Here is a discussion that will hopefully put to bed the annoying quarrel that people outside of real estate just don’t get. I’m going to show you the hidden ways you make your money on real estate rentals that blow REITs, Crowdfunding deals, and Real Estate Notes out of the water. There are potentially better investments (risk divided by reward) backed up by a hard asset, however, those deals are not obtainable by the average individual who does not have access to a rich and powerful network of people (not this bottom feeder one) and who does not have a net worth exceeding $1-million. These are the deals that happen behind closed doors in the country club crowd, but that’s not what we are here to talk about today. If you’re wondering, I too am Tiny Tim peering into that window of that exclusive party. The simple rental is something that is accessible to everyone and today we are talking about the math behind it. So put on your propeller hats, because we’re about to talk numbers.
“Hidden Returns of Rental Real Estate – 30%+ ROI a year smokes the pants off stocks/mutual funds”Continue reading
A post just for fun…
Some days I just need to take a break or need that jolt of energy to write an article or do my day job. Here is what I make every day before I get going and to grab life by the nuts:
The Simple Passive Cashflow Latte Recipe
|Because coffee is the drink of the gods, caffeine
||Bulletproof (non-moldy beans), Kimera Coffee (Nootropic infused), or Kona Coffee (to support the 808 State)
||Fat – because it’s not the 1990s anymore
||KerryGold because it’s organic. I like the salted version because it’s more widely available but the salt adds depth to the taste
|1 Tablespoon to 1 OZ
|MCT are medium chain fats, the key to brain function and good skin. Basically modern day snake oil.
||Bulletproof Brand has XCT Oil but I use this Mickey T Brand (isolated 8-Carbon Caprylic Acid Molecule) which is the same thing except a lot less marketing costs. You can use Coconut Oil in a pinch but the taste isn’t that great.
|1 Tablespoon to 1 OZ
Whey Protein Powder
|Whey is the cheapest form of protein. This is a way to add a bit of sweetness and blends into a foam. Life is always better with a bit of foam!
||Optimum Nutrition is the go-to brand for thousands of wannabe bodybuilders so stand on the shoulders of these giants and do the same.
|1 Tablespoon to 1 OZ
|This is the most expensive protein that has benefits for skin, joints, bones, hair, and digestion. Sort of like drinking bone broth without the flavor.
||I use Natural Whole Nutrition Vital Proteins Collagen Peptides.
I have also used Collagen Hydrolysate under the Great Lakes brand.
|Other optional pick me ups:
1 Teaspoon (pick only one)
Cocoa Powered for a Mocha
Vanilla for a Vanilla Latte
Turmeric for a yellow mess
|Cocoa improves blood flow (not saying it’s going to be like Viagra but at least it takes like Chocolate)
Turmeric – Google it
Vanilla – Google it
For those of you who are into the whole autophagy intermittent fasting protocol (12-hour daily fast) this is pretty good for you too because you are basically drinking a MCT oil drink. The only recommendation is to eliminate the whey protein. Also if you really want to geek-out, blend the whey separately because it is the most unstable. By blending separately you allow the butter and oil to cool down the hot coffee and protect the whey from heat.
Blend and serve in a mug that says “What Would You Attempt To Do If You Knew You Could Not Fail” or “Life Begins at the End of Your Comfort Zone”.
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I went to a general meetup of professionals. I don’t really know what I was looking for since I was not really looking to sell anything but I was curious because it seemed like a nice downtown venue and with over 100 participants. Unfortunately, the crowd was a bit tough to break into (I’m not the natural extrovert) because I was talking about real estate investing. The group median age was in its early 30s with a vast array of professions and industries. The majority of the people there were very career focused (trading time for money) or technical in trade. I also found that the level of participants were mostly entry level in terms of career stage and thus the reason they are hustling for leads, networking, and even jobs. Needless to say, these people did not have much money to collaborate in a real estate deals and even if they did they were not drinking the Real Estate Kool-Aide and were into their JOBs (just over broke) and “401k 4-Life”. Suffice to say I am going to be more selective in my networking events as I try to find other like-minded investors but here are some fun observations.
I realize that one can call BS and say that I had a negative mindset and that I was not networking for quality or building a long-term relationships. However, I got the feeling that a lot of the people in the room were just interested in passing out cards and with the “what can I get mindset” which is typical for the scarcity mindset population. Here are a couple fun examples:
“My Networking Event FAIL!”Continue reading
I promised real life properties and updates and here is the first one. For obvious reasons, the address will not be released for the tenant’s privacy but I am renaming the properties with the city name (Birmingham, Alabama) and the corresponding number that it was acquired.
This property was put into service in September of 2014 and was the successful beta test to prove the concept of remote out-of-state investing. I acquired the property from a marketer that makes connections with the rehabbers in certain markets and finds buyers such as myself who are typically located in low price to value ratio locations (this does not necessarily mean high-priced locations) such as California, New York, Hawaii, Seattle, Portland, and basically the coastal areas that all the cool kids what to actually live. Marketers have their place if the buyer is totally clueless but once you purchase a few of these properties the marketer really does not offer much value. The only thing I see that they would offer would be someone to be the bad guy role in a negotiation but many of the marketers are buddy-buddy with the rehabber because of their business relationship and won’t stick their neck out for you. As the buyer, you need to take ownership of the due-diligence process and negotiations because that marketer is not a licenced agent and does not have a fiducial responsibility to you.
“My Rental #4: Birmingham”Continue reading
Capital Expenses (Cap-Ex) are the large items on your expense list that are not repairs or maintenance. I repeat, this is in addition (account another 10-20%) to your normal repairs/maintenance for minor components. Cap-Ex is for example roof, water heater, HVAC, flooring, paint, cabinets, landscaping, windows, etc.
“Don’t Forget! Capital Expenses “Cap-Ex””Continue reading