If you ever want to get to know me, or just get on my good side, play me in a game of Monopoly. It is my favorite game in the world. My Monopoly set is also one of my most important possessions. As a child I would play with my Dad, and he made the experience more than just a game, it was a learning experience. Monopoly helped form my world view, and today I am going to share it with you. So lets start with some stats.
Over 60% of Americans wealth is built on the equity of their home. Most Americans Net Worth is baked into the equity they have in their home. A high number of those Americans only own 1 home. Also most of these homes are 2 family or less. So in short, most of y'all are playing games instead of building real wealth.
Owning a home is one of America's greatest past times. It has always been a symbol of class, mobility and status. To the point that many of the people in the generation before us decided to buy one they couldn't afford and lost it in 2008. This caused many people to be homeless or underwater in their mortgages and probably turned us all off to the real estate game. The issue is that you've been taught to play the game all wrong. So today, we learn how to play the game right.
Real Estate: What is it?
According to Wikipedia Real Estate is "property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing."
In short it's making a business out of property. You can own the property, rent the property, not even be in or near the property to make money off of it. There's an opportunity in it no matter what. For example... Airbnb is one of the largest profiteers off of real estate and it doesn't own any property.
So how do I get started?
Everything in business depends on 3 things:
1. Time commitment
2. How much money you have
3. Your goals
These 3 are a balancing act that give you a result. Success. Real estate is no different. If you don't have time, you better have money. If you have lots of time, you don't necessarily need to have much money. If you don't have time, or money, you better be humble with them goals.
Be flexible with these 3 and success will come your way.
Now you can get started in a number of ways. You can become a licensed real estate broker, you can invest in properties on your own, you can invest in real estate through the stock market and many more.
Let's start with the easiest:
Investing through the stock market.
Real Estate Investment Trusts:
A Real Estate Investment Trust (REIT) is a company that invests in income producing real estate. Their real estate portfolio may vary. It can be a portfolio of shopping centers, mortgages, rental properties, office spaces, and many others. This portfolio is then calculated to a single dollar amount that you can buy into in the stock market.
Here is a list of REITs you can invest in today..... REIT List
Now if you're unsure of which REIT to pick don't worry, you can also invest in this exchange traded fund (ETF) that invests in a number of Real Estate investment Trusts you can check out the actual fund and everything it invests in here-----> VNQ:US
If you need info or just a better understanding shoot me an email, or hit me on twitter about these.
Buying physical real estate.
This is the part that people tend to run away from. You do not need to be rich to invest in physical real estate. There are many places you can buy real estate for cheap.
Real Estate Owned:
So here's the scoop. When a bank forecloses on a home the property is still on their books. The bank has to service the property. Basically the bank is taking a loss on the house so the best thing for them to do is to sell the house as soon as possible. So today I'm giving you the databases where they have all of the properties for sale. Pick a place, and see everything for sale. They're usually significantly cheaper than the average home price in that vicinity.
Chase
https://servicing.chase.com/REO/Property/AdvancedSearch
Bank of America
http://foreclosures.bankofamerica.com/real_estate_owned
Wells Fargo
https://reo.wellsfargo.com/Home-Search.aspx
Citibank
Citizens Bank
https://ctbconnect.com/residential-bank-owned-assets/
Delinquent tax auctions:
These auctions are for homes who haven't paid their taxes. All you have to do is participate in the auction and pay the tax debt on the home. Then it's basically yours.
All real estate information is public for everyone everywhere. Unless you buy the home as an LLC.
Why buy as an LLC?
Sadly in America a corporation has more rights than people. So instead of being upset about it, take advantage of it. Buying a home as an LLC shelters your personal assets, allows you to keep the information private, and allows you to get loans easier. For example if you purchase a home as an LLC and lose it, the home doesn't affect your personal credit or personal assets. Your company can declare bankruptcy, you personally can have a damn 800 credit score.
How To Know Where To Go
Follow the fast food chains.
McDonald's, Chipotle, Dunkin Donuts, Starbucks, they don't open up in places where there isn't people. If you visit the franchise side of all of these areas you can find out where they are opening up aggressively.
Dunkin' Donuts for example ----> http://www.dunkinfranchising.com/franchisee/en/whatsavailable.html
Follow the developers.
Many development companies release their books publicly and this information tells you where their new projects are.
What to buy?
Millions of Americans make this mistake. Owning this...
Without owning anything else.
The money in real estate comes from income. You can't have income in a home that only you in your family live in. Get started by buying a multiple family home.
Buy a townhouse
With multiple units.
If you think I'm nuts.... meet Mark
Mark Scott is a Licenced Real Estate Person. He knows the ins and outs of real estate and how to buy a home from scratch.
His website is ----> http://thecoffergroup.com/mark-scott.html
Personal number (347) 739-2521
Hit him up for home sales, apartments, whatever you need that involves living in something.
Mark is a 2nd generation real estate guy. His parents owned 7 brownstones in the Bed Stuy, Park Slope, and Prospect Heights areas. So growing up in real estate and learning from his parents he's a wealth of knowledge when it comes to executing real estate transactions.
Advice from Mark
"You don't need to be Rockefeller to own a house. My parents came from humble beginnings, with blue collar jobs. They hustled & made their money work for them. The house I was born in was a multi-family. We lived in the duplex & rented the top two floors. Ideally, you want the rental revenue to pay for the mortgage. NYC is high right now so reach out to these underdeveloped cities like Philly, Baltimore & Detroit (no offense) & do the research on the rental market to see if it makes fiscal sense to purchase & rent out. Most, if not all, real estate transactions is public information so it's not hard to get your foot in the door (no pun). " - Mark Scott
Anything is possible y'all. Being wealthy isn't impossible, living comfortably is not something rare and far away. The keys are here and me & Mark are here to help. There is so much more to this game, we just hit the tip of the iceberg. There is more to come.
Take these notes and put it to work. Until next time.
Keep Stacking your paper y'all,
CJB