Get Rich Education

The wealthy are enjoying federal monetary stimulus. Meanwhile, unemployed tenants can now be evicted nationally (check your local law). Own assets? Great. Mortgage interest rates are at historic lows; the S&P 500 is at an all-time high. (Entire episode transcript is below. Read as you listen.) In the pandemic, tenants want single-family homes more than communal apartments. Fannie Mae & Freddie Mac want to add a 0.5% refinancing fee.  Homebuilder sentiment is high? Why? High demand, low inventory, low rates. Stagflation is explained. It is a stagnant economy with high inflation. There are signs that inflation is poised to increase. Resources mentioned: Inflation Triple Crown video: https://youtu.be/dZojl686fU0 Section 8 turnkey property: www.GetRichEducation.com/Section8 Stagflation video: https://www.youtube.com/watch?v=YaC_PNKu_Cg&feature=youtu.be Elevator Anxiety: https://www.axios.com/elevator-anxiety-reopenings-9a474985-4786-43a3-8b64-5119ff7f2267.html Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Complete Episode Transcript:   Welcome to Get Rich Education. I’m your host, Keith Weinhold.    The rich are getting richer and the poor are getting poorer. I can’t think of any one time in my life where that’s been happening more than it has been than right now.   I’ll tell you why - and what you need to do to get on the right side of that.    What is going on in the real estate market and what are the real estate economics that matter? Then, a discussion about inflation. Today, on Get Rich Education. ____________   Hey, you’re inside GRE. From Manila, Philippines to Managua, Nicaragua and across 188 nations worldwide, I’m Keith Weinhold. This is Get Rich Education.   The rich are getting richer, the poor are getting poorer - and I can’t think of any one time in my life where that’s been happening more than it has been than right now.   Because Americans living paycheck-to-paycheck might now be ... paycheck-less. Some of them are laid off - because of the pandemic - and now they're concerned that there's no national eviction ban.   That’s right. In most states, non-paying tenants CAN be evicted at this time. Now, you’ve got to check your local law.   Well, when is Congress going to do something to relieve those that the pandemic has left unemployed?   Well, they don’t even reconvene until after Labor Day.   Some people are wondering - “Where is the CARES Act 2?” Where are those updated forbearance options, eviction moratorium, the PayCheck Protection Program, and the $1,200 stimulus checks and the stepped-up weekly unemployment compensation?   In fact, Richmond Fed President Thomas Barkin had  good metaphor. He said: “Months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate.    Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate.” That’s the end of what the Fed President said.   Now, look, I think there’s a lot to be said for just letting the free market do it’s job.    But it’s a little hard to be in this laissez-faire, Austrian economics school of thought when some people could be suffering.     So that you know what I’m talking about, “lay-say-fare” basically means no government intervention into the free market.   Meanwhile, the rich are bingeing off Federal Reserve policy and liquidity injections that keep mortgage interest rates at historic lows and the S&P 500 at an all-time high.   Mortgage rates recently dipped below 3%, which is just amazing.   You don’t even have to be THAT rich … to benefit. If you’ve got substantial exposure to the real estate market or the stock market, chances are, that those assets are doing alright.   One thing that you need to keep in mind as an investor, is that, when the Fed puts rates on the floor, it affects more than just MORTGAGE rates - it affects other rates too - like savings account rates.   Just look at the rates at bank savings accounts.    Even if you’re in one of these online banks that give better yields than traditional brick-and-mortar banks - we’re talking about online-first banks like Ally Bank and Popular Bank - they were paying two-and-a-half percent on savings accounts not all that long ago.    Even those banks are now down to about three-quarters of one percent - probably less than the real rate of inflation.   So because savers get punished worse than ever right now, that, in turn, forces more people INTO things like real estate, because you’re in search of that yield.   Even retirees can’t rely on the paltry income from three-quarters of one percent yield so they have to go to the markets to chase yields too - sometimes unwillingly.   Well, when all these people that got negative REAL yield on savings accounts and CDs - and aren’t going to stand for it anymore, it forces more demand … and money into markets and consequently, floats the price of everything up.    That’s what’s going on now.   Now, I personally don't really like this deepening canyon between the "rich” and the “poor". But I know which side I'd rather be on.   Besides the investment properties, a lot of people want to move and shake-up their living situation like never before - their primary residence - and filter their new home-buying criteria on pandemic ways of life.   Bidding wars are rampant for single-family homes. How rampant are they? Well,  Zillow just reported their highest daily active user count ... ever.    Now, though property data can move even slower than your last 1031 Exchange did, Real Estate Economist Daren Blomquist just compiled THESE year-over-year price changes through quarter two.   You’ve heard Daren Blomquist on the show here. He broke this down this way:    City real estate is up +4% - again, this is all year-over-year through the second quarter. Town +4% Suburban +5% Rural +11%   The two sources are ATTOM Data Solutions and the U.S. Census Bureau.   So rural is appreciating the best. City and town is appreciating the least.    With time, I expect urban areas and apartments to slump. Of course, urban areas and apartments kind of go together.    In the pandemic, living in a lot of large apartment buildings has become about as fashionable as Jazzercise and The Atkins Diet.   Of course, at GRE, we've long focused on rental single-family homes. We’ve talked a little about apartments and you know that I started out with a four-plex & got my start in real estate that way.   This week, NAR Chief Economist Lawrence Yun noted:   " ... (There's) an oversupply of apartment buildings, especially in city centers given the evident recent shift in consumer preference for single-family homes in the suburbs.    Lawrence Yun continued: "Apartment rent growth could therefore be tough going ahead.   The rise of single-family units is welcome, as overall inventory of homes for sale are down 19% from one year ago and there is intense buyer competition in the market as a result." That’s the end of what Lawrence Yun said.   As long as your tenant can pay the rent, this is welcome news for your existing single-family rental homes - like the ones that you’ve acquired through GREturnkey.com.    It puts upward pressure on the price. So congratulations there.   The appetite for real assets, especially desirable rental single-family homes, now propelled by low inventory and low interest rates has put you in good shape if you’ve acted.   But of course, the COVID pandemic isn’t over. We don’t really know how all of this is going to turn out. And even when a vaccine is developed, remember that it will probably take … at least a few months to distribute it.   In my OWN portfolio, all of my single-family rental homes are occupied - 100%. But my apartment building vacancies are unusually high right now.   When we talk about apartment buildings and office buildings as well - Axios recently reported about how residents and workers are experiencing what they call “elevator anxiety”. I’ll put that in the Show Notes for you.    An elevator is one of the most physically, uncomfortable awkward places to be in the pandemic.   If you’re wondering about how that real estate looks - we’re generally talking about buildings that are four or more stories in height.   In fact, the ADA - the Americans with Disabilities Act - stipulates that properties with four or more stories generally are going to need to have an elevator.    I’ll tell ya - if apartment buildings are as unfashionable as the Adkins Diet these days, then being inside an elevator is about as hip as Jane Fonda workout videos, NordicTrack, and Sweatin' To The Oldies with Richard Simmons.   https://youtu.be/na9ZZ4ZjVa8?t=28     Oh geez. Did that really just happen? I guess it did. So … while we’re all processing that, getting back to real estate here.   Now, Fannie Mae and Freddie Mac recently said that they will start charging a 0.5% “adverse market fee” on all refinances, including both cash-out and non-cash-out refis. They were trying to put that new fee into effect for next month. What a drag that would be. So for every $200,000 you refinance, you’d have to pay an additional $1,000 fee - or maybe your lender would pay it. What Freddie Mac said is: “As a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty, we are introducing a new … what they call ... Market Condition Credit Fee in Price”. Freddie sent in their notice to lenders. Wouldn’t that be an annoying fee? Well, almost immediately, the National Association of Mortgage Brokers struck back. They launched a campaign to reverse that newly announced one-half of one percent refinancing fee. We’ll see where that goes.   Now, things are really good for homebuilders these day. An index measuring homebuilder sentiment matched its highest level ever yesterday. Why? I mean, it’s simple. There is a healthy amount of DEMAND from buyers and not enough homes to meet it.  Also, the 30-year fixed mortgage rate bottomed out at 2.88% in August, the lowest point on record. Those low borrowing rates are boosting homebuyers' appetites … obviously. There really are a few recent stories that are de facto microcosms - reflections of this appetite for a work-from-home arrangement and less dense housing. For example, it’s really telling to look at what the outdoor clothing and gear company, REI just did. Do you like REI? I like shopping there. Even if you aren’t into outdoor stuff, you can always find a cool water bottle or something at REI. Well, they just announced plans to sell the lavish corporate campus that they had just finished building near Seattle.  REI executives concluded that employees were able to collaborate remotely better than the company originally THOUGHT ...so a massive physical HQ just wasn’t worth the cost any longer. So REI is selling what they had just built. Other real estate segments falling out of favor - are those high-density places, like you might expect - New York City and San Francisco.  StreetEasy reported that Manhattan home values dropped 4.2% since last year and homes are lingering on the market more two months longer … than they had just last year. San Francisco list prices are down 5% annually, while inventory is up 96%. Yes, a near doubling of available inventory in San Francisco. NYC and San Francisco were already the most expensive housing markets in the country BEFORE the pandemic. And life under lockdown has given people that nudge they had already been considering for years. And then, single-family homes in outlying areas are the real beneficiaries here. There have been a number of notable milestones. COLORADO SFH sales rose 21% July-over-July. The median price statewide in Colorado is now $444,000. Just looking at Denver, Denver just broke the $600K mark for the first time ever.   So, a few months into the pandemic, we’re getting a clearer sense of who the winners and losers are - a lot of them are what we expected.   If I had to slim it down to just a 3-word answer for you on why the rich are getting richer, those 3 words are: Federal Monetary Stimulus.   And the stimulus is disproportionately benefitting … asset owners.   Well, the pandemic hasn’t affected some real estate investors at all. Others, feel more reliant on the next government stimulus program to give their tenants the wherewithal to pay the rent.    