Expected Air Date: 9/6/18

Opening

Today we are going to talk about Returns. I’m not talking about tax returns – perhaps that’s another show. I’m talking about the Returns you receive. Yes I’ll discuss Return on Investment, but there’s also Return on Cash, Return on Equity Return on Assets. 

But there are other Returns in life beside the financial. There’s a Return on Effort, a Return on Deeds, a Return on Principles. Some of these things are difficult to precisely quantify, but we are going to do our best to provide food for your thinking. And I’m going to recommend you think through your investing decisions and using the ideas I’m sharing today, nearly every decision you make in your business is a type of investment and it will bring a “return.” 

There is a law of sowing and reaping discussed in the Bible. Some of us spend our youth sowing wild oats and then spend our adulthood praying for crop failure. Similar to this idea is the idea of Karma. We all have a few people that we would really like to say, “see that light ahead? That’s not the end of the tunnel, it’s the headlight of the Karma train about to visit you up close and personal.” 

From the computer business we get the old phrase GIGO – Garbage In Garbage Out. A computer can do amazing things amazingly fast, but the results are only as good as the programming that goes into it. All of these are just different ways of saying you get out of your investments, your job, your relationships, your church, your hobbies, your LIFE — what you put into them. And this is generally true. 

So we are going to think about this, try to quantify some of it, and perhaps most importantly, try to help you understand how to respond and what to invest when you are on the wrong end of injustice. Because you know, sometimes life hands you a basket full of difficulties before you’ve ever had a chance to make mistakes. Occasionally we begin with an uphill struggle. 

It’s easy to think this is unfortunate, but for many, this challenging situation was the crucible in which their character, dedication, and determination were forged. And we MUST deal with the question of how to respond to a wrong when all we have done is sow good seed. We’ve invested kindness and it what we got in return was lies, cruelty, and heartache. I’m going to do my best to answer those questions in a few minutes when we talk about Returns. 

How to contact us

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it’s worth. 

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question. 

Announcements:

• September 12, Chantelle Owens at Flipping Atlanta, Tax Liens
• Lunch with me every Wednesday.
• Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
• Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.  

News!

• https://www.investopedia.com/terms/r/return.asp
• https://www.investopedia.com/terms/r/returnonassets.asp
• https://www.investopedia.com/investing/roa-and-roe-give-clear-picture-corporate-health/

Topic: Returns

Financial Returns

Return on Investment

Return on Cash (annualize these)

Return on Equity

Return on Assets

Non Financial Returns

Return on Effort

Return on Deeds

Return on Principles

Emails: 

Questions@flippingamericaradio.com Tell us where you’re from!

• Buster, Colorado Springs, CO “I’ve bought a ski resort cabin with my self-directed IRA. What is the limit on how much time I can use it each year?”
• Andi, Long Beach, CA “I’m looking at a flip here in Long Beach. The house is a run down 1800 sf 3/1 that I can buy for 600k. I put 70k into it and can sell it for 800. But when I calculate the interest for a loan to do this, it almost seems not worth doing. I have to put $100,000 into it and in the end I’ll net about 30k. Am I looking at this wrong? Is there something else I should be doing with the money?”
• Caroline, Birmingham, AL “I just heard about your Menternship and read about it on your website. Am I too late to join?”
• Albert, Harrisburg, PA, “How do you handle buying deals from HUD, Banks, or wholesalers that do not allow a due diligence period?”

Motivational Thoughts for the day

• Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence. Helen Keller

Transcript

[0:00] Music.

[0:28] For flipping America the show that teaches you how to make money in real estate or wherever you are whatever your situation there is an opportunity for you.

Flipping America is brought to you today by Braswell Capital Solutions commercial lending made easy

on the web at Braswell Capital solutions.com.

And now here’s that flipping America guy Rodger Blankenship.

Did you enjoy a great Labor Day weekend did you stop to take some time to think about all the people that labor or did you spend the day laboring what did you do you know I like to say that when you’re an entrepreneur

you only have to work half a day and you get to pick which 12 hours that will be.

And that means a lot of times will work in the day before Labor Day in the state of Georgia the Foreclosure auction is the first Tuesday of every month which means that we are busy busy busy on the first Monday of every month and

of course that means every year on Labor Day and some years on Memorial Day we’re working we’re busy sorry no way to avoid it

but sometimes you just have to do what you have to do but that’s okay hope you enjoyed a good time with your family and you’re ready to get back to work today we are going to talk about returns.

I’m not talking about tax returns perhaps that’s another show I’m talking about the returns you receive.

[1:53] Yep I’m going to be talking about return on investment we get a lot of questions about how to calculate that and return on cash I’m going to talk about return on

equity and return on assets now that’s more M4 stock type of investing but you know since we’re talking about return I’ll I’ll go ahead and throw in a little bit of

discussion there but there are other returns in life besides financial and this is what I really want to get to today there’s a return on effort.

[2:21] Then I want to talk about every turn on Deeds a return on principles now I’m not talking about Prince

pull the money that you put into a deal I’m talking here about a return on your principles guiding rules of life okay some of these things are difficult to precisely quantify I get.

