Fresh & Fit - How To Make HUGE Returns On Real Estate!

00:12:45.000 And we are live, guys.

00:12:46.000 What's up?

00:12:46.000 Welcome to Freshman Podcast.

00:12:47.000 We're here with Chris Krohn.

00:12:48.000 We're going to talk about real estate.

00:12:49.000 I'm excited about this one.

00:12:49.000 Let's get into it, baby.

00:12:50.000 Let's go!

00:13:40.000 All right.

00:13:41.000 And we are live.

00:13:41.000 What's up, guys?

00:13:42.000 Welcome to the Fresh Fit Podcast, man.

00:13:43.000 We're here with a special guest, Chris Krohn, one of the top real estate investors on YouTube.

00:13:48.000 And we'll talk about that here in a second.

00:13:50.000 But, yo, guys, check us out, rumble.com slash freshfit.

00:13:52.000 As you guys know, that is the home base for us.

00:13:53.000 Where you can find us.

00:13:54.000 Also, cowsclub.tv.

00:13:56.000 So, you know...

00:13:57.000 That's where we were able to unleash and give you guys the real content that you guys want because we have to be careful on YouTube.

00:14:01.000 But don't worry, this episode is going to be clean because we're going to be talking about money focusing on real estate.

00:14:06.000 So, anyway, without further ado.

00:14:07.000 Welcome back.

00:14:08.000 Welcome back to the show, Chris.

00:14:09.000 Thanks, guys.

00:14:09.000 Appreciate it.

00:14:10.000 It's been a while.

00:14:10.000 Good to be here.

00:14:12.000 In person this time.

00:14:13.000 Yes, in person this time.

00:14:15.000 We know who you are.

00:14:16.000 We've had you on the show before.

00:14:17.000 It was a great discussion.

00:14:18.000 But for those that might not be familiar with who you are, can you introduce yourself to the people?

00:14:21.000 Yeah, so I've done two billion dollars worth of single-family residential real estate and played the game where I said, if I can figure out how to scale a game that most people don't know how to play, I can make a name for myself.

00:14:32.000 Basically, riches are in the niches, so go to a niche that no one wants to play in.

00:14:36.000 Most people, they do single-family and they graduate to multi-family.

00:14:39.000 And so I just basically said, hey, let's see who can produce the highest ROI in single-family.

00:14:44.000 We figured out that game.

00:14:45.000 And I never graduated to any other real estate because I can't find any other game that has an ROI that high.

00:14:50.000 Wow.

00:14:51.000 Beyond that, the last several years I've been in private equity, sift through thousands of companies every year, find 10 companies that I want to bet on.

00:14:59.000 And so when I'm not investing in real estate, I'm investing in tech and other companies that are insanely disruptive and changing industries.

00:15:06.000 And so I'm enjoying playing that game as well.

00:15:07.000 When it's not that, dude, it's just me and my wife and my four kids.

00:15:11.000 I've got an 18-year-old, my youngest is 13, and we've been world schooling for the last five years.

00:15:16.000 Wow.

00:15:17.000 Meaning took them out of public school and basically hired our own teachers, brought them in and said, you know what, we're going to educate you.

00:15:24.000 We're going to customize your education.

00:15:25.000 We don't really believe in college anyway.

00:15:27.000 Let's get you educated based on this crazy world that has changed so much.

00:15:31.000 Let's get you prepared for that one.

00:15:33.000 You can't send your kids to public school anymore without them being indoctrinated on some BS, right?

00:15:36.000 Oh, 100%.

00:15:37.000 That's what we had to get out.

00:15:38.000 So, yeah, that's a little bit about me.

00:15:39.000 Very smart.

00:15:40.000 And you're based out of Utah, which is a more conservative state, so that makes sense.

00:15:45.000 Obviously, they've still got their head on straight over there, versus the clown world that we see.

00:15:49.000 Because, I mean, I wouldn't want to send my kids to public school nowadays either.

00:15:52.000 It's scary, man.

00:15:53.000 You've got the whole agenda of, like, warmness.

00:15:55.000 The alphabet community.

00:15:56.000 Yeah, that's scary.

00:15:57.000 Trying to indoctrinate your kid.

00:15:58.000 And when that comes to Utah, that's when you've got to be super freaked out.

00:16:02.000 You're like, this is a deeply red state, and that stuff made it here. 1.00

00:16:05.000 And I'm like, okay, I'm out.

00:16:07.000 We're not doing it that way anymore.

00:16:08.000 You've seen the Olympics, bro?

00:16:10.000 That ceremony?

00:16:11.000 It was crazy.

00:16:12.000 No, that was disgraceful.

00:16:14.000 It was awful.

00:16:15.000 And you're a Christian base, right?

00:16:17.000 There you go.

00:16:18.000 And a huge religious community in Utah with Mormons.

00:16:23.000 Are you Christian, Catholic?

00:16:25.000 So I'm Mormon.

00:16:26.000 We definitely consider ourselves Christian.

00:16:28.000 Fair enough.

00:16:30.000 So, real estate, you mentioned that you, single family homes is your niche and you also do help with startups 10 per year, you said that you pretty much stake on, where you fund them, get their business off the ground.

00:16:41.000 Well, and it's not just syndicating and funding them, you know, we've developed a passion for how to grow companies successfully, so when we find a company that we want to back, often they'll literally house in one of our offices, we'll bring them into our culture, we'll provide leadership training, we'll headhunt their CEOs for them,

00:16:56.000 so we take a Really a hands-on approach to helping grow those companies.

00:17:00.000 Nice.

00:17:01.000 And you said it's in more industries that are like kind of, you said tech industries that can like really...

00:17:06.000 Yeah, but also disruptive, right?

00:17:07.000 I mean, tech is usually, SaaS is where you're going to find 30, 40 X multiples, where you got opportunities for really great growth.

00:17:14.000 And it's also, software's just how you scale.

00:17:16.000 You know, scaling companies is hard, and software allows you to scale like crazy.

00:17:20.000 Boom.

00:17:20.000 Okay.

00:17:21.000 So, single-family homes, right?

00:17:26.000 People always give residential real estate a bad name. 0.95

00:17:29.000 Like, oh, it sucks.

00:17:30.000 It's not worth it. 0.97

00:17:31.000 I love Greg Cardone, but more doors are better.

00:17:34.000 It's peanuts to deal with single-family homes or even residential.

00:17:37.000 He's like, you've got to do more doors, more doors, more doors.

00:17:40.000 10x, 10x, 10x.

00:17:41.000 You have a different approach.

00:17:42.000 You're doing the single-family home route, which I think is great because I'm in the residential space as well.

00:17:49.000 What is the main reason why you stick to single-family homes and stay away from the duplexes, triplexes, and commercial real estate?

00:17:55.000 You know, in the game of real estate, people get into these debates about strategy.

00:17:59.000 They're like, oh my gosh, are you flipping?

00:18:00.000 What strategy are you leveraging?

00:18:02.000 Are you doing land development, entitlements?

00:18:04.000 And I'm like, you know, every one of those strategies has an ROI associated with it.

00:18:09.000 But it has other vectors that you've got to look at.

00:18:10.000 It's like, okay, yes.

00:18:12.000 How much money is it going to make me?

00:18:13.000 But then, is it a job or is it passive?

00:18:15.000 So, how much time is it going to take?

00:18:16.000 By the way, is it hard or easy?

00:18:19.000 You know, how much risk is associated with it?

00:18:21.000 Does it work in up and down markets?

00:18:23.000 And so, I've got six different vectors that I look at when I'm looking at all strategies.

00:18:28.000 And the reason why I roll with single family is because for me, I can produce the highest ROI with the least time, the least effort, and the least risk.

00:18:34.000 It works in up and down markets and it provides a service.

00:18:37.000 And so, you know, I had Cardone on my podcast and he's like, dude, why aren't you doing multifamily?

00:18:42.000 I said, it's because I like more money.

00:18:44.000 It's called higher ROI. We just completed a 10-year study year over year on our last 2,130 properties and evaluated where, you know, what is our ROI? What are we making year over year?

00:18:57.000 We're making 60.6% on our money.

00:19:00.000 Sure.

00:19:00.000 That's wild.

00:19:01.000 Damn. 0.99

00:19:01.000 According to Rule of 72, that means that I'm doubling my money every 10 months. 0.99

00:19:05.000 Wow.

00:19:05.000 And it's like, can I do that in multifamily?

00:19:07.000 No. 0.76

00:19:08.000 Multifamily is for lazy people.

00:19:09.000 It's like, oh, single family. 0.98

00:19:11.000 No, it's for lazy people.

00:19:13.000 Hey, man.

00:19:13.000 What are you trying to say, Chris?

00:19:15.000 Oh, damn. 0.99

00:19:16.000 I'm saying that it's like, oh, I got tired because I was figuring out how to scale single family, and I got 25 homes, and I was the landlord, and I was doing all the work, and it was so hard. 0.99

00:19:25.000 And you know what?

00:19:25.000 I sold it all, and I rolled it all up, 1031 Exchange into multifamily, and then it manages itself with an on-site manager, and you're like, wow, that's so much easier.

00:19:32.000 I'm like, yeah, and what did it cost you?

00:19:34.000 How much of your future did it cost you on the money you're not making because you're lazy?

00:19:38.000 So, you know, to the credit of people out there that do multifamily, it's not just lazy and easier.

00:19:45.000 They just can't figure out how to scale single family.

00:19:47.000 And I always just told myself 20 years ago, if I can figure out how to scale this game, which I don't know anyone that scaled as big as I have, but if you can figure out how to scale it, then you're going to make way more money than multifamily.

00:19:57.000 And so I basically said, okay, let's take on Mission Impossible.

00:19:59.000 Yeah.

00:19:59.000 Let's figure out how to scale.

00:20:00.000 Quantity and volume is like the name of the game if you're going to go in the single family home realm.

00:20:07.000 There's been talk for years, by the way, and I really want to get your take on this, because I think it's actually genius that you do single-family homes, because it's an asset class that's never going to go away, and it's the most required.

00:20:18.000 People always say, the real estate market's going to crash, blah, blah, blah.

00:20:21.000 I think last time we spoke, there was something like five million homes shortage.

00:20:25.000 Now it's six.

00:20:26.000 It's six million, so it's actually went up.

00:20:27.000 It's gone up, and right now, at the pace that we're going, we're not going to solve this problem for like a decade.

00:20:33.000 And if you look at that, it's like, where are we at with multifamily?

00:20:36.000 Multifamily is overbuilt.

00:20:37.000 That market is softening right now.

00:20:39.000 People are making less money, and it's because we built too much of it.

00:20:41.000 What we really need in this country are the missing 6 million homes.

00:20:45.000 And so anyone that's worried about a bubble bursting, I'm like, the cool thing is, real estate is different than the stock market.

00:20:49.000 Stock market is like, oh, it's an election year.

00:20:51.000 I don't know, you know, how that's going to have an impact on the S&P. No one can control the stock market.

00:20:56.000 Real estate, it's literally just supply and demand.

00:20:59.000 It's like, as long as there's a demand for six million homes, that market is not going to crash.

00:21:03.000 And so, you know, there's 324 markets that make the United States.

00:21:07.000 I invest in the top five and I basically track the inventory in those markets.

00:21:10.000 And as long as we have demand for homes, we're not worried about a crash.

00:21:15.000 And that's why we've seen real estate, year over year over year, since 2008, go up in value.

00:21:20.000 And there's people starting to freak out, like, with the pandemic.

00:21:22.000 They're like, oh my gosh, 2020, 2021.

00:21:24.000 Each of those single-family homes went up $100,000.

00:21:26.000 That's crazy!

00:21:27.000 Like, it can't keep going up because it's not affordable and sustainable.

00:21:30.000 I'm like, I got news for you.

00:21:32.000 It may not be affordable, it may not be sustainable, but it's not gonna stop until we build those six million homes.

00:21:37.000 Wow.

00:21:39.000 Okay.

00:21:39.000 Real estate gets a bad rap right now because the interest rates are high.

00:21:44.000 It's expensive to get commercial real estate, office space isn't a thing.

00:21:47.000 What I've come to realize is people ask me all the time, well, why are you in real estate?

00:21:52.000 The interest rates are high, people aren't renting as much, there's too much inventory, blah, blah, blah.

00:21:58.000 And they always say the real estate market is going to crash.

00:22:00.000 But I think they tend to look at the commercial side versus the residential side.

00:22:03.000 Because what you do is very specific with single-family homes.

00:22:07.000 And that particular market, there's a huge shortage.

00:22:10.000 Versus on the commercial side, there's too much.

00:22:12.000 And a lot of these loans are coming up now.

00:22:15.000 Can you explain to the people why the single-family home market is completely different from the commercial world and why people need to stop conflating the two and trying to say it's going to be a crash?

00:22:24.000 It's weird that people actually do that.

00:22:26.000 At least if you look at multifamily and single-family, it's people that need houses, right?

00:22:30.000 Yeah.

00:22:30.000 But commercial is business.

00:22:32.000 Like, that's for businesses, and it is possible to have a softening or a crash of the commercial market, which, frankly, the pandemic created a lot of that problem that we're in right now, because a lot of people have figured out, why am I renting this really huge building when people are completely capable of working from home?

00:22:48.000 That's created a nightmare in that arena.

00:22:50.000 Single family, however, is really just written by supply and demand.

00:22:53.000 And when you look at the high interest rates, here's the weird thing, because I have a ton of people, they're like, oh, Chris, I want to invest.

00:22:58.000 And I want to get in the game, but not right now.

00:22:59.000 Rates are high.

00:23:00.000 And I'm like, okay, pause.

00:23:01.000 You don't know what you're talking about.

00:23:03.000 What is the difference between an 8% rate and a 5% rate?

00:23:06.000 Well, you're like, that's three points.

00:23:07.000 That's like hundreds of dollars in payments.

00:23:09.000 That's such a big deal.

00:23:10.000 I'm like, did you know in my world that my overall ROI is affected by less than 1% based on that jump in rate?

00:23:17.000 In other words, all it does is affect cash flow and cash flow is only one of the four ROIs and it's the smallest of the four ROIs.

00:23:24.000 It's like, you guys are actually like, like you're trying to jump over dollars to pick up pennies and it doesn't make sense because they don't, they think, oh, real estate is always about cash flow and I always tell people in the beginning, if you can get a high ROI and you're broke, because most people get into real estate not because they want to buy a home and have a $400 a month cash flow.

00:23:41.000 They want that home to turn into five and they want that five to turn into 15 and eventually it's like, hey, I got It's like when I was 26 years old.

00:23:47.000 I got 25 homes.

00:23:49.000 They're each bringing in $500 a month.

00:23:50.000 I'm making $12,000.

00:23:51.000 I'm now graduated college.

00:23:52.000 I don't got to get a job.

00:23:54.000 Real estate works for me so I don't need a job.

00:23:56.000 Cash flow is important after your money has grown.

00:23:58.000 But before it's grown, you don't focus on cash flow.

00:24:00.000 You really got to focus in the beginning on being in a place, being in a market where you're going to get maximum growth so that then you have millions to convert into cash flow.

