Welcome to another episode of Passive Real Estate Investing. I’m your host, Marco Santarelli. And today we have what I’m calling part three of a series I’m doing called the 7 Common Questions Asked of Our Investment Counselors, all six of our investment counselors, talk to investors and clients, and they all ask different questions. Some of them are very similar as, you know, a lot of common questions, but every once in a while we, you know, have stuff that is different. And some people don’t even think about that question and they realize, oh yeah, that’s a good question. Maybe I should have asked that as well. And so I thought I’d interview or bring on each of my investment counselors or at least four of them to talk about the seven most common questions that they get asked in these seven categories that I’ve created. And the feedback has been really good at the first two. And so I’m gonna do at least another one or two, and today is number three. So with me today is one of our investment counselors, senior investment counselors, Michael. Michael, welcome to the show.
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I appreciate your invitation.
Yeah, definitely. Well, it’s good to have you on this is I think your first episode, is it not?
Yes, it is. And <laugh> with that lead in, I’ve some big shoes to fill, so I’m looking forward to it.
Well, I don’t know about that, but I’m happy that you’re on. So let’s have a nice conversation here today. So we, we did a little chatting before we started recording here and you had an interesting twist. We don’t need to get deep into it, but if you want to comment on it, you mentioned that most questions are instinctive. I thought that’s okay. That’s interesting. But you know, you’re angle that you might take here today is to answer these common questions from a more intuitive perspective. Do you want to comment on that real quick before I start diving into the seven areas?
Yeah, absolutely. And part of where this came from is more of just been doing this for about five years with the rental properties, been in the financial industry, investing over 25 years. And when you had asked me to come up with the common questions, what I’ve noticed, a lot of my clients, a lot of my investors is there’s really two sets of questions in a general kind of form that they have on all of our calls. You had mentioned the instinctive questions. And those to me are more the, the obvious, the procedural type questions, or like a lot of people refer to the how to questions, what mark, how to put the pieces together. What should I expect things of that nature, but where I’ve seen where at some of the most important questions are those intuitive questions and what I mean by that?
These are my clients. When I get on the phone, they are asking the question, maybe not specifically in word form, but it’s those intuitive questions of why, why do I invest in real estate? Why should I invest in rental real estate? Why should I use turnkey rental teams to manage my properties? Because for me in all of my years of investing asset classes have cert time of the years or certain events, you can look back on the late eighties, early nineties with the advent of the semiconductor and Moore’s law and increasing computing power technology was the asset class to be investing in. You could maybe even look to mid 2000 with the advent of the commodities and you had that run with China expanding. And so every asset at class does have an environment that is why we should be investing. So I really would like to kind of take more of the approach to help our clients think of it as more or the why question, answer the why question. And if you agree with the why question, the answer, then all of the instinctive, all of the procedurals, the how tos are just pretty simple and more specific on each individual.
Got it. Okay, well, I’ll set the stage and then I’ll let you take it wherever you want. So I might conduct this the same way I did the previous two recordings for this type of episode, but we’ll just take it wherever it takes us. Love it. Okay, Michael. So the first area that is really in the beginning, so the getting started and I typically ask, you know, what is the most common question you get from clients and investors as it relates to getting started? And that could be literally anything from, what do I read? Where do I start something related to financing? Am I making the right decision, even getting started in real estate investing, it could be anything, but this is before we have a conversation about markets, neighborhoods and properties.
And it’s kind of the latter of the questions that you have measured. It’s should I get into real estate? Why should I be looking at this asset class? And that kind of is one of the reasons when I was thinking about, of how to have this conversation with you is really to focus on those intuitive questions. And for me, the, that is the question to answer why rental real estate, because once you know, this is where I want to invest my capital, it’s gonna help bring all the pieces together and very bluntly and very straightforward. The reasoning why rental real estate is the asset class of choice. And my humble opinion is increase in inflation as well as cheap cost of capital. You look back over history. You look back in the late eighties when we had the high inflationary period, and those yields were at 15, 20% on some of the 30 year mortgages borrowing costs were so high.
