Best Rental Properties To Build Wealth

Why top investors like Warren Buffet attribute the 30-Year Fixed Mortgage as one of his top 5 Wealth Building Strategies

Written by Adiel Gorel
Updated: November 27, 2023

What are the first things you need to get in order to start investing in real estate?

Don’t allow the “paralysis of over-analysis” to prevent you from investing. Don’t lose sleep over wondering how to invest in a rental property. I have been striving for decades to make the process of owning rental property as easy, simple, and doable as possible. As much as I can make it simple and doable, a huge resource are local market teams, our local property management teams, and of course— my company and I are available to help you as well. But here are the basic first steps of our rental properties investment strategy to get started: You do need to have money available for your down payment. But remember to see this rental property as business building, wealth building, and freedom building. Let’s say the typical home these days is about $250k. If you put 20% down, that’s $50k, plus closing costs, loan costs, etc. Let’s call it $60k. That’s one thing that you do need. Another thing you need to have is decent credit, and a steady income, so you can get good loans. But besides that, there’s not a whole lot more that you need.

How To Invest In Rental Properties Without Credit:

The heart and soul of investing, especially in single-family home rentals, is the 30-year fixed-rate loan because that loan never changes with the cost of living. One question I get often ishow to invest without credit. Consider this, when you have a rental property, inflation will continue to erode the real value of a fixed-rate loan day after day, while the tenant is paying your mortgage off for you. Getting that loan can seem daunting and you can get caught up in the question of how to invest without credit, since getting a loan would require credit. You can invest like some of the foreign investors I know, and that means with cash. You buy the home for cash, and then you don’t have the 30-year fixed-rate loan. When you just invest in cash, yes, your cash flow is better, because you don’t have a mortgage payment to make, but you didn’t really leverage your money, meaning to use a smaller portion of it to raise a larger amount. The 30-year fixed-rate loan is a specific benefit we have in the US, and it makes money for you and turns inflation into your ally. So how to invest without credit and get the benefit of the 30-year fixed-rate loan? One way is if you have a partner who has credit, and you can buy the house together. Your partner will qualify using their credit, and now you can have an agreement that you own the home 50/50– you pay the cash necessary for the down payment, it can be 50/50, or 60/40, or whatever other combination you choose— And now you co-own a home without needing to have credit. Here’s how to invest without credit in another way. There are lenders who may make loans for people that don’t have credit, but the loans are not going to be as beneficial because they’re not going to be as low-interest. But that’s how to invest without your money. In other words, yes, having credit is extremely helpful in buying homes in the method that I recommend, which is to put in a down payment, and get a 30-year fixed-rate loan, which never changes with inflation. While inflation raises the prices of everything else, your mortgage payment never changes and the loan balance continues to go down with principal payments, but the remaining balance also never changes with inflation. However it’s still doable. My first recommendation would be to obtain a copy of your credit report and correct errors, or bad credit before you shop for a loan. This is entirely possible to do in a relatively short period of time. Especially with a financial goal as important as having remote retirement riches.

Along with how to invest without credit, a common question I am asked about being a co-owner on a property is, “If I pay cash and my partner uses their credit, will that help my credit score go up?”

Yes and no, because the problem is, let’s say that I don’t have any credit at all, and I partner with you. Now we need to get the loan in your name because you’re the person with the credit. All the benefits for building credit, from paying on time, etc., those benefits go to you. They don’t go to me. But one thing we can do is, I can buy it, and you can be the cosigner, and now my name is still on the loan. If my name is on the loan, then, yes, it’ll help build my credit which will help you avoid the conundrum of how to invest without credit in the near future. You will see once you buy one and feel the power of that 30-year fixed-rate working and making inflation your friend you will want to buy more than just one.

Now if you get a cosigner, hopefully, you will qualify for the loan based on their credit, but both of your names will be on the loan. And now as you make your payments in a timely manner, you are building up your credit slowly and making it better.

Becoming financially fit means understanding your overall financial picture and setting goals. Learning to budget and allocate funds for investing is essential to your financial fitness.

How do you know when refinancing rental properties is right?

Refinancing rental properties is always something that you can do, and you need to know when it makes sense. So let’s use this time period as an example: the pandemic. In many markets, the pandemic has caused an incredible increase in value for single-family homes inspiring people to refinancing rental properties along with their own homes.

The biggest market that we ever invested in was the Phoenix, Arizona Metro Area where we bought over 3,000 properties over 21 years. During nearly two years of the pandemic, the prices of those homes went up by, wait for it— over 50%! You can see how at this moment you might be tempted to focus solely on refinancing rental properties to maximize your investments as the rates have certainly lowered since the original purchase. Let’s break this down. So now let’s say you had a home that in February 2020 that was worth $300K, and at that time you had a loan that was $150K. Well, today, the home is worth $450K, and it has a loan that’s even slightly less than $150K because you keep making principal payments. So let’s say it has a loan that’s $145K. When you have a home that’s worth $450K, and it has an existing loan at $145K, it could be the right time to refinance. If you have an existing loan of $145K with a super low rate, you can still refinance because when the home is worth $450K, you can easily pull $300K out (that is a mere 67% loan-to-value), pay off the old loan, and you’ll still have about $150K left over. By the way, refinancing rental properties means tax-free cash.

If the interest rate on the old loan is higher, which could be quite likely, as you may have bought the home at a rate of about 5%-7% or higher , now you’re refinancing to a much lower rate, maybe 3.5% or 4%, and pulling out cash. And indeed, your monthly payment may not even be that much higher when you move down from 7.75% (the rate that many of our investors were getting in the beginning of the 2000’s) to 3.5% or 4%. So yes, that would be an example of where it’s good to refinance rental properties. I would say if you are just refinancing rental properties to improve your rate, without pulling out any cash, I wouldn’t bother unless I was improving my rate by at least 1.5%, and preferably 2%. Even if people tell you, “Oh, there’s gonna be no points. There are still closing costs, which can run you a few thousand dollars. Of course, you should always do the calculations. I’m a long-term investor, and I let these loans pay for themselves in the course of years…but if it’s worthwhile, based on your calculations, then of course, go for it. Just keep in mind, as a general rule: In my opinion, less than 1.5% improvement is not worth it. Let me give you an example. Let’s say you have a rental property that’s worth about $300k, and you have a $200K loan on this rental property. You can’t really pull out much cash, as the existing loan is already at 66.7% LTV. if the existing loan is at 4%, and maybe you can now refinance to 3.6%. I would not. I would absolutely not bother. But if you have a loan that is 5.75% and you can refinance to 3.6%, then I would seriously consider refinancing that rental property.

If you can pull out a significant amount of cash at a lower rate, so your payments are not too high, then you can take this cash, and if you’re a real estate investor, you can use it as a downpayment to buy two or three more homes. You don’t pay taxes on a loan, so here is some tax-free cash. You increase the quantity of homes from one to three or four, and you get a loan at a very good rate. I should mention that these days, the interest rates are essentially the lowest rates in the history of all time. The average interest rate for a 30-year fixed-rate loan is between around 3% for a homeowner and about 3.75% for an investor. It’s another reason why a 30-year fixed-rate loan is a very good idea.
For more details on questions about refinancing rental properties, or rental properties taxes you can contact us. Many people don’t know how rental income is taxed and are surprised by the answer. Especially when they learn about rental properties and tax deductions. Feel free to get in touch with us at

How to calculate return on investment for rental property?

