The Downpayment

Down payments are a real dividing line when getting into real estate. It is almost like a four year degree. Everyone goes to high school, but not everyone has the endurance to make it through college. Similarly, everyone has a place to live, but not everyone buys a place to live. For most, this is due to having to save up for a downpayment.

I can’t tell you how many times people tell me they want to make passive income on real estate. They tell me that, but then they save no money for a downpayment. It’s too hard. They don’t want to make any kind of sacrifice. Instead, I hear excuses as to why they can’t save up enough to buy their first property. I want you to understand, making passive income on real estate isn’t hard, but you can’t be lazy. You have to save up for that down payment. Now I hear some of you saying. “Ken, I make just enough money to take care of myself and my family. There is just no way I can save money.” You know what I say to that? You’re not being creative enough.

Here are two stories I have for you of people making minimum wage that invested in real estate. The first was a young couple each working minimum wage jobs. They decided to rent a 2 bedroom condo and lease one room out for $500 a month. That helped them have a lower rent payment and they were able to save money each month. They also each cut back on their spending for two years. After two years time they bought a two bedroom condo in Austin. They kept that roommate which was cash flowing them $500 a month and now have purchased their second rental. All because they made the sacrifice of living with someone else. Is that something you could do? Could you rent a room in the place you are living to make extra money each month?

My second story was a 24 year old girl. She was barely making it between student loans and her low paying job. She posted dog sitting services on Rover and used the money to start saving for a rental. She became so busy that she didn’t even need an apartment. She was overnight dog sitting about 26 days a month. She then just paid her friend $100 a month to store her things and she would stay there on a night she was off. Within 2 years she had enough for a down payment on her first home. She now uses it as a dog daycare as well. Which covers her mortgage each month. She is now saving for a second rental.

In these two stories of people I personally know they didn’t have a lot. They had to work really hard to save the money for their first home and rental, but they weren’t lazy. They didn’t expect it to fall in their lap. But what it did is is allotted them the opportunity to get into real estate. Now, they have cashflow whether from a home based business or a roommate to then take that money and continue to invest. To begin is the hardest part, but remember don’t be lazy….but do be creative.

Talk to you soon,

Ken

The 4 Keys to CORRECTLY Invest in Real Estate..

The average person doesn’t know how to get started investing in real estate, and therefore, gets their cash flow from a nine to five job. That scenario is the exact opposite of being financially free, because cash flow doesn’t come from depending on a job you have to go to everyday in order to get paid. Financial independence happens through investing in things that make money for you.

Now, real estate investing may look like risky business to some, and that’s true, because it definitely can be. But just about anyone who works smart enough, and hard enough, can use real estate investing as a way to increase their wealth. Many people ask why they should invest their money in real estate. I say because future retirement based on cash flow from a rental property isn’t a dream, it’s a real-life possibility.

So here are a few of the keys, from a much larger list, to investing in real estate:

• Pick Moderately Priced Properties. Keep in mind that expensive homes in sought after areas like the oceanfront usually have low cash flow returns. You’d be better off investing in a more moderately priced property with a higher cash return.

To learn what the other three are click here!

 

Facebook Forum – Question of the Week

If you are a premium member of KenMcElroy.com you are invited to join my new Facebook group! I’ll be jumping in to answer questions from you about real estate, leadership, entrepreneurship and life. I’ll hope you’ll join me in this new forum. If you’re not a premium member sign-up here, and then send a request to join us on the inside.

Each week I’ll pull a question from the forum and present it here. Below is this week’s question.

Do you think we’re close to another market crash like in 2011?

Ken McElroy:

“I don’t. That crash was excessive lending that led to poor buying decisions which was all unmanaged. Lenders are much more stringent right now which is good. Right now we might see crashes in Retail RE and possibly Malls and Office (mostly due to direct to consumer) purchasing. Multifamily and Industrial is VERY strong and shows no sign of weakness into 2020.”

Investing in Mobile Home Parks

Affordable housing is a legitimate concern in the real estate market. Not only considering when buying for yourself but also thinking of long term rental properties to own as well. Mobile home parks are a two sided coin. On one hand, they are usually fairly easy to obtain properties and most can be acquired for under fifty thousand. On the other hand, depending on the property itself, the city or town may look down on the property for poverty level or crime rates. There are ways that you can invest in mobile home parks to make sure that you are keeping a long term cash flow at hand.