So why rental real estate has been the asset class of choice is a low cost of capital being able to maximize your initial invest. But really what’s been driving over the last 18 months is inflation. And as people have been paying attention to the market, chairman Powell switch from transitory now to more sticky inflation and why this is so important is in an inflationary environment in order, or to preserve capital and maintain your income or your growth to inflation being in an asset that produces income helps mitigate any of the inflationary pressures that you might have. So looking forward, having your capital, not inequities, not in stocks that are based on future earnings, but having those hard assets, having those income producing assets and best of all, having those income assets purchase with leverage today puts you in a tremendous protection period. It as well as in a great spot to really take advantage of the environment that we’re seeing in the next three to five years,
I love it. Those are two very, very big reasons. And you basically answered the why question by saying that it’s inflation and we have a high inflationary environment and real estate is a natural inflation hedge. In fact, it experiences price appreciation because of the inflationary environment. And secondly, we have ultra cheap capital available that allows you to not only acquire real estate with a low cost of capital, but you’re borrowing at historically low rates of interest. Absolutely. And so those are two perfect call it the perfect storm, but those are two tremendous advantages of being in real estate and a real estate investor. Did I get it all right?
You got it right. And let me add something, not even is better, not only is an inflation driving up the appreciation value of the asset, that’s your real estate. But if you kind of caught what I said at the beginning rental real estate, and why that’s important is your rents will track inflation. So over time, if inflation go and services, that’s what your inflation is. So goods and services, that’s not only is the goods you’re buying or the services you’re paying, but it’s also your home, your shelter, which is my memory serves me, correct. It’s about 33% or about a third of the CPI. And why that’s so important is if inflation is moving forward, not only is your house price being driven up, but also your rent roles are being driven up. And why is that important to a rental investor? It means in the future, you’re generating more income.
You’re generating a higher cashflow because of inflationary as well as growth expectations in the future. And to bring it all in circle to what you had alluded to about cheap cost of capital. If I I’m borrowing today, I’m locking in my rate of, of interest rate my cost of capital. But if I’m using my cap rate, if I’m using the income production of this asset to pay that mortgage down and accelerate the paydown, if that income is following an inflation, it means I’m making more money in the future. And using that to pay off in cheaper dollars of my loan. That is your perfect storm.
That’s huge. That is very powerful. I mean, that is wealth acceleration right there. Even if you don’t get ahead, you’re certainly beating every other asset class.
So eating every other asset class across board, and that doesn’t include all of the tax savings that, or at least to set date that the government does have. So you’re right from an asset class perspective, it’s really hard in this environment to say that is gonna be better.
Good stuff. I mean, those are topics that we could spend hours on. And I really think you hit the bullseye there with the inflation and cheap capital, as far as, you know, what intuitively speaking the most common question would be about real estate investing and getting started. So let’s transition from that. If, unless you have anything else to add to it about the most common question that is market related. And again, I’ll let you take this however you want to take it and answer it however you like.
Yeah, from a market, the intuitive part from the market. I think we covered it quite well. And then of course, get on the call with one of us. We can the investment counselors and we can get into more detail along that end. But the other intuitive aspect that I like to bring up that maybe is not wasn’t thought of before is more of the intuitive question of why turnkey, why not I do it myself because my wife and I, we have, I think we’re going on our fourth asset now. And it’s always that question. When I talk with new clients, new investors is I don’t wanna deal with tenants. I don’t wanna deal with headaches. I don’t wanna deal with fixing things. Now it, now of course you do it yourself. You should be getting paid more, but there always is that question that I have with my clients of why should I invest with an out of state team someplace?
I don’t know, or some team, I don’t know that I can’t go over next door and kick and knock on the door. And the real simple answer to that is because your time is worth more for, for you than that. And in this environment and what Norada, what our group does is helps take a little bit of those bricks out of that bag. We do a lot of vetting of our teams and we help provide our clients with these are the teams that are highly skilled old and from a numbers from an investment standpoint, the why do I do turnkey is so I don’t have to worry about any of those issues, but equally. So I know that I have a great team, a great management team, a great maintenance team. That’s taking care of my asset. So as long as that asset is producing as such, that helps mitigate a lot of what new time, real estate investors, rental, real estate investors have of the, I don’t want to be dealing with headaches.
