\n<\/p>\n
Want to escape the rat race<\/strong><\/a>? To do so, you\u2019ll need some serious investments. And if you want bigger and better cash flow <\/strong>or appreciation, commercial real estate<\/strong><\/a> is the place to start. But how do you find these bigger deals? Sure, it\u2019s easy to log on to your favorite listing website and find a hundred houses to buy, but what about self-storage facilities, <\/strong>multifamily<\/strong><\/a> apartments, warehouses<\/strong>, and more? How do you find the BIG deals?<\/strong><\/p>\n On this Seeing Greene<\/strong>, we\u2019re answering crucial investing questions so you can build wealth better and reach financial freedom faster<\/strong>. First, Real Estate Rookie<\/em><\/a> guest Mike Larson<\/strong><\/a> calls in to ask how to find off-market commercial real estate <\/strong>deals. If you\u2019ve ever wondered how to invest in commercial real estate, this is the place to start! Next, a BiggerPockets Forum poster asks for the best investment to \u201cescape the nine-to-five rat race.\u201d<\/strong> A short-term rental investor needs to know the best way to invest <\/strong>his home equity<\/strong><\/a>. Plus, we discuss why mortgage rates DON\u2019T matter<\/strong> as much as you think they do!<\/p>\n Want to ask David a question? If so, <\/strong>submit your question here<\/strong><\/a> so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums<\/strong><\/a> and ask other investors their take, or follow David on Instagram<\/strong><\/a> to see when he\u2019s going live so you can jump on a live Q&A and get your question answered on the spot!<\/p>\n David: David: Mike: David: James: James: David: Mike: David: David: James: James: James: Mike: David: Mike: David: James: James: David: David: David: David: David: David: Rory: David: James: James: David: James: James: David: David: David: James: James: David: David: David: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is the BiggerPockets Podcast show, nine seven C. What\u2019s going on everyone? This is David Green, your host of the BiggerPockets Real Estate podcast, the show where we arm you with the information that you need to start building long-term wealth through real estate today. And I\u2019ve got a surprise for you. We\u2019ve got a Seeing Green episode that\u2019s right in today\u2019s show. If you\u2019ve never heard one before, we\u2019re going to take questions from you, the listener base that sent them into me directly and answer them for everybody to hear. In today\u2019s show, we get into if interest rates justify holding a property that\u2019s not performing well or if you should reinvest that money into better opportunities, what to do with $70,000 if your job is to escape the rat race and a little back and forth going on in the BiggerPockets forums. What to do when you\u2019ve got a bunch of equity in a brrrr stir?<\/p>\n
That\u2019s a brrrr property that\u2019s now a short-term rental and more up. First, we\u2019ve got a flipper wholesaler who is looking to expand into multifamily and storage. He wants to do all the things and wants to know where he should start. Most importantly though, if you want a chance to ask your question, please go to bigger p.com\/david where you can submit a question, be featured in the show. If you don\u2019t remember what I just said, we also put the link in the description. I love it when you guys listen to me. Thanks so much for submitting your question. Let\u2019s kick this thing off. Alright, up next we have Mike Larson out of South Carolina. He was featured at episode 2 75 of the Rookie Podcast and he\u2019s here joining us on Seeing Green today. Mike, what\u2019s your question?<\/p>\n
What\u2019s going on guys? Well, first I just want to say thank you for having me. This is truly a ton of value. So right now I own a small wholesale and a flipping business and I\u2019ve built up the systems to find single family homes, but I want to start to scale into storage and multifamily and I use your basic marketing cold calling, texting P-P-L-P-P-C, direct mail and stuff. But how are you guys marketing and finding properties that are 10 plus doors or storage facilities that are a hundred plus doors?<\/p>\n
James, what are you doing to find these? You got a whole bunch of apartment complex stores, don\u2019t you?<\/p>\n
Yeah, we\u2019ve been buying a lot the last 24 months too. Even with these high rates, one thing that we\u2019ve learned, and Mike, I started the business doing what you\u2019re doing. We had a wholesale business fix and flip brokerage, and we were always the people self-generating our own deals for small multifamily fix and flip any of the residential space. But then as we started to grow our doors, what we noticed, at least in our market is we had to expand our network because large multifamily a lot of times is a smaller group of brokers that actively know that product. So the good thing about commercial brokers or multifamily brokers, they\u2019re not as wide as we are as investors, and so when you get into that space, you want to kind of expand your network. And so again, I self generate a lot of my own product with cold call rooms, direct mail door knocking referrals from other investors.<\/p>\n
