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Latest Episodes:

904 - Real Estate Vs. Stocks: What 145 Years Of Returns Tells Us by G. Brian Davis Part 2 Apr 06, 2023

Show notes

Let’s get one thing straight: everyone should hold both stocks and real estate in their portfolios. Diversification is the ultimate hedge against risk.

But that doesn’t mean we can’t pit stocks and real estate against each other in a classic Mortal Kombat-style matchup. Which earns the best return on investment: real estate or stocks? And while we’re asking this grandiose question, which investment is safer?

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903 - Real Estate Vs. Stocks: What 145 Years Of Returns Tells Us by G. Brian Davis Apr 05, 2023

Show notes

Let’s get one thing straight: everyone should hold both stocks and real estate in their portfolios. Diversification is the ultimate hedge against risk.

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902 - How The “Denominator Effect” Is Impacting Real Estate Investors by Paul Moore Apr 04, 2023

Show notes

Do you want to destroy your wealth? I can teach you how. Do you want to create more wealth for yourself? I can teach you to do that as well.

Do you know about the denominator effect?

In finance and investing, the “denominator effect” occurs when the value of one portion of a portfolio decreases drastically and pulls down the overall value of the portfolio. As a result, any segments of the portfolio which did not decrease in value now represent a large percent of the overall pie.

While this is true and somewhat obvious, there is another denominator effect at play in real estate. An insidious destroyer of investor dreams and wealth.

If you acquire and operate a great asset andthis denominator goes in your direction, you will celebrate with a double win. But even if you buy and operate your asset well, this denominator effect can destroy you and liquidate your equity.

What is this denominator effect? I’m talking about cap rate decompression.

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901 - DSCR Loans: How To Use Pro Strategies To Save More And Make More by Robin Simon Apr 03, 2023

Show notes

In January, we published an article about DSCR loans, a product increasingly used by more and more real estate investors to scale their portfolios.

Known for easy qualification and light documentation standards (no income verification, no DTI requirements, no tax returns, etc.), sophisticated real estate investors are continuing to utilize DSCR loan options after maxing out on conventional financing options or simply finding it’s not worth trading the time and hassle of a bank qualification for the slightly lower rates.

The previous article outlined the basics of how to best position yourself as a DSCR loan borrower to get the best rates and terms on your DSCR loans. Quick recap: the rates and terms are primarily driven by three main metrics:

Loan-To-Value (LTV) Ratio
Debt-Service-Coverage-Ratio (DSCR) Ratio
FICO/credit score

While the rate you’re going to be quoted is going to be mainly driven by those three factors, there are several other pieces to the puzzle that can also change the terms offered. The savvy DSCR loan borrower will use all the options available to optimize terms, especially in volatile rate environments like today, where every little bit of rate matters in securing profitable investments!

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900 - How Did A $200B+ Bank Collapse In 48 Hours? Is Real Estate Going To Be Impacted? by Dave Meyer Apr 02, 2023

Show notes

Last week, Silicon Valley Bank (SVB) rapidly collapsed—going from normal operations to insolvency in a matter of days. SVB was the 16th largest bank in the United States, with about $209B in assets. The failure represents the 2nd largest bank collapse in U.S. history. As of Sunday, March 12th, a second bank, Signature Bank, was seized by regulators for fears of insolvency. As of this writing, the government has stepped in with emergency measures intended to stop a full-blown financial crisis from occurring, but this story is still developing. In this article, I will explain what has happened so far and what you should be keeping an eye out for in the coming weeks.

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899 - How To Find Real Value And Invest Correctly Right Now by Paul Moore Apr 01, 2023

Show notes

I’ve written two relatively recent articles on the economy. The first summarized Lauren Baker of ITR Economics keynote address at BPCON 22. She concluded that signs point to a potential soft landing in the economy—the aversion of disaster. Great news!

Or not.

I discussed the potential that the throttling of commercial credit markets could crash-land this potential soft landing.

In my second article, I talked about the implications of the credit cycle. I overviewed Howard Marks’ thoughts on the potentially disastrous impact of a restricted credit market. We discussed the characteristics of a generous credit market as well as a tight one. We reviewed the possible impact on the economy and what could go right or wrong.

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898 - What Is Land Trust Affiliate Marketing? by Anthony Greer Mar 31, 2023

Show notes

You’re not alone if you’re unfamiliar with land trust affiliate marketing. However, it is quickly becoming a popular real estate marketing strategy—and can be a highly effective one at that!

Land trust affiliate marketing is a technique that involves using land trusts to market real estate properties. This post will dissect exactly what that means, how it works, and its benefits and disadvantages.

Are you ready to discover one of real estate’s newest marketing trends?

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897 - 2023 Regional Rental Report: California—Can You Cash Flow? by Melanie Kershaw Mar 30, 2023

Show notes

There are few real estate markets with as many attractive cities as California. From the allure of luxury and lifestyle in Los Angeles to the technology heart of San Francisco, there’s a reason why California rents are often reported to be the highest in the nation.

The California real estate market is an important one for real estate investors thanks to its large and diverse economy that spans numerous industries, including technology, entertainment, and agriculture. This creates sky-high demand for housing, leading to attractive rental income and consistent property appreciation. It also makes California an incredibly competitive real estate market.

It’s not the easiest region to achieve positive cash flow in real estate, with a higher entry point than many other states. Those who already own property, have recently inherited a home, or have decent capital to reduce debt servicing tend to fare the best in the Californian market.

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896 - States With The Lowest Property Taxes In 2023 by Anthony Greer Mar 29, 2023

Show notes

Property taxes can substantially impact how much you’re paying for your home and dig into your profits as a real estate investor. They also vary widely from state to state, with Hawaii’s average property tax rate at around 0.29% and New Jersey’s averaging approximately 2.46%.

While there’s only a 2.17% difference between the two, that 2.17% equates to a lot of money. Let’s say you own two homes: one in Hawaii and one in New Jersey, and they both have an assessed value of $500,000. If you’re paying the average property tax rates for each state, you’ll owe $1,450 in Hawaii and $14,546 in New Jersey. That’s a $13,096 difference!

While there are no states without property taxes in 2023, many states have low property taxes. In this article, we’ll discuss what property taxes are, how they’re calculated, and list the states with the lowest property taxes.

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895 - What Is A Blanket Mortgage And Does It Make Sense To Have? by Scott Gibson Mar 28, 2023

Show notes

A blanket mortgage is useful for real estate investors with a large real estate portfolio. Also called a blanket loan, the mortgage consolidates several separate loans into a single mortgage. For many experienced investors, having one loan payment makes juggling several mortgage payments and interest rates more straightforward.

However, arranging a blanket mortgage loan is not always the best financing option. For example, loans are harder to secure. And putting individual mortgages under one “blanket” can put all properties in the portfolio at risk.

When does it make financial sense to put separate mortgage loans into a single loan? Are there situations when it is best to keep individual loans separate and not consolidate them into an entire mortgage?

This article explores the pros and cons of using blanket loan refinance to manage multiple properties in a real estate portfolio.

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