When is it time to Retire? Accredited Investor Live Coaching Call

Share on facebook
Share on twitter
Share on linkedin
Share on email

 

Summary: Live coaching call of an Accredited investor. Discussing when to retire and how to transition to cashflowing assets such as multifamily apartments or syndications.

 

Start learning about real estate investing – SimplePassiveCashflow.com/start

Subscribe to the Top-50 Investing Free Podcast – https://podcasts.apple.com/us/podcast/simple-passive-cashflow/id1118795347

_________________________

Top SimplePassiveCashflow Posts:
This website has been going through daily improvements everyday since 2016. I admit things are a bit all over the place as I learn about these investments and wealth tactics.

Events – SimplePassiveCashflow.com/events
Past Projects – crowdfundaloha.com/past-projects/
Simple Passive Cashflow’s Investor Friend Finder!!! –SimplePassiveCashflow.com/friends
Menu of Investing Options – SimplePassiveCashflow.com/menu
LaneHack – SimplePassiveCashflow.com/lanehack
Passive Investor Accelerator eCourse – SimplePassiveCashflow.com/ecourse
Passive Investor Accelerator eCourse & Mastermind – SimplePassiveCashflow.com/journey
Coaching – SimplePassiveCashflow.com/coaching
Join our Private Investor Club – SimplePassiveCashflow.com/club
Join our Team – SimplePassiveCashflow.com/jointeam
Our Mission – SimplePassiveCashflow.com/mission
Partner Opportunity – SimplePassiveCashflow.com/partner
Products I support – SimplePassiveCashflow.com/products
About Lane Kawaoka – SimplePassiveCashflow.com/about-me
Quarterly Investor Updates – http://simplepassivecashflow.com/investorletter
SPC YouTube Channel – https://www.youtube.com/channel/UC3cIIsGKx3osVU5rt2P0HfQ
Real Estate Book Recommendations – SimplePassiveCashflow.com/books
Backwards Engineering Happiness – SimplePassiveCashflow.com/happy
Rental Property Analyser – SimplePassiveCashflow.com/analyser
Visit Lane in Hawaii – SimplePassiveCashflow.com/retreat
Start Here – http://simplepassivecashflow.com/start
Ultimate Simple Passive Cashflow Guide to…
1031 Exchanges – Simplepassivecashflow.com/1031guide
Newbies – SimplePassiveCashflow.com/noob
Infinite Banking – SimplePassiveCashflow.com/banking
Your Opportunity fund – SimplePassiveCashflow.com/ofund
Taxes – SimplePassiveCashflow.com/tax
Tradelines – Simplepassivecashflow.com/tradelines
Turnkey Rental Guide: simplepassivecashflow.com/turnkey
Syndication Guide – simplepassivecashflow.com/syndication
Crowdfunding – SimplePassiveCashflow.com/crowdfunding
Networking – SimplePassiveCashflow.com/people
Private Money Lending – SimplePassiveCashflow.com/lend
Investing in Coffee/Cocoa – SimplePassiveCashflow.com/coffee
Investing in Non-Preforming Notes – SimplePassiveCashflow.com/ahp
Rent don’t buy – SimplePassiveCashflow.com/home
Investor Fallacy: Return of Equity – SimplePassiveCashflow.com/roe
How to Calculate Investment Returns – SimplePassiveCashflow.com/returns
Why you should break up with your Financial Planner – SimplePassiveCashflow.com/fp
Quitting your job – SimplePassiveCashflow.com/quit

Transcription:

0:07
What’s up simple passive cash flow listeners once in nounce, the first multi day we mastermind in Hawaii will be holding it on my island of Oahu, Honolulu is on President’s Day 2020. And that’s February 14 to 17. And a reminder, Valentine’s Day is the 14th. But we’ll keep that evening for you. families and couples want to come on down for that we’re actually encouraging spouses and families have come down, because that’s part of the whole experience. Getting to know other families and getting to know other committee members is gonna be a big part of this. So what to expect