But where we get most of our larger multifamily once we stepped in that space is those commercial brokers. Because commercial brokers work specific areas and because there\u2019s only so much product in a lot of those areas, they know the sellers a lot more. And by getting to know your seller leads more, just like you do with wholesaling, you get higher conversions. If you know what\u2019s going on, you\u2019re staying in front of \u2019em. And so we\u2019ve had really good luck just working with our commercial broker network and multifamily broker network, always bringing us deal flow because a lot of times these multifamily properties do never hit market. They\u2019re trade off market. These guys are good at finding the opportunity, selling it, they\u2019re motivated by their commissions and that is by far the most product we get is from our broker community.<\/p>\n
What do you think Mike? Makes<\/p>\n
Sense to me. I mean, I\u2019m good about the networking aspect as far as what I\u2019ve been doing so far. Hold once a month I\u2019ll do a meetup to try and meet other people in the market and have other wholesalers send me deals. So I guess I could just do the exact same thing as far as going after the commercial brokers try and meet up with more of those<\/p>\n
Guys. So you mentioned the similarities. Like you said, you network with residential people like wholesalers and agents. Now you\u2019re going to be networking with commercial. Here\u2019s the differences so that you\u2019re not walking in blind. Most wholesalers and agents aren\u2019t worried about if the person asking about the properties is a serious buyer because it\u2019s not hard to get financing for residential properties. There\u2019s a million different loans that you could get right now. You got people that are putting together money and they\u2019re thrown at an investor\u2019s just like, please take my money. There\u2019s more money to land than there are Deals are. When you walk into the commercial space, those brokers are going to be way more concerned that you\u2019re a tire kicker, that you\u2019re wasting their time, that you\u2019re not a serious buyer than what we residential investors get used to. So you\u2019re going to want to understand their vernacular.<\/p>\n
You\u2019re going to want to get cut to the chase and be able to portray yourself as a serious person. This isn\u2019t like real estate agents are willing to give me a free education and real estate hoping that I become their client. These are sharks. They\u2019re only here because they spend their entire life building relationships with wealthy people that own these commercial properties. They\u2019re understanding what triple net leases are, the different financing options with these things, how you\u2019re going to improve the net operating income. They\u2019re going to use phrases that you may not know if you haven\u2019t gotten involved in this. And if you\u2019re staring at them blankly, it\u2019s a really good way to lose the trust and then that deal\u2019s not going to you. It\u2019s going to someone with a proven track record. Kind of got to fight your way into the good old boys club if you want to be a commercial investor.<\/p>\n
And the reason it\u2019s like that too is these commercial brokers are working this targeted area and they have a lot of times they have a small group of sellers and they don\u2019t want to jeopardize that relationship they\u2019ve been working on for two years. So that\u2019s why they want to bet you correctly. But as you go into markets too, other things, commercial brokers, they can be a little standoffish sometimes and just like David said, you want to kind of qualify yourself, but if you\u2019re getting some pushback or they\u2019re not bringing any inventory, other ways that we do target multifamily and Mike, if you\u2019re a wholesaler, you could definitely do this because you know how to target direct or direct to seller targeting. A lot of times we like to pull the recently rented properties and then we pull the information on \u2019em. So let\u2019s say an apartment building is running for a thousand dollars a unit.<\/p>\n
We pull that tax record up that looks below market value and we see when they bought it, then we can look at how much they\u2019ve depreciated from that property based on if they\u2019ve been there 10 years, they\u2019ve depreciated most of it. Then we\u2019re looking at their equity position and we run the return on equity. And that\u2019s what we approach these sellers with is going, Hey, we have an opportunity for you. You have almost a fully depreciated building right now. You\u2019re collecting this much in rent with this much equity, which is this return, and usually it\u2019s going to sound pretty low one to 2% because it is. And that\u2019s how we get these multifamily sellers to at least start listening to us because they\u2019re more sophisticated than your usual single family seller. And when you\u2019re talking to you\u2019re, when you\u2019re talking to \u2019em about buying their property and you\u2019re giving them the information, they already understand the benefits of depreciation and return on equity, but they just don\u2019t realize it sometimes.<\/p>\n
And so by summarizing it can get them to kind of work with you a little bit more. And so those are ways that we\u2019re looking for because we can call them with an opportunity, they should upgrade their portfolio we want to buy. And so those are good target lists. And another really good way to find more multifamily is to reach out to multifamily property management companies. Say, Hey, look, I\u2019m looking to buy, if you\u2019ve put it together the deal, I\u2019ll use it as a broker and I\u2019ll keep your property management in play. They have a lot of sellers that it is in their best interest to sell that get \u2019em into another property anyways, and they might know landlords that want to move and it\u2019s another good way to dig out deals without having to pay all the broker fees.<\/p>\n
