Welcome to REITV. Today we’re gonna be talking about how to make money in real estate. And
I wanna start with this question: Is it hard?
It depends. I think a lot of people think that real estate is difficult, complicated,
and ultimately hard. And hard usually in their mind equates to RISK. And you know what, let
me just take a moment and validate it.
There are so many ways of doing real estate that are hard, that are risky, that create
that concept. And I think it all today is gonna come down to what your STRATEGY is.
Because I AM GONNA SHARE WITH YOU a strategy that for me, makes real estate extremely easy.
“Do you think it’s hard to make money in real estate?”
“Yes.” “Why would you say that?”
“Well, because we’ve had experience in that and they’re... We have a number of
our family members who are underwater in their homes.”
“What do you think would keep you from investing in real estate?”
“Not knowing enough knowledge about the markets, and about the ups and downs of it,
to feel secure about, you know, handing my money over to something that really at that
point, I didn’t have any control over.”
“Right now I probably wouldn’t do it, but it can be a good idea.”
“Do you know some who have lost money in real estate?”
“I do. I know quite a few people that have, actually.”
“And does that encourage you to wanna invest in real estate?”
"No, not at all." "Alright." "Quite the opposite."
“Do you know anyone that’s gotten hurt or struggled in real estate?”
“Yeah. My family.”
Alright. What I wanna do right now that I think would be most useful and most helpful
- at least this was the most helpful thing my mentors could’ve done for me when I got
started, was really helped me figure out what would really identify the BEST strategy in
all of real estate.
And I had to create a custom formula for that and after a time, I actually got tired of
explaining it to people so I wrote a book about it, Strait Path to Real Estate Wealth.
For this moment, I just wanna give you a quick crash course. For me, the best real estate
investing strategy would have six core elements, and you might wanna write this down.
The first one is a strategy that will take the least time, effort, the least risk, would
make the most money, would work both in up and down markets, and it’s something that
would provide a service. So let’s break that down just a little bit.
LEAST TIME. Who wants to do the real estate strategy that takes maximum time?? There’s
a lot of strategies out there. For example, I hate fix and flip. Because there’s so
much time that can be involved with that kind of system.
So I’m interested in the kind of real estate and of all strategies, that would have the
LEAST TIME component.
Next, EFFORT. In life, there are hard ways and easy ways and real estate is the exact
same thing. There are SO MANY hard ways of making money, and usually the harder it is,
the more risk there is, so... I like easy. It’s not because I’m lazy (sometimes),
but I really like to gravitate towards something that requires the LEAST AMOUNT OF EFFORT.
The third one; RISK. You know, there’s risky strategies. There’s actually A LOT of risky
strategies. I would wanna know a strategy that had a component of the LEAST AMOUNT OF
RISK and I encourage you to look for that when you’re looking at real estate deals
because something with the least amount of risk is gonna be the most sustainable.
My fourth key element that I search for in a strategy is something that can create the
HIGHEST DEGREE OF PROFITABILITY. And most people, unfortunately, think that that’s
the only one that matters, but it’s always relative to these five other core elements.
So, PROFIT is an important gauge, but I will walk away from an even more profitable strategy
because I’m not willing to take on all that extra risk. Key component number four.
And then number five - it NEEDS TO WORK IN UP AND DOWN MARKETS. Lot of strategies are
market-dependent. And the problem is, is that you can get caught with a lot of real estate
at the wrong time and some of you know somebody or you yourselves may actually know what I
mean by that from some of the street interviews that we’ve heard from people.
So, you need a strategy that’s gonna work regardless. And then finally, there’s gotta
be a SERVICE component.
“Have you ever met anyone that has made any money in real estate?”
“Shysters.” “Shysters.”
There ARE ambulance-chasing strategies out there where people are just trying to take
advantage or prey on people in a really nasty situation. For me, I gotta sleep well at night.
I wanna do MORE THAN sleep all night and I wanna feel good about what I’m doing.