00:24:07.000 Growth first, cash flow second.

00:24:09.000 And I think it's very important when you mentioned earlier that you did your 10-year study and you had a 60% ROI. Can you break down for the audience real fast?

00:24:16.000 Because people tend to hone in on that cash flow thing that we just discussed.

00:24:18.000 Can you discuss the components as to how you're able to achieve that return on investment?

00:24:22.000 Let's start with what most people are comfortable with, a 401k.

00:24:26.000 Because everyone's told that's your retirement, right?

00:24:28.000 They just completed in 2024 a study on the last 20 years for the average 401k.

00:24:32.000 It's producing 4.2%.

00:24:34.000 Now to put that in perspective, inflation is sitting at 4.1.

00:24:38.000 Which basically means if your money's in a 401k, it's breaking even.

00:24:42.000 And here's the bigger problem.

00:24:43.000 Combine your 401k with maybe a more lucrative IRA earning at 6%.

00:24:48.000 Let's just say your money's earning 6%.

00:24:50.000 To put in perspective the difference between 60% and 6%, 60% is not 10 times more.

00:24:57.000 With compound interest, It's literally a hundred times more plus.

00:25:01.000 And so a lot of people don't understand that.

00:25:03.000 So you got some money you save in a 401k or an IRA for some day.

00:25:06.000 It's earning these single digits.

00:25:07.000 And at 6% in 20 years, all of a sudden is triple.

00:25:11.000 So I was like, cool, my 50 grand turned into 150 grand.

00:25:14.000 In real estate, if all you were earning was it was earning 25%, which is four times the ROI, it makes 27 times more money.

00:25:22.000 It makes $4.3 million in that same span of time.

00:25:26.000 So, understanding ROI is actually a really big part of the game.

00:25:30.000 Now, to break down that 60%, there's four different major ROIs.

00:25:33.000 The first one is the very obvious, appreciation ROI. And the reason why I only invest in the top five markets nationwide and give people access all over the world to just those five markets, with, by the way, Orlando, Florida, I mean, we're in Miami, but in Orlando, not far away, this is where I buy a lot of my inventory.

00:25:48.000 Because Orlando is now...

00:25:51.000 One of the top, it is the 15th largest economy on the planet.

00:25:55.000 Florida is on the rise.

00:25:57.000 It has excess money for, you know, in its budget for doing that 8 billion dollar railway and everything else, right?

00:26:03.000 So Florida is definitely one of the top five markets that I'm in because of the appreciation.

00:26:08.000 So of that 60%, a lot of that comes from appreciation.

00:26:11.000 And the reason why the appreciation is so high is because you get to leverage banks' money.

00:26:16.000 The banks will put up $4 for every dollar you put up.

00:26:19.000 And so instead of putting in a 401k, put it in a property and then you get leverage.

00:26:23.000 So that the appreciation now is five times more money to you on that first ROI because the bank's putting up the money.

00:26:30.000 And real quick, just for the audience out there, for anyone that doesn't understand what Chris is talking about, Fresh, you bought a home in what, 2020 or 2021?

00:26:37.000 2019.

00:26:38.000 2019.

00:26:38.000 How much money did you put down?

00:26:40.000 12K. 12,000.

00:26:41.000 What's that house, what'd you buy it for?

00:26:43.000 330.

00:26:44.000 What's it worth now?

00:26:46.000 650.

00:26:47.000 Boom.

00:26:47.000 There you go.

00:26:48.000 $12,000.

00:26:49.000 For a $300,000 gain, calculate the ROI. I'm such a nerd.

00:26:53.000 I'm such a nerd.

00:26:55.000 I'm just so excited right now.

00:26:56.000 I have to do this.

00:26:56.000 I'm like, okay, $330,000.

00:26:59.000 Use the FHA loan, got the property, controlled it, lived in it for a year, got out.

00:27:02.000 That's a 27X return on your money over five years.

00:27:06.000 So you take that return, you divide it by the last four years.

00:27:08.000 You basically made 680% on your money year over year over year.

00:27:14.000 Think about that.

00:27:14.000 Now, that's because you have 3% down payment, right?

00:27:18.000 Super smart.

00:27:19.000 So that's the first ROI. And that's to add more credence, because you were saying Florida's an exploding market.

00:27:23.000 I wanted the audience to have tangible numbers.

00:27:24.000 Like, guys, literally, Fresh is right here to tell you guys the Florida market is crazy.

00:27:28.000 But Orlando, because of Disney, Universal, that's a booming market, man.

00:27:31.000 That's really smart, actually.

00:27:32.000 I think it might be better even than Miami, to be honest with you.

00:27:34.000 We should go there.

00:27:35.000 I'm not in Miami for a reason.

00:27:37.000 We can talk about Miami too, but sorry, continue on.

00:27:40.000 So you were talking about ROI, I just wanted to give the audience that example so they have some real numbers.

00:27:43.000 So 27X for fresh.

00:27:45.000 Appreciation, that's your first ROI. Your second ROI is your cash on cash.

00:27:50.000 I rented out the property, I'm actually producing a positive cash flow, so what percentage my ROI in the money coming back to me?

00:27:57.000 So of that 60%, a portion is appreciation, a portion of it is cash flow.

00:28:01.000 And then the third one is principal reduction.

00:28:04.000 I buy a house every day and I outsource to a renter and say, hey, will you buy that house for me?

00:28:09.000 That's what I'm doing.

00:28:10.000 My tenants are buying me houses.

00:28:11.000 I buy a house every day.

00:28:12.000 I set it up, and then I put a tenant in there and say, I want you to pay this off for me.

00:28:16.000 Yeah.

00:28:17.000 Is it rent to own?

00:28:19.000 No, no.

00:28:20.000 What I really mean by that is...

00:28:21.000 They're paying the rent, which covers the mortgage.

00:28:22.000 Gotcha.

00:28:23.000 You got it.

00:28:23.000 So principal reduction just basically means, okay, so when they give me the rent payment, a portion of that goes to service the loan, and a portion of that isn't to interest, it's to principal.

00:28:32.000 And there's an ROI. You know, on a...

00:28:34.000 On a $250,000 to $300,000 home, that's my buy box that I kind of zone in on.

00:28:39.000 Say that number one more time for the audience.

00:28:41.000 Between $250,000 and $300,000.

00:28:42.000 Okay.

00:28:43.000 So my average person's price is right around $270,000.

00:28:47.000 I've got some markets where I'm buying brand new homes for $180,000.

00:28:51.000 How much do you put down?

00:28:52.000 20%.

00:28:52.000 Okay.

00:28:53.000 Yeah, yeah.

00:28:54.000 And most of it's people taking from 401ks and IRAs and saying, I'm sick of that.

00:28:57.000 I'm gonna transfer it to real estate and I'm gonna make 27 times more money.

00:29:00.000 What is the median, I think last time we spoke, the median house price in the United States was somewhere around 350.

00:29:06.000 What is it now?

00:29:08.000 $436,000. 1.00

00:29:09.000 God fucking damn! 1.00

00:29:11.000 I have like almost 100K in a year. 1.00

00:29:13.000 Yeah, it's crazy.

00:29:14.000 Yeah, I should have bought more.

00:29:15.000 Mm-hmm.

00:29:16.000 Yeah.

00:29:17.000 I mean, we can make that happen.

00:29:19.000 Let's do it.

00:29:20.000 No, let's do it, bro.

00:29:20.000 Yeah, yeah, yeah.

00:29:21.000 I'm down for sure.

00:29:22.000 No, absolutely.

00:29:23.000 So principal reduction.

00:29:24.000 On a house in that price range, having tenants basically servicing the loan, you're going to make around 4% on your money on average just there.

00:29:34.000 So what you'd make in a 401K, literally your tenant, by servicing your loan, you're making 4% on that.

00:29:40.000 And if you add in tax reductions as well.

00:29:42.000 Now, that's the fourth one.

00:29:43.000 Oh, because the inflation, right?

00:29:44.000 Is that what you mean with the 4% or?

00:29:47.000 Yeah, well, and it's not really inflation.

00:29:49.000 What I literally mean is I'm making a 4% return on my money by having them pay off the house for me.

00:29:53.000 Gotcha.

00:29:54.000 Because all of that, as the principal comes down, eventually I'm going to sell that house and it's like, oh, like the house came down, that's a return of capital I'm getting.

00:30:01.000 I see what you mean.

00:30:01.000 What's that ROI on the money I put in?

00:30:04.000 They're building more equity for you.

00:30:05.000 In the home.

00:30:06.000 And that's a portion of your ROI. Absolutely.

00:30:08.000 And then the last one is your tax advantages, right?

00:30:10.000 I mean, you get to take the house.

00:30:11.000 This is the coolest thing.

00:30:12.000 People don't understand this.

00:30:14.000 If you buy enough real estate, you don't have to pay taxes, right?

00:30:16.000 I get to take a house.

00:30:18.000 I get to depreciate it over 27 and a half years.

00:30:21.000 So let's take your $330,000 house that you bought four years ago.

00:30:26.000 I'm going to divide that by 27 Divide that by 27.5, you get to write off 12 grand every year.

00:30:36.000 Now, let's say your cash flow is $6,000 a year.

00:30:39.000 You're pocketing six grand, but because you have a $12,000 write-off, that's six grand, you don't pay taxes on that, that is literally tax-free money.

00:30:46.000 And then you're like, wait a second, but every year I've got six grand left over, what do I do?

00:30:50.000 Well, where's your income?

00:30:52.000 Reduce it by $6,000 and now you don't have to pay taxes on that.

00:30:55.000 If you're in a 25% tax bracket, 25% on that $6,000, that's another $1,500.

00:31:01.000 So it's like, wait a second, I bought a house, all the...

00:31:04.000 Wait, wait, wait.

00:31:06.000 My income is going up, but I don't pay taxes on it.

00:31:09.000 But then on paper, it looks like my income is actually going down, and I don't pay taxes on that.

00:31:13.000 So every home you buy, you create this spread where for the first seven years I bought real estate, I didn't even have to pay taxes because of this one little hack that people don't understand.

00:31:23.000 Yeah.

00:31:23.000 And I'm going to display to you guys, again, so people understand more simply how this works.

00:31:30.000 When I was working for the government, right?

00:31:31.000 I tell you guys this story all the time.

00:31:32.000 I made about $120,000 per year.

00:31:34.000 Every year I'd pay $30,000 to $40,000 in taxes, right?

00:31:38.000 One year I bought like seven real estate properties.

00:31:41.000 Spent whatever it may be.

00:31:43.000 Put 20% down.

00:31:44.000 Some of them bought cash.

00:31:44.000 Whatever it may be.

00:31:46.000 I made a little over a million dollars that year, right?

00:31:48.000 So in one scenario, I make $120K, pay $40K in taxes.

00:31:52.000 Next year, make a little over a million, buy seven houses, I paid how much of taxes?

00:31:57.000 $40K while making all over a million.

00:31:59.000 So I literally paid the same amount of taxes making 10x the money.

00:32:04.000 You know how much I paid last time for taxes?

00:32:06.000 Almost nothing.

00:32:07.000 Yeah, almost nothing.

00:32:08.000 But that's what real estate does, is it allows you guys where you can make a bunch more money, but the real estate offsets your income.

00:32:15.000 And this is all legal, by the way.

00:32:17.000 It's all legal.

00:32:17.000 Yeah, of course.

00:32:18.000 All legal.

00:32:18.000 And that's just the depreciation.

00:32:22.000 We haven't even talked about cost segregation yet.

00:32:24.000 Oh, yeah.

00:32:24.000 The cost segregation lets you get even more tax benefits.

00:32:27.000 Yeah, but that only depends on whether you actually need it.

00:32:31.000 Most people don't.

00:32:32.000 But if you get to a point where it's like, I'm making more and more money, now I gotta get aggressive, then for me, I'm like, oh shoot, I gotta figure out how to now write off millions of dollars years in taxes.

00:32:41.000 Well then you get more aggressive.

00:32:42.000 Cost segregation is a great strategy. 0.91

00:32:44.000 It's like, oh, you guys have a business that's called Fresh and Fit.

00:32:46.000 I'm like, if I were you guys, next year, go buy a commercial building.

00:32:50.000 Before the end of this year, buy a commercial building, you can rent out 50% of it, you only have a 10% SBA down payment, and if you do the math, after cost segregation, You would literally, for every dollar you'd give the government, you actually get to pocket two dollars while buying an asset that has rental income to you.

00:33:07.000 Those are aggressive strategies that help people.

00:33:10.000 Once you, it's like, well, if you can buy 10 homes, you can buy 100.

00:33:12.000 And essentially, you're gonna come into a lot more income, and when you do, then you need more aggressive taxes.

00:33:17.000 And I tell people this, like, I tell them that story, not to flow, I'm gonna do this much money.

00:33:20.000 It's to say, like, Literally, if you're in the middle class and you don't have assets, they destroy you in taxes.

00:33:26.000 Versus if you have assets and you're in real estate, you can make 10x the money and pay the same amount of taxes as someone that makes 10 times less than you.

00:33:31.000 That's crazy.

00:33:32.000 And to your point, Chris, as well, if you're working a regular job, understandable, you're making money.

00:33:36.000 Putting it in a 401k is one thing.

00:33:38.000 But putting it into real estate, all these benefits here, why even put it in a 401k anymore?

00:33:42.000 Speaking of which, you're heavily critical on 401ks, IRAs.

00:33:46.000 Dave Ramsey.

00:33:47.000 They're scams. 1.00

00:33:48.000 They're stupid. 1.00

00:33:49.000 They're dumb. 1.00

00:33:49.000 They don't make sense, and they make you poor. 1.00

00:33:51.000 If you want poor people to stay poor, you should put money in a 401k.

00:33:54.000 Even the creator of the 401k, after a 40-year study, said, this is a failed experiment.

00:33:58.000 This is a bad idea.

00:34:00.000 I can almost argue, if someone tells you, the masses say, okay, go do this for the masses.

00:34:04.000 Go do this thing right here.

00:34:05.000 I'm like, uh...

00:34:06.000 It's a different way to make money.

00:34:08.000 Because you're very critical of Dave Ramsey and the whole saving money thing and the 401ks and the traditional financial advice that they give you.

00:34:17.000 What do you think is the problem with it?

00:34:19.000 Why do you think it's a failed system now?

00:34:22.000 A dying system.

00:34:23.000 Yeah, a dying system and why should people look to real estate instead?

00:34:26.000 I just came out with a new book.

00:34:27.000 It's called Time Machine.

00:34:28.000 And in that book, what I do is I talk about the five different ROIs that can help anyone achieve a lot of wealth in a very short period of time.

00:34:35.000 I'm reading some of the comments because we're live and there's someone here saying, oh, this is why the rich stay rich.

00:34:39.000 I'm like, I started poor.

00:34:40.000 I don't know about you guys, but I didn't.

00:34:42.000 Listen, I might be 6'5 in finance, but I didn't start with a trust fund.

00:34:45.000 I don't got the money.

00:34:47.000 I had to create that wealth, and we're really exposing here how we did that.

00:34:51.000 And so when you take a look at the system of 401Ks and IRAs, the problem is that everything society asks you to do with your money is single-digit.

