If you want to support the channel, please share this video to increase its reach. It would really help us out, and it motivates Ken to make more videos. Thank you so much it really means a lot.
Hey Ken, when you're constantly writing off depreciation for tax purposes, how do you then get more loans considering your income on the books is so minimal?
I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 3500+ units. I do not work.
I only contribute 5% to get full company match, that’s it. The 401K plan is designed for you to work until you are about dead. Also, the government does not have their hands on it yet either.
🚨🚨🚨 SCAM WARNING 🚨🚨🚨 This conversation is bots "talking" to other bots trying to impersonate real people receiving real advice. This is a scam that happens on a lot on these financial videos. Obviously these scammers are not very clever (most scammers aren't) and their made-up conversations are easy to detect. The comment and author has been reported to RU-vid.
@@BotSniffer221 thank you Buddy. There are so many scammers out there. What's good is they didnt get to the part where they posted the fon number to call in Wassup yet!
@@These-times-are-awesome I have Peace of Mind. And all the $ I will ever need. Folks be wishing to have such Freedom, and they Risk Everything to Win Big. And MANY end up eating catfood, receiving $1037/mo SS checks. In the 80's everyone was going to Get Rich with an Invention. Now it's another man's Get Rich Quick Scheme. ↨ CAVEAT EMPTOR baby, a man get's what he earns, no more and no less.
Making money is action, saving money is behavior and Growing money is Knowledge. The first step to gaining weaIth is to outIine your goaIs, with the heIp of a financiaI pIanner and following through with best ideas, you will attain weaIth in no time & enjoy the benefits of managing your finance.
My decision on my finances gained so much (gathered over 1M in 2yrs) with heIp of my financiaI pIanner. Got my 3rd house yesterday and, hoping to retire soon...
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
Exactly, I used to undermine the efficiency of a financial advisor until my wife company assigned her an investment adviser back in 2020 and tbh, it’s been the best financial decision I’ve made.
Melissa Terri Swayne is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I used to think every investor lose out during a crash, meanwhile some make millions. I'm nonetheless considering whether to put $150k in my stock portfolio. What is the greatest approach to profit from the market?
Accurate asset allocation is crucial, and some individuals use hedging strategies or allocate part of their portfOlio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay finan-cially secure for over five years, yielding nearly $1 million in returns on invest-ments.
I am going to look her up, I have about $81k i want to start with, might be small but it's better than nothing though. Since the 08 crash is playing out again.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
Consider investing in stocks especially during a recession . While recessions can be tough, they can also offer good chances to buy low and sell high in the markets if you're cautious. Just remember, this is not financial advice, but it's a good time to think about buying stocks since having cash on hand isn't always the best option.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
My CFA “ Gertrude Margaret Quinto “, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..!
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favourable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich.
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or market condition, but such execution are usually carried out by investment experts or advisors with experience since the 08' crash.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
This is very significant! Do you think you could direct me to your advisor? I've been researching advisory management as well, looking for strategies to invest and increase my income despite the prevailing economic uncertainty.
Personally, I think investors will start to seek more market diversification. can i confidently invest about $350k into the financial markets in 2024? I'm still not sure how rates will effect the market just yet, which worries me a lot.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
I appreciate this share. I set up a call with her and I am keen on getting to talk to her particularly. Lady looks really great though even with the exams and other stuff.
Thank you for sharing. Financial education is crucial today to show incredible resilience and discipline in the volatile market, masterfully balancing strategy and insight for success. This dedication to continuous learning is inspiring...managed to grow a nest egg of around 2.1BTC to a decent 15B TC in the space of a few weeks... I'm especially grateful to indeko Glenn, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape..