But we’re going to do our best to provide some food for your thinking and I’m going to recommend that you

think through your investing decisions using the ideas that I share today nearly every decision you make in your business is a type of investment in fact.

You could look at all of your life this way your relationships are at.

Type of investment the way you conduct yourself not only in business but in life even on the drive to and from work

those things are a type of an investment and they bring a return you have.

[3:15] A way to spend investing your time and there is a return for the way you invest your time you know there’s a law of sowing and reaping

discussed in the Bible now I know some of us spend our youth sowing Wild Oats and then we spend our adulthood praying for.

Failure similar to this idea is the idea of karma we all have a few people to whom we would really like to say you see that light ahead

that’s not the end of the tunnel it’s the headlight of the karma train about to visit you up close and personal.

But of course we never say that to anybody right okay well from the computer business we get the old phrase gigo

g i g o and it stands for garbage in garbage out maybe you haven’t heard that one that’s an old computer phrase you know what computer can do amazing things amazingly fast but the results are only as good as the programming that goes into it if you skip a step it doesn’t work at all if you put in bad information bad conclusions are going to come out so it’s gigo garbage in garbage out

all of these are just different ways of saying that you get out of your Investments your job your relationships your church your hobbies in your life what you put into them in this is generally true

so we’re going to think about this try to quantify some of it and perhaps most importantly try to help you understand how to respond and what to invest when you’re on the wrong end of Injustice because you know.

[4:40] Sometimes life hands you a basket full of difficulties before you’ve ever even had a chance to make mistakes.

Occasionally we begin with an uphill struggle

it’s easy to think that this is unfortunate than to feel sadness and sympathy for people that are in this situation but for many

this challenging situation was The Crucible in which their character

dedication and determination were forged and we must deal with the question of how to respond to a wrong when all we have done is so good seed

we’ve invested kindness and what it got in return was lies cruelty and heartache.

[5:20] Does it happen to you if it hasn’t happened to you I’m sure it’s happened to someone you know and it does happen What do we do.

Do we go pull a baseball bat out of the trunk of our car and start swinging at anyone in and within range that there is a different way to respond

when those things happen the way that’s much more productive

I’m going to do my best to answer those questions in a few minutes when we talked about returns but I want to thank you for taking time to join us today on Flipping America I am Roger Blankenship your host and I teach people how to make

money in real estate now we don’t encourage everyone to drop what you’re doing and start flipping houses like you see on TV in fact

just the opposite it’s not for everyone we do.

On the other hand encourage everyone to consider real estate is a parlet part of a balanced Investment Portfolio into that end we hope to bring you here on this show the best information news.

Methodology ideas demographics statistics and market research that we can we try to keep it light and interesting we try not to

bog you down with a lot of details and numbers and and math formulas and story problems however

we do want to help you be involved in real estate I believe that everyone should have some type of a relationship with real estate and.

Perhaps even more than just owning your own home because owning real estate is a key.

[6:45] To Financial Freedom for so many people and I can help you and I will and I want to and that’s what the show is all about if you would like to reach us.

We welcome your questions they can be about anything related to real estate.

[6:59] And you can send your questions to questions at flipping America network.com

questions at flipping America network.com we’ve answered every question that’s ever come into the show and we plan to continue answering every question even if we have to put on more people a lot of the questions are the same that’s okay

you can ask us a very basic question we maybe we’ve answered it a million times we will answer it a million and one we are here

to help you we sincerely mean it and we’re dedicated to that task

now if you want to give us a call and ask your question that’s fine more than likely

you’re going to get a met you going to get an opportunity to leave a message with your question and I want you to call 404-2369.

1018 extension one now if you need to really talk to someone if you have an emergency situation or something like that you can press 0 and see where that takes you but if you just press extension one then.

[8:03] You’ll be able to leave your question or your comment and I tell you they common sexually we never played him on the show but it is so gratifying to hear the things that you’re saying.

Both about the show and also about the events and so forth that we do we thank you so much and hope that you will keep it up because it encourages us.

Okay we’re going to take a quick break when we get back I’ll take give you some other announcements.

[8:26] Music.

[9:00] You never know what’s around the corner but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living life

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The preparation of your will is included with your LegalShield membership at no additional charge.

You can protect your business or start one select a variety of business legal plans to help you keep your focus on your business

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For you or your family for your business Legal Shield is the solution for your legal needs just go to Rodger b help.

Dot-com right now just signed up that’s Rodger V Phelps. Com Legal Shield protection for every part of life.

[10:27] Music.

[10:44] I was in the process of telling you how you could get in touch with us but basically what I’d really like for you to do is just find us on face

flipping America media that’s what you look up on Facebook and then follow us on Twitter and Instagram

flipping America you get a ton of information we cover a lot of news here on the show but we don’t get to just a tiny fraction of it on the show a lot of Articles get LinkedIn sent out now I know on Instagram you’re just going to see the pretty pictures of lynx don’t really work I understand this way

Instagram works and there is some sort of a workaround but hey I’m doing all I can to stay to keep my head above water here with the show postings and all of this stuff so follow us on Twitter those links are clickable

we also post the same new stories and links on leaked LinkedIn and on her Facebook page and you know if you’re on Google Plus they’ll show up there too it’s all going all over the place all right

announcements coming up September 12th just to Thursday a week from now.