00:35:00.000 And so we have the stats they're in.

00:35:03.000 At 65 years old, the average person that followed society's game plan has $254,000 in retirement.

00:35:10.000 But right now, as of this year, the average American across the board has an average of $304,000 of equity in their home.

00:35:18.000 So their equity, that was never a retirement plan, that was an accidental...

00:35:22.000 I was just buying a home to live in for my family.

00:35:24.000 And paying the mortgage.

00:35:26.000 Gave them more money than a 40-year intentional plan.

00:35:30.000 Wow.

00:35:30.000 And the average person in retirement spends $85,000 a year, so your $250,000 will last you three years.

00:35:35.000 You spent 40 years...

00:35:36.000 Saving money for three years.

00:35:38.000 And so if I'm critical about Dave Ramsey, it's because he gets people focused on the wrong KPI, the wrong goal.

00:35:45.000 His outcome is debt is evil.

00:35:47.000 Get out of debt.

00:35:48.000 I'm like, well, actually, I love debt and debt makes me money.

00:35:51.000 And Dave, you know that because of all the real estate you own.

00:35:54.000 Yeah. 0.97

00:35:55.000 No, it's a little hypocritical.

00:35:57.000 Dave's good for people that are irresponsible and uneducated with money, where it's like, hey, if you don't know how to budget and you're blowing your money, blowing your wad, then yeah, you gotta actually get all your stuff paid off.

00:36:07.000 But you've got a lot of good people that actually buy into that philosophy of no debt will set you free.

00:36:13.000 I'm like, dude, when you wasted 22 years of your life or 16 years of your life on Dave's Baby Steps program, and you're like, I'm 52 and I'm finally, I'm out of debt.

00:36:23.000 I'm like, you were out of debt 30 years ago.

00:36:25.000 You wasted all your time because for money to multiply and to invest it and go somewhere, you need time.

00:36:30.000 And so you focused on getting out of debt.

00:36:33.000 What you should have been doing was actually growing your money.

00:36:36.000 And if you can learn, most people have debts at like 5, 6, 7%, not 18 and 22, like reasonable rates.

00:36:42.000 When I can make money earning 25% or 50% or 60%, why would I ever focus on eliminating a 5% mortgage?

00:36:50.000 When I can grow my money at 50%, it doesn't make sense.

00:36:53.000 So, make the money, make money and then go pay off your debts.

00:36:56.000 Like people are retiring their money in the river, you know, they're doing it out of order.

00:37:00.000 They're prematurely satisfying their debts.

00:37:02.000 They're like, if I pay off my debt first, then I can invest.

00:37:05.000 I'm like, uh-uh.

00:37:06.000 Go invest, make your money matter, make your money, make money, then go pay off your debts.

00:37:11.000 Because what would you rather have?

00:37:12.000 Would you rather be debt free, or would you rather have 10,000 residual dollars coming in every month for the rest of your life growing at 10%?

00:37:19.000 You're right, yeah.

00:37:20.000 That's financial freedom.

00:37:21.000 The first one is actually a form of bondage, and it's a waste of time.

00:37:24.000 Slavery almost.

00:37:25.000 Yeah.

00:37:26.000 So, you know, Dave Ramsey, when he does talk about buying real estate, he talks about buying real estate cash, not using loans.

00:37:31.000 What are your thoughts on buying houses cash versus buying homes with leverage with banks?

00:37:38.000 What are your thoughts on that?

00:37:39.000 Well, I love leverage and I put 20% down on pretty regularly.

00:37:45.000 The bank puts up the other 80% of the money and my rule is I don't want a house to be ever more than 50% paid off.

00:37:51.000 When I talk to someone, once their house is 50% paid off, I start freaking out because all I see is Hey, if that worked for you, pull out, harvest that equity, and go buy three more.

00:38:02.000 You know, think about that person that is 65, a lot of young people are watching this, but imagine you're 65 years old, and you got $300,000 of equity in your house, and you have $300,000 for retirement, and you know that you only have a few years to live with what you save for retirement, and strangely, you're like, I got $300,000 in equity.

00:38:16.000 And in that moment, you're thinking, You know, if I had just bought six or seven more of these, I'd be worth two million dollars.

00:38:23.000 And then I'd have a residual income from a bunch of paid off houses and then I could live my life.

00:38:27.000 But instead, I'm going to have to go back to work or rely on government or rely on charity and I'm going to drop below the poverty level on my income because I can't stretch my money.

00:38:37.000 But modern medicine is going to keep me alive for 40 years, yay.

00:38:40.000 Gotcha.

00:38:41.000 That's scary, man.

00:38:41.000 Yeah.

00:38:42.000 So would you say it's not a good idea?

00:38:45.000 Because I have bought houses cash before, but typically it's because they couldn't do a loan.

00:38:50.000 It was the end of the year.

00:38:52.000 I didn't have time to do a loan.

00:38:53.000 I'd buy cash then. 0.99

00:38:54.000 But I always cringe at myself whenever I'm like, oh my God, I've got to buy this thing fucking cash. 0.98

00:38:57.000 Because I do think it's a foolish thing because you can take that, let's say $300,000, $400,000, and buy multiple homes. 0.97

00:39:03.000 And they get the depreciation benefits.

00:39:06.000 And for the audience, when we talked about depreciation over 27 and a half years, It's off of the purchase price.

00:39:10.000 So if you buy four of those houses versus only buying one, you're able to get way better tax benefits.

00:39:15.000 But I guess in what situation would you say does it make sense to buy cash besides maybe some of the ones I... Well, first of all, there's always a way around.

00:39:22.000 Like right now, you have DSCR loans.

00:39:24.000 And they'll basically say, hey, if you're going to buy home cash, do it cash.

00:39:27.000 And then two months later, refinance it, pull 60% of the money out on a DSCR loan.

00:39:32.000 And they're going to qualify you not based on your credit or your job income, but actually on the merit of the rents from the house.

00:39:39.000 So I have hundreds of houses that I do DSCR loans for.

00:39:42.000 If you have anything paid off right now, put those loans in place and then all of a sudden you've got that money out and it wasn't a qualifying game.

00:39:49.000 Your credit didn't even matter.

00:39:51.000 Wow.

00:39:52.000 Interesting, I didn't even know about this.

00:39:53.000 So if you have, you said it's called what?

00:39:55.000 DCR loans?

00:39:56.000 DSCR. DSCR. So if you have a home paid off, go to these people, hey, I want to pull out, is it a cash out refi essentially is what it comes to?

00:40:04.000 Here's what's happening.

00:40:05.000 I got people all over the world that follow me on my social and they say, Chris, will you be my mentor?

00:40:09.000 Partner with me and they're basically saying, if I put up the 401k and IRA or equity in my home, will you put your team to work buying and doing all the work so I don't have to learn how to do this?

00:40:19.000 I don't want to be coached.

00:40:21.000 I don't want to do it.

00:40:21.000 I just want you to do it for me.

00:40:23.000 And so I'll go in and we'll partner up and I have 1800 partners around the world.

00:40:27.000 I build their portfolios and a bunch of my partners are in a situation where they can't use their credit.

00:40:33.000 So I have to use an alternative method.

00:40:35.000 My method is, we just go buy cash.

00:40:37.000 I pull my investors together in a fund, we buy cash, and then it's like, okay, well, when you buy cash, your ROI drops by like 80%.

00:40:44.000 It's awful.

00:40:45.000 You're lucky if you could get a 10% return.

00:40:47.000 You'd be lucky if you can get a 10 or 11% return.

00:40:50.000 That's when I go and buy them cash.

00:40:52.000 I do the DSCR loans, pull 60% of the money out, go buy cash again, do the 60% loan and do it a third time.

00:41:00.000 And now I have a whole bunch of houses where maybe the houses are more like 40%, 45% loan to value.

00:41:06.000 So they're over half paid off, but now they're still performing at a, you know, they're not performing at a 60% ROI. They're still performing at a really high ROI, something that kicks the trash out of your 401k.

00:41:17.000 Gotcha.

00:41:18.000 And what's the interest rate like back on these and what's the repayment?

00:41:21.000 It's actually really similar, especially because there's not a lot of risk to the bank.

00:41:26.000 The bank's like, hey, we're only giving you 60% instead of the traditional 80%.

00:41:30.000 So rates are identical.

00:41:32.000 Okay, to whatever's in the market.

00:41:34.000 And then what is the repayment like?

00:41:36.000 Is it like 30 years?

00:41:37.000 It's just a normal 30-year.

00:41:39.000 Really?

00:41:39.000 Nothing weird, nothing funky.

00:41:40.000 Okay.

00:41:41.000 Fixed rate, 30-year.

00:41:43.000 So it's basically a less risky cash out refinance for the bank.

00:41:46.000 You got it.

00:41:46.000 Essentially.

00:41:47.000 And they love them.

00:41:48.000 Yeah.

00:41:48.000 They'd rather give that out.

00:41:49.000 Yep.

00:41:50.000 And it's great for people like me that are complicated.

00:41:52.000 Because it's like the average person only can get 10 loans on their credit.

00:41:55.000 DSCR is a way to work around that and say, okay.

00:41:58.000 Oh, it's not Fannie Mae.

00:41:59.000 Mm-mm.

00:41:59.000 Okay, real quick for the audience.

00:42:01.000 So guys, once you start doing this and getting into real estate, you could get 10 loans that are like Fannie Mae loans that give you the good interest rates and everything else like that.

00:42:08.000 After that 10, because I've had to deal with this, you have to start becoming a bit more creative with your mortgage broker and finding loans and stuff like that.

00:42:14.000 So this is one that doesn't count towards that 10.

00:42:16.000 Doesn't count.

00:42:17.000 One more time.

00:42:18.000 DSCR? Mm-hmm.

00:42:19.000 Okay.

00:42:20.000 That's something new.

00:42:20.000 I didn't know about that.

00:42:22.000 My world revolves around that system.

00:42:24.000 So let me ask you this then, Chris.

00:42:25.000 What if someone says, well, Chris, why would I do that when I could just do a home equity line of credit?

00:42:29.000 And I can have the money available to me.

00:42:30.000 I could borrow more and it's there.

00:42:32.000 I don't have to necessarily pull out one time and then use it.

00:42:34.000 Why not just do a HELOC? Home equity lines of credit only work on primary residences.

00:42:39.000 So when you start buying investment properties and it's like, hey, there's cash.

00:42:41.000 I want to get it out.

00:42:42.000 You have to do a cash out refinance.

00:42:44.000 You really can't do a home equity line of credit.

00:42:46.000 It's really hard.

00:42:47.000 You have one on a rental, but they gave you a high rate.

00:42:52.000 Do you want to tell the audience about it a little bit?

00:42:54.000 Luckily for me, I have a relationship with my lender, and he made a different type of loan for me, but it's this hybrid between HELOC and Cash Out, basically.

00:43:03.000 It's not easy to get.

00:43:04.000 No, and that's not a standard program.

00:43:06.000 No, it's not.

00:43:07.000 Yeah, I would say a lot of my people that I work with, they either come at me with retirement or equity in a home.

00:43:11.000 Like, if you bought a home and you're watching this and you're like, well, I've had a home for five years.

00:43:14.000 Trust me, you have over $100,000 of equity.

00:43:17.000 And in my opinion, if you don't touch it, that means that your goal is to pay it off. 1.00

00:43:21.000 And I think that's stupid. 0.99

00:43:22.000 You should be asking, how do I harvest that? 1.00

00:43:24.000 How do I take that out?

00:43:26.000 Because, dude, think about most people.

00:43:28.000 The average person's country, average household income is $80,000 a year.

00:43:32.000 Like, Even if you're saving 20% of what you're making, that's like, what, 15 grand a year?

00:43:38.000 How are you ever going to save enough?

00:43:40.000 You wait a decade and you're like, hey, I finally have 150 grand.

00:43:43.000 It's way too much time.

00:43:44.000 You're wasting time.

00:43:46.000 It's about performance of your money over time.

00:43:49.000 And you've got to start young.

00:43:50.000 And so if you have equity, you pull that out and that's your path.

00:43:54.000 So let's say, Chris, I'm someone watching here.

00:43:56.000 I'm 25 years old.

00:43:58.000 I want to get into real estate and do this the right way.

00:44:00.000 Should I use you or how should I start this program, you'd say, to get this started?

00:44:04.000 Well, I think you always have two options.

00:44:06.000 The first one is you have to ask yourself, am I interested in real estate as a shortcut because I want the money?

00:44:11.000 Or am I actually passionate about learning how to do it?

00:44:14.000 And I'm going to tell you, I've ruined a lot of people over the years that I trained to do real estate that never wanted it.

00:44:20.000 And so you have to ask yourself, am I going to become the master?

00:44:23.000 Malcolm Gladwell says 10,000 hours to master something.

00:44:26.000 So if you're like, if this is like your thing, like when I look back on my working life, I'm going to look back and say there was a handful of things I mastered and real estate was one of them.

00:44:33.000 Then you should do it on your own.

00:44:35.000 Go find a mentor, get a coach, do it on your own.

00:44:37.000 But you gotta be honest with yourself.

00:44:38.000 If you're like, yeah, the reality is I'm interested in real estate because I know how lucrative it is, but I know I'm gonna cut corners.

00:44:45.000 I don't trust myself to do it on my own.

00:44:47.000 Then you gotta find a partner.

00:44:48.000 You go find someone that mastered it, and I would rather have a slice of watermelon Than an entire grape.

00:44:55.000 Because when you partner with someone like me, who's making 60% of my money, half of that is 30%.

00:45:01.000 There's no way on God's green earth that you're going to make 30% on your own.

00:45:06.000 Forbes reports that the average investor pulls in 10.4%.

00:45:10.000 On their real estate.

00:45:11.000 I'm doing 60.

00:45:12.000 So someone says, hey, if I partner with Chris and he does all of the work, that's way better than my learning curve of trying to figure the game out.

00:45:19.000 So it depends if you want to be the master or it depends if you just want the benefits.

00:45:22.000 So Myron mentioned my property I first got and I had a mentor to help me with that property because I didn't know what I was doing.

00:45:27.000 I just knew it was money and real estate.

00:45:28.000 So that's a good point.

00:45:28.000 Find a mentor that knows his stuff.

00:45:30.000 Hey guys, get your questions in, because obviously we got an expert in single-family homes, residential real estate, so if you guys got questions, make sure to get in, like, yeah, literally a master at this stuff.

00:45:40.000 So let me ask this, because we talked about the benefits of real estate, we talked about residential versus commercial, you know, the scam of IRA, buying cash versus using leverage.

00:45:48.000 So I guess for the audience that's watching, let's say they're like, all right, I want to get into the game.

00:45:55.000 I want to get my feet wet.

00:45:56.000 I want to buy maybe my first or second deal by myself.

00:45:58.000 Then I go ahead and get with an investor, someone that's knowledgeable like Chris, because I kind of want to understand how to do it myself before I start getting involved with other people, which I tell people all the time, hey man, buy at least one house by yourself, figure out the process, go to the closing table, figure it out, understand how to deal with real estate agents, etc.

