Most real estate investors focus on cash flow from rental properties (and for some very good reasons), but in some markets and some situations it is important to understand how rental properties can be considered a vehicle for savings even if they are not producing immediate cash flow. In this class you'll learn:
- What are your options if you find yourself in a market where it is difficult (or impossible) to find positive cash flow properties?
- Should you even still buy properties if they don't cash flow with a reasonable sized down payment?
- A comparison of rental properties to other investments the masses make that do not cash flow
- The risks and dangers of speculation and why you should avoid it
- What are the Return Quadrants™ and why should I even care?
- What component returns of real estate are speculative, volatile, consistent, limited and unlimited and what to do about it
- When do you receive each component return from real estate and why it matters
- The role and importance of reserves in real estate investments
- The past does not equal the future and the impact of this on making investments in general and real estate investments in specific
- A discussion and exploration on historical returns for the largest 552 real estate markets in the US
- Using real estate as a savings vehicle
- A review of the compound interest formula and James' black box model of debt paydown
- The return on investment you earn by paying off properties starting with a variety of initial down payments and the shocking realization of the characteristics of this return
- A more holistic analysis of using real estate as a savings vehicle and an introduction to some powerful portfolio analysis tools for seeing this in your own portfolio of properties using the Real Estate Financial Planner™ software
- An introduction to the Return in Dollars Quadrant™, Return on Investment Quadrant™ and Return on Equity Quadrant™... the impact and addition of reserves on these and new reports
- And a final warning to be careful and specific things to watch out for if you opt to pursue this idea
Duration: 2 hours and 6 minutes
Recorded: March 31, 2021
Instructor: James Orr