Get Rich Education 548: A 7-Figure Income is the New 6-Figures, Car Loans, Pros and Cons of Turnkey Real Estate
Keith discusses the shift from a six-figure to a seven-figure income being necessary for a comfortable lifestyle and argues that a $5 million net worth is a minimum for financial security.
He explains the benefits of leveraging a car loan for arbitrage, using a 3.99% interest rate to invest in real estate with a 20-25% total return. He also discusses the current state of the real estate market, noting that home prices and rents are expected to increase by 3-5% annually.
Lower mortgage rates could increase affordability and bring more buyers into the market, potentially leading to higher home prices.
Two-bedroom rents have increased by 3.7% nationwide, with significant growth in Nebraska metros.
Resources:
Get our wealth-building newsletter free—
text ‘GRE’ to 66866
Show Notes:
For access to properties or free help with a
GRE Investment Coach, start here:
GRE Free Investment Coaching:GREmarketplace.com/Coach
Get mortgage loans for investment property:
RidgeLendingGroup.com or call 855-74-RIDGE
or e-mail: info@RidgeLendingGroup.com
Invest with Freedom Family Investments.
You get paid first: Text FAMILY to 66866
Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”
For advertising inquiries, visit:
Best Financial Education:
Get our wealth-building newsletter free—
text ‘GRE’ to 66866
Our YouTube Channel:
www.youtube.com/c/GetRichEducation
Follow us on Instagram:
Complete episode transcript:
Automatically Transcribed With Otter.ai
Keith Weinhold 0:01
Welcome to GRE. I'm your host. Keith Weinhold today, why earning a seven figure income is the new six figures? Then a discussion on the direction of real estate prices and rents. I just bought a car though I could have paid all cash. Why did I get a loan instead? Then learn about how to perform due diligence on buying an income property with the pros and cons of turnkey real estate investing and the mistakes you must avoid today. On getricheducation.
since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com
Corey Coates 1:20
You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.
Keith Weinhold 1:36
Welcome to GRE from the first State of Delaware to the 50th state of Hawaii and across 400 nations worldwide. I'm Keith weinholden. This is get rich education, the voice of real estate investing Since 2014 Are we really gonna change the name away from the Gulf of Mexico? Well, I'll tell you one thing. There is zero history of hurricanes in the Gulf of America, therefore, I expect the appropriate adjustment to my insurance premiums big savings. Hey, you know, despite being a geography guy, I'm really not emotionally invested in this movement to change the names of giant pieces of real estate like Denali back to Mount McKinley and the Gulf of Mexico to the Gulf of America. It's only a little interesting to me. I mean, there are just more significant things to concern oneself with. So call it either one. I don't care. I know what you're talking about. Before we talk real estate, let's discuss your personal finances. I recently watched Dr Steven Franson speak surfacing this topic, and it got me thinking, when it comes to annual income, is you earning seven figures like the new six figures. Now, I guess that earning six figures could still be a short term goal to some people that are new to the working world, but maybe as little as a decade ago, having a six figure income was aspirational, or even a sign that you made it, or could even feel wealthy. I remember that today that is so far gone. Now, of course, it depends on where you live, but today, you need 50k just to survive. Your housing would be pretty standard in that case, and I don't know that you could get much fresh, healthy food at 50k per year, you might still have to be living with your parents. You need 100k just to sort of live. Perhaps that's if you're single and you're near the coasts, or you're married without children today, you need 200k for a life with travel and some dining out. I mean, you couldn't really even ball out on your vacations, like on 200k you're gonna balk at 500 bucks a night for a resort hotel. I mean, you're staying at more of a hotel than a resort, but at 200k of income, you can usually do some discretionary spending. At 300k in a lot of places, that's what a full family needs, a household with kids in order to live a little bit beyond that, and that's a combined income both spouses. If you make 450k today, now you're able to travel pretty well. You're probably still flying coach more than first class at 450k you may or may not be paying for the airline lounge, but you are staying at some comfy hotels. You really need to make $1 million a year today to live pretty close to all out fly first class travel well. But you're still flying commercial on a million dollar salary. You're not chartering anything. If that has not bought you time to cook, you can afford an executive chef with a million dollars so that you don't have to eat restaurant food. You know, restaurant food, even at finer restaurants, is laced with seed oils. This is why what used to be a six figure lifestyle is now a seven figure lifestyle. My