Having enough money to survive is crucial! Having extra money, is icing on the cake! However, trading time for money, can deteriorate your quality of life. Passive income can allow you to generate money, while relaxing, while on vacation, while spending time with loved ones, or pursuing a hobby. In today’s episode, I’m going to share some information, about my favorite, tool, for passive income, which is rental houses.
Welcome! I’ve accumulated over 2.5 million dollars in investment property. In the interest of helping others improve their lives, I want to share with you, what I’ve learned, and explain how I built a great real estate portfolio, that pays me back, every day.
I’ve spent quite a bit of money, and time, attending courses, and studying material from many well known real estate gurus, including, but not limited to, Robert Kiyosaki, Ron Legrand, Robert Allen, and Bill Bronchick. I’ve learned a great deal along the way. And, I now have a real estate investing strategy, and a process, that works well for me. In the interest of helping you improve your life, in this episode, I’m going to explain my real estate investing strategy, and how my strategy has enhanced my life, with passive income, and how it can do the same for you.
I also, have a great interview lined-up for you today! My guest, Jason Hartman, is a very successful real estate investor. And, he’s created a company, “Platinum Properties Investor Network”, that offers a turnkey approach to real estate investing. His company identifies markets that have all they key factors to support a profitable real estate investment. Due to his success, in real estate investing, Jason has the freedom to enjoy life, and travel, and vacation around the world.
Before we start the interview, let’s make sure we’re all on the same page.
What is passive income?
You can think of passive income, as the opposite of punching a time clock.
In my first few jobs, working retail. I got paid for the hours I was there, and working. Only. Later, I moved into salaried positions, that offered more flexibility, and nice benefits. However, I was still trading my time for money.
Passive income, is income that you can receive while sleeping, while relaxing on a beach, while traveling, while spending time with your family.
Awesome, huh??!!
Before we go any further, I just want to make it clear, that this information is based on my years of research and experience. Please consult with the appropriate tax, legal, or other business professional, for individualized advice.
Okay, so what are some options for passive income?
There are many. I think most areas of passive income, would fall into the following 2 categories:
Investing (basically, buying something and getting returns)
Stocks w dividends, Precious Metals, Real Estate
Intellectual Property (basically, creating something and selling copies)
Book, Music, Movie, Software
Why Rental Houses?
Now let me tell you why I consider real estate, to be the IDEAL investment.
Reasons:
I = Income
The monthly rental payments not only cover the monthly mortgage payment, they also provide income
D = Depreciation
Real Estate is the most tax-favored asset class
The IRS not only allows, but actually requires, that I write-off part of the value of the property every year, reducing my taxable income
E = Equity
The principal is being paid-down every month (not by me, but, by my tenant)
A = Appreciation
With a house in a good area (w successful companies nearby to provide jobs)
The house, over time, appreciates in value
There may be slight dips in the market, but over the long run, history has shown the values to steadily go up
L = Leverage
The bank will lend me 75% (and sometimes more) on my investment properties
Have you ever tried to get a loan to buy stocks, or gold?
When it comes to investing, there are many different types of real estate, that you could choose from. For this podcast, we will focus on residential real estate. I’ve researched commercial opportunities. And, I may eventually venture into commercial real estate. But, for now, we’re talking about residential real estate.
Residential real estate, basically, consists of houses, condos, and multi-family properties (up to 4 units). Multi-family properties over 4 units are considered commercial properties (at least, from a lending point-of-view, they are considered commercial properties).
My favorite is houses. Now, let me be clear, I’m talking about buying houses, and holding onto those houses for rental income. I’m not talking about flipping properties. Flipping properties can also be a great way to make money. However, it is not passive. You have to put in the work, to renovate the property, then sell the property to make money. After the sale, the money stops. In the interest of having an amazing life, I want to help you to create a stream of income, while protecting your valuable time!
Questions, Comments, Compliments
Before we jump into the interview, I want to remind you, that “The LIfe I Deserve” is here for you! Let me know how I can help you. What topics would you like to hear more about? What goals do you have, for your health, wealth, and happiness? Reach out to me! Visit “TheLifeIDeserve.com”. And send me email or voicemail. From the Web Site, click on the “Contact” tab. You’ll see a button, there, that will allow you to record voicemail. Or, if you’d rather leave email, just fill-in the form, just below the voicemail button.
I really want to hear from you!! And, yes, I do mean you! Reach out! Let me know what’s on your mind. Maybe you have an inspirational story, or thought, that you’d like to share. Just go to “TheLifeIDeserve.com”, and then click on the Contact tab.
Stay tuned after the interview, as I share with you how I got started in real estate investing. I’ll also give you some tips to help you get started.