The real estate market crash discussion here is like peeling back layers of an onion. This breakdown hits hard with the reality check many need right now. same time there are people pulling millions from the downsides affecting retail investors, because inflation is a wealth transfer mechanism
One moment, you're riding high on the promise of appreciation, and the next, you're scrambling to cover equity shortfalls. It's a wake up call for anyone banking solely on market trends. I've seen returns of $800k, thanks to strategic decisions like shorting downturns and avoiding misreported leverage positions
I attribute my success not to luck, but to thorough research that led me to Emily ava milligan, a top fund manager. Going from 200 grand to where I am now was certainly not a stroke of luck
It's interesting how similar our experiences are. I pulled in 105 grand last month despite the market hurdles, thanks to my fund manager. It's encouraging when i see others make tangible results
after i copied her name and pasted into my browser, her website popped up immediately. It's hard to find tangible examples like this for reference, thanks for the share
Ken is a great guy, imagine being in his position and financially independent for generations to come and then taking time out of your day to educate us on how to follow his path, that’s big!!!
Cash flow or capital gains. Great explanation of the difference. It is something that was forgotten in the past couple years. The overall cost of capital, debt and equity has risen sharply. With prices decreasing equity is being lost and there is not much choice left. We will see how much this carries over into other segments of the economy.
Let’s make this even simpler. I purchased a 16 apartment building. Price 820k 25% down. =205K Mortgage is 6.5% 25Y 10Y balloon 615K loan balance. Payment principal and interest is $4300 Rental income is 11K 100% leased. Here’s the other numbers. $800 month insurance. $900 month prop taxes $500 month in utilities Yes I will have vacancies. Over 4K a month of cash flow. I have only 40 rentals. It’s not “passive” as I self manage. But look, people made money in 1981 when interest rates were 15%. Trust me.
What if you get hit with state-mandated repair-assessments and a massive increase in homeowners insurance? This is the dynamic in California and Florida.
@@genarolegorreta3418 There’s a lot of “what if’s” If those 2 things happens in Ohio then I guess rents go up even more. Like Cali and Fl. It’s always a cat and mouse game with income and expenses. On the owners side and the renters side. The game is the same.
@@abel4776 That example I purchased 6 months ago. I self manage/repair. I have 40 “doors” I’m maxed as far as what I can handle. So, the T12/P&L the previous owners had was inflated because they are a huge company and have all this overhead. So look for something like that, owned by a larger company. That if you know you’re going to self manage and do the work yourself.
I did pretty well as well. Credit is a killer. Sold soon as i heard people were getting into houses again with pretty much nothing again i sold in arizona. Its about to bottom again
Thank you for the great explanation. How do sale/leasebacks get impacted by the downturn in commercial real estate? Will many companies will need to sell at lower prices and then lease back at a stable price for a set term?
History. We must believe in history. 1971. 3Bed 3bath gulf side condo in Florida Naples. 65K We all said no way. Who would pay for that. Way over priced. I’ll wait. 1981 130K 1991 275K 2001 580K 2010 690K 2020 1.3K Now it just sold for 1.8K And along the way the majority of the population kept saying it can’t go any higher. This is it. No way. And everyone has been wrong.
@@abel4776 Well using the last 150 years as reference when it comes to housing only 2008-12 was the worst. Even worse than the Great Depression. Again just looking at housing. And If ‘08 was a mid correction only, well we are all screwed lol. But over a long course of time, 10years, real estate has more than doubled every 10 years. Of course some areas less, most areas more. Real Estate, particularly rental real estate. Is the best asset class. By far. 800K purchase on a 15 unit apt building. 25% =600K at 6.5%. 25y. P&I is $4200 Gross rent is 10,500 100% leased. Yes there’s maintenance. So is your home. Yes there’s vacancies. Yes to all the stuff everyone’s going to come up of all the reasons NOT to do it. Every problem anyone list, it applies to your own home, with one exception, your wife and kids probably aren’t paying you rent lol. And…then..this wonderful, magical thing at tax time called depreciation. Omg. I right off 29K every year. Like a cash expense. Without having a cash expense. It’s a beautiful thing.