Chantel Owens the queen of tax lien just going to be at flipping Atlanta not flipping Atlanta is a networking group that we do here in the city of Atlanta that’s where the show comes from

we do the networking group The the second Thursday of every month and I want invite you to come on out then.

[12:01] I order some food at the Hudson Grille enjoy an adult beverage or two and sit down and listen to Chantel she’s a delightful person she’s been on the show and she’s just wonderful to be around and everyone loves Chantel and she really knows what she’s talking about she’s going to talk to you about the difference between

tax liens tax deeds

and up and what you need to do what you need to know how you need to research and find these opportunities and how you can be picking up properties at these auctions for pennies on the dollar that’s coming September 12th if you want more information Go to meetup.com

flipping Atlanta join the group.

[12:40] And once you join the group you’ll be able to stay in touch with everything is going on we we don’t bombard anyone with a bunch of emails but we do let you know about the upcoming events I’m one of the things that flip and landed does the group also is

sponsors a lunch every Wednesday and that lunch is usually with me right here in metro Atlanta here lately we’ve been meeting at the Huey luey Mexican restaurant Don.

Roswell Road in Sandy Springs just down the street from our office and Studios and.

We invite everyone to come all you need to do is Splenda buy lunch there is no platform no program no speaker

the agenda is set by whoever is there and whatever your questions are and some days it’s two people and some days it’s 40 most days it’s something in between we’re just happy to see if you come in from out of state.

And you join us for lunch and you tell me that you heard about it on the show your lunch is on me.

[13:33] Okay so we’ll see you on Wednesday we’ve got a couple of apps in the App Store of course you can listen to this show in the app store if you haven’t downloaded it

downloaded now and listen to the show at the apps Oliver show notes are in the app and you’re able to access everything that we’re doing behind the scenes to get prepared for the shows and

please if you would you take a minute and give us a rating in the App Store we would appreciate it the apps relatively new and we need some good ratings from you

so thank you for that all right I got emails and all kinds of stuff coming up for you in just a few minutes I think what I’m going to do is

actually I’m just going to change gears right now and go to the emails we don’t have time in this segment 2.

[14:14] Get on to our topic for the day so I’ll take a couple of your emails now then we’ll do the talk and then I will come back and more emails and close out the show that way how about that staff yeah we’re going to mix it up a little bit today

okay no problem sorry Buster from Colorado Springs Colorado the Buster I have a question for you is that your real name.

I just kidding I don’t know if anybody names are kids Buster but something happened in your life that make you take that nickname and that’s okay hate not making fun just if it’s it’s cool that’s what you want to call yourself

that’s great alright Buster from Colorado Springs I guess the reason I say that is because that’s usually something that my sister or my mom would say to me when I was in trouble boy

wait till Dad gets home Buster.

I don’t know why my brain works that way but that’s just crazy way from Colorado Springs says I’ve bought a Ski Resort Cabin with my self-directed IRA.

What is the limit on how much time I can use it each year all right this a good question and the answer is none.

[15:22] With this little caveat okay it is yours and understanding I want you to have contact your

Ira custodian and ask them the question I appreciate you asking me but I am almost certain that if you’re

self-directed Ira owns an asset like a ski resort you cannot be it you cannot do business with your self-directed IRA so

you can’t rent and you can’t stay there for free sorry I don’t think you can use it at all now if you owned it.

In some other entity you probably could use it and there are some specific rules and Taxation things about that.

[16:02] That you would need to consult with your tax professional but if you are using a self-directed IRA.

I don’t believe that you can stay in the property at all which reminds me this is a good Segway we have picked up a new sponsor for the show I’m so excited I’ll be introducing to you.

[16:20] Over the next several shows

American Ira out of Asheville North Carolina Welcome to the flipping America Network American IRA and I’m going to have someone from American diarrhea hopefully they’re found a gym hit

I will be on the show and just a day or a week or so and.

But I want to officially welcome them and you’ll be hearing a little bit more from American Ira as we go and glad to have you aboard.

Thanks for joining and then in the future will just be loving those questions about self-directed Ira is over to you and by the way since we are planning to have gym or someone from American Ira on the show really soon

go ahead right now and load up my inbox with questions about

using IRS okay as many as you can it doesn’t matter if we’ve dealt with it before we’ll deal with it again whatever your questions are about self-directed IRAs and all of the different possibilities solo case converting your 401k all of those things

I want your questions now because I just want to Ratatat tat send them to Gym machine gun style once we get on the phone all right.

When we come back from this break I’m going to talk to you a little bit about returns and then we’ve got some more questions from you listeners hang on I’ll be right back.

[17:39] Music.