People have many different ideas about how to calculate return on investment for rental property. Some think the return on investment is only the cash flow, but for me, it’s different. For me, how to calculate return on investment for rental property is very simple. I look at the IRR, Internal Rate of Return. I can only look at the entire picture when I can see the entire picture. So here I am, I bought the rental home, I know how much money I put down, and my closing costs, and all the expenses. And then I held it for so many years because I’m a long-term holder. So I know the rents that came in, and the mortgage payments I paid, and repairs that took place, and all the expenses—and then I sell it. Now I have all the numbers. I know how much the property sold for I know about commission costs. I know my closing costs. Now I have every single number available to me, and I can plug it into an Excel sheet that actually has a function called X IRR, where you can calculate your internal rate of return, exactly. To me, that’s the true, comprehensive measure of how to calculate return on investment for rental property. Then you can easily see what is a good return on investment for rental property and make your decision wisely.

So I have to say, even though good single-family homes in good areas sometimes seem like a boring investment, (which I actually like, as that means no headaches), it’s a solid investment. The “boring” consistency yields a good return on investment for rental property. While it seems lower on cash flow at the beginning, the overall internal rate of return is usually very good. Remember, now you have the forces such as inflation, constantly eroding your loan and making it smaller in real dollars, while the tenant is paying it off with the rent. And then eventually when you sell it, since you bought it only with a down payment, and used leverage, the internal rate of return is quite high— I don’t think I’ve ever seen the ROI lower than 15% on any single-family homes that I’ve bought. And in the times that I could put only 10% down, which were many years before, and even 5%, the internal rate of return zoomed up to 20% and even much higher. But when determining how to calculate return on investment for rental property people have made the mistake of looking only at the initial cash flow which can cause problems. I talked to an investor the other day and she said, “I’m not buying good properties so I can have cash flow.” Well, why would anybody volunteer to buy not-good properties? Because on paper, the cash flow seems better. Life doesn’t happen on paper. Life happens in real life. And so what happens when you buy bad properties because you think the initial cash flow is the only return to consider? You’re all about that initial cash flow, so you’re buying worse properties in worse locations, in worse condition. And you’re wondering what is a good return on investment for rental property of that low caliber. The results are almost always very congruent: You get worse tenants. You get worse rents. You have more evictions. You may have more repairs. And all of a sudden, even the hallowed cash flow is worse versus the boring, beautiful property that brings lower “to begin with” cash flow but constant and more predictable cash flow overall. I’m not even talking about the rates of return or the rate of growth of white hairs on your head! When you buy nice properties, things go more smoothly. That’s the whole principle behind Remote Control Retirement Riches. So for me, return on investment is the internal rate of return, including absolutely everything—how much you bought it for, how much you sold it for, and the cash flow in the middle. That is the true measure. And I advise you not to get sucked into the common mistake of buying junk because you think you’re going to get a better rate of return on paper.

What are the different types of real estate investment loans?

Real estate investment loans are simply tools to reach your financial goals and can be used in a variety of ways. My universe centers around buying single-family home rentals, and holding them for the long term. That also includes the possibility of getting Real estate investment loans to buy duplexes and fourplexes if they are in a good area, but single-family homes really are the best. The reason I use real estate investment loans to purchase single-family homes, besides them being the most liquid real estate, is that you can get the best loan in the world on these homes. That is the 30-year fixed-rate loan.

When I speak in other countries, people are astounded when I tell them that we have real estate investment loans in the United States called 30-year fixed-rate loans. They are shocked because the monthly payment and the loan balance never keep up with the cost of living. They don’t believe me, they think it’s too good to be true. Frankly, it is! It’s insane. To the best of my knowledge, the US is the only country where you get 30-year fixed-rate real estate investment loans. Also, you don’t have to wait for 30 years. After 10, 12, 14 years, your loan balance is a mere fraction of the value of the home because inflation made everything else higher in price, while the loan was always fixed. And that’s the time when people tell me, “When I saw that I had eight homes like this, I sold two of the houses, paid my capital gains tax, and used the remainder of the proceeds to pay off the other six tiny loans that remained. Now I’m retired with six homes, all without a mortgage.”

As you can see, the 30-year fixed-rate loan is the best loan you can get. It’s unbelievable. You can put as little as 20% or even 15% down with private mortgage insurance as an investor, and that’s the loan I recommend for almost anybody.

Ok, let’s look at other real estate investment loans. There is also the 15-year loan. Some people think it’s better. It is not. In a sentence, you can pay off the 30-year loan in 15 years, but you can’t pay the 15-year loan off in 30 years. These 30-year real estate investment loans also include the 15. If you tell me that you get a slightly better rate on the 15-year loan, I’ll respond by saying it’s not worth it for the enormous loss of flexibility to pay the lower payment of the 30-year rate. And you can pay it off in 10 or nine or 11 or 17 years, whatever you want. I personally just let it sit there and let inflation pay it off and make it puny. Not only can you retire well from these homes, but you can send your kids to college—Because you buy a home, you get a 30-year fixed-rate loan, you have a one-year-old baby, and 17 years later, you still have 13 years left on the loan, but it’s such a small amount! You can sell the home, and it’ll send your kid to college. And then I always like to say this joke, “If you want to send your kid to Harvard with a Porsche, you buy two houses.” And everybody laughs. Well, I was wrong. I have a 17-year-old kid right now who wants to go to Stanford, and it turns out that just one of my homes in Phoenix will send him to four years at Stanford. So these real estate investment loans are powerful. And the 30-year fixed-rate loan would be the best. A 15-year loan may seem like a prudent thing to do, but if you are looking for long-term growth, 15 years down the road, you’ll be further along financially for taking out a 30-year fixed-rate loan now.

Fannie Mae loans are the best type that you can get. Fannie Mae sets the secondary markets, and they set the parameters for what kind of loans the bank will give. It’s important to know they limit the number of loans a person can get, up to 10.

How to maximize your rental property investments as a married couple.

Many married couples ask me, “how many rental properties to retire, if I am this age or if I have this income and want this kind of lifestyle? How many rental properties to make 100k is a very common question for couples. Well. one person is only allowed to have up to 10 FNMA loans at one time. If you are a married couple, and each of you can qualify separately, then Fannie Mae enables you to take the ownership to the homes in both your names, but put only one of your names on the loan. How many rental properties you need to retire becomes more of a game of how many rental homes in order to retire-wealthier-than-I-had-previously-imagined. Because being able to qualify separately for the FNMA loans, makes the limit of 10 become 20! Yes, so how many rental property FNMA mortgages can we have as a married couple? 20! What do you do when you have more than 10 or 20 loans? There are lenders who give non-Fannie Mae loans and some of them could still be 30-year fixed-rate loans. Maybe the rates are slightly higher. Some people say “I’m getting a commercial loan.” These are the loans that you get when you buy apartment complexes or commercial property. These loans normally will not be 30-year fixed-rate loans. Sometimes these commercial loans can have a 30-year amortization schedule, but they will not be fully 30-year fixed-rate loans. Commercial loans are usually chopped and sold, in the secondary markets on Wall Street. They have prepayment penalties. You may see words like defeasance, or yield maintenance—those words make a commercial loan much more difficult to stomach. Because when it’s time to sell, you have to consider what the yield maintenance will be. These are more difficult loans. Some of them are fixed for a certain period of time, 5 or 7 or 10 years, but then they may have a balloon. So my favorite recommendation is to get the 30-year fixed-rate loan.

