in acquisitions, development, and project management. Scott Stay is president and CEO of CM&D, with 25 years of experience developing and managing over $23 billion in projects in hospitality, residential mid-rises, single family master plan subdivision, student housing, hotels, commercial retail and industrial campuses. He's also the design and construction manager of our project in Costa Rica. www.RealWealthCrowd.com www.RealWealthShow.com