Well, if you, as an investor want to have the majority of your rent income payment guaranteed to be made by the government to you over the long-term, well, that’s what landlords of tenants with HUD-funded “Section 8” housing have enjoyed for decades.   You have guaranteed rent income.    I think you remember that I had a turnkey provider that specializes in Section 8 housing here on the show on Get Rich Education Episode 297. So just ten show ago, which was 10 weeks ago.   Like any investment, Section 8 Housing is best viewed through a prism of pros and cons.    Section 8 is not for everybody. Some love it, some don’t … but this provider manages the Section 8 administration FOR you. They’ve got a great relationship with the housing authority.    That’s something that most landlords of this government-subsidized housing never had.    “Guaranteed rent income” has a nicer ring to it than it did just a year ago.   Get the provider report and learn more at GetRichEducation.com/Section8   That’s our Richmond, Virginia provider. In fact, CNBC named Virginia as the most business-friendly state in the entire nation.   I’m Keith Weinhold and I’m coming back to talk to you about inflation.    Again, learn more at GetRichEducation.com/Section8. This is Get Rich Education!   _________________   Hey, you’re back inside Get Rich Education. I’m your host, Keith Weinhold.   Both the pandemic-driven CARES Act, and whatever other monetary stimulus acts that follow … are injections of trillions of dollars into the economy.    In fact, it’s now driven our national debt to nearly $27 trillion dollars.   Of course, this has the effect of … money printing. It’s not literal money printing. The more you learn about it, it’s often U.S. government bond issuance.    A bond really just means that the government issues an I.O.U. that someone else, like China buys.    Those are some of the semantics behind, what we you can really more closely think of as “currency creation” rather than money printing.   Will this result in inflation? That’s the big question. Well, longer-term, many think, “yes”. Short-term, “no”. We are in a low demand environment.   Of course, as a real estate investor, you want inflation. You might have seen on the Get Rich Education YouTube Channel where, I have visually mapped out how you win “The Inflation Triple Crown”.   In fact, if you just Google the three words, “Inflation Triple Crown”, you can probably see me - as the first hit on Google - and you can watch me doing the whiteboard video.   As you’ll remember, real estate investors win the Inflation Triple Crown because inflation provides you with: #1 Asset Price Inflation, #2 Debt Debasement and #3 Cash Flow Enhancement - that all works terrifically when you’re leveraged.   There are more signs of inflation out there in the economy right now than we’ve seen in the recent past. Though I still expect it to be mild as long as we’re in this pandemic-driven low demand environment …   The consumer price index rose six-tenths of one percent last month. That beat the two-tenths expectation that economists had had.    Food are prices up substantially, and then, a substantial input to homebuilder pricing and therefore the future value of homes - is lumber - and lumber prices have been soaring higher.   Treasury Secretary Steven Mnuchin said that the administration is unfazed with these historically obscenely high levels of government spending … thanks to the nation’s very low interest rates.   See, the Fed is less concerned about mounting debt when the interest rate that THEY pay on their debt is low … much like you’re less concerned about your debt when the interest rate is so low - you might be looking to take on more debt now.   Of course, YOU’VE got a better deal on your real estate debt than the Federal Government does, because the Federal Government doesn’t have tenants to service their debt for them like you do in an occupied rental property.    Could America reach a STAGflationary state again like it did in the 1970s? We haven’t discussed the economic phenomena of stagflation before.   Do you know what that is? Stagflation is a stagnant economy with inflation. That’s what it means.   OK, usually a more stagnant economy - like we’re in now - is characterized by low inflation due to lower demand not running up the prices of consumer goods and household staples.   But again, stagflation means that there’s a stagnant economy WITH high inflation. Could THAT happen this decade?    To reinforce your learning here, let’s listen to the audio from this explainer video from One Minute Economics about stagflation.    This is less than a minute & a half in length.    https://youtu.be/YaC_PNKu_Cg   Yes, well, if we get stagflation, meaning again, a stagnant economy that we have high inflation, I don’t know that we’d have another Fed Chief like Paul Voelcker - who, 40 years ago, brazenly raised interest rates so aggressively to combat inflation that mortgage rates were 18% forty years ago.   I don’t know that anyone would prevent inflation from running away at that point.   But again, that’s STAGFLATION.    Now, I know what you might be thinking. Maybe you’re thinking that all of the Fed currency creation to pull us out of 2009’s Great Recession didn’t produce high inflation, so why would it be any different this time, with all these CURRENT cycles of massive dollar creation once again?   That would be a valid thing for you to think.   At least based on the official government numbers, we’ve only had about 2% monetary inflation in recent years.    Well, see. Though high inflation wasn’t the RESULT ten years ago, it might have actually been CREATED and you just didn’t know it. So, here’s what I mean.    Say that the expansion of globalization and technological advancement REALLY meant that we had NEGATIVE 5% inflation - another way to say that is that what if we WOULD HAVE had 5 points of deflation if they’re WEREN’T any excess dollar creation?.   But yet, all of the dollar creation after the Great Recession caused 7% inflation.   Well then, 5 points of DEflation offset by 7% INflation resulted in ... 2% inflation.   Think about it that way. Maybe something like that is what really happened … and that is why all of today’s currency creation COULD result in high inflation. We don’t know that it will. But that’s just one reason why it COULD.   Now, overall, to pull back and look at the state of housing in this pandemic-driven recession.    Housing has been - and continues to be - substantially better off in this recession THAN it was in the 2008 Great Recession - that event - twelve years ago, had a housing COLLAPSE as a driver. People left the keys and walked away from their homes back then.   Now, instead, we’ve got bidding wars for housing.    I want to temper that with a reminder that the pandemic is not over yet, and it could still take an unforeseen turn.   The bad part about this recession is that we’ve got higher unemployment than we did back then.   Now, the reasons that real estate is BETTER OFF in this recession compared to the last one is:   Housing Demand Exceeds Supply - that was in the OPPOSITE state last recession. Responsible Lending Prevailed - again, that was OPPOSITE of last time. We’ve Got Low Mortgage Rates - lower than they’ve ever been.  And We had No “Bubbly” Price Run-up before this recession, unlike what happened in the 2008 Great Recession.    They are … the key differences.    Coming up on a future episode here - we’re primarily a show about how buy-and-hold residential INVESTMENT property produces wealth for you - and how to avoid mistakes.   But so many people are re-evaluating their primary residence situation lately, that, coming up on the show, I’m going to go deep on - “Should You Rent Your Home Or Should You Own Your Home?”   There is some counterintuition and paradox here.    I’m going to give you a new twist on the fact that - if you pay rent, that is NOT The Same As Throwing Money Away     Also, some people seem to think that homeownership is like: "Renting. Except you get to keep it." That is false and that has caused millions of people to buy houses that they later regret.   Is your primary residence an investment? Do YOU consider it an investment? Well, in almost EVERY case it is a poor financial investment, but it could be a good lifestyle investment.    So, “Should You Rent Your Own Home Or Own Your Own Home that you live in.” That’s coming up on a future show.   Well, regardless of your living situation, pandemic-driven unemployment might have made you realize that … you need a durable, long-term 2nd source of income - if you don’t already have one.   Even if you aren’t losing your job, circumstances have hit close to home for a lot of people.    You can either let other people make money off your money, like the bank paying you 1% on your savings.    Or you can make money off OPM (like borrowing at a 5% mortgage to invest at 11% - or hopefully, a lot more than 11% with the (up to) five profit centers that real estate has.)    RE is that instrument of arbitrage.   As they say, you can either teach a man to fish or give a man a fish. Well, why not do both? That IS the abundance mindset afterall.    At GetRichEducation.com, we teach you how to fish.   At GREturnkey.com, we give you a fish too.   What is going on at GREturnkey?   Well, first, get your mortgage pre-approval at a reputable lender that specializes in investment property like Ridge Lending Group.   You’ll see at GREturnkey.com that Birmingham and Huntsville, AL have investor-advantaged numbers that work.   Pockets of Huntsville may have better appreciation if they’re tied to employment in the space industry.    Gosh, love him or hate him, Elon Musk gave us something to actually celebrate in an otherwise tough 2020 as he led the first private company to launch astronauts to space - emblematic of the burgeoning space industry - both Huntsville, AL and Orlando, Florida there at GREturnkey pick up on some of that.   We just discussed Chicago here last week. Chicago and Dayton, Ohio are two markets that keep sourcing existing inventory that they beautifully renovate, and both markets have rent-to-price ratios that are typically OVER 1%.   When you’re over 1% and mortgage interest rates are this low, it makes your affordability as an investor REALLY advantageous. That’s Chicago and Dayton.   Des Moines, Iowa is sourcing a little inventory lately - not as much as some of the other providers. That’s a stable place.   Florida is a bright spot for new construction turnkey property - Jacksonville, Tampa, and the aforementioned Orlando all sourcing brand new construction property.    When it’s NEW construction, your insurance cost is often really low too.   Memphis, Tennessee and Little Rock, Arkansas are both the SAME provider there at GREturnkey - and that provider name is MidSouthHomeBuyers. There you have lower price points and MidSouth Home Buyers is so good with beginners.   And then, Oklahoma City - the numbers work and some media outlets have named Oklahoma City as the most recession-resistant market in America. You’re getting a 1% rent-to-price ratio there too.   Finally, Richmond, Virginia - I mentioned them earlier. They specialize in knowing the ways and means of how to optimize Section 8 tenancies because they have a great relationship with the housing authority there.    Most, or really all of these markets that I mentioned are in the United States Midwest & South.    Florida - oddly enough - is not culturally the South - though it’s the most southeastern state there is - their history of net-in migration makes them culturally disparate from what we think of as the south, but …   … all these markets I mentioned are in investor-advantaged metros where you generally have more stable prices, and landlord-tenant law that favors your rights moreso than the tenant’s rights.    So these markets are hand-chosen pretty carefully for you.    Once you’re pre-qualified for a loan, find all those providers & a few more at GREturnkey.com.   I am honored because you have given me something … and that is that I have had the privilege of having your time today.    Until next week, I’m your host, Keith Weinhold. Don’t Quit Your Daydream!