Challenges

There are many challenges that one might face when looking into purchasing a property in a mobile home park. You have to be realistic about where you’re buying and the cultural climate, no matter where you are buying properties. When you are realistic about the cultural climate going into a property then you can prepare yourself for anything that might arise. There are also challenges that arise when trying to create mobile home parks to increase your rental revenue in a certain area. Most cities do not want mobile harm parks because they are within the belief that they bring higher crime rates to the area.

Benefits

There are also many benefits to look into when deciding on purchasing a pre existing or creating a mobile home park for your own benefit. You can use it to your benefit for paying off land, where tenants will pay the land fees while the value of the land will continue to go up. You can aquire a newly renovated mobile home for an average of forty-five thousand and with the ability to rent at two to three times below the market rate, you can usually acquire long term tenants somewhat faster than you can with other properties. This is a great buy for people who are new to the world of buying and renting properties. You go in with less capital than you would for most other properties and can buy multiple at a time.

Conclusion

Mobile home parks, like any other investment have both upsides and downsides. It is about finding the right property or the right land to place the mobile home on. Location has a lot to do with how things will turn out in the long run. If you choose to purchase for an area with a high crime rate then you run the risk of the city not wanting to host any mobile homes at all. You also run the risk of having issues with break ins and crimes of other sorts. On the other hand, if you use the mobile homes to assist in land buys, then you can have the tenant pay the land fees and continue to hold on to the land as the value goes up over the years.

You have to weigh out the positives and the negatives when dealing with mobile homes whether you are purchasing them as rental properties or acquiring them to put onto land that you are buying. If you can find the correct location and the best deals for both the acquisition of the mobile home and the land, they can make for a very lucrative long term deal.

2020 Moving Forward Through Uncertainty

Join Ken as he talks with Blair Singer about how he is approaching the uncertainty going forward.

To learn more about Ken visit: https://kenmcelroy.com/membership-registration/

To learn more about Blair visit his website at: https://blairsinger.com

Episode Transcript:

Ken McElroy (00:01):
Welcome to the real estate strategies podcast. I’m Ken McElroy and I’m here to give you creative ideas on how you can get started or continue your journey in real estate. Each week we will bring you inspiring and informative conversations with successful people and their path to obtaining or investing in real estate. Enjoy the episode.

Hey everybody. It’s Ken. Hey, look, we’re stopped in the office. My good friend, Blair singer. Hey Blaire. Good to see you, man. Hey, not too close, not too close. By the way. Check this out. Social distancing. We’re practicing it. Don’t touch that. So, uh, we are making sure that we’re, uh, we keep our distances, but, uh, Blair, uh, texted me this morning and he’s actually working on a deal down the road and I said, Hey, why don’t you come by? I’m at the office. Uh, I’m actually an investor in that deal. So we haven’t talked about it yet, but, uh, I would imagine it’s going to be a very interesting discussion with what’s going on with everything that’s happening right now. So, um, so first of all, uh, you know, Blair obviously owns properties. He’s an investor. He’s got cash flowing properties. He’s got lots of, lots of, lots of books.
He, he trains all over the world. He actually helped me significantly, uh, do presentations from stage back when I first started with rich dad 20 some years ago, I remember we were in New York and I remember I was scared to death. This is how Robert Kiyosaki does things by the way. He’s like, you remember that you’re up. Yeah. He’s like, Hey, come on, come to New York. I fly to New York and I’m a real estate guy and I’m, and there’s 4,500 people at this place in New York. And he goes, you’re up. So I started, walked up on stage and did my first talk in front of a somewhere over 4,000 people. And um, you know, I’m sure I fumbled through it horribly. And uh, but I, afterwards Blair grabbed me, he said, I see, I’ve just figured out, you know, how you can make your presentation even better. Basically what you did. And he broke it up into four or five things and it was kind of my launch to be able to speak. And, and present and, and all that. And, and Blair does that internationally, right. All over the world, all over the world. So blur real quickly for those people that don’t know you, once you give them a 32nd commercial.

Blair Singer (02:24):
Yeah, sure. No problem. Yeah. And cause that’s exactly what I, one of the things that I do, I’ve worked with entrepreneurs all over the world for the last 15 years, helping them increase their cash flow through sales and pull their teams together and create, get the message out to the world. That’s what we were working on is, you know, you get the ability to present, to present your dream, your, your mission, your product, your service to the world. So rather than going one on one, go one to many, and right now in this environment, the ability to go one to many is critical. So we’ve been doing that, you know, over 15 countries around them.