0:49
structured

0:50
networking and masterminding with existing CWI investors and other affluent investors. We’re going to create the time in the environment to build real relationships that you can take For forever and for you, a students out there will do even be doing a full day of networking and mastermind and education. So once again, bring your families we’re going to have optional excursions such as a luau, happy hours dinners and some other activities to be able to have fun in the sun. And, you know, space is extremely limited because my vision is to kind of create this as a more intimate

1:29
environment

1:30
where we’re all one big little ohana here. So come in and combined business and pleasure in a little tax write off hopefully you can get that right off in before the 2019 ends. Those signing up now we’ll be able to get a free one on one strategy session that if you want to stick around till Tuesday, you can knock that out or if you’re leaving early, we can try and get that done throughout the weekend. But Hope to see you out in Hawaii go to simple passive cash flow. dot com slash week three and we’ll see you guys here

2:06
a simple passive cash flow listeners today we have Mr. accredited investor Lee here we’re going to be going through his personal financial sheet and hopefully I would say a lot of you guys are in this situation is on the verge of being accredited so let me introduce codename Lee here How’s it going? Good yes so once you kind of give us the high level and and where you’re at with life and what you’ve done up to this point and a little bit of your day to day because you do for work and tell us a little bit about yourself.

2:34
Okay, I’m a engineer for general contracting Hawaii and I’ve been doing it or been with them for about 20 years I’ve been in the business about 35 so I started investing in about five years ago started with get

2:48
funding for flipping houses here in Hawaii and then I started going to the mainland because they had a little bit better profit. So you kind of came to this a little bit later. I mean, you are no more investing for one K off market or a decade or two, what wish you to look elsewhere?

3:04
Well, it kind of started late in my time in investment. So just looking at the time I wanted to retire and the amount of time I had now needed to accelerate my portfolio for my retirement. So I figured real estate investment might be a good idea to meet my retirement goals. Being an engineer, you can kind of do the math math doesn’t lie but what you end up with

3:25
Yeah, so that’s what I did. I was coming up short so I figured I needed to find another way other than stocks and going K to meet my retirement goal see are mostly a passive investor doing private money lending to a bunch of local flipper, what were some of the the rates you’re getting there. And how did that go for you,

3:41
the local vendors, I would say like 10 to 15% 15% would be kind of lucky.

3:49
that a long time ago though, right now, like cap rates are getting compressed now. So everyone’s starving for deals, that’s still the going rate.

3:56
Now, so I would say about five years ago, so not that long, but it’s getting harder the margin is getting harder to get 15% 10% is kind of the norm but even that I think it’s going even lower because of the offer ratio so I went to the mainland and went to this seminar and kind of bought in and I did three deals one I made out maybe about 20 to 20% profit another way just broke even and third one

4:22
I lost everything What were you guys doing was the operation was flipping houses

4:25
okay Roman oh

4:26
yeah all over the US different cities I’m making you can make money doing it. But I mean, I live in Hawaii too. I’m actually got the rehabs in the progress right now. And I’m know I’m getting gouged on price but I have no leverage being remote mean I know people get an inspector to inspect the work part way but I don’t know. I think it’s just a single point of failure and you’re gonna get screwed at some point. Yeah, I noticed a key so you gotta have a good contractor realtor and like you see an inspector and some of these people that you deal with, you know, they were all part of a group but you don’t really know that. And their experience so if they don’t have a good contract there it’s like the first time they ever worked with them and you know the history and background like one of my deals contract actually was doing shoddy work so we had to do that on goal me being a passive investor I didn’t know who this contractor was or what his experience was unfortunately they found somebody else to finish up the job and so when we broke even we didn’t make anything but we didn’t lose anything and I think one thing I noticed a lot of people just don’t realize flipping houses you’re a private money lender you have no upside you’re not equity investing is a debt investor and even when you’re doing your own burst out of stage and all these profits are all active income and as I learned from very high net worth investor the game as much attacks game as it is making money game, you know, you’re not getting any depreciation there too. Yeah, that’s

5:48
correct. You’re absolutely right. The profit I made I have a sequel. Yeah, the tax you off of that profit. And so there’s not much tax relief on that. Yeah.

