In this episode, I discuss recent headlines as they pertain to our current and future financial crisis. Recently, Tax Attorney Mark Kohler put out a great video about proposed changes to tax law that could have a massive impact on those who use IRA's to invest. You can watch this on youtube by following this link: HTTP://CashFlowGuys.com/IRAdrama This impacts house flippers, real estate syndicators, and the like across the board. Should you sit on the sidelines and let this unfold before you invest again? Does it make sense to buy now? These are the topics I discuss in this episode.
Mais episódios de "Cash Flow Guys Podcast"
311 - Getting Max Value All The Time
26:30When positioning property for sale there are several factors to consider in regard to getting top dollar. Many homeowners feel that they need to spend money to complete improvements for the next owner of the home whom they have yet to meet. First, how could you possibly be able to accurately pick what the future buyer would want? How do you know they want terra cotta accent walls? What if they don’t like that shade of blue? These are questions you should be asking yourself before you do any improvements to a property in preparation for sale. Keep colors neutral so you can appeal to the largest number of buyers. Cleaning and decluttering often bring more ROI than repairs do. In over 20 years of selling real estate, I’ve come to the realization that 90% of buyers will complain about the improvements you choose to make. If you are selling your current home, or perhaps one you inherited, consider first cleaning and decluttering. Have an estate sale or garage sale and get rid of all the extra stuff. If you are a home flipper, find a new construction model home in your market and go walk the models. Notice the colors they choose and the amenities they provide, those choices come from market research. Homebuilders put lots of effort into maximizing efficiency on new builds, and frankly, doing what they do can save you a fortune. I know home flippers that follow the other flippers they see in the market in regard to finishings and such without ever visiting a new construction model. What happens is a classic case of the blind leading the blind. One flipper makes a bad design choice and is quickly copied by the next ten flippers behind him. The end result is a bunch of crappy renovations that nobody wants. I recently had a home seller ask me if they should do any improvements to their home before selling. It was a really cool historic home located in a great neighborhood that was in full swing in regard to gentrification. Several homes in the neighborhood have been renovated making the neighborhood a crown jewel of the area. The seller’s home did show some deferred maintenance but had curb appeal and was in an ideal location. This home would be a great renovation project for an incoming homeowner in a neighborhood that boasted pride of ownership. Because of the type of home, it was and the location, it would bring top dollar in its current condition with no money invested in improvements. I explained to the seller that I could bring them a buyer willing to pay between $550K to $575k for their home as is, no repairs or upgrades, just move out and clean.. Instead, they chose to list it with “the neighborhood agent” for $515,000 in August. They said the other agent had sold 50+ homes in the neighborhood which is what made them choose the local lady. They went on to say that the agent said they will need to replace the roof, A/C, refinish floors, paint, on and on which wound up costing them around $30k give or take to complete. The price dropped $16,000 twenty days after listing, then another $20,000 a week later, then $10,000 two weeks after that, two more weeks dropped the price another $10,000 and it finally went under contract on 10/15 with a list price of $459,000. It’s still not closed so only time will tell what it sold for (assuming the agent can get the deal closed). In this case, the seller lost out on $146,000 or more ($30,000 of which was in improvements). All due to bad advice and an ineffective marketing strategy. To get top dollar for any property, the whole world needs to know it’s for sale. You don’t have to try to trick anyone by putting lipstick on a pig, instead, invest that money in your marketing. Run paid ads on Facebook, Instagram, Youtube, Twitter, Wall Street Journal (for higher-end houses), and so on. Make the house viral on social media. Doing so can often bring you more money than ever thought possible in your wildest dreams. I have so many true stories of how I have used purely marketing strategy to give my sellers heart palpitations when the offers start to roll in. This happens because everyone with eyes and ears knows the property is for sale. I truly believe there is a buyer for every house. In almost every instance, the reason a property isn’t selling isn’t a price problem, its a marketing problem. The buying public does not perceive the true value of the home because you simply have not found the right buyer. Without guerilla marketing finding the highest paying buyer will never happen. Folks, it’s no rocket science to sell your next property at a price so high it sets the market, you just need to hire the right team to help you get it there. That team can be a Realtor or Wholesaler who is a marketing expert or a marketing expert that will bring cash-wielding buyers to your front door. Either way, unless you can get people to the front door in droves (without using price as a motivator) you’ll never see top dollar and have to live with leaving money on the table.
