EP327: Try Adding a Few B Class Properties to Your Portfolio

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This episode of Investing in Real Estate is sponsored by Travel Guard. For times when trips don't go as planned, there's Travel Guard travel insurance. Travel Guard coverage includes: flight and hotel re-booking; lost or delayed baggage; passport or ticket replacement assistance; and more. Get coverage now for just $30 by texting INVESTING to 484848. 

There’s nothing I love more than building my portfolio around C class properties. C class properties produce the highest return on investment, and are largely untouched by economic downturn. However, recently I’ve started implementing a new strategy—adding a few B class properties to my portfolio.

On this episode of Investing in Real Estate, I’ll share why you might want to consider purchasing some B class rental properties. I’ll talk about equity, ROI, and the appreciation you can expect to receive. I’ll also share the secret that wealthy people know about owning real estate! Don’t miss episode 327!

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I understand that the neighborhood classification system can be confusing. If you need a refreshed on the distinction between neighborhoods, check out this post. Personally, I love to build my portfolio around C class properties—they are the backbone of everything I do in real estate.

But recently, Natali and I have started implementing a new strategy—adding a few B class properties into our portfolio. This is not to say we are totally rebuilding our strategy; we’re not. We still focus on C class properties, just not exclusively.  

B class properties will have a slightly lower ROI, yet higher equity and appreciation. Also, purchasing a property that is worth $80,000 instead of $40,000 is a fast way to increase your personal net worth. However, I’m not talking about B class properties in B class neighborhoods.

This strategy consists of finding a rare gem—a C class property in a B class neighborhood. I’m looking for properties I can still purchase under market value, add value in order to increase my equity position, and still get a high ROI. Again, I’m not suggesting redirecting your strategy altogether. I still love C class properties. But in a portfolio of 30 properties, it might be smart to consider purchasing 3-5 B class properties.

On today’s show, I’ll go more in depth about this strategy, and why it might appeal to you. I’ll talk about how much to spend on a rehab, and why building your net worth is so powerful. It’s all here on Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How much should you spend on a B class property?
  • What kind of ROI should you aim for on a B class property?
  • Why is building your net worth important?
  • Why do B class properties become foundational properties in a portfolio?
  • And much more!

Episode Resources
AIG Travel Guard
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 Here's why you might want to consider purchasing some B class rental properties. We talk about equity, ROI, and the appreciation you can expect to receive.

EP326: Commercial and Residential Rentals 2018 - Interview with Mark Ferguson

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Today's episode of Investing in Real Estate is sponsored by FilterEasy! FilterEasy is a super convenient subscription service that makes it impossible to forget to change your filters. With FilterEasy, when it's time to change your filters, they'll be at your doorstep! FilterEasy is offering our listeners their first order for FREE! Sign up at FilterEasy.com and use code INVESTING or call 1-855-910-EASY (3279).

Being a savvy investor means keeping your finger on the pulse of the market, and then acting accordingly. Today's guest, Mark Ferguson, is a smart investor who is well-versed in both the residential and commercial investing sectors. Mark has been in the real estate game since 2001; he runs a brokerage, has a buy and hold portfolio of 18 properties, flipped 26 homes in 2017, and just wrapped up a $2.1 million commercial project. Additionally, Mark is a podcaster and blogger at Invest Four More. 

On today's episode of Investing in Real Estate, Mark is walking us through his investing experience and strategies. We'll talk about his biggest successes as an investor, and how he learned to pivot in the industry. We'll discuss Mark's buy and hold portfolio, how he finds his deals, and so much more! If you're ready to learn about what it takes to be a successful investor long-term, this show is for you!


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When it comes to the world of real estate investing, Mark Ferguson has a storied past. He's done it all--buy and hold investing, flipping, commercial investing, and more. In fact, Mark began his real estate career as a real estate agent in 2001.

And up until a few years ago, all of Mark's properties were residential. He owns nearly 20 buy and hold rentals in Colorado. However, prices in that market continue to rise, and rental amounts can not keep up in order to bring in a high return.

Because of this, Mark decided to shift his investing strategy. He explains that at the time, he wasn't necessarily considering commercial real estate investing. However, a deal came across his desk that was too good to pass up. 

In February, Mark closed on an incredible project. He and his partner purchased a $2.1 million commercial strip mall. The building is over 68,000 square feet, is home to a grocery store, a coffee shop, and Mark's newest venture--his brokerage!

On today's show, Mark is walking us through his incredible real estate journey. We'll talk about his tips for securing a successful commercial investment, and how to find the best houses for flipping. We'll talk about appreciation, Mark's goals, blogging, and so much more! Please join us for episode 326 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you'll learn:

  • Why did Mark stop buying rental properties in Colorado?
  • Can you find worthwhile rental properties on the MLS?
  • What kind of commercial properties does Mark consider to be safe? 
  • How many units does it take to qualify as a commercial property?
  • Where does Mark find his deals? 
  • And so much more! 

Episode Resources
FilterEasy
Invest Four More Podcast
Build a Rental Property Empire by Mark Ferguson
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

Contact Mark Ferguson
Website
Facebook
Twitter
LinkedIn

 Mark walks us through his investing experience and strategies with commercial and residential rentals. We'll talk about his biggest successes as an investor, and how he learned to pivot in the industry.

EP325: 5 Reasons Why Real Estate Is a Safe Investment

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Today's episode of Investing in Real Estate is sponsored by Purple. Purple is a leading comfort tech company that uses cutting-edge science to create the
world’s most comfortable sleep and sit products. Right now, our listeners will get a FREE sheet set and mattress cover with any mattress purchase. Get yours at Purple.com/INVESTING. 

Let’s face it: financial security is important. We all want to feel like our investments are low-risk and secure, that we'll be comfortable in retirement, and that our children won't have to worry about money. But the truth is, most of us have been fed lies about the nest egg and the 401k when in reality, this is not the route to financial security.

On today’s show, Natali and I are sitting down to hash out five reasons why real estate is the safest investment you could make! We’ll talk about unwinding traditional conditioning about finances, how to create passive income, and much more! Don’t miss episode 325 of Investing in Real Estate! 

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  1. Real estate can never go down to zero! When you own a piece of real estate, you can always sell it! Even if the value drops, it never becomes worth nothing, unlike a stock.
  2. Real estate is a tangible asset. A rental property is an actual structure on a real piece of land. A stock certificate is just a piece of paper that indicates that you own a share. Since real estate is tangible, it can always be sold and you can claim depreciation!
  3. The real estate investing market is stable. Historically speaking, the real estate market (for investors) has more stability than the stock market. In the areas where we advise investing, you won’t see a dip in values or rental income even in a recession.
  4. Real estate investments appreciate! The value of your property won’t decline—you can count on your rental property to appreciate, even if that amount is small.
  5. Real estate is the best, most reliable way to create passive income. When you purchase a piece of real estate, you’re turning a lump of cash into a stream of cash. That’s true financial freedom! Download our Freedom Cheat Sheet to learn more about creating passive income for your family.

On this episode you’ll learn:

  • What is the reality of investing solely in a 401k?
  • Who really makes money off of a stock based investment vehicle?
  • What is the reality of a cyclical market?
  • Why is the stock market so volatile?
  • And much more! 

Episode Resources
Purple
The Inventor of the 401k Says He Created a Monster
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 

 Five reasons why real estate is the safest investment you could make.

EP324: The Worst Way to Invest in Real Estate

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Today’s episode of Investing in Real Estate is brought to you by Hims! Hims is a one-stop-shop wellness brand for men. Hims connects you with real doctors and provides prescription solutions backed by science! Visit forhims.com/investing to get $5 off your trial month with Hims!

If you’ve been listening to the podcast for a while, you’ll know that there are numerous ways to invest in real estate. However, there is one destructive investing mistake you can make.

On this episode of Investing in Real Estate, I’m sharing the worst way to invest in real estate. I’ll explain two examples of the worst way to invest, and how you can get in the right mindset to start earning a passive income.


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I talk to a lot of investors, and one of the things I always ask is how they purchased their first property. I find that many people end up holding onto a home that they used to live in, simply because they love the property.

For instance, I recently spoke to a couple based in Philadelphia who owned one property. It was their first home, and when they had to move, they couldn’t bear to let go of the house.

When I asked them about their return on investment, they said they were in the process of paying down the mortgage, and that they were basically breaking even. They projected that they might begin to make a profit in ten years.

This is a huge red flag for me; the whole point of investing is to make money! If the return on investment is low or non-existent, it’s simply not a good investment.

This is why the worst way to invest in real estate is emotionally.When you invest in a home or a neighborhood solely because you love it, chances are, it’s not a profitable investment.

On today’s show, I’ll give another example of emotional real estate investing. I’ll also discuss the importance of being honest about the numbers in a deal, the disadvantages of emotional investing, and how you can get started achieving financial freedom.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What should you do if you want to keep a property that isn’t profitable?
  • How to release emotions and focus on the numbers.
  • The one metric that matters in real estate investing.
  • And much more about buy and hold real estate!

Episode Resources
Hims
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 Two examples of the worst way to invest in real estate, and how you can get in the right mindset to start earning a passive income.

EP323: Understanding Passive Loss - Interview with Tom Wheelwright

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Today's episode of Investing in Real Estate is sponsored by Purple. Purple is a leading comfort tech company that uses cutting-edge science to create the
world’s most comfortable sleep and sit products. Right now, our listeners will get a FREE sheet set and mattress cover with any mattress purchase. Get yours at Purple.com/INVESTING. 

When it comes to business, you might think that loss is something you want to steer clear of. However, creating a passive loss in your real estate business can actually help you save money! This topic can be quite confusing, so on today's show we're calling on an expert!

On this episode of Investing in Real Estate, we're bringing back tax genius Tom Wheelwright to discuss the ins and outs of passive loss! Tom is sharing the two different ways to qualify an activity as passive, what it takes to become a professional real estate investor, and so much more! As always, Tom is an incredible wealth of information; you won't want to miss episode 323!

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A loss on your taxes means that your business did not make any money for the IRS to tax in a certain year. Claiming a loss is actually beneficial when tax time comes around, because then you have less income to pay taxes on! Many high earning investors like to claim a loss, in order to lower their overall tax burden.

Tom explains that there are three classifications written into the tax code: ordinary, investment/portfolio, and passive. Losses in one category can only be deducted from income in the same category. This means that passive loss only pertains to passive income. 

With some exceptions, rental real estate falls into the passive category. Tom explains that in order to claim passive loss on real estate income, one of two things can happen. Either the investor can move their rental income out of the passive category, or move other income into the passive category. The second scenario applies to those who make over $150k. 

On today's show, Tom is sharing the finer details of passive loss in the new tax code. We'll talk about why and how to qualify as a professional investor. We'll discuss depreciation, cost segregation, and section 179 of the tax law. Please join us for episode 323 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you'll learn: 

  • How can you change a loss from passive to ordinary?
  • What is in section 179 of the tax code?
  • What are the three rules of becoming a professional investor?
  • How can you find an incredible CPA?
  • And much more?

Episode Resources
Purple
Tax-Free Wealth by Tom Wheelwright
Loopholes of Real Estate by Garrett Sutton
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

Contact Tom Wheelwright
Website
Facebook
Twitter

 

 Creating passive loss in your real estate business can actually help you save money!

EP322: How to Treat Tenants in Your Rental Property

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Without tenants, a rental real estate business cannot cash flow. In our real estate business, our philosophy is to treat our tenants well. We do this not only because we believe in treating people well in general, but also because we understand the importance of having tenants stay in order to produce monthly income.

On this episode of Investing in Real Estate, Natali and I are sharing how we handle issues with our tenants. We’ll talk about power exchanges, dealing with gray areas in lease agreements, and much more. Don’t miss episode 322 of Investing in Real Estate!

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Some landlords take a cavalier approach when it comes to their tenants. They know that their rental property is an asset that they own, and that their tenants simply rent from them. Personally, we believe that having a big ego like that is dangerous.

We like to remember that an important piece of our business structure is creating a great home for an individual of family to live in. We have to remember our main purpose: to provide a home for families. We want our tenants to feel at home in our properties. Because of that, our relationship with our tenants tends to be flexible—it’s a give and take.

We certainly set boundaries, and we don’t want to be taken advantage of. In order to make decisions about what our tenants can and cannot do, we ask ourselves if what the tenant is asking will help them feel more at home.

If a tenant feels at home, they are more likely to stay long-term. The longer the tenant stays, the longer we receive consistent rent from that rental property. It’s important to remember that a rental real estate business revolves around humans. Not everything is black and white.

On today’s show, we’ll give examples of some things our tenants have asked of us, and how we have generally responded. We’ll talk about the importance of saying yes as often as possible, how we try to be hospitable, and more!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What is the value in allowing tenants to have pets?
  • Why is having a third party property management company important for dealing with tenants?
  • How can you set clear expectations in regard to property maintenance?
  • How can you deal with a tenant’s financial hardship?
  • And much more! 

Episode Resources
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 How we handle issues with our tenants: We talk about power exchanges, dealing with gray areas in lease agreements, and much more.

EP321: The Three Stages of Real Estate Investing

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This episode of Investing in Real Estate is sponsored by eero. With eero, you can install an enterprise-grade WiFi system in your home in just a few minutes. For free overnight shipping to the US or Canada, visit eero.com and at checkout select overnight shipping THEN enter promo code INVESTING.

If you’re wondering when you’ll achieve financial freedom through real estate investing, there’s a simple formula that can help. On this episode, I’m elaborating on the three stages of real estate investing from Gary Keller’s book, The Millionaire Real Estate Investor.

Today, I’m going to walk you through the stages, including when you should expect to reach each one. This is an important concept to understand; you won’t want to miss this episode of Investing in Real Estate!

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The first stage of real estate investing is buying. In this stage, you shouldn’t be concerned with making money, which I know seems counterintuitive. This stage is simply about building your net worth, and letting your rental payments go toward paying off your loan or private lender.

The second stage of investing is when you own your properties. At this point, you’ve paid back your lenders. Once you own your properties outright, you’re well on your way to reaching your goal.

The last stage of real estate investing is when your properties are cash flowing. This is the stage that many people look ahead at prematurely. It’s the main goal; this is the destination in which you will reach true legacy wealth.

I find that many people tend to look at these stages in reverse, and want to attain the cash flow immediately. I’ve been there in my own business. It’s incredibly important to keep these stages in mind in order to meet your end goal of financial freedom.

On today’s show, I’ll explain how I keep this process in mind for my own business, and how you too can get started achieving financial freedom. I urge you to find your Freedom Number to begin on this journey.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How long should it take to accumulate a portfolio of real estate investments?
  • What is the rule of thumb for leveraging properties?
  • When should you be focused on cash flow?
  • How should you allocate profit in stage one?
  • And much more about buy and hold investing!

Episode Resources
eero
The Millionaire Real Estate Investor by Gary Keller
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 If you’re wondering when you’ll achieve financial freedom through real estate investing, there’s a simple formula that can help.