spin here on this also is whatever you do at any income level, 50k a year to a million bucks a year or more, buy enough time to exercise that's something that's going to matter both to you and to those that you love over the long term. All right, so that's income. How about when it comes to net worth? There is a minimum amount in my mind that you need to have in net worth for me to say that you've got it made in America today. What do you think that number is? How about that? What do you think is the threshold? What's your thought? It is $5 million that is just a starting point, a minimum net worth that you need, if you just invested that you could probably live off its income for the rest of your life. For most people, compound interest will not get you to the $5 million net worth Mark anytime soon. Only leverage will. But yeah, after the COVID induced wave of inflation years ago, you've gotta recalibrate what you think of as a lot of money, and some people haven't caught up with this still. Now, I was on that great riverboat tour of Chicago not long ago. I think I brought this up to you in a previous episode, but you know, one thing that struck me as odd was that the tour guide, he was describing Chicago skyscrapers and the architecture around us, and he said they poured millions into that project. I mean, really emphasizing that millions were spent. I mean, today millions can mean as little as 2 million. That's an amount so tiny today for a construction project that what is that like, four average homes would be $2 million I mean, some entire counties in the Bay Area have a median home price of more than $2 million just one mediocre home. So let's talk about the direction of home prices and rents nationally here. Now I do not think that home prices or rents can really climb a whole lot over the next year, like 10% appreciation. I don't see it now. I also don't see how home prices and rents could fall substantially. The reason that prices cannot spike dramatically, it's still due to an affordability constraint, and I don't expect that prices or rents are going to fall a good bit either, or really fall significantly at all, because housing demand still exceeds supply. So that's the constraint on the downside. Really, nothing has changed there. The average for sale home today, it gets between two and a half and five offers that obviously depends on the area, so you keep seeing both prices and rents increase at this range of three to 5% that's the zone that we're in now, and we've been in that zone for most of the last Two years. Really pretty modest, not exciting, appreciation rates. Zumper tells us that two bedroom rents are up 3.7%
nationwide. Rents have actually declined in some Sunbelt cities, Durham, North Carolina and Nashville are some big losers I was describing Austin to you a few weeks ago. Do you know that two national leaders in rent growth are both in the same state. Yes, these two cities are both up more than 20% in rents year over year. It's in the Midwest. Any idea where I'm talking about it is Lincoln and Omaha, Nebraska both up over 20% and perhaps recent GRE listener guest grant Frankie is happy about that. He's the only person I know that invests predominantly in Lincoln, and this is due to strong job growth and also that supply that still hasn't kept up with demand. Now back to my point about how nationally, both rent growth and price growth are still pretty modest, which is still a highly profitable formula for a leveraged investor that bought right But historically, it is kind of boring. Many believe that as soon as mortgage rates fall sharply, and a lot of surveys show this, if. That five and a half percent is the magic mortgage rate level that will increase affordability so much that home prices will soar. I'll tell you my spin on that is maybe even that remains to be seen from listening to me for 10 and a half years now, you know that the direction of the economy has a substantial effect on housing, rents and prices, a force bigger than just mortgage rates. And when mortgage rates fall and other interest rate types fall, that usually means that the economy needs the help, which might mean that employment is down. If employment falls, home prices can still rise. They usually do, but perhaps not as much as you thought they would. So my point is, is that when mortgage rates fall significantly, that does not automatically translate into soaring price growth. Again. You gotta take history over hunches. If there's one thing that feels a little different in this cycle though, it's that we do have this palpable amount of pent up housing demand, so lower rates really could bring a lot more buyers off the sidelines. So therefore, it is possible that home prices will soar if rates really plummet. It is just not axiomatic. Now I just bought a new car, though I could have paid all cash. I chose to get the loan. And before I tell you about why I considered not getting a car at all and just using Uber Lyft ride sharing services forever. But sometimes I like to go off the beaten path and trek in some remote places. So that just wouldn't work. I also travel a good bit, and I considered not owning any car that's tethered to just one