You contribute to homelessness. I do too. The problem goes right through real estate. Factors include: NIMBYism, minimum wage, salamanders, smoke detectors, and rent control. (Complete transcript on homelessness segment below.) Then, Chicago is a world class city with lots of economic diversification. Chicagoland’s numbers make sense for real estate investors. In northwestern Indiana (suburban Chicago), you avoid the high cost of Illinois property.  A typical SFH has $1,350 rent and a $125,000 purchase price. If you’re serious about building your cash-flowing portfolio, learn more and see property at: www.GetRichEducation.com/Chicago Resources mentioned: Chicagoland turnkey property: www.GetRichEducation.com/Chicago Environmental regulations & housing: https://www.huduser.gov/periodicals/cityscpe/vol8num1/ch5.pdf NIMBYism: Reason.com Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Welcome to Get Rich Education! I’m your host, Keith Weinhold, with a two-part show. Real estate is a substantial input into homelessness. Why are people homeless - and why might you & I be partly RESPONSIBLE for it, in fact?   The second part - in general, world class cities don’t make any sense to invest in for cash flow - New York, LA, DC, London, Singapore … but we’re going to discuss one “world class” city that actually DOES. Today, on Get Rich Education. __________________   Here it is - hey! You’re inside GRE. From Sarasota, Florida to Sarajevo - in Bosnia and Herzegovina - and across 188 nations worldwide.    I’m Keith Weinhold, this is Get Rich Education.   Even in the affluent United States, there is a large and growing population of vagrants - homeless people … more than half a million of them … and you & I … unknowingly play a role in keeping them homeless.   Why are people homeless? Well, the #1 reason is real estate-related. So that’s why I’m talking about it in the first of two show segments here.   Let’s look at the Top 5 cited reasons that people are homeless.   5th most common - Substance abuse - drugs. 4th - Mental illness. 3rd - Poverty ...OK, that’s sort of an obvious one. 2nd - Unemployment 1st - Lack of affordable housing   Lack of affordable housing is the #1 reason that people are homeless. Well, one mission here at GRE is that we PROVIDE society with affordable housing.   But, it’s generally not the same kind of Class D, lowest-end housing that there is - and that homeless people are looking to get into.    We focus on properties just below the median housing price in some of the lower-cost U.S. metros - B-class and C-Class. That’s a notch or two above where those on the brink of homelessness would be.   The homeless population is more visible in my own home city since the pandemic - and perhaps yours too … now that the unemployment rate is 10%.    I’m going to tell you what contributes to homelessness - and a lot of this has to do with real estate: contributors are carbon monoxide detectors, minimum wage, salamanders, NIMBYism, and over the long term: rent control.   Now, before we unpack that. Let’s define homelessness.   One of the better accepted definitions is - a condition where people lack "a fixed, regular, and adequate nighttime residence". That’s “homelessness defined”.    I think you & I can agree that “homeless” is not the best technical term - right? Because even if someone lives under a bridge, that IS their home.   Houselessness would actually be more accurate.   Vagrancy is an even better way to say it. A vagrant is a person without a settled home or regular work who wanders from place to place and lives by begging.   That’s what we’re really talking about here. But homelessness is the widely understood term, so I’m going to it.   Now, HUD - the U.S. Department of Housing and Urban Development has a lot of statistics on the homeless, and ...   … as of 2018, they reported there were roughly 553,000 homeless people in the United States on a given night,[2] or nearly two-tenths of 1% of the population.    That’s about 1 in 500 Americans then. Well, many people - me included - believe that the real number of homeless is greater than this 553,000.   In fact, private & local reports tell you that the homelessness have increased 40% per annum in recent years - yeah, 40% per year!   A big mistake is that people think about the homeless as all one type. But there are so many different types of homeless.    There are the temporary homeless -  passing through that 553,000 number.   Some are voluntarily homeless. Others are really couch-surfing because perhaps they were in a divorce or domestic violence situation.   Then you need to realize that about 2/3rd of their population is sheltered, and ⅓ unsheltered.    Consider too, that there are at least 40,000 homeless veterans. To think that a person could have served this country - and maybe even risked their life for this country - but don’t have a home in this country … can be heartbreaking to think about.   Now, though I’m not sure, I don’t believe that a digital nomad would be considered among the homeless - the laptop entrepreneur that stays at a different AirBnB location, say monthly.      Before we bring in the real estate angle, let’s get some historical context. Just talking about the U.S. here ...   Homelessness emerged as a national issue in the 1870s.[6] Early homeless people lived in emerging urban cities, like New York City.    Into the 20th century, the Great Depression of the 1930s caused a substantial rise in unemployment and related social issues and distress and homelessness.    In the 21st century the financial crisis of 2008 and resulting economic stagnation and downturn has been a major driving factor and contributor to rising homelessness rates.   That is probably happening again, right now, in the COVID pandemic.   A Zillow report found that people in communities where the average renter spends more than 30 percent of their income on rent — meaning that they can be described as being “rent-burdened” — are particularly vulnerable to rapid increases in homelessness rates.   Eviction obviously creates homelessness.   Now, some naively think - can’t we just raise taxes to build permanent housing for them & move them all in there? I really doubt that that’s a viable long-term solution.    Because at some point, if taxpayer funded housing is just “provided” for people, then people don’t have incentive to work & pay the rent.   That’s in general. Right, maybe someone has a disability that prevents them from making a living.    Some think - maybe we SHOULD impose rent control. Rent control means capping the amount of rent that a landlord can charge.   I’ll tell ya - that could reduce the number of homeless people in some areas that HAVE enough housing. But long-term, rent control is a terrible plan.   Because now an income property owner like you has zero incentive to improve the property any longer.    Long-term, rent controlled areas fall into serious dilapidation.    And because homelessness is concentrated in inner cities. It’s those exact same big cities - like New York - that have tried rent control.    It doesn’t work. So many areas that have tried to impose it, have to repeal it, because it eventually turns areas into ghettos.   What if you own property in an area where rent control were imposed? Even if you did improve your property - not only would you NOT get more rent for it - but you had better believe that property owners all around you wouldn’t be improving their property … and the entire condition of the neighborhood would be on a loooong downhill slide.   You might remember that I devoted an episode to the rent control topic. You can look that up on Get Rich Education Episode 192 if you’re further interested there.    One factor that contributes to higher housing costs - which prices people out of having any shelter and creates more homeless people are … environmental regulations that limit development in certain areas.   Sometimes you need to leave a development buffer for streams or you can’t build in areas that are wetlands in order to protect flora and fauna.   A rare orchid, or a spotted salamander or a threatened egret or an endangered heron. They say, you can’t build in their critical habitat areas. You’ve got to protect them.   But yet, often, the same type of people that want more environmental regulations are the same people that say that they want more affordable housing options.   Well, when you limit where you can build, now you’ve reduced the housing supply. Real estate pricing is highly susceptible to supply/demand factors, of course.   All these wildlife protections limit supply. That makes prices go up. That prices people out.   Now, maybe you’re thinking I’m anti-environmentalist? No, I’m not taking a side either way.    It’s just that one needs to understand the cost and the longer-term ramifications of decisions that limit development in protecting the spotted salamander.    I think it’s easy to make a case that more biodiversity is better than less biodiversity. But the better question is: “At what cost should we protect species? How far do we take it?”    Environmental regulations in the United States are intended to improve the quality of the environment; preserve ecosystems - that includes wildlife; and protect human health too.   But these regulations are often written without considering how much they will cost.   Another contributor to homelessness is excessive safety regulations.   Again, some safety regulations are good. But how far do we take it?    My gosh, when an area needs to build more affordable housing for people - which is something that would reduce the homeless rate … and ...   Sheesh, a new home today might need fourteen smoke detectors and five carbon monoxide detectors … then the detectors need to be connected to each other so that they can communicate with each other … and all these devices and this added complexity increases the cost of housing.   That makes mortgage payments higher, rent payments higher, and it just prices more people out of the real estate market. The lower end of the income spectrum gets priced out of affordable shelter.   I’m not anti-safety. But at some point, one has got to ask the question, “How much safety do we really need?”    Even - “What is the cost of a human life?” There actually is an answer to that question. In fact, the EPA pegs the cost of a human life at $10M - one of the highest of any federal agency.     And then, there’s the entire question of how can you ever monetize the value of a human life. You can make the case … that it’s priceless. That’s a different discussion.      But the point is, all these safety regulations increase the cost of housing and increase homelessness.   Minimum wage does, in many instances, increase homelessness long-term.    This might come as a surprise to you. You would think that raising the minimum wage would have to DE-crease homelessness - because a higher wage would mean that low-income workers could now afford housing.   Well, long-term, besides higher wages in an area creating inflation & soon making the cost of everything go UP - including housing …   Think about it from the perspective of if you’re an employer & you have to pay your workers a higher wage - now that minimum wage is higher.   If someone that works for you makes $9 an hour - but they only produce $12 an hour worth of productivity for you...     And a new minimum wage of $15 an hour is implemented, you’re losing money if you retain that worker. So you would lay them off.   You would find ways to automate - or make a machine do the work that that employee used to do for you. That layoff increases homelessness.   Just look at the number of self-serve checkout kiosks in grocery stores. Those lanes used to be staffed by humans that earned a wage.   With a hike in the minimum wage up to $15 an hour, you’d begin to see a trend where more fast-food restaurants have self-serve kiosks. You’ll have fewer humans there.   That’s because some employers can’t afford to pay people $15 an hour. Every self-serve digital kiosk that you see represents a laid-off worker.   Talk to your parents or grandparents and they’ll tell you that gas stations used to be attended by humans that would pump your gas for you, check your tire pressure, check your fluid levels - that’s been gone for a couple generations.   Now, an increase in the minimum wage would help get some people out of homelessness short-term … yes.    I’m giving you insight so that you can see both sides & see the long-term consequences of government intervention into the free market.   Let’s say that you’re an employer at a warehouse, the minimum wage is $15 an hour and you want to hire someone to help you sweep floors & do odd maintenance jobs around this warehouse that you own.     Well, now it’s illegal for you to hire them at $12 an hour. You’d love to give a kid a job and help him learn - and you can’t make the numbers work at $15 an hour.    So now he’s unemployed because the government said, “No. You can’t hire him at $12 an hour.” That’s what a $15 minimum wage says. Try looking at it from that angle.   Another phenomenon that keeps people homeless is NIMBY - Not In My Backyard.   NIMBYists are the ones that say, “No, I don’t want you to build low-cost housing in my neighborhood, because I’m afraid that it’s going to ruin the character of my neighborhood and it’ll stifle the rate of home appreciation here.”   Lafayette, California is a wealthy San Francisco suburb. It is nestled in Contra Costa County, where its residents fight to stop what they call a "very urban," "unsightly" 315-unit housing development    It was recently profiled by The New York Times.   Over in the suburban community of Cupertino, California—we’re talking Silicon Valley now—local activists spent years trying to stop the development of an abandoned mall into apartments, half of which would be rented out to lower-income tenants at below-market rates. In  Berkeley, California, activists often argue against new housing on the grounds that it will threaten their community's sustainable character. Well, what is another example of NIMBYism?  At a recent Zoning Adjustment Board Meeting in Berkeley, I think one resident summarized NIMBYism really well - and this was published in the New York Times - they said "Berkeley needs to prioritize a livable, sustainable environment for people who already live here” … … when they were opposing a 57-unit development of student housing. They went on to say: "We are not obligated to sacrifice what is best about Berkeley to build dorm rooms." That’s the end of what they said. NIMBY - this “Not in My Backyard” opposition to new housing development - centers on concerns of property values and crime and gentrification and environmental sustainability.  Even though it’s often not their intent, the result of NIMBYism is that less housing gets built, housing costs go up and homelessness … rises. So, let’s draw some conclusions here and look at some actionable ways that you can make things better.   Though it isn’t immediately apparent - carbon monoxide detectors, minimum wage, salamanders & egrets, rent control, and NIMBYism - all go right through the heart of real estate investing and contribute to the long-term cycle of homelessness.   A giant takeaway for you here, is that, what is the common denominator in ALL of these factors. There is one common theme.    You know what that is - it is Government intervention.   Government intervention and interference in the free market - is the contributor here - excessive safety, minimum wage, protecting salamanders & egrets, rent control, and NIMBYism.    Every single one of them.    And now, maybe if you’re a new Get Rich Education listener - especially - you might be wondering, am I some anti-government guy where I think that the answer to EVERYTHING is free market economics.   Well, though I think that less government would be better.    I’ll tell you that SOME government regulation is good - just less than what we have now.    For example, look at all the smoky, hazy pollution in Pittsburgh, PA in the 1970s. It was a hazard to your health just to walk Pittsburgh then.   You might have heard about this: famously, in the summer of 1969 - An oil slick in Ohio’s Cuyuhoga River caught on fire.   Companies were committing rampant pollution such that it was a hazard to human health. Well, government regulations like the Federal Clean Water Act Of 1972 helped to clean that up.   So, that regulation helped. Government has a role, but it’s often overly intrusive.   When it comes to you helping the homeless directly, I like the campaign slogan that says, “Give real change, not small change.”    That means, don’t give money directly to panhandlers on the street. Where do you think that your goes then? Probably straight to cheap monarch vodka in those plastic bottles.   Also, if you don’t want to see homeless people in your neighbourhood, don’t give to them if they’re on your city’s street corner - like they are mine - because you’ve just given them an incentive to show up there again & do the same thing.   So instead of small change, give real change. When you donate to your local homeless shelter or soup kitchen, your money is going to do MORE REAL GOOD for the homeless.   It’s going to provide them with shelter, or educational resources, or a computer so that they might be able to apply for a job. That’s real change.   You want to help the homeless? I think that’s great. That’s kind. Give real change, not small change.   When it comes to NIMBYism and the environment, there’s a great saying out there.   What do you call a developer –  someone who wants to build a house.  Well, what do you call an environmentalist – someone who already owns the house, [LAUGHING] because they don’t want anyone else to build there, right?   Well, we avoid investing in coastal areas here at Get Rich Education. They’re what I call the volatile markets - they have a history of more regulation, more rent control, and more laws that are disadvantageous to property owners.   Just more reason … as to why we invest in the U.S. Midwest & South. They’re what I call the stable markets.   You’re listening to Get Rich Education, Episode 306.   We are your source for independent groundbreaking, original content on really three main topics: real estate investing is what we major in - with minors in both wealth mindset, and real estate economics.    Get Rich Education is not affiliated with any large media conglomerate.    And we’re here to enrich you - and sometimes even rescue you & help you survive in this widening difference between the “haves” and “have nots” - that continues to broaden in pandemic times.   This show is also when you can find all your finance heroes - that have come onto the show to run alongside me for an episode.   Check our shows published over the years to find me here with the best-seller finance author of all-time Robert Kiyosaki, the world’s leading sales trainer Grant Cardone, global wealth mindset magnate T. Harv Eker, and other economic minds and thought leaders Jim Rogers, Jim Rickards, Sharon Lechter - all your favorite thought leaders are here on this show.   We have more of them coming onto the show in the future, including the upcoming Get Rich Education debut of success thought leader Hal Elrod and others.   There is so much real estate & economics news that the pandemic is providing to us ... more & faster than before.   We bring you that here. Also, be sure to subscribe to the DQYDD Letter. That’s our wealth-building email letter that you can get at GetRichEducation.com   A lot of times, I can write you something in the letter faster than I can get it out here on our weekly show. Yes, I do write the letter myself - and email it directly to you.   Never any spam - never sharing your email address with others, of course.   Also, would you like to join me on a live webinar? We’re looking at doing some of those soon. Look for those announcements - in the Don’t Quit Your Daydream Letter as well.   Information, actionable resources, and education -     Get ahold of that completely free - at GetRichEducation.com   Again, What do you call a developer –  someone who wants to build a house.  What do you call an environmentalist – someone who already owns the house.   Kind of exciting next - A world class city where the real estate numbers actually make sense for you … straight ahead.   I’m Keith Weinhold. This is Get Rich Education.