00:46:13.000 If someone wants to do this, what do you think is the first thing they should do if they want to get their first house?

00:46:18.000 If they're just trying to do a house for themselves and start with a little bit of like house hacking, like this is how I got started.

00:46:24.000 It was like, okay, this is cool.

00:46:26.000 This is a three or a three and a half percent down payment.

00:46:28.000 And so even though we talked about how much homes have gone up by, if I was a young single person, I would be racing to save up 10 to $15,000 in the bank.

00:46:35.000 When you come out of college, it's like, man, do not adjust to your lifestyle to that income.

00:46:41.000 Like live on the cheap or else you don't have much of a hope in life financially because I want to be clear.

00:46:47.000 Like, our Millennials and our Gen Zers, they have it way worse when you compare it to Gen X or Boomers. 0.99

00:46:53.000 They can't buy a home?

00:46:53.000 No, and not only that, but they get this bad rap that they're lazy.

00:46:56.000 I'm like, no, no, no, they're way harder working.

00:46:58.000 We can measure it.

00:46:59.000 If you take a look, this is kind of crazy stat, Gen Zers, I got kids that are Gen Z, you compare them to Baby Boomers when they were in their 20s, And literally, Gen Z has 85% less buying power than a boomer did in their 20s. 0.52

00:47:12.000 Which basically means they have to work way harder for the same dollar, which means they got to work smarter.

00:47:18.000 So here's what a lot of them are doing.

00:47:19.000 They're still living at home.

00:47:21.000 They're saving their money aggressively.

00:47:23.000 They're saving $10,000 to $15,000 and that's a 3% down payment on a $300,000 to $400,000 home.

00:47:28.000 Then go get four roommates.

00:47:30.000 And then literally rent the house out to them.

00:47:32.000 Take just a room for yourself.

00:47:33.000 And then there's a means to actually have the mortgage even potentially fully covered by them.

00:47:38.000 And it's like, okay, a house hacked.

00:47:39.000 I worked hard.

00:47:40.000 I came up with the 3%.

00:47:41.000 And I've got someone else now actually making my payment.

00:47:44.000 And then 12 months later, do it again.

00:47:47.000 Move and do it again and house hack.

00:47:49.000 And if you could do it three or four times, you're getting away with murder with a 3% down payment, fully legally, doing that system.

00:47:55.000 And where does that put you in five years?

00:47:57.000 Dude, you own four or five homes.

00:47:59.000 And now if they're going up, you know, if they're going up, let's just call it 5% a year on a $400,000 home, that's 20 grand.

00:48:05.000 I got four of them.

00:48:06.000 That's $80,000 that I'm increasing every single year.

00:48:10.000 You're probably not even making $80,000 a year, but now you are in real estate.

00:48:13.000 Yeah.

00:48:14.000 Ooh.

00:48:15.000 So, okay.

00:48:16.000 So they capture their first home.

00:48:17.000 They do what you did.

00:48:18.000 Get the roommates, et cetera.

00:48:20.000 Get it paid down.

00:48:21.000 Now it's time to find the second home.

00:48:22.000 Yep.

00:48:23.000 What should they be looking for when they're looking at the home?

00:48:27.000 Should they be looking at, okay, let's make sure the exterior is nice.

00:48:30.000 Maybe it has some issues here.

00:48:32.000 What should they be looking for when they're trying to pick up this second home as an investor?

00:48:35.000 Yeah.

00:48:35.000 Like deal breakers to stay away from versus things that are good.

00:48:38.000 Before you actually look at the contents of the house, I actually would crunch the numbers.

00:48:43.000 I would ask, Where are rents per room in the areas where I'm buying?

00:48:47.000 Because I want to add it up and be like, okay, my county allows me in this area to have up to five different residents.

00:48:55.000 So I'm going to have four roommates.

00:48:56.000 And I can't charge more than $500 a room.

00:48:59.000 So I'm going to maybe pull in $1,800 to $2,000.

00:49:01.000 What's my mortgage going to be?

00:49:02.000 Okay, my mortgage is going to be $1,900.

00:49:04.000 I broke even.

00:49:05.000 That's smart.

00:49:06.000 Hey, I wonder what happens if path of progress is over here.

00:49:09.000 Homes are a little more expensive.

00:49:10.000 I ran the numbers.

00:49:10.000 Guess what?

00:49:11.000 I'm gonna pull in $2,400 a month, but my mortgage is only going to be $2,200.

00:49:14.000 I actually have a positive cash flow of $200 a month while I'm living for free.

00:49:17.000 So you gotta be able to crunch the numbers and just ask, what will actually make the most money?

00:49:22.000 Because you don't want to burden yourself with debt that you have to service.

00:49:26.000 You want other people to service it for you.

00:49:27.000 Yeah, and this is like a really simple, but like, Guys, a calculator that's really good for this is literally just going on Redfin.

00:49:35.000 Redfin.

00:49:36.000 It's really basic and simple, but what I've realized is with all my deals, I'll just use the Redfin calculator to see what my monthly payment's going to be and then how much the house generates.

00:49:44.000 And if there's a cash flow that I'm happy with, a lot of the times, by the time I close the deal and be done with it, it's pretty accurate with how much money I make.

00:49:52.000 So that's really important to crunch the numbers.

00:49:54.000 Now, Chris, in your opinion, what do you think they should be looking for as far as a cash-on-cash return, which we discussed before, guys, which is...

00:50:01.000 Well, we can tell them what a cash or cash return is first and then what they should be looking for.

00:50:04.000 Let's just say for a moment that you were going to put up $12,000, like fresh.

00:50:08.000 And that's your 3% down payment on a house.

00:50:11.000 And then let's just say that after renting it out, there's $200 a month left over.

00:50:15.000 And as long as you kept your, you know, let's just say vacancies and everything was taken into account, that's $2,400 a year.

00:50:21.000 So if I put up $12,000 and I make $2,400 a year, I can figure out exactly what my return is.

00:50:26.000 Everyone should know how to calculate an ROI. You take your gain, which is $2,400 in this scenario.

00:50:31.000 I'm going to divide it by my investment of $12,000.

00:50:35.000 And then I'm going to times it by 100.

00:50:37.000 And that tells me that I have a 20% cash on cash with my 3% down payment.

00:50:42.000 Do I think you should look for a cash on cash on a home that you're going to live in?

00:50:45.000 I don't think so.

00:50:46.000 I would focus more on what do I want to put out and how much do I want to try to get back?

00:50:50.000 Like my very first house, I didn't have necessarily roommates.

00:50:53.000 It had a separate basement apartment.

00:50:55.000 I rented out the basement and that covered the entire mortgage.

00:50:58.000 So my wife and I lived upstairs for free.

00:51:00.000 Wow.

00:51:01.000 So, you know, there was really good house hacking because a person's rent or their mortgage is the biggest expense you're ever going to have your entire life.

00:51:07.000 If you can be smart and wipe that out in the beginning, then it's like you've removed the largest financial burden.

00:51:12.000 What should you be doing with that extra money?

00:51:14.000 You should buy a nicer car.

00:51:16.000 Just kidding.

00:51:16.000 You're supposed to save that money.

00:51:18.000 You're supposed to save that money and by the way, you're not saving it for 401k.

00:51:22.000 You're saving it to invest.

00:51:24.000 So now you can buy, you know, so cash on cash, I think becomes more important when you start buying non-owner occupied real estate, meaning I'm buying homes, investment properties, like, okay, now I'm not living there.

00:51:35.000 It's less confusing.

00:51:36.000 My optics are cleaner.

00:51:38.000 How much money am I going to make?

00:51:40.000 How much money do I want to make on that house? 0.66

00:51:41.000 So for me, right now we're in a scenario where rates are high and rates are scheduled to come down and if they can get a handle on inflation, let's just say in the next 12 to 24 months that rates come down two or three points like they're hoping.

00:51:53.000 If that happens, cash flows are going to be booming because rents have not been catching up as fast as prices have gone up in the last two years.

00:52:00.000 So we're in a really weird season of crunch, which is not what we'll see for the next 20 years.

00:52:05.000 It's like the next two years are going to be funky because rates are high, which means cash flows pinched, but rents haven't caught up yet.

00:52:11.000 And so we've got this gap.

00:52:13.000 So I might have a property today where I'm like, I'm getting like a 1% cash on cash.

00:52:18.000 It's like a hundred bucks a month.

00:52:19.000 That's not exciting, but in two years when everything evens out, it returns to a 4.5% cash on cash, which is actually, that's actually pretty decent.

00:52:27.000 Yeah, and I think it's very important for the audience to understand, like, if you guys buy your first house and you're living in it, right, you might make little to no cash, but like you said before, you live in it and you're living for free.

00:52:37.000 If you're living for free, that's a W. If you're making a little bit of profit, that's an even bigger W. I'll never forget, when I did a strategy that you just mentioned before, my rent was, I believe we're at my old spot, $1,200.

00:52:49.000 So I got a property, and I had three units.

00:52:52.000 I lived in one, the other two.

00:52:54.000 At that point, they covered the mortgage, and I lived rent-free.

00:52:57.000 So the $1,200 I was spending for rent, guess what I did with it?

00:53:00.000 You were going to save it.

00:53:01.000 Saved it.

00:53:01.000 And buy something else.

00:53:03.000 Exactly.

00:53:04.000 But also, I was somewhat house poor.

00:53:06.000 So the money I had saved, I used to fix repairs for the property and stuff like that.

00:53:11.000 But imagine if I had to do repairs, we could do it without money.

00:53:13.000 So you're right.

00:53:14.000 I think when I got into real estate in the beginning, I was like, I have to buy junky homes and I have to fix them up.

00:53:19.000 And then I remember after doing that for a few years, I found this really sick deal that didn't need any repairing.

00:53:24.000 And I'm like, oh my gosh, I feel like I just saved like 10, 20 grand in repairs.

00:53:28.000 My ROI is going to be really big.

00:53:30.000 And I thought, I just got lucky.

00:53:32.000 And that's when I learned, it's like, wait, actually just raise your standards.

00:53:35.000 Those houses are available.

00:53:36.000 Yeah.

00:53:36.000 Turnkeys are available.

00:53:37.000 And I like them better, personally.

00:53:39.000 Yeah.

00:53:39.000 Well, almost everything I do now these days is turnkey.

00:53:42.000 And if it needs $20,000 or $50,000 repairs, I put that on the investor, not me, saying, hey, you take that risk and then bring it to my buy box.

00:53:50.000 And then if it still fits, then I'll buy it.

00:53:51.000 Okay.

00:53:52.000 And for the audience, guys, a turnkey property is basically a property that you buy, it's ready to go.

00:53:56.000 Like, you don't gotta do no fixes, whatever.

00:53:57.000 A lot of people like to fix and flip and whatever. 0.95

00:53:59.000 You don't deal with none of that crap. 0.90

00:54:00.000 It's pretty much ready to go. 0.98

00:54:01.000 Rent are ready.

00:54:02.000 Maybe you do a little bit of painting or whatever, but it's right there.

00:54:05.000 Or there's tenants in it already making, paying rent.

00:54:07.000 There's definitely a lot of comments coming through where people are like, Chris, can I mentor with you?

00:54:11.000 Can I partner with you?

00:54:12.000 And there are links provided where you can look at that.

00:54:14.000 Even if you're just brand new starting out, Yes, I can be your mentor.

00:54:18.000 I can guide you in doing this on your own.

00:54:20.000 Or if you're one of those that are like, hey, don't teach me to fish, bro.

00:54:23.000 Give me a fish.

00:54:24.000 I think we live in a day and age where you have to decide.

00:54:28.000 You can't do everything on your own anymore.

00:54:29.000 You can't, no.

00:54:30.000 You can't lone wolf it.

00:54:31.000 And so you've got to be smart and you've got to ask, okay, with the limited resources I have, what should I do?

00:54:36.000 And then when do I need to hire it out or bring someone else into my world?

00:54:39.000 And partnering, you know, when I got started, my original partner was my father-in-law.

00:54:44.000 He was so skeptical.

00:54:45.000 When I bought my first house, I was just in college.

00:54:46.000 And he's like, why are you buying a house?

00:54:48.000 That doesn't make any sense.

00:54:49.000 I bought my second house.

00:54:50.000 He's like, are you guys getting divorced?

00:54:52.000 Like, he was so confused about my third house.

00:54:54.000 He's like, he wrote me off. 0.99

00:54:54.000 He's like, you crazy. 0.99

00:54:55.000 But after those three houses, I got this weird phone call six months later where he's like, Hey, like, what are you doing in real estate? 0.92

00:55:03.000 He started asking me questions.

00:55:04.000 I could tell you who's calculating my ROI. So I just revealed all my numbers and he's like, oh my gosh, do you know what kind of ROI you're producing?

00:55:11.000 I'm like, yeah.

00:55:11.000 I was like, this is a lot better than my 401k or IRA. I was like, yeah.

00:55:14.000 He's like, well, what are you doing?

00:55:15.000 I said, well, it's weird that you're calling because I just found a fourth deal.

00:55:18.000 I want to buy it.

00:55:19.000 I need 20 grand.

00:55:20.000 I don't have the money.

00:55:21.000 He said, I'll give you the money, but can we partner 50-50?

00:55:25.000 And I did not have to think about that because I was so poor.

00:55:27.000 I'm like, You come up with the money, and then I only have to give you half of the return?

00:55:33.000 And I tried not to sound excited, so I was like, You don't think I'd consider that.

00:55:37.000 I was like jumping out of my skin.

00:55:39.000 And we did 50 homes together, millions of dollars in real estate, and that's when I learned the power of, because there's a lot of people listening like, well, what if I don't have the money?

00:55:48.000 What if I don't have the credit?

00:55:49.000 The biggest asset that you have is learning how to be resourceful.

00:55:52.000 You should not take advice from your credit score.

00:55:55.000 You should not take advice from your bank account.

00:55:57.000 Because when your credit sucks or you don't have money, you're like, well, I guess I don't have opportunity.

00:56:00.000 I'm like, no.

00:56:01.000 That's part of this.

00:56:01.000 It takes money to make money mindset.

00:56:03.000 You want to gravitate to a different game, a different mindset that says, well, I can find the resources.

00:56:08.000 And so I started doing that for other people.

00:56:10.000 Now they find me and they're like, hey, I don't know how to do it.

00:56:12.000 You know how to do in real estate, you know, but I've got some, I've got some 401k.

00:56:16.000 Can we work together?

00:56:17.000 That's why it's important to go outside, meet people, make connections, go to events, because my realtor helped me with this first property, right?

00:56:24.000 I met him at Toastmasters.

00:56:25.000 I didn't even know who he was until I met him there.

00:56:27.000 But then again, being resourceful, finding ways to make money is very important.

00:56:31.000 Yeah, and Tony Robbins, years ago I was in his Lions Club.

00:56:34.000 He'd pay hundreds of thousands of dollars to go through that whole system.

00:56:37.000 And I was sitting there at his house, and I'll never forget when he said this.

00:56:40.000 He said, you're one person away from lifetimes of income.

00:56:44.000 And I think about all the money I've made in my lifetime, and I'm like, Yep.