place. It's just not that efficient. But it came down to freedom. I enjoy my freedom and autonomy to hop in my own car and drive it on a whim. Though I could have paid all cash for this new car purchase, I chose to put the minimum amount down, and I got a loan for about 95% of the cost of the car. Why would I do that? Car debt is surely not as good as real estate debt. With car debt, I have to repay my own loan. I cannot outsource these car debt payments to tenants, and the payment is about $900 a month. I'll have to pay all of that myself. Also, unlike real estate, a car is a depreciating asset. Unlike mortgage interest, car loan interest is typically not tax deductible either. I'm not going to rent this car out through Toro and try to get an income stream off the car. Nothing like that. So this might sound like three strikes against a car loan. I've got to make the payment myself. It's declining in value, especially as a new car. It starts depreciating fast as soon as I drive it off the lot, and I'm not going to have any tax breaks. Oh, come on. I mean, that might sound like bad debt to a lot of people. Leading GRE I am a staunch advocate for good debt. So why did I embrace a car loan to the maximum leveraged amount? Because I am making my car loan good debt. The definition of good debt is debt that makes money for you. Car loan debt is secured, meaning there is underlying collateral, the car itself. And by the way, credit card debt is an example of unsecured debt. The big reason, though, is the financing through the dealership BMW is a 3.99% interest rate for five years, my credit's perfect. So I got a good rate there. Therefore this car loan is a simple arbitrage play. I'm borrowing at a lower rate to invest at a higher rate. Look, even if my car loan rate were double 8% I would probably still get this car loan, but it's 3.99How do I have confidence that I'm going to beat that on an annualized basis over the next five years? Well, first future inflation expectations are elevated, like I touched on on last week's show, if true, inflation the real diminished purchasing power of your dollar over the next five years is 4% I mean, that's a break even for me, right there already, but I'm gonna do a lot better than that. As a real estate investor, I know that instead of sinking this money into the car, that's enough of a down payment for a rental single family. Home or almost a low cost duplex, and being cognizant that real estate pays five ways, I expect a minimum of a 20 to 25% total rate of return with low risk. Now, if you're a new listener, that last part sounded far fetched. I know that's okay. You just don't know how to calculate your ROI for an income property with a loan. Yet another way to describe my strategy here is though I could pay cash, why would I tie up that many funds in a car? So I'm cognizant of opportunity cost. Opportunity cost means that you're missing out on a greater benefit when you choose one option over another. This loan approach also keeps me more liquid. Look, keep your money. Don't give it to a bank. Make your bank take five years to get all the money, while my $900 monthly payment stays fixed the whole time as inflation just keeps relentlessly debasing the bank's payment that they get from me. I mean, with that part, it works the same way as it does in real estate or any fixed rate loan that you could get. Be mindful, by paying all cash, you would not improve your net worth at all. Nothing happens to your net worth. Paying all cash reduces both your asset column and your debt column by the same amount, and it hurts your liquidity. Now, if you've got an emergency, you could be in a case where all of your funds would be gone if you paid all cash, they're inside the car, and you might not be able to extract them back out. All right. Well, what about the depreciating asset part of this equation? That's what most cars are. Well, just like a piece of real estate, your car's value will rise or fall regardless of your equity position. That doesn't influence it at all. So I will be underwater on the car. That's a way that some people might look at it. That means that I'm going to owe more on the balance than the car is worth. That appears irresponsible to some people. Well, yeah, that just means that the bank's money is tied up in the car, not mine. I've got it off giving me a good return. Look, when you have loans, you have another type of leverage, and it's not the mathematical type that I often discuss here. I mean, have you ever owed a friend money when something untoward happens? Who is motivated to talk between the two of you? You are your friend, your friend. They're going to be the one that's willing to work with you and help you out. They've got to give you levers when there's a mal apropos occurrence and the borrower loses their job or has a medical disaster and a huge bill, the person that's owed the money is always going to keep communication lines open with you, you as the borrower, are the one that is in control. Keep your debt on, keep your own money, stay in control. And how is this car loan making money for me, if I get a, say, 23% total return from income property and keep paying a 4% car loan, that is 