Investing in real estate might be the dumbest thing you ever do.
I lost a million dollars on a single transaction. I have lost money in real
estate. And for a guy who's bought thousands of homes, I want to be the
first to tell you that most people should not be in the game of real estate.
Especially with the way that they tackle it. My name is Kris Krohn and today, I am
going to be talking about how you would build wealth intelligently through real
estate. But frankly, all the people who shouldn't be in it, to find out if you're
one of them.
You know, I love telling the truth but truthfully this one hurts a little bit. I
mean, I've created so much wealth through real estate. It has created such a
wonderful life for me. But I actually believe that real estate is bad news for
most people. And that's because of how most people get caught up in the game of
real estate, right? I mean either it's through an infomercial or some kind of
ad that you see on the internet. Something pops up and all of a sudden,
you see that goofball missing teeth that tells you about the millions of dollars
that they made in real estate as a testimonial. And before you know it,
you've caught this bug. Because someone is selling this get rich dream crap that
feels so alluring. Because... Let's be honest. Most of us are stuck in a rat
race. Most of us are busy living a life that we're actually not really enjoying,
that we're not really connected with. Part of us just wants to dream about
having a better life. We dream about having more about traveling more. We
dream about a nicer home or a nicer car. There's a time for many of us where
that's really really important. And so, you capture the right moment with the
right real estate advertisement. The right video and all of a sudden, you are
hooked and you're thinking to yourself, I'm going to go out there and do real
estate. Now, this is where it actually gets really bad news for you. The problem
that a lot of people have is when they get into real estate, they don't get a
mentor, they don't get a coach and they make assumptions. And by the way, I paid a
million dollars for what I'm about to tell you. I kid you not. From one of my
mentors. The most dangerous information is what you don't know. And what most
people don't know when real estate is actually going to crush them and leave
them in a really hurtful place. You see, what they do is they go out there and
they're like, "I want to be an investor. And if I buy real estate, things will be
better off for me." So, what do they do is they go out and they buy a house."And
they don't put a whole lot of thought necessarily into is it a good deal.
Because they don't even know what a good deal is. And before you know that, they do
one of 2 things. (1) They become a landlord. And this basically means that
they have a mortgage and they need to get the house rented. And in the course
of getting the mortgage and getting it rented, depending on how much they put
down, depending on the price of the home most people buy a home that is too
expensive. And as a result, when they try to rent it out,
they're really close to a break-even. But even when you get to a break-even, you
have expenses because you have things like repairs. And so, you might have
started off with saying, "Hey, I've got a mortgage that I need to cover that is
$1400 a month." I actually rent this home for $1,500 a month because I didn't
really know what I was doing. So, I have $100 more I'm collecting a month in the
mortgage. But then, the fridge goes out or the a/c unit doesn't work. Or you can't
get it rented out. So, you have to like do carpet and paint. And before you know it,
you're upside down in the house and you're paying more money. Well, you can
get on a fast track. Especially if you put the wrong tenant in there. So, easy to
do that. When you're brand-new, it's so easy for you to be taken advantage of.
Because a renter that is struggling financially, what they're going to do is
they're going to test their waters and figure out "Who can I be flexible with?"
They can't be flexible with their cell phone service. Because if they don't pay
their cell phone bill, it just gets shut off. But they know you.
They've had a conversation. And you seem like a pretty nice person. Because you're
not a professional at this. They without training our farm or superior in their
professionality than you. And that victimhood had a hard month is going to
rise to the surface. And all of a sudden, they're going to put you between a rock and
a hard place trying to get you to make favors on them. And they'll find out if
they have flexibility with you and this is the biggest expense in their life,
they're going to push on you every single time they have a hardship. And before you
know it, you become in the landlord real estate business what we call a "Don't-wanter".
A "Don't-wanter" is someone that basically has real estate. They got it
because they thought it would do good things for them. And then because they
don't know what they're doing and it didn't do good things for them they get
burned out and they get really upset. Now, apologize if you're watching this video
and you're like, that happened to me. I hope it hasn't happened to you yet.
Today's video is really more about "If you are in that situation what can you
do?" But more importantly, how do you avoid getting in that situation at all?
Before I share that with you, another scenario that is pretty typical in the
game of real estate is people will buy a home and they'll say to themselves, I'm
going to do this thing called a flip. Now, what's a flip? Buying a flip is like, "Hey,
I purchased this house. I got it for 150,000. And I think
it's worth $200,000." And you're thinking "Because I got it
$50,000 below, this is going to work out great for me. I'm
really excited about this." Here's what your inexperience hasn't taught you.
There's $30,000 or repairs. There's going to be 15% of
selling fees by the time that you sell this. You might have to dock the value
10% to get it to move based on the market timing. You might have over
repaired it. You add all this stuff up and if $50,000 here can
actually turn very quickly into a 10 to 20 thousand dollar loss. I just
showed you exactly how it happens and I assure you this is something that
happens. So, listen. Real estate it's brilliant done correctly. But done
incorrectly, it's a nightmare. It sucks. It's a it's something that you
just don't want to be involved with. You have some other options though. And what
I want to do right now is I want to take you through what those look like. Having
been a professional investor long enough to have done thousands of deals, what I
want to do in the remainder of this video is share with you a superior
approach to doing real estate that will keep you safe. What that really has to do
with is "How do you put less money to work? And how do you get yourself
protected?" This is what it looks like: When you get in the game of real estate,
one of the things that you want to be aware of is "Am I going to actually be
the implementer?" And this is for the hands-on person. And if you're really
hands-on do-it-yourselfer --DIY, you are super dangerous in the game of real
estate and what you need is a mentor. You need someone that literally can walk you
through every step of the deal because you might be handy. You might know how to
fix things. But I'm telling you right now, you don't actually know how to crunch
all of the numbers. And if you don't, then you can get upside-down and actually get
hurt by your real estate. But I want to speak to you that are saying, "I'm
actually hands-off". And hands-off is D-F-Y. It stands for Done For You. And in that
case, you don't really need a mentor. What you're really looking for is a team that
is experienced and they know what they're doing. You know the first secrets
are really winning in the game of real estate is understanding whether you're
really hands on or your hands off. Do you want to be active and participatory or
do you really want to be passive and let it happen for you? Both options exist. In
fact, one of the things that I've done is I've helped thousands of investors all
over the world access the best markets, And those that don't have any money or
want to passive, I show them how to get involved
in real estate. Those that do or don't have money that want to be hands-off, I
show them how to do real estate. So, at the end of the day, no matter what
situation you find yourself in, you got to understand that there's some options. You
want to be in real estate. I want to be clear. Real estate, if you look at from
1963 to 2019, real estate is averaging 4.58%
appreciation. If you buy in the right markets and you're getting a 7%
cash-on-cash return... Now, between the 4.5% and the 7, now
you're 11% ROI. Now, I've beaten the S&P 500. Then you add on top of that
the principle reduction. And some of the other benefits. And you can quickly find
yourself running over 20% of your on your money. I Average 25%. And so, real
estate is a really brilliant play as long as you've got a mentor with the
hands-on. Or whether you've got an experienced team with a track record on
the hands off. If you want to explore what both of those paths look like, go
ahead and click the link below. And you can get with a member of my team where I
can show you how to get mentoring on the do-it-yourself. Or I can show you how to
access a team they'll allow you to be passive and get all the benefits that
real estate has to offer. Thank you guys so much for watching today's video. The
link below will literally show you your next steps get with the member of my
team. They'll create a custom game plan for you that can basically show you what
both of these options look like. So, you can be in the game of real estate.
Today's video, the point don't do it on yourself. Don't be a lone wolf. Because
most of us are programmed to really tackle life that way. That's a great way
to get spanked and get yourself into a world of hurt. Don't do that my friend.
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