That\u2019s genius. I love that.<\/p>\n
There you go, Mike. Thanks a lot, man, appreciate it and good luck to your nephew in his wrestling tournament today. Thank<\/p>\n
You, sir. Thanks guys. Have a good one.<\/p>\n
All right. After this quick break, we\u2019re going to be covering different financing types and the pros and cons of each and welcome back. We just heard from Mike who was trying to scale up from wholesaling and flipping to finding more commercial properties, breaking his way into a new asset class. Alright, James, now we sort of covered there with Mike that the networking component is different with commercial than residential. The financing component can be pretty different to especially when you\u2019re a residential investor that\u2019s used to buying distress properties. Can you kind of cover what people can expect in financing differences if they make the jump from residential to commercial?<\/p>\n
Yeah, a lot of times, especially when you\u2019re buying those brrrr, multifamilies two to four, a lot of investors including myself, that you utilize hard money and construction loans because you buy it\u2019s below market, increase it with the construction funds and then refi it into a permanent loan commercials just lot more, it\u2019s a lot different, right? Because you\u2019re not getting 30 year financing typically on these buildings, they\u2019re commercial loans that have balloon payments at five, seven and 10 years. And typically when we\u2019re buying these multifamily, small or large, we\u2019re working with local banks and that is a big difference between your residential lenders too. When you\u2019re getting your commercial financing, you\u2019re actually meeting with your bankers, you\u2019re talking to your local bank and they\u2019re looking at it like an actual asset. Whereas if I\u2019m getting a residential loan, I\u2019m dealing with the mortgage broker who\u2019s making sure that I\u2019m packaged up right, and they\u2019re dealing with the bank.<\/p>\n
And so commercial, as you get into multifamily, these relationships with local banks are really important. It\u2019s good to go meet with them, establish some, move some deposits over. The more you get to know them, the better leverage they would get. And when we buy value add multifamily, it\u2019s always a two step loan, but it\u2019s rolled into one transaction. So when we buy these properties, we set it up with a bank financing, they give us a construction component, it\u2019s interest only, a little bit higher rate, but it\u2019s about three points cheaper than a hard money loan. When we close on that loan, we\u2019ve already had our permanent financing locked. So we know when we get done with the stabilization what our interest rates going to be, and I do think that\u2019s really important for people to look at as they get into multifamily. You don\u2019t want to buy a property without a locked rate because if the rate changes your perform is going to change. And so the beautiful thing about multifamily is you can get your construction loan and your perm loan all locked in one, so you can actually reduce your risk, but you want to work with a local bank that understands multifamily and does construction. There<\/p>\n
You go. Another little perk that I like with that is if you\u2019re maybe unsure of your underwriting or the process of buying commercial properties, if you\u2019re going the route, you\u2019re saying, James, you have a couple other sets of eyes looking at the deal that you won\u2019t have yourself, right? It doesn\u2019t hurt to have more experienced people looking at it and maybe saying, Hey, this could be a problem, or we would want to see this become better because you\u2019ll learn from that experience. Great point there. Alright, in this segment of the show, I like to take questions from the BiggerPockets forums or comments from YouTube or reviews that people left wherever they listen to podcasts and share \u2019em with everybody. Today we\u2019re going to be getting into a question from the BiggerPockets forums, which real estate strategy works the best to escape the nine to five rat race?<\/p>\n
My question for anyone that escaped the nine to five rat races, what real estate strategy did you use? For example, if you had between 20 to $70,000 to invest in real estate, how would you use that to replace your income of seven grand a month from your job? Would you do fix and flips tax liens, mortgage notes, buy and hold rentals, Airbnbs, what would you do? They then go on to say that they think house vacuum would be a great strategy, but they prefer tax liens and short-term rentals. Now Abel Curel from Queens, New York responded with, Hey Rodney, great question and you came to the right platform. Each strategy that you listed requires different experience, risk tolerance, networking, connections, project management and initial capital to invest. Have you tried looking further into those strategies? I\u2019d suggest that you weed out the ones that don\u2019t fit your end goal and your schedule.<\/p>\n