This is not your parents buying a house in the early sixties, around in the corner as a rental, going over fixing thing. This is an investment and really that intuitive, why turnkey, because I don’t have to deal with any of the headaches that come with owning real estate. I can view my asset as an investment. And what Nora has done is brought together those teams that we have a high degree of confidence. So that’s that other part of the intuitive questions that I always get? It might not be the specific question why turnkey, but it is that general of why should I invest with somebody not around in my neighborhood, not in my area. Why should I have confidence in them? And that really in my opinion, is why it not worth your time, as well as the teams that we have are highly experienced with providing that consistent engine.
Yeah, I think you said it very well. There’s a lot of benefits to investing in what we’ll call turnkey real estate, whether it be a newly refurbished property or a new construction property. One of the big factors is the amount of time and brain damage that you save, knowing that there are systems in place that you can take advantage of as well as vetted providers and teams of people that we just hand over to you. So you can reinvent the wheel and do it yourself and build your own team and vet your own people. That’s all well and fine. But you know, when I have conversations, one on one with people that I meet at different events and, you know, they ask me about the company and what we do and the service we offer and I explain it to them and you know, there’s always a pause and they’re staring at me realizing, wow, that’s a lot of value.
You provide a lot of things that I would need. I can’t think of anything else I would need outside of your company and your network. So, you know, the question comes up and sometimes it’s unspoken is why would I try and do this on my own? Or why would I go anywhere else? And the simple answer is you wouldn’t, I mean, the question is, why would you want to go elsewhere when we can provide you, literally everything you need from markets to properties, to financing and it, everything else in between. And then it’s kind of funny. I gotta chuckle every once in a while, cuz I’ll just throw it out there and I’ll say, oh, by the way, you know everything, I just told you all that value and those services, they’re all provided to you at no cost, meaning it’s free. Then there’s a little bit of a Stu look and people ask, well, how do you make money?
And then I explain it to ’em, you know, we’re essentially a real estate, a brokerage, and we only get compensated on the sales side of the equation, not the buy side. So you as our client, don’t pay us a single dime before, during or after a transaction. So everything we’re providing to you is free and always will be free. Oh, absolutely. So, and they’re just blown away. It’s like, wow, that’s when the question really kicks in. As in, why would I wanna do this on my own? Or why would I want to go anywhere else when you’re providing me literally everything I need and you’ve been doing this for 18 years and there’s no cost sign me up, you know, that’s kind of the reaction I get.
Exactly. And I will always say it doesn’t mean you don’t do it yourself, right? I mean, let’s not discount that, but you also wanna just measure the return if you’re only a 1% more return, but you’re spending 20 hours a month working for that. Well, I think you can take that time and have much more value to it. Cause I do have some clients that occasionally, you know, they’ve looked at some of our properties, but you know, they have 10 or 15 homes and they’re, they enjoy the manage. Perfect. But I always like to say to that is in that scenario, at least measure the engine, make sure you’re getting yourself paid for your time and always remember a story of a, a good client of mine up in Michigan getting 18% cap rates. Well, not gonna beat that now. I’ll be very honest, not going to beat that. And, but yet he doesn’t mind doing the work to get it. And so be it, but it’s always that most of my clients and kind of to what you’re leading to really say, well, why wouldn’t we, you use you is they have another job. They’ve got another career. They’ve got family. They don’t have that time. So you’re absolutely correct. They look at us and say, well, why would what you use and exactly that’s, that’s what we’re here for.
Yeah. And before we go on to the next category, I I’d just like to paint both sides of the picture, you know, the good and the bad, you made a comment, something about not having to deal with tenant issues and headaches and this and that. The reality is is that nothing is gonna be perfect. There never will be a case where you are investing in real estate and that you will not have a call from the property manager because there’s an issue large or small, usually they’re minor issues. And you don’t actually even hear from a property manager when things do come up. But the reality is we’re dealing with two things. One is we’re dealing with humans that are sometimes either unpredictable or have family and life situations, whether it be a job transfer, job loss, a death in the family, whatever it is.