19% arbitrage, I mean, what an easy choice. Again, the definition of good debt is debt that is used to increase your wealth. So getting the Max car loan allows me to avoid paying that opportunity cost of having all the funds tied up in a depreciating asset. And that is how a real estate investor buys a car. Now you're a smart investor. I mean, we have a really wise, responsible audience comprised of people just like you. But what would be some reasons that a real estate investor should pay all cash? Because there are some, and a lot of them revolve around, if you're financially irresponsible, if instead you got a car loan so you could stay liquid and maintain your life as a profligate and reprobate gambling degenerate and lose it all on sports gambling through the freaking Draft Kings and FanDuel apps. Okay, that's not a good reason. But as a GRE listener, that probably is not you. I was probably not talking about you, right. There another reason to pay all cash rather than getting the loan like I have, is if you don't have the liquidity to service the 900 Dollar monthly debt payment yourself, you could be over leveraged. See the chunk that I'm investing in real estate instead of the car that real estate will produce income for me, but it actually will not produce as much as $900 in cash flow to fully offset the car payment. Now it's going to produce a few $100 but my arbitrage is being created with the summation of all of real estate's five profit centers. I've got the whole shebang now, the leverage appreciation, the cash flow, the ROA, the tax benefits and the inflation profiting all coming at you. All five. My liquidity comes from elsewhere. A third reason why a real estate investor would want to pay all cash for a car is because say that you would effectively be forced to pay all cash for the car. Because if you took on a $900 monthly payment, that would dent your mortgage loan qualifications, debt to income ratio that mortgage loan underwriters are going to look at it would hike up your DTI so much that you couldn't qualify for future income property loans. So right, there are, what was that? Three reasons that a real estate investor would want to pay all cash if they could. But let's not lose the bigger point I was talking about the exceptions there. The bigger point is that consider getting the maximum loan for your next car, or even getting a loan against your current car if you already have one without any debt on it. It's actually a rational approach, because you want to consider the loan first, since this is your money, you earned it, approach it with the strategy first of keeping your own money that you traded away your finite life's time for. Think of keeping it first and only then consider giving it away next. I am getting the biggest car loan that I can and making the minimum monthly payments all 60 months five years, I did the same thing with my last car. It is an easy choice for me in just one word, it is for the arbitrage one word, most experienced financiers and real estate investors have not been exposed to those ideas that I just shared with you, and at the least, I am confident that I just gave you something to chew on mentally. There I've been talking about the intersection of your personal finances and real estate investing. Today, I'm your host, Keith Weinhold here on episode 548 of the get rich education podcast
what have GRE listeners been doing these past few weeks, they have been scooping up BRRRR properties, employing the buy, renovate, rent, refinance and repeat strategy fueled by GRE 's recent live event. You can watch the video of the event on demand right now, get an understanding of the strategy, see why it's so lucrative, and if it interests you, even get you paired up with actual property addresses conducive to the strategy. You can do that at GRE webinars.com this event can indelibly elevate your entire socio economic class and shape your legacy. That is a deep statement. Hey, this is what 8x leverage and $500 plus of cash flow on each single family rental property can do for you with the burr strategy in Cleveland. I mean, how much earlier will this allow you to retire? The event is free to watch. You can watch from home. I mean, come on, what else are you going to do at home tonight? Spend that time cleaning out your closet or smoking meats. Maybe at least, spend that time getting a car loan. What's the opportunity cost of you smoking meats tonight when you can actionably Build a real estate legacy with the BRRRRstrategy? Strategically outsource the meat smoking to somebody else. That's what I do. It does not take much to get started. These pre renovated homes are often about 60k some GRE followers have already bought two or three at a time. You'll see Jerry's investment coach Naresh and event co host Phil. I mean, just watching him talk is amazing. Phil is America's preeminent authority on burr real estate investing. Again, you can watch the event right now, and I don't know how long we'll keep it up for, just visit GRE webinars.com
Next fatal mistakes that you've got to avoid when buying income property with some vital due diligence tips. I'm Keith Weinhold. You're listening to get rich and. Vacation.