GDP fell 33% annually, the unemployment rate is high, and even the Tokyo Olympics have been postponed, all pandemic-driven. Housing continues to hold up well. Nearly all assets are - gold, stocks, crypto, and some commodities. This is partly due to a weaker dollar. The gap between “haves” and “have nots” widens in the pandemic. 15-year mortgage rates fell below 2%. VP of Grocapitus, Anna Myers joins us to discuss real estate trends, market analysis, and where to invest for economic survival. Neither she nor I see a “V-shaped recovery”. I’ve been saying this for five months. Anna & I discuss real estate’s winners and losers in the pandemic. With more people having shakier job situations, fewer qualify for loans. This increases the renter pool. Winners: smaller cities, suburbs, e-commerce, tech, warehouses, places like Salt Lake City, Raleigh-Durham, Memphis Losers: high density places, hospitality, medical, oil, long-term college. Resources mentioned: Grocapitus.com MultifamilyU.com https://www-housingwire-com.cdn.ampproject.org/c/s/www.housingwire.com/articles/uwm-now-offering-15-year-fixed-mortgage-rate-as-low-as-1-875/amp/ Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold

Income over $75K-$95K does not increase happiness.  Earning over $105K actually decreases happiness. This is based on studies from Princeton and Purdue universities. Then what’s the point of building wealth? You get answers. These surveys do not consider replacing your active income with passive income.  Matt Bowles of Maverick Investor Group joins us to discuss: market due diligence, pandemic changes, and how to use real estate to build lifestyle design. We also discuss changes to the rental market from 2007 to today. Ten years ago, you could buy properties for less than replacement cost. No longer. Markets like Phoenix, Dallas, and Atlanta have largely lost their investor-advantaged status. Check out Matt’s podcast, called: “The Maverick Show”.   Resources mentioned: How Money Really Affects Your Happiness: https://www.cnbc.com/2020/05/26/how-your-salary-and-the-way-you-spend-money-affect-your-happiness.html Maverick Investor Group The Maverick Show: Podcast on Apple Podcasts, Spotify, etc. Remote due diligence: WeGoLook.com NeighborhoodScout.com Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold  

We compare do-it-yourself vs. professional property management. New home price annual sales volume spiked in June. There’s a scarce inventory of suburban SFHs. The co-founder of Avail, Laurence Jankelow joins us. Avail.co streamlines life for DIY property managers. Avail is free. It enables you to centralize your: rental listings & applications, tenant screening, credit / criminal / eviction reports, rent collection, maintenance tracking, and even rent price analysis. Becoming a landlord is like becoming a parent. There’s no certification course or degree required. You cannot violate Fair Housing Laws. Giving one tenant a break - and not another - could violate Fair Housing Law.    Smart home technology often still does not exist for the most profitable long-term rentals. Rent collections during the pandemic continue to be greater than most people anticipated. Avail is best for landlords with 1-9 rental units. There is a general minimum standard for what landlords must furnish to tenants. It’s called an “Implied Warranty Of Habitability”.  This includes: access to clean water, heat, electricity, sanitation, rodent-free, fire-safe, and meets local building codes. Resources mentioned: DIY Property Mgmt. Software: Avail.co New construction Florida income property: GetRichEducation.com/Orlando GetRichEducation.com/Jax GetRichEducation.com/Tampa Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold

Learn how real estate pays you up to five ways simultaneously. Should you be playing offense or defense as an investor now? Learn how a return of less than 20 to 25% is disappointing. We’ll add up all five ways you’re paid and see what your Year One return is from: Appreciation, Cash Flow, Return On Amortization, Tax Benefits, Inflation-Profiting. See brand new construction SFRs and duplexes in central Florida at: www.GetRichEducation.com/Orlando Central Florida rent-to-price ratios are about 0.8%. Interest rates are at historic lows. What does late rapper Notorious B.I.G. have to do with real estate investing? You’ll see today. Kind of.  **Complete episode transcript below. Read along as you listen.** Resources mentioned: New construction Orlando income property: GetRichEducation.com/Orlando Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Welcome to Get Rich Education. I’m your host, Keith Weinhold. There are seasons in your investor life where you either play offense or defense. What should you be doing now? … as we refresh the “Up To 5 Ways That Real Estate Simultaneously Pays You.”   Anything less than a 20 to 25% rate of return in buy-and-hold real estate investing is disappointing. How can that be? Today, on Get Rich Education. ______________________   Welcome to GRE! From Asmara, (Air-UH-tree-UH) Eritrea to Ashtabula, OH and across 188 nations worldwide. I’m Keith Weinhold. This is Get Rich Education.   Thanks for being here, but you’re not here for me. You’re here for you.   In your investor life, are you playing offense? Or are you playing defense right now?   Or, in general, longer-term, are you a more offensively-oriented investor, which correlates with more risk-taking for higher returns.   Or are you more defensively-minded - where you’d rather have less risk and lower return?   Are your mindset and actions aligned toward offense or defense?   Well, I’ve got an answer for you here, and you’re going to have a really valuable takeaway.   Anything less than a 20 to 25% annual rate of return in real estate is really … actually … disappointing.    “What choo talkin’ ‘about, Willis?”   What I’m talking about … Will - is ...    Really, this all comes back to how - when you buy income property the right way - you are paid up to five ways simultaneously.   A stock typically only pays you one way, perhaps two.   I think that the easiest way for you to understand the five ways you’re paid - and even celebrate these five ways you’re paid - because … this ... is ... pretty compelling - is to use an example.   I’ve discussed this before. So if you’re a longtime listener, I’m going to put “The 5 Ways” through a new filter for you.   And if you’re a newer listener, say in the last year, this could completely change your investing thought paradigm for the rest of your entire life.    In fact, compound interest is lame and rarely, if ever builds real wealth in real life. I’ll tell ya what does here.    And yes, I know that this is abject heresy. It is replete blasphemy to criticize “compound interest” in the finance world.    I am surely guilty of committing financial profanity right there.   This is really fundamental stuff I’m about to share with you here - and yet the real paradox is that most real estate investors don’t even understand this.   This is pretty fun to do. We’re going to add up the five ways you’re paid and determine your total rate of return here.   Let’s say that you purchase a $100,000 property - $100K. And, no worries, if that’s too “small time for you”, this is all based on ratios, so it scales up to a $1M or $10M property.   (Ha!) And sometimes I wonder how much longer a $100K property will even be a feasible example as inflation makes $100K properties less common all the time.  But with your newly-bought $100K rental single-family home, you buy it with a tenant already residing there, where the monthly rent income exceeds the monthly expenses - that’s a big part of “buying right”.    With your 20% down payment, you have $20K out of pocket then, and an $80K loan.   The first of five ways you’re often paid is ...  1 - Appreciation Let’s just say that your property appreciates from $100,000 to $106,000. That is just commensurate with real estate’s historic appreciation rate of 6%. But here’s the big “a-ha” moment.    Your $6,000 gain is based on only your $20,000 down payment.  Well, that’s your ROI formula - your gain divided by how much you have invested. Well, your $6K divided by $20K is a 30% return to you. Really? How did that happen exactly?   How do you have a 30% return from just this first of five ways you’re paid?    This is because you achieved a 6% return on both your $20K of skin-in-the-game and the $80K borrowed from the bank. This is what is known as financial leverage. Financial leverage means that your return is 30%.    No wonder that I’m known for saying that compound interest is lame and leverage builds real wealth. More on that soon.   2 - The second way you’re simultaneously paid is with Cash Flow It’s your monthly rent income minus all the expenses (like mortgage, vacancy, insurance, maintenance, taxes, utilities, management). We’ll be conservative and say that leaves you with only $100 of residual income in this case.   Annually, that’s $1,200 more for you, divided by your $20,000 down payment.    Yes, it’s $1,200 still divided by that same $20K of skin you have in the game.    This another 6% return for you. This portion is what is known as the Cash-On-Cash Return.    So, so far you’ve got a 30% return from leveraged appreciation PLUS a 6% cash-on-cash return from that monthly cash flow & we’re still going.   3 - Loan Paydown Unlike your own home where you pay down your principal mortgage balance with money that you had to earn, well, here, your tenant pays the monthly principal portion of your $80,000 loan on this property!    At a 6% interest rate (and you know you can do better than that today, but we’re being conservative here) on a 30-year mortgage, that’s about $1,000 that the tenant pays down your loan for you annually.    Divided by your (still the same) $20K of “skin-in-the-game” means that’s ANOTHER return for you of: 5%. This portion is known as your ROA - your return on amortization. We are still going - still adding up all the ways you're often paid in real estate.   4 - Tax Benefit You can have a mortgage interest deduction, an ability to pay zero capital gains tax with a 1031 Exchange, and tax depreciation - which can tax-shelter part of your rent income.    This is hard to measure. We’ll conservatively call your investment tailwind another 5%. There’s something else called “bonus depreciation” that can certainly make this 5% tax tailwind higher, but let’s just leave it there.   And the fifth and final way is what I call Inflation-Profiting. Few people understand this.    Like inflation erodes the value of your lump of savings, it also degrades your mortgage debt balance.    How is that? It’s because your $80,000 loan today gets easier to “pay back” as wages and prices escalate over time. Your bank only asks to be repaid in nominal dollars (while your tenant pays the interest), not real, inflation-adjusted dollars.    So just say that over a few years, you had 10% cumulative inflation. Well, then rather than paying back the bank $80K, you really only need to pay them back $72K in inflation-adjusted terms.   Inflation has been low lately. We’ll call this benefit a return of another … just 2% to you.   Well, there were all five ways. Let’s add them up to see what your total rate of return is. You got a return of:   30% from leveraged appreciation, then… 6% from cash flow - which is that portion known as your cash-on-cash return, plus another 5% from your ROA - that Return On Amortization, where you tenant pays down your loan for you. Then another … 5% from tax benefits … 2% from inflation-profiting ...   And your first year total Return On Investment from this income property is 48%   You just achieved a 48% return - and without taking any INORDINATE risk. Now, your real-life return probably won’t be exactly that - it’ll be higher or lower.   A few other caveats here. I think you probably realize this example is simplified.    If we had 18 spreadsheets, then we could probably get an exact number, like rather than a 48% total rate of return for you - then it might be 46.16% or something like that. …   … but eighteen spreadsheets doesn’t work in audio format as we’ve just broken it down here on Get Rich Education Episode 302.    1) Note that in the example, we did not factor in your buyer mortgage loan closing costs (the seller can often help you pay these).    Of course, risk still exists. If you buy property in a losing job market, or hire a disreputable property manager, for example, your return can erode.    3) You will still have SOME inevitable problems along the way. It just happens in real estate.   Also, note that your property insurance premium WAS considered in the example. That hedges you from a lot of major loss types.   And that your management cost was considered here, meaning your income is largely passive.    Also, be mindful that after your 48% return in Year One of this hypothetical example, your return typically DROPS in future years.    Maybe it’s down to 38% in the second year and 29% in the third year.    Why is this? Well, primarily due to the fact that equity accumulates in the property, and equity has zero rate of return.   Compound interest? Well, you’re typically not leveraging other people’s money with compound interest.    In the example we used - you’re not just growing from the return on your own money.   You achieved that return because you got to use BOTH your own money plus three other parties’ money at the same time:   the bank’s for the leverage   the tenants for the income and the return on amortization … and    … the govt’s for the tax incentives - plus, really the government’s policies for the inflation-profiting benefit too … if ya think about it.   With just a 20% down payment, you got access to getting the return on OTHER people’s money all over the place.    Another risk is to be mindful of overleveraging. Overleveraging means that you’ve borrowed so aggressively that, say you get in a situation where the tenants rent income no longer meets or exceeds the monthly property expenses.    That’s negative cash flow from overleveraging.   With these five ways ...   Now you understand how real estate makes ordinary people wealthy!   Now you know how to actually “keep score” with real estate investing.   Now you understand how less than a 20-25% Total Rate Of Return is disappointing.   This is LEVERAGE rather than compound interest.   Long-term, one’s hopes for compound interest get eroded and worn down to nothing after applying - something that longtime listeners can almost repeat after me - applying those deleterious effects of inflation and emotion and taxes and fees and volatility.    If you understand what I just described, you understand something that Billionaire RE investors do NOT understand.   