Ok back to the original question, how many rental properties to retire? Now the whole point is, if both of your names are on the loan, you only get 10 FNMA loans. But let’s say you make a salary from your company, and your spouse makes a salary, and you can each qualify separately just on your own strengths. Well, you can get 10 FNMA loans only under your name, and 10 FNMA loans in your spouse’s name. Now your family total is 20 investment rental properties with FNMA loans. If you put both of your names on the loan, it’s only 10 for the household. As we mentioned, Fannie Mae enables you to take the ownership in both of your names.

Ten loans may seem like a large number! But when we buy in affordable markets—when you can buy beautiful brand new homes for $250,000, or maybe even less—10 loans can come pretty quickly. So there’s a benefit if you’re a married couple, and each one of you is financially viable enough to qualify separately, We already discussed that Fannie Mae enables the married couple to buy the property in both names husband and wife, and have only one of the names on the loan. So now you can get 10 FNMA loans in the name of the wife only and 10 FNMA loans in the name of the husband. And for people who think that 20 is a super large number, let me just remind you 20 of the nice homes that we buy for a price of maybe $240,000 will amount to one home in Palo Alto, CA. Don’t be afraid to dream big when asking the question how many rental property mortgages can I have? Single-family homes as long-term investments are the least risky: 5, 10, and even 20 homes truly are within your reach, particularly in less expensive markets. I have hundreds of investors who have reached the limit of 20. When you’re a married couple, and you have the knee-jerk reaction to put both of your names on the loans, resist it, because you may be wasting your “silver bullets”.

Is rental property depreciation good or bad for investors? So first, what is depreciation?

Rental properties depreciation is an important factor to consider. In general, buying real estate investments in the United States is pretty nice. Not only can you get 30-year fixed-rate loans that never keep up with inflation, which is a miracle in itself— But when I’m in another country explaining some of the benefits that we get here, I explain about rental properties depreciation, and here’s what they say to me: “you want to tell us that on top of all the other benefits that you guys get in the US, you buy a home that will likely appreciate in value with the years, but for tax purposes they let you pretend that it’s a machine that goes down in value so you can take a loss? What kind of a country is that?” Well, it’s a great country!. is a tax benefit. Tax benefits for real estate investors are much better than tax benefits for homeowners. Real estate for investors is often seen as a gift to people outside the US. Because the value of your home goes up, while the tax law pretends that it’s a machine that has a limited life cycle and will be worth zero at the end of a period.

Let’s say you bought a home for $300k, and the value of the land is $60k (the lot value). So, $240K is the value of the structure. It’s called ‘the improvements.’ So you can calculate the depreciation of the home every year with $240k divided by 27 ½ years. It’s going to be about $8000 a year, and you will take it as a loss on your taxes. Now, depending on what your tax return looks like, you may enjoy those losses right there in the same year, or you will carry them forward to be used in the future. So that sounds like pure benefit, but it’s not all obvious when you sell the property. Now, you have to pay taxes. So if you held it for longer than a year, of course, it’s long-term capital gains. But there’s also a component called depreciation recapture. So when considering rental properties’ depreciation consider that you were given the depreciation but now it’s being recaptured. I’m not a CPA, I don’t follow the tax law every day. The last number that I remember, I think rental properties depreciation recapture is at 25%. However, if you’re at a higher tax bracket, and you use the benefit of the depreciation last, at a higher rate, and recapture it many years later in the future, where the dollars are very cheap. It’s very good anyway. Some people never have to even do that. Let me give you an example. You have the $300k home, the land value is $60k. The rental property’s depreciation is $240k, divided by 27 ½ in a straight line, which you take every year, every single year. Let’s say you’ve held the home for 20 years. So you’ve taken the depreciation 20 out of the 27 ½ years. Now, every time you take the depreciation, you lower the “tax basis” for the home. So the home value, including the land is $300K. You took depreciation of $8000 per year. So now, after 20 year, the tax basis (or just “basis”) is no longer $300K, it’s 300 minus $8000 multiplied by 20 years, which is $160,000. So now the basis is $140K. Let’s say after 20 years, the home is now worth a million dollars. I’m just making up a story as an example for this discussion of depreciation. So let’s assume that after 20 years the home is worth a million dollars, let’s even say net a million dollars when you sell it, after all the commissions and closing costs you’ve got a million dollars.You have to pay long-term capital gain taxes on a million minus the basis which is $140,000K. That’s a big chunk of tax. There is also the component of depreciation recapture. However, one of the other benefits we have in the United States because it’s a great country, is the 1031 tax-deferred exchange. So let’s say you say I’m not going to actually sell it outright, I’m going to sell the property and put all the proceeds in the account of a Qualified Intermediary and use it to buy 10 new houses.

Now, you made your estate a lot bigger, hopefully, you’re smart and you got ten 30-year fixed-rate loans, which inflation is now going to erode. And you didn’t pay tax. The taxes didn’t get forgiven, you are carrying the obligation to pay them forward. The tax obligation has been deferred. Let’s say another 15 years go by, and all the 10 homes now are worth a million dollars each (or something like that. I am just constructing a hypothetical example). ou have a lot of taxes to pay, and you choose to do another 1031 exchange and now you have an estate of 40 houses, you are becoming very wealthy, and you still didn’t pay all that depreciation recapture or capital gains, since they were deferred by the 1031 exchanges. Then one day, you make a move. I don’t recommend it. But for taxes, it’s a good move: You die. Again, not my recommendation, but it’s been known to happen.

So, I’m using this example on a single home. Let’s say you have a home that’s worth a million dollars net, and your basis is $100k. If you sold the home the day before you die, you need to pay long-term capital gains (and depreciation recapture) on a million minus the basis of $100K, that is, on $900K. Big tax. The minute you die, there’s a step-up in basis to the value of the home on the day you died. In my example, your heirs now go to sell the home the day after you died. Now they need to pay tax on a million minus the new basis— also a million, which equals zero. So you could take depreciation, enjoy the depreciation losses for many years, do a 1031 exchange if you want to, then make the ultimate tax move and die. And you never had to pay the recapture. Again, not a recommended move. But since it happens anyway, it’s not a bad thing to know about. Please check with your CPA as to the details of this general discussion.

What is the best time to invest in real estate?

