Center for REALTOR® Development 093: Investing in Real Estate is More than the Purchase with John LeTourneau
This episode's guest is John LeTourneau. Our topic is real estate investing. The Center for REALTOR® Development has a course that teaches this: Real Estate Investing: Building Wealth: Representing Investors and Becoming One Yourself. There is so much opportunity for you, our listeners, in this area. John is just opening the door of what's possible. Let's find out more.
[2:42] John became a broker and a REALTOR® in 2005.
[4:11] John started in residential but preferred B2B, so he worked as a non-REALTOR® commercial broker for several years at a large commercial firm. John shares a prospecting story.
[6:50] John does volunteer work for his local, state, and national associations and public speaking and education in the U.S. and internationally. Every hour he gives comes back 10 or 20 times in satisfaction, wisdom, and knowledge.
[10:23] In commercial real estate, you are a product specialist and territorial generalist, or a territorial specialist and product generalist. John's license allows these transactions: listing property, buying property, working with landlords, and working with tenants.
[11:22] John wants to reach the person who can spin off all four activities: a real estate investor. John can build a team and an income stream with that person.
[12:11] John's specialty is helping people build multi-generational wealth through investment real estate. Through his connections, he can tap into local market resources around the country and find local knowledge.
[12:44] The IRS has a passive loss rule for full-time real estate professionals. Full-time real estate professionals can lose money on real estate. John describes additional tax advantages only for full-time real estate professionals.
[17:52] Your day-to-day brokerage activity will rarely be enough for you to retire. Start building sources of passive income. Figure out what it costs you to live every day and every year. That's your freedom number!
[20:14] John believes that real estate, with its market advantages, in concert with a diversified portfolio of other things, is a phenomenal way to hit your freedom number.
[24:04] John's real estate investment advice. In most cases, single-family homes are among the worst investments you can make. You have a lot of risk buttoned up in one tenant in your expensive property.
[31:33] John explains straight-line depreciation. When your rental cash flow surpasses the depreciation, it is a good time to sell. If the home is expensive, you can see if it qualifies for accelerated depreciation or cost segregation.
[36:41] Article 11 says you should not offer specialized services unless you have the skill set to do it. Refer it out or partner up with someone with that skill. Don't put your commission ahead of your client.
[39:03] John shares some NAR statistics about the time and cost of a residential real estate transaction in the United States.
[39:26] Getting a lead and making a referral of it in about 30 minutes and getting a referral percentage, is the best hourly rate you can make anywhere in the world.
[40:41] John describes a cycle of investments starting with residential, into industrial, then long-term net leases.
[43:14] The generational shift of wealth is where we as real estate professionals can consult in a great way.
[49:43] To get into commercial, coming from residential, the top-fourth of your database is in top positions in their businesses to give you referrals.
[50:27] John reviews the demographics of residential real estate agents contrasted with commercial real estate brokers.
[53:30] Spending time in commercial will limit the time you spend in residential, so your residential income will decrease before you see income from commercial real estate. If you partner with a local mentor, you can get business quickly.
[55:50] Invest early, invest often. Don't be the broker who dies broke. Please take advantage of all the things you have and invest in real estate. Build multi-generational wealth. The world's in front of you!
Tweetables:
"In commercial, you're either going to be a product specialist and a territorial generalist, …. or you're going to be a territorial specialist and a product generalist." — John LeTourneau
"What does my license allow me to do? My license allows me to represent four basic transactions: listing property, buying property, working with landlords, or working with tenants. So, there are four primary ways to monetize my license." — John LeTourneau
"The number one indicator of success in commercial real estate is your ability and willingness to prospect consistently with people you don't know." — John LeTourneau
"Invest early, invest often. Don't be the broker who dies broke. Please take advantage of all the things you have and invest in real estate. … Build multi-generational wealth." — John LeTourneau
Guest Links: John LeTourneau on LinkedIn
Book recommendation: The Psychology of Money, by Morgan Housel
NAR Resource Links NAR.realtor/technologyReal Estate Investing (REI)
CRD Episode 057: Financial Planners, Insurance, and REALTORS® with Rich Arzaga
Additional Links:
Microcourses found at Learning.REALTOR. Use the coupon code PODCAST to obtain 15% off the price of any microcourse!
Learning.REALTOR — for NAR Online Education
Training4RE.com — List of Classroom Courses from NAR and its affiliates
CRD.REALTOR — List of all courses offered
Host Information:
Monica Neubauer
Speaker/Podcaster/REALTOR®
Monica's Facebook Page
Instagram.com/MonicaNeubauerSpeaks
Guest Bio
John LeTourneau is currently the KW Commercial Managing Director for the E to P Group of 9 offices in the Chicago area. In his role, John oversees the strategy implementation and daily operations of the KW Commercial brand, with a special focus on mid-market commercial properties in the Chicago region.
During his career, John has represented landlords, tenants, investors, owner-users, and sellers in all aspects of commercial real estate; and looks to use this experience to leverage the KW Commercial platform. Mr. LeTourneau's accomplishments include:
● Member of the Board of Directors, Illinois REALTORS®
● Immediate Past President, Mainstreet Organization of REALTORS®
● Member of the Board of Directors, Mainstreet Organization of REALTORS®
● Member of the Commercial and Government Affairs Committees at Mainstreet
● Member of the Illinois REALTORS® Commercial/Industrial, Leadership Development, and Public Policy
Working Group
● Member of the National Association of REALTORS® Commercial Real Committee
● Overseas Member of the Institute of Professional Auctioneers & Valuers (IPAV),
Dublin, Ireland
● Illinois Consulate Liaison to the Republic of Ireland
● Illinois State Legislative Contact for Senator John Curran
● Approved Continuing Education Instructor in Illinois
● Approved Instructor for NAR and REBAC
● Carries the CIPS, e-PRO, ABR, CRS, SRS, PSA, RENE, C2EX, AHWD, and GRI
Designations/Certifications