5:58
I mean, whether you have an LLC or something Corporate all falls down to yourself.

6:02
And then when you take it out to your personal then you get taxed again. So it gets kind of a double tax.

6:07
So which might be fine if you’re a broke guy, right making like 2040 grand a year but you’re not a broke guy so I’m kind of digging into the personal financial sheet and you guys are looking at the YouTube channel we have this displayed on the screen. So if you guys want to go over there and check that out, you know, a bunch of other coaching ones that we’ve done just like this, but I’m looking at celje 38 years monthly salary is 9000 bucks a month. That’s pretty good in Hawaii. Right took I took like a 30% pay cut. When I went from Seattle to Hawaii,

6:39
you did Oh my goodness.

6:40
I don’t know people survive out here but so that every dollar that you make private money lending or flipping a house gets taxed at a pretty high rate exactly what it is that like 20 to 30% there. So the way I break down this personal financial, the first thing I do is I look at this upper right hand quadrant and I’m just kind of seeing where you are in terms of network. You’re right under a million bucks. So that’s good. And then I’m trying to look at your income and expenses. This is sort of your monthly cash flow. Right? And what I’m looking at is, you know, as much as I praise the higher salary there, you know, that doesn’t matter because I talked to a lot of people that make 250 Grand 400 grand a year yet they can barely save $10,000 a year, which is just like boggles my mind.

7:24
Yeah. So lifestyle, I guess.

7:27
San Francisco and ours.

7:31
Once your world changes of their anyway, it’s this bottom left you 53 cell, which is the net cash flow per month, so you’re able to put away probably about $30,000 a year. That’s about right.

7:45
Yeah, that’s about right.

7:46
Yeah. So I will put you in like the top maybe 80% of my podcast list, or I mean, I think the top 510 percent are the guys able to save 50 grand a year but then hey, this is doable, right? I mean, at this rate You’re able to buy one turnkey rental a year and a $30,000 downpayment. But your net worth is high enough where I wouldn’t really suggest buying single family home but like I tell people, you don’t want to be like me and by 11, turnkey rentals, you’re just going to realize you’re just like, create another job for yourself. Yeah, I

8:16
don’t want to deal with the management and the idiq.

8:18
Right. So you’ve got a lot of your assets are sort of tied up in equity in your home. So let’s kind of dig into that currently, your home is appraised at 525. Okay, balance of 385.

8:33
Part of that was investing in these flips, so I will use my healer. Okay, so part of that is coming back and once a clip is completed, and right now I was doing some private lending to one of the associates I’ve been dealing with, and she just needed a kind of like a bridge loan. So it was about eight weeks, so it should be due in a couple of weeks. So reduce debt, he lacked balance.

8:56
So first question I would ask is like are you going to live in this house for A long time you think this kind of your forever home? Yeah, I think so that’s the case you know you have some nice equity here. Maybe you might want to think about getting a new, new 30 year loan, especially before you retire. Right? And I think once you get fully invested, I don’t know why you’re even working to be honest. But before even but make sure you you get that 30 year mortgage, that’s all fresh. He drained the equity out of it.

9:25
Yeah, actually, the mortgage is paid off so that the only mortgage proceeds that he learned

9:30
Oh, goodness gracious, yeah, you need to go get a loan tomorrow. I’m being very serious, actually. He looks are nice because it’s not like you have to pay origination fees with that stuff. I tell people use it as a temporary as you’re trying to dabble and all these real estate investments and you’re getting used to it. It’s a great way to kind of dip your toe in the water and I know in Hawaii there’s a lot of introductory keylock teaser rates, which I have already a local comm slash lock, spreadsheet and cheat sheet for that. you’re somebody who’s already kind of drinking the Kool Aid and you get this stuff. I’d say it’s time to go and get after the whole thing, because the problem with the helix is they only give you up for like, what 80% of the value? Yes, that’s right. So it’s kind of like one of those Gator a bit gets where you’re never getting at that bottom 20%.