Billionaire real estate investors don’t understand what you now know.   So, when it comes down to, are you playing offense or defense as the theme for your own investing strategy?    The answer is, when you’re paid five ways, you have the ability to constantly do BOTH - you’re playing both offense and defense - at the same time, all the time.   By the way, they say that offense wins games but defense wins championships. It was legendary Alabama football coach Paul “Bear” Bryant that’s credited with saying some version of that.    I don’t know whether that’s so true or not, but here you have multiple offenses and defenses.   But what I’m talking about here, is, with the 5 ways you’re paid:   Appreciation - That’s playing offense Cash Flow - That’s more predictable than appreciation, and that’s playing offense too Return On Amortization - That’s defense. It’s slow, predictable, and it builds illiquid equity The fourth way, taxes - that’s defense too. It’s kind of built-in, predictable, and really just recurs when you do your annual taxes. And the fifth way, inflation-profiting - That’s defense too.   So, there you go, with one single-family rental home or apartment building, you’ve played offense two ways and defense three ways … all at the same time.    And when you’re paid five ways, if one or two stop providing you with yield, well, then you’ve still got three or four ways that are.   But, yeah, these return sources aren’t apparent to a lot of people.    You know, I was recently doing a review of one of my larger apartment buildings with an experienced investor, because the cash flow basically dried up.   And, for example, this apartment building has $2,100 of tenant-made mortgage principal paydown every month. That’s $25K per year in equity buildup.   $25K divided by my $475K in equity is a Return On Amortization of about 5% on this particular apartment building.   So I think that the real takeaway here is - invest in something where you’re paid multiple ways, where you can invest in offense & defense at the same time, and it pays you income so that you can begin enjoying your life now, not “maybe someday” - which correlates with more of a compound interest approach.   If you think about it, a central theme of this show is how to optimize the 5 Ways You’re Paid - and avoid mistakes.   This is really a huge part of the compelling “why” for real estate that is so often missed.   You want to own the real property yourself to make sure all five of these benefits aren’t diluted.   You also want to be sure to have a good loan on your property to amplify your ROI over the long-term.   As you know, I am “pro-good debt”. I have no interest in paying down low interest rate debt, that the tenant pays down for me and inflation even further debases.   Instead of using that dollar to pay down debt, you could use that dollar as a down payment on another property - expanding your empire.   Gosh, with interest rates this low, it puts an exclamation point on the fact that you don’t want to be paying down your debt … here in the early 2020s decade.    Paying down good debt is one of the last things that I would do with my money. You lose leverage every time you do that.   Turning a liquid dollar into equity just transferred cash into equity.   Financial freedom achieved when you do the opposite - when you transfer equity into cash flow.   The probability that I’m going to wake up tomorrow and start accelerating paydown on low-rate, fixed mortgage debt tied to this cash-flowing property - is about nothing.   It’s about the same as the chance is that my Dad wakes up tomorrow and starts listening to the Notorious BIG with Junior MAFIA.   “I chill … “ to “ … you know”.   Haha! Yeah, not happening!   Not for my Dad, anyway. Not his style. Sounds alright to me. I might drop that in during a workout or something.   You’re listening to a more detailed discussion about the Five Ways That Real Estate Pays You and we’re talking about it through a fresh lens of “offense vs. defensive” investing here on Get Rich Education Episode 302. I strongly believe: It is very difficult to get wealthy without debt. Often won’t achieve freedom without debt. It’s going to be alright ... when your debt is reliably outsourced to others.   You know, at one point in my life, when I still worked for an employer. (The last day job I ever had was working in the QA section for a state DOT, by the way).   At one point, I realized that every dollar I lock in a stock or 401(k) is a dollar that I can’t use to leverage OPM. That epiphany was a real turning point.   Checking the RobinHood app every 15 minutes isn’t going to build real, durable wealth for you.   And, sometime before that, it was the realization that for me - and for you - to get more out of life, you can’t live below your means, you’ve got to expand your means.   To achieve financial freedom, it sure isn’t going to happen by cancelling Netflix $10 for month.   That’s not going to happen if you save $80 on air tickets by adding an extra layover on your trip itinerary. You just added three hours of low-quality time to your life - and you’ll never get that time back.   That’s cheesy. That’s unattractive.   It’s not about saving money on your Butterball turkeys or car gasoline.   I’m not saying you can NEVER do those things. Sometimes you gotta do what you gotta do.   But people need to stop being congratulated for being cheap or even focusing on frugality. Gosh, that stuff can make people miserable.   People that say, “I want to live frugally.”, they don’t REALLY want to live frugally. They actually want to say, “I want to live well.”    But they don’t know how to do that. They don’t have a vehicle to move forward with.    It’s kind of like, when we had T. Harv Eker here on the show here a few years ago - it’s about setting your mental thermostat higher, so that you can get greater wealth & freedom for yourself …   And with the “five ways you’re paid” like I described earlier, hopefully, I’ve charted a substantially clearer path forward for you so that you can do that.   Well, with “The Up To 5 Way That Real Estate Often Pays You”, that’s something that I first started talking about more than five years ago. I’ve never heard anyone else talk about it before. So, as far as I know, I guess I’ve “coined this” or whatever.   But since I began talking about it, I hear other people talking about it too - even other educational platforms.   Now, I do own three real estate trademarks, so what do I think about OTHERS now teaching the “5 Ways You’re Paid”. I’ll discuss that in just a few minutes here.   I’m also going to discuss who influenced ME - and give them some credit. And this includes a couple people that you’ve surely never heard about before.   If you would like to see the “5 Ways You’re Paid” in one easy-to-read infographic - that all fits on one sheet - so that it’s REALLY cear to understand - I’ll send you a colorful electronic “5 Ways Infographic” all you’ve got to do is go to GetRichEducation.com/Book.   That’s got to be one of the greatest deals anywhere. That’s where you can opt-in to get the electronic version of my int’l bestselling book, free, emailed right to you.   Then a few weeks later, the “5 Ways You’re Paid Infographic” is automatically sent to you too.   That’s at GetRichEducation.com/Book   More next. I’m Keith Weinhold. This is Get Rich Education. ________________________   Welcome back to Get Rich Education. I’m Keith Weinhold.   Hope you like our humorous moments to lighten up the show here. Hey, you run a little math on audio and … it begs for some embellishment to spice things up.    When it comes to the up to five ways you’re paid in real estate investing. Yeah, since I first discussed this more than five years ago, I’ve noticed that other REI educators now teach the same thing.   I don’t know whether they credit that to me or not - and you know what - I don’t really care whether they do or not. I mean, it’s cool if they do, but …   … the more important thing to me is that conscientious people get the information. Share it. That is so much more important than anyone getting the credit.   So just … share it.   “Helping the people” is more important than “getting the credit”.    I think that the world would be a better place - imagine if everyone put “helping the people” before “getting the credit”.    I don’t own trademarks so that I can go after people that say the same stuff that I do. That’s just not in my nature. I’d rather do productive things with my time.   The trademarks are thre just because I wouldn’t want someone else to swoop in and tell me that I can’t use something that I might have come up with in the first place.   When it comes to “helping the people” and “getting the credit”, now, everyone has influences - things they learn from others. You & I are no different that way.    Even those that influence you were influenced by someone else before them.   Well, I DO like to give credit to those that I learned from, so ...    Though I know he’s a polarizing figure to some people, credit is due to Robert Kiyosaki and the Rich Dad Company. Learn more about them at RichDad.com   The most important lesson that I learned there is “Don’t live below means. Expand your means.”   It’s more important to increase your income than cut your expenses.    Don’t make a budget. You’re just tearing things down.    Instead, build a cash flow statement. Now you’re constructing. Now you’re making more of yourself, not less. These are really Rich Dad principles and helped develop my mindset.   Now, as for who helped turn this mindset into something actionable? I’ve got to give props to “The Real Estate Guys” - Robert Helms and Russell Gray. Learn more about them at RealEstateGuysRadio.com    That’s the first place that I learned, for example, that in real estate, the market is more important than the property.   Look, you can’t very well be in your crib with your trading app and just order up real estate - even though people are building online marketplaces.    But one mistake people make is that they buy property because the numbers look good based on some YT video they watched on how to crunch the numbers - but they know nothing about the market or the team.    Then they buy it. Then only after they go buy it, NEXT they go looking for a PM and hope there’s a good one that can handle it.    Then next, they try to figure out the market that they already bought in.   That does not work. They’ve got it backwards. If the market and your property manager check out, then & only then do you get the property in that market.   It’s sad when people get that wrong. That’s why people walk away from RE & they say that RE doesn’t work.   Well, no, that investor wasn’t very strategic. But you CAN understand how that happens to people.   And it was great to have both authors of the “Rich Dad, Poor Dad” book Robert Kiyosaki and Sharon Lechter - and The Real Estate Guys all here on Get Rich Education with us multiple times.    Another set of influencers are two guys that you’ve never heard of before.    Their names are Chris and Raj. They are simply two longtime friends of mine that bought four-plex buildings.   That got me to make my first-ever property that seminal four-plex building where, with a 3.5% down payment I lived in one unit, rented out the other three, and that started it all for me.   These otherwise “regular guys” reinforce the quote from the late Jim Rohn, “You Are The Average Of The Five People That You Spend The Most Time With”.   Today, I’m a collector of real estate - most of it in the United States. Being the geography guy that I am, did you know that I have a world map on the wall of our garage …   … and I have a little red sticker - little red dots on top of those areas where I own property. Yeah, it makes this real estate collecting kind of visual. Maybe you want to try that too.     Well, one part of the world that I’ve been adding more red dots to lately is where I’ve been buying - across Florida.    Areas around Tampa, Orlando, and Jacksonville all make sense from a cash yield perspective.   A lot of BRAND NEW construction properties have numbers that work there, especially where our Orlando provider - that’s Greater Central Florida really - have been actively sourcing brand new construction property in Sebring, Florida, among other nearby places.    Sebring is pretty much smack dab in the center of peninsular Florida, south of Orlando.   These single-family homes that make great rentals have a metal roof, they’re 3 bed, 2 bath, and the prices really are remarkable - $179,900 and $159,900.    Yes, that’s for new construction in Sebring, Florida.   The rent-to-price ratios are a very attractive eight-tenths of one percent or so. Quite good for new construction, plus you’ve got the tailwind of extremely low interest rates as well.   And when it’s new construction, the PROPERTY INSURANCE premiums are so reasonable too.   If you’d like to learn more about those, you can do so at GetRichEducation.com/Orlando   It isn’t just single-family rental homes. New construction duplexes are available too.    That’s GetRichEducation.com/Orlando   You know that I often like to leave you with something actionable like this at the end of an episode.   And knowing and doing are two very different things.   How do we already know that? Well ...   Many people aren’t at their ideal body weight … and it isn’t because they don’t know what to do, they just aren’t doing it.   You also need time to figure out what you want to do. I like eating pizza, for example,  but it took me eating different foods in order to find that out. I had to try and do.   Learning is best done by trial-and-error but it doesn’t have to be YOUR trial-and-error.    Learn from me. I’ll even eat your pizza for you!   I help give you the information you need to make an informed decision.   I connect you with property teams with proven track records - many of whom I invest with myself.   You ultimately choose your investments.   There’s risk with anything … anything in life.    You either take the risk or lose the chance. I think it’s helpful too, that you follow someone that’s been through a recession.    I’ve been investing for … nearly 18 years … it’ll be 18 years next month … since I bought that landmark four-plex building.   Teach you how to fish or GIVE you a fish? Well, why not do both? You can get the fish at GetRichEducation.com/Orlando   Have you ever wondered where your money is? Well, the world already has your money. You just need to go out and claim it.   I’m Keith Weinhold - grateful, as always for your listenership. I look forward to chatting with you again next week.   Don’t Quit Your Daydream!