00:56:48.000 A handful of mentors unlocked all of the doors of possibility for me.

00:56:52.000 So everyone's got to be out there thinking, okay, you either subscribe to go to college, which I think is a broken system.

00:56:59.000 You either think I'm just going to read books.

00:57:01.000 That's never going to get you where you want to go.

00:57:03.000 I've never found a system that is more efficient and better than...

00:57:07.000 Oh, just go find someone that's already done it and if you can find an arrangement with them to learn from them, there will never be a faster way to the top of the mountain.

00:57:14.000 That's like doing Everest where people die and it's like, do you really want to climb the mountain with a Sherpa in their first year that has no track record or the dude that's been up 200 times and has never lost someone? 0.99

00:57:24.000 Go find the smartest, brightest, most successful person that's relevant And then figure out how to grab onto their coattails.

00:57:30.000 Grab a tiger by the tail and then let them carry you up the mountain.

00:57:34.000 That's what I did.

00:57:35.000 I feel grateful for the people that carried me to the top.

00:57:37.000 Well said.

00:57:38.000 So you mentioned earlier that you're very particular about where you buy.

00:57:42.000 There's five markets that you're buying in.

00:57:44.000 Can you tell us some of these markets?

00:57:45.000 I can.

00:57:45.000 You mentioned Orlando earlier.

00:57:47.000 Well, can I start by telling you the places where I would never invest ever again?

00:57:50.000 Please, go ahead.

00:57:50.000 When I went nationwide for the first time, this was like 2009, this is right after Fannie and Freddie had just, they were getting foreclosures like crazy.

00:57:59.000 And I got access to a tape of 187 homes that they were going to sell me at a 92% discount.

00:58:06.000 These homes were in Ohio, so we're talking about Cleveland, and then also in Michigan, in Detroit.

00:58:13.000 And I was like, oh my gosh, if I get a home at a 92%, imagine for a moment buying like a $150,000 entry-level home for like nine grand.

00:58:21.000 You're thinking, this is amazing.

00:58:24.000 So I went in, I bought all these homes, I raised capital to do it, and then I fixed them up, I took them to market, and then disaster struck.

00:58:32.000 Renters would move in.

00:58:33.000 They would literally pay me their first month's rent deposit and then they would never do anything again.

00:58:38.000 These were professional renters.

00:58:39.000 They would strip everything out of the house, take everything, pipes, copper and leave.

00:58:43.000 And then I had to refix them up again.

00:58:45.000 Wow.

00:58:46.000 And I lost a million dollars trying to escape my 92% discount on 180 whatever homes.

00:58:52.000 Well, I'm glad that I didn't give up.

00:58:55.000 Fortunately, I was resilient and I went back to the market and I said, okay, play the game different.

00:59:00.000 Don't go to blue states.

00:59:02.000 Go where they have a surplus of beautiful homes.

00:59:04.000 And that's when I developed a system for basically finding these markets that have really high performance.

00:59:12.000 Because what I'm about to suggest, when I reveal what these markets are, it's not about a good deal on a house, it's actually about a good market.

00:59:19.000 In other words, the secret to my ROI, over half of that 60% comes from macroeconomics.

00:59:24.000 It's a study of population, migration, the economy in those local markets, the companies that are moving in, jobs, like for example, Blue Oval City.

00:59:35.000 Let's talk about Blue Oval City.

00:59:36.000 You guys should all Google that so you know exactly what that is.

00:59:39.000 Ford says we're building an electric plant.

00:59:41.000 It's $11 billion.

00:59:43.000 We're going to create 11,000 jobs for the plant and they don't have real estate in that area.

00:59:48.000 So what happens?

00:59:49.000 Then you're going to need thousands more jobs for diners and new restaurants and everything else.

00:59:54.000 And I'm buying these brand new houses turnkey for $180,000 that I'm projecting in the next five years are going to be worth $340,000.

01:00:02.000 Well, that market won't last forever.

01:00:05.000 I'm gonna be there for the boom, and when everything is still taking off, I'm gonna pull out, but I'm still gonna have some of my greatest wins.

01:00:12.000 Those are the markets that I actually look for.

01:00:14.000 So, we're talking about Orlando.

01:00:16.000 That's a great growth market.

01:00:18.000 Memphis, Tennessee is a second market.

01:00:20.000 Really?

01:00:20.000 Oh yeah, there's outskirts in areas of Memphis where I'm getting some of my highest cash on cash.

01:00:26.000 Look up Jonesboro.

01:00:27.000 I shouldn't even say that one.

01:00:29.000 That is the market where my cash on cashes are between 4% and 7%.

01:00:32.000 In a market where it's hard to beat 1% or 2% cash on cash, we are slaying it in those markets.

01:00:40.000 So Alabama is definitely a market that you want to look to.

01:00:42.000 Oklahoma is another market that you want to look to.

01:00:45.000 Those are the markets that I'm in and we're basically...

01:00:49.000 Any particular cities or are we just going like the whole state is good?

01:00:52.000 No, not the whole state.

01:00:53.000 No, no, no.

01:00:55.000 So when you start...

01:00:57.000 So talk about Oklahoma City.

01:00:59.000 We go to Oklahoma City and then in Oklahoma City, then you have to say, well, where's the path of progress?

01:01:05.000 What side of the railroad tracks do I want to be on?

01:01:07.000 And then I only buy in certain zip codes.

01:01:09.000 And then I focus in on an age range of home.

01:01:12.000 And so I get super, super micro within that zip code down to the neighborhoods.

01:01:17.000 And now I actually say, now I'm willing to entertain properties in my buy box.

01:01:21.000 And the majority of homes that we find there, I don't even want.

01:01:23.000 So it is literally sifting everything.

01:01:26.000 For the audience, because that's like a really good strategy, because for the audience, guys, when it comes to residential real estate, it's heavily dependent upon comps.

01:01:32.000 So if the area has homes that are a certain price point, etc., like that's sold in the past year or so, whatever was sold is typically what's going to be...

01:01:41.000 The general thing, because with residential, it's like comps mean almost everything.

01:01:44.000 So even if you trick out the house and make it super nice, they're still going to put it at the same...

01:01:47.000 If your neighbors aren't doing it?

01:01:48.000 Yeah, if your neighbors aren't doing it, it's not going to work.

01:01:51.000 So what are some of the things that you look for in the home?

01:01:55.000 What's your, I guess...

01:01:56.000 Cash on cash targets?

01:01:58.000 The price range target?

01:01:59.000 How much do people need to earn in that area for where you want to go?

01:02:03.000 Okay, there's a couple of things that are really important there.

01:02:05.000 First of all, I'm almost always a three bedroom, two bath.

01:02:07.000 I might be a four bedroom, three bath, but my average square feet is $1,500.

01:02:11.000 And that's actually really important because if you actually cross-examine all real estate and ask what real estate performs the most, let's say on the high end I have million dollar homes, half a million dollar homes, entry level homes, and then pre-entry level.

01:02:26.000 And then what's smaller than pre-entry level like a 3-2, then you start getting into really weird two bedroom, one baths, condos, and townhomes.

01:02:32.000 Your highest cash on cash return.

01:02:35.000 Is always entry-level single family starting at a 3-2.

01:02:39.000 If you go to a 5-3, your cash on cash is actually going to go down.

01:02:42.000 You go to a half a million dollar house, your cash on cash is going to go way down.

01:02:45.000 You go to a million dollar house, you're going to be majorly negative.

01:02:48.000 So there's a zone of genius where you earn the highest cash on cash.

01:02:52.000 So we're always looking for the cheapest Nicest home, in the path of progress, starting at a 3-2, and that's where I'm actually gonna get my highest overall ROIs.

01:03:03.000 Don't do condos, don't do townhomes, I don't do two bedroom, one baths, I'm always starting with that 3-2.

01:03:07.000 They have the highest performance, they have the highest growth and the highest gains.

01:03:11.000 Gotcha.

01:03:11.000 That's some sauce right there, bro.

01:03:12.000 Yeah, no, yeah, 3-2's are fantastic.

01:03:15.000 Because it's, yeah, it's like perfectly in the middle almost.

01:03:17.000 Okay, so you mentioned, so I got here, Memphis, Orlando, Jonesboro, Oklahoma City, Jonesboro, and then you mentioned, was there, Am I missing one here?

01:03:25.000 Nothing on that.

01:03:26.000 Okay.

01:03:28.000 Why not Miami?

01:03:28.000 Because we had discussed before Miami.

01:03:30.000 I think I have an idea of why.

01:03:31.000 I know why.

01:03:32.000 Yeah, but what's your thoughts on Miami?

01:03:34.000 Because you love Florida, but Miami, stay away from it.

01:03:35.000 Yeah, let's actually talk about affordability.

01:03:39.000 Go back with me to 1980 LA. People were freaking out.

01:03:43.000 If we could go back in time and watch the news reports, they're like, guys, real estate just got over $100,000.

01:03:52.000 It's unaffordable.

01:03:53.000 No one will ever be able to live here.

01:03:55.000 The market has to crash.

01:03:57.000 And everyone's like, why does it have to crash?

01:03:58.000 Because that's too much.

01:03:59.000 I'm like, that's not what dictates a crash.

01:04:02.000 Affordability doesn't dictate a crash.

01:04:04.000 Now that same home is worth $980,000. 1.00

01:04:08.000 It's a piece of shit, too. 0.99

01:04:09.000 Yes, and if you think real estate's gonna come down, it's not. 1.00

01:04:13.000 So what am I doing?

01:04:14.000 I'm selecting markets that are pre-LA 1990.

01:04:18.000 So, for example, when I go to Jonesboro and I'm buying a brand new house for $180,000, I'm looking at affordability.

01:04:25.000 What state is that in, Jonesboro?

01:04:27.000 I'm gonna let you look that one up.

01:04:30.000 So if you take a look at the macroeconomics on that, talk about affordability.

01:04:38.000 You're looking for an intersection where real estate is way less than what people earn in the area.

01:04:44.000 So in the reason why not Miami is because the prices have already hiked outside of my price range.

01:04:50.000 My goal is to always buy and I'm gonna drop a huge nugget here.

01:04:53.000 I always buy 30% below the median for an area.

01:04:57.000 So if the national meeting is $430,000, my average purchase price has got to be under $300,000.

01:05:02.000 My current average purchase price is $270,000.

01:05:05.000 Why am I 30% below the median?

01:05:07.000 Watch this one.

01:05:08.000 For single-family homes, right?

01:05:09.000 For single-family.

01:05:10.000 When the market crashes, on a bad crash, like a 2008 crash, a million-dollar home is going to go down to half a million.

01:05:18.000 Half a million is going to go down to 300.

01:05:20.000 300 is going to go down to 220.

01:05:22.000 220 is going to go down to 190.

01:05:24.000 190 is going to go down to 175.

01:05:26.000 175 is going to go down to 170.

01:05:28.000 In other words, everything above the median takes the largest hit.

01:05:33.000 Everything below the median takes a much lower.

01:05:35.000 And if I'm 30% below the median, I actually have minimized myself so that it's like, oh, you're right.

01:05:40.000 We had a nasty crash.

01:05:42.000 My property barely went down.

01:05:44.000 But my rents are actually going up.

01:05:46.000 And so what am I gonna do?

01:05:47.000 I'm gonna hold.

01:05:48.000 Why would I sell?

01:05:49.000 I'm in a good position.

01:05:50.000 This is why I didn't lose any of my real estate or inventory in 2008 when everyone said sky is falling is the worst market. 0.88

01:05:55.000 I'm like, you guys crazy!

01:05:56.000 Within five years of buying my first couple thousand homes in Phoenix and Vegas, you know, we had made our investors over a hundred million dollars.

01:06:03.000 At a time when everyone said, don't.

01:06:04.000 By the way, we're in the same timing right now.

01:06:06.000 People are saying, look at interest rates, look at the economy, look at the market, don't.

01:06:10.000 And I'm like, you guys, I am making the most money I've ever made in the game.

01:06:15.000 Y'all crazy for not, but watch this.

01:06:18.000 You wait a couple of years, rates will come down.

01:06:20.000 We're going to get that buyer's market surging hard.

01:06:23.000 Real estate prices are going to skyrocket.

01:06:25.000 What's everyone going to do?

01:06:26.000 They're going to try to buy real estate. 0.99

01:06:27.000 And I'm laughing as I'm selling my inventory, going to the bank, saying, y'all not counter cyclical. 1.00

01:06:32.000 I'm making money because you're all stupid. 1.00

01:06:34.000 You're always buying when you're supposed to be selling, and you're always selling when you're supposed to be buying. 1.00

01:06:38.000 People don't get that.

01:06:39.000 It doesn't matter how loud I scream.

01:06:40.000 They're not getting it.

01:06:41.000 And earlier in the chat someone said, well, that's why the rich stay rich and there's all this negative sentiment about, you know, the people with the haves and the have-nots.

01:06:47.000 I'm like, bro, you can be poor and you can have money if you find a mentor and you get smart and you learn how to play the game.

01:06:53.000 So Miami, the affordability, it's already out of the price range that I want to be in.

01:06:57.000 That's why I'm in other parts of the state.

01:06:59.000 There's also one other reason.

01:07:00.000 It gets super nerdy, but you know, you're in a hurricane area.

01:07:05.000 And so when I get to Orlando, by the time a level 5 hits and goes inland, it's down to classified as a large storm.

01:07:11.000 It's not going to do the damage.

01:07:13.000 And when you're thinking macro and buying thousands of homes like me, you actually have to start looking at, you know, some of the natural disasters and features like that.

01:07:21.000 Speaking of hurricane, there's one on the way actually this weekend.

01:07:24.000 Storm.

01:07:25.000 Are we good in here?

01:07:26.000 I know.

01:07:27.000 Yeah, no.

01:07:28.000 And I've told people all the time, actually, I'd like to get your take on it. 0.99

01:07:31.000 I tell people all the time, condos, don't fucking buy them. 0.92

01:07:33.000 You know, there's very few circumstances where buying a condo makes sense financially because of the HOAs, especially here in Miami, where you're paying $1,000 to $2,000 on HOA alone, which that price can only go up. 0.98

01:07:42.000 What are your thoughts on condos?

01:07:43.000 Why should people stay away from them?

01:07:45.000 What's your take?

01:07:46.000 They just don't perform as high.

01:07:47.000 Like, literally, if anyone gets anything out of this podcast, it's like, you know, that's really weird.

01:07:51.000 It seems like Chris is really biasing everything against ROI. And that would be right.

01:07:56.000 It's like, hey, if I specialize in condos, guys, my 60% ROI is going to be 34%.

01:08:00.000 I'm like, who's with me?

01:08:01.000 Let's go.

01:08:02.000 I'm like, no, that's actually a really unintelligent choice.

01:08:06.000 So, no, I won't do condos.

01:08:07.000 I won't do townhomes just because it's less ROI. It's less in demand.

01:08:11.000 They don't perform as well.

01:08:12.000 They don't increase in value as much.

01:08:14.000 Yeah.

01:08:16.000 We could read some of these chats, actually, because I'm sure there's probably some questions.