Best time to buy a house? Usually between 2:34 and 2:37 in the afternoon? No, no, no, no, not like that. Typically, you’d say that the best time to buy a house is when you have a market that’s a good strong market—and yet, it’s experiencing a recessionary dive. And it’s slow. So the best time to buy a house, to have invested in places like Phoenix, in Las Vegas, in Orlando, and Tampa, would have been 2008-2012 because they went down enormously with the recession and became incredibly cheap. That would have been the best time to invest in real estate there. However, people were very scared, and understandably so. There was a big recession, and people were afraid they were going to lose their jobs. What I did was to raise money from investors, and we bought 160 homes because we knew it was cheap. So those are the very best times to buy. Barring that special circumstance, the best time to buy a house, the best time to invest in real estate is ALWAYS because, to me, the heart of the matter is that this is a long-term investment. It’s a future changer. I can’t tell you how many people I know who retired powerfully, and sent their kids to college, based on buying several single-family homes, getting a 30-year fixed-rate loan, putting a down payment, and then proceeding to do the hardest action for human beings to do— nothing. Just letting it sit there. The 30-year fixed-rate loan is the heart of the matter because inflation keeps eroding it down to a place where it looks like it’s hardly existent. What is the best time to invest in Real estate? It’s always beneficial to buy, and I’ve seen people buy properties at seemingly wrong time and still succeed. Like in 2005 and 2006, when we had a major upswing, a major boom, in many markets. Normally you don’t want to buy during a boom. Yet, many people who bought hundreds of homes that I’ve seen in 2005 and 2006 at super high values, got a 30-year fixed-rate loan, and then there was a recession, and the values went down. But they just sat back and did nothing. Today, of course, these homes are full of equity. They did very well despite buying at the seemingly wrong time. Remember, a mere 3% inflation typically decreases purchasing power by about one-third in only 10 years, so the time to buy is always as soon as possible. I believe buying constantly for as long as you can, if you can get the good loans, it’s the best time to invest in Real estate. Yes, it’s better to buy when there’s a downturn, just like in stock. Isn’t it better to buy a stock of a good company, when it dives? When it’s cheap? Yes, and it is the same in real estate. But don’t let things like that stop you. And especially don’t let media predictions stop you. I actually know people who have been coming to hear me speak for 30 years by now, and they never did anything. The media will say, “oh there will be a boom” or “there will be a bust” and then they get scared, and do nothing. From that standpoint, the best time to buy real estate is any time. The optimal time to buy is when the prices are down, and also a good time to buy is when the interest rates are low. So for example, towards the end of 2021, many markets have high prices, but the interest rates on 30-year fixed-rate loans are the lowest pretty much in the history of all time, making it a good time to buy in some markets.

Do I need a website for rental houses?

My recommendation is no, you do not need a rental home website. Because most people who invest usually are busy with other things in life, these investments can change your future, but they shouldn’t change your life or dominate your life. You’re not running an Airbnb. One of my favorite things to say and it’s true, is “you know I own a lot of homes, and if I were taking care of my own homes like each one was a vacation rental, renting them, managing them myself, I wouldn’t be able to enjoy sharing these wonderful wealth-building investments with you. I’d be hunched over the toilet fixing it at this very moment at a vacation rental of mine.” I refuse to let the houses dominate my life. Having a website for rental houses is not an investment worth your time and money, in my opinion. I believe in Remote Control Retirement Riches and the whole crux of this is that you have professional property managers taking care of your property. Not like an Airbnb but long-term rentals to families, for long-term predictable, reliable returns on your investment. Although it will be an option for you to make all final decisions, a property management company will save you time, help you avoid costly mistakes, and help keep your investment healthy and profitable.

I have investors from across the ocean who live 7,000 or 8,000 miles away from their properties. They’re not expected to hop on a plane to rent the property or to fix the leaky faucet. They’re not expected to figure out what is the best website for rentals, or even have a rental home website. The whole idea is you have professional property managers who will do a better job than me or you because that’s what they do. They know how to do it. They are also local to the properties.
At the same time, you become free to do what it is that you do best, or just play with your kids, or have fun. So no, I don’t believe you need a rental home website. I don’t believe any of that Airbnb-like work is needed on your part. This is Remote Retirement Riches. You just need a good property management firm.
We have developed a way to use good property management firms, and give them so much business that we have a lot of clout, which all our investors enjoy. All of our investors are treated as part of the very important ICG family by our management companies. They are extremely invested in keeping us happy and keeping it simple for investors.

What type of insurance do I need for rental home properties?

What about insurance for rental homes? This is a common question. If you buy the property, and you get a loan, which I recommend—especially the 30-year fixed-rate loan, the lender will absolutely insist that you have insurance. So at the very minimum, you need to have insurance to the specification and the minimum that your lender will insist on, because the lender puts in more money than you, and they want to protect you and they want to protect themselves even more than you. heap insurance isn’t really securing you in the long run, but that doesn’t mean you need expensive rental property insurance. Obviously, there will be the usual hazard insurance and fire and all of that stuff. When you buy the home from the real estate broker, the broker will connect you to the local insurance agent. Have a discussion with the insurance agent and talk about the kind of coverage. Clearly you will have rental property insurance for things like fire and damages of this nature. You also clearly want to have liability insurance on the home. My recommendation regarding insurance for rental homes is to go with as high as you can get on the liability side. My favorite is a million dollars per home. Sometimes the insurance agent may just slap on $300k, so you say, “Can I get 500k or a million?” Usually, it’s quite inexpensive and well worth it. You only add a little bit on the premium to get a million dollars in liability insurance. If you have more than one house, sometimes you may want to get an umbrella insurance, on top of the liability insurance. If the property is in a flood zone, the bank will insist that you also get flood insurance. If you think you bought a property in an area that may not be officially in a flood zone, but it’s close to possible flooding, you might still want to get flood insurance. It’s best to discuss this with the insurance agent in that state. They know what’s right for that state. We had an agent talk about rental property insurance at our event that’s recorded on our website, under resources/webinars from May 16, 2021.

Do I need to look into condos as potential rental home property investment?

Considering real estate prices of condos as to their investment potential, is not a yes and no subject. Just a couple of things to look out for when considering what type of investment property is best: Normally, I recommend buying single-family homes in the suburbs of large metropolitan areas, over investment condos. The single family homes would preferably be brand new and located in the Sunbelt states. Single-family homes are very liquid. Everybody wants them. Families with kids live there. They tend to be long-term renters. Today more than ever, people appreciate having a yard. During the pandemic, there was a lockdown. People learned to appreciate what it’s like to have a yard. People want to have room for home offices. And with that change, the type of investment property which is best clearly comes out as Single-family homes in the suburbs. The real estate prices have shown us just how super popular they’ve become in the past couple of years. For me, they were a super popular for decades. So where do condos fall? Well, condos could accommodate a single-family, but usually depending on the size, we’re more likely to see a condo being occupied by a single tenant or a young couple, or maybe a young couple with a baby before they move to a single-family home. So right there, the single-family home has an edge on investment condos which exist within the framework of a whole condo complex. Plus, the complex has a homeowner’s association. Now, single-family homes could have a very lightweight homeowner’s association, just to keep the neighborhood nice and maybe to take care of a little shared park. However, in a condo complex, the homeowner’s association is a heavy-duty entity making investment condos less desirable. Some of the homeowners association fees include a lot of different insurance fees. Now, I’ve seen during downtimes and recessions where you could buy investment condos, and you could be a perfect citizen. You make your monthly homeowner’s association payment like clockwork, but it’s a recession – people in the complex could get fired, downsized, they might lose their income. If that happens, they can’t afford to pay the homeowners association fees and so they don’t. All of a sudden, the homeowner’s association doesn’t have enough money. They try to put a special assessment for repairs because the property might be deteriorating. There’s not enough. All of a sudden, you—despite being a great citizen, are now stuck with investment condos in a complex that’s going down, not looking good, harder to rent, and it’s not your fault. I’ve seen it happen in condo complexes, and not so much in single-family homes. Also, it can be more difficult to get a loan to purchase in condo complexes. Lenders are more leery and there are even some additional conditions. Lenders sometimes look at many of the condos in a complex are investment properties.. If I had my choice, I would always choose the single-family home. That being said, condos and townhomes could be a fine investment if the price is right, and if the context is right.