10:17
But it’s interest only versus a 30 year locked in with a principal and interest. So your monthly is higher than to get the healer which is a lower interest only rate and you can pay whatever you want on the principal.

10:29
Yeah. If you’re kind of just dabbling and you haven’t bought into the whole alternative investing thing. I think it’s a good idea, but the fact that you get at that extra 20% and I know what these banks do this like it shouldn’t be a thing where they sort of downgrade the appraisal value. How do they dp risk their side of the investor?

10:46
Yeah, I noticed that

10:48
you’re absolutely right. Yeah, those tricky suckers.

10:52
Oh, really, there’s probably about 30% maybe even more of the equity. You’re never getting it. So hey, you’re an engineer. Do you then numbers for yourself. It’s kind of up to you, but that’d be my suggestion. Okay. When I

11:04
was getting my first few rentals, I found networking and local Rei club absolutely a waste of time. Most of the people you network with, especially in random networking events will not lead to anything. The running joke amongst sophisticated investors is that the local real estate club is the worst place for us passive investors to find peers because it’s just a bunch of broke people. That’s why people are seeking real estate advice to get unbroke hashtag BP. For the same reason I am turned off by the 10 x crackered own followers because they are really a ninja in disguise, no income, no job, no assets. And some cases they have a scarcity mindset motivated individual willing to step over whoever they need to they are not broke anymore. For more networking tips go to simple passive cash flow.com backslash people since 2016, I’ve given hundreds, almost thousands of free calls my podcast listeners. And now you can chat with me but you got to join the who deal pipeline club. I do this to filter the right people into my circle. I’m always watching and taking notes. Tip I give freely and generously to those who reciprocate and exhibits generosity. Some people are givers and other takers. I’ve lost so much money on the table giving out free advice, contacts, and resources. This is the way I filter people who I want to work with in the future. Ultimately, I play the long game. The mastermind journey the simple passive cash flow is a platform to find like minded, curated, not broke people are jerks, and the best chance for busy adults to meet lifelong friends even when you have graduated from the program. For the price I’m offering for the networking alone, it’s worth it. But way by the way, you get 27 weeks of organized content and bi weekly semi private coaching calls to simple passive cash flow.com backslash journey Learn more

13:04
see going down here and see here the he locks you had, you know here you had an interest rate of 2.5% I think that’s a logical fallacy that most people will say, Oh, that’s a great interest rate. Why would you want to trade that in for three and a half percent today sophisticated investors don’t really look at interest rate. I mean, that’s 21% not not losing sleep over that what I would lose sleep over is what if the economy turns right and now all these Keizer keylock rates go away and then worse the equities gone that you can’t draw from the law because this is all fine and dandy now, but if you were to lose the equity, your car goes away where he would have locked in a 30 year loan got that cash? Yeah, that’s true. But if you weren’t going to look live in that home for the next 10 years, I would say maybe that would be a better strategy. That’s why I asked you if you’re going to live in that home for a while. So what’s this other condo

13:56
here? Oh, my sister and I own condo. Okay,

14:00
so it’s worth about the ad. Yeah. You guys or was only 50 grand loud.

14:07
Yeah, that was part of the

14:08
deal. So tell me about that relationship. Are you guys getting along? Well, yes.

14:13
My sister and I get along really well. So she trusts us. And

14:16
so does she invest in real estate too? And the alternative investing? Really?

14:22
Yeah. Sounds like my family.

14:25
Let’s see. I’m working on it.

14:27
Yeah, yeah. Why you would you keep this condo? Or you got renters in here?

14:31
No, that actually my sister lives in that condo. So it’s all paid off. It was absolutely yeah, yeah.

14:36
Why doesn’t she get her own mortgage? Can she buy on her own? What do you mean because what I’m looking to do is just like your primary residence, drain the equity out of this thing. Get it?