Stocks, real estate, gold, oil, inflation rate, and interest rate valuations are all updated after the first half of the year. Housing Wire tells us rents are up in: Memphis, St. Louis, Greensboro, Jacksonville, Columbus, Tampa, Cleveland, Kansas City, and Virginia Beach. I discuss where they fell. San Francisco rents just plunged 12%. Macroeconomist Richard Duncan of MacroWatch joins us to discuss depression chances, and inflation vs. deflation. For a 50% subscription discount on Richard’s MacroWatch video newsletter, use Discount Code “GRE” at: RichardDuncanEconomics.com. Fed intervention has prevented a COVID-induced economic depression (so far). We will need more to prevent depression. Hordes of dollars can be created by the U.S. because dollars are not tied to gold. Many Americans still don’t understand this. Recent currency creation has not caused high inflation. The Fed usually hit below their 2% inflation target. Could consumer price deflation create asset inflation? Yes. I describe deflation vs. inflation as a “tug of war”.  Deflationary tugs: globalization, technology.  Inflationary tugs: currency creation. Bottom line: Be invested in something that pays you five ways like real estate. Resources mentioned: Richard Duncan’s MacroWatch newsletter: RichardDuncanEconomics.com Use Discount Code “GRE” for a 50% discount. Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold

Homes with many small bedrooms are hotly desired today. Why? In an economic rough patch, people need roommates. Secondly, home offices are more popular than ever. Residents increasingly want yards today too. Gardening is popular as a hedge against disruptions in the food supply chain. This all makes single-family homes more popular than apartments. *The entire episode transcript is below.* The debt-to-income ratio requirement is positioned to be removed from qualified mortgages. Three listener questions are answered:  1) What about CapEx expenses?  2) What about all these property notices I get in the mail?  3) What happened to the coffee and cacao providers? I give you four reasons about why money is a taboo topic.  Learn the least likely money topic that people are willing to discuss. The most I ever made at my day job was $108,000. People must stop equating net worth with self-worth.  Resources mentioned: April Home Prices Grew 5.5%: https://www.housingwire.com/articles/u-s-home-prices-grew-5-5-in-april-despite-pandemic/ Why Money Is A Taboo Topic - Ally Bank survey: https://media.ally.com/2015-11-24-Holiday-Tip-Most-Americans-Say-Social-Conversations-About-Money-are-Taboo-According-to-Ally-Banks-Money-Talks-Study The Atlantic: Why Americans Don’t Talk About Money Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Top Properties & Providers: GREturnkey.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold   Welcome to Get Rich Education. I’m your host, Keith Weinhold.   Talking about today’s hottest rental type, then my favorite guest is here on milestone Episode 300 - because that guest is you - as I help with your listener questions about your rental property operations, then “Why Money Is A Taboo Topic” (why DO people hide their salary?), and finally a little Episode 300 bonus. All today, on Get Rich Education. _____________________ Hey, you’re inside GRE. From Phoenix, AZ to Phoenixville, PA and across 188 nations worldwide. I’m Keith Weinhold.    This IS that show that’s created more financial freedom than nearly any show in the world.   You’re listening to milestone Episode 300 of Get Rich Education. More on that later.   The hottest INCOME PROPERTY housing type today could very well be single-family rental (SFR) homes that have many small bedrooms.    Four bedrooms is often better than three. Three is better than two.   Yeah, today, a high number of small bedrooms is being favored over fewer large bedrooms.   For one thing, this is because as the economy is in a rough patch, more people seek roommates to share housing costs.   Also, with more people working from home now, they want the extra bedroom for quiet office privacy.   You probably already understand that more residents prefer SFRs over apartments to avoid common areas like laundry rooms and hallways and even elevators.   Another reason boosting SFR demand today is something that you might be overlooking when it comes to rental property … because often, you’re thinking about things INSIDE the property like amenities, and square footage, and layout.    But another reason renters increasingly want single-family rentals are yards. Now sometimes, duplexes might have a fenced yard for each side too, of course.   But … why are yards more desired today?   Well, there are a few reasons. In the pandemic, people have discovered gardening like the hunter-gatherers did.   Yeah, gardening as a hedge against these disruptions in the food supply chain.   In fact, Burpee Seed Company recently had the highest sales in its 144-year history.   People are gardening. In fact, the homeowner’s association in my own neighborhood recently put it to a vote among residents about “OK’ing” having a second detached building in your backyard (only 1 maximum is allowed now) and that’s because more people want to have a greenhouse today.   Gardens and greenhouses - these are most conducive to single-family rentals.   People are even buying egg-laying chickens like never before. It’s kind of a back-to-basics subculture that’s emerging.   Yes, humans are mammals and mammals need sustenance! Haha.   You need food and you need real estate.   In the midst of The Great Shutdown, people want to do more with their lawns.    Lowe’s & Home Depot are doing really well - and they’re selling home-dwellers a lot of things like Inflatable pools, patio furniture, and trampolines.   Then back indoors, yeah, you may very well want to tilt your new property buys into SFRs with more small bedrooms.   Sometimes, older SFHs can have four or even five bedrooms. One reason for that is that families had more children generations ago.   Family sizes are smaller now. So if you still have a 4-5 bedroom place, it can work well for either roommates or home offices.   If you're the "hands-on" type, building a wall to divide a large bedroom has rarely been more lucrative than it’s been lately.   Now, one 300 sf bedroom is pretty big. Dividing it into two bedrooms of 150sf each is paying off more than it has in the past.   They are some housing trends in the pandemic - demand for SFR with more small bedrooms and a yard for a garden.   In the pandemic, the broader economy is getting "bailed out" more often than a bank behaving badly.   It's not just quantitative easing, dropping interest rates on every loan type, or loosening bank reserve requirements or putting free checks into unemployed people’s hands.   Many real estate investors are getting support … almost like they had opened their own GoFundMe account.      Low supply keeps housing prices buoyant. Low mortgage rates keep demand high. Forbearance keeps borrowers from defaulting - so that further supports prices.   Now, the debt-to-income ratio (DTI) requirement is positioned to be removed from qualified mortgages.   This means borrowers that have higher existing monthly debt payments on everyday things like their car or their credit cards could now qualify for new mortgage loans - when they couldn't previously.   Well, what this does is that it creates a larger buyer pool. More people have the capacity to qualify and buy property.   This larger buyer pool serves to further push up real estate prices - and that’s both investment property and primary residences.    Well, eliminating the DTI is great news if you want to lock up more property at these historically low interest rates.   But there can be too much of a good thing. It's a call-to-vigilance to be sure we don't return to those loosey-goosey days of, say, 2005.   That's when virtually anyone with a name and a signature could get a loan. Borrowers lied about their income on loan applications and the income wasn't checked - it wasn’t even confirmed in underwriting.   So then, people with historically low-paying jobs like movie theater ushers & dishwashers & pedicurists could sometimes own a fairly lavish home back then.   When appreciation stopped in 2007, liar-borrowers had no equity to remove for servicing the payments … and that whole thing didn't end well.    We're nowhere near that point. But watch that pendulum swing.    If you’re buying for resilient cash flow, you’re not so price sensitive anyway.   -----   The first one of your listener questions today comes from Chad in Saline, Michigan.   Keith, I like your easy-to-remember VIMTUM explanation of expenses but why are you excluding CapEx expenses from the cash flow calculation?   OK, thanks, Chad.   Let me translate if you, the listener, are uninitiated on this.    The easy way to remember how to calculate your monthly cash flow is to take your rental income and subtract out your mortgage (that’s principal & interest) and your operating expenses, which I call your VIMTUM. V-I-M-T-U-M.    That’s just an acronym I use for your regularly, recurring operating expenses and VIMTUM stands for Vacancy, Insurance, Maint., Taxes, Utilities, and Mgmt. V-I-M-T-U-M   What Chad is asking about are CapEx - which a shorthand way of saying Capital Expenditures.   CapEx means large, IRregular expenses that an investor or even a homeowner - often incurs with their property over longer periods of time.   An example is, what happens when your roof needs to be replaced? A lot of roofs have a 25-year life expectancy.   Now, your property’s water heater has more like a 10-year life expectancy.   Chad is basically asking me how I’m accounting for that when figuring cash flow. I think I addressed this on a prior episode, but it’s been a long time so I’ll bring a fresh angle to the answer.   First of all, I’ve mentioned previously that it's prudent to keep 3-5% of the TOTAL value of your property portfolio in a liquid side fund.    So if all your properties are worth $1M, you’d have $30K - $50K in cash or cash equivalents.   If you’ve just got your, say first turnkey at $100K - have $3 to $5K set aside.   Note that when you qualify for a mortgage in the first place, mortgage loan underwriting typically requires that you have reserves already.   And, by the way, this liquid side fund should be in addition to any overall liquid emergency fund that you have in your life.   But, Chad, on your CapEx question, you might still be thinking ...   Yes, I want to take some of those dollars that you’ve felt compelled to put in a liquid side fund account monthly and factor THAT in to your property ROI. I get that. Here’s the thing.   If you follow … really … the entire wealth formula espoused here on the show, your CapEx expense should be limited. You’re going to pay less in CapEx expenses than other investors.   Why is that? It’s because at the 8-to-10 year mark, which is before a lot of major CapEx items need attention, you’re going to sell your property and 1031 Exchange it into the next one - or hopefully into two at that point.   That is all driven by the fact that, after most any 10-year slice in the housing market, you’re going to have appreciation, hence accumulated equity.   As you know, home equity is unsafe, illiquid, and its rate of return is always zero.   So it’s really due to math and the loss of leverage that makes you move your property along before CapEx expenses kick in.   And with SFRs, you can sell to an owner-occupant buyer that typically get emotions behind the home and isn’t at all concerned that you were the one that enjoyed the new roof in its first ten years of use or whatever.    Now, if you have substantial enquiry accumulation after 10 years on a property that performs really well and you want to hold onto it, then you might do a cash-out refi and have CapEx expenses like a new water heater.   So, thanks for your excellent question, Chad.     One other thing I’d like to mention that a lot of real estate people don’t like to talk about are to, in general, run your cash flow projections fairly conservatively.   That is because, in real estate, unexpected expenses are more common than unexpected income.   Thanks, Chad.   The next question comes from Lori in Pasadena, CA.    Lori says, “Keith, love listening to you. You’ve got the most relevant real estate show out there. Wow, thanks for that.  Things are going fairly well with the properties that I buy through GRETurnkey.com but with each buy, I get more & more of these various letters in the mai that I have to deal with.   The latest one is an annual property rental fee statement from Florida. Things like this continue to cut into my time … umm … and then Lori goes on to give another example.   