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    822: Seeing Greene: The 10-Year Real Estate Retirement Plan (Use Home Equity!)

    enSeptember 24, 2023

    Podcast Summary

    • Focusing on equity is crucial for scaling a real estate portfolioEquity is essential for making down payments on next investments. Strategies like buying equity and forcing equity can generate income. Location matters for wealth building, and understanding cash flow in any market is valuable. Small business tips include balancing saving money and increasing revenue when making property upgrades.

      Focusing on equity is crucial for scaling a real estate portfolio. Equity represents the financial energy within a property that can be used as a down payment for the next investment. Strategies like buying equity and forcing equity can help generate income in any market. Additionally, location plays a significant role in wealth building, and understanding how to make money even when cash flow is scarce can be valuable. The episode also touched upon starting a small business and increasing sales. A quick tip provided was to balance the goals of saving money and increasing revenue when making decisions on property upgrades or replacements. For passive income without the property headaches, investing in a private real estate fund or buying a turnkey rental property for no money down are options for accredited or high net worth investors.

    • Effective sales is about understanding client needs and communicating benefitsEffective sales involves listening to clients, determining their problems, and communicating how your solution benefits them. Oren Klaff's book 'Pitch Anything' provides valuable insights.

      Effective sales is not about convincing people to buy something they don't want. Instead, it's about understanding the client's needs and communicating how your solution can benefit them. RentReady's new tenant screening feature, which includes proof of income verification, can help landlords make informed decisions and avoid potential financial risks. For those looking to improve their sales skills, Oren Klaff's book "Pitch Anything" is a valuable resource. It emphasizes the importance of listening to the client, determining their problem, and effectively communicating the benefits of your solution. As a young entrepreneur, Jed's question demonstrates a proactive approach to growth and self-improvement. Whether you're in real estate or running a gutter contracting business, understanding sales techniques can help you build stronger relationships with clients and grow your business.

    • Understanding Different Brain Processes for Effective CommunicationTo communicate effectively, acknowledge and respect the different ways the human brain processes information: build trust with the reptilian brain, differentiate oneself in the midbrain, and present logical arguments in the prefrontal cortex.

      Effective communication involves understanding and addressing the different ways the human brain processes information. The brain processes information through three main parts: the reptilian brain, midbrain, and prefrontal cortex. The reptilian brain, or amygdala, is responsible for survival instincts and perceives any new information as a potential threat. The midbrain evaluates information through a social context, comparing it to past experiences. The prefrontal cortex is responsible for logical reasoning and analysis. Most communication failures occur when people fail to acknowledge and respect these different ways of processing information. To communicate effectively, one must first establish trust and safety with the reptilian brain, then differentiate oneself from others in the midbrain, and finally present logical arguments in the prefrontal cortex. Starting a conversation at the prefrontal cortex level without building trust and differentiation can come across as threatening and untrustworthy.

    • Focus on equity for long-term successBuilding a successful real estate investment portfolio requires a focus on equity, achieved through buying undervalued properties, adding value, or benefiting from market appreciation. Use alternative loan products like DSCR loans to fund future investments when cash flow is insufficient.

      To build a successful real estate investment portfolio, it's essential to focus on equity rather than just cash flow. Equity represents the financial energy kept within a property, which can be used as a down payment for the next investment. Creating equity can be achieved through buying a property for less than its worth, adding value to it, or benefiting from natural market appreciation. However, with the current market conditions, it may be challenging to rely solely on natural equity growth. Instead, focus on forcing equity and buying equity to build your portfolio. Regarding financing, lenders will consider income from rental properties as a source of income to qualify for future loans. However, equity from previous properties will not show up on tax returns, making it difficult for lenders to consider it as collateral. It may take a few years before your rental properties generate enough cash flow to help fund the next investment. Consider alternative loan products like DSCR loans, which can approve borrowers based on the positive cash flow from their rental properties.

    • Two pathways to real estate wealth: equity and cash flowReal estate wealth can be accessed through equity by selling properties for a profit or through cash flow by living off rental income and potentially paying off mortgages. Commercial lenders focus on property income, offering stability and long-term security.

      Real estate wealth can be accessed through two main pathways: equity and cash flow. When building wealth through real estate, you can either wait to sell your properties to access the equity or use the cash flow generated from rent to pay off your mortgages and live off the income. Commercial lenders primarily focus on the income generated by the property rather than the borrower's personal income, making it an attractive option for long-term wealth building. This strategy allows for 30-year fixed-rate terms, providing stability and security. The equity pathway involves selling the property for a profit, while the cash flow pathway enables you to live off the rental income and potentially pay off your mortgages entirely. Both methods have their advantages and can be used in various market conditions. Understanding the fundamentals of wealth building through real estate is crucial, as it provides a timeless framework for achieving financial freedom. For more insights, check out Tyrone's book, "Pillars of Wealth," released on October 17, 2023.

    • Two primary paths for building wealth through real estateStability and reliability from buying and paying off properties, or faster growth with equity model. Access equity through cash-out refinance or 1031 exchange.