You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it. If I wasn't invested myself, you can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom, family investments, liquidity fund, again. Text family to 66866
Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com that's Ridge lending group.com
Robert Kiyosaki 26:49
this is Rich Dad, Poor Dad. Author Robert Kiyosaki, listen to get rich education with Keith Weinhold. And the reason I respect Keith, He's a very strong, smart, bright young man.
Keith Weinhold 27:10
Welcome back to get rich Education. I'm your host. Keith Weinhold, it's been a while, but I know that I shared with you before that my first ever out of state rental property that I bought ended up being a loser, and this is despite the fact that the turnkey provider and property manager that I was hiring for the property, they even told me not to buy the property because they couldn't keep it occupied in that neighborhood, and they told me to buy a different one instead. I didn't listen. I bought it anyway, and I lost we couldn't keep it occupied, so after a few years, I sold it to an owner, occupant, family for a small profit, but it was after years of negative cash flow, so there really wasn't any profit there, because, like I just said, we couldn't keep it occupied with a rent paying tenant that was back in 2012 near Fort Worth Texas. I bought it because it was cheap, just 153k and it looked pretty. It was brick. Those are both bad reasons to buy. Cheap doesn't always mean good. And the fact that a property looks pretty, I mean, I guess that's a somewhat good thing, but it should not be a deciding factor. I was never going to live there facts Trump feelings in investing. So my first bad experience was totally avoidable. I can only blame myself. Let me tell you about some other fatal mistakes to avoid, as we talk about some turnkey real estate investing due diligence. Since turnkey means all done for you, or another way to describe the property is a rent ready property. You know that word turnkey? It's sort of this compelling, even seductive buzzword, and it just might make you think that, ah, everything is just handled now and forever. It's gonna sail along just fine. No, it won't. Now, this is the type of investing that can change your life. This is the real estate pays five ways. Compound leverage Trumps compound interest, type of vehicle. Financially free beats that free type of vehicle. You're winning the inflation Triple Crown all those great, formulaic GRE mantras, but you better check to make sure before you get too far into it. And that's why we're talking about vital due diligence here. I think you know by now that turnkey, it means a property that's really just got three things. It's already renovated or new. Secondly, has a tenant in it, and it has professional property management from day one. Now, the property providers at GRE marketplace, they are some of the good ones. They have good reputations. Many have been in business for a long time, but some others do not. So what about a provider? Provider that's in, say, Oklahoma, but you live out of the area on one of the coasts, and this Oklahoma provider, they're trying to pass off a property in Oklahoma City or Tulsa to you, it's actually in a class D neighborhood the worst. And they're sort of presenting it like it's a Class B minus neighborhood, right? How can you hedge against that? How can you know that things are not being misrepresented to you? Well, of course, everyone knows about Google Street View. You're probably going to look at that first that's going to tell you about the street scene. It's free to use a paid service that gives you neighborhood analytics. Is it neighborhoodscout.com you want to verify crime rates in areas, income levels, poverty levels, education levels and school quality to make sure that the property characteristics are what you are being told, and some of those attributes always matter with property. I mean, crime rates matter because even though you're not living there so you're not going to be able to retain respectable rent paying tenants that would tolerate a high crime neighborhood. Understand, though, that not all crime data is the same. Violent crime is probably the worst shoplifting, I'll call that in the middle. And then most traffic violations, they're light crimes. Now, if you're buying a single family rental type, of course, the quality of the school district, well, that's going to matter more than if you're buying a building of little efficiency apartments where the school district hardly matters there, because you're not catering to families. I've mentioned before that we go look.com. Is a service where you can hire an independent inspector, not even a real estate related person, necessarily, but just an independent on the ground inspector to just go check out a neighborhood at any hour of the day or night. Now, if you have any question about the out of state neighborhood that you're buying in an easy way to get a check on the decency of the neighborhood is something really