Ken McElroy (03:00):
I know. It’s been so fun, honestly, and I’ve learned so much from you. Um, so first of all, thanks, uh, literally, uh, guys this morning I said, Hey, you want to come in and, and um, and do something with us? He said, absolutely. Um, because usually you’re traveling a lot. I travel now. Yeah, I know. I know. Usually you’re all over the world and hopefully you quarantine yourself cause I don’t know. Where’d you come back from last? Well, actually, where was I last? I was actually in Germany last I was in Germany and it was there and then came back to Ohio to be with my family and then back here and then everything just kind of locked down. So we’re holding steady. So I know you have a lot of clients all over the world. Um, what are we, you know, everybody, you hear a lot, a lot of stuff. We watch a lot of stuff locally. What’s happening? What are people saying around the world? Well, you know, people that weren’t afraid got afraid. People that, that were afraid are not afraid anymore. It just depends where you talk to you. We have clients in Taiwan and they’re like, what? What problem? Life is normal back here in Taiwan and in Thailand and places like that. You have other places. We’re all like in Italy where we ha we have custom clients, people, members of my team that had been locked up for six weeks. You can’t get out of your house. You know, in Italy they got those big problems. But the one thing that that is true with everybody that we work with is that clear need. You got to pivot right now. If you’re not pivoting in your business and your messaging, who you’re talking to, even possibly who your customer is, you’re in bed, you can be in very big trouble. Or you could be making the first step into a giant new market for yourself either way. Right? Well, right. Some people, this is a clean slate time. Totally peop like people slates are getting cleaned now. They don’t want them cleaned. They’re getting cleaned. So let’s talk about pivot. I love that word. So when you talk to somebody about it’s time to pivot, what do you mean? Well, I think you’ve got to pivot from, from a sales person. I was talking about income. Okay. From an income perspective, you’ve got to pivot. What’s the message you put out to your customers? Is it going to, is it the same message today that it was two weeks ago? Because their needs are different. If you look at Maslow’s hierarchy right at the top, you want to be their best at that. Now they’re people, they’re worried about survival, they’re worried about security. So how do you take your whatever you’re offering and put it in terms that give them some sense of ease along the lines that make sense to them. So it’s part of it’s pivoting your message. It can also be pivoting your product or your service, your offering if you were offering. Um, like for us, we do a lot of work with teaching people to be teachers, leaders and trainers over the last five years. Our roots are in team and sales development, right? So we are shifting very much heavily back to S to helping people generate income. How do you crisis proof your sales team? I know, I’ll tell you a funny story. Um, true story. My trainer who I love, I’ve been training with this guy for four years. He’s in his fifties it’s done Ironman, all that kind of stuff. And he’s a great trainer. But I’ve been telling him for years, you know, I’m like, Hey, like you, you gotta like, cause he loves photography too. I go, you gotta go, he’s not on social media. Okay, think about this. And he’s like, ah, I go dude, you have to like, you’re a trainer, you’re not on social media. So I said, he’s like, nah, I don’t need it. You know, times are good, right? He’s got lots of clients, he’s busy, he’s, you know, he’s putting cash in the bank and you know, he’s traveling and you know, and he’s in great shape and all those kinds of things. So I saw him yesterday because all the gyms are closed in Arizona. So I said, Hey, can you come to my house? We’ll just work out at my house. He’s like, done. So yesterday he goes, I’m thinking about going on social media and I’m just like, are you kidding me? Like, and he’s like, yeah, cause I think then I can start to do short videos on training. I’m like, duh. You know what I mean? Like everybody has these resistance points and um, you know, his, and they all come during crisis. So I said, what are you doing? He’s like, I’m working at ACE hardware, what he’s working on because a lot of his clients, because training through a lot of people’s discretionary, you know, it’s 85 bucks an hour, not everybody has $85 an hour. And, and so he picked up a part time job at ACE hardware. And so then he told me this story, he’s like, there’s a gym that opened up next door as a franchise. And the woman came in and she was buying some things to put, um, you know, to put it in her, in the bathroom, like towel bars and things like that because she had just bought this franchise as a gym.

Ken McElroy (07:42):
And then of course, you know, the governor said, all gyms are closed. So she bought it. I put all his money in there, has this lump, and he’s telling me the story. And I’m like, are you like, this is exactly why I’ve been telling you to, you know, to build this internet presence, people know you need a personal brand and this is, you talk a lot about personal brand and this is a guy that does not have a personal brand. You know, he believes that neck, you know, tomorrow is going to be as good as yesterday. I don’t know about you Blair, but I’ve been through a lot of corrections. He, you know, and he’s not positioned to pivot. He’s now starting at zero. He’s not even online. Right. I know, I understand it. You know we S I see it a lot. It is a part of it.