[18:00] Do you want to learn how to flip houses I want to show you how to flip houses and there’s probably no one in the country better qualified than me to show you I flipped hundreds and hundreds of them.

And I also have some training and degree and experience and education so I could show you how to do exactly what I’ve done hundreds of times don’t believe me.

Head on over to put starter event.com but in the meantime Give a listen to Pat caywood.

[18:26] Cleveland Tennessee and I’ve been.

Doing some flipping since about March of this year and had started with a Nationals program that was very expensive I spent today with Roger Blankenship.

Learning about his program and boy do I wish I’d met Rodger.

[18:48] He has a clear concise program and many tools that are going to be very hot.

[18:54] And starting and managing a program and the mentorship and Leadership and coaching that he saw frame are in value.

[19:04] Thank you so much.

[19:06] Music.

[19:56] Then decide when I want to talk to you about financial returns.

[20:00] When we’re looking at a real estate investment you know and just today I got an A question in from.

One of our students actually who is going to put up $70,000 into a rehab deal to basically be a gap lender and that’s the topic for a different day but.

To make a deal possible and he wants to know what percentage of the profits I think he should be entitled to and of course

we didn’t finish the conversation unfortunately because I had to come to the show my commitment you know is to him and we’ll all get back in but my commitment is also to you and in order to make my deadline we had to jump in here and do the show but

I am.

[20:43] I asked him what’s the total investment and he said 575,000 of which you would be putting up $70,000 rest of it would be coming from the other investor in the form of a loan alright I said well.

What is the expected profit he said 70,000.

[21:03] And I said to him you know there’s no way I would do this the property I would like to know how to do this project and he said what why.

And before I could get an answer back to them I had to jump off that and jump into the show here and but I’m going to go ahead and tell you why right now if you are investing 70

thou’s if you appear missing 573

5000 to make 70000 let’s do the math here okay in order to calculate return on investment.

You take your total amount of profit now they’re saying they’re going to make $70,000 so you put 70,000 in your calculator then you hit the / button and then you put in the number of.

Is the investment and in this case it’s 575,000 and then you hit equals it’s a simple as that and so.

When you do that it says 12% let’s do it again because I was talking while I was doing it let me go.

Blankety-blank / blankety-blank way.

Equals yep you get 12% .1 to 12% all right who out there would want to make 12% on your money.

[22:22] Okay nothing wrong with that and now this project you know it may take eight months to complete

it may be done less than a year let’s say if it was done in 6 months in and out which you know seems like a pretty big project to be done in 6 months but if you could then.

We would annualize that returned and I’ll give you the math on that just a minute but you’d be talking about making 24%

this is what you have to think of when you’re thinking of a real estate deal you’re thinking about making 12% all right.

You are about to put up your money.

And you’re in a risky position when you do Gap funding because I guarantee you the lender.

Is going to be in first position and if this deal gets sideways and it doesn’t finish doesn’t make any money you’re going to be out you’re going to be out the 70,000

and not only are you not going to make any money but you’re not going to get your 70 grand back.

This the Gap funding is a a way to be involved in

a lucrative profits and they should be lucrative because your risk is extraordinary in this proposal your risk is directly connected.

[23:37] To the ability of the person that you’re investing in the operator who is going to conduct the deal if they’re good at this

then that’s one thing but the other thing is it’s possible that they’re good at this but they have made a $60,000 mistake on a $500,000 project.

And it’s a rehab It’s Not Unusual to have a $10,000 / site something something might go wrong or be over budget and so now you’re

your numbers are dropping down there’s just the out that you would want to make 12% fine if you could make 12%

that would be great but the likelihood is it won’t be 12% and I didn’t get a chance to ask him this is that the 70,000 net after all expenses including the cost of financing or it does that

is that 70000 gross and then act out of that you have to reduce the amount of interest that you paid and how is that going to be reckoned in should have

come to your side or should have just affect you know that

the prophet split of the investor itself a lot of questions to ask and I’ll take them up with my friend as soon as you get off the show but we’re talking about here is calculating return on investment.

It’s pretty simple it’s your net profit / how much money you spent on the deal that’s not too hard to find now.

[24:55] It’s not that useful though until you annualize it and by annualizing I mean.

If you calculate the rate of return is if this money had been deployed in investment of this strength for one year that allows you to compare

two different projects mean would you rather make 30003 months or 80,000 in a year a lot of that depends on how much money you have to put into it right

to get your your rate of return but and

the other thing is how long you’re holding it if you have two identical deals for your making $30,000 on $100,000 investment and you doing it in 3 months and you have a nut another deal for you make 30000 on the hundred-thousand-dollar investment and you do it in one year

then it seems like the three months would be the better deal I just seems like that intuitively right they’re both 30% returns

but that’s the deal return on investment what we need here is a good way to express a formula for calculating annualized investment.

[25:59] Again this is going to sound complicated but it’s not it’s easy enough that I’m going to give it to you on the show now if you’re driving just make a note to come back and listen to this show in a minute bout minute we’re in the 26 and 27.