simple. Make sure the turnkey provider owns properties in the area that they're selling to you. This helps ensure that they're not offloading their problem properties onto you. That's something that's probably only going to happen with an inexperienced provider that doesn't have a reputation to protect yet. But when it comes to neighborhood quality, once I'm pretty serious about buying a property, do you know who I usually get reliable information from? And it's virtually free, and you're contacting this party anyway, so it's so easy for you that is just simply ask your property inspector. I mean, you always want that independent, certified Property inspector to walk inside every room of your prospective purchase, and they make that punch list for your seller before you close that's on either a renovated or a new build property always get that inspection. I've talked about that before, and that often costs $500 or less on a single family home, and today it's about $800 or less on a duplex, well before my inspector even checks out the place. I like to let them know that I live outside the area, and I want their insight on the neighborhood as well. I mean, inspectors live locally there, so they'll probably be able to give you a good answer before they even do your physical inspection. They already know the area really well, and it doesn't even cost you any more above your normal inspection cost to just get a little on the ground intelligence. And of course, your inspector works for a company independent of your property provider, so their information should be unbiased. They work for you. Now after the inspection, how about your appraisal and some due diligence with that, what if your appraisal comes in low. Everyone wants to talk about if your appraisal comes in high, that's instant equity that you have, but see if the appraisal comes in low with a turnkey property where everything was renovated, that may or may not be a problem, because the comparables that were used for your valuation, they don't have everything renovated in them like your property does. So the subject property, the one that you've got under contract to buy that could very well have a lot of say, new plumbing, electrical, HVAC, the roof, bathrooms, paint, flooring, lighting, kitchens. I mean, most, or all of those components could be new in yours. It's common for yours to have all those components, and then the comparables do not have those now, you and your seller, you will have to negotiate on who's going to close the appraisal gap. I've discussed that part on a previous episode, but I'm point. Out how you can still be getting value even when your appraisal is low and it's worth it. Down the road, you're going to have less maintenance headache than your appraisal comparables will most of the time. Turnkey properties are renovated to cover major systems, and that means you do not have major expenses. Soon these expenses get wrapped into your mortgage payment, and that's a lot better for you than coming out of pocket three years later to replace an entire roof. Another thing to keep in mind is that a property provider that's been in business for a lot of years, they do not have interest in selling you a lemon of a property and hurting their reputation, but that seller does have a little interest in getting the maximum dollar. I mean, that's almost intrinsically natural in human beings. I mean, everyone has that motivation, just like you do when you sell your property down the road. So these rent ready or turnkey properties, they're almost always better if you're a busy professional or you just want to spend your time doing something else. I mean, I think that's a pretty well established concept in the investing industry, but I really think these rent ready properties, they are better for even more people than just busy professionals. I mean, consider the alternative, if you try to screen and identify a property yourself and do all the rehab and manage the contractors. I mean, first of all, you can be dealing with a hard money loan where you're paying four or five points plus a 12% interest rate, since that's all that's available for distressed properties, and unless you have experience managing contractors, oh, boy, you could have construction timelines that go over by several months. Well, now that can eat a huge portion of your investment that you thought you were making. You're paying 12% and you have no tenant all this time, but instead, when you buy a rent ready property, and you've got the best mortgage rates and terms from day one, and you've got a rent paying tenant from day one, and not all these headaches and time lost and contractors are trying to manage with turnkeys at GRE marketplace, those rehabs are done by crews that work full time for the turnkey provider, so they work at more affordable rates than what you could get as an out of state buyer if you're trying to patch together contract and crews yourself. So at scale GRE marketplace providers, they're also dealing with the same material types over and over again, so