01:08:19.000 We got, what, 4,000 plus y'all in here?

01:08:20.000 5,000?

01:08:21.000 Between X, YouTube, Rumble, etc.

01:08:24.000 I hope you guys are enjoying the show, man.

01:08:26.000 That's a lot of information.

01:08:27.000 We get a lot of sauce.

01:08:28.000 I have a home in New York with three...

01:08:30.000 Oh, one last thing before I read these chats.

01:08:32.000 What do you want?

01:08:33.000 What should people look for when it comes to renters?

01:08:34.000 How much money should they be earning per year?

01:08:36.000 And does credit score matter as much?

01:08:37.000 Yeah, so my average renter makes $60,000 a year.

01:08:39.000 The moment you find renters that make $40,000 or less, those are the kind of people that when they leave, they leave you surprises.

01:08:46.000 But if you make $60,000 on up, That's when people start acting like homeowners and they start taking care of you.

01:08:52.000 By the way, if you guys want to get crazy, if anyone wants to drop in the chat that wants to do a game plan, drop any of your assets.

01:08:58.000 Just tell me, do you have equity in a home, a 401k, IRA? And I'll project in 20 years what your net worth could be.

01:09:03.000 That could be a little bit interesting.

01:09:04.000 Okay, go ahead, guys.

01:09:06.000 Yeah, drop it in.

01:09:06.000 That's pretty good.

01:09:08.000 What do we got here?

01:09:10.000 I have a house in New York with 331k owed and worth 550 to 600k.

01:09:15.000 I used the VA loan and wanted to buy a house in Frisco, Texas.

01:09:18.000 What's my method to get there?

01:09:20.000 Okay, so a couple of things.

01:09:21.000 The first one is, if you take a look at that equity, watch how I do this math.

01:09:24.000 We have a, let's call it on the low side, a $550,000 house.

01:09:29.000 You're going to go get a home equity loan up to 80% of the value.

01:09:33.000 So I'm going to multiply that by 80%.

01:09:35.000 It's $440,000 minus the $330,000.

01:09:38.000 You have $110,000 that the bank is going to give you on that house.

01:09:42.000 Now, let me just tell you what that means in my world.

01:09:44.000 Don't get caught up on the details like, I was in military, so I have VA, so I can do 0% down.

01:09:50.000 Again, that's getting lost in strategy.

01:09:52.000 Focus on ROI. You have $100,000 that you can access.

01:09:56.000 If I put $100,000 earning 34%, not 60%, 34% year over year, For a period of 20 years, that is going to turn into 34.6 million dollars.

01:10:12.000 That's what happens when you compound your money.

01:10:15.000 So, you all got to be thinking, how do I access my assets and how do I earn a superior ROI? If all you ever do is go from a lame single-digit ROI like a 401k or an IRA that's earning 5-6% and put it into real estate just even earning 20 or 30%, just wait 20 years.

01:10:32.000 Your money will multiply and at retirement, you have millions.

01:10:34.000 You may not be rich.

01:10:36.000 But you can definitely have two, three, four, five million dollars.

01:10:38.000 And for the average person, it's like, okay, well, Chris, let's just say I do that, Mr.

01:10:43.000 Kim Pop, that says, hey, okay, 20 years from now, I've got a bunch of paid off Rinkler real estate.

01:10:49.000 Real estate that's paid off is going to earn you on average a 5% cash on cash.

01:10:52.000 So let's just say that you did that.

01:10:54.000 Let's just say that you had $5 million and you're earning 5% on it.

01:10:58.000 Your cash on cash is a quarter million dollars a year.

01:11:01.000 So it's like, I retired, and I got a quarter million dollars coming in tax-free, growing at 5-10% year-over-year-over-year.

01:11:11.000 That's a good retirement plan, but to do it, Kim Pop's got to take that equity out of the house and go and buy it. 1.00

01:11:17.000 What do you guys think of house hacking and buying a home in Columbus, Ohio?

01:11:21.000 Is Ohio a good landlord-friendly state?

01:11:22.000 We talked about house hacking is good, but yeah, Ohio is good.

01:11:25.000 Get houses for great prices.

01:11:27.000 Sorry, can I correct that real quick?

01:11:28.000 Yeah, go ahead.

01:11:28.000 I hate Columbus.

01:11:29.000 Okay, you don't like Columbus?

01:11:30.000 The state of Ohio?

01:11:32.000 I don't like anything in Ohio.

01:11:33.000 Oh, you don't like Ohio?

01:11:34.000 I don't like Ohio at all.

01:11:35.000 By the way, you're right.

01:11:36.000 You can buy a cheap house for $50,000 or $100,000.

01:11:39.000 3% down, you're like, oh, that's great.

01:11:41.000 But tenants.

01:11:42.000 It was $1,800, but tenants.

01:11:44.000 So you've got to be insanely picky and choosing them.

01:11:46.000 Please be aware that you're in a state that doesn't favor you as a landlord.

01:11:50.000 They favor the tenant.

01:11:51.000 Yeah.

01:11:52.000 Yeah. 1.00

01:11:52.000 Shit. 1.00

01:11:53.000 That's a good point. 1.00

01:11:54.000 Yeah, because we had investment join here, and he does all this shit in Ohio. 0.99

01:11:57.000 But yes, he's getting houses for cheap. 0.95

01:11:58.000 But yeah, finding tenants might be tough.

01:12:00.000 If I say $15,000 or $20,000 towards a home, average home in New Jersey is about $350,000.

01:12:04.000 How would I even get a bank to even approve me for that amount?

01:12:07.000 My sister's husband brought my W-2 to his people and said I only qualify for $65,000, which I don't think is right because I can get that easy in a few years.

01:12:14.000 With rent utilities, I paid $15,000.

01:12:17.000 30k truck in two years easy how do I even get the loan to begin with then and if I put three percent down when I pay crap town ton in homeowners insurance do it bro what the hell is this question?

01:12:27.000 I think I got it okay yeah so let me talk to Vilexia Vilexia first of all if your husband brought your w-2 to a bank and cut you out so they're the middle person you got to pause and get enough financial education to go sit down and talk to the bank yourself for them to say that you only qualify for $65,000 as Trailer Park House, 1.00

01:12:44.000 that means that you're not even working part-time and you're earning minimum wage.

01:12:47.000 So there's definitely something wrong.

01:12:49.000 You're saying that you can save $15,000 to $20,000 towards a home.

01:12:52.000 So if you just ask yourself, what is a 3% down payment of $350,000?

01:12:56.000 That's right around that $12,000 mark.

01:12:58.000 So in a year, you can save enough money for that 3% down payment.

01:13:02.000 Now, let's just say that you do have a problem qualifying.

01:13:04.000 What do you do?

01:13:05.000 You get a cosigner.

01:13:06.000 You find someone else that has good credit and income, they'll combine your income with their income, and boom, it's just another way to get a house.

01:13:13.000 But I would find out for yourself actually what's going on.

01:13:16.000 Alright, who's up next?

01:13:18.000 These are all Cows Club chats, by the way.

01:13:21.000 Guys, again, if you want to get a discount on the chats, join Cows Club, man.

01:13:25.000 We read all these chats first.

01:13:27.000 How can you go and get your first house?

01:13:29.000 Also, is there a way to maneuver not putting a down payment from your own pockets?

01:13:32.000 Yeah, so if you want to buy a house, like there are no 0% loans unless, well, that's not exactly true, right?

01:13:39.000 If you're VA, they're 0%.

01:13:41.000 If you're USDA and you're willing to live super rural, they're 0% down.

01:13:45.000 So there's a handful of 0 down products that are out there.

01:13:48.000 But really, you know, for most people, you're going to save a 3% down payment.

01:13:52.000 That's going to get you into a house. 0.99

01:13:54.000 Banks are built on basically running your financial situation.

01:13:57.000 If you have an average financial situation for a person, for example, coming out of college, and if you've built your credit up to something really, really basic, go talk to a bank, get qualified, find out what you need to do.

01:14:07.000 When I got started in real estate, I couldn't qualify.

01:14:09.000 My mentor said, hey, you're gonna need to state your job for 14 more months so that you get your two-year track record.

01:14:14.000 I need to put five grand in the bank for your tiny down payment on a tiny little house. 1.00

01:14:19.000 And then I need you to go get two more credit cards and use them responsibly and keep them paid off.

01:14:23.000 And I did those three things and 14 months later, I barely qualified by the skin of my teeth to get my first house.

01:14:28.000 Wow.

01:14:28.000 That 3% down payment?

01:14:31.000 Became equity in a house that I took out to buy my second house.

01:14:34.000 The second house bought my third house.

01:14:36.000 And you fast forward to 25 homes later, four years later, I had $1.6 million net worth all on a $3,300 down payment.

01:14:43.000 Boom.

01:14:44.000 Think about this, WFreshFit, no one else gives this much value.

01:14:47.000 You know it, guys.

01:14:48.000 Nobody stops us.

01:14:50.000 Hey Chris, I've got a home I bought for $445K in 2020 at 3.25%.

01:14:54.000 I owe $385K now and I'm debating on selling it right now for between $650 to $690.

01:14:59.000 My payment is $2500.

01:15:00.000 I think I can rent it for $4K. Should I cash out the $200K or go ahead and rent it out?

01:15:04.000 I was thinking the same thing that others are that it's going to crash.

01:15:08.000 Okay, so a couple of things for you.

01:15:09.000 Number one, the market is not going to crash.

01:15:11.000 Number two, I don't keep any rentals that are worth more than $300,000 because when the market does eventually crash, I think we're a decade out on that, I think you're going to get spanked.

01:15:19.000 So for me, if I were you, I want to sell that house even if I have a $1,500 a month cash flow, I'm going to take my $200,000 of gains and I'm going to use that to buy two or three homes at a lower price point in one of the top markets where I'm going to get a higher performance on my money.

01:15:33.000 So a question for you, actually, I was gonna ask this.

01:15:35.000 When it comes to renters, you said you want them to make 60k per year, bare minimum.

01:15:40.000 What about credit score? 0.84

01:15:41.000 Because I've noticed, like, with credit score, I'm not putting anyone else in that's under, like, 720 or something, because I've seen people that make 100, and they still fucking don't pay rent.

01:15:49.000 Yeah, we're 680, 690 minimum, and then anything on up is good.

01:15:53.000 But yeah, if they have credit glitches, like, that's definitely a red flag that the moment they have problems, they're going to, like, poke around and figure out, who can I get by not paying?

01:16:01.000 Now, I'm also a professional organization, so I also know how to kick people out immediately and there's no bleeding hearts on our side of the fence because it's a business.

01:16:08.000 How do you go about...

01:16:09.000 Evictions.

01:16:10.000 Yeah, evictions.

01:16:11.000 How do you go about that? 1.00

01:16:12.000 It is a pain in the ass. 0.99

01:16:13.000 I've done it a few times. 0.99

01:16:14.000 One time I did it.

01:16:16.000 I do not recommend, unless you're going to be that Malcolm Gladwell 10,000 hour expert, you should hire a property manager and take a cut in the cash flow and have a professional manage that for you because your bleeding heart is going to get you in a lot of problems.

01:16:28.000 Like, running a real estate long-term rental business is actually a very tough business emotionally unless you're really bred for it.

01:16:34.000 So, I would rather take a cut in cash flow and I'm going to have someone else come in and manage it for me.

01:16:39.000 So, I don't have to worry about that.

01:16:40.000 By the way, cool little trick.

01:16:42.000 People don't know this one.

01:16:43.000 When I go into a top market and I bring all my partners with me and every day we're buying homes there, I find a property manager where I can take advantage of them.

01:16:52.000 This is going to sound a little bit bad but I'm just going to kind of tell you one of the little hacks here.

01:16:55.000 That when you're a nobody and you go to an out-of-state and you go buy a house and you find a property manager there, you don't mean anything to them.

01:17:03.000 You mean 100 bucks a month, 150.

01:17:04.000 There's no loyalty.

01:17:05.000 100 bucks a month don't get you any loyalty.

01:17:08.000 So what I do is I find, I stay away from the large companies that manage thousands of homes.

01:17:14.000 I find one that manages like 500 homes and I know in the next year or two I'm gonna bring them 500 more.

01:17:19.000 I'm gonna double their operation in two years.

01:17:21.000 They're not, they're gonna view me as a single client and so instead of charging me 10%, I sometimes can get them all the way down to 6%, but because I'm half their portfolio, They basically treat me like I'm the boss.

01:17:33.000 And so now what I do is I have bought loyalty in mass.

01:17:36.000 So it's bulk that actually gets loyalty.

01:17:39.000 That's one of the things that my partners love is they're not an individual buying a home with me.

01:17:43.000 They're really part of a collective even though they have individual ownership.

01:17:46.000 And so you should always look for ways of bulk.

01:17:49.000 Because bulk is how you drive up ROI. Like you look at what I'm doing there on my rent fees going down from the property manager.

01:17:57.000 That translates into a higher cash on cash ROI. So you mentioned earlier that you're getting in, you're buying, you're holding for a bit, and then you're selling three to five years out.

01:18:07.000 Usually five.

01:18:09.000 I'm doing like a five-year hold.

01:18:11.000 Maybe a seven on the high side, but sometimes only three.

01:18:13.000 Okay.

01:18:14.000 Because I'm waiting for the market to go up to a certain level, and then the market's going to keep going, but I want out because it's outside of my buy box.

01:18:21.000 So when I left Phoenix, like watch this.

01:18:23.000 I go into Phoenix and 2009, 10, 11, I'm buying homes for $120,000, $130,000, sometimes $90,000, that we're selling for $250,000 to $300,000.

01:18:32.000 Once that market came back to 80% of its original value, I left the market.

01:18:38.000 It kept going up.

01:18:39.000 But I didn't want that money.

01:18:41.000 The first money that I made, the first hundred plus thousand dollars, that was the safe money.

01:18:45.000 The next 50 grand, that was way riskier.

01:18:47.000 So, my strategy is not to get...

01:18:50.000 I want the low-hanging fruit.

01:18:51.000 I don't want the high-hanging fruit.

01:18:53.000 So, in the markets, I'm going to stay there for the first 5 years.

01:18:55.000 I'm going to watch affordability get crunched as we're making all of this money.

01:18:59.000 And then when that market normalizes and has gone from a really juicy opportunity to an average opportunity, I'm bailing on that market and I'm finding the next market where affordability is low, all my macroeconomics line up, and I'm going to go start discharging all my money in that market again.

01:19:15.000 Gotcha.

01:19:15.000 So you're holding it for a period of time where it's the most profitable, then you leave.

01:19:19.000 And you said once it's out of your buy window, which I think you said your buy window was somewhere between $250K to $300K. Yes.

01:19:25.000 So let's say you buy that house for $200,000.

01:19:27.000 Market gets better, it goes up to $300,000.

01:19:30.000 You're getting out at that point.

01:19:31.000 Not necessarily $300,000 because that's a moving number that's going to keep on moving.

01:19:34.000 Oh, $350,000.

01:19:35.000 It might be at that point $350,000.

01:19:36.000 And it's like, I made my $150,000.

01:19:38.000 Of course that market's going to keep going up.