And there’s a bit of disruption in their financial life. And sometimes that trickles a up to you as a property owner and they have to move or break their lease or they’re laid on a payment or maybe they end up skipping a payment and hopefully later catch up and that’s often the case, but things do happen. So it’s not like there won’t be a little bit of drama or bumps in the road. And second, we’re dealing with properties that over the long term do have wear and tear. This is why we budget for maintenance and repairs. And over the long term, you know, you, you certainly are gonna have capital expenditures, you know, cost to replace things that last 10, 20 or 30 years, like let’s say a roof. So knowing that from upfront and knowing that that is 1% of your investing journey, other 99% is, is gonna be great. And so you have to understand that nothing is gonna be a hundred percent perfect. It might be 98, 90 5% perfect throughout the years, but little things will come up. So anyway, I just kind of wanted to throw that in just to make sure that people understand that investing in turnkey rentals, even new construction does not mean that things are perfect all the time, every day of the year.
Absolutely. And that, and that’s good clarity and I’m, I’m glad you did bring that up. I was kind of when I was referring to that is more of that day to day stuff. Yeah. Getting the phone call at two in the morning or finding the client, but you’re correct. And, and I’m glad you did that. It is our asset. It is our investment. It’s going to take investment type questions and issues will pop up. So that will be needed to be. And, and also just kind of on a, on a side note, anybody else out there that can get me a guaranteed return, please let me know, because I would love the five back guaranteed return.
Right. Right. So let’s transition to neighborhood related questions. So I have no idea how you’re gonna answer this, but what would you say is the most common commonly asked question as it relates to neighborhoods or anything related to neighborhoods?
That does get into more of kind of what we had talked about at the furs of that instinctive kind of questions that like, where is it an a neighborhood? Is it B neighborhood? Is it a C neighborhood? Is it a D neighborhood? Well kind of the way I like to approach that is, it’s just, it’s a personal question. It’s as I love to say to all of our clients, what allows you to go to sleep at night? And what I mean by that is every market, every neighborhood has a return to it. It’s a cost, it’s a risk reward type type analysis. So I would tend and want our clients to be more because everything is off hand. You want to be in those, I guess you could say those subjectively looked at the type neighborhoods if you wanna call them that. But at the end of the day, everything still bases on the property management team bases on the team. If you listen to one of my calls, I commonly make the joke. It’s either a beachfront property in San Diego, which is where I live or a house in the middle of Montana. It doesn’t matter where it is. If it’s not rented, it’s making you what return
Zero, zero.
<Laugh> correct. So that’s why, yes. You might pick a certain neighborhood, but it always remember we’re not living there. Our kids, our grandkids are not living there. This is an asset. And as long as the asset, which then translates to the property management team, you can be in that level. Now, if you wanna sleep at night, if you want to have that comfort, yes. You start to look at little higher quality houses areas, neighborhoods equally. So your price points will go up. Your returns will get a little skinnier. So that’s just that common balance that I have having that discussion with all of our clients, cuz some clients a little bit more familiar with real estate, a little bit more familiar with areas, a little bit more risk takers. Others are good example. My parents at 79, very, very risk adverse. So they’ll forego a little bit higher return in order to get a little bit more consistent neighborhood in their opinion. But at least that kind of what it looks like on paper. If you want to use that phrase.
Okay. I’ll take it. That, that works for me. So I’ll transition to properties if you’re done with the neighborhood related questions. Yep. Okay. Yep. So again, same type of question. What is the most common question you get asked as it relates to properties? Now, when they’re looking at any kind of turnkey rental or property that we’re providing?
Well, I think that kind of gets back to that original question of what are your investment goals. If you’re kind of thinking of the, of the instinctive, like where do what markets make sense to me? Okay. Because often the property type can dictate what your goal is. Meaning just like what we had talked about neighborhoods, if you’re looking for the highest return, that’s not gonna be a new building. That’s gonna be an older home. That’s been rehabbed, maybe a lower price point home or maybe in a market that has a lot higher income production and not as much growth. So from a property type that really is driven by what is your objective and also what is your comfort of the asset you want? And here’s the big difference that I’ve seen, especially post COVID with the driving of rates with this inflationary environment. There’s been a lot of appreciation, a lot of driving up of current assets, which is pushing up the value of the rehabs.