they're faster at doing it. The materials are also reliably sourced. You won't have the 10s or hundreds of hours managing all this, checking with the rehabbers, checking for quality control, making sure the amount of work that you were paying for was actually done. I mean, some people listen to this show and they had that real estate pays five ways, epiphany, that big light bulb moment, but then they try to do this rehabbing and investing themselves to save a few dollars, is what they thought, and it's rarely worth it. So avoid the massive time commitments with all this. I mean, you're also going to be doing other things, coordinating inspections and permits with city municipalities. I mean, what a nightmare. GRE marketplace providers, they've already done all of that for you and more now that you've bought the property, all right, what about the potential for poor management? Choosing your property manager is of utmost importance, because that person or firm, they're going to vet your tenants, handle the repairs, collect your rents and take care of any other issues at your rental property. They'll understand the local landlord and tenant law, you're going to be seeing the property infrequently, if you ever see it at all, so keeping an eye on things becomes key. Now, once you own the property and you have the tenant in there, there is always the potential for your property manager to do a poor job, costing you money, making your investment less lucrative, I like to ask my manager if they do regular property inspections, like getting inside the unit every six months. Now, you can read online reviews, like the star reviews, the number of stars for property managers. I mean, that could be helpful. It can also quickly get misleading. You can get a lot of bad reviews on an adequate manager. Because property management is such a tough job, I think that one of the best things you can do when vetting a property manager is to ask a friend. A lot of people don't have that option. So then do a search on the bigger pockets. Forums for your prospective property manager. So read reviews. Don't just look at star ratings. And I'll tell you, property management is one of the few areas in my life where I am willing to accept a service level of adequate or mediocre. Almost no one raves about their property manager, but I do have managers because they are the guardians of my quality of life, of your standard of living. We want them to serve our tenants, but I don't want 80 tenants being able to text message me. So there you go, armed with a number of due diligence items that can help you make sure that you buy your next income property, right? GRE marketplace, we typically connect you with the experience providers, but I'm telling you this because it's prudent to do some checking on your own and inquiring like this too, in case you have any doubt. Now, you notice on GRE marketplace, where you can connect with free investment coaching as well, that the properties, at times, they seem less expensive than you would expect. Why is this? Well, investor advantage markets, they have low prices. I mean, that's just one reason that they are investor advantaged like Ohio, Indiana, parts of Pennsylvania, Michigan, Missouri, Kansas, Nebraska, Tennessee, Arkansas, Georgia, Alabama, Oklahoma, Texas and some of the other Mid Atlantic states And Florida, another reason the GRE market prices seem low is that there is no agent that has to be compensated. It is a direct model. Another reason is economies of scale. Providers provide homes in bulk, so there are savings that way, and there also aren't any owner occupied emotions evolved with income properties. Those emotions can run up the price, or what they really do is they keep it stuck at a high price. So to help you review what you've learned today, a seven figure income is the new six figures. Real estate prices and rents just keep moving up, but modestly for the time being, a car loan can be good debt when you have a reasonable expectation that you can create arbitrage and sufficient liquidity in your life. And though income property is perhaps the most proven wealth generator ever, there are some mistakes to avoid when it comes to buying right between the guidance that you have today and the help of our completely free investment coaching another safety layer. If you're confident that it can benefit you, I encourage you to engage and move at the speed of instruction. It's the only way that you'll benefit I built this resource. I really wish it existed when I started out, and it's available for you at GRE marketplace.com, until next week. I'm your host. Keith Weinhold, don't quit your Daydream.
Speaker 1 43:18
Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.
Keith Weinhold 43:42
You know, whenever you want the best written real estate and finance info, Oh, geez. Today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long. My letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.
The preceding program was brought to you by. Your home for wealth, building, getricheducation.com.