So that’s that sixth key element that I find to be really critical is - ‘What is
the service that I’m actually providing for mankind?’. And I found a really core
key strategy that takes all those six core elements and in my equation, has shown me
the ABSOLUTE BEST APPROACH TO REAL ESTATE.
So let’s answer this question: ‘How DO YOU make money in real estate and WHAT IS
THE BEST STRATEGY with these six core key elements?’.
For me, it is A SHORT-TERM, BUY AND HOLD RENTAL strategy on SINGLE-FAMILY HOMES PURCHASED
BELOW THE MEDIAN IN THE BEST MARKETS.
Pause. Breathe. That was kind of a mouthful. Let me break it down.
Short-term for me is a 2, 3, 4, or 5-year holding strategy. I’m not trying to hold
a home for 30 years. Why? Because if I buy a home, I’m gonna start accumulating some
repairs, refurb repairs after 5, 6, or 7 years; so I like to hold it short-term.
It’s a short-term buy and hold on single-family because I’m interested in the American dream
real estate. That’s why it’s bought below the median. 3-bedroom, 2 baths; 4 bedrooms,
2 baths - That’s the largest percentage of Americans... What they’re trying to get into
So you want to be in the real estate investing game that is really going to cater to the
largest population out there that’s interested.
Buying below the median is also key for up and down markets like I was referencing because
if you buy below the median, you’re really insulated and protected when the market falls
apart. Similarly, that’s why I then go in and purchase in the very best markets.
You know, I get asked by people how I came up with that formula. And for me, it’s kind
of a funny story ‘cause originally, I was going to college ‘cause I wanted to be a
doctor and after a year of failing all my pre-med classes, I finally listened, caved
in to my adviser that told me I was too stupid to get into medical school.
And that was really a good thing because I thought, well, maybe I need an MBA. So I started
taking those pre-req classes and, one of the things I did was I took a Stats class and
I was thinking ‘Oh, I’m gonna fail this Stats class’ ‘cause it’s another pre-requisite.
And I was really surprised at the end of the semester when I was actually Number 1 out of 200 students.
Man, I think Math, dream Math, sleep - I love Math! Real estate really is, it’s nothing
more than Math and understanding that. So when my mentors came to me and started saying,
you know, sharing all these strategies, I was asking them ‘well which one is best?’.
And they couldn’t answer it.
Those 6-core criteria I just gave you AND my formula for how to make the most money
in real estate - really comes down to the algorithm and this Math.
And so, I may be too stupid for medical school, but YOU NOW HAVE THE MATH on those 6-core
criteria of what you can do to give yourself a better shot at making money in real estate.
So these six criteria, for me they come down to two really important things:
Number 1 is I need an equalizer in the formula to make sure that when I’m comparing all
real estate strategies, that I have something to make sure I'm comparing apples and apples, instead of apples
and palm trees - two very different things; because two different real estate strategies...
They can be THAT different.
When we talked about least time, least effort, least risk, most profitability, providing
a service and working in up and down markets, that also comes down to quality of life.
For me, think about it. I wanted - I wanna enjoy the quality of my life. And most real
estate strategies are actually jobs in disguise. You don’t wanna get from one job and do
another job and have twice as much stress. For me, quality of life says ‘'If my real estate
can build and grow and run passively, especially inside of a system with a team.’'
That’s really gonna be a a game-changer, making sure that I can enjoy my life. True
to this day, I spend less than five minutes a month managing hundreds of homes because
of these 6-core criteria, this specific strategy, and the team and system that I have in place
to manage it.
In summary, there’s a lot of different ways in making money in real estate. But with THIS
specific strategy of SHORT-TERM, SINGLE-FAMILY HOMES that are bought BELOW THE MEDIAN with
equity, with discounts, with certain cash flows, in my opinon, THAT’S the strategy
for making the most money with THE LEAST TIME, EFFORT, and RISK.
Thanks for watching the video! I certainly hope that you found it helpful. I invite you
to subscribe and keep watching and learning more from these videos on real estate. With
real estate, knowledge can definitely be power. So keep on learning.
I also invite you to share your comments and questions below, and I look forward to seeing
you next week.