310 - Keep Your Asset Covered
19:11In this episode, I’m going to tell you a true story about a situation that happened to me recently regarding one of my properties. We have owned this one since 2014 and currently operate all the apartments as short-term rentals. In 2016 when we made the switch from long-term to short-term tenancy I met with my insurance agent at the time to be sure I had adequate coverage for the change of use. I figured that the property would be subjected to a bit more use and abuse due to the short-term nature of our tenant’s stays. My agent suggested that I simply purchase an additional liability policy that would cover any claims of damage or liability that stemmed from the short-term occupancy. The cost of the plan was only $1200 a year which was well within my budget since the property consistently cashflows 10x that or more each month. In 2020, my insurance agent sold his practice to another agent and retired. I did not find this out until 6 months after the sale which irked me a bit I must admit. After chasing down the new agent for well over two months, I finally received a call back where he explained he has been “busy” with the takeover of the agency. I ask that my policy be reviewed to be sure it still provided adequate coverage for my short-term rental which he acknowledged that it did. This fall, while speaking with one of the agents in the office on an unrelated issue the conversation came up about policy renewal. I asked if it was still necessary to have three separate policies due to the Airbnb situation which she replied that my wind policy would not offer any coverage in the event of wind damage from a hurricane or likewise if I was using the units as short term rentals. You can imagine my feeling when I discovered that all along I have been underinsured! If I had suffered a loss at any time over the last 7 years due to a storm or wind damage I would have zero coverage available to me. Let’s not even get into the wasted money of paying for the wrong policy, EVEN after being proactive about full and unsolicited disclosure about exactly how I operate that property. The agent determined that I had to switch to a commercial insurance policy because of the AIRBNB element. This increased my annual insurance costs by over $6,000 per year. As you might imagine I wasn’t real pleased about receiving this news but at the same time, I am thankful the issue was discovered and hopefully corrected. I must say, after this debacle, I am very insecure about whether or not I have the proper coverage. I certainly don’t want to pay for coverage I don’t need, nor do I want to risk being under-insured. Clearly, I need to have another licensed insurance agent take a look at this situation which has proven to be a challenge all by itself. It seems no insurance agent in Florida needs more customers. They don’t answer the phone, respond to email or website inquiries. Even those who referred to me simply will not respond. After about trying over two dozen companies I finally got one to call me back only to learn that they would not consider quoting the policy without me proving my roof was under ten years old. I was dumbfounded to hear this because the effective age of a pitched shingle roof in Florida is 20-25 years, yet now the insurance companies have decided that they no longer like that timeframe. Fortunately, the roof was on schedule to be replaced this year anyway so needless to say we expedited that process and are now awaiting the materials to arrive for the roofer to begin the project. Once that’s done the roofer will provide me a 4 point inspection form and proof the job was completed that I can turn over to my current and future insurance companies. In the end, it’s the cost of doing business. I could choose to get all upset about it, sell off my portfolio and trade crypto in my Mom’s basement, yet that would be foolish. When I consider the $100,000’s of thousands of dollars of legally tax-free income I have earned from this investment property over the years, the costs I mention in this episode become small and insignificant. In summary, how you choose to interpret things that happen will make you or break you. Those that crack under pressure are generally the same people whose property I wind up buying at a bargain price because they simply chose to fail. Instead, choose to succeed, find a solution because I assure you there is a solution for each and every problem you face.
309 - How To Make Money From Offerpad
18:41In this episode, I uncover a recent discovery I made (by accident) and how you can profit from it. The iBuyer craze is taking America by storm until this week, Zillow jumped off the bandwagon, cut loose 25% of its staff, and is dumping inventory like mad. I'll uncover how you can leverage this service to your advantage no matter if you are a seller, Realtor, Wholesaler or Rehabber. Don't miss this one!
308 - Monkey See Monkey Do
33:05When I see a dangerous trend that impacts lots of people who listen to this podcast, I feel it’s my duty to create an episode to explain what I am seeing in hopes that you will take pause and dig a little deeper before you jump off that cliff. I’ve done my best to keep you up to speed on trends I discover that end up trapping good people into difficult situations. When I first got started, I followed the herd-like most of us do. I flipped houses first, then later wholesaled for a while. While I made some serious cash doing these things, I also wound up paying far too much of my earnings to the IRS in the form of tax. I also overpaid mailing houses, sign companies, call centers, software salesmen, and asset protection lawyers that said I needed a bunch of LLS’s, trust, and other nonsense. Recently I’ve been learning about investing in / trading cryptocurrency. I’ve read books, watched YouTube videos, read forums and chat groups, and dabbled in it myself. I still have lots to learn (tech analysis), discovery and rationalization of trends, and so forth. I have discovered that public opinion or group thinking is often the driver of cryptocurrency performance and not so much the technology. There are groups of people who spend their days and nights offering unsolicited advice on crypto without any sort of credentials being presented or discussed. For all I know I could be talking to some teenager in his mom’s basement. When Elon Musk, Mark Cuban, Robert Kiyosaki, Logan Paul (YouTuber), Gene Simmons, and Snoop Dog speak, what they say influences the financial markets of cryptocurrency. I gotta say, such a phenomenon does not make me comfortable with cryptocurrency in any way shape, or form. In fact, it keeps me from investing any large amount of money in this space. I’m not saying crypto is bad, evil, shady or anything like that I’m just saying before you leap in, might want to swim around in the shallow end and get a feel for your risk tolerance before proceeding past your comfort zone of loss. When you invest in anything be sure to never invest more than you are willing to lose. I decided my magic number was $5,000 for crypto. Although the investment has grown quite a bit, I also realize that if Snoop Dogg can’t find weed because of the supply chain issues then it’s likely he may tweet out some nonsense to wipe out my profits. As I dig into learning more about the chart analysis of crypto, the more I see and come to understand how market cap and trading volume impacts the price of crypto, unlike stocks, those are generally the two metrics available to track. Please note both of those are directly impacted by emotion and the public consensus on the very second a crypto buyer executes a trade. The bottom line is that we all need to do our best to avoid playing monkey see monkey do when it comes to investing. Take a time out to learn about what you plan to invest in, how profits are derived, know the risks and only invest that which you are willing to lose until you get to a place where you feel comfortable taking bigger steps.