Ken McElroy (08:23):
We, like you said, we’re having to pivot a lot too. And it, what happens is Mac Newton has a great expression. He told me, he goes, this is why and I love it. He goes, crisis is change trying to happen. That’s a good one, man. That’s a re that’s, that’s a rideable. One of these crisis has changed trying to happen. He goes, so what happens is you always getting invitations to change, but you don’t, with your health, with your finances, with your business, all that stuff, until you get to a point of crisis, like your body gives or your health

Blair Singer (08:56):
gives out, your finances give out. Now you better fricking change because, but now you’re in a crisis, which is much tougher because your emotions high and your intelligence is low and you don’t think clearly

Ken McElroy (09:08):
point. So I know it’s so horrible time. You know what I mean? I mean there’s some, but there are solutions, there are solutions and, and people are in pain, you know, financially. And there’s a lot happening. I mean, we’re having to retract on a number of things. I know you are too, right? Like we’re here talking, but the truth is we have our own fires going on. Plenty. Plenty of them. That’s right. And, and you know, there’s a number of them. And so I don’t want you to think that, you know, it’s all good all the time. It’s not, you know, but I will tell you, we both put things in place to make this a little softer. Right? Right. So when you’re talking, cause we were just talking before this, he’s, you’ve got one guy, a Alfredo who’s got 400,000 followers. You got another guy that’s got 2 million followers.

Ken McElroy (09:58):
So this is the time guys, this is a time to monetize that. And these are followers. Guys want the, you know, followers like Kiyosaki. I don’t know what he’s got now. Few million Facebook followers, right? He’s hunkering down and he said, you know, I talked to him all the time. I know you do almost every day. And he’s like, this is what I’ve been talking about. You know, it’s horrible to see people go through this. But this is exactly what I was talking about and this is why we have financial education. This is why we, we’d go for cashflow, not capital gains. This is why we do personal development. This is why we try to understand that this is why we try to understand taxes all of because of what’s happening right now. Right? It’s a great time to educate.

Blair Singer (10:44):
Yeah, well you have to get educated now because nature of the marketplace, the economies forcing you to do it. Um, and I, and I think, and there are things you can do or things you can do and I think that if you’re an entrepreneur right now, um, if you’ve got a team, it’s time to pull your team together. Okay? If you haven’t done that, you pull them together. And then the second thing is if you’re not, if you’re not selling, don’t stop selling. Now you’ve got to sell more than ever right now. Don’t cut marketing budgets that you’d be marketing, creating more exposure. Now if you are, if you’re used to face to face selling, you better learn how to work on a camera right now. Pull out your phone as are working on it so you, and you don’t have to be great, but you just have to make that change now because here’s the thing, some people will do nothing. They’ll just try to hunt her down and weather this whole thing. We’ll live off their reserves or do whatever. And that’s, and that’s okay. Now, somewhere down the road, smoke will clear, right? There’s other people, they’re gonna jump right on this thing. And in, even if what you’re doing is not necessarily the right thing right now, but you’re doing, but you’re doing the right things, but you’re not doing them perfectly yet, by the time the smoke clears, you’re gonna be so freaking far ahead

Ken McElroy (11:54):
of everybody else that was doing nothing. That this is the greatest opportunity in the world to get ahead in business right now. I know, I was talking to Curtis, you know, uh, today and um, you know, he’s like, yeah, I lost 20 million bucks in Oh eight. He goes, I literally spoke to him today. I go, yeah, I know there’s a lot of people lost a lot of money in 2008. He goes, you know what it was. I go out and he goes, practice. He goes, it’s practice for what I’m about ready to go through. Right. Because it’s true. You don’t really learn much when times are good. I mean, that’s been my experience. So, you know, when, when everybody’s making money, what are they doing? They’re buying cars or buying houses, they’re, you know, they’re doing it. They’re doing all these things that are access related but now is when everybody really learns the lessons.

Ken McElroy (12:41):
That’s right. That’s, and again that’s what I’m saying is that I work with a lot of entrepreneurs. I got a big team, we’ve got about in terms of trainers, we’ve got about 450 of them deployed around the world. I mean they’re their own business guys, they’re entrepreneurs, but they are all part of the same group and you know, working with them and pulling them together and just cross Pawnee, well this is working for you, that what’s working for you, what’s working for you and people going, I tried that to do that joint venture. Let me share your posts. And if you’ve got a network, it’s probably even if you got nothing right now, my suggestion is you jump on a network, jump on a net, become part of one part of something. Yeah. Because being alone is two problems. First of all, you gotta, you gotta lose out.

Ken McElroy (13:23):
Second thing, it’s not good for your mental health. The first sign of depression is isolation. So if you isolate yourself and say, well, I’m not going to, you know, you’re not doing your, you’re not doing your little voice and your mindset any good at all. And we, I’ve seen a lot of that right now. So if nothing else, pull your team together, creates the connection, creates energy, the energy creates confidence, et cetera, et cetera. So kind of wants walk through like, you know, there’s people, you know, going through different stages at different times, you know what I mean? What the first stage is typically shock, denial, right? Right. I mean, and so the question is, is how resilient are you? Right, right. Yeah. I mean, obviously we’re all in shock and denial, but then you have to, you have to just dust yourself off. He goes, Nope.

Ken McElroy (14:15):
You know, no one’s watching. No one cares. You know, everybody’s pretty selfish, right? So nobody’s like judging you. Nobody cares. Nobody cares. They care about themselves and what’s happening next. You know, there’s no one watching. That’s right. You know what I mean? This is your time. This is your time to do something for yourself and your family. You know, and, and it’s interesting you say that too, is that I, Robert was at work, I was at Robert’s house the other day and we’re talking about sales and he goes, okay, so if you’re going to help people with sales, what is it all boiled down to? What’s the big, what is, you know, you know how it gets in your face?

Blair Singer (14:52):
What’s the thing? No, it’s not that. No, it’s not that he’s yelling at me or the yell. Okay, so what do you want? He goes, what is it? I go, it’s, it’s, it’s, it’s, it’s fucking discipline. He goes, yeah, discipline. And it just popped out. I mean, he’s brilliant that way. Right? And so, and so it’s like, he goes, explain to me, discipline. I go, well, in my life and in your life, we, all of our lives, there’s something that you’re probably very disciplined in something that you’re going to do. Cause you know, it’s the right thing. It could be your health can be working for me. It’s health, it’s working out. You know, it’s honing my personal, my personal skills and I’m really, I’m really diligent about that and studying and those things. And so then out of the question is right now, if you’re going to generate income, you got to take that discipline and that area of your life and now move it to this area of the life because that’s what’s going to keep you going.

Blair Singer (15:45):
I mean that’s what’s true for me. It’s kind of like what Mac dude said. Totally. Totally. So I’m working out with him online, right? So he’s doing everything online and he’s are the workouts now online are harder than what? I’m in his freaking studio. I’m going, he goes, he yells at me, he goes, Hey, what’s the temperature in your room? Cause he always turns it up really hot. Look, and I could lie to him, but I got to, it goes 75 turn it up to 90 right? So he’s putting, so he’s going through this workout and I’m dripping wet and I’m thinking to myself, this is what I need right now. Me, I’m not saying you, I’m saying me because it reminds me that I can do this. I can do that. I can be disciplined here, I can be disciplined there. We all know that you’re, you know, you’re the leader in that area.

Blair Singer (16:32):
How many times have you climbed Kilimanjaro? Uh, 11, 11 times. So, okay. Blair is a rockstar when it comes to health and some of you are, and some of you are not. Right? Right. And so the question is, what’s your financial health exactly? What’s your spiritual health? What’s your relationship? You know, everybody focuses on their physical health, you know, which is super important, right? Yeah. It’s a balance. Yeah. And, and you know, and different parts of your life in different times of your life, you’re gonna be called upon with a crisis or a challenge. And what I got from Mac is the only reason it’s a crisis because you kick the can down the road too long. And you and I have had this discussion more than once when you’ve been in my face and you probably just heard this guy say, I told you.

Blair Singer (17:17):
Right? But, but we all know that, and you know it at the time that you make the decision, you know, at the time that you make the wrong decision that, that you should’ve done something else. Well now it’s all on the table and now we ought to just fricking deal with it. It’s the best of times. I tell you what this time is, it’s your financial report card. That’s what it is. Totally. Yeah. Period. Yeah. So what’s your GPA? Right, right. That’s it. So I remember Robert telling me, he’s like, yeah, Blair’s working so hard, the gym and I’m

Ken McElroy (17:50):
just riding my little bike. He’s watching you run live.

Blair Singer (17:54):
Yeah. Yeah. He goes, cause he goes, uh, well what he say? He said, I’m going to be re, I’m going to always be richer than you. And I go, yeah, well I’m going to live longer than you. Yeah. So he got this back and forth and right.

Ken McElroy (18:07):
So we don’t want to make light of what’s happening guys, but I got to tell you it’s, it’s actually a healthy release. I haven’t actually talked to Blair since all this happened. And um, you know, we have friends, family businesses, all in trouble. Yeah, we do. Right. And um, you know, it’s um, everybody’s just trying to come together and learn.

Blair Singer (18:27):
Right? That’s right. And, and your education is more important than ever. Don’t sacrifice your education because right now the universe, the marketplace, your F your financial statement is talking to you. What are a couple things people can do today? Well, if you’ve got a business, let’s go there. I mean, if you got to, if you’ve got, well, no, let’s go personal first. Personally, you got to keep your little voice in order. Okay. Because it can go pretty crazy pretty quick. Uh, that’s why one of the things we’ve been doing for years is we have a Mo, if you don’t have a morning routine, you should have a morning routine. Right. Uh, how Al rod I believe was his name, wrote the book miracle morning book. Yeah. Get that and follow that system. I follow it every single morning

Ken McElroy (19:14):
without fail is important guys. You know, cause I, I now, you know, I get up, let my dogs out, I meditate. You know, I spend time on myself, I spend time on my company. I have a routine that I do every morning. I don’t, before I get on email, before I get on tax, before I do anything, I knocked this out. It’s super important to get set your mind for the day.

Blair Singer (19:35):
That’s right. Because if you don’t, this whole crisis will dictate every action

Ken McElroy (19:40):
you’ll get up, you’ll get right on the internet and you’ll start going right into panic and fear and anxiety and stress.

Blair Singer (19:45):
That’s right. So you’d have that time, you know, for me it could take anywhere from 30 minutes to an hour and a half, depending upon, say with me how I go through it and I meditate for five minutes as honestly sometimes I meditate longer. Right, exactly. And you know, and then you get a workout somewhere in there, you know, I’ve got to get physical with this thing. Get your cause, your, your physical, mental, emotional and spiritual. And they’re all hooked together. You change one, you change them all. So that’s, and then I have a routine at the end of the day, I sit down and I do a gratitude exercise. Part of my gratitude exercise at the end of the day, list all your wins for the day. No matter how little they are, all those wins, go to bed. Okay? So that’s the first thing that I would do. Really important. Guys, you got away, I want to put his point out, cause I’ve known you a long time.

Ken McElroy (20:32):
All of those things that you just mentioned probably took you 10 years to implement, right? I mean they sound like, Oh I’m just going to go follow this checklist. No, no. Something came painfully slow. Then it was adopted. Then the next thing

Blair Singer (20:48):
was adopted a year later, two years later. Right. You know, then we let the children read the book, what, three or four years ago, try this type of meditation or that type of meditation guys, you know, don’t think that we’re just following some checklists and all of a sudden their lives are better. I mean these are, you know, these are trial and error. That’s right. Right. That’s right. And new. The good thing about it is because we’re a team and we’re friends, he said, can’t go is why try this, check it out. Go. Yeah, I’ll try that. Check that out. I hate you. And so we vet the resources together. Yeah, check out this video. Robert probably sends me almost every day a YouTube video. I say this is a book I’m reading. You know like we have a network and this is the network we’re talking about.

Blair Singer (21:30):
You know your lifeline outside of your house. That’s right. Right. You need it guys. I’ll wake up in the morning and some, and I’ll have the rich dad advisors for example. We always have a chain of something going on. Sometimes it’s a lot of smart ass stuff, which is always good and makes you laugh. But a lot of times it’s super educational because everybody looks at the world a little bit differently. Right, exactly. And what’s the business one? So the business one is two is two things. First of all, you got to create it. Well, first of all, if you’ve got a team, pull your team together because the cause, there’s synergy there, or there’s dysfunction there, one of the two. And right now you need synergy. You need to bring them together, get them together, get them to cross pollinate resources, how they’re feeling, what’s going on, and give them tasks to do.

Blair Singer (22:13):
Give them meaningful things to do. Don’t let them sit around. I heard somebody say a real good quote the other day, go fear lives in stagnant water. That’s not a good one. That is, yeah, this is the time for leadership. Yeah, this is it. And right now you’re finding the people that that can lead. And you know, so that’s number one. Pull your team together. Number two is you must freaking sell. Don’t stop selling. And you, and on top of that is you gotta get your team to sell. We’ve always talked about this for years and years. Everybody on the team must sell. Well, now everybody’s got to sell. I mean, in my office, everybody’s got a sales quota every day. A number of calls I gotta make. Even people, you know, customer service, even my bookkeeper, she, okay, I’ll just call these people, check in with them.

Blair Singer (22:58):
How are they doing? I was there any way we can help them. How can we support them? You’ve got to keep that flowing out there. Um, because this is a, you know, we talk, we call them touch points, right? Yeah. How many times we’re not trying to, you know, you’re not necessarily trying to sell them on anything. You’re trying to keep the relationship. That’s right. Let them know your existing clients right now guys are gold. Exactly right. Goal. Yeah. Some of the other thing is, is that sometimes when you’re selling in these days, you’re not just selling your coaching. You’re actually coaching your clients. You know, cause some of them, they’re sitting on the edge, right? They’re like, well, I don’t know what we going to do. So you’re not just selling your product or your service to them. You’re actually coaching them. So how’s it going on for you?

Blair Singer (23:42):
How can I support you? What’s going on here? I saw this video over here. Can I send it to you? Will that help you? How can I support you? How can I support you? That’s it. You know, and I even have people that go, well, I don’t have anything to sell. Okay, here’s, I’m going to give you one other thing to do. If you don’t have anything to sell, go out and help somebody. Just help somebody serve some, find something that people want and need and help them get it, which is basically all sales is anyway, and there’s a tremendous amount of gratitude around.

Ken McElroy (24:09):
What a great episode. I hope you learn something new from today’s guest. For full show notes, check out Ken macra.com if you enjoyed the episode, then jump on iTunes, subscribe and leave a five star review. Also, if you can check me out at Ken McElroy official on Instagram for daily real estate advice. See you next week.

Rich vs Poor Mindset

The variables that come to the table between those sitting down on the wealthy side and those sitting down on the opposite side have less to do with opportunity and more to do with their mindset. This is an important thing to acknowledge. Our background, our educational status and so many other variables are less impactful than the mindset that we have during our day to day lives. The mindset we choose to have will change absolutely everything. The mindset of the poor is commonly directed towards what they cannot afford and the mindset of the wealthy is more directed to how they can work to afford the things that they want.

Spending Habits

There are many differences between the spending habits of the wealthy and the spending habits of the poor. Those who are poor spend the money they make and then choose whether or not to invest what is left. Those who are on the wealthy side of the spectrum invest first and then spend when needed. The wealthy know that investing their money will result in long term cash flow while those on the poor end of the spectrum only care what the money they have can do for them in the here and now.

LLC Benefits

The wealthy know that having an LLC will protect their assets. If they are in a position where they are being sued, the person is actually suing a corporation or a company. There are layers that they will have to pierce to actually sue them directly and this is a very difficult task. The LLC also gives them the ability to write off more taxes from their business investments as well. People on the other end of the wealth spectrum are more often than not working a w-2 job and not able to get any tax breaks. Moreover, this thought process usually does not occur to them at all.

Investing

The wealthy and the poor handle their investments very differently. The wealthy are very active in their investments. They are aware of what is happening to their money on a regular basis. They find them personally, do extensive research, and understand the numbers and the fees involved in the investment. On the other hand, those on who are considered, “poor,” usually hand off their money to someone without any research involved. They hope for the best but are not truly aware of what is happening with their money at all. They do not fully take the time to understand the investment that they are making or have the knowledge to make the financial decision to invest at all.

Conclusion

Mindset is an invaluable asset when it comes to wealth. Those who are wealthy have an abundant mindset. They are purposeful about their spending habits and knowledgeable about where their money is going. They are direct about their objectives and they are fruitful in their investments. Those who are poor do not keep track of where their money is coming from or where it is going to. They may invest on a whim and hope for the best but they do not plan and follow their investments through to the end. This all comes down to the mindset that someone has. There is a clear line that draws the differences between the mindset of the wealthy and the mindset of the poor. If you can take the time to change your mindset, you can change your life.

3 Ways to Get Started in Real Estate and 1 Way I Would Never Recommend!

Invest In A Bigger Real Estate Deal with a group of people or a company

The first is what I do with my investors at MC Companies. Which is joining with others to invest in a bigger deal. This can be either commercial or residential.

There are two great things about investing in a larger real estate deal.

  1.  Low minimums – Sometimes you can invest as little as $500 and be an owner in a property. (but always remember you will have little to no say in how the property is managed)
  2. You don’t have to be an accredited investor – in the past, to participate in these types of investments, you had to be an accredited investor, but that rule has gone away for certain investment types. At MC Companies you do have to be accredited.

Buy A Rental Property

Purchasing homes and renting them out is a great way to produce extra monthly cash flow.

To do this, you have to purchase a house that has a combined monthly mortgage payment, home insurance payment, and property tax payment lower than the rent the property commands. There are several ways to do this – from buying in an area with high rents to putting a lot of money down so that your mortgage payment is low. If you buy correctly, rental properties can be very lucrative. And, if you do the upfront work of finding those hidden gems, you can let a property management service do the rest and rental properties can be a form of semi-passive income.