14:45
Oh, I see. Like I said, we’re working on it.

14:47
So let’s say like the low hanging fruit for you is the your primary residence. And then as you do equity, this is the second you might happen to this a year from now.

14:57
Yeah, I try not to touch that because as hers in Something is left in the cold. Yeah,

15:04
here’s how I would explain it to her, you go out and get a new mortgage on this. And then I think the mortgage payments would might be, what about 2000 bucks a month, right? So you set aside 100 grand or 50 grand, and now she can live off that for five years. And surely she can get on her feet in five years, right. But in the meantime, you’re turning your money more effectively. I think people have that false sense of security is what they need. But like I said, you’re going to tap the primary residence for equity first, and for now, I would just start having the conversation can be slower than working with the government on this year. That’s true, though. Just like your construction projects. I’m sure some of your environmental permits or take like a year, two years, this might be a little faster, but I would start the conversation now. And what I would do is I would have the property in her name, mortgage in her name, and there’s a little bit of liability there, too. It’s just better to get get it out of your building. Now. That’s the reason why I asked you guys get along some people got like drug addicts, sisters or brothers? Right?

16:03
Yeah, I have some friends that do. So

16:06
yeah, that’s just another thing to keep in mind. So this is the just regular Term Life home. So you got some 401k money. Is that still on touch then? Yeah. So in terms of risks, like if there is a recession, I don’t know what’s worse, having the money in your 401k or the or the equity in your home, I really don’t know I don’t have a crystal ball. But let’s say this would be another source of equity to start investing this $400,000 and I have this conversation with almost every other person I have a call with people they think this 401k is not getting taxed on but the argument I always say is like, hey, you’re going to get taxed on this 100 grand either now or later, I would rather pick it out now hidden taxes on it now because in the future, you’re going to be paying more tax because number one, you’re going to be making more money unlike how financial experts say you’re going to be living on rice and beans on your own. I want you to be living on caviar and you can Whatever. And I mean, the country’s not going in the right direction taxes are going to go up How else we’re going to pay off all this stuff?

17:06
Yeah, we might not have security system either. Yeah. So how can you get this 401k out of it in taking out loans?

17:13
Yeah. So taking the loan is like your short term solution. That’s kind of how you are using the key lock for you. Right, but other primary residence and you’re still another like six months, 18 months from like, really, really needing this cash cow. I would say I’m assuming this is what your primary source of income your construction company, right, so yeah, yeah. So you’re currently still working with them? What I would do is I would call your HR and ask them Can I do it in service transaction, and there’s kind of a little blurb I wrote on this on my time and guide at simple passive cash flow, comm slash q Rp. But you want to basically see if they can do that, from what I hear about informally pulling my folks is that 20% of companies will allow you to do it in service transaction and be able to get the money out of this thing, but it depends how they set it up. They’re 401k

18:01
Yeah, I tried to ask him about that. It seems like they have strict rules on taking out certain amount you might

18:06
want to ask again and talk to a supervisor because most times people don’t have a freakin clue about this stuff. And they’ve been told this they need to go in the manual and look this stuff up. It’s a long shot, you know, the only be like, 20% of time that they can. But if I were you, I know you’re not going to do this. I would just quit my job and just be a full time investor. Take all your passive losses, get your active income. I mean, you’ve got enough net worth to make it happen, but I know you’re not going to do that. That’s what I would do. And then I can get at my 400 grand.

18:37
That’s true. That’s just one way of getting it the 400 Yeah, cuz How old are you now? 61

18:42
Yeah, I know. You’re probably thinking well, I just wait to normal age but what’s the normal eight most people who are 65 they’re sick and they’re broke.

18:49
Are they still working? Yeah, Tuesday’s get a higher score their retirement age.

