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Real Estate Investing with Keith Weinhold
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Your Questions Answered: Overleveraged, House Hack vs. Turnkey, Hyperinflation
• 32 minKeith Weinhold answers listener questions about real estate investing. He advises listeners on how many properties they need to own to become a millionaire, how to invest $40,000 to reach a $100,000 down payment for a rental property, and how to find the best future real estate markets. Keith emphasizes the importance of positive cash flow, avoiding over-leveraging, and owning properties in multiple job growth markets and states. He also discusses the potential for hyperinflation and the benefits of owning real assets to combat inflation. Keith encourages listeners to leave a rating and review for the podcast and consult with professionals for individualized advice. **Taylor's question [00:01:07]** How many properties must I own to become a millionaire? Keith explains that it depends on the profitability of the properties, how much they go up in value, and how much rent is charged. **Mitrel's question [00:05:04]** Should I invest my $40,000 in the stock market to reach my $100,000 down payment goal for a rental property? Keith advises on risk tolerance and suggests alternative options such as I bonds. **Kevin's question [00:09:08]** What are the forward-looking indicators to find the best future real estate markets? Keith talks about the prospect of hyperinflation and provides insights on finding the best real estate markets. **Forward Looking Indicators for Real Estate Markets [00:09:16]** Keith answers Kevin's question about selecting MSAs with forward-looking indicators, including population growth, employment, and upcoming government infrastructure projects. **Sponsor Ads [00:15:45]** Keith thanks Ridge Lending Group, JWB Real Estate Capital, and Mid-South Home Buyers for sponsoring the show. **House Hacking in Southern California [00:18:03]** Keith advises Connor on whether to invest in an out-of-state rental or house hack in Southern California, considering high real estate prices, tax rates, and tenant protection laws. **Real Estate Financing Options [00:19:03]** Keith discusses financing options for single-family homes and fourplexes, including FHA and VA loans, and the advantages and disadvantages of house hacking in Southern California versus investing out-of-state. **Hyperinflation and the US Economy [00:21:40]** Keith addresses a listener's question about the possibility of hyperinflation in the US economy, defining hyperinflation and discussing the factors that contribute to it, including a nation's debt and foreign demand for its currency. **Leverage in Real Estate Investing [00:25:00]** Keith answers a listener's question about being over-leveraged in real estate investing, explaining the risks of taking on too much debt and emphasizing the importance of buying properties that are cash flow positive. **Real Estate Investing Strategies [00:28:00]** Keith explains how to avoid over-leveraging and how to project positive cash flow from day one. **Benefits of High Leverage [00:29:09]** Keith explains how high leverage can help you build wealth faster and why it's best to finance your properties. **Encouragement to Leave a Podcast Review [00:30:07]** Keith encourages listeners to leave a podcast review and explains how it helps the show reach more people. **Disclaimer [00:31:32]** A disclaimer is given that nothing on the show should be considered specific personal or professional advice. Resources mentioned: Show Notes: www.GetRichEducation.com/445 I-Bonds: https://www.treasurydirect.gov/savings-bonds/i-bonds/ Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Find cash-flowing Jacksonville property at: www.JWBrealestate.com/GRE Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review” Top Properties & Providers: GREmarketplace.com Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold Welcome to GRE! I’m your host, Keith Weinhold. I answer your listener questions today. A 12-year-old listener asks, how many properties must I own to become a millionaire? Another asks, “Should my first property be a house hack or an out-of-state rental”? One question is about the imminent prospect of HYPERinflation. Also, “What are FORWARD-looking indicators to find the best future RE markets?” Those questions and more questions all answered, today, on Get Rich Education! ___________ Hey, welcome in to GRE. I’m your host and Founder, in fact, of this very show… and all Get Rich Education platforms, a 20-year REI and Active Member of the Forbes Real Estate Council. My name is Keith Weinhold. Ya probably know that by now. This is Episode 445 of Get Rich Education. When