Rentals and Airbnb seem to be the most common route for investors in your situation. Depending on the cost of living in your local market and availability of two to four unit properties, house hacking may be a strategy worth exploring. Travis Timmins from Houston weighed in and said, my path was owning a business that I sold and acquired real estate along the way. It\u2019s going to take more time than you were planning and be harder than you thought. Real estate doesn\u2019t pay you well. If you need the money, it\u2019s like the house knows you need the cash and something\u2019s going to break and deplete all of the cashflow for that year. As far as the strategy goes, I would suggest leaning into your current skill set and knowledge to find an unfair advantage. Flipping short-term rentals, tax liens that set are all great strategies if you are good at them and terrible strategies.<\/p>\n
If not, if I had 20 to 70,000 to invest, I\u2019d buy a house hack in Dallas if your debt to income ratio is solid. So it seems pretty clear that Rodney with around 20 to $70,000 is trying to escape the rat race and the people in the forums are saying, you\u2019re probably not going to do that with 20 to 70 grand. You should start house hacking Now why are they saying that he should house hack? It\u2019s because they\u2019re recognizing that Rodney needs more equity or more cash to invest in real estate if he wants to get enough cashflow to quit the job. House hacking is a great way to start that journey. You start the time ticking or you start the snowball rolling of building equity and when you get enough of it, you can invest it at a return that could provide you with enough income to quit your job.<\/p>\n
But like Travis said, it\u2019s going to take you longer than you think. It\u2019s going to be harder than you think. This is a one step at a time journey. This is not a thing that you\u2019re just going to learn in two to three years and then have $20,000 of cashflow coming from your single family rentals that you can just quit that job and that rat race. It\u2019s one of the reasons that I wrote Pillars of Wealth, how to make, save and invest your way to financial freedom because you got to focus on three things, making more money, saving more money, and investing the difference, not just investing to get where you want to go. And in the book I talk about, you got to find a way to make money that you like doing. You got to find a way to fall in love with the process of becoming great.<\/p>\n
We really want to be chasing excellence, not just chasing cashflow because when you catch excellence, money will find you and you will have a lot more to invest which will turn into cashflow. Great conversation here. I appreciate everybody\u2019s engagement and I love being a part of a community that asks questions like this and shares it for everyone to hear. If you\u2019re liking today\u2019s show and you\u2019re enjoying the conversation, please take a second to leave me a five star review wherever you listen to your podcast and comment on YouTube and let me and my production staff know what do you think about today\u2019s show and what do you wish that you could get more of? All right everyone, let\u2019s get into the next question.<\/p>\n
Hey, David, Rory, corporal from Lamont, Colorado here, a longtime listener first time poster. So hey, we\u2019ve got a mountain property that we did as a burster. We built it back in 20 and 20, 21 and the short-term rental market has really slowed down, but we are sitting on a ton of equity really thinking about what our next steps are. Looking at either a 10 31 exchange and moving that into turnkey properties or an RV park or self storage, something with real estate involved or potentially or multifamily. Another option would begin, have a HELOC on it and use those dollars to invest in some other building projects that we\u2019re looking at as well as perhaps buying a cash pulling business. Love to get your thoughts on what we should do with the equity. We\u2019ve got about 600 K that we\u2019re sitting on right now, and yeah, love the show. Love what you guys have going on and really appreciate your help. Thanks, bye.<\/p>\n
All right. We\u2019re going to take a quick break, but when we come back, a Brrr-ster property owner has $600,000 of equity and is looking for their next move. Is it a 10 31? Is it a cash out refinance? Are they going to move to The Bahamas and open a snow cone company? The tension is killing me and I bet it\u2019s killing you. Hang tight. We\u2019re going to hear about it after this break. Welcome back to the BiggerPockets Real Estate podcast. Let\u2019s jump back in.<\/p>\n
Rory. He\u2019s got the same question we all have. What do we do with this equity and how do we maximize it? When I hear this, especially when we\u2019re talking about reloading it into 10 different asset classes, we got it\u2019s self storage business, RV parks, multifamily, and again, that comes back to all the noise in the internet now because everyone\u2019s promoting that their strategy is the best, and you know what? It probably works really well for them. Anytime that I\u2019m looking at making a trade on equity, I want to put it, if you\u2019ve earned $600,000 in equity, you did a phenomenal job, you bought the right thing, you grew it correctly. How you execute even higher is buying something that you know and you\u2019re familiar with. And so when I\u2019m looking at doing trades, I like to look at what is my skillset and how can I maximize this?<\/p>\n