We own all our CRE residential free and clear. What changed me was this realization: "I own stocks. When I first started with stocks I used margin to boost my returns. I stopped using margin. WOULD I BUY STOCKS AT 50% MARGIN? 60% MARGIN? 70% MARGIN?" The answer was 'no' and that's when I stopped using leverage to buy property. No one forced all these syndicators to buy on 60% or greater leverage. Just because lenders are willing - does NOT make it a good idea. Debt service coverage ratio is making it hard to refi/rollover the 10 year interest-only loans, due to the much higher interest rates, with "let's raise new money' as a way to avoid giving the property back to the bank when you can't refi. .
Anyone using a capital gain strategy isn't really investing - they're just gambling. Then the sad part is, IF they win, they then have to pay all the taxes on their winnings 😂. You do an amazing job at explaining this stuff, thank you for the video.
Wow! Thank you. I’ve been trying to explain this to people. I’m still having a hard time understanding why people or investors are still buying bad debt. They’re buying property without cash flow. Real estate has become a 401k instead of a cash flow investment. They are literally buying the property to pay the bank out of pocket for the investment. Why? There’s on price Discovery.
What about building the capital to get to that point? What would be the road map for someone who currently has a W2 to get into investing into larger deals with the cashflow model?
I believe this is what he would owe investors who provided the equity or down payment, for this property. If you are investing for cash flow then you want some sort of return even while you own the property. If you’re making the play for capital gains, you might not see anything until you actually sell the property for profit.
One part of this presentation that I do not understand is that of the servicing of the equity portion of any property. My current understanding is that equity would be the cash that is contributed to the deal by the buyer. Would you be able to further explain as to why there is a servicing of equity requirement.
I wish Ken sees my comment, but most likely not going to happen. Anyway...Ken please explain whats the difference between what you are saying here in this video and the difference between the videos you were doing during Covid. The videos in which you were saying how people should be buying then, because of stagflation and how prices are highly unlike to come down or at least not in a repetition of 2008? All this seems very contradicting!
Thank You how do you know when the price is done going down and that it has gone down say from your example from 50 to 40 million how do you know this and how do you know it will not go down more say to 25 ?
The value of the property is reduced when the prevailing interest rates rise. In this case, the Fed has increased rates very quickly, which results in a corresponding drop in real estate valuations. As cap rates have risen on literally every investment, the corresponding asset values decrease. For example if I have a property that cash flows 60K annually, and the cash flows are solid (relatively low-risk), a few years ago, it might sell at a cap rate of 7.5%, or $800,000 ($60,000/.075). Of course at that time, short-term T-bills might have been paying only 1.5%. Now, short-term T-bills are paying over 5%. In order for me to sell an investor my property now, the risk profile is significantly greater because the riskless rate of the T-bills has increased more than three-fold. A smart buyer/investor is going to demand a higher return, say 10%, in order to buy my property. That means my $800,000 property has dropped in value to $600,000 ($60,000/.10).
I'm in residential and I am already seeing people talking about walking away from their properties off just a 5% drop in appraised value. Wait till it hits 10%
@@erickchavez5725 DFW area. Values are down just 5% plus property taxes are up. This isn't a huge percentage of people, I am just hearing it from a few people thus far.
the reason you getting that deal in the first place is because the tenants defaulted on payments, so when you buy that deal, you have the same problem as the previous owner, that is no paying tenants for you
Would the 20M in equity be aquired from a cash out re-fi from other properties? Im not following how you just start with 20M in equity and only need 30M in loans for this example. TIA to anyone who replies
Thanks Ken , you a have beautiful simplicity way of explaining real estate and the difference between CF AND CG . I have some mild brain damage , I have real estate coarse before , even Robert K in Sydney in 2000 , although you’d you tube lecture was so clear that I understand exactly what your saying and it’s correlated todays market . I only want to follow you and do exactly what your doing . I once oben 6 apartments in Sydney , sometimes had to sell because of maintenance concrete cancer , and now I own nothing and have had to fast for 19 days no food . If I had extra money , I would fly and do your LIMITLESS coarse , just to be around great people , even knowing I have no money to invest . I love real estate and the only thing I could do is work for you for free finding dealing and work on commission. Thanks I really appreciate your honesty to most out of all you lectures . Kind Regards Ross Trevail
The same ppl yelling, "you shouldn't have purchased in the last 3 years", are the same ppl that were hyping up novice investors over the last 3 years to "buy now, buy now!" Sorry to say, many listened and will ultimately pay the price.
