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Where Will You Be in 10 Years?

ICG Sept7 Expo Future Featured Image

If that question scares you, we might have an answer

There’s no sure way to predict the future, but there are ways to prepare for it. With younger generations becoming less and less optimistic about their financial futures, top real-estate investor Adiel Gorel and International Capital Group invite aspiring investors of all ages to the ICG Real Estate 1-Day Expo, this September 7th, 2019. 

Get an experience that will teach you how to:

  • build a remote-controlled rental home portfolio
  • navigate through new and evolving regional real-estate markets
  • leverage current loan plans to your favor
  • Meet the market infrastructure and property managers.

Where Will You Be in the Future

Network with other like-minded investors. There will be a lot of Q&A which is in itself extremely useful.  Learn from several expert guest speakers.  

Your financial future doesn’t have to be scary. Learn how to invest in your future with strategies designed for even the most inexperienced and/or busy rental owners. No matter what size, design the future you want when you register with ICG today, so you don’t have to wonder anymore where you’ll be in a decade.  A lot of useful information for experienced investors will also be presented. Register fast before space runs out.

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The Key to Wealth is also the Key to Health

The modern-day picture of a successful career includes financial stability and less sleep. To secure financial freedom, one must sacrifice family, personal comforts, and mental health to the widely-accepted stressors of today’s fast-paced workforce. Sadly, the exclusion of restful sleep in our image of success does more harm than good as sleep-deprivation may also decrease life expectancy by 15%, shaving off almost 12 years from the standard life expectancy of 78 years. As we become busier with our daily goals, sleep tends to be tossed to the wayside, yet what good is wealth without health?

As an international investment corporation, we acknowledge and encourage wellness as the primary investment our members should make, starting with sleep. Affecting 30% of the American population, sleep-loss impacts our financial stability as much as economic and political shifts by crumbling our bodies from inside out. Not only does it maximize stressors, but sleep-loss has been linked to several illnesses, including a 70% drop in natural killer cells – the same cells responsible for preventing cancer. With an overwhelming amount of research begging for better sleep patterns, healthy investment options are crucial more than ever.

Close Your Eyes and Open Your Mind to the Key to Wealth.

Open Your Mind to the Key to Wealth

In the face of chaotic trading floors, fluctuating markets, and complicated investment plans, it may seem hard to equate financial investments with rest. Contrary to cultural norms, long-time real-estate investor, Adiel Gorel presents flexible financial plans built with manageable low-risk solutions, such as single-family rental homes and the amazing 30-year fixed rate loan, all more conducive to improved health and wealth with minimal:

  • Financial strain from rental upkeep 
  • Time wasted in closely monitoring multiple assets in different locations
  • Sleep loss due to long work hours dedicated for far-off retirement plans

Created for inexperienced investors with little time to spare, investment strategies such as Remote-Controlled Retirement Riches can assist in creating prolific single-family home portfolios using multiple real-estate markets all with the support of tested strategies and experts.

Sleep-deprivation does not –and should not– equal success. Discover a new way to invest and rest with Adiel in our next broadcasting, August 10th, at 10:30 am on KQED Plus and create your wealth plan without sacrificing the core pillars of your health.

For more information on wellness and financial investments, visit our Membership Area to explore related podcasts and webinars designed to empower the decisions you make now and in the future.

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The American Dream is Growing. Are You?

Family Buys American Dream Home

For years, it’s been widely accepted that owning a home resides at the core of the American Dream, yet studies conducted by the Urban Institute report that 53% of millennials today cannot afford a home as they can’t even afford a standard 20% down payment. Between escalating healthcare costs and burdensome student loans, the average millennial would take up to two decades to save up for a down payment. The dream of owning a home may seem to be crumbling, yet based on these startling numbers, it is clear that the desire for financial stability is as crucial as ever.

While roughly 80% of millennials don’t expect to receive benefits from current Social Security policies, the pursuit of financial security and growth is still very much attainable through home ownership and rentals. Thanks to the magical 30-year fixed loan rate, maximizing savings’ funds can be done through remote control retirement, one of the many innovative strategies to be presented at the ICG Real Estate 1-Day Expo in San Francisco, U.S.

Dealing with the Unstable Concept of Financial Stability for the American Dream

As inflation and increased cost-of-living may pose as threats to buying a home, single-family home rentals revive the financial success “dream” as the most liquid type of real-estate on the market. Join us this September 7th, 2019 at South San Francisco Conference Center to learn how to leverage single-family rentals to your financial benefit while:

  • Getting experts’ strategies and opinions
  • Navigating taxes, loans, new markets, and more
  • Networking with like-minded investors
  • Exploring new market trends
  • Participating in collaborative Q & A.

Just as technology advances year after year, it’s only natural that real-estate markets evolve with each generation, yet the result of a sound investment is a constant: financial success. Despite the negativity surrounding real-estate, there is still much to be discovered. Luckily, we are devoted to doing just that.

Whether it be through podcasts or interactive conferences, ICG is can help you invest in single-family rentals and guide you through a minimum-risk process designed to fit even the most inexperienced and/or busy rental owner. No matter your age, it’s not too late to start investing in your future. Register today before space runs out and build your own future on your own dream.  Learn more with our podcasts and webinars in our Membership area where we outline strategies in more depth.

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Setting Up an LLC With Single-Family Rental Home Purchases

Should I start an LLCIn a podcast I recorded recently, I gave my take on the question I get asked almost daily: “Before I start buying investment homes, should I create an LLC?” I begin by stating that this is a legal question and should be posed to a lawyer.

The 30-Year Fixed Rate Loan

As a non-lawyer, I point out some issues:  We talk about the benefits of getting the fixed-rate 30-year loans.  These loans are referred to as “FNMA loans” ( since they follow the FNMA – Federal National Mortgage Association guidelines). The FNMA loans will not be given to a new LLC. They will be given to an individual with income, a credit score, etc. Thus if you create a new LLC and buy the property in the name of the LLC, you will likely be giving up on one of the most powerful pillars of single-family rental investments: the 30-year fixed-rate loan.

Also, again, speaking as a non-lawyer (always fact check with a lawyer), an LLC has protective qualities only if it adheres to being a completely separate entity from you. It needs its own bank account, checks, (checkbook) books (bookkeeping or software like Quickbooks), etc. If there is a shortage in the LLC, you cannot just transfer money to it. That would be commingling funds and may destroy any protective qualities the LLC might have had.

Multi-Member LLC

In addition, lawyers have been telling me that court cases indicate more and more that for meaningful protection, you need to have a multi-member LLC and not just a single member one.

A single-member LLC is liked because it is a “pass-through” entity. That means the financials of the LLC flow through to the owner’s taxes and no separate tax return is needed for the LLC. However, a multi-member LLC needs its own separate tax return, K-1’s issued to the various members (and who is that other member, by the way?). That means more costly accounting fees and time spent.

In addition, some states require (besides a tax return), a yearly fee. California, for example, charges $800 per year per LLC.

I also mention that when you buy a home for $180,000 and put 20% down, you have a loan of $144,000. If a lawyer considered suing you and looked at this home, it would be unattractive – since the lawyer may not be a real estate professional, and he or she would assume that selling a $180,000 that has a $144,000 loan on it, will yield virtually no money after commissions, expenses, and perhaps selling quickly (it is not always an ideal time to sell). Thus the very existence of the mortgage is already a good protective measure.

Knowledgeable lawyers I know recommend using insurance as the first line of defense. Get good liability insurance on the home, and get umbrella insurance to cover up to your entire net worth.

Recently, I interviewed one of the best lawyers I have met on this subject, Brett Lytle, partner at McDowall Cotter out of the San Francisco Bay Area. Brett is also one of our expert guest speakers at our quarterly Expo once or twice a year. The podcast interview can be found in the Member’s area on our website:  www.icgre.com/members

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Some Markets Starting to Shift from Seller’s Markets to Buyer’s Market

Culdesac Single-Family Homes Shifting from Seller's Markets to Buyer's MarketIn a Fortune Magazine article by Chris Morris, published in February,  it is reported that in January 2019, there was more inventory available and houses sat on the market about a week longer than in January 2018.

As of January, there was an available inventory of 1.59 million homes overall, versus 1.53 million in December 2018.  Of course, the article is lacking by treating the entire country as one monolithic real estate market. Needless to say, there are hundreds of markets, and they don’t always perform in lockstep.

Nevertheless, there is a subtle shift, even in mentality, that is more favorable to buyers as opposed to sellers, who until recently reigned supreme. Since we are primarily buyers  (and then we hold for the long term), a buyer’s market is a positive for us.

Adjusting expectations

It is interesting to note, and one of the reasons I am posting this blog based on an article several weeks old is that while in January 2019 sales were flat, in February 2019 sales surged up, but then dropped only slightly. This is likely to continue to lower rates and sellers having to adjust expectations. Overall, we can see that while there is a shift towards buyers in many markets, the market is still hovering near a relatively stable point. With the low-interest rates and more friendly sellers, this becomes a positive for the investor.

We like to buy brand-new homes. Clearly, the sellers for us are builders. Some builders don’t want to sell to investors. Our market teams successfully convince the builders that it pays to work with our investors, as they get good volume from us. As the mood changes, these very builders may become more receptive to working with buyers, and perhaps even offer more incentives.

This will be discussed in more depth in a podcast on our Premier Members area soon. We will also talk about this during our next ICG Real Estate 1-Day Expo on May 18, 2019

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Is a Downturn in the Air?

Downsize and Downturn image blogAs we head into spring, there is a saying, “…spring is in the air.” And that is not the only thing being felt in the air. There seems to be a persistent notion that the “real estate market” has been going up for too long and is due for a correction. People also point out that the last big recession started in 2008, and perhaps the “cycle” is indicating that the new one may be upon us.

 

Of course, there really is no “real estate market” in the United States. There is the Phoenix market, the Dallas market, the Kansas City market, and the markets in every other metro area, such as Los Angeles, San Francisco, and so on. Not every local real estate market behaves in the same way others.

 

All markets do not experience a boom

 

Even during the major boom of 2004 to 2006, not all markets went through the boom. Some entire states “sat out” that of that one.  Similarly during the big recession, between 2008 and 2011, not all markets tanked. In fact, most of the markets that tanked were the ones which had boomed before.

 

Some states did not move down very much, even during the recession. This is an important point. If the San Francisco Bay Area (for example) does go down and corrects for its fast rise over the past few years, it is not “an automatic” that affordable markets like the Sun Belt states, (like the markets in which we invest) will do the same.

 

During past recessions, the rentals actually were better than usual. The reason is likely that if a tenant had been saving up to buy their own home, during a recession they are likely to shelve those plans till better times. Thus, even more, people rent than during stable conditions. Even if a downturn hits, the investor would likely benefit by just sitting and doing nothing, letting the loan balance pay down and get eroded by inflation, while enjoying lower vacancies.

 

How the Dodd-Frank bill helps

 

In addition, measures taken by congress after the last recession, like the Dodd-Frank bill, have mitigated the unbridled risk in lending that existed prior to the 2008 recession. My belief is if and when a downturn occurs, its magnitude is likely to be lesser than the last time.

 

One of the riskiest things, ironically, is that people delay buying solid investment homes, especially with today’s fantastic interest rates. I have met people from my past who never got started because there was always a recession around the corner, or a boom, or some other news item. Some of these people can be quite regretful 14 years later, realizing they could have changed their financial future but didn’t.

 

We will discuss this and many other issues at our 1-Day Expo on May 18th. I will also address this topic during our first webinar tomorrow–our official launch of the Members area on our website! Learn all about it and get on board at icgre.com/MEMBERS. Join us and stay informed!

 

 

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Recap of the March 9, 2019 ICG Real Estate 1-Day Expo

Crowd at the ICG Real Estate 1-Day ExpoOur ICG 1-Day REAL ESTATE Expo took place on Saturday, March 9th. It was a huge success; thank you to everyone who joined us. Throughout the day, we had 750+ attendees, with over 550 people in the main room at the same time. Great energy! Some of the attendees were KQED donors, who purchased the Remote Control Retirement Riches with Adiel Gorel Master Package. The donors received two tickets as part of their donation to KQED. It was an honor to have KQED members at the event, and what a thrill to explore our tried and true method with so many new folks. There was a good mix of investors: brand new investors, very experienced investors, and everything in between.

Market teams, property managers and expert guest speakers

The questions from the audience at the ICG Real Estate 1-Day Expo were excellent and I enjoyed answering all of them. I had the main market teams present, and some of the property managers within our national infrastructure there as well. Scott Webster from All Western Mortgage described regular FNMA (Fannie Mae) 30-year fixed-rate loans (some at just under 5%, which, for investors, is a low rate). He also described loans available to people who can’t get the FNMA loans, by virtue of owning more than the FNMA limit. He also outlined loans available to foreign investors. The attendees enjoyed the three expert guest speakers: CPA Joshua Cooper talked about the Opportunity Zone and other tax issues. Joyce Feldman talked about using insurance as the first and probably most important line of defense, and Lucian Ioja talked about optimizing real estate investing in the larger context of financial planning.

New offering on our website

Many new investors joined our QUICK LIST, to whom we send property sheets when we get them from the various markets. Those who joined the list will also receive event invitations and updates, throughout the year. (You can also join us, by texting QUICKLIST to 57838, or by emailing info@icgre.com and request to be added.)

I also introduced the NEW Members Area on our website. The Members Area will be an exciting treasure trove of information, offered in two tiers. It will be fully populated with podcasts, FAQ’s, and other useful information. It is a work in progress right now that we are truly excited about. There will also be webinars on specific subjects offered, as well as special one-on-one “Connect for Success” meetings with Adiel Gorel. We enabled people to join the membership area at a special discounted rate, as an “early member” which is good until April 10th only.

If you were not able to attend the ICG Real Estate 1-Day Expo you can still take advantage of our early member discount. Just use the code MARCHEXPO at checkout to receive 20% off, only available until April 10th. Also, for our early members (at either level), you will be able to attend two LIVE webinars that I will be recording before the “official” May 1st launch.

Everyone’s “membership clock” will only begin to tick on May 1st. Thus, by taking advantage of this discount you are getting a “backstage pass” as we get all our content loaded, and your payment will cover the time starting May 1, 2019. We are excited to have you join us, and will be working diligently to provide useful content to help you secure a strong financial future.

Next Expo May 18th

Many of the attendees from the March 9th Expo registered for the next 1-Day Expo, on Saturday, May 18th. We will have a new market available, three expert guest speakers, and of course loads of Q & A. You can register now for the May Expo here.

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Natural Disasters, Insurance and Real Estate Investing

Tornado Natural Disasters

I am often asked about the potential dangers of hurricanes, tornadoes, and other natural disasters in regards to investing in single-family rental homes.

Every state/city in the U.S. is subject to (some type of) natural disasters that bring various risks (with few exceptions). Along the coasts, hurricanes happen, in the middle of the country, there are tornadoes, in other states, we have wildfires, earthquakes and more.

How insurance handles property damage when natural disasters hit

Pay attention to is how insurance handles damage from such events. For example, despite hurricanes being more frequent in recent years, their coverage by insurance is still quite good, so that minimizes risk greatly. We are always here to help you assess the fine print, too.

Tornadoes are more narrow in scope and thus usually don’t even hit homes in the major metropolitan areas at all, despite striking parameters. For example, Oklahoma City does have some tornadoes; over nearly 15 years, our real estate investors bought over 1,200 single-family homes and not one home purchased has been hit by this natural disaster.

Joe Pryor, our main Oklahoma City broker, has not seen any homes hit by a tornado that he knows, and he has lived there for decades. Even if that were to happen, insurance coverage is very good. The insurance premiums in Oklahoma City are quite low, indicating that the insurance companies themselves must consider the risk to be minimal.

Questions about tornadoes and hurricanes

The irony is that most questions about tornadoes and hurricanes come from people who live in the San Francisco or Los Angeles areas. Now, these are areas with real risks – earthquakes – which are poorly insured. In fact, one would need to be pretty brave to own an expensive home in the San Francisco Bay Area, where earthquakes can cause severe (if infrequent) damage, while earthquake insurance is usually very incomplete, with relatively poor coverage.

Feel free to post questions about your concerns and let’s discuss. What concerns you may just concern others. You may also email me at info@icgre.com.

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Buying a Home to Live in Versus Renting

Buying a Home to Live in Versus Renting

 

A classic question I get when talking to a would-be real estate investor is: “Shouldn’t we buy a home to live in first before buying investment homes?”

The answer is – it depends on where you live.

When considering owning your own residence, there are various layers of reasoning.  Some are logic and numbers-based.  Some are emotional, traditional and familial.

Owning your own home can be associated with safety, security, having “arrived”, satisfying family members’ aspirations, the stability of having a (hopefully) permanent place to live, and so on.

Of course, everyone has a different set of emotional considerations when it comes to owning a home.  These vary from person to person and, needless to say, are hard to quantify.

In this post, I will address the logical, numbers-based approach to the question of whether to buy your own home as your first real estate move, or rent and buy investment homes instead.

The numbers tell the story when considering buying a home

If you are considering buying your own home, the price of the home matters, the rent required to rent that same home matters, the local property taxes matter, the mortgage interest rates matter, dwelling insurance rates matter, and even the new 2018 tax law weighs in.

If you live in a market where property taxes are relatively low (say, between 1 and 1.7 percent of the home price per year), and insurance rates are reasonable, then if you are considering buying a home under about $400,000, that should be a “no-brainer” as your first step.  Between $400,000 and $500,000 would still be a reasonable range to consider buying the home.  In such a market, once you step up to the $500,000 range and above, the math may well start to turn as you climb higher in price, in favor of renting a home in the area in which you live.  Following that, owning rental homes in more optimal markets makes sense.

Watch out for high property tax and high insurance rates

In markets where the property taxes are high (like in Texas and Oregon), and insurance rates are high (Texas again, for example), the “no-brainer” number may shrink to $300,000 or so, while the range above which you may consider renting your own home while buying affordable investment homes in other markets, will likely be $400,000 or above. This is because with high expenses for property tax and insurance, (which as a homeowner you would be paying) the overall numbers and logic “turn the corner” faster.

Certainly, in expensive areas like the San Francisco Bay Area, Los Angeles, San Diego, New York City and others such markets, it is usually far more logical to be a renter, while owning rental properties in affordable markets, where rents are actually quite high as a percentage of the home purchase prices.

Our next quarterly expo is December 1st near San Francisco Airport. Email us at info@icgre.com and add “Read your blog post” in the subject line and come as my guest. We will get back to you with registration information. Learn more about the event at icgre.com/events.

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