You want to reap the benefits of investing in real estate without all — or without any — of the work. This show is for you. There are several ways you can do this, but one of them is to purchase a Turn-Key Rental and that’s what we are talking about today. In a few moments I’ll be joined by Antoine Martel who started right out of college investing in rental properties – NOT in California where he lives, but in Memphis and Cleveland. How does it do it? Stay tuned and you’ll find out.
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Real Estate Investing QuickStart
- The Flipping America REIA meets every Wednesday from noon to 2 and Thursday from 7-9. You can join the REIA and learn real estate investing from the comfort of your own home, or get together with a few friends and form a chapter in your area. Learn more at flippingamericareia.com.
- 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.
- FlipCalcs allows you to enter one data set about a property and consider up to six deal ppossibilities.
- “Real Estate Investing Quick Start” Fifteen lessons to start your real estate investing career. Study from the comfort of your own home. I give you 8 action assignments in lesson 1 and show you how to complete them while holding your feet to the fire over the next 15 lessons. bit.ly/requickstart.
- Are you stocked up? The best time of the year is just a couple of months away. https://www.housingwire.com/articles/the-best-time-to-sell-a-house-is-quickly-approaching/
- Good tips on Turn-Key Rentals. https://money.usnews.com/investing/real-estate-investments/articles/things-to-know-about-turnkey-real-estate-investments-for-retirement
- Questions you should ask yourself when considering your real estate investing options. https://www.fool.com/millionacres/real-estate-investing/articles/best-place-invest-real-estate/
- Of all the things you could name your new real estate company, let’s go for something that screams “unprofessional.” https://www.housingwire.com/articles/real-estate-and-mortgage-startup-homie-raises-23-million/
Guest: Antoine Martel
- Flipping America 313, Best Places for Rentals
- Amanda, Memphis, TN “Would you say that real estate investing is better than the stock market? I kinda think you would, but I want to hear it from you.”
- It depends. An experienced stock investor / day trader might achieve the same returns as an experienced real estate investor. In that case, I say “do what you know and enjoy.” If you are inexperienced in both and relying on the returns from an indexed stock fund compared to standard real estate appreciation, the stock market is going to appear to perform better every time. The secrets in real estate however involve the gains that can be realized through leverage, depreciation, and growth in equity over time.
- Juan, Houston, TX “I have a good job I want to keep, and I want to invest in real estate but don’t make enough extra money to enable that. What would you do?”
- What I would do when I were younger would NOT have been what I would recommend now. That’s because I wasn’t as smart then as I am now. What I would do NOW is adjust my lifestyle. You really only have two options. You have to either take on a side hustle to earn money to invest in real estate, or your have to decrease your living expenses to save money. Your side hustle could be real estate wholesaling or deal structuring, but there is no avoiding the time needed for this. Those are your options.
- Millie, Pontiac, MI “Ten years ago my husband got transferred. We rented out our house in Columbus, OH and it’s been a continual problem. We’ve tried a couple of property management companies and it really isn’t any better. We want to get rid of it and it looks like we are no longer upside down on it, but we hate to dump it and not make any money. It needs a few minor repairs and a major update. Tell us what we need to be thinking about in order to make this decision.”
- You are correct if you do not think about this as your home. You don’t live there. This is an investment property and should be treated that way. As such it has a fixed daily cost. You need to know this number so you can feel the pain of it sitting there empty. One small difference is if you have a loan on it, you are probably paying down the balance a little each month, which is better than the interest-only loans used by house flippers.
- When thinking about repairs, I always first fix everything that is broken and then I evaluate all of the “nice-to-have” items in the rehab. The first thing I want to know is what the financial return will be for each expense. If I spend 15,000 in the kitchen, will I be able to sell the house for $30,000 more? I rank the rehab priorities according to the financial return.
- Then I rank them according to my opinion about how much more quickly they will help me sell the house. This is a bit of guesswork and the realtor can help. If I spend $3000 for no increased price but the house will sell 60 days sooner, I will spend the money. It’s still the smart play. Every rehab decision runs through this grid and we acknowledge there is some guesswork involved but it’s better than not thinking it through at all.
- Carson, Brookfield, WI “Do you ever get those really cheap houses here in Wisconsin?”
- Yes! Recently in Milwaukee and currently in Catawba!
- Kyle, Atlanta, GA “What are the criteria you use for the inexpensive houses you buy around the country?”
Motivational Thoughts for the day
“There is no royal road to anything. One thing at a time, all things in succession. That which grows fast, withers as rapidly. That which grows slowly, endures.”
– Josiah Gilbert Holland
Expected Air Date: Sat 2/29/2020
Guest: Antoine Martel