On the show all right so go back to the podcast download the Apolis to get the minute 26 and 1/2 by the time I finish with these instructions will be at 26 and a half and then write down this formula you’re ready.

[26:25] Okay your formula for return on investment is net profit divided by total investment then put a big princess around that.

[26:33] And then put a Time sign and then another princess open up the print season inside the parentheses you’re going to have 365 / your whole time in days.

If we’re going to bother with this we might as well get precise and it’s not that hard to calculate your whole time and days we actually have a formula.

[26:55] That helps you calculate how long you’re going to hold a prophet a property assuming everything goes reasonably okay but there’s a little fudge Factor built into our formula there to however

if you know your whole time and days

you take 365 / that whole time and days all right let’s go back to the example we held it we made 30,000 on a hundred thousand dollar investment that’s a 30% deal return * 365

/ how long do we hold it if we held it for 4 months while we held it for a hundred did I say 3 months

performance chip for my 220 days okay so 365 / 120 is roughly 3 so are 30% return divided by 3

turns out to be a 90% annualized return.

But your other return is just so you know it took a whole year so that would be * 1 so 30% * 1 is 30% would you rather make 30% or 90% you see whole time can make a huge difference in your return.

And that’s why we annualize everything okay when we come back I’ll review that and then we’ll move on to some other Financial returns.

[28:11] Are you one of the 70% of Americans living paycheck to paycheck and tired of the stress if so I understand it I used to be in that 70.

I start investing 2003 when my network was negative eighty.

Since then I’ve built a business that generates over $500,000 a month in income and allows me the freedom to do what I want I’m Brad Chandler and I tease people just like.

How to find Freedom through real estate investing using a tactic that doesn’t require credit or tons of cash for a free training on how you too can do this please visit Brad channel.com for freedom.

Hey flipping America listeners have you ever walked into her property and said I have no idea what it will cost to repair this home.

[28:48] Music.

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just visit ultimate rehab estimator. Calm and click on plans and pricing we have for plans all designed to meet the needs of your real estate business ultimate rehab estimator works on every device you have and wherever your property is get the

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[29:39] Music.

[30:26] And we’re back I am Roger Blankenship and I teach people how to make money in real estate.

And today on the show we’re talking about returns and I’m doing a section or two here on Fancher returns but I’m going to talk about there’s more to life than just your financial returns we’re going to talk about the non-financial returns just a woman.

But let me get back on this annualized return okay we want to.

Make sure that we angel eyes are returned every time so that way we can compare one investment with another and.

This is a function of how much money you put in it and and how long you hold it so here’s the formula again the Angel Eyes return is.

[31:09] Net profit divided by.

[31:13] Total investment princess around that times new princess 365.

/ your whole time and dates close parentheses you got it that’s it that’s how you analyze the return.

And once you’ve got your brain wrapped around that formula and use it you’ll be using it all the time because you always want to be looking at annualized returns.

There are other types of returns and then fact another very important return that we use everyday in this business is called return on cash there’s a difference between the return on investment and return on cash return on investment is about the strength of the deal.

Return on cash just takes a look at the the out-of-pocket fees that you put into it and

that’s really kind of what you’re looking at but I think you should consider the return-on-investment to look at the strength of the deal but you also you should take a look at the return on cash now in real estate if you borrow money

and so you’re not using all cash for the deal your return on cash is going to be higher and sometimes much higher than your return on the investment.

As a whole.

[32:22] Okay so when you use debt you dramatically increase your return on cash of course when you use that you.

Fairly significantly reduce your return on assets

and that’s another type of financial return now this is not a show about investing in general to show about real estate but

let’s talk a little bit about some of these other types of return okay what is a return a financial return in the simplest terms is money made or lost on an investment.

[32:56] The return can be Express as a change in the dollar value of an investment over time or it can be expressed as a percentage to ride from the ratio of profit to investment and that’s what we do we do the ratio of percentage

a drive from the the ratio of property investment now I am relying a lot on Investopedia and that it’s a great resource and I’m going to

it’s in the show notes and you’ll see it in the show but you should be looking up some of the stuff on

Investopedia now return on assets I will talk about return on assets and return on equity and just.

Just very briefly return on assets as an indicator of how profitable a company is relative to its total assets I Roa the formula is net income divided by total assets this is something that you would use when you’re evaluating a company to invest in

in terms of the stock market it’s not something that we use I’m there’s another type of return called a return on equity and return on equity.

[33:58] Is reflection of how well a company uses investors money and is expressed as annual net income divided by average shareholders Equity all right

without getting into too long of

a discussion about the difference the similarities and differences between return on equity and return on assets I just want you to know that I’m aware that they exist and I am aware of the basic

the concepts of them but I’m going to refer you also to look at the Investopedia articles because they do a really nice job of explaining this and providing some examples for you.

Just be aware that they are there what we use everyday all day in our business is an understanding of return on.

Cash versus return on investment and this does have a bearing when we start

calculating things like capitalization rate on some of the rental properties in Office Buildings in that sort of thing but that’s also a little bit outside the scope of this discussion

just wanted you to know there are number of different ways of calculating returns all of them are important they have their distinctions and they give you a picture of the profitability of an investment but I really wanted to spend some time talking with you about.