Conversely, there are still new construction. Yes. We had a little commodity spike, little in quotes. Lumber went up to about 1600 thousand $1,600 per thousand yard, but it’s pulled back. But in relative speaking, it is still an a, a, a solid rate of return as compared to rehabs. Now as pre COVID, there was a pretty bit material difference. So one of the questions and kind of from an asset or property that I’ve been expos and really diving into with a lot of my clients is rehabs versus new builds. I am really starting to see a lot of value in a new construction as compared to the rehabs. If, and this is the key. If my clients have a timeframe of at least three to four or more years, if we’re looking for a straight yield play, the rehabs tend, those property types tend to have the higher cash flow. But on a longer term view, as I mentioned, three, four, maybe even five plus years, I’m seeing those new construction cuz the differentiation between the overall cap rates, the overall returns are much smaller. Now therefore the, the ancillary benefits of new builds, new homes, cap X, potential growth, appreciation, potential appreciation, and rent demand. Moving into those markets. Those are coming very, very attractive assets moving forward. So from a property type, that’s kind of where we have that, that overall discussion of rehabs versus new construction.
That’s really interesting. One thing I was thinking of as you were describing that with the time horizon, you talk to people that are looking at a short time horizon. In other words, somebody has got, you mentioned three years and I can’t imagine having a short time horizon with investment real estate. I mean, for me, if I’m gonna own property, I’m gonna keep it forever. I’m never selling it. And I’ve said this before, the only time I’m gonna to sell anything is if I have better opportunities elsewhere and I’m doing a 10 31 exchange. So my time horizon is forever. It’s not five years. It’s not 10, it’s not 20 years. It’s it’s forever. And you know, and I might take a 30 year time horizon just because of depreciation. But I can’t imagine that you’re talking to anybody that has a short time horizon, like three to five years. Maybe I’m wrong.
Yeah. But see that, but see, that’s a good question, but you’re, you’re thinking of it as liquidating the asset, right? That’s how your that’s is that how you’re looking at it, selling the asset, right. I’m thinking of more of why I’m owning the asset take if I’m 79 years old and I need to start paying bills next month. What is my time horizon? My time horizon is two months. Cause I need the income to pay my bills and live on now myself at 36 again in, I use the, again as that joke there, I’ve got a 10 or 15 year window, so I don’t care. I don’t need the income for the next six or seven years to service, to pay my bills to live on. So for me, it’s a different asset class. It’s a good point you’re making, but what I’m not looking at as selling the asset, I’m looking at as, why am I buying rental income real estate. I’m doing it for the income stream. So it’s more of the perspective of time of when I need the money for X reason. That’s what I mean by a three or less year time. Got it. So it’s more of the income production as driving the timeframe, not the liquidation of the asset, cuz I’m with you. There’s no reason why any of us should ever sell a piece of real estate unless we’re are looking to go into another real estate. IE, what we talked at the beginning of the call, right? Cheap rates and inflation.
Right. Okay. I get that. And that topic alone could be a conversation in itself. I mean, we could talk about that for 10 minutes or two hours. Absolutely. Yeah. Okay. All right. So we talked about properties, property related questions. Let’s transition to management related questions again, same question. What are the most common questions you get related to management? And you’re gonna probably shift this into the why.
Yeah. It’s a little bit shifted to the why as a why you do it, but probably the, the simplest property management questions are just performance. What is their experience? What is their, you know, turnover rate? What is their average? More of those just procedural system questions that are just specific to each team. Most of my investors, when we’re at this position, it’s more of a understanding having a conversation with the property management team and knowing that they’re competent because at this point we already got the asset. We’ve got the why I just need to know I’ve got a good captain at the shift. That’s gonna manage my engine. So really the, the, any property management questions would just be those very basic. How many properties you have under management? What is your turnover? What is your average tenant? Stay? Things of that nature, just on a very data driven type type questions from the management side,
I’m gonna send you a bit of a curve ball question here, just outta curiosity. What are your thoughts, if any, between self-managing versus having a full service property manager, do you have an opinion or bias on that or is it just whatever the client wants to do?
