Welcome to REITV. Today I'm going to be talking about how to be successful in your real estate
investing. And, how to be successful? Think about it, that's HUGELY different than investing
in real estate because obviously there's a lot of different ways to screw it up.
I'm gonna talk specifically about a five ingredient formula that I use when I invest
in real estate, and the reason why these five ingredients work is because it is a systematized
approach. As much as I love real estate I love business systems even more and when you
put the two of them together, I'm gonna show you mathematically why I believe that
this is the singular best strategy in all of real estate.
So let me share with you my
five ingredient success formula so that you understand exactly how I do real estate every
single time; I do not deviate from this. There are a lot of different ways to invest in real
estate, do you think there is a best way out there? To say, is there a best way, sure!
I think there is a best way, whether or not anybody can find it is, it'll be
interesting to see. The first step is you gotta start with the right system, so the
right system would include buying real estate - single family homes! Not like this commercial
stuff you see in the backdrop here. I buy them three bedrooms, two bathrooms; I
call them the American dream real estate and when I buy it, I wanna buy it below the median
because remember, everything below the median is a lot safer and insulated than anything
over the median. What do you think is the most overwhelming part of real estate? The
risk that it entails. I mean there's a lot at stake, a lot to lose. The second thing I do is I
wanna buy my real estate in the very best markets. Now I've got two different types
that I'm interested in. One's called an equity growth market, another one is a cash flow market.
What do you think you do in a cash flow market? You go after properties that have the highest
cap rate or the highest ROI, or your month on month return - the money that you get every
month as far as cash flow is gonna be the highest. Or I'll go to an equity growth market
and what's great about an equity growth market is I'm focusing on getting those big gains
because I'm buying severely below the rebuild value. So for example, I'll purchase homes
in Orlando, Phoenix, Las Vegas - those are great equity growth markets, or I'll purchase
my homes in markets like Indianapolis or Memphis; those are markets where I'm getting 13%, 14%
cap rates all day long. So of all the different ways to approach real estate, how does
someone go about trying to figure out how do you even do that with so many options out
there? You know, I guess that was actually one of our hesitations as well. Because you
know, when we did take those classes, they covered every different type of real estate
and I picked out a few that I thought sounded interesting and that was really kind of how
we made our decision. You know, but there was no structure behind that. And no proof that
what I wanted to see was gonna work and yeah, found out the hard way that some of the
strategies really didn't work well for me and some of them did. Total guess game. The third
step in the success formula is having track record. That's actually a really critical
key piece here, and I do that through commoditizing real estate. Remember how I said it was 3-bedroom,
2 baths, certain amount of square footage, and all these other variables that
are really important in putting this whole system together, well that's exactly what
I am doing with my real estate. I'm comparing it against each other. So for example, if I
buy in a market, I can take a look at my last 1,000 homes and then I can compare them to
each other and start figuring out really important critical information like how long is it going
to take to rent - 42.3 days in this zip code, 38.4 days in that zip code. And you know what,
knowledge is very very powerful to make sure you're properly and adequately prepared, so
track record is really key. What do you think the biggest obstacle is that keeps people
out of real estate? Money! We really need money. So you have to have money to make money?
Really, yeah, you do. Another thing I like to do is I love to leverage other people's
money. Now I'm not just talking about using the bank's money on purchasing a home where
you get a 5 to 1 ratio. I put 20% down. I can put a partner's 20% down and supply the
real estate so I'm no money out-of-pocket. But even when I acquire my real estate, I like
to set up my deals where I ask somebody else to use their money to put up the risk, because
in real estate things can look really good on paper, but 30 days after you buy it, you're
gonna find out on whether or not you actually maybe made a mistake. So where do you think
investors go to find the best properties? I'd say, find a good agent. Find a good real
estate agent. Why? Somebody who knows areas and knows how to get good deals. Okay
this is the final secret and this is a big one you have to have the right team! There's
no such thing as succeeding in real estate all on your lonesome, you gotta have a
team, k? Strategy is important. System is important. But TEAM is one of the most important key
elements. Why? Because this is where you're coordinating the people that are gonna
keep you safe with all the proper contracts and legal contracts on, on, on actually acquiring
the real estate and lining up the lending, and the property management, and having it
properly insured. So I've assembled a team that I use for example, and at the end of the
day, I just hand a, I put the request in I hand everything off to my team, they step in and they do all
the work. So make sure you assemble the correct team when you're putting this together.
Now here is a little tip - bonus feature I wanna add for you. It's this idea that when
you're buying real estate and assembling a team, they're all going to be motivated by
their own commission. So if you can at least unify them with a common purpose by understanding
the strategy, the goal is to get them to communicate with each other. Because when I go off and
do my real estate and I do a really wide scale thousands of deals, I actually have to go
so far as to take all their commissions away even though they're all licensed, then put them
on bonus and salary and that's the easiest way in volume I can get them to participate
really, really well for me. I'll share this final point with you. My dad
raised me saying son if you want something done right, do-it-yourself! And I tried that
for my first 25 homes and that's when I needed to acquire and put a team together. I was
pulling out my hair! I NEEDED leverage. I needed people leverage. When I put my team
together and have them effectively compensated and working as a team, you know what happened?
Something miraculous, something really beautiful. I turned the philosophy around, if you want
something done right, don't do-it-yourself. And my team - that's the way I function in my
real estate today because even though I know how to do all these things, there's still an
average of 341 hours that my team puts in on every single deal. The more people you
have involved, the more leverage you have, the easier it is for you to expand your operation
without you necessarily getting buried by the workload. Alright there you have it. Those
are my five ingredients for successful real estate investing. You may wanna watch the
video again and even take some notes because these five elements - They're key to what exactly
helped me become successful in real estate.
Thank you for watching today's video. If you'd like
to get a lot more information and details on what we've covered today, I've got it all in my book,
The Strait Path to Real Estate Wealth. And I've got this book in audio CD, AND I'm willing
to make a copy of it to you for free. All you gonna do is click the link below,
pay a couple of dollars for shipping, and I'll make sure that I do my part and get you a
free copy. With that, have a great day!