It's real estate really a safe investment? I mean the world has changed
dramatically. Technology is changing, is real-estate changing? Today here on
Limitless Wealth TV, me and Steven Michael Miller are going to break down
real estate and we're really going to get into the nuts and bolts and brass
tacks of whether or not it's a safe place for you to be or not.
Real estate, a safe investment? This is such a great question and I don't know
if you're asking the right guys here, right? Because if you ask your financial
planners or your tax advisers, you're going to get a lot of people up they're
going to say, "don't do real estate". But you're talking to guys here that have
done nearly a billion dollars worth of real estate. So we're a little bit biased
but what we're going to do is, we're going to share with you the information that
creates that bias for us, so you can understand, because up front, you got to
understand something. Does real estate have risk?
Yes, but here's the facts of life when it comes to money, this is the
birds-and-the-bees of money .If you want to become financially, you weren't
expecting that I was going to say. I wasn't expecting. The birds-and-the-bees of
financial life is that, don't pollinate your money? No we want to pollinate the money.
We want to multiply it like crazy. We do want to pollinate, yes, we want to fit man in
this. So that's German for multiply. So you got to understand that if you
don't take risks, you are guaranteed to fail. Yeah. Like if you got a great paying
job, I'm talking about you got a multiple six-figure job and you're an incredible
saver. You might be able to save enough money with taking very little to no risk.
Just putting money under the mattress, securities, bonds, you know, real basic
financial instruments. Yeah. I mean if you're learning how to live on half of
your income and you're saving the other half you might do okay. If you do that
for forty years. Yes and then when you retire, it's not going to be like a grand
retirement. But you know, what you're going to financially survive. Hands down yes
you are. Here's the reality, to get where you want to go, there's going to have to
take risk, but there's intelligent risk and then there's like Vegas risk. And so
what we want to do is, we want to talk about real estate and talk about what
it's real risks are. How you mitigate those risks, as a bonus to the video and
really help you understand why are people investing in real estate, anyway.
So the question is, is it safe to invest in real estate and and that safety
question, I don't want to overly blanket or stereotype anybody but
I'm married and I've been around a lot of women in my life. With that a mother
and have four daughters and cousins and you know friends and I think this idea
of safety and security is predominantly a you know a female.
I mean it's driven by females, a lot. Well I'll tell you
we've met enough couples that one of the two whether it's the man or the woman or
the however, there's at least one person in the relationship, don't beat me up
over this, okay? I'm not... There's going to be at least...I'm still worried
Steven I'm trying to save you a little bit here, okay? I'm not being sexist. No, I want to
address this though, because that nesting instinct, there is that desire, for having
safety. And they're not always saying, "oh who cares about financial security." We
got to make sure that we got things covered today, absolutely. And in any
relationships, there's always going to be at least one person. Thank you for saving me.
That place is safe. So safety and security is something that all people want. Is that
better? Something all people want. But the way that they get, but the way they
go about it, the way that they get it, is often really misguided and misunderstood.
So think about this for just a moment. Let's think about what the world thinks
as safe. Now the world says it's safe to buy your home and to pay it off as
quickly as you possibly can. Like just pay it off. It's also safe to put your
money in a 401k. Like those are what the world will tell you our safe investments.
Your own home, the 401k. Now let's look at history for just a moment .Will your 401k
ever truly be able to retire you well? No. Well your home, if you pay it off, does
your home pay you once you've got it paid off? No, no so at the end of a 30 or
40 year or 50 or working career, if all you have to show for it is a meager 401k
and a paid off home, then you're going to have to plunder them. Are you safe? No because
you have to pillage them. No, you know, here's the thing, you know what's going to
happen. And you were talking about risk. here, a second, but I'll go Kris you
know that it's riskier to put your money in your own home and in a 401k. That is
actually riskier, because at the end of those, at the end of the day, you know
exactly what it's going to produce for you which will be not enough. Yeah, so
it's interesting we know we need to take risk, but now we need to take calculated
risks. We need to take smart risk and I want to be clear. Steven said this, if
we're talking about real estate and just dropping a blanket over all of it, I do
not believe in most real estate is a good investment for the average consumer,
the average beginner investor and someone trying to get somewhere.
Commercial can be risky as anything. Skyscrapers cost too much to get into.
Well you could go dump of money, a bunch of money storage units and never get
them performing the way you want. There's a lot of risky real estate out there. And
so, I think the first thing to focus on, is that, it comes down to
strategy. Because in real estate, there's hyper risky strategies and then there's
near risk-free strategies. And Steven and I found what we believe to be a really
really good balance. There's only a handful of strategies that we really
recommend when it comes to lease options, partnering, buying in the nation's
hottest markets, leveraging a team and track record. There's things that we'll
do single family homes, purchase blow the median. There's even some commercial
deals. But they go through a very specific filter. So yes real estate can
be risky, but if you work with the team with the track record or you've got the
right strategy and philosophy, it can work out really really well for you.