18:54
Yeah, I mean, maybe you can like even go take a contractor role, right and just to get at the 400 Grand and take a peek. Who cares about your income, you get so much money sitting on the sideline. Yeah, and they don’t really do anything. Yeah, you don’t need to get up for work every day. At this point, of course, you gotta get proof of concept for what you’re investing in, right? But I’m just kind of telling you what’s possible and then loans or you can do that in service transaction or just quit the government. I mean, they need people like you, I know, we kind of talked before, I mean, you actually kind of enjoy your job. It’s not too stressful. So get that. But I mean, just think about it. If you quit your job, you put this 400 grand and something like HP, you know, I’m not saying you would put it all in there, right. But that’s 40 grand coming at you every year, you know. Now you can go work half time, and pretty much get the same thing. And I would call HP sort of your bronze level invest 10% a year, no depreciation on that either. Just like the private money lending stuff. I would say like the Roth a Roth IRA is your first lover here that you’ve already paid the taxes on. So all you have to do is pay the penalties on that to get that out. You can take out all the distributions and I’m just guessing, you know, maybe 30 grand or this is what you deposit it in, right? Yeah, if are you I would just take that out tomorrow, the 30 grand Roth IRAs 401, K’s all don’t make any sense, in my opinion, because you’re kind of stuck investing in garbage investments. I know a lot of people try and sell the self directed IRA, which I’m not a fan of at all. I mean, you can invest in private money lending stuff, but those are pretty bad investments, in my opinion, because you don’t get the deduction. What about the GRP? So you can you can put your 401k roll into a Q Rp. But again, you don’t get any of the deduction? Oh, I see. I think the Q RP is definitely better than the sub directed IRA, because the self director are going to be getting the unified tax and all that stuff on the leverage portion in pretty much every deal there that’s hitting those nice returns are using leverage to get that. But hey, you know, a lot of people make a lot of money selling self directed IRAs. So that’s why it’s out there. Right. Just like the 1031 exchange, people make money off doing it. Not to say it’s not a bad thing. But all too often that tool is sort of used for most things when it shouldn’t be. So yeah, first thing here, I would get the 30 grand of what you put in out tomorrow. You run out of cash. But yeah, you got a lot of slack here, right? I mean, you’ve got cash all over the place. I think need deals, right. You need to put your money into you long term equity deals done looking for. Yeah, I mean, a lot of this stuff. You have the conversation with your sister about the condo, but that’s still a year off you off? I would say But yeah, I mean, any kind of questions. I mean, I don’t know why you’re working man. I’d say the only other thing would be is your spouse work? I’m not married. Yeah. So you can marry some kind of like real estate agent. Now you can get that real estate professional thing. Oh, yeah. I mean, but that’s another reason why you should just quit your job. Because then you can get the real estate professional status. Now you can take those passive losses.

21:50
Right, right. Yeah, I have some friends that their spouse is a realtor. In fact, my daughter’s a realtor. So

21:57
yeah, there you go. You got an 800 credit score, but that doesn’t mean anything. You don’t want to buy your own rental properties. No, there’s I mean, at this point, I don’t know if you’d like to do all that travel hacking, but you can have fun with that stuff. If you’re bored. Just get all the credit cards you want bomb your credit score.

22:12
Yeah, I don’t need that. Yeah.

22:15
Some people find it fun. But yeah, I mean, there’s any questions that are next step? Well,

22:18
I was thinking of investing. You’re talking about some bonus depreciation deals and getting through those? Yeah, let’s say syndicated deals.

22:27
Yeah, let’s say like, come around my group, don’t talk to me talk to the other people in the deals and see what kind of feedback they have. From my experience in 2018. I think I must have got like a few hundred thousand dollars of passive losses. I asked like my lawyer, and some of my people, my inner circles, like so I’m not paying taxes, right, but the next few years and they’re like, no negative ghostrider you’re not paying any taxes. You’re gonna pay a sum, right? Just the, you know, keep the auditor’s off your back, right. But I mean, it’s crazy. Oh, that’s all the rich though, right? Yeah. So the rich do it and they’re just following the tunnel. Expo this kind of going out with the outside pitch and just riffing at the right field. Yeah, but I would say yeah, you gotta like build up your passive investor network. Unfortunately, I haven’t found too many groups locally where you have people who are even a net worth of $500,000 or above. I mean, that’s the key. You have to find people that are around your network, which sounds really horrible from economic or, I mean, just makes me sound like a jerk, but it’s all part of a journey. And you’re trying to find people sort of at your point in the path.