If I did it with a single family house that maybe I was a heavy renovator, the next transition for me would be into going to maybe a value add multifamily, because it\u2019s the same type of asset, it\u2019s the same type of product, but a little bit different asset class. To increase the cashflow, I have to renovate it like a single family house. I have to lease it like a single family house. And with your short-term talents, you might be able to do two short-term rentals and a couple stable long-term tenants to keep your investment more stable. And you can do a hybrid blend. And so I would say you want to audit. What do you want to do with your equity? What is the return that you want to make? What markets do you want to be in? And then what products should you be looking at to meet that return expectations rather than just the next hot sizzly asset class? And I think a lot of people are in this jam right now with the short-term rentals. They bought a lot of good property that grew in equity and as that slowed down, the returns have diminished. And so you\u2019re doing the right thing. Is my asset producing me the right return, right yield? And if it\u2019s not, relo it out, but do that soul searching, find out you\u2019re good at what you want to make on your return, then go look at the asset class because each asset class pays you differently<\/p>\n
A hundred percent. First off, I don\u2019t think that you should have equity burning a hole in your pocket. I guess it doesn\u2019t burn a hole in pocket. That\u2019s cash equity. Would what? Burn a hole in the house. Don\u2019t worry about it though. You don\u2019t have to invest that $600,000. You could take your time. Second, just like James said, don\u2019t ask the question of, well, what\u2019s the best return out there? I don\u2019t know that there is a best return out there. Ask the question of, well, what do my skills, my opportunities and my competitive advantage offer me? Do you have opportunities to put that money to place that someone else doesn\u2019t because of the background? Do you have a construction background? Do you have a finance background? Are you really good with short-term rentals? And so you can buy more short-term rentals in the same area that you already have some now and get economies of scale. Think like a business owner. And then lastly James, what do you think about somebody like this lending out, maybe taking a HELOC on their property and lending that money out? Becoming a private lender to other investors?<\/p>\n
That is actually how banks make money and a lot of times people kind of forget that they borrow money and then they relend it out and they make an interest yield. I think that\u2019s a great way as long as you are not jeopardizing your own asset. Before you do that, you really need to know how to vet a loan. You need to vet the operators and the more experienced your operators and the more you understand how to vet a hard money loan, the less risky it is. I do thousands of hard money loans a year between our company and myself privately. I have a default rate over a 16 year span that\u2019s less than a quarter percent, or actually, excuse me, it\u2019s less than 1%. Well, I\u2019ve only lost money on a loan less than a quarter percent, but that\u2019s by underwriting correctly underwriting the borrowers.<\/p>\n
I\u2019d be cautious about taking out a heloc if you\u2019re going to get it right now, HELOCs are about 9%. You\u2019re going to re lend it out about 11 to 12% or maybe get some equity in there. And so the yield\u2019s small and the gain would be small for you, and so make sure that you really understand it. You don\u2019t want it being too high of risk for that little return. If it was me, I would look at 10 31 exchanging, go buying a property so I can get that depreciation right down the taxes and then maybe pull some out to invest it in hard money separately so you\u2019re not taking on more leverage. I\u2019d rather pay the tax than take on more leverage and have a smaller yield. Hard money is a great space if you want to make cashflow. The one negative is you pay high tax. You don\u2019t get all the same benefits as you get from owning a rental property. The depreciation, the depreciation, the write-off expense, it\u2019s ordinary income. You\u2019re going to pay it. It\u2019s a high. Typically I\u2019m paying 40% tax on my hard money loans and there\u2019s not a lot of relief there, but it is steady cashflow and it is how I live my life today. Everything I do today is paid for by my hard money passive income.<\/p>\n
Great point, James. Different opportunities come with different pros and cons, and one thing that creates analysis paralysis is investors that are trying to find the one option that doesn\u2019t have any downside, but you\u2019re not going to get it if you\u2019re trying to avoid the tax implications. You\u2019re going to take on more work or more risk. If you\u2019re trying to get the best return possible, you\u2019re probably going to have to learn a new thing. If you\u2019re like, man, I just want a high return with no work, you could put it in a retirement account, but you\u2019re not going to able to use the money for something else. So the key is to look at the downsides of every single option and find the one that the downsides affect you the least. Alright, our next question comes from Dan Way in Madison, Wisconsin. Dan says, I\u2019m wondering how saving money in the future through refinancing would look.<\/p>\n