Other types of returns because you know those those financial returns are great especially when you’re running a business and making decisions but there’s more to life

then decisions I want to talk to you about the non-financial returns.

[35:22] Return on effort now this actually does come to play in our business we we consider the return on effort if I can if the.

[35:32] Numbers come down on two different projects

and the numbers are identical then the next thing I go to is which one is going to be tougher to do which one is going to be.

Harder to pull off which one has more chance of going south or sideways and

I am going to go with the easier one now that I hope that you don’t think this is a reflection of character in and I hope it’s not a reflection of character to me it’s Common Sense we all have the same amount of time and we don’t have the same amount of energy

but we do have we do have the opportunity to renew our energy every day just get a good night’s sleep still we have a certain amount of time and energy that we can put into things and honestly I would rather it if two projects were

equal in every other way I will choose the easier one every time except for those times when I choose to do both because sometimes.

Will take on the easy one and the difficult one you are going to have to do that if you want to get to any kind of volume in in this business.

Show return on effort is something worth considering it’s difficult if not impossible to quantify.

[36:44] But you may not be able to put it into a spreadsheet but you know what it is when you see it.

You know this project is going to make multiple trips it’s going to be different it’s not one of our standard projects I’m going to have.

Get out and do a bunch of shopping and some people get excited about that not me I want to use the same paint colors in light fixtures and furniture and different things appliances in every house.

If I can so if it’s not a cookie-cutter deal if it’s something unusual something extra difficult something that’s just going to.

Make your life a little bit miserable or has the potential to do it then we’re going to go with the other one okay now.

[37:23] My dad brought me up with the and then drove home to me the value of hard work.

I hope you understand I don’t mind working hard I know that I make this radio show look easy but there’s some hard work involved in this

and

just some I make understanding the the math and the finances and this whole real estate business look easy I understand but I’ve worked hard to get to the point where it seems easy and second nature

and so I’m not afraid of hard work but I am going to choose the to maximize the return on my effort and that’s

books that’s not just how hard one particular project is but that’s how hard you work on certain aspects of your business and working on the right things I still see so many people putting so much effort into picking out a logo and a business card.

They need to put that effort into finding their next deal alright I’ll be back in a minute.

[38:22] Music.

[38:28] Not too long ago we did a one-day flip starter in Chattanooga Tennessee and low and behold one of my old College friends came out to the event his name is Peter Faulkner and here’s what he had to say about the event.

[38:41] Peter Falkner here I tended a one-day flip starter training session led by Rodger black.

And I was amazed to see what has happened in Rogers Live from the last $15 plus years flipping over 800 houses and then this one day training he tell how he did it and what.

Falls the blessings the benefits and how to do it and I was so impressed with how well organized and how smooth the training winners today.

You’re tempted or in courage to go go at was not a bad price and if you get a chance to do it even just to consider investing.

But I just want to thank Rodger for a great day today and appreciate what he’s doing.

[39:26] Music.

[39:39] So we talked a little bit about

Financial return in return on effort I want to talk to you about return on deeds and return on principles do you know the law of sowing and reaping does there are exceptions to the rule sometimes there is crop failure and sometimes

you do so kindness and and reap

cruelty I understand that that does happen I’ll get to that just a minute but most of the time.

[40:06] What you reap is what you sow and the Deeds that you plant now

understand that everyone listening has different or slightly different understandings of the Divine and the spiritual and so I try not to give offense to anyone here but if you want to call it God or if you want to call it the Universe I I happen to be a believer in God I do believe that what you put out there is going to come back to you

and it’s it’s kind of like a a loop it comes Arena what goes around comes around and.

If you so enough.

Chaos and difficulty and problems and so forth then you’re going to live a life that is filled with drama but if you so if you continually so Deeds of kindness.

[41:04] Doing the right thing making the good decision valuing people.

[41:13] Those things are going to come back to you as well I am living proof of this and I’m not the only one.

There are millions and millions of people like me who believe that sewing goodness into the world.

Comes back to us now it’s not because we’re just sitting here keeping score I’ve done three nice things today so three nice things need to come back to me

that’s actually a different kind of sewing right there but keeping score is not something you need to do nevermind the score just make up your mind

that this is the way I’m going to act and to get to the other thing this is the way I’m going to choose to react.

Now this is not natural but.

To respond to Cruelty with kindness is definitely going to challenge you to respond to difficult situations with not giving up.

[42:10] It’s going to be maybe the toughest thing you’ve ever faced until you get to the next tougher thing.

And then that’s the toughest thing you’ve ever faced listen people if you want to get anywhere in this life you just have to embrace.

The fact that the world is filled with difficulty there are people who will mistreat you there are people who will take advantage of you and

at first when I got into the business world people took advantage of me and I didn’t know it hit me and now.