01:19:40.000 In fact, everyone's excited about it, but my ROI start getting squished and they start going down.

01:19:45.000 And I'm greedy.

01:19:46.000 I want my 60% ROI. I don't want a 30% ROI because that's now what that market's turned into.

01:19:51.000 Okay.

01:19:52.000 Now question, because a lot of people are big on buying and holding etc.

01:19:56.000 Do you just feel as though taking that money and going into another market is going to present far more opportunity than buying and holding and just keeping it consistent?

01:20:02.000 No, it's actually not.

01:20:03.000 It's about a different type of multiplication and velocitizing my money.

01:20:07.000 So think about this.

01:20:08.000 You bought your house for $330,000.

01:20:10.000 Now your house is worth $650,000.

01:20:12.000 Right now I'm panicking if I'm you because I got $300,000 and I want to do a cash out refinance and at least pull out $150,000.

01:20:19.000 Why?

01:20:20.000 Because I'm gonna go buy two more homes.

01:20:21.000 Because if one home has been doing that well for you, imagine if you had two more.

01:20:26.000 So you now go buy three.

01:20:27.000 You wait five more years and it's like, uh-oh, I can keep these homes or sell these homes, but either way I can take my three homes and I can turn them into seven homes.

01:20:35.000 If one was good and three was better, then seven is going to be the best.

01:20:39.000 Now I'm going to transfer to seven.

01:20:40.000 And I don't have to pay taxes when I do this.

01:20:42.000 I don't have to pay on any of my capital gains because of my 1031 exchange.

01:20:45.000 Or I'm doing a cash-out refinance, which is, you know, pushing off and deferring my taxes.

01:20:50.000 So think about this.

01:20:52.000 Like, let's go really simple numbers.

01:20:54.000 You're earning a 25% ROI on average on every home.

01:20:57.000 Let's just say you're doing 25%.

01:20:59.000 You put your money in a home, it's earning you 25%.

01:21:02.000 If you can sell it and trade it for three more, now I'm making 25 here, 25 here and 25 here.

01:21:07.000 I'm making 75.

01:21:09.000 Okay.

01:21:09.000 If I go by, if I could double my portfolio again to six homes and I earn 25 on each one of them, it's 25, 50, 75, 100.

01:21:15.000 I'm earning 150.

01:21:17.000 More homes earning that ROI is literally more money.

01:21:21.000 So part of the reason why I sell in five years is because either way, I need to get out and transfer it into a larger portfolio.

01:21:28.000 Hence, This is how I can compete against Grant Cardone's, the multifamily game where they're like, dude, I just buy one big complex with all the doors and it's all done.

01:21:37.000 I'm like, I get it.

01:21:38.000 My system looks harder because I'm buying them individually, but I'm getting higher performance on all of them.

01:21:43.000 And I'm going to sell these homes and trade up for more.

01:21:46.000 And that's where I'm going to get a crazy compounding effect.

01:21:49.000 You're getting just wild volume.

01:21:51.000 Wild volume, man.

01:21:52.000 So I want to get out anyway, just because I got to sell them and trade up anyway.

01:21:56.000 That's clever.

01:21:57.000 You need a team to do that.

01:22:00.000 Obviously you're watching the markets, you're obviously tapped in, which is good because you're going to be more informed than 99% of real estate investors because you're constantly looking at markets, you're constantly buying and selling, and you know what's going on.

01:22:11.000 I think working with Chris, you're pretty much getting the team.

01:22:14.000 He deals with that for you.

01:22:15.000 Do you know how big that team is?

01:22:19.000 That's 200 people.

01:22:20.000 I was gonna say, you gotta have a couple hundred.

01:22:21.000 Holy!

01:22:22.000 Because you're looking at different markets.

01:22:23.000 Hey, this house is coming up now.

01:22:25.000 We need to get out.

01:22:26.000 You probably have...

01:22:27.000 I don't want to say stop losses.

01:22:28.000 That's a crude way of saying it.

01:22:29.000 But you probably have...

01:22:29.000 No, that's fair.

01:22:30.000 Okay.

01:22:30.000 That's exactly what it feels like.

01:22:32.000 It's like we put in our offer.

01:22:33.000 We know where we need to be at.

01:22:34.000 If we're off by a grand, we're out.

01:22:36.000 Yeah.

01:22:37.000 And then there's houses that are coming up like, okay, this is starting to get out the buy box.

01:22:40.000 We gotta sell this.

01:22:41.000 Yeah, you need a team for that.

01:22:42.000 That's a lot of knowing when to sell, when to...

01:22:45.000 Oh, God.

01:22:45.000 Performance.

01:22:47.000 Because with single-family homes, since the cash flow isn't as much as you would say, you need to buy more of it, but it has better returns in general.

01:22:54.000 We're like two-man armies, three-man armies by ourselves.

01:22:58.000 Twin people is a lot. 0.76

01:22:59.000 That's great.

01:23:00.000 That's how they find the deals.

01:23:02.000 What else do we got here?

01:23:03.000 Big shout out to Fresh and Fit.

01:23:04.000 And guys, don't worry, we're going to do the Cali Muscle interview coming up shortly here.

01:23:07.000 We're giving y'all four episodes today, man.

01:23:09.000 Well, we filmed one earlier, but we're going to do three episodes live for you guys.

01:23:12.000 Big shout out to Fresh and Fit.

01:23:13.000 Change your lives out here.

01:23:14.000 And great meeting you, Bills and Brickell.

01:23:15.000 Happy to chop it up with you when you're waiting to leave.

01:23:18.000 We're waiting to leave.

01:23:19.000 Sir Douglas?

01:23:19.000 Sir Douglas.

01:23:21.000 Retirement for police, $320,000, $457,000 plan, $147,000, $5,000, and my 401k.

01:23:26.000 Let's do it.

01:23:27.000 Okay, I appreciate that.

01:23:28.000 Okay, Kim Pop came back!

01:23:29.000 Okay, so retirement for police, $320,000 stuck in a $457,000, which is like a 401k.

01:23:35.000 So, you know, what you want to do is you want to talk to your custodian in HR and ask them if you can do what's called an in-service distribution.

01:23:42.000 This will reveal how much of that money you can take out.

01:23:44.000 Now, they're going to discourage you from doing that because when you do that, they're going to say, oop, we're going to slap you with taxes and penalties.

01:23:49.000 Penalties 10%, that's $32,000 off the top.

01:23:52.000 Then it's going to look like you've got $290,000 coming as personal income that year.

01:23:57.000 That's going to pop you into a really high tax bracket.

01:23:59.000 You can avoid all that by actually dropping it in a self-directed 401k, which is your way of saying, I want it out of the 401k market and I want it in my hands in a special device that I can deploy into real estate.

01:24:12.000 So, if you can do that, you can avoid taxes, avoid penalties, and you may have a full $320,000 right now that you can start investing in real estate.

01:24:20.000 On top of that, you've got $147,000 in another plan and $5,000 in just your traditional 401k.

01:24:26.000 So you're in a position, Kim Pop, where first of all, thank you for your service.

01:24:29.000 Thank you for doing a very hard, dirty job.

01:24:32.000 And you've got the ability to easily, I believe, with a little bit of time, become a multimillionaire in the game of real estate.

01:24:37.000 Wow.

01:24:38.000 Absolutely.

01:24:40.000 What else do we got here?

01:24:41.000 I pulled the money out of my 401k when I left law enforcement and I bought a real estate, man, because, yeah, man...

01:24:46.000 Guys, the stock market, S&P 500, whatever, yeah, you're fighting for pennies, man.

01:24:50.000 You're fighting for single-digit returns.

01:24:51.000 Like, people brag, S&P 500 gives a 10% return!

01:24:55.000 Yeah, like 7% to 10%.

01:24:56.000 Cool.

01:24:56.000 They're bragging about that.

01:24:57.000 It's like, bro, come on, man. 1.00

01:24:58.000 But you don't get the tax benefits, none of that shit. 0.99

01:25:00.000 What do we got here, JTK? Yeah. 0.99

01:25:03.000 Okay.

01:25:03.000 401K is a way to get a lower taxable income while saving that part of your on-tax paycheck and earning interest on that.

01:25:11.000 How is that a failure?

01:25:11.000 Go ahead.

01:25:12.000 Yeah, I want you to go to my YouTube channel, and I want you to look up the video, 401K Scam, and I'm going to share with you the five ways that the 401K is a scam.

01:25:20.000 Because JTK... You're getting a lower taxable income?

01:25:24.000 False.

01:25:25.000 Anytime you take money out of your 401k, you will be taxed.

01:25:28.000 Here's the lie that you've been taught that you don't understand.

01:25:31.000 What you're saying is, when I retire at 65, I then can take it out and I don't have my 10% penalty, but whatever you take out, you're going to pay taxes on.

01:25:38.000 And here's the horrible lie.

01:25:40.000 You're going to take it out a little bit each and every year to live off of, and because you're only taking out a little, you're going to pay a little bit in taxes.

01:25:47.000 I got news for you.

01:25:48.000 That has nothing to do with a 401k.

01:25:50.000 That's just called tax bracket based on how much money you earn for the year.

01:25:53.000 So, like, it's a total farce.

01:25:55.000 No, your 401k gives you zero tax benefit.

01:25:58.000 Go to 401k Scam on my YouTube channel.

01:26:00.000 Let me educate you on the truth about 401ks.

01:26:02.000 And real estate is going to give you a way better tax benefit.

01:26:05.000 It doesn't even come close.

01:26:07.000 Real estate effectively lowers how much money you make per year just off of depreciation alone.

01:26:12.000 We haven't even talked about cost segregation or whatever.

01:26:14.000 I told you guys the example before of when I made $120K versus $1.2 million and how I paid the same amount of taxes on 10x the income.

01:26:22.000 And it's because of real estate, guys.

01:26:23.000 Which is crazy, by the way.

01:26:24.000 Come on, man.

01:26:25.000 It doesn't even come close.

01:26:26.000 Think about this. 0.98

01:26:27.000 Like, people talk shit about Trump all the time, like, oh, Trump didn't want to show his taxes, blah, blah, blah. 0.99

01:26:30.000 Well, he probably didn't pay taxes. 0.99

01:26:32.000 Why?

01:26:32.000 Because he's a real estate investor.

01:26:33.000 He was able to depreciate, cost aggregate, a bunch of other stuff, and it's all legal.

01:26:36.000 Jeff Bezos, Amazon warehouses, same stuff.

01:26:37.000 It's all legal, dude.

01:26:39.000 It's how the wealthy stay wealthy and they don't pay taxes. 0.97

01:26:41.000 They make the joke that Warren Buffett paid less taxes than his secretary, which I believe, because Warren Buffett talks a lot about stocks and all this other shit. 0.86

01:26:47.000 He's heavily in real estate, too. 0.95

01:26:50.000 What do we got here?

01:26:50.000 Think about this.

01:26:51.000 Chris, I saw a YouTube short saying you let your wife have guy friends and they have private little walks together.

01:26:57.000 What occurs during those walks?

01:26:58.000 What does that even matter, bro?

01:27:02.000 I just think that's taken out of context.

01:27:05.000 My wife and I, we've got a lot of great friends and we're really secure in our relationship and our marriage together.

01:27:12.000 I think there's a lot of trad wives out there that are like, oh, I'm just stay at home and then I basically put food on the table for my husband and that's it. 1.00

01:27:19.000 My wife works in our foundation.

01:27:20.000 We're going to Guatemala next month.

01:27:22.000 We're taking our four kids with us.

01:27:24.000 And this is really cool.

01:27:25.000 We've got 71 kids that we support that have come out of sex trafficking.

01:27:29.000 And we basically pay for their therapy, their food, everything.

01:27:34.000 And then basically help bring them back to life.

01:27:37.000 We went to Ukraine three times during the war so far in the last couple of years.

01:27:41.000 We've got a safe house in Mexico with kids that are pulled directly out of sex trafficking that we support.

01:27:46.000 And so my wife is an activist.

01:27:48.000 She's out there.

01:27:48.000 She's an action taker.

01:27:49.000 And she's just got a huge heart.

01:27:51.000 So she's out there doing just beautiful work and helping people.

01:27:54.000 What's up, man?

01:27:56.000 That's a good leader.

01:27:57.000 Yeah.

01:27:57.000 People, Vargas goes, hey, I'm 22 with 35K investments, stocks, crypto.

01:28:01.000 Should I cash out my investments and start looking for a property or just keep saving and adding to my portfolio?

01:28:06.000 Okay, this is a really good question.

01:28:08.000 The question is, when you're young and you're saving money, where should you save it?

01:28:10.000 First of all, crypto's an investment.

01:28:12.000 It's insanely risky.

01:28:13.000 I believe in crypto, but there's less than 1% of my net worth that's actually sitting in it.

01:28:18.000 I think that it is mostly a great game for hodling and for basically the long game.

01:28:22.000 The rest of the money that you've saved up in stocks, I actually keep my money in life insurance.

01:28:27.000 Now, there are rare types of life insurance policies that pay out a very consistent 5%, 6%, 7% year over year, and so they don't dip and move with the market.

01:28:36.000 They're just actually paying you a really great return.

01:28:39.000 I save my money, I stash it basically in life insurance and let it build up until it's time to take it out and put it into real estate.

01:28:46.000 But listen, you're 22, obviously you've got a job.

01:28:48.000 If you already saved about $35,000, you should already own your first house.

01:28:51.000 And if you own your first house, you should pull it out and put it into your second house and have your roommates pay the mortgage.

01:28:57.000 Boom.

01:28:58.000 Okay, what else do we got here?

01:29:00.000 I miss your funny hats.

01:29:02.000 Epidem, can you guys do a real news IRL stream where you ask regular people about the real news and see what they think?

01:29:08.000 I guess maybe in the future.

01:29:10.000 ITK goes, a 401k is a way to get a lower taxable income.

01:29:13.000 Oh no, that's it.

01:29:14.000 Oh, we got it?

01:29:15.000 That's it.

01:29:16.000 We did them already.

01:29:17.000 Oh, we did?

01:29:17.000 Okay, CEOs need...

01:29:18.000 What do you guys think of Nick Rochefort?

01:29:21.000 He does house reviews and financial advice.

01:29:22.000 Super funny guy.

01:29:23.000 Never heard of him.

01:29:24.000 That is...

01:29:26.000 I bought a three-bedroom co-op a couple years ago for $230,000 at 4.25 interest rate, monthly payment of $940,000.

01:29:32.000 I should be getting my settlement check by next year.

01:29:34.000 Should I pay my mortgage off when I receive my settlement check next year or invest in a property?

01:29:39.000 What kind of property should I get, by the way?

01:29:40.000 This is a good question.

01:29:41.000 Blue Silent, just right now, if you take that money and you pay that house off, I'm just letting you know I'm going to roll in my grave, I'm gonna die, and I'm gonna say that is the worst choice you could possibly make.

01:29:52.000 Because here's what's going down.

01:29:53.000 You have a $940 a month payment on a $230,000 house with a really cheap interest rate.

01:29:58.000 My guess is you're renting out and making several hundred dollars a month.