Most of the time I hear about refinancing, it\u2019s when rates are lower than when you originally purchased the property. How can we ever expect to lower our monthly payments without the expectation of seeing lower than three to 4% rates? I\u2019m looking to find my next property through Fannie Mae loans for the low down payment aspect. However, the monthly payments associated with these properties with the low monthly down payment make it almost impossible to cashflow, which I understand is harder to find in this market at this time in this first place. But how can I even rationalize these deals with little to no possibilities of lowering those monthly payments in the future? So this is an interesting question here, James. If you\u2019re getting in at a three to 4% interest rate, you have no possibility of really refinancing any lower than that. It\u2019s hard to picture rates getting lower than that.<\/p>\n
But if you\u2019re buying property now and you\u2019re waiting for a refinancing rates to go down, you don\u2019t feel like you\u2019re in control of your own investment future because you don\u2019t control when the rates are going to go down. And it looks like Dan\u2019s thinking, Hey, I\u2019m willing to buy property that doesn\u2019t cashflow right off the bat if I have hope that I can refinance these things in the future, but how do I rationalize these deals with little to no possibility of lowering the monthly payment in the future? So the question is, should we be buying real estate right now if we don\u2019t know that we can refinance into a lower interest rate later? What\u2019s your thoughts there?<\/p>\n
I think one thing I would really remember is interest rates. Cost of money is just the cost of the deal, and I don\u2019t make my investment decisions based on interest rates. I make it based on cashflow and returns. Very recently, I just traded a property that cashflow $1,200 a month and I had a 4.25 rate on it and I traded it for a property that basically breaks even and I have a 7% rate on it, and there was a purpose to that. I think a lot of investors get caught on that rate. They\u2019re like, I can never get rid of this rate, and I wouldn\u2019t look at it that way. I would look at, okay, if it\u2019s not working for me, I need to explore other markets to give me a better return.<\/p>\n
I think it\u2019s important that you evaluate, Hey, here\u2019s my strategy. You came up with my strategy. I\u2019m going to use a Fannie Mae loan, buy a rental property with low down, I\u2019m going to get better financing than an investor. That is your strategy. Now it\u2019s going, how do I execute it? And maybe the market that you\u2019re looking in right now is just not working and you need to go to outside markets because you can cashflow in this market. You just might have to explore cheaper ones. If that is your plan, I would go find the market that it works in, utilize that loan, and then look at pivoting your strategy out later. You can only do so many low down loans anyways. I would utilize it, put that money to work, but change how you\u2019re implementing it, not how you\u2019re doing it.<\/p>\n
That\u2019s a great point. I\u2019m also not a huge fan of the, I have a two and a half percent interest rate. I can never let it go. I\u2019ve never heard a person who did really good in real estate. And when I talked to \u2019em about how they did it, they said, well, you know what? I got 3% interest rates and I held \u2019em the whole time. They always talk about the deal. They talk about the property, they talk about the increase in rents, they talk about the increase in value, which is usually a function of the location that they bought in or the time when they bought. It\u2019s never about the rate. And so I just don\u2019t know why we put so much emphasis on that other than the fact it just stings that it used to be better than it was. But isn\u2019t it always like that?<\/p>\n
We talk about 2010 real estate. It used to be better than it was. I wish I had bought then in 2016, everybody thought that real estate was too expensive compared to 2010 Now. Now in 2024, we look back at 2016 prices and say, oh, I wish I had bought then. And you know what? In 2034, we\u2019re going to be looking back at 2024 prices and saying, oh, I wish I had bought. Then we are not going to be thinking, well, the interest rates were seven and a half, and so it didn\u2019t make any sense to buy it never actually works out that way. So try to take your attention off of the rate and try to think about the other ways real estate will make you money. Can you get a tax advantage from it? Can you shelter income from other things with it? Can you set it up to we\u2019re making extra payments on your principal and pay it down quicker?<\/p>\n
Can you add square footage to the property? Can you add units to rent out? Can you buy in an area before everybody else gets there? That\u2019s the next up and coming emerging market. Let\u2019s just think a little bit more than just what fits into the spreadsheet. And sometimes those answers will pop out. All right, and that was our show for you all today. Just a little recap here. We talked about networking for commercial properties and how to build a pipeline, whether you should keep a property because of the interest rate or think about the overall returns, what to do to escape your nine to five with $70,000, and how to handle the problem of having a whole bunch of equity and not sure what to do with it. Thanks again, everybody. We love you. We appreciate you for being here. I know you could be listening to anybody to get your real estate investing knowledge from, and I really appreciate the fact that you\u2019re coming to me. You can find my information in the show notes if you want to reach out to me personally, and if you\u2019ve got a second, let me know in the YouTube comments what you thought about today\u2019s show.<\/p>\n