There are people that take advantage of me and I see it coming and I’m I participate with my eyes wide open because the only alternative for me is to do something that is wrong or incorrect

towards someone else so that means that this situation is just not going to work out great for me sometimes sometimes.

I know that I am investing my time.

My experience my skills into someone who doesn’t appreciate it who isn’t going to respond in kind and I’m probably not going to get any kind of material reward out of the situation you know what

I’m okay with that because I do believe in the longer View and here’s the thing.

[43:28] When you get to a point.

Where you were saying I did nothing but so kindness and goodness into this situation and all I brought me was misery and heartache

and I was not repaid kindness for kindness and so the law of sowing and reaping isn’t true.

That last statement is the only part of that that I’m going to disagree with you see.

We don’t know how long the season is in the sowing and reaping of life it could be that.

[44:05] You are going to reap at a later time.

[44:10] In fact I believe it’s almost a certainty that you will it may not be now it may not even be in this lifetime.

[44:20] It may be in the next lifetime.

[44:27] Because I do believe in rewards after this life I do believe that there

is the type of judgment coming in an evaluation of the things that we do here on Earth and it makes it worse doing the right thing even if it doesn’t come back to you and material ways right now

and in fact if it means that you put yourself into a position where it allows other people to come and take advantage of you the story is long.

Don’t give into interpreting Life by what’s happening in the moment.

[45:05] So what should you plant this well this is why I plant valuing people.

[45:14] If you know if you just if you’re guiding ethic is to Value people.

Jesus said love others as you love yourself which actually was a quotation from the book of Deuteronomy.

In the Old Testament just love doing to others as you would have them do unto you love others love God and love your fellow man.

And in those two principles hang all of the law and the prophets just anything that

you could want guidance for if it shows the way of Love toward your fellow humans it’s a good thing and it’s a good way to sew and it’s a good thing that will come back to you in our programs here we teach you know how to rehab a house we teach

fix it like your mama is moving in this is our interpretation of the Golden Rule

we have bought houses that have been where the work has been started by other rehabbers and I’m embarrassed by the things that they have done to these houses because they’re just taking shortcuts to save themselves money

that end up creating problems for the future owners of the house that’s not the way to roll folks.

Look I don’t want to get all judgy on you or anything like that but I’m just telling you there is a there is a sowing and reaping and I’m talking about getting a good return not just on your investment but a return on your life.

[46:39] That’s what it’s about I don’t really have enough time to

do justice to some of these questions that we have sitting here and so I’ve got a little bit of an announcement that we’ve been holding onto and it’s probably too soon to say.

Stay tuned folks because flipping America is growing

I’m just got word today that we are about to be on at least one more station and we may be on the verge of adding several more stations and this is all thanks to you thanks to my tremendous team here in

flipping America headquarters who help me.

Put things together and the thank you to you for listening and for your kind words and your constant stream of questions and and

the comments that you send we’re just so grateful for the opportunity to serve you and in just a few days I think we’re going to be able to announce that

we’re going to be able to serve more people as we add more and more stations to the flipping America Network.

[47:40] Alright we’ll get back to your questions right after this break will be right back.

[47:44] Music.

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[49:25] Music.

[49:39] Andy from Long Beach California says I’m looking at a flip here in Long Beach the house is a rundown 1800 square foot three one that I can buy for 600k.

It just blows my mind I put 70000 into it and can sell it for 800.

[49:56] But when I calculate the interest for a loan to do this it’s it almost seems not worth doing I have to put a hundred thousand into it and in the end on that about 30,000

am I looking at this wrong is there something else I should be doing with the money oh Andy I think that you kind of answered your question they’re just by the way you.

Phrase the question you’re not looking at it wrong if you’re putting a hundred thousand into it and knitting about 30 well there are worse things you could do with your money stick it into a CD or into a Bank savings account would be examples of that

and look I’m not here to give you money advice but I am helping I am here to help you see what’s going on with the real estate investment okay

Dubai run down 3-1 that for 600 you put 70 in y’all into 672 sell it for 800 when you calculate the interest at the out you know that looks like your you might make in fact I think you’d be doing well to make 30000 on that if you have a hard money

loan involved so

you have to ask yourself first of all how long is it going to take remember we were talking about Returns on the show if you can do this project in 6 months in and out

and you can make 30000 on your hundred thousand that’s not so bad because that’s a 60% annualized return on that money.

[51:14] There are few places you can go to get that kind of return no that’s not a return on the deal that’s a return on your cash but that’s all right if that hundred thousand is all the cash that you have into it you know.

[51:28] What you need to do Indians think about the other things you could do with your hundred thousand dollars over the next 6 months what could you do if you could buy some Bitcoin

you could buy some stock and that might be all right.

But you know there are some that think the stock market is kind of beat I don’t know I’m not an expert enough on stock market to tell you one way or the other I know it’s been if you bought

into the stock market in 2007 right after the crash you’re sitting pretty now or even if you bought into the stock market right after the election 2016 you’d be sitting pretty right now but who knows what the future is going to be my stock market.