01:30:01.000 If you pay that house off, all you're going to do is increase your cash flow.

01:30:06.000 But here's the crazy part.

01:30:07.000 By not that much.

01:30:08.000 Not by that much, because when a house is paid off, You get a very low return.

01:30:14.000 The more real estate you buy with leverage, the higher ROIs you get.

01:30:18.000 So, really you should ask this question.

01:30:19.000 I want to answer the question, when do you pay something off?

01:30:21.000 Is that fair?

01:30:22.000 No, that's fine.

01:30:22.000 When do you actually pay something off?

01:30:25.000 Write this down, my friends.

01:30:27.000 When you have a passive income that is greater Then your ideal expenses that basically covers the lifestyle of your dream life, then start paying crap off.

01:30:41.000 But if you're like, I want to pay stuff off, but I don't have a passive income, your money is not supposed to pay stuff off.

01:30:47.000 Don't even pay off student loan debt.

01:30:48.000 You're supposed to use that money, and what do you do with it?

01:30:51.000 You buy investments that produce a passive income, and when that passive income is equal or greater than the expenses of your ideal life, now start paying stuff off.

01:30:58.000 You do it in the reverse order, you will wind up poor. 0.99

01:31:01.000 Damn. 1.00

01:31:02.000 Yeah. 1.00

01:31:02.000 No, that's great advice. 1.00

01:31:03.000 I mean, it's very simple, guys.

01:31:05.000 Like, earn more money, invest money into assets that pay you back, take money that comes from the asset paying you back, and then use that to pay your bills.

01:31:13.000 That's like working one job, trying to pay off debt.

01:31:15.000 You get two or three jobs, and pay it off faster.

01:31:17.000 Well, and let me give you a real life scenario.

01:31:19.000 When I had a net worth of $1.6 million when I was 26 years old, those 25 properties, I was millions of dollars in debt.

01:31:26.000 I want to be clear, I owed millions of dollars.

01:31:28.000 But after servicing the debts with all the rents that I brought in, I had $12,000 left over every month.

01:31:34.000 So, most people graduate college on a $50,000 a year average salary.

01:31:38.000 I graduated college with a passive $120,000 a year.

01:31:42.000 Now, you'd have to say, yeah, but Chris, I was millions of dollars in debt.

01:31:45.000 I said, yeah, but I had $12,000 and I didn't need a job.

01:31:48.000 Who was free?

01:31:49.000 I was free.

01:31:50.000 I had time freedom and I had money freedom.

01:31:52.000 I can do whatever I wanted.

01:31:53.000 The thing is, was I comfortable with debt?

01:31:56.000 And people, unfortunately, have been mis-indoctrinated about the word debt.

01:31:59.000 There's two kinds.

01:32:00.000 A bad debt, like I bought a boat.

01:32:02.000 It costs you money.

01:32:03.000 That's bad.

01:32:04.000 You shouldn't do that, right?

01:32:05.000 That's Dave Ramsey, and that's good.

01:32:07.000 He's right on that.

01:32:08.000 But you should be acquiring good debts.

01:32:10.000 What is a good debt?

01:32:11.000 A good debt makes you money.

01:32:13.000 So it's just like, what do you do with your money?

01:32:15.000 I acquired debts like what are you doing?

01:32:18.000 I'm going the guys right now put it put a hundred million dollars in front of me And I will sign it today because I know where to put it like I know how to make a hundred million dollars of debt Make me so much money.

01:32:28.000 I want that so you got to actually fall in love with good debt And then you've got to do everything you can to stay out of bad debt Got it.

01:32:35.000 And real estate, guys, is good debt.

01:32:36.000 Like, if you're using a bank and they're giving you 80% of the loan and you're putting down 20%, well, you put down just a fraction, you put down a fraction of it, that house is generating you money, and the person's paying down the principal for you like we were discussing before. 0.91

01:32:48.000 It's a fucking W. W. Because you're not paying the debt, guys. 0.97

01:32:51.000 They're paying it. 1.00

01:32:51.000 Well, vacancy! 1.00

01:32:53.000 Alright, cool.

01:32:53.000 You cover the debt for a month or two until you find another tenant.

01:32:55.000 Who cares?

01:32:56.000 It still pays for itself in general.

01:32:58.000 In the long term.

01:32:59.000 And it goes up in value.

01:33:01.000 Guys, people still have this weird concept in their head.

01:33:04.000 They hear debt and they think automatically it's bad.

01:33:06.000 But guys, real estate debt is the only debt, really. 0.97

01:33:08.000 I mean, I can't think of another one, really, that's like a good fucking debt. 0.93

01:33:11.000 I can't either. 0.92

01:33:11.000 No, I won't have as much as I can. 0.92

01:33:12.000 By the way, I would go into business debt.

01:33:14.000 Business debt.

01:33:14.000 Like buying businesses and then owing money on businesses.

01:33:17.000 I mean, business in some ways is way better than real estate.

01:33:20.000 Meaning, when you buy real estate, it's predictable, it's consistent, and you know how it's going to perform.

01:33:24.000 You can fast forward 10 years and you know exactly where you're going to be at.

01:33:28.000 But when you buy a business, what you can do is you can walk into some really huge active incomes.

01:33:33.000 Like, for example, Shark Tank.

01:33:36.000 Yeah.

01:33:36.000 Same thing.

01:33:36.000 You buy a business like that, it could do crazy numbers times 10, or maybe not so much, but it's a benefit.

01:33:42.000 And there's definitely risk to doing that.

01:33:44.000 Yeah.

01:33:45.000 But if you know what you're doing, it's like, hey, here's a company that's been around for 10 years.

01:33:48.000 You can buy this business for a million dollars.

01:33:50.000 You basically put 200 grand down.

01:33:52.000 They'll finance the other $800,000.

01:33:53.000 You buy this business, you're going to be 800 grand in debt.

01:33:57.000 Servicing the $800,000 is going to cost you, let's just call it $10,000 a month because it's really expensive seller financing.

01:34:03.000 But the business has a consistent positive cash flow of $30,000 a month.

01:34:07.000 Would I buy a business that have to pay $10,000 a month due to service that has $20,000 of net profits and has a 10-year history of that?

01:34:15.000 Yeah, I do that deal all day long.

01:34:16.000 Please, I want to be 800 grand in debt.

01:34:18.000 Why?

01:34:18.000 Because I want an extra quarter million dollars a year.

01:34:23.000 What else do we got here?

01:34:25.000 Chris, what would you recommend I do to pay off my debt slash build my credit and save money to invest in some type of property as a beginner?

01:34:31.000 3K in capital, 5K in credit card debt and collections with a shit credit score sitting at about 530, 560, joining the army in two weeks, four-year contract, 20K bonus, maybe 16K after taxes, 23 years old, and fairly educated credit.

01:34:42.000 Just allowed myself to drop off mentally and gave up for about two years. 0.54

01:34:45.000 Myrna Fresh, I appreciate your opinion as well.

01:34:48.000 TIA. Yeah, you fucked up, bro. 1.00

01:34:50.000 I'm gonna keep it a thousand with you. 1.00

01:34:51.000 Fucking up your credit like that is a problem. 0.98

01:34:53.000 And having credit card debt is absolutely gonna hurt you there. 0.98

01:34:55.000 But you're young, yeah.

01:34:56.000 You can change it.

01:34:57.000 Chris, what do you want to say here?

01:34:58.000 I'd say that credit card debt is the biggest problem, right?

01:35:00.000 Yeah, so I take that $20,000 and because of the situation that you're in, I would pay off the $5,000 of credit card debt.

01:35:07.000 That's not a lot of debt, but what you've got to be doing is building your score back.

01:35:11.000 So you're going to probably put out $1,000 and you're going to hire a credit repair company and say, hey, help me rebuild my company.

01:35:16.000 Because when I come off of active duty, I would like to step back into good credit and I basically want to have a do-over.

01:35:21.000 So, you get $20,000, you take $5,000, you pay off your debt, you pay $1,000, you find a credit repair company that's going to help you build it back.

01:35:28.000 What do you do with the other $15,000?

01:35:30.000 Well, now you've got VA for 0% down, technically you already have 3% down payment on a house, and go buy a house!

01:35:37.000 When you come out, you'll be able to put no money down and you'll make a bunch of money and you'll be able to save because you'll be active and you won't be able to even spend that money.

01:35:44.000 But loader beans, I just got to tell you, there's a ton of people in your situation that they actually ignore their bad credit because they're feeling shame and guilt and embarrassment.

01:35:51.000 And 10 years later pass and they still have the same dang credit score because you didn't take active measures.

01:35:57.000 So I want you to attack the problem.

01:35:59.000 Don't ignore the problem.

01:35:59.000 Yeah, it hurts at the very beginning seeing it and like, damn, this is what I'm into right now, this much debt, but once you pay it off, you're gonna feel a weight lift off your shoulders, bro, and you can focus on investing like what Chris said.

01:36:10.000 Yeah, get rid of the credit card debt first, man, because the problem with the credit card debt, right, is that the interest rate is too high for you to, like, stave off.

01:36:18.000 Because the problem with credit cards is it fluctuates between...

01:36:21.000 I've seen as low as 13% all the way to 30% on credit cards, and it fluctuates.

01:36:25.000 It's crazy.

01:36:25.000 So you've got to pay that off immediately, bro.

01:36:27.000 Because even if you get a property with amazing ROI, that credit card is going to eat into everything you're doing.

01:36:32.000 Yep.

01:36:33.000 And it hurts your score.

01:36:34.000 That's a big one.

01:36:35.000 Bought a three-bedroom, two-bath last year for 320 at 5.2% principal.

01:36:39.000 It's 1,800 mortgages, 2,400.

01:36:41.000 In two years, I'll be moving on orders.

01:36:43.000 Okay.

01:36:44.000 Be buying another single family home, $275,000 to $300,000 while renting out the first property.

01:36:48.000 What should I be doing and looking for to buy more to build my portfolio, et cetera?

01:36:54.000 All right.

01:36:54.000 So first of all, you're in a great position because your first purchase was a 3-2.

01:36:58.000 You did it for $320,000.

01:37:00.000 You still got a relatively low interest rate.

01:37:02.000 And you rent that out, you're going to be positive cash flow.

01:37:05.000 I like that.

01:37:06.000 On your second house, it looks like you're going to be in an even lower price range, $275,000 to $300,000.

01:37:11.000 That's also a really smart thing for you to be doing.

01:37:14.000 Two houses are going to build up equity faster than one home.

01:37:17.000 So I like the move.

01:37:18.000 So let's just say you wait three years and you've got $60,000 in one house, $60,000 in the other.

01:37:23.000 You've got $120,000 between the two of them.

01:37:25.000 Well, now you've got some money between the two that you can hopefully pull out and go buy a third house without needing to move again.

01:37:30.000 Very, very smart.

01:37:34.000 Yeah.

01:37:34.000 Alright, I think, uh, cause we gotta get Chris out of here, guys.

01:37:37.000 He's got shit to do. 0.98

01:37:38.000 Yeah, we do. 1.00

01:37:38.000 We do. 1.00

01:37:39.000 Yeah, uh, so, cause Chris is a busy man.

01:37:41.000 Chris, where can I find you, brother?

01:37:43.000 What's coming up next?

01:37:43.000 Everyone can go to chriscrone.com, but the thing is, if anyone wants to get a free game plan, one of the things that I What I love to do is I give everyone a multi-millionaire's perspective on what would I do if I were you.

01:37:53.000 We did a little bit of that today, but we actually go really, really deep.

01:37:55.000 I got a team of 25 trained people on my staff that basically know how to deliver a perfect textbook Chris Crone game plan.

01:38:02.000 So it doesn't matter whether you're worth a lot of money or you're worth nothing, you can get a multi-millionaire's perspective.

01:38:07.000 And here's what it does.

01:38:08.000 It gives you options and opportunities that are blind spots to you.

01:38:11.000 That if you act on, you're going to put yourself in a smarter financial position and everyone has to start from somewhere.

01:38:16.000 So if you want to become a multimillionaire in the game of real estate, that's not even a lot of money anymore.

01:38:20.000 If you want to make a few million bucks, get someone else's perspective.

01:38:23.000 I'm willing to give you that perspective entirely for free.

01:38:25.000 And on top of that, come and actually join me live September 13th, 14th, and 15th here near Miami.

01:38:31.000 We're actually putting on the Clever Summit.

01:38:34.000 I'm one of 20 different speakers.

01:38:36.000 Where Florida is it going to be?

01:38:37.000 That's going to be...

01:38:39.000 In Florida.

01:38:42.000 But here's what I can tell you.

01:38:45.000 During those three days, we've got Ryan Serhant coming out.

01:38:48.000 We've got Cody Sperber, Jen Gottlieb.

01:38:49.000 We've got Patrick Bet-David.

01:38:52.000 We've got some of the biggest names in real estate that are going to be taking that stage for three days.

01:38:56.000 It's close by.

01:38:56.000 It's very, very close by.

01:38:58.000 And so coming out to the event, there's a link if you go to www.chriscrone.com forward slash fresh gift.

01:39:05.000 And you get the tickets there, and then on top of that, I'll give you a free game plan.

01:39:09.000 So request a free game plan, connect with me and the team, come see me live for three days, and let's help you get straight in the game real estate.

01:39:15.000 Well, maybe we'll pull up, guys, while he's down here in Florida.

01:39:18.000 The link is in the description right now, so if you guys go ahead and click in the link in the description right now, you're going to get immediate access to that.

01:39:23.000 There you go.

01:39:24.000 Free value.

01:39:25.000 And what we'll do, guys, is...

01:39:26.000 I know some of you guys had questions or whatever.

01:39:27.000 We'll have...

01:39:28.000 I'll coordinate with Chris.

01:39:29.000 We'll do a private Zoom call with you guys.

01:39:31.000 A council club.

01:39:31.000 And you guys can get more information on, like, if you want to partner with them, whatever.

01:39:34.000 Because the guys in the council club, a lot of you guys are serious about making money and you guys have questions on this stuff.

01:39:38.000 So we'll definitely, like, do a private Zoom call where Chris can go into more detail and give you guys some sauce.

01:39:42.000 And, you know, you guys definitely want to partner with them.

01:39:44.000 We're talking about doing something on the side as well.

01:39:46.000 So anything else, Chris, before we close out?

01:39:49.000 No, man.

01:39:49.000 It was great.

01:39:50.000 It was awesome.

01:39:51.000 Listen, this is an amazing time to be in the game of real estate.

01:39:53.000 Please ignore everyone that is saying wait.

01:39:56.000 Waiting is costing you everything.

01:39:58.000 He could be waiting a long time.

01:39:59.000 Yeah, guys. 1.00

01:40:00.000 Don't listen to the idiots, man. 1.00

01:40:01.000 Guys, we're back here with Callie Muscle in a little bit, man. 1.00

01:40:04.000 Love you guys.

01:40:04.000 Peace.

01:40:05.000 I ran.

01:40:06.000 I ran so far away.

01:40:10.000 I just ran.

01:40:12.000 I ran all night and day.

Fresh & Fit - August 02, 2024

How To Make HUGE Returns On Real Estate!

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