OK, Lori. Yeah, what she’s talking about here … is that the Florida municipality - the town - where her rental SFH is located has this annoying little administrative charge.   They charge a whole $50 per year to Lori for this property because she’s an out-of-area investor that has the “privilege” of owning Florida rental property in their town.   This is basically like a tax excised by the town where she owns her property.   What something like this really is Lori is … a nuisance. Just reading the form, and figuring it out what it is, and seeing how that Florida town accepts the payment. It IS annoying. It cuts into your time.   In fact, I got a piece of nuisance mail for one of my apartment buildings just yesterday.      This is from a utility provider - the natural gas provider to the building. Basically, the natural gas company is working on a high-pressure gas transmission pipeline, and the R-O-W for the pipeline is apparently within ⅛ of a mile of this apartment building of mine.   The letter said that the property residents should be informed.   Well, Lori, with the piece of nuisance mail that you received and the one that I got, here’s what you do. Get it out of your life. Get that nuisance mail out of your life.   Now, I don’t mean “throw it away”. This all comes down to one word - and that word is “manager”.    What I did was get out my phone, I took a photo of this letter, sent the letter image to my Property Manager right away.    I asked them to handle it - and also asked the manager to make sure to tell the letter sender that any future correspondence like this be sent to the manager, not me.   You know what we just did, Lori. We both just increased our ROTI. Yes, we just increased that all-important investor metric that’s even more important than ROI.   ROTI is your Return on Time Invested.   I’m a big proponent after having a professional Property Manager. Remember, it’s their job to handle communications with your residents like this - and it doesn’t cost you anything extra.   Remember to outsource these little nuisances to your PM.   Lori, I don’t know how many properties you have, but just say you have a total of ten rental doors.    With a portfolio that size, some months, you might have what investors call “a perfect month” - that is, a month with zero repairs or maintenance in your portfolio.   But whenever you do, sometimes you might wonder - well, what did I pay the manager for?    Well, you still paid your manager to collect the rent and pay your bills and itemize your statements, and just have the peace of mind that your tenants can’t get ahold of your DIRECTLY at an inconvenient time.   But ensuring that your manager handles all your nuisance notices such that you don’t even know that you got one … that increases your Return on Time Invested.    Be that responsible owner. Do good in the world. You want a nuisance tax notice to get paid, you want your tenants to be informed about nearby utility work - but be sure to outsource it and keep your quality of life.    Like I’m fond of saying, “Be sure your quality of life exceeds your cost of living”.    Bottom line is - Use your manager. Thanks for the question, Lori!     The next question is from Brian in Austin, TX. Brian says:    Hi Keith, I am an investor with $7 million in value across 32 properties. (Nice job there, Brian). I noticed you are not promoting coffee and cocoa any longer and was curious if there was concern or a reason behind it? Thanks, Brian.   Alright, Brian. What he’s referring to is that at GREturnkey.com - where our list of cash-flowing property providers is, there used to be a page for coffee investing there and a page for cacao investing there - and they’re both currently gone.   Brian, what happened is that, with the provider there - and its the same provider for both types of agricultural investment - that is, where you, the investor, get cash flow from the ANNUAL harvest of coffee and cacao is that that provider is having trouble with the deeding process where those parcels are located - namely, in Panama.   The provider is still delivering the land deeds to all the investors. But working with the municipality there is taking so long that this long, drawn-out deeding process was frustrating to some investors.    In fact, it might have taken me … something like two years to get my deeds for my coffee farm parcels. I don’t really remember - but it took awhile.   Anyway, those offerings aren’t currently on GREturnkey.com because the provider is changing their model, in part because of the slow deeding process. They’re listening to your input and responding. They’re doing, really, what you would want them to do.   So they are moving toward a Private Placement model. That way, they can issue the share certificates in a matter of weeks, not years like it is with the deeds, and they can focus their time and effort on actually developing, growing and operating the business.   Another is that under the deeded model, they couldn’t accept IRA funds any longer.   So, expect coffee and cacao to be back on GREturnkey.com at a later time. That’s why they’re not there now. There aren’t any more deeded parcels available - and they’re changing their model.    But, of course, they’re still working on getting the deeds for those that have bought those farm parcels in the last few years & still don’t have their deeds.   The main reason that you’ll see a provider be removed from GREturnkey.com is that they’ve run out of INVENTORY in that market.    If a provider doesn’t have inventory & doesn’t actively source it, then there’s no reason to waste your time & have it there at GREturnkey.com.   That is all for our listener questions today.   Homes prices for April grew 5-and-a-half percent year-over-year despite the pandemic. Yes, real estate is slow moving and we’re still looking at April data here near mid-summer.   That article is in the Show Notes for you.    My guess is that I wouldn’t really expect an appreciation rate that high over the NEXT year.   But one thing that is supporting prices are those “erstwhile” mentioned low, low mortgage interest rates that are even lower than the ocean floor at this point.    Let’s look at mortgage interest rates decade-by-decade. Gosh, this is just remarkable.    It gives you perspective sort of like a while ago when I played those cornball television commercial ads from the 1980s where you could finance a car for an 11% APR - and that was touted as a great deal.   Well, let’s look at the average 30-year fixed OO mortgage rate that was issued in the 1970s.   It was 8.9% then. That was the average rate. Inflation was increasing.   By the 1980s decade, inflation had reached a crescendo. This was the Voelcker Era - where Fed Chair Paul Voelcker famously raised interest rates to try to stomp out runaway inflation.   And Voelcker’s bold move WAS successful. But this helped result in a 1980s decade mortgage rate of 12.7%. Gosh, 12.7%.   By the 1990s, they settled down to 8.1%.   By the 2000s decade, down to 6.3%. Yeah, that sounds about right - I bought my first ever property in 2002 at right about that rate - it was 6-⅜%.   By the 2010s decade, we had low interest rates to pull us out of The Great Recession and they stayed low. In fact, the average for the 2010s decade was … 4.1%.   That felt unprecedented at the time. Well, today, take another full percentage point off that yet. Mortgage interest rates are 3.1% today … as we’re here early in the 2020s decade.   Just astonishing. 3.1%.   Now, interest rates correlate with inflation. So today we’re in a low inflation environment and hence, a low interest rate environment.   Well, coming up here on the show next week, one of the world’s most prominent economists will be on the show with me and we’re going to discuss Inflation vs. Deflation.    Which side is winning … and what is going to happen next. Of course, we’ll discuss the state of the broader real estate economy and so much more as well. That’s next week.   I hope that you are doing well. We’ve been largely sheltering-in-place here at our home in Anchorage, Alaska. I’m coming to you from Anchorage today.   Next week, if all goes as planned - it’s an awkward time for cross-continental travel, but I’ll be flying into Buffalo, New York, and then spending a good chunk of this month in both western New York State and mostly Pennsylvania … as I’m visiting family. I think I’ve told you before that I feel like I won the “parent lottery”.   My terrific parents have lived in the same upstate Pennsylvania home since 1974. They've also had the same phone number for all 46 years.    And when I visit them, I still sleep in my same bedroom that I slept in as a baby. I love Curt & Penny Weinhold - and I am so grateful and inspired by their example of goodness and stability.   As far as events - if you want to meet in-person. I had hoped to do meetups in New York City and Philadelphia this summer, as well as a Harrisburg, Pennsylvania real estate field trip. But COVID has wiped out all of that.   Of course, as always, you can keep up-to-date on all of that GetRichEducation.com/Events   Some other live speaking events have gone virtual. For example, I’ll no longer be speaking in Birmingham, Alabama at the Spartan Summit this coming October.    But I will be speaking at their “event gone virtual”. In fact, I’ll be the speaker KICKING OFF The Spartan Summit. Again, learn more at GetRichEducation.com/Events.   I hope to do some or all of the live New York City, Philly and Harrisburg events next year.    For milestone Episode 300 here, do you like the Get Rich Education … theme music? Or did you at least, wonder where the now-familiar-to-you music comes from.     Well, we don’t purport to be any type of music channel. This is an investing show.   But this one time, for Episode 300, we’re going to play all of it - it’s two minutes long - at the end of the show today.    We own the royalty-free track. This show launched in 2014, and this track has been our theme music since late 2017. It’s from a DJ named Wicksford and it’s called “Cannot Be Stopped”.    But first - why don’t people talk about money? Why are other people so secretive about their salary? Why is money considered a taboo topic, then anyway? That’s next.    I’m Keith Weinhold. You’re listening to the wealth-building Get Rich Education.  ___________________   Welcome back to Get Rich Education. You are listening to milestone Episode 300.   We’ve been talking about some of your harder real estate investing skills today.   Well, what about mindset?   Why Don’t People Talk About Money? Why is money a taboo topic - one of those things that you just don’t talk about? It’s taboo stuff - right up there with politics, sex, and religion? Well, if people would stop equating self-worth with net worth, then talking about money would not be this big taboo thing.   According to a survey conducted by Ally Bank, 70% of Americans think that it’s rude to talk about money.  Just, get this - Research shows people would rather talk with a stranger about an STD than their salary. Oh geez. You’d rather tell someone you have an STD than tell them how much you make? People would rather admit to contracting gonorrhea than fessing up that they only make $54,000 a year. Sheesh!!  Oh, gosh … and did I really just use that word on the show. Especially here on Milestone Episode 300? So … well why this … society-wide gag rule? Why does this taboo exist? I think that it all boils down to about four big reasons. People don’t talk about money because, most people don’t have much money. So there’s this negative association. Talking about money is proportionate to talking about problems. If you’ve had more financial success in life, then it can be easy to forget that so many people think this way.  The second reason that “money talk” and especially “salary talk” is taboo is that because if you have a lot of money … you know what can happen to you?  Someone might ask you to borrow it. Well, lending money to family or friends is a great way to strain relationships. If they’re late to pay you back, then it’s rude for you to even ask someone when they’re going to repay you. Another reason that there’s a prohibition of “money talk” … at least in America here … is because many Americans put a higher value on PRIVACY than other societies do. Now, I think that there are gradations of what money TOPICS are acceptable to discuss and what are not. I’m pretty sure that I’ve told you on a previous show - though at this point, 300 episodes, sometimes I can forget - but I’m pretty sure that I told you that the most that I ever made at my day job before quitting it more than five years ago was $108K. At times, I had to work more than forty hours a week for that.  