Ken you’re a genius and a billionaire, but if I look on a 100 year time table real estate does indeed always go up. What’s never been the same before is the government’s willingness to print money - with real estate being a hard asset wouldn’t it be more of a vehicle to store wealth at this point? Could it be possible that gone are the days of typical cash flow and appreciate is the new game - is that a possibility?
Yes, over the long-term real estate trends upward. And if you’re in it for the long run, there’s less risk that you would actually take a loss. That being said, I don’t believe that cash flow is out of the picture entirely. That will really be determined by the supply and demand of housing. If we are already short in supply, at some point in the next few years, we will see rents start to go back up. 😬
@@MyWealthBuildersRealty Ultimately, as long as the asset can service the debt, is it a bad investment? Over the long run, cap rates are likely to compress, especially when value is measured in the form of a fiat currency.
I would rather make some money, but if it services all the debt and breaks even, I’d take that over no money at this point 😅I think what Ken is saying is that if you are getting money from other investors then they are considered “debt” as well.
All these real estate investors. Who look at markets with a Fundamental Analysis? Are losing their minds and shirts currently. The calls I'm getting from places like. Austin Dallas Las Vegas are insane right now. PS Like always Ken I enjoy your real estate knowledge and breakdowns.
I was just in Austin last weekend. Rentals no longer have rent specials and real estate is looking to go back up again after the laid off young folks left
How does this relate to your earlier statements that housing will become completely unaffordable starting in about two years? Or is this basically exclusive to commercial real estate?
You're looking good Kenny! Still the same great leader with solid advice, along with some hard work this AZ Real-estate is a great business to be surrounded by. The success part is all up to me. Thanks for such a great opportunity working with you and following your lead.
There 10 million new ppl who have joined in America, real estate market won’t crash because we have a high rent demand but people with bad loans will suffer for sure
Yeah, I prepared November 2006 When a field report indicated Banks were doing NJNI loans CDOs are garbage Bought an small apartment complex I am 225% up in value plus a nice cash flow
Do you think then it is another 2008? Dave Ramsey says they are still undervalued unlike 2008 since there is no supply and did a I told you so video last week
I don’t think you will get distressed assets this time because (1) there is tremendous amount of private and public liquidity and fed and government spending is making sure that it stays that way (2) inflation: it will drive the cost of building a similar new property to $70 mil, at that point it all about capital gain. Cash flow matters but as long as you have enough liquidity to survive you are fine.
Hi Ken, what changed your mind from “not gonna see a crash” to “most likely gonna crash”? I think it’d be really good to hear your reasoning behind that change.
60% of folks have a very good rate mortgage. We’re not going to have a crash. In fact home production has fell a lot since 2008. Way less homes then the market demands. Keeping prices up. Unless there is a economy issue (job marke crash) we not gonna have a real estate crash.
But the bank is not going to loan you $30 million on a $40 million property. They’re gonna loan you 24 or 25 million or maybe even 20 million. So you’re gonna have to come up with more equity or more cash down. Also, who said that 40 million is the bottom? That property could go to 30 million or less.
Almost an A+, but I would distinguish that debt is either fixed or variable. Your example is great, but you look to be assuming a variable debt which is usually less likely the scenario.
It would be helpful if you broke down a smaller deal. I get the math is easier with round numbers. And sure, I have a calculator and can do the math myself. But these numbers feel depressing. Great to understand the macroeconomic environment. But not relatable.
Trump and many other billionaires write books and do things to teach others how to help others. Self actualization isn't a sign that he's broke but that he's on top.
LOL. Most people on the internet with all the views have no assets. Ken has an excellent track record of building wealth. But it's slow and that's not what the internet wants. 2nd attention is the new oil. More attention = more money and more deal flow, aka in thus example the rich getting richer