Interview
Jason Hartman has been involved in several thousand real estate transactions, and has owned income properties in 11 states and 17 cities. Through his company, Jason provides real estate investing education, research, and resources.
[Please listen to the audio for the interview. Thank you!]
Podcast Recommendation
I encourage you to check-out Jason’s “Creating Wealth” Podcast. I think you’ll find the knowledge that he shares invaluable to your real estate investing career!!
Jason continually researches housing markets, not only in the US, but occasionally in other countries. He knows what constitutes a great investment.
I’d like to make it clear, that I do not receive any incentive (financial or non-financial), for recommending Jason, or his company. I’m recommending Jason, because he has been very helpful to me, with my real estate investing. And I’m confident that he can help you as well.
And one more thing, about Jason. Jason is not shy about his political opinions. I highly recommend him for his real estate advice. However, I’m not recommending, or endorsing his political opinions. However, regardless, if you agree or disagree with his political opinions, it’s always interesting to hear different perspectives. So, I encourage you to listen, learn, and enjoy!
How I got Started
So, at this point, you may be interested, but wonder how to get started. I think, for most people, the biggest challenge, is getting the money for the down payment, on their first rental property.
To address this concerns, let’s start with this question. How much money do you have saved? Are you saving any money?
Analyze your monthly spending. Where’s your money going? Where can you save money? How can you bring in more money?
When I went through this process, I cut-back on eating-out. I started using coupons at the grocery store. I did everything I could think of to reduce my spending.
And to increase my income, I built web sites. I made several thousands of dollars creating web sites. That actually worked-out very well. I found my clients, almost accidentally. I never looked for clients. I’ve always enjoyed great design! And I think I may have mentioned, while in conversations with people, how I like to create beautiful web sites. And that may have generated the business. I never looked for a web site design client. As a matter of fact, I had to turn some business down. Another great reason, to pursue work that you love!
So, the combination of cutting-back on spending, and generating more income, provided me with the down payment for my first property.
Actually, I remember getting the instructions for sending the down payment. It was actually a few thousand more dollars than I anticipated. I remember getting a sick feeling in my stomach, and having a rush of negative self-talk, fill my head, “did you really think you could buy a place in Santa Monica?” “What were you thinking?” “You don’t have the money for this?”. I then recalled lessons that I learned from Jack Canfield. We have to replace the negative thoughts, with positive thoughts. If we can dream it, we can achieve it! I thought to myself, “I can do this. I will do this. I am doing this.”. I then remembered, hearing that you could borrow money from your 401k for a 1st time home purchase. I went to my local fund manager’s office. I informed the fund representative that I wanted to borrow money from my 401k, for a first time home purchase. The novice representative told me that’s not an option, you’re going to be penalized heavily for taking this money out. I trusted my instinct, took out the money, bought my first property, and a few month’s later, refinanced the property, at a lower rate, taking some cash out to pay back my 401k account.
Landlording Concerns
What if I can’t find a tenant?
How will I deal with maintenance issues?
My Strategy
To answer these questions, I’m going to walk you through my strategy. And, I’m going to point-out, as I go, how I address each of these concerns.
Please keep in mind this is my approach. It works great for me. However, depending your needs, and your interests, you may want to consider a different approach.
Finding Tenants
The old saying location, location, location, is so relevant here. Find a great location, and you’ll find tenants. So, what makes-up a great location?
Number 1, jobs!! People will go where the jobs are! Be cautious, on this one. Yes, a new factory may have just opened, creating 10,000 jobs. But, is this the only source of jobs? If so, consider another area. Make sure an area has many job sources, across at least 3 industries. For example, if all of the jobs in the area were from Blockbuster Movie Rental Stores, and even the Blockbuster Corporate Office, that wouldn’t have been a good area to be invested in, when NetFlix came around.
Number 2, great schools!! Education-conscious parents will pay more to rent houses, in areas with great schools. Although, the school taxes may be a little higher in these areas, I’ve found that the higher rents, make these areas great opportunities for sound investments.
Maintenance Issues
To cover this area, I’m going to start by telling you, there’s more money in apartment buildings. If there’s more money in apartment buildings, why, Adrian, do you focus on rental houses?
The answer… mentality!
Apartment renters usually have renter’s mentality. Which they should. They’re renting. I’ve known people, renting apartments, who have called maintenance for something as small as a bulb being out.
My tenants are in houses. They are surrounded by homeowners (in the suburbs). They never call about a bulb being out. As a matter of fact, some of my tenants have even installed ceiling fans, garage door openers, and new lighting fixtures (with my approval of course). Also, I should point-out, in these situations, I reimburse the tenant for the cost of supplies. But, providing they are handy, they take care of the labor themselves. From my experience, tenants living in houses, surrounded by homeowners in houses, tend to be more responsible and mature, than tenants living in apartments.