I do these listener question episodes, I generally begin with some of the more basic questions. Today’s first question comes from Taylor in Wooster, Ohio. Taylor is age 12 and he simply asks: How many properties must I own to become a millionaire? Well, thanks for that, Taylor. I don’t often get questions from a 12-year-old. I love that you’re listening and the fact that you ARE greatly increases the chances of you building wealth when you’re an adult, yet young enough to enjoy it. Like a lot of questions in real estate, the answer to how many properties you must own to become a millionaire “depends”. It depends on how profitable your properties are - how much they go up in value and how much you’re getting from the rents that you charge the tenants, how long you do a good job of keeping them as tenants, as well as how capable you are of controlling your property’s expenses. So, you could own as little as just ONE property and be a millionaire, Taylor. Owning MORE properties is better than owning fewer properties. That way, if you have one that isn’t profitable, you’ll have profits from your others. And you can own more properties when you can use part of your OWN money & part the bank’s money… in owning the property. Now, Taylor, if you have one million dollars, say, you had a million bucks in stacks stuffed in your closet, you need to understand that that is not enough. You’re 12 years old now. You might live another 80 years. Then you’d need that million to last you 80 years. Even a 50-year-old with a million dollar stack of dollars bills in their closet would not have enough money to live on for the rest of their life. You might need closer to 10 million dollars. That’s called a decamillionaire. So think about setting your net worth target higher. Think, “How can I be a decamillionaire?” But actually, you don’t just want to think about the height of your stack of dollar bills reaching any certain number of millions ONLY. It matters. But what matters more is how fast your stacks are GROWING. That’s called cash flow. If your stacks are growing at a rate every year that exceeds all of your expenses, you are financially-free. That’s why it beats being debt-free. Another thing, Taylor, I know that your hometown of Wooster, Ohio is between Columbus and Akron so - though I’m not familiar with Wooster - but I do know its the county seat of Wayne County - …you do tend to have markets nearby that can create CF really well - that’s that ability to GROW your cash stacks, hopefully to a height of 10 million someday. Thanks for your question, Taylor. You know, it warms my heart to know that kids listen to the show. I remember shortly after launching the show in 2014 that a Dad & son from New Jersey wrote in and told us that they look forward to listening to the show together every week. I like to do that family-friendly show, from Day 1. A clean lyrics show since inception. I like to keep it classy. I like to make that show that would make my late Grandma Weinhold proud - though I don’t think she ever knew how to listen to this show. That’s part of my brand… and it warms my heart to see children in the audience. ______________ The next question comes from Mitrel. I don’t know where Mitrel is from, because some questions come in on our YouTube Channel, but he says… I have a good job and $40,000 in savings, expect an upcoming BOOM in real estate and need $100,000 for a down payment. Does it make sense to gamble my $40K in the high risk stock market to get up to the $100K sooner and capitalize on the RE purchase? If I lose the $40K, I’ll recover it in time with my job anyway over time. If I win & get it to $100K, I’ll have my income property and be off to the races with leverage and Real Estate Pays 5 Ways. If I simply tried to preserve the $40K in a savings account, I’d lose to inflation anyway. That’s his question. Alright, Mitrel. You’ve got $40K, want to get to $100K for your down payment on some rental property. Now, we have properties at GRE Marketplace where $30 or $35K is enough to get started… but with your $100K down payment goal, I sense that you might have a specific purchase in mind. Of course, it’s about getting a 20-25% down payment + 4% CCs - as a percent of your purchase price - and you’ll want to hold some reserves. Well, to get your cash stash from $40K up to $100K, it has to do with your risk tolerance. It sounds like you’re open to risk with putting it in the stock market short-term to try to reach your goal faster. So, yeah. You would probably want to do that OUTSIDE of a retirement account since they generally have early withdrawal penalties. In a savings account, yes, you’re aware that with true inflation, that would ju
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