A crystal ball is is so broken I don’t think I’m ever going to get it out of the shop and I’m not even trying to get it fixed because I can’t see what will happen with stock market I like real estate because it moves slower it’s easier to predict

ghetto hit makes me look like a genius but you are not looking at this wrong.

[52:28] And it’s an awful lot of work to make $30,000.

And as far as is there something else you should be doing with the money maybe you should think about a couple of things okay perhaps you should think about Turn Key Rentals

you’re not going to make that kind of return but it’s not going to be that much work either and the other thing that you should look at is possibly putting your money into a long-distance flip.

[52:53] And.

We can talk a little bit more about that people have been asked me to devote a whole show to and I don’t really know that it needs a whole show but on a long-distance flip you got to have good resources on the ground on the other end if you got that

then you have people that you can trust to her confidence and they’re going to make sure this thing happens then your money might be better spent somewhere else

but in the end.

Do you have to decide whether you want to put the money into someone else’s hands and trust them to get you a return or if you want to still control things that it’s not just a matter of risk it’s a matter of control with those of us who are putting our own money into a real estate deals that’s really what it kind of boils down to

I’m not sure I answered your question Andy because I’m not sure I

I know enough about what’s going on in your mind and in your heart for these things but hopefully that little bit right there if you just think about your risk tolerance in your desire to control versus your ability to network around.

And other areas and across the country and maybe put your money into a little bit higher return deals but.

I’ll be out 30k on the 830 K on the 607 investment that’s a not a very good return it all that’s honestly a deal I would not do.

Regardless of the return on cash because there are much better deals to be found all over the place.

[54:22] Caroline from Birmingham Alabama says I just heard about your internship and read about it on your website am I too late to join well good news Caroline it’s never too late to join actually.

Let me modify that by saying it gets too late every month but then you get another chance next month so it is too late to join for September but it’s not too late to join us for October and we will start another batch of the interns

in

[54:50] Night at the 1st of October and summer asking about you know what this is really we had an internship program this summer.

And it went so well the interns learned so much so quickly that we’ve decided to open up that opportunity to the people or two others who wanted just

come for mentoring and training

and if you can come to Atlanta for a few days at the beginning of the month and get some training and information and data and then some reps that’s what it really boils down to we put you in front of live data from our lead set

and this will happen about the second week of each month and

oh you know we’ll get in you know a few hundred or thousand leads and will divide them up and and you just go at it cuz the first thing we’re going to teach you is how to analyze a property to know whether or not it’s a deal and

then we’re going to show you how to do a little bit of skip tracing to find people from these leads and and make some phone calls and perhaps earn some money

using our leads but you’re earning money.

And that’s how we have people who are paying for their own internship we have a young man that join the program just about 3 weeks ago and already has his first house under contract and so the.

[56:11] Is finder’s fee that he’s getting paid out of this will pay him back for his monthly fee for the internship program is a year-long program and do you have an opportunity to earn.

Money to pay for your training as you go using our information our leads our resources and.

It’s a beautiful thing.

[56:35] So Caroline it’s it’s too late for September but it’s not too late for October all you need to do if you want to sign up for this is go to flipping America network.com forward.

Internship that Simeon t e r n s h i p see what we did there we combine men mentoring with internship.

The other thing you can do is just go to the website flipping America network.com and it’ll fly up right in front of you right at the top of the page you can just click on that whole section is just one big link

you can click on that and it’ll take you to the mentoring ship

if there’s a video there now and the testimonial from someone else participating in it you can see what it’s about you can join.

We only take 10 people a month in the program because well that’s all we can handle

our office isn’t that big and we want to get you in get strength and and and give you individual attention to help answer your questions and move you along in the program so by month number 3 you’re ready start helping other people who are coming along behind you

it’s kind of a cool thing I Caroline thanks for that question.

[57:44] Albert from Pennsylvania Harrisburg Pennsylvania says how do you handle buying deals from HUD thanks or wholesalers that do not allow a due diligence.

Well the answer is we Boogie out there to the house very quickly and take a look at it if you get a good deal under contract you have 24 hours to finish the paperwork and void.

If we haven’t seen the house we definitely want to see it within that 24 hours sometimes we forget.

With banks you got to get in there ahead of time and with wholesalers same thing you got to get in there ahead of time you have to see the house and you have to get good at doing your inspections.

And later on maybe if we have some time I’ll answer the question about why people do their why Banks and institutions don’t allow due diligence.

But we’re out of time for today folks thank you so much for joining and for listening and we look forward to talking to you again just a couple of days.

[58:35] Music.

[59:01] Helen Keller said optimism is the faith that leads to achievement nothing can be done without hope and confidence.

This thought was brought to you by the foundation for Renewal working together with communities Nationwide to bring lasting impact and life change find them on the way back renewal fund. Net and is always your gift is tax deductible and much appreciated see you soon.

[59:22] Music.

[59:32] This has been flipping America real estate investing for everyone.

If you have questions about real estate Investments send them to questions at flipping America radio.com listen every Monday at 11 Thursdays and Saturdays at 10 on stations across the country or on iheartradio.com.

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