Landlording Product
Like I mentioned earlier in this podcast, I’ve spent many years, and a great amount of money, studying with some of the most successful real estate gurus. From all of this education, I’ve chosen all of the landlording processes that I found to be most effective, and I’ve put those processes into practice. I now own over 2.5 million dollars in investment properties. I’ve compiled and simplified those processes into a system, that I feel has the best balance of being lucrative, ethical, and passive. In the interest of helping you to get started, I’ve put together all of the forms, and processes, that I use, into a nice organized package, that you can download, for a limited time, from TheLifeIDeserve.com/landlording. Again, I’m offering this product for a limited time. If you’re listening to this episode in the future, it’s possible, that this product is no longer available. Whether you want to invest locally, or in a remote location, my processes, and forms, will simplify your investment experience. All of my properties are over 1500 miles away from where I live. However, with my processes, I’m still able to run a successful real estate investing business. All of my forms, have been carefully designed to keep you in control, while delegating most of the landlording responsibilities. One very well written form, could save you thousands of dollars. I know, because not having one of these forms, actually cost me over $2,500. I’m offering this package of forms and processes at an extremely low price. This low price, helps me to pay for the production cost of this podcast, which enables me to help more people to create the life they deserve. Please visit TheLifeIDeserve.com/landlording, to get more information on this valuable product.
It's Trivia Time!
Last show’s question:
The highest number of pregnancies, ever recorded? It occurred in the 1700’s.
And the winning answer…
...was again, submitted by Andrei Aleksandrov, who correctly guessed “69”!! How in the world, one woman, gave birth to 69 babies, is beyond me. Regardless, this number of births was recorded to have happened in Russia, between 1725 and 1765. Congratulations, Andrei!!
Today’s trivia question:
When Apple was building a new data center in North Carolina, they paid one elderly couple $1.7 million dollars for 1 acre of land. How much did the couple pay for the land 34 years earlier?
Send your answer from the Web Site, “TheLifeIDeserve.com”. From the Web Site, you can leave voicemail or email. Just click on the “Contact” tab.
Jason Hartman has been gracious enough to provide 2 valuable prizes for our trivia contest winners!! These are great prizes! Listen to this!
One of the prizes, would be a free Platinum Properties Deal Evaluator! The Deal Evaluator normally costs $50. However, this service, in my opinion, is much more valuable than $50. Jason’s team has evaluated and executed millions of dollars, worth of real estate transactions. They know how to weigh all of the factors, and determine if a deal will be profitable, or a problem. For details on the Deal Evaluator package, go to “JasonHartman.com/deal-evaluator”.
The second valuable prize, is 50% off of any course from HartmanEducation.com! 50% off!! I had to double-check with Jason on this! This is an amazing discount!! I told Jason, too! 50%, that sounds amazing!! Are you sure? Yep, 50% off.
The 1st winner will get to choose, either the Free Deal Evaluator, or 50% off of one of the great courses at HartmanEducation.com.
So again, today’s trivia question:
When Apple was building a new data center in North Carolina, they paid one elderly couple $1.7 million dollars for 1 acre of land. How much did the couple pay for the land 34 years earlier?
Go to “TheLifeIDeserve.com”, to submit your answer.
Salutation
Well, that’s going to do it, for today’s show. I hope you found this episode valuable! My mission is to inspire and empower, those that I encounter, to live full and meaningful lives, by sharing lessons learned, tools for self-improvement, and life-changing perspectives. Subscribe to the Podcast, so we can take this journey together. I hope today’s show has helped you to see, that you can take control of your financial future. :-)
Final Quotes
I’d like to leave you with the following great quotes about real estate:
"Real estate is the best investment in the world, because it is the only thing, they are not making anymore!"
-Will Rogers
“Real estate investing, even on a very small scale, remains a tried and true means, of building an individual's cash flow and wealth.”
-Robert Kiyosaki
“90% of all millionaires, become so, through owning real estate”
-Andrew Carnegie
Thanks again, for listening to the “The Life I Deserve”. This Podcast was designed for you! Designed to enhance your health, grow your wealth, and fill your life, with happiness!! Visit “TheLifeIDeserve.com”, and send me voicemail, or email. Let me know something about you. What inspires you? How can I help you? Do you have a suggestion for the show? Let me know. And, if you just happen to love the show, please post a review on iTunes! :-)
Thanks, again! Love you all!! Until next time… goodbye.
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