How much do I need to start real estate investing?

People wonder how to invest using your own money, and how much money they’re going to need to start investing in real estate. Of course, that’s a very broad question depending on where you go, what you buy, what loan you get, and what the downpayment winds up being. Remember, you can substantially increase your net worth just by buying one more home, so at first keep your sights on just that one goal; acquiring a good home in a good area with a down payment and a 30-year fixed-rate loan. Once you have that first goal accomplished, the next steps to acquiring another rental property will become clearer. In my universe, I see each rental property as a business. I like to buy brand new homes in the suburbs of large metropolitan areas, in the Sunbelt states. These homes, as I’m speaking now— are bought anywhere in the range of $200k- $300k. So let’s take a home that’s $250k. And break down how to invest using your own money. Fannie Mae enables you, as an investor, to put a minimum down payment of 15% with private mortgage insurance or PMI. Many people choose to put 20% with no PMI. But if you chose to put the minimum down on a home that’s $250k, 15% would be $37,500 plus the closing cost and the loan costs, so let’s add another $10,000. So, in this example, of how to invest using your own money, you need $47,500 rounded up, a little less than $50k is what you need to get started investing in my world.

How do I know how much investment property I can afford? What’s the minimum investment I’d need?

Keeping your money in a low-interest savings account for short-term goals is worthwhile, but when you save over the long-term, meaning you are just letting your money sit there in your account—you can actually lose money. For one-on-one advice, you can get in touch with us at But as a rule, you need to talk to a lender and see about investing in real estate and specifically what level of investment property you can qualify for. The great Warren Buffett, who’s usually a stock-and-company type of investor, says one of his top pieces of advice for people on how to get wealthy is: Get a 30-year fixed-rate loan because the 30-year fixed-rate loan is an excellent investment strategy for you as an investor. I’m assuming if you have a job, and if your credit is decent, you can probably qualify easily for a loan on the type of investment property that we like to buy, which are brand new homes between $200k- $300k. The rest is how much cash you need for a minimum investment. The minimum investment or down payment that Fannie Mae allows you to put as an investor is 15%, with private mortgage insurance or PMI. So if you buy an investment property for $250k, then 15% will be $37,500 plus closing costs and loan cost— let’s say it’s less than $50k. So now you know how much minimum investment you can afford, and the lender will tell you what kind of loan you can qualify for. And then you know! If you want more information, get in touch with us. Send us an email at, and I’ll be happy to discuss the specifics of your situation. That’s what I love to do.

How many rental property mortgages can I have?

The answer is not super simple, but most people refer to the Fannie Mae mortgages. So, let’s take how many rental property mortgages can I have with Fannie Mae as our example. Fannie Mae mortgages are the mortgages that are governed by the guidelines of Fannie Mae, who runs the secondary market. Fannie Mae has a limit of 10 rental property mortgages per investor. But here’s something very exciting, if you’re a married couple, and each of you can qualify separately, Fannie Mae enables you to place the ownership of the home in both of your names, but they let you put only one of your names on the loan— that will make the maximum of 10 become 20 mortgages for rental properties. However, once you reach the limit of 10 or 20, there are mortgages available to you from other lenders. In the non-Fannie Mae universe, these are called non-QM mortgages. QM means qualified mortgage, and Qualified Mortgage usually refers to mortgages that are given under the guidelines of Fannie Mae. Non-QM means not under the guidelines of Fannie Mae. So when you reach the limit of 10 or 20 mortgages for rental properties, you can’t get any more mortgages with Fannie Mae, but you can get mortgages with other lenders on a non-QM basis.

Once I have a house, how do I raise the rents? Do I do it annually? Only on move-outs? What about rent control?

Well, the name of the system that I like to work under, and have created is: Remote Control Retirement Riches. Part and parcel of this is you are a busy person, you may live more than 1000 miles away from where the property is, you don’t know the market rent rates, and you are not necessarily keeping your finger on the pulse of that market. However, the reason you can even own this rental home is because there’s a local property management company who handles it— rents it, fixes it…they have their finger on the rent rates, on that market’s pulse, and they will know when it’s appropriate to send out a notice of rent increase. In general, it’s best that a rent increase doesn’t happen automatically. Typically, a rise in rent should reflect the market rates of the area. If there’s a great tenant in the property, and they take good care of it, and they pay on time, the property managers may not initiate a rent increase or raise it as much, because a good tenant deserves a little break. I personally leave the decision to my property managers. They know much more than me about that market. I try not to micromanage the managers, and my advice to you is to do the same. We hire them for their expertise and their expertise is what allows us to not worry about Rent rates, or when to send a notice of a rent increase. This is one of the many benefits to Remote Control Retirement Riches.

Once I have a house, how do I raise the rents? Do I do it annually? Only on move-outs? What about rent control?

Well, the name of the system that I like to work under, and have created is: Remote Control Retirement Riches. Part and parcel of this is you are a busy person, you may live more than 1000 miles away from where the property is, you don’t know the market rent rates, and you are not necessarily keeping your finger on the pulse of that market. However, the reason you can even own this rental home is because there’s a local property management company who handles it— rents it, fixes it…they have their finger on the rent rates, on that market’s pulse, and they will know when it’s appropriate to send out a notice of rent increase. In general, it’s best that a rent increase doesn’t happen automatically. Typically, a rise in rent should reflect the market rates of the area. If there’s a great tenant in the property, and they take good care of it, and they pay on time, the property managers may not initiate a rent increase or raise it as much, because a good tenant deserves a little break. I personally leave the decision to my property managers. They know much more than me about that market. I try not to micromanage the managers, and my advice to you is to do the same. We hire them for their expertise and their expertise is what allows us to not worry about Rent rates, or when to send a notice of a rent increase. This is one of the many benefits to Remote Control Retirement Riches.

When we buy brand new properties, they usually have some form of a homeowner’s association. Do they limit you in some way?

Yes, new residential subdivisions for single-family homes will usually have a homeowner’s association with HOA fees and HOA rules. And that is actually a good thing in many ways because they make sure that all the homes look good, that the grass doesn’t grow too long etc. Sometimes HOA rules nag at the homeowners, but it keeps the neighborhood looking good. It’s not nearly as extensive as when you have a condo, or townhome where the complex has a Home Owners’ Association.

Yes, HOA rules can limit you from doing certain things, but not on how you structure the rentals, as long as you are allowed to rent. Usually, there’s no serious limitation, but it varies from association to association and each HOA has its own t HOA rules. It could vary. Maybe there will be an association that will say no pets whatsoever, or if the area is mostly people that are 55 and over, they can’t rent to people with kids. However only twice in my entire rental home investment history of decades, have I seen a homeowner’s association that actually had it in their HOA rules (or CC&Rs) to limit investors from renting out their homes at all.

In one circumstance, the HOA rules said “we don’t want more than 10% of the homes being investment homes.” And when 10% was reached, they actually started contacting homeowners and saying, when your tenant leaves we don’t want you to rerent. It’s very harsh. The property manager brought in a lawyer. The HOA relented and agreed to let my investors rent freely. In another case, something similar happened that’s extremely rare, and it was also resolved, but these things can happen. Remember, homeowner’s associations are made out of people. People vary in how they think, but the law is there to protect both them and you. We can’t really generalize, but by and large, I would say 99% —no limitations on renting.

Are there any tips for negotiating the purchase price without blowing the deal?

The method that I believe works well for most of us, is what I call Remote Control Retirement Riches, and the job of understanding the fluctuations in real estate prices, and negotiating purchase prices can be trusted to a good broker. There are people who are there to help you, people who have made knowing the rental properties for sale in that particular market, their entire career. They have their ear to the ground, and when they bring us deals for home buying, they have already negotiated these deals with the builders. You’ll be amazed at how many builders don’t even want to sell to people buying investment property at all. There’s the notion that selling to a homeowner is much better because they’re more committed and attached to the house. The mindset is that they’re going to be living in the house while investors could change their mind. Many builders need to be talked into even selling to us in the first place. So when our brokers bring the rental properties for sale, the deals have been pre-negotiated. We are leaving it to the experts and enacting Remote Control Retirement Riches as our business model here.

What’s the importance of having good credit?

Good credit is important. Remember there is a good credit score range, not just a number. In the United States, you don’t have to have the very best credit, which would be more than 800, but usually having a good credit score that’s more than 700 starts to make it very comfortable for you to get good loans. Yes, you will get the very best loan with a good credit score, or higher credit, but I think from 700 and up it’s considered a good credit score range, and you’ll get pretty good loans, maybe even with a credit score range that’s a little less than 700. It depends on the lenders, and the market, the period, all that…Yes, it is important to have a good credit score. So I would strive to keep it good. It will help you get better interest rates, and it’ll help you get the best loans. But there are loans out there in the marketplace for people whose credit is not the best. And surprisingly, they’re not really bad loans— depending on your credit score range, of course. They might be just a little bit worse than the loan with the best credit. But absolutely, it’s always good to keep your credit in good standing. Knowing your credit score and monitoring your credit regularly is recommended. It’s important to your long-term future.

When applying for a loan, lenders will always look at the “Four C’s:”
Collateral: Refers to the property itself.
Cash: Refers to the down payment.
Capacity: Refers to your income, debt, and cash reserves.
Credit: Refers to your credit history.

To get your credit better, there are some simple things you can do. Some people have too little credit, if that’s you, get a credit card from your bank, use it, and pay it on time. That’s an easy way to start building a good credit score. Definitely pay your credit cards consistently, and on time. Sometimes at our live events, I invite experts to talk about what a good credit score is, how to improve your credit, simple tactics to change your score to a better credit score in a relatively short time, etc. In fact, I think it’s not a bad idea to even connect with a credit improvement company, as you prepare to invest in rental properties. They run through your credit report and find the glaring holes, which they can mitigate. I’ve seen credit scores go quite a bit higher after professional consultation. I think it’s worthwhile.

How do I find the right mortgage broker near me?

We are now in a period where there is property scarcity across the board almost everywhere. In most markets in the country, especially the ones where we like to buy that are actually nice properties, there’s much more demand than supply. So to buy brand new homes, we buy from builders. Builders, during times where they get more business than they can handle, one of their knee-jerk reactions is “I don’t want to work with investors at all. Only with homeowners.” There’s the notion that homeowners would be better and safer. It’s not true, but that’s how they think. So builders are very picky. One of the ways that they show their pickiness is by saying, “I don’t want an investor, especially from out of state, using some lender that I never met that I don’t know about, who may not know how to close loans well in my state.” We have been seeing that; builders insisting that buyers use a mortgage broker who they know, and who operate locally in their state. My recommendation is that you ask the local broker team to connect you with the local mortgage broker that the builders feel comfortable with. It’ll give you an edge. There is a mortgage broker that deals in most markets in the country, which I’ll be happy to connect you to, and in fact, they will be invited to speak at our next event, and they will talk all about using a mortgage broker vs banks. You’re welcome to join, and ask questions if you like. You can register on under Events, and it’s free so be sure to learn more.

How to go about finding rental properties to buy?

I have a simple criteria for finding rental properties to buy. I start with the sunbelt states, large metropolitan areas, and several other criteria that we will discuss in any one of our events. It’s about narrowing it down to the best places in the country to buy. Brand new, single-family homes in good areas are my preferred rental properties to buy because hiring a construction crew to make cosmetic changes or upgrades to older properties is almost never cost-effective, unless you have close connections with a local crew, and can acquire materials at wholesale. For a brand new single-family home to be profitable, things really can be as simple as: Good tenants are attracted to good properties and responsible owners.

One of the keys to finding rental properties to buy, is you don’t want to buy in an area that is too good. You don’t want to buy the $5 million home. When deciding which rental properties to buy consider finding rental properties in an area that is just now building new homes. Again, the name of my system is Remote Control Retirement Riches. You work with the local teams that we all work with, who know their market. Remember, the real strategy in finding rental properties is that it’s much better to invest in a pretty good market than to miss out on enjoying the benefits of real estate investment altogether because you can’t currently invest in the “best” market. You don’t need the best deal in the world for your investment to be greatly beneficial. Seasoned property managers will guide you on the best rental property to buy for you at any given time— you just need to be ready to make your move. You don’t have to take on the burden of becoming a Sherlock Holmes, a researcher on real estate markets across the country. That could take years. You know, I’m all about Remote Control Retirement Riches. Do I want you to go and visit a place where you are finding rental properties appealing? Absolutely. I think it’s an excellent idea for you to feel safe. You drive around with a local team, you see what rental property to buy, what not to buy, you meet with the property managers, and it will help you feel comfortable with the process. But the rental property to buy should be chosen by a professional, locally. And this is how we work. We talk about it at every one of our events.

How to minimize vacancies?

The best way to minimize vacancies is to not micromanage the professional property management firm in the market where you own the property. Let them do their job. They will minimize the vacancies absolutely in a better way than you can. This is one mistake that I see a lot of s the investors making: Trying to micromanage the managers. The investor might be in San Francisco, and they bring San Francisco notions to Oklahoma City. It doesn’t work out for the best. In my book, Remote Control Retirement Riches, which you can purchase on Amazon, I have a whole chapter about that. Do not bring the concepts you have about vacancies from where you are into the market where you buy. Let the professionals do that because they are entrenched in that market, and have great insight and local experience. Use it to your benefit. Something I always tell people is that there is no such thing as an unrented house, there’s only asking for too much rent. Property managers will minimize vacancies by knowing what to do in the local market. This also takes a burden off your shoulders. You don’t have to be a vacancies expert. You can be a busy person with a fulfilling career, who’s using their time to play with their kids, pursue personal interests, and take vacations. For me, that’s the way to go! I don’t deal with that stuff. I have managers who deal with it. It should be the same for you, as far as I’m concerned.

Are rental houses a good investment?

Let me take all the various factors of real estate investing for beginners, go through all the thinking – are rental houses a good investment? Should I invest at my age? Is it a good idea to own rental properties?… I’ll put it all in the blender, and I want to give you a concise type of an answer. Okay, here it comes: Yes, it is. Investing in rental properties is a very good investment. Residential Real estate overall has continuously appreciated at 1.5 times the rate of inflation over the long term, even when you factor in the occasional boom or bust.

Rental property investing is all I’ve been talking about for nearly 40 years. To own rental properties is an astounding investment, especially in one country in particular: this country, the United States of America. I talk about it so much, and I write about it in my book, which you can get on Amazon. And there’s the television show I made for Public Television, in which I talk in great detail about rental property investing. I’ll be happy to provide you with a link to that TV show, right here. But in this country, as long as you buy good homes in good areas, you use a tremendous resource that may sound trivial and normal, but it’s anything but trivial or normal. It’s the 30-year fixed-rate loan.

Always keep in mind: You can tailor a 30-year loan to meet your financial planning goals by paying it off sooner, or you can just let your tenants pay it off slowly over time. Don’t be afraid of the 30-year commitment of rental property investing, because it doesn’t mean that’s how long it’s going to take before you see massive benefits. When considering a 30-year fixed-rate loan, people often think, “Thirty years! Do you know how OLD I’m going to be 30 years from now?!” And they allow that thought to create hesitation. In most cases, tremendous financial benefits manifest after 10, 12, 14 years – way before the 30-year mark. Since the loan is FIXED, inflation constantly erodes its real value, and your tenant is making the payments. Combined with some principal payments, the loan balance could be quite small relative to the value of the house (which overall doesn’t just keep up with inflation, but historically has gone up at a rate of 1.5 times the rate of inflation). In any case 30 years from now you are going to be 30 years older whether or not you engage in rental property investing. However, as I said, major financial life changes manifest in as little as 10 years, or 14. You could even just refer to the term “30-year fixed” as just a name. If we names that loan “Kevin” or “Mary”, would that ease your mind more?

The great Warren Buffett, who’s usually a stock-and-company type of investor, goves, as one of his top pieces of advice for people on how to get wealthy is: Get a 30-year fixed-rate loan because the 30-year fixed-rate loan is unimaginably good for you and rental property investing. Almost too good to be true, but it’s a fact. You get a loan where your monthly payment never changes with inflation, and your mortgage balance never keeps up with inflation, even though you’re constantly paying it down via amortization principal payments. It doesn’t keep up with the cost of living. Inflation becomes your best friend. Inflation keeps eroding the true value of your debt while raising all prices in the country except your mortgage. That is absolutely insane. So, are rental houses a good investment? absolutely! Here’s a typical example of what happens, and I have seen this scenario happen thousands of times: Somebody comes in and hugs me at a party a couple of years ago, and I said, “What’s that for?” He says, “Well, I own rental properties thanks to you! I bought eleven homes with you guys while in my 40s. Today, I’m 56. Last year I looked at my eleven homes, and even though I bought them with a 20% down payment and 80% mortgage, last year after about 13 years, with 17 years left to go on all my loans, my loan balances were about 28% of the value of the homes. Inflation eroded them, right? So I sold three of the rental properties, paid capital gains, and used the remaining proceeds to pay off all the other eight small remaining loans., With eight free and clear homes, I never have to work again. That’s why I’m hugging you.”

Investing in rental properties is a great financial goal. In fact, buying one investment home should be your first goal. Just one can make a substantial difference in your future, and you can begin by putting your focus on acquiring just that first investment home. The best strategy I know for scaling up from there is to utilize the flexibility and unbeatable benefits of the 30-year fixed-rate loan. There’s no way that I can talk about it in this short answer form, but I talk about real estate investing for beginners, and how you can own rental properties = that’s multiple properties – all the time. I write about it all the time. Join us at our next event. You can register for free at under Events.

How to calculate return on investment for rental property? Does a rental properties calculator give you a good indication?

Some people even confuse what I call cash flow from rental income with total return. There is more to consider when deciding how to calculate return on investment for rental property. I personally calculate a return on investment for rental property when I have all the numbers available to me completely. Then you can calculate the most meaningful return: IRR (Internal Rate of Return). When I buy single-family homes, I buy the homes as an investment. I know all the numbers associated with buying, the downpayment I put in, the closing costs… the projected or already established rental income, every single dollar. Then I kept the home for x amount of years, received x amount of rental income and I know what I paid in management fees, what I paid in repairs, in property taxes, insurance, and whatever else. I know I have all the numbers. Then I sell the house. Once it sells, I know exactly how much I sold it for, what commission I paid, closing costs, etc. When I have all the numbers, from the beginning of the investment until and including the sale, I can then plug it into a function Excel has— a function called X IRR, which calculates IRR, which I consider the real return on investment. IRR means internal rate of return. Why is this an important point? Because some people sometimes come to me and say “I want to buy with cash flow.” Well, when you only look for cash flow, which is the net income that you get right now from the get-go, it isn’t truly accurate. It is almost always true that when you buy bad properties in a bad location in bad shape, the cash flow is going to seem better than a nice property in a good area ON PAPER. However, life doesn’t happen on paper. After the third crime-related shooting, or the second breaking and entering, that initial rental income cash flow isn’t going to look so good anymore. In fact, this striving for initial rental income cash flow makes people buy lousy stuff in lousy locations. What does the experience end up being? Lousy neighborhoods, bad tenants, evictions…all kinds of bad stuff. When people say location, location, location—they really have something there. The good properties will typically have less cash flow to begin with, but over the years, they’ll have better cash flow, because less evictions damage, and things of that nature. To measure the return, you go with an internal rate of return, after you’ve bought it, you’ve held it, and you’ve sold it.

Here’s an interesting fact: I have never made less than 15% IRR on a single-family home, even when I was starting out with a negative cash flow. In the 1980s when the interest rates on mortgages were very high, my rental income cash flow started out as negative. Still, as I held the houses, and eventually sold some, the internal rate of return was better than 15%. Due to low down payments possible in the 80s, in some cases the return was well over 20%, and even got to 30% on the cash invested.

I had an investor call me lately, and she was new. She was a stock investor and a very smart lady. But she’d been listening to lectures about cash flow, and she said, “Okay, I’m going by cash flow, and I have an Excel…” and right away, I knew what that meant: She wants to buy the bad properties in the bad areas, in the name of rental income cash flow. Let me say this once again: When you buy bad stuff, the rental experience is bad, too.

If you look at cash flow, these days, the interest rates are so low, that even with a 20% down payment, many properties will give a decent few hundred bucks a month in positive cash flow from rental income. When I began buying in the 1980s interest rates were 14%, and I put the minimum down which was usually 10%. With PMI (although in some cases it was possible to put only 5% down). Every property I bought started out with a negative cash flow, but they all yielded amazing internal rate of return as I held them over the years, and the cash flow got better because mortgage payments never changed. They are fixed. But the rental income changes with the cost of living as the years go by. So be careful to examine your notions of cash flow. Total return on investment is important. As I said, I’ve never made less than 15% IRR on rental single-family homes. I actually bought properties with a negative cash flow, not to say the return was negative—the return was beautiful.