There are predominantly four things that you want to be aware of that makes real
estate so attractive compared to other investments. Number one, taxes. Taxes have
the ability to erode our investments over time like crazy. They will rob us
the majority of our wealth. Now by the way, I believe in paying taxes, but I also
believe in using all the proper tax loopholes. So real estate gives you three
biggies. The first one is you get to write off all the interest. Number two,
you get to write off depreciation and the number three, you actually also get
to write off your business expenses. If you don't understand what those three
are, just super quick, when you pay a mortgage and you're collecting rent,
you're getting income but you have an expense. The interest, you get to write
off. Which ends up making a big difference on sometimes making money on
your real estate, but showing a loss. This is a good thing in the tax world. Making
money, real money, money. You keep and eat you're safe. But money that you're
actually not paying to taxes. Number two is depreciation to me...It's delicious, right?
You like that. I just want to hit depreciation real quick. Depreciation means, and by the way, they
just enhance the tax code that allows you to write off way more depreciation
one year front up some. I mean you can write off a ton of depreciation on that
property up front. This these are huge tax benefits. So depreciation is if I
have a $100,000 house, I get to write it off let's say over twenty seven years.
Every year I get to add three thousand extra dollars I ran off per property.
That's going to keep you from paying taxes and yet making money and then of
course can that business write-off so I think you get what that is. So that's the
first of the four bigs. And I don't know if you wanted to disclaim a real quick.
We are not tax professionals or tax advisers. We do not give tax advice, no legal
advice or any advice. This is no advice. It's just an information.
Awesome opinion. Alright, let's go on to the second reason. Why real estate is a
safe or what we would consider a safe investment. With real estate, you can
leverage and I know I get it a lot of people think that leverage is horrible
and risky and all that's crazy. Leverage is one of the safest things you
can do because you're putting a portion of your money in, to receive all of the
benefits, right? In other words, I can't go to the stock market and say, "hey let me
put... well I want to buy a hundred thousand dollars worth of stock,
but I'm only going to put $20,000 in. But I want the benefits as though I had the
whole hundred thousand dollars worth of stock. Yeah, stock market won't do that.
You guys, you can't do that anywhere. You can't but you can understand that
you can abuse that leverage. If you're putting leverage on a million dollar
house, yeah, prepare to lose lots of money. If you're putting leverage, you know, if
you don't have a right strategy, against strategy, it's going to bury you. But you let
that strategy on a single-family home price below the median $200,000 house
entry level house and some of the best and safest marks around the country, then
leverage, its going to make you a ton of money.
I mean think what leverage is, imagine I'm trying to move something impossible.
My big fireplace man, is right there, it wastes so much, it's impossible but if
I had a long enough lever, and if I was on the other end, I could move it with my
pinky. And tear this whole house down. So leverage with the right strategy is
incredibly powerful. Yeah, absolutely. So the third one here is, appreciation. Yeah,
your assets going to grow. Assets are going to grow. They're going to go. They're going to
go up, They're going to go down, but over time, they do what? They always go up. They
always go up. And by the way, they move in cycles. The cycles help you mitigate the
risks that you can understand timing on real estate when to buy, when to sell. By
the way, just a little hint here, when everyone is selling, it's a really good
time to - buy. And when everyone is buying, it's an excellent time to be - selling. Alright
so understand that as a sophisticated investor, you're always
going to be moving contrary to the populist. Counter-cyclically. Boom!
So appreciation, we don't count on it but you need to account for it it is going to
happen and the longer commitment and strategy you have into real estate, it's
going to actually be a big part of your winnings. But only a part depending on
strategy. And then the fourth one that I want to
talk about here, is that in most investing, it's highly speculative. I'm
going to put my money here and I hope it gets into something, right? Every three
out of four years, the market is up in the stock market. So my 401k, I'm going to be
up every you know three out of every four years. But every fourth year, guess
what? I'm going to take a dive. Every five to eight years there's a really big
correction it takes two or three years to come back from that. And so
financially, you understand that most things that you invest in, you put your
money in and you're speculating over time that you're going to get your money
back. But in real estate, while we are maybe speculated that the market will go
up even though it has like a three thousand near the track record on doing
that, the benefit that we get is real estate gives us something along the way.
It's real property, that can be rented, that produces income. Income producing
property, I mean, are there income producing stocks? No.Other income
producing 401k? No. Income producing IRA? No. Most investments are not income
producing. So real estate not only uses this incredible benefit of leverage, but
you're also getting this income component. By the way, the income
component alone, with the right strategy, can make this incredibly awesome.
So what about the speculation here for just a moment, Because I think this is
important first of all. If you're going to do real estate, do the type that is not
speculative in nature. This is what we really focus on is, doing that real
estate that is safer that has less risk, that is not speculative. But I want to
speak to this speculation for a moment, because speculation is what drives and
oftentimes what kills economies. Yeah. Okay, so let's let's just talk about for
a second. In the real estate markets and even in speculation within real estate.
You've got what happens is, when the markets go down, those that know, those
that are in the know, the experts will jump in. Like, the small percentage of
people that know what they're doing, what's up in, when the markets crash
Kris what do we do? Where we, with those markets that crash the hardest. We're
buying as much real estate and we jumped in. We bought as much as we possibly
could. My homes in Phoenix in Vegas for under a hundred thousand dollars that
were selling for two, three hundred thousand. We were a first mover. Now as a
first mover, people are speculative. People were speculative of what we were
doing. Okay? they were weary about it. They were leery, they were like, hmm
this seems strange. So they held off because of their speculation.
Okay they held off for a while, and then the market grew. They still held off for
a while, then the market grew more, they said, "I still don't know if this is safe
enough." They held off, had off until the market had turned almost around, then
those speculators, those that were the most speculative in the beginning, a
most skeptical in the beginning, right? Decided, finally okay, maybe I'll
jump in now. Oh it's amazing and hoping that it was going to continue to
increase and rise. Dude it's so amazing. The skeptical consumer is the opposite
of the sophisticated investor. So by the way, once once the skeptic gets
involved, you better be running for the hills because there's a reason why
they're skeptical. They keep getting spanked in life. You're about to get
spanked again, but by the way whether the skeptic says, "there's no way I'm going to do
that, guess what the sophisticated investors
are doing? I'm in. There pouncing on all over it. So point is, this is skepticism
and speculation oftentimes go hand in hand. Now, I do want to I do want to say
something. In real estate and in business and in financial life, you got to be
pessimistic. Yeah I wouldn't be really clear. I'm not, I don't mean negative. I
don't mean I don't mean skeptical in a negative way. What I mean
is you can't afford to be optimistic when it comes to money. When it comes to
real estate, you need to be able to look at it and say how am I going to lose money.
This is one of the best questions that you can ask. You should write it down. I
got this from my billionaire mentor. He said, "how am I going to lose money?" Anytime I
look at investment. I'm asking how am I going to lose. Show me how I'm going to lose
money or show me how we can't lose money. Because now, we're actually looking at it
like a business. Because by the way, can you lose money in real estate? Yes. We're
not here to tell you to be optimistic and then it's all roses. We're staying
with the right strategy and understanding it, you can win long-term.
Because we've been winning and thousands of our clients, have been winning with us
along our side. So today friends, we talked about, is real estate a safe
investment for us? When we reign. Now I've got 20 different asset classes that I
invest in and real estate is ranked amongst the safest, but it's asymmetrical
and risk. That means that, it has a very high upside as very low downside with
the right strategy. Are you hearing that theme today? Yes, we're talking about tax
benefits, yes we're talking about leverage, yes we're talking about growth
and appreciation. Yes we're talking about income producing investments. Those are
all things that make real estate unique, standout and absolutely incredible. But
it's all contingent on what strategy. So, our advice is if you're
liking this video, subscribe, check out some of the other things that we talk
about here. And when you feel like you're ready to figure out how Kris, "what do
you mean real estate is asymmetrical? How do we actually jump in and get in on
real estate that has some of the highest gains but very low risk?" Head over to our
website. Check out the different options that wheel out there, because Steven and
I, we have our YouTube friends that come and partner with us and invest with us
all the time. Some are very wealthy and they partner
directly with Steven and I. And we'll build a portfolio together, others, you
just borrow our team and our team will do it for you. Or if you're starting with
no money, we'll even show you how you can get started for under $1,000 to start
crushing in real estate. You got all those options on the website. So are we
big believers in real estate? Yes as long as you've got the right - strategy. Thank
you so much for watching this video. Listen, if you haven't already, go ahead
and subscribe. Hit that button in the corner, so that you and I, we can become
even better friends. And you know what, if you want to come join Steven and I at
one of our live events or you want to learn about the different ways that we
can be playing in real estate together, check out the link, make sure you're
familiar. We're always updating it and in the least, download my book for free. If
you want to learn more about how safe real estate can be and how to mitigate
the risks that are there, then my book that I give you both an e-book and
audiobook format can be a super useful tool, for showing you how to crush it.