I would probably have to say, it’s gotta be, what do the numbers tell you? Numbers don’t lie, right? That old statement, right? Numbers don’t lie. So if I’m gonna self-manage something and I can make a much better return or a good example is, is one of the assets that my wife and I own is in San Diego. And we manage it ourself. Why cuz we live here. But also more importantly where rents are in this, in this city, that’s a big monthly payment for not a lot of headaches. Now you’re in middle of Montana. You’re in Tennessee. Self-Managing that outta state that will probably put a lot of costs. So I always will just fall back on, run the numbers. If you self-managing, it makes you saves you more money or makes you a better return than it. Then you do a cost analysis. So for me, the simple answer to that question is run the numbers. If you’re making more money for your time, then do it. If not or equal or less than why would you spend your time or effort when you have professionals that can do it for you on that. Right. And roughly any ain’t outta state. I would not self-manage at all. Of course not.
Okay. Yeah. There’s definitely mixed opinions and mixed feelings on that. And there’s really no right or wrong answer. Oh, of course. I don’t have the time to, even though it’s minimal, but I Don the time right now to self-manage my own properties, even though the tools are out there and we’ve had two guests on this year talking about how to self-manage and all the tools that are available and how you can do it quite easily and I’m not opposed to it. In fact, I’m quite interested in trying it. So, but right now it’s just not the right time for me.
Yeah, and I’m not opposed to it. That’s why, you know, for, from kind of the straightforward run the numbers, but all it takes is one major issue or one bad turnover and you’re never gonna want to self-manage yourself. I will leave it with that because that is all right. You know, when you self-manage or you have a, you know, couple partners here and there, as long as it’s smooth, as long as it’s perfect world. Absolutely. It’s when you start getting calls at two in the morning or you have something that, you know, really comes up yeah. That having that full turnkey, as long as the numbers make sense, that’s usually where I would lend to drive and make that suggestion.
Okay. So we’re on the home stretch here. So let’s transition financing. What is the most common question you get related to financing?
It’s kind of a good question because most of my clients understand financing in the sense of they need to get a mortgage. So the most obvious, just structural question or process question is where can I get the cheapest rates, which is all we want the cheapest rates. Now you do occasionally have investors who have maybe looking for an alternative form of, of a, of a lending instrument, a nonconforming loan, or maybe a nonrecourse loan. I do find when a lot of our clients might not be aware of the retirement dollars, rolling into a solo 401k. You can use leverage, unlike in the stock market, there are no margins that you can use. I don’t need to go into ETFs cuz yes, you can get a little margins there, but on kind of the rate investment outta your retirement account, it’s a hundred dollars, goes into a hundred dollars share.
There’s no margin in your retirement account in real estate. There is a non-recourse, which is leverage. So probably if you, other than just where is the cheapest rates or who would you use Michael or for conventional, the only other common questions are, how can I get more loans? I E nonconforming loans above your 10 slots, or I’ve heard something about retirement accounts. Can I get loans? And then that’s where you get a lot of kind of aha moments of clients, investors, wait, I can leverage my retirement dollars into real estate. And then those will be where we kind of dive into that non-recourse loan.
Okay. Not sure if there was a question there or an answer to a question, but that’s fine. I guess is the common question is how do I finance? Or are they already you’re you’re saying they already know they need to get finance because it’s other people’s money and it it’s ultra cheap financing right now.
Yeah. I mean, I, I have personally not have any clients saying, what is leverage? What is conventional financing? What does that mean? Every individual that I’ve been speaking with understands that you buy an asset with leverage. So if you, if you’re asking for a in question, it’s just, okay, where can I get the cheapest conventional financing? Okay. Now where I do get new questions is on the, I can’t get conventional financing. Are there other loan options? And yes, there’s different loan, loan options out there, nonconforming, nonconventional, even non-recourse at that point. That’s where if you get any question, if you wanna kind of PE it, in that sense, is people asking, I’ve used my 10 slots. I cannot get any more Fannie Fred Mac back, conventional financing loans. How can I get other sources of leverage?
And I’m sure a lot of the listeners know by now. And you’re probably telling people as well, that what we have Nora real estate funding. So as far as unconventional loans or non QM loans, we can basically finance somebody to infinity after they’ve gotten their 10 up to 10 conventional loans.
Absolutely. And you love that little lead in, I got for you there.
Yeah definitely worth mentioning.
A lot of funding does. Yes, sir. And, and a lot of, a lot of, especially now a lot of my clients are looking to get that additional loans, cuz even at a little bit higher rate, it’s still in a very, very advantageous position with where cap rates are.