23:29
Yeah, just gotta keep on looking at Yes, yeah, find the right group. You know, one question I always ask

23:33
my investors is, Do you know anybody in your network currently doing private placements or syndications, and it’s very polarized. Most people they have nobody. And this is why they’re kind of subjected to these private money lending deals, and you’re only getting eight to 10 12%. You get none of the upside. You get no depreciation or the other guys who Yeah, they have a few people in their network doing it and they’re already a couple dozen deals, it’s crazy. It’s like the rich get richer and the poor get poorer. But it’s not in rich in terms of money. It’s more rich in terms of network, like I’ve always hear about the term your network is your network, which is being an engineer. I thought that was kind of BS. But now I think when your network goes above $500,000, that becomes so true. You don’t really need a network to get from zero to 500,000. You just got to bust your butt and go to your day job and work hard to get there. But to take that next step, there definitely is a strategy ship. Yeah, I mean, was there any other acts legal or infinite banking questions you had or anything under the sun? Yeah, you

24:36
know, the infinite bank, easy that kind of like you’re setting up your own bank, and you’re lending. What is the benefits of that? Yeah. So

24:42
what you’re doing there is it’s not really for life insurance. It’s just life insurance, but you don’t get taxed on the game. So it says, Oh, I see. Right, but you’re able to put it in there. You make like a small return, but it’s tax free, and then you borrow from there at a rate but it’s tax deductible because it’s a business expense. So there’s a little bit of a Delta there. But you can make it into a bank account for yourself where you just sort of store liquidity for yourself. And now it’s off the table in terms of liability. It’s still good occasion, but it

25:11
has tax advantages, because you’re not really paying tax on it.

25:14
Right? Right. But the money’s not making anything. So you got to take that money out in terms of a thing alone from yourself, then invest. Right, right. But when you get ca invest that money and profits, does that get tax or? Yeah, yeah, it might be good for your situation, because you have so much slack. If tomorrow You did the right things, you you got a loan on your primary and then that condo, and then you pulled out your Roth IRA, you probably have like four to $600,000 in the video, I wouldn’t suggest you invest that in syndication all in the first year. And they took me 18 months to kind of meet the people and learn that investment. So I invested 50 grand, I probably put a cap on you and say yeah, and the next six months to a year you can’t invest more Than $100,000 No, you’re not allowed to just going to do something stupid or invested. Right, right.

26:06
Well, yeah, I kind of wanted to fill out the syndicated deal and not go overboard and put it all in. So

26:12
yeah, yeah, if you start out with 50,000 and then see how it goes, right, so you got like $400,000 and you’re going to invest 100. Now, what are we going to do with the other 300? Right? Yeah, that’s where all right, this money is not doing anything, we might as well just start priming the pump on your infinite banking. So you’re not just shooting from the hip here, maybe you put in like 20 grand a year to start on the low side. And then it’s usually like a plan where you have to sign out to do it for five or six years. Right? Right. So that would sort of allocate 120 grand over the next five years of that liquidity and you know, what’s nice about is you can layer another policy on top of it and increase it as your you kind of get the hang of it. Because what will likely happen is you put in 20 and then you might backdate it six months so you can put another 20 all in a couple of days. So you up to 40 grand. And then next year you put another 20. And you kind of use it right? You’re using it for quiddity events, you’re like, Oh, I like this. So I might play another $10,000 policy on top of that,

27:11
what’s the normal percentage that comes out of the investment for for the insurance portion.