Now, that might be $125K in today’s inflation-adjusted dollars, but that salary was no longer that interesting to me when my real estate provides value to people with very little of my involvement. Now, I’m kind of a rare person for me to even mention - a past salary like that - even though it was kind of in a former life of mine. In America, if something costs even more than a few hundred dollars, MAYBE you shouldn’t mention it. If your friend bought a canoe for the lake - you might want to know how much it cost, but you’re hesitant to ask them the question.   When we talk about gradations of cultural acceptance, I think that if you inquire about the cost of your friend’s lunch yesterday—that’s a transaction with pretty limited connections to the past and future—and that generally isn’t off-limits.   Now, in Israel, people OPENLY discuss salary. Why is that? Well, there are a couple reasons. It’s because a place like Israel historically places a lower cultural premium on privacy.  Another reason … is that a place like Israel and other places in the world have higher levels of labor unionization. You see, “once it’s collective bargaining, it’s not as personal”. When you’re a member of a labor union, you often know each other’s job classification and that job title is rigidly tied to a fixed and publicly-viewable salary or wage.  And then, really another reason for the cultural “Money talk taboo” in America, is because asking someone what they earn means that you are indirectly questioning their personal worth.”  “By contrast, in China personal worth is not primarily indexed to financial worth, but rather one’s ‘quality’ or what they call “SUZZ-eee” (suzhi).  Your moral and ethical values cannot be reduced to economic value.” Yeah, I really respect that. Getting back to the Ally Bank survey - what they found is that when people DO discuss finances socially, nearly one half of the survey respondents said they prefer to keep it neutral - for example, talking about price comparisons on goods and services like granola bars or a manicure, or where to find a better interest rate on a savings account." It also found that younger people are more open about discussing money More than any other age group, millennials (59 percent of them) acknowledged talking with others about their income, savings and debt, even though nearly two-thirds agreed it is rude or inappropriate to talk about money in a social setting.    In fact, almost half say they disclose their income to others, and 62 percent say it is important for them to surround themselves with people who they feel are financially secure. So, even kind of the second-youngest generation today, Millennials, would rather be around people that are financially-secure. Hmmm … that’s really “telling”.    Now, what I found interesting is that the survey revealed that: The majority of respondents said they discuss sensitive money matters with family is 69 percent, with financial professionals is 26 percent, and with friends is only 22%, while only 8% percent said they discuss sensitive money matters with work colleagues.  That shows more there that when you to talk about it - it’s deemed to be a real breach of professionalism to discuss this stuff at work.   People are most likely to disclose their income (39 percent) over savings (30 percent) or debt (29 percent) to family and friends. That tells you that disclosing debt is the most embarrassing for people. Of course, that’s mainstream society.  Here at Get Rich Education, displaying the amount of good debt that you have probably says something rather positive about your real estate portfolio size.   Now, in WORKING-CLASS communities, the money taboo can be weaker there.  Jennifer Silva is a sociologist at Indiana University and she researched the coal-producing region of Pennsylvania. The bottom line is that the working-class families she’s interviewed didn’t hesitate to disclose specifics about their income, rent amount, or expenditures.  “People would say, ‘I’m an open book,’ and they’d be straightforward, open, not ashamed.”  They freely discussed “the challenges or even impossibilities of supporting a family on minimum-wage work” and almost acted a little proud of their resourcefulness, like “how they would make their budget stretch, such as buying ground meat in bulk and freezing portions to make it last.” You know, from my personal vantage point, sometimes you will BE around people that you know make substantially less money than you, And you know what, you DO find yourself tilting the conversation so that person isn’t made uncomfortable. What about when you go get your hair cut? I mean, the 15-minute conversation that takes place between me & the person that cuts my hair … it’s like, if they ask me what I did this weekend - and I stayed in a resort and they already told me that they played basketball with their kids or something else - even though basketball with your kids might be a GREATER activity in a sense than staying at a resort … I don’t mention staying at a resort because it sounds hoity-toity … a little snobbish. Kinda unrelatable to them. So then maybe I’ll tilt that chat to NBA Basketball or something. Chat about something that’s not so socioeconomically stratified. You can always find that common ground somewhere.  You know, another personal anecdote, in my life, I do a lot of these 5K running races & other events like that. The race event makes my time publicly available. The local news outlets might even pick up those races times and publish them.  Anyone can see it. Well, that is a measure of my fitness on that day. There are clearly plenty of runners that rank both above me and below me. So, that’s made public? But yet salaries are not?  Somehow, American society does not equate physical fitness nearly to the degree that we evaluate and stratify how much money you make. I don’t know that it should be that way, but it is. I think that’s rather weird. Revealing how much money you make, to many people,  “exposes how you’re valued by your employer and how your contribution is valued even more broadly, by the community.” That makes an ounce of sense, sure, but why such a high value? I don’t get that part. Few people would think “You are worthless because you haven't broken the 20-minute mark in a 5K yet.”  But for some reason, WAAAY more people would equate you with having a lower worth if, say they learned that you only made $54,000.  Now, Eli Cook - he’s a history professor at the University of (HIGH-fuh) Haifa and the author of a book on the topic, says that this money taboo has been going on for about 150 years in America.   In the late 1800s and early 1900s, he says that many Americans internalized the lessons of mainstream neoclassical economics, which suggested, through [the economist] John Bates Clark’s theory of marginal productivity, that everyone earns what they in fact produced.”    So … that’s one opinion on about HOW LONG this has been taking place.   Really, what a lot of this comes down to is that the everyday conversations that you have with others are filled with questions about what people buy, what they do for a living, or how long they’ve been investing in real estate, and where they went to school.  And once you know all of those things about someone else, the salary or net worth or cash flow are less important … because all of this is CONTEXT that you have about others - and these are all really proxies for class position anyway.   When we can stop equating net worth with self-worth, money has a chance of no longer being a taboo topic … and that really is, the big takeaway.   I trust that you’ve been enjoying MILESTONE Episode 300 of Get Rich Education.   As always, to get the Show Notes, you can go to GetRichEducation.com/300 - since that’s the episode number.    In fact, this week, you’ll find the entire transcript to the episode if you would like to read along … or you tell someone else about the show and tell them about the option to read as they listen.   Above all, I have got to thank you for listening. I hear from so many people that tell me when they discover this show, they want to go back & listen to all 300 episodes …   … usually because I hear one of two things. They say it makes actionable real estate investing more CLEAR than anywhere else … or that it's changed their investor MINDSET more than anything else.    Remember, if you’re interested, hang around until the very end of the show today to hear the entire uncut theme music … as a little Episode 300 bonus.    More importantly, if you’re one of those people that STILL has not bought your first property.    You can’t TIME the market, and you can’t make any money from the property that you don’t own.    As long as you’ve been educating yourself for a while, then, if you think that inexperience is the only thing holding you back, well, then the only way to GET that needed experience and learning is to act.   Some people wait for ALL blue sky and everything to be perfect before they begin. Well … that really never happens.   You’ll either change what you’re doing … or you’ll keep what you’ve got.   Teach a man to fish … or give a man a fish?   Well, here, we do both. At Get Rich Education, we TEACH you how to fish.    GREturnkey.com is our sister website where we GIVE you a fish too - with top national turnkey providers.   Get your mortgage pre-approval and download a provider report. We give you all 8 main steps at the top of the page there.   View available properties, make an offer, please get a third-party property inspection, then comes the appraisal, then sign a Property Management Agreement …   … have your property closing, and finally, own the property and enjoy the collected RENT that your PM auto-deposits into your bank account. Get started at GREturnkey.com   I’m your host, Keith Weinhold and I’ll be back next week and every week to help you build your wealth. Don’t Quit Your Daydream!

Turnkey RE providers must acquire distressed property at a discount in order to stay in business. We go behind-the-scenes and see how these companies really operate. They take risks, maintain relationships with myriad parties, coordinate contractors, bear holding costs, buy & store materials, screen & place tenants, and operate a management division. It’s a ton of work that investors can outsource to turnkey providers. They are professional fix & flippers.  The “consumer-profit chain” helps you understand this. Dani Lynn Robison of Freedom Real Estate Group near Dayton, Ohio offers private lenders like you 8-10% cash-on-cash returns at www.GetRichEducation.com/Lending The funds are used to purchase and rehabilitate distressed property. They’re transformed into turnkey property. Your loan collateral is tied to a specific address. A note and mortgage is produced. You have first lien position. This provider has performed 300+ fix-and-flips since 2015. Get the report and connect with the provider for predictable 8-10% cash returns for four to twelve month terms at: www.GetRichEducation.com/Lending   Minimum investment amount is $50K. You DON’T need to be an accredited investor. Resources mentioned: Private Lending with 8-10% cash return:  www.GetRichEducation.com/Lending Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold

Learn how to “get rich for sure” versus “get rich quick”.  You must diverge from the herd to get more out of life. Today’s guest, 24-year-old Hayden Crabtree, found that he owned more property than his college real estate professor. After college, he worked to learn rather than earn. He worked for free for over a year! That’s how he attracted a real estate mentor - by providing immediate free value, not “taking”.  Hayden also values relationships, and structuring “win-win” deals. He authored the new book, “Skip The Flip”.  House flipping is not real estate investing.  Hayden, based in Athens, GA, focuses on self-storage units. Some family and friends will critique you for being different. Few understand financial freedom. He uses debt (leverage) to create wealth. Hayden is giving away his e-book free at: HaydenCrabtree.com/freebook Resources mentioned: Hayden’s book is free: HaydenCrabtree.com/freebook Mortgage Loans: RidgeLendingGroup.com QRPs: text “QRP” in ALL CAPS to 72000 or: eQRP.co By texting “QRP” to 72000 and opting in, you will receive periodic marketing messages from eQRP Co. Message & data rates may apply. Reply “STOP” to cancel. New Construction Turnkey Property: NewConstructionTurnkey.com Best Financial Education: GetRichEducation.com Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold