ICG Blog

Taking A Home Loan? Keep This One Thing in Mind

15-Year Loan Or 30-Year Loan? There Can Be Only One Answer – And It’s Simple
One of the questions I am asked most often – by clients and people who attend my seminars is this: should we opt for a 15-year loan or a 30-year loan? My answer is simple – the 30-year loan every single time! And what about if the rates are lower with a 15-year loan? The 30-year loan is still your best choice. If there is a 40- or 50-year loan, choose that! Here’s why.

Choose the longest possible loan repayment plan.

Make this a rule. A rule written in stone. Consider this – what does an avocado cost today? Say about $2.25, right? What will it cost in about 14 years? It will cost more in the region of $4, you reckon? So $2.25 today will be worth about the same as $4 in 14 years. People who argue that longer loans entail a higher amount of interest payments to the bank forget to consider the true value of money and how it changes over time due to inflation. What might be a substantial monthly outflow now will look like a joke in 15 years, perhaps just enough for a fancy meal for two!
The 30-year loan is also the most flexible kind of loan. You can, of course, repay earlier if you can and you want to. You can repay in 15 years or even 10 years. But you don’t have to! With a 15-year loan you don’t have the 30-year option. What if something goes wrong and you have some unforeseen expenses, or if, god forbid, there are retrenchments where you work? The 15-year option would be difficult but the 30-year option is much easier! You can even pay more for a while and then revert to the lower repayment option. And when you have a lower monthly payment, you can afford to buy more homes; invest in more real estate!
In other words, you cannot afford not to take the gift that is the 30-year fixed rate loan. Check out this video to know more reasons why this is the only savvy option. I will also explain why inflation is your best friend when you have taken the 30-year loan. Go ahead and spend a few minutes watching this video – those few minutes may end up saving/making you a lot of money!

35% Of The US Population Are Renters — Why This Is An Opportunity For You?

Why Inflation Is Your Best Friend When It Comes To Real Estate Investments
In the mid-19th century, life expectancy was about 40 years. In 1950, that rose to about 65 years. Today, that life expectancy has grown to about 81 years, and it continues to go up. We are having longer retirements than ever before in history. Medical science progressing at the rate that it is, those retirement years are going to stretch even further! We are living longer, healthier lives than ever before, so shouldn’t your financial health reflect this? Here’s how you can ensure it.

It is never too late to invest in real estate.

I have in the past connected with Warren Buffet, and we have communicated now and then since. Now this financial whizz isn’t known to be a big investor in homes, but even he saw the wisdom of buying single family homes in the aftermath of the 2012 recession.
If you think that this is something you should have started when you were younger, let me tell you, you can start to invest in real estate at any age. We have had people that have started the process well into their 70s or even later. There is the story of Mindy, a school teacher who bought a rental home in her 50s. She finished paying for her 30-year fixed rate loan in 16 years, so now at 70 she has free and clear ownership of a property that earns her a steady passive income from rent. There is also the story of Brad who lives in the San Francisco bay area. He started investing in the 1990s, ended with 16 homes in the Phoenix area and retired early!

Invest in the Sun Belt states.

About 35% of the US population is renting – that is over 110 million people! A massive potential for passive income right there! For a number of reasons the sun-belt states suggest themselves as the places with the best growth potential right now. In these areas, the larger metropolitan areas with a lot of commercial activity are great choices.
This is where young professionals and their families are coming to work, where they are looking to rent properties, live, study. So if you want to make the wise decision to invest in real estate, I always recommend single family homes in good areas rather than apartments or condos. You are setting up your present as well as your future.

Let inflation be your friend.

Usually inflation is a bad word, but not when it comes to real estate investments. Firstly, I recommend the 30-year fixed rate loan – and that you make the lowest down payment possible. While your outgoing seems high right now, after some years it will be roughly the same as a nice dinner out somewhere. While your loan repayment amounts remain the same, your rental incomes go up over the years because the cost of living (with inflation levels) goes up!
So, what size of home should you buy? New or pre-owned? What type of property is going to fetch you the best rental incomes and what will appreciate over the long term? Who will manage properties so far from where you live? I have the answers to all those questions and more. Check out this video where I answer some of these vexing questions – and more.
inflation and real estate investing

How To Buy Multiple Homes In The US And Secure Your Future

Remote Controlled Retirement Riches How to Make This A Reality
My first job was as a research engineer at Hewlett Packard labs. It was fine but when I looked at the financial profile of people who had been in similar jobs for decades, I was not impressed. It was not what I wanted for myself and my future. These people had worked hard for years and didn’t have a lot to show for it. So it was in the 1980s that I first started to buy homes in Vegas. My Silicon Valley colleagues laughed at me. But soon, those same Silicon Valley engineers also started investing in real estate in Vegas!

You can buy anywhere.

There is this unwritten rule somewhere that if you invest in property, that property should be within a 30-minute driving distance from you. Pardon my bluntness, but that is rubbish! You can buy property anywhere in the United States, wherever else you live. I did it! I worked in Silicon Valley and within a little over a year, I had bought 22 rental homes in Las Vegas! And those same Silicon Valley guys who laughed at me had to eat their words. Soon I was leading a group of about 20 of those engineers, and over just a few years we had bought 250 rental homes!
Soon property prices in the area started to go up and our investments appreciated. So then the whole group changed their orientation and decided to invest in the Phoenix area. Until about the year 2000 this was the place to invest. I would not advise buying in those areas now, because it isn’t cost effective. But I will tell you where to buy and how.

Anyone can invest in real estate.

Now if you’re a busy professional, you probably feel that you don’t have the time or the knowhow to make wise investments or to look after those investments. The thing is, you don’t have to! I will tell you the best areas to invest in today, in a way that you get passive income in the form of rent from homes that you own. Choose quality homes in good areas of towns in states that are going to see property prices appreciate in years to come.
The next question is, how would you afford the mortgage and how long would you keep paying it. Well, here the 30-year loan is your best friend. It is a gift that keeps giving. The amazing thing is that this makes your future inflation proof. So let me tell you, buying single family homes right now for securing your financial future is not daunting. The opposite is daunting! How can you afford not to invest in real estate? Like I tell my clients, if you want to send your kid to Harvard, buy one home. If you want a Porsche in your driveway, buy two!
Watch this video where I crunch some numbers for you so that you understand more about property prices, rental incomes as well as your outlays in terms of insurance, property taxes, repairs, property management and so on. This is where my decades of experience really counts – let it count for you! Watch it here.

No Fannie Mae Loans Available? Non Qualifying Mortgages are The Way To Go!

The government directives regarding Fannie Mae or qualified mortgages is seen as bad news by investors. They are scared because this could well mean scarcity of QM loans in the market. But here’s the solution: non qualifying mortgage loans! These are the loans that are going to tide you over and secure those retirement riches for you. Watch as I explain how.

Non-Qualifying Mortgage – your secret for success.

As I always say, it is the loan duration and the amount of down payment (should be the lowest possible for most circumstances) that are the key to a successful investment and rich returns. This is more important than whether it’s a non-qualifying mortgage or a Fannie Mae loan.
Right now, the idea of non-QM loans may seem intimidating, but they are a smart choice for investors who cannot get QM loans, and in the long run, they aren’t that much different. Right now rates are low and this is what makes now the perfect time for you to pick this option instead of doing nothing, as I explain in this video.

Initial negative cash flows? No problem!

And yes, even if you’re looking at negative cash flows to begin with, I would still tell you to go ahead and invest in property and buy as many homes as you possibly can (assuming you can sustain  the slight negatives). Whatever your negative cash flow is right now, in the future it may be  about the same as one dinner in a fancy restaurant (after, say, fifteen years or so)! While your PI payments will remain fixed, the rising cost of living will ensure that your rent amounts keep increasing.
Check out this short episode where I speak about non-qualifying mortgages as well as Fannie Mae loans and the pros and cons of each. Also find out more about my early experiences with real estate investments in the Vegas areas back in the 80s. You probably will not believe the sort of prices at which I acquired homes at the time why I was able to buy so many and why I would buy a hundred more if I could go back in time. Check it out right now – you can thank me later!

Fourplex and Duplexes or Single Family Home – Which is the Better Investment Choice?

I am often asked this question by people interested in building a sound real estate investment portfolio: should they invest in single family homes or multiple unit properties? The popular idea is that one is supposed to start with single family homes and then ‘graduate’  to duplexes and perhaps fourplexes (and later, to larger apartment complexes). This is where the cash flow is, they’ve been told. I have something different to tell you. With my decades of experience in real estate, I have helped create wealth for a lot of people, so you may want to watch this to know more.

I recommend not graduating.

 
Think about it – which neighborhoods would you consider are the best ones? Are they the ones with apartment complexes or the ones that have individual homes with some space for kids to play? Let me put it another way: would you like to live in a place where you share a wall with a potentially noisy neighbor, or somewhere you have to share spaces with others and risk an infection in pandemic times?
I think the answer is evident: you would pick a picturesque neighborhood with a good quality of life and nice neighbors. And if this is the choice you would make, there is no reason to presume that people are looking to rent some other type of home! So for me, and all investors I advise, it is the single family home every time if you’re looking to make a prudent investment. There are several excellent reasons for this, as I explain in this video.

The IRR (Internal Rate of Return) is important.

 
This cash flow myth is just that, a myth. The cash flow isn’t necessarily better with investments in apartments, duplexes and so on particularly when you consider all the numbers and calculate the internal rate of return for the entire life of the investment. For you to secure your financial future and to ensure that you have access to the kind of retirement riches that you can truly depend upon later in life, there is no more prudent investment than single family homes!  There is an exception if you purchase duplexes in good areas (some of our broker teams have convinced builders to build duplexes in the same quality areas as single family homes. That would make duplexes attractive enough for us to buy. Remember also that once you exceed five units in a single property (i.e. apartment complexes), the magical 30-year fixed rate loan is no longer available, and you need to get much harsher commercial loans, with onerous pre-payment penalties. Buy single family homes (or duplexes in quality areas). Not one, not two, but as many as possible! Yes, it is possible and I will tell you how – check out this video for all the answers!

Three-Point Formula for the Best Returns On Your Property Investments

Buying Property to Secure Your Retirement – As Easy As 1, 2, 3
People tell me it is so very difficult to decide how, where, when to buy property, and I tell them it is not! Buy now, buy as many as you can! It’s simple and easy if you follow these three rules of thumb that I will now share with you
I am someone who has facilitated the sale of thousands of properties, and I would recommend property as the best investment you can possibly make. But it is daunting, I hear you say! What if you make the wrong choices? Would you be endangering the financial security that you have mapped out for your retirement years? No! Let me explain how you can invest safely, wisely, and smartly.

Where should you buy?

I’ve been in the property investment business long enough to know which markets are saturated and which ones still have potential for growth. So where at one time I would have urged people to opt for, say, Las Vegas or Phoenix, my advice is very different today. We closed thousands of deals in those areas in the past. Right now, I see potential in the Sun Belt states. Investing in properties in areas such as Nevada, Arizona, Texas, Oklahoma, Louisiana, Georgia, and Florida today will serve you well in the long term.
I always recommend that investors should invest in properties in the larger metropolitan areas to get the best returns on the property in terms of rental income, and make it easier to find good property managers and so on. Metropolitan areas are where commerce and industry are. These areas are also magnets for employees and professionals. This is where you’re going to see the biggest turnover of professionals who come in search of better opportunities.

What should you buy?

Another criterion for buying property – I am often asked – should you opt for new or preowned property? The answer is really clear and it is clear for a lot of reasons as I explain in this short video. Find out more about these simple but useful property-buying mantras. After you’ve made the right choice, just do what I always say is the most difficult thing for a human being to do – you do nothing! And you wait for your life to change – for the better!
Watch this under 5-minute video to learn the three golden rules to follow when buying homes for investment and financial freedom.

How ICG Helps You Utilize Real Estate – The Most Powerful Investment Tool

What if I told you that there is a sure shot way to create a safe and strong financial future for yourself – and that it won’t cost you anything extra? Well this is precisely what my company ICG and I can do for you. So when people ask me, why they should engage the services of ICG, I have a simple answer as I explain in this short video.

What is ICG and who is Adiel Gorel?

I am often described as a veteran international real estate investment expert, author and speaker. I am the CEO of the prominent Bay Area real estate investment firm ICG (International Capital Group). My company and I have facilitated over 10,000 real estate investments and have over the years built up a strong network of contacts, real estate experience and expertise that counts! I have bought about 400 properties as part of my own investment portfolio. This is, I think, the strongest evidence of the fact that I follow my own advice about real estate being the best and safest investment there is.
While it is possible for an individual to live in one part of the country and buy property in a whole other part of the country, this is fraught with peril, as I will explain. So how can you make the right decisions when buying real estate? This is where a reputed and reliable real estate investment company comes into the picture – and it costs you nothing extra! How does all this work exactly? Watch this short video to know exactly how to secure and strengthen your financial future.
ICG real estate investing

Buying A Home – Should You Buy Right Now or Can You Afford To Wait a few months?

All You Need To Know About Buying a Single Family Home


At this moment, there is a lot of hype in the media about a shortage in the property market, and about long waiting lists of people wanting to buy single family homes in particular. But here’s why this is just hype: there are quality homes you can buy. You may have to wait a month or even two months but this will make no difference in the long term for you as an investor. In fact, right now is the best time to go for that single family home purchase, as I explain in this episode of Investing for Busy People.

There’s no rush.

There is no doubt that buying a single family home right now is a great idea. Buyers and renters prefer this living situation right now to apartments with shared spaces/surfaces, lifts and so on. There is also the fact that interest rates are low and it would be a shame not to take advantage of the 30 year fixed rate loan.
However, you’ve waited years to buy your home, and you can certainly wait for a month or two more. And the benefits are many. Buying now means that your long term financial prospects in ten or fifteen years are genuinely positive. There is no need to be in a hurry. There is certainly no need to settle for a poor quality property in a low quality market that will leave you with far lower returns over the longer term.

How to buy a single family home right now.

Now there are a lot of people who choose to forge their own path in an unfamiliar market, probably far from home, choosing their own property manager. While this is possible, it is positively brave in fact it is fraught with risk. I would advise property buyers to opt for the ICG advantage. Check out my podcast to know more about this and the right way of going about buying that single family home right now.

Which Is Better – Higher or Lower Down Payment? The Simple Answer

Years ago, when I communicated with Warren Buffet, he told me – I’m never putting down more than 20% – or words to that effect. Now, this is a guy who can afford to put down pretty much any amount of down payment and even afford to buy any property outright in cash. However, this man, famous for his financial acumen is also known for his fiscal prudence. He is of the view that when buying property the down payment should be low. This is a view I second, and I explain why in this episode of my Investing for Busy People podcast.

The argument for a lower down payment.

As an experienced property investor, one of the questions I am asked most frequently is about the initial down payment: small or large? To this, my answer is very simple: your down payment should be low. In fact, I would go with the Fannie Mae minimum! And why do I recommend this?
Well, I believe that the 30-year fixed rate loan that Americans have the benefit of, is a gift. It can be life changing and this is an option that a lot of people in other countries simply don’t have. This sort of loan is also very beneficial in the way that it lets a property owner take advantage of higher inflation rates, as I explain in my podcast.

Advice for the investor.

As an investor, your most precious resource is the cash reserve you have – a resource that you want to use sparingly and wisely. If you decide to pay a higher percentage of down payment, say 30%, you are actually squandering that most vital resource of yours. A lower down payment will actually translate into a higher buying ability over time. That’s an early retirement opportunity right there! If, for instance, you can buy ten homes making a larger down payment, you will be able to buy 14 homes making a smaller down payment. I explain this in detail in my podcast.

My point is that the 30-year fix rate loan is a gift – one that could be life changing for the smart investor. A smaller down payment is a smart use of your cash resources and it makes a whole lot of sense over the long term financial scenario. It means that you’re putting your money to work for you; ensuring more effective and better wealth creation for yourself. Check out this episode of my podcast to know all about down payments and why the Fannie Mae minimum makes so much sense.

 

real estate investing mortgage

ICG 1-Day Live Expo 5-15-2021

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