307 - Lets Talk About This Crisis Situation
29:16In this episode, I discuss how the current events happening in our daily lives eventually wind up holding us back from making forward progress. I dive into the most important thing that you can do to protect yourself from the uncomfortable changes in your life from an economic standpoint.
306 - Never Trust The HOA with Attorney Shawn Yesner
35:38In this episode, I bring back my Real Estate Attorney Shawn Yesner to discuss HOA foreclosure issues that are rapidly becoming more commonplace. This episode is packed with the info you need to avoid this common "gotcha" that catches many real estate investors off guard and can cost you hundreds of thousands of dollars. To connect with Shawn go to YesnerLaw.com
305 - What The US Debt Limit Means For You
33:09There's been a lot of chatter lately about the US Debt Limit "crisis" that was created by our elected officials. I'm not suggesting its not a crisis, it certainly is, yet 100% of the blame is shared by our elected officials on both sides. The easiest way to understand it is to think of it as a credit card that has a credit limit. Imagine if you paid all your bills using that card and suddenly decided you wanted (or needed) to buy more stuff. If the credit line is maxed out, simply call the bank and ask for a higher line of credit...what could go wrong? LOTS, lots can go wrong. There is an unimaginable amount of bad information spewing from Washington DC on this topic which is why I made this episode. It's time for you to take action to protect yourself from our elected criminals. This episode will help explain what's really going on, how we arrived here, and then offer suggestions on how to prepare yourself to weather the storm. SHould you be nervous about the debt limit? No, but you should be taking steps to prepare and to protect your financial future.
304 - The Subtle Art of Raising The Rent
28:26For every landlord, the day comes where we find the need to raise the rents. For many, this is a routine that happens annually or semi-annually. The event can bring with it a bunch of emotions from landlords and their tenants, some good, some bad, some indifferent. Nonetheless, there is a "right way" to raise the rent such that the most desired outcome for you is probable and that's what I am discussing in this week's episode.
303 - Can They Prove It?
33:02“Deal Shopping” tends to lend itself to the rose-colored glasses effect, everything is great, no worries here, this place is just under-rented, all ya gotta do is buy it and POOF double the rents and get rich right? WRONG Before we go any further, let’s discuss the two types of vacancies. Physical vacancy applies to actually empty units (nobody living in them) Economic vacancy identifies the difference between the potential (proforma) rent and the actual rent. As a passive investor investing in someone else’s deal, it’s a good idea to perform your own independent market research. Your findings should align with the finding of your deal sponsor. If you are buying a property yourself as an active investor, the same is true. You can’t count on the Wholesaler, Broker, or Seller to be accurate with the information they provide. It’s not that they are lying necessarily, instead, it’s more likely that they simply were not willing to do their homework if they are the Broker, Wholesaler, or Deal Sponsor. If the seller is off, I often find they are conveying what the “feel” it will rent. Let’s keep in mind that they never actually get that much, after all, they don’t want the tenants to leave right? In this episode, I’m going to break down how you can assemble the most accurate information available. Its making decisions based on facts that will keep you safe during your investing journey. If you want to learn more about what I am up to in Key West as far as my upcoming deals, go to keywestcashflow.com/call and schedule a time to get on my calendar to discuss our plans down here and how we might be able to work together in the future.
302 - What Financial Crisis?
24:32In this episode, I discuss recent headlines as they pertain to our current and future financial crisis. Recently, Tax Attorney Mark Kohler put out a great video about proposed changes to tax law that could have a massive impact on those who use IRA's to invest. You can watch this on youtube by following this link: HTTP://CashFlowGuys.com/IRAdrama This impacts house flippers, real estate syndicators, and the like across the board. Should you sit on the sidelines and let this unfold before you invest again? Does it make sense to buy now? These are the topics I discuss in this episode.