What are the basic types of real estate investment? Are rental houses a good investment

Well, real estate investment includes a lot; short-term rentals, long term investments, houses, duplexes, apartment complexes, commercial properties, industrial properties, land. In the realm of rental properties, many ask if rental houses are a good investment, or whether they should be looking at condos, or duplexes? As I said, real estate investments could be single-family homes. It could be condos and townhomes. It could be short-term rentals, duplexes, fourplexes, or larger apartment complexes, commercial property, industrial property…It’s a big universe, but for the individual investor, the real amazing sweet spot is the single-family home. Here is a little real estate investing for beginners tip that always holds true. The most amazing thing that exists in the United States is the ability to get a 30-year fixed-rate loan, where the payment and the loan balance never keep up with inflation. While everything else in the US economy expands with inflation, your mortgage stays fixed. This is the heart of the entire issue: how to invest in real estate? The 30-year fixed-rate loan would be what I would look at. That is what I’m aiming for when I’m looking to own rental properties. Inside this mini-universe, of properties eligible for the 30-year fixed-rate loan, I prefer the single-family home. It’s the most liquid rental property. If you sell it in a marketplace, everyone is your potential buyer. Duplexes and fourplexes could work if they are in good areas; however, in most markets, duplexes and fourplexes are not in the best areas of town. So, single-family homes would be the ones to look at, with a 30-year fixed-rate loan.

Single-family homes are the most appropriate investments for “real people,” as opposed to uber-wealthy people, or the very experienced full-time investors. They are the perfect first step in real estate investing for beginners.

Exceptions could be duplexes in good areas. What about condos and townhomes? Under certain circumstances, they could work fine, if you can get the 30-year fixed-rate mortgage on them. But beware of the big homeowner’s association that could limit you. And there’s a lot more to say about that. So to make it short and simple, single-family homes have a lot more benefits and a lot less headache.

What are real estate investment groups?

Real estate investment groups can come in several flavors. One type is a group that gets together to share their resources to buy as a group. They syndicate in some way; maybe as an LLC, as a company, as a limited partnership, whatever it is, and that’s one way the group can do it. I’m a very strong believer in you buying your properties in your name. I buy my properties for me, and we all own our own properties. And yet, we can enjoy the power of real estate investment groups without having to be part of a group where Johnny wants to sell and Mary doesn’t want to sell and it could lead to some problems. So here’s how we work: When I began this whole thing I started buying in Las Vegas. I was living in Palo Alto, CA, so I needed property management and local brokers.

Once I bought my first couple of dozen homes, many of my Silicon Valley friends started saying, “Oh, can we join you?” I said, “Why don’t you do it on your own?”. They replied “Because you already know what you’re doing and you already own lots of homes.” Then they asked, “Can you lead us?” So, I led them, and we ended up buying about 250 homes in Las Vegas over a period of roughly three and a half years, not as a group. One woman bought six homes. One guy bought four homes. I bought two more. Each one bought their own homes, but the service providers, the property managers, and the brokers knew that even if the guy or the girl who bought just one little home were not happy with them, they would complain to me, and I would not be happy with the property managers. All the other management companies in Vegas were calling me all the time. “Come to us.” “Work with us, we are cheaper.” “No, come to us, we are better…” Who doesn’t want to get 250 homes to manage? Are you starting to see the power of real estate investment groups? So even the person who bought just one little home in their name enjoys the clout— the power of the group that bought 250 homes. Today, we have markets where my investors bought over 2000 homes. Same principle though. So the real estate investment groups that I prefer are ones where we all each buy individual homes, but we use the infrastructure that I laid in place, and the managers know if one of you is not happy, we are all here to listen to you. And nobody wants to get a call from me asking, “What about Johnny’s home, what’s going on?” Because they know 2000 homes are at risk that they can lose, not to mention the hundreds more that we may buy in the future. So to me, that’s the way to look at a group.

What’s the best type of investment property to buy?

Those who have heard me speak on finding rental properties to buy before know that I will always say the single-family home is the best. Single-family homes are the most liquid rental when you go to sell them. Everyone in the marketplace is your potential buyer. A single-family home is still the American dream, even though in some areas in the country like San Francisco, Los Angeles, New York… it’s not a very affordable dream. But in many markets, it’s still affordable. You know people dream about owning their own family home, and especially during the pandemic, we saw that single-family homes became extremely popular, making finding good rental properties to buy more of a challenge for investors. The demand has been very high. People want the yard, and the additional room for a home office if they work from home. With single-family homes, you can get the 30-year fixed-rate loan, although you can also get those on duplexes and fourplexes but again, single-family homes, to me, have certain advantages, like less involvement with a pricey condo homeowner’s association (single family home neighborhoods usually also have a minimal homeowners’ association). Duplexes come close if they are in a good area. So to make it simple, single-family homes are the best investments that I know of in real estate, and you get the 30-year fixed-rate loan, the virtues of which I extoll everywhere.

Keep in mind the essential criteria that I use for selecting single-family homes as rental properties to buy: a big metropolitan area, a good rental market, decent ratio between rents and prices, a relatively low median price (relative to all US markets), and located in the sunbelt states. In addition, I recommend buying brand-new homes.

Also, choose properties that are:
NOT next to loud, busy streets.
NOT close to high-voltage power lines.
NOT in the same area as sewage treatment plants, or the public dump.

We’ll talk about it at every event because these are key points. You’re welcome to join us we’ll be talking again about finding rental properties to buy, how to determine if the rental properties for sale are right for you, the best investments, the best investment properties to buy at our next event you can join us register for free at under Events

Are rental properties good investments, Are they really a simple path to wealth?

For long-term investments and long-term wealth building, purchasing multiple properties as “building blocks” while utilizing the benefits of 30-year fixed-rate loans, is an excellent choice. Lots of people get caught up on wealthy vs. rich, and the definitions of each, but let’s stick to long-term investments and wealth building for our purposes. If you go to any country in the world, you will see that people say, “Oh my God, we are so thankful that grandma bought these three apartments, which we inherited after she passed” or “that grandpa bought these four houses that put the whole family on a wealth track that didn’t exist before.” Real estate is making people solid and strong the world over. But there is one country out of all the countries in the world where real estate is one of the very best long-term investments, and that country is called the United States of America. Here’s why real estate in the US can be an even more compelling path to wealth: The 30-year fixed-rate loan. It blows my mind to this day. I learned that they have a loan like this in this country about 42 years ago, and I still haven’t recovered from the news. If you found a simple path to wealth and tried and proved it to be true year after year, house after house, decade after decade, you would be over the moon too. When I speak in Europe, I tell them that my investors in the US can follow a simple path to wealth because they can get a loan called the 30-year fixed-rate loan and they say “what does that mean?” I tell them, “what the name implies.” The monthly payment is always fixed, and it will never ever change with inflation or the cost of living, even if in 16 years, the monthly payments are no more than what it costs to buy dinner for two—that mortgage payment will never go up, and the loan balance also doesn’t keep up with the cost of living”. The Europeans flip out. They are looking for long-term investments and can’t believe what the US offers. They think I don’t know what I’m talking about. They think I’m stupid. They say it’s impossible. They said, “Let us prove to you that what you’re saying is not possible.” They tell me, “With inflation in the US 30 years ago, you bought a postage stamp for four cents, and now the same stamp is 55 cents. Thirty years ago, you went to the movies in New York City for two