      There are two primary paths for building wealth through real estate: buying and paying off properties over time for a steady cash flow in retirement, or using the equity model to scale investments faster with more control over the equity built. Each approach has its advantages and disadvantages. The first path offers stability and reliability, while the second provides the potential for faster growth. When it comes to accessing the equity built in real estate, the most efficient methods are a cash-out refinance or a 1031 exchange, with the former being the least disruptive to cash flow. Ultimately, the choice between these paths depends on individual financial goals, risk tolerance, and investment strategies.

    • Accessing Real Estate Value: Trade-offs and ToolsReal estate investing offers access to built-up value, but comes with trade-offs like closing costs, capital gains taxes, or higher mortgage payments. Tools like DealMachine and RentReady can help streamline the process and make informed decisions.

      Real estate investing involves transferring or accessing the "energy" or value you've built up in your properties, but it comes with trade-offs. You can access this value through refinancing your mortgage or using a home equity line of credit (HELOC), but you'll pay for it through closing costs, capital gains taxes, or higher mortgage payments. The upside is that you can create more equity and keep more of the value in your asset. However, the downside is that real estate value isn't as liquid or easily accessible as cash in a bank account, and it takes a long time to pay off a mortgage. Ultimately, the best way to build wealth through real estate depends on your comfort with these trade-offs and how you design your life around them. Additionally, tools like DealMachine and RentReady can help streamline the real estate investment process by providing access to valuable information and automating certain tasks. For instance, DealMachine offers unlimited access to phone numbers and contact information for potential leads, while RentReady provides automatic tenant income verification. By utilizing these resources, investors can save time and resources while making informed decisions.

    • Technology Enhancing Real Estate ProcessesProperty management companies offer discounts for high-speed internet services, lead generation tools provide unlimited access to contact information, and real-time listing apps make home buying and selling more convenient. These advancements demonstrate the power of technology in simplifying and enhancing various real estate processes.

      Technology is revolutionizing various aspects of the real estate industry, from property management to lead generation. Rent Ready, a property management company, is offering a discount for Quantum Fiber Internet, a high-speed internet service, to enhance residents' living experience. DealMachine, on the other hand, provides unlimited access to contact information and phone numbers for real estate investors, making lead generation more efficient. Lastly, Redfin's app offers real-time listing updates and personalized recommendations, making home buying and selling more convenient. Overall, these advancements demonstrate the power of technology in simplifying and enhancing various real estate processes. Additionally, Brandon Smith, a listener, emphasized the importance of turning a job into a business with the help of his book, as mentioned in episode 798. Meanwhile, a viewer named Bishop praised episode 810 featuring Tom Brady's performance coach, Greg Harden. These examples illustrate the value of technology and knowledge sharing within the real estate community, making it an exciting and continually evolving industry.

    • Retiring in 10 years with $350,000: Focus on real estate equityTo retire in 10 years, focus on buying real estate in growing markets, adding value, and paying off mortgages. Keep working and consider a side hustle, read Chad Carson's book for strategies.

      To retire in 10 years with $350,000 cash, focus on building equity through buying real estate in appreciating markets, adding value to properties, and paying off mortgages. The key is to think about the future, prioritize areas with wage growth, population increase, and less competition, and balance new property purchases with mortgage payments. Don't quit your job yet, instead work harder and consider starting a side hustle while keeping a job. Read Chad Carson's book, "The Small and Mighty Investor," for more strategies. Remember, the tortoise wins the race in the long term.

    • Building wealth for retirement in 10 yearsTo retire within 10 years, focus on building a profitable business or real estate portfolio, live frugally, prioritize necessary repairs, and find reliable tenants.

      If you want to retire within 10 years, you need to put in the hard work and energy upfront to build a profitable business or real estate portfolio. This may mean living frugally and working long hours for an extended period. For real estate investors specifically, when it comes to rentals versus flips, prioritize functionality over cosmetics. Make repairs that are necessary for the property to be safe and efficient for tenants, but avoid unnecessary upgrades that won't significantly increase rent or have a long lifespan. Remember, the goal is to keep costs low and find reliable tenants who will respect the property. Additionally, consider the durability and cost-effectiveness of repairs and upgrades before making decisions.

    • Maximizing real estate returns: Cash flow vs appreciationConsider active management for short-term rentals to boost cash flow, or prioritize long-term appreciation with the 'BEEF' strategy, but don't overlook alternative wealth-building methods in real estate.

      Maximizing returns on real estate investments, particularly short-term rentals, may require active management to increase cash flow and focus on amenities that can command higher rents. The traditional model of paying high fees to property management companies can significantly reduce profits. Meanwhile, the "BEEF" (Breakeven Appreciation Focus) strategy, which prioritizes long-term appreciation over immediate cash flow, is gaining popularity but often overlooked due to the challenge of marketing and selling educational courses around it. Ultimately, investors need to consider various ways to build wealth in real estate beyond just cash flow.

    • Accepting uncertainties and risks in real estate investingDiversify income streams, focus on solid markets, prioritize long-term gains, have a financial foundation, and adopt a long-term perspective for successful real estate investing.