27:15
So it’s a step down thing. So in the beginning, you’re typically doing maybe 30 35%. In terms of fees, by the time of year three comes around, it goes down to maybe about 10%. And

27:29
so the more the more you put in the

27:30
non non is not the more you put in, it’s just like on the timeline is, you know, it’s usually five or six years is how much you have to commit to putting incremental payments. And so the, if you think about it, like if you think about in terms of a graph, like it’s a step down thing, like goes down as time that the fee percentage than the beginning, it’s 35% 30% of what you put in and then steps down 10% of what you put in here three then buddy Oh,

27:56
I see. I see. Okay,

27:58
yeah. And I think like, you know, basically Your age, that 35% ship you pretty much the ballpark.

28:04
This kind of like the surrender years, the longer participate in the amount of return is is more, right right and

28:11
your situation where your net worth is. And based on how much slack you have like a good idea, just do something or like 25 grand a year, you just get that rolling you probably people up to 50 grand a year if you wanted to. So for the guy listening on this YouTube channel on the podcasts, like if you got under $500,000 this is not for you, right? This is more for people with higher net worth because of that 35 30% of the fees go away to the life insurance, right? It’s a great way to make fees for these guys are those people you need every dollar to go through a down payment for rental property. You just can’t afford that you got to deploy all the troops to go make money for you can kind of batten down the hatches like how you’re doing here. The way I do it is I would recommend the like the logic I would use is all right, you’re going to you’re going to create some kind of at the payment schedule and the next one to five years right so maybe this next six months you just don’t do any but six months 18 months you’re going to deploy 100 grand in a couple of years and then after that you’re going to go in a deal every six months or something like that, it should be conservative. All right, and then you know, you kind of put that on a spreadsheet on a timeline one year 12345 and then you also overlay on top of that pay 25 grand is going to go out this year for my life insurance next year for life insurance and then just kind of play out your liquidity and make a plan that way as much as a joke around that you know, you probably should quit your job I know you’re not going to do that you’re not going to see the feedback for another couple of years

29:40
yeah, that’s what that’s what I wanted to do is see how it works out and then if it doesn’t, yeah, maybe I will quit my job but you get have to

29:47
see for yourself. I mean, not how it feels go well, but a you get the depreciation and nothing

29:53
is guaranteed investment. So

29:54
yeah, but you go at least going into the deal where it’s cash flowing day one and A better way of doing it.

30:01
Yeah, can be that

30:02
was there anything else you want to chat about? Oh, you’re in good shape here. I mean, I, maybe we check in in a couple of years, I’m sure we’ll be starting to think about when that retirement day when you’re going to pull the pin, you know, hopefully sooner than later. But I think that’s the main thing, mindset wise, I mean, I’m just looking at this numbers here. And if over me, I’ve deployed 200 grand of it the next six months, and I’m pretty sure you could retire on that. But let’s go with a real life conservative plan of attack here and I’m thinking maybe in the next couple years, you’re going to start to see these fields that you go into, start the pan out, get stabilize the cash flow, and then start to figure out when when the last day is and then you know, I would say in the next year, you’re gonna start to see a little signs of this and maybe you can even start over like what am I going to do after I like retire, you know, yeah.

30:53
Pick up a hobby or something.

30:55
Yeah, maybe flip some houses or something.

30:56
There you go. Just for fun,

30:59
just for fun, right? But how do you want to do that? That’s a DOB that’s a more competitive game. Oh

31:05
that’s I was got funny I wasn’t doing that wasn’t doing the deals because yeah these guys are just tearing each other apart yeah it’s it’s a lot of work you got a lot of communication with your contract a realtor yeah

31:16
yeah rosters these house flippers they pay all my taxes for the state and federal for me yeah they do god bless them

31:27
god bless america

31:30
all right leave up till next

31:31
year Great thanks Lee

31:37
this website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers and inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained here at information is not Gary T as in every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.

Transcribed by https://otter.ai

 

Close Menu

Free resources!

1) Turnkey & Syndication Guides

2) Networking Opportunities

3) NEW Trial of eCourse

Join our Community? 

Free 15 minute
Strategy Call

*No sales pitch. Period.