Exactly. Yep. For sure. Okay. And lastly, so a client has purchased, they’ve closed. They’ve now have possession of, and title two, a new property, a new rental property, new investment property. What, if anything, do you get as far as the most common question post closings?
How can I get more?
<Laugh> that’s always a good question.
Yeah I mean, and, and that’s, and that’s an honest answer, cuz if we’ve answered the why, and then once we go through the process and you see how we and our teams, let’s not forget our teams, our teams have put together their processes and made this a very efficient manner. Then everyone realize it’s like buying stock. It’s like buying Apple and buying Microsoft or putting money into a savings bond or buying commodities. It becomes a very efficient system and they realize, I gotta take advantage of these rates. I gotta get in front of inflation. And if I do have the available capital, it is how I get more Michael.
Yeah. And it’s worth mentioning that there’s a learning curve. And when you get your very first rental property or investment property, there’s a lot that you’re gonna learn in that first transaction. But as you go from the first to the second, it gets a little bit easier as you go from that second to the third, it’s a little bit easier. There’s a lot of things that are repetitive and common. They become ultimately familiar to you. So that 11th property after you’ve gotten your 10th is that much easier. And so as you go, it just becomes easier and easier and easier. So there is a learning curve it’s not difficult, but it’s a little more difficult in the beginning. And as you go and you start to build your portfolio and stack properties, it just becomes very familiar to you. So the whole thing about how can I get more? Well, you just rinse and repeat, it’s the same process with some differences. You’re looking at different properties and maybe you’re looking in different markets as you go mm-hmm <affirmative> but generally speaking, the process is the same. Yep. So that’s how you get more. Yes sir. Good stuff. Well, Michael, anything else you’d like to share or any advice or comments you want to give our listeners before we wrap it up?
Other than, get on a call, speak with your investment counselor. Start to have that discussion because I talk with a lot of my clients every once in a while, I kind of make that little analogy of, I remember sitting in front of the trading desk at 2008, I saw bank of America at 97 cents. It was in the fear of thinking they were gonna nationalize the banks. If you would’ve thought and, and had the right decision as they were not gonna nationalize the, then this is a great opportunity. That’s where we are with interest rates. In about three, four years, we are all gonna collectively look back and say, why were we not buying rental income on leverage? Because it’s an, it’s a once in a generational opportunity. So my suggestion would be anybody listening to the, this, get on the phone with your investment counselors, give them, give me a call, start discussing what the next steps are and just see if you have the ability to start building out that portfolio.
Yeah, that’s perfect. Michael, and if I may, I’ll just add one or two quick comments to that, you know, the old saying, when was the best time to start investing in real well, you can pick any year in the past and say, well, that was the best time. And even towards a peak because you know, long ago when you had a peak, well that’s a low decades later. Yep. But the best time to invest in real estate was five years ago or 10 years ago or 20 years ago. The second best time is today. And the other thing I’ll say in addition to that is, is don’t wait, get on the equity train. And I’ve said this many times on this podcast, when people ask me, should I invest in real estate? Is it too late or is now a good time? My answer is always, this it’s always a good time because it’s not a question of when should I invest.
It’s always a question of where should I invest? <Affirmative>, it’s a function of location. It’s the fundamentals and the dynamics in a market that determine whether it’s a good time to be investing there specifically there. So it’s not about if it’s about where it’s not about when it’s about where, and I can argue that, you know, to the ends of time <affirmative> so I think that’s where I’d like to close it. How about you?
Amen to that!
all right. Sounds good. Well, Michael, again, thank you for taking the time to come on this part three of our series. I think this will be very, very beneficial for a lot of people. And as Michael said, if you know, you want to have this conversation or a similar conversation, or just talk about real estate investing, what it can do for you, where to invest or anything that we’ve talked about here today, by all means, just contact us, talk to your investment counselor, or go to the website, fill out the form if you’re new to us. And we’ll we’ll certainly connect you with our team. That is it for today. So remember the free strategy sessions. Shoot me a question about real estate. If you have a question that hasn’t been covered on the podcast yet we’re remember to subscribe if you haven’t done so already and that’s it. So thank you for listening and we will see you all on our next episode.
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