      Real estate investing involves uncertainties and risks that cannot be fully controlled or predicted. It's essential to accept this reality and adopt strategies to mitigate potential losses. Diversifying income streams and focusing on buying in solid markets with long-term appreciation potential are wise approaches. While cash flow is important, a singular focus on it can lead to poor investment decisions. Intelligent investors understand that more wealth is created through buying in better areas, even if it means sacrificing immediate cash flow. It's crucial to have a solid financial foundation, including savings and a reliable source of income, before investing in real estate. Ultimately, the key to successful real estate investing is a long-term perspective, smart financial planning, and the ability to adapt to unforeseen circumstances.

    • Understanding Cash Flow's Role in Real EstateCash flow is crucial for real estate investing, but it's just one piece of the puzzle. Focus on time in the market and financial freedom, and find a knowledgeable agent to guide you.

      Cash flow is an essential aspect of real estate investing, but its significance goes beyond just the immediate income it generates. David Green clarified that cash flow doesn't matter in the way it's often portrayed, as some investors may focus solely on it at the expense of long-term growth. He encourages listeners to expand their perspective and consider the role of cash flow in the context of time in the market and financial freedom. Additionally, the importance of finding an investor-friendly agent to help navigate the real estate market cannot be overstated. By utilizing BiggerPockets Agent Finder, investors can quickly connect with local market experts who can provide valuable insights and guidance to help them make informed decisions and ultimately achieve their financial goals.

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    “The stack” method is how to buy rental property faster than you thought possible. With so many real estate investing beginners wondering how to build a real estate portfolio, especially in today’s market, Dave Meyer, VP of Market Intelligence at BiggerPockets, decided to reintroduce “the stack” on today’s podcast. In it, he’ll show you exactly how someone with zero real estate investing experience can go from one to two to three rentals and beyond by following this simple framework. If you’ve struggled to buy your first rental property or never made it past the first deal, this is the episode to watch. Dave walks through how you can use “the stack” method to explode your real estate portfolio, the three simple steps to start buying rental properties today, and the one tool top real estate investors use to buy more real estate and find financial freedom faster. Beginner or investing veteran, if you’re feeling stuck but want to reach your financial goals, this might be just what you need. Sign up for BiggerPockets Pro to get unlimited access to the rental property calculator and all the tools from today’s video. Use code “FIRSTPOD24” to receive 20% off!  In This Episode We Cover How to buy your first, second, or third rental property using “the stack” method The easiest way to find real estate deals in today’s market, even if you have no experience  How to analyze a rental property in just minutes with the BiggerPockets Rental Property Calculator Financing and funding your first/next deal and why it’s not as hard as you think The best real estate investing tool for those who want to explode their portfolios  Why real estate is the perfect investment for financial freedom  And So Much More! (00:00) Intro (00:35) How to Buy Your First Rental Property (02:53) Achieving Financial Freedom (05:03) Scared to Invest? (09:44) "The Stack" Method (12:11) 1. Finding Deals (14:20) How to Analyze a Rental Property  (25:36) 2. Finding Financing/Funding  (28:34) 3. Finding Direction (31:14) 3-Step Recap (32:40) What Pro Investors Do Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-no-number-2 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

    978: How to Build Your Real Estate Investing Team (Agents, Contractors, Lenders)

    978: How to Build Your Real Estate Investing Team (Agents, Contractors, Lenders)
    If you want to grow your real estate portfolio faster, make more money with less headache, and achieve whatever financial dreams you desire, you need one thing—a real estate team. Most people don’t realize that the top real estate investors rarely do everything themselves. Instead, they’ve hand-picked real estate investing rockstars to grow their businesses FOR them. We’re talking investor-friendly agents, lenders, contractors, property managers, and more. If you can find the right people to fill those roles, you’ll be able to grow your passive income faster than you thought possible. So, where do you find them? Dave Meyer and Henry Washington are back to give a masterclass on building your real estate team. They’ll walk you through each role—real estate agents, lenders and brokers, insurance agents, property managers, and contractors—describing what to look for, red flags to run from, and exactly where you can find the best of the best in your market. Get this right, and you’re on a fast track to real estate riches, but get it wrong, and you could delay your financial freedom! Ready to build your investor-friendly real estate team? Check out BiggerPockets’ free team-builder to find agents, lenders, and more in your area!  In This Episode We Cover How to build an investor-friendly real estate team from scratch  The sign of a great investor-friendly agent and clear red flags experienced investors notice Why some lenders will lend to you much more easily than others  Why Henry ALWAYS uses an insurance broker (NOT an agent) to find policies  How to incentivize your property manager to make you more money (NOT just collect fees!) A unique way to find quality contractors in your area and how to inspect their work BEFORE you hire them  And So Much More! (00:00) Intro (02:24) Real Estate Agents  (12:15) Lenders and Brokers  (22:08) Insurance  (25:27) Property Managers (34:26) Contractors  (44:07) Where to Find Your Team Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-978 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

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    Why 2023 Is the Year to Invest in North Dallas Real Estate!

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    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!
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    327: The “Buy, Rehab, Rent, Refinance, Repeat” Method Made Simple With David Greene

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