Rent A Portion Of Your Existing Home

If you aren’t don’t have the cash to buy a rental property, you could first test the waters by renting a portion of your house. You have a couple of options to do this. First, you could rent a spare room in your home or you could rent the basement. If you’re yet to purchase your first home and like this idea, you could even buy a duplex and live in one apartment and rent the next.

The advantages of renting a portion of your house are that you get to watch your tenant closely. It’s less likely that a tenant will try to stiff you for the rent payment when you’re in the same household. Renting a portion of your house also gives you the ability to get a feel for what it’s like to be a landlord without making such a huge monetary investment.

What I would never recommend…

House Flipping:

I feel like house flipping is similar to gambling. You may win once or twice, but it’s never a long term success strategy. Below is why….

How Do You Make Money Flipping?

As a flipper, it’s simple Math. Add up how much you paid for the property, plus all the expenses to rehab it (it will always be more than you think), monthly cost to hold it, and any other expenses. Then you subtract that (likely very large) number from the income you get from selling the home, and that is your profit or loss.

It’s not like you see on TV. At all. As with most reality shows, they make it seem so easy: buy a home, work with your contractor, fix a few things up and boom you just made 100k. It’s not like that at all…..below is the reality of house flipping.

It’s Risky

Most flippers usually use leverage to purchase the property, and usually those are hard money loans to secure the property and pay for construction. They then try to fix it up quickly to maximize profits. Unfortunately, with each passing day/week/month, holding costs continue to add up. Some holding cost examples are maintenance, insurance, and interest. Delays will
kill your profit and delays are inevitable when dealing with contractors and the unknowns of reconstructing a house.

Taxes

The main reason I hate house flipping is the tax. The rate at which your profits are taxed can depend on how long you’ve held on to the property. If the property is held for a less than a year, then the profits are taxed at ordinary income tax rates, which can be 30-40% (it can be more if you’re in a higher tax bracket) Real estate is a very tax efficient vehicle, but flipping most definitely isn’t. If you hold onto the property for more than a year, you’ll be taxed at the long-term capital gains rate that typically ranges from 15-20%.

Conclusion

You may get Lucky once or twice flipping a home (or you may lose your ass) but at the end of the day there is no long term tax strategy and you will pay high taxes.It isn’t a strategy I recommend because I like long term cash flowing deals.

The 3 Things you can teach your kids about Money

Difference Between an Asset and a Liability

Assets put money in your pocket. Think of a rental property, a business, a skill. A Liability is something that takes money out of your pocket (that is why your primary house is a liability) Credit Cards, your home, your car are all liabilities. Explain this in children’s terms using their allowance. Most kids will just buy liabilities. Candy, games, etc. But open their minds a bit. Have them save to buy a rake and then use that rake to rake yards in the neighborhood for a profit. Or buy business cards to pass out where they can pet sit. The rake and the business cards are assets for children because they are vehicles for them to make more money.

With my kids when they were little we would go pick up golf balls from the course and sell it the next day to the golfers for $1 a ball and $5 for the nice golf balls. My kids were easily making $100 a day. Those golf balls were producing a profit for them far greater than their allowance for picking up their room.

Explain why it is so important to have so many assets under your ownership

When they start seeing profitability from one of their assets explain to them they can have another one. Show them the more assets they have the more opportunity they have to make money. This is diversifying your assets. For example, if they buy a rake to rake leaves their profits will be highest in the fall and non-existent in the winter, so they need multiple assets, so they can withstand the highs and lows.

Cash Flow vs Capital Gains

This is a tough one to teach kids, for adults we understand this. We know if you try and flip a house or sell an asset that is it very risky. For one, you have to try and time the market perfectly and second you pay the highest tax rate even if you do so successfully. I believe it is like gambling, you may win one hand, but will eventually lose it all on red. This is a bit over a child’s head. Capital gains, tax, etc. What I don’t think is over their head is cash flow. So for this lesson, have them take their business and create a recurring revenue around it. For example, if they pet-sit for $15 an hour, tell their clients there is a $10 monthly fee to be able to book services at that price. If not, it is $25 an hour. Explain to their customers what you are trying to teach them. If you can show your kids a monthly cash flow that comes in without them having to go and find more business I think that is a great groundwork for the cashflow vs capital gains conversation later on when they are older.

Real estate strategies heading into a downturn

Join Ken and Robert Helms for the RealEstateGuysRadio.com podcast as they talk about unique defensive strategies that you can use to mitigate the results of the next downturn – or profit from it.

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