Before we start, there's a lot of information here, and as always, keep in mind that none of this is advice, recommendation, etc, use all of this information at your own risk.
What’s next with regards to real estate: If people only have to go to work 2x/week, a couple will want a 4 bed home so both have their own office. They might also be open to buying further out because they’re ok commuting longer but only 2x/week.
Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae has 3 rules of forecasting: If you give a date don’t give a number, if you give a number don’t give a date, if you get it right don’t get surprised.
He doesn't predict a huge flood of foreclosures either because this is the order of how things will happen:
1. The job market will be back.
2. Fannie/Freddie will help them adjust payments as job market gets back.
3. There’s enough equity for them to sell and move somewhere else.
4. If none of the above apply to them, then they foreclose.
If you are looking at getting a loan with Fannie Mae, always tie your project into affordable units / consumer protection.
Tom Wheelwright, CPA and Rich Dad Advisor, he charges $100k for people to work with him, so what he shared you can't take lightly, which is the following: California people, pay attention, there’s a new proposal out there that if you die, your heirs get 8%. There is also a proposal that if you transfer your property from your name to an LLC or to a Trust, that will be a taxable event. This will have significant implications on your properties if you don’t put it in a Trust this year. Note that this hasn’t passed yet, but if it passes in September this year, everyone will be working on a Trust and you might not have enough time to get it setup.
CTA: It’s a new law for LLC’s to provide a bunch of things to the government. Here’s how the government worded it, to make it sound like it's a good thing: The Corporate Transparency Act (CTA) was enacted on January 1, 2021 as part of the National Defense Authorization Act creating a federal beneficial ownership registry applicable to corporations, limited liability companies (LLCs) and most partnerships.
Never take your eyes off your numbers. Get a bookkeeper and meet him/her twice a month.
There are ups and downs all along the way, no matter which asset class, you are not alone!
Sell the bottom 10% of your properties, the ones that are least performing.
Eliminate the idea of balance, just be very present wherever you are.
Think about the one thing that if you did it would have the greatest impact on your life.
If you are a syndicator, always put your own salary as an expense item, in case something happens to you, someone else will need to be hired and you need to budget for that.
Why would you save money when the government and the Fed are printing money?
You wake up everyday slaving for dollars that they print out of thin air!
So you can wrap your head around taxes the government is your silent partner, shows up once a year.
The author of Rich Dad Poor Dad, Robert Kiyosaki, said that the problem with free education is that it’s very expensive.
If teachers were smart, they’d be rich.
He also said “my banker never asked for my report card”.
The overall agreement was that stagflation is happening right now, stagflation is a persistent high inflation and a relatively high unemployment. How many times over the last couple of months have you bought something and realized that the price went up, and thought to yourself “but my salary didn’t go up!” that’s stagflation.
Turn your liabilities into assets!
All the fun expenses have to make money, your thought process should always be “what am I going to get in order to pay for X”.
For example, Ken McElroy wanted to buy a Ferrari, he has something like $1B worth of multi-family investments, he has all the money he needs, but he still said, what can I purchase that will pay for the Ferrari. He ended up purchasing a piece of land that had a billboard in it, the piece of land cost $300,000, the billboard was making $40,000/year. He created an easement on the billboard section, which is the right to use that piece of land for however long you decide (since you're the land owner) and sold the land for $300,000! He now has $40,000 income free and clear yearly that is taking care of his Ferrari.
Another example, Kim Kiyosaki wanted to buy an airplane, by the way, I also want an airplane. She ended up buying her airplane, the entire purchase can be deducted, plus all of the expenses of the airplane. Not only that, they are chartering the airplane when they’re not using it! So the plane is either going to be free, or they will make money off it. You can do the same thing with a boat! Imagine that!
To put it in my real life context, here’s an example that I just thought about when I was planning a vacation this summer. I’m thinking of going to Europe for 2-3 weeks, and putting this mindset to work I remembered that I once looked at renting a castle in France and share it with friends, so why not rent the castle and share with only incredible people I want to spend more time with? I can charge just a little bit more to cover for my trip and at the same time get to spend time with amazing people!
For every million that you want to make, you must purchase $4M of investment.
Kenny McElroy's example of how to make infinite returns:
$25M (based on income increase)
$20M (new loan)
$25M (don’t max out)
Have no money for a down payment? There are plenty of options: You can get money from most major credit cards, with zero fees for 10 months.
Ask your bank lines of credits, ask to increase the lines of credits every 6 months.
Pre-sell a product to create income (in the real estate example, for the down payment).
There are many many ways to invest in real estate with no money down, I have already interviewed quite a few people and I will bring one more in the next couple of episodes, he is a 21 year old who owns 30 units and put zero of his money down.
Don’t ask “When should I get started” ask “How can I get started”.
Even very successful people still get nervous when buying properties, Ken McElroy said himself that he still gets nervous when closing on a deal!
Real estate strategies:
Donate land to the city to build stadium, and you will still own all the land around the stadium.
Buy two properties that are next to each other so you can combine operations and expenses and increase NOI, therefore you increase the value of your properties right off the gate.
One thing they always say is for you to purchase 5-10% of your net worth in gold, just in case something really bad happens. If you are like me thinking that that gold isn’t producing any money, so I’ll just purchase stocks or real estate instead, the good news is that there are firms that will loan against gold and silver (at Prime + 2 points). What you need to keep in mind is that if gold or silver goes down in value, the firm will ask you to come up with the difference. When that happens, another strategy around that is that you can just buy more gold at that time because gold will go up later either way.
Important things to do next: Create a Trust before end of year - make sure you get your CPA and an attorney together to put your Trust in place.
Read the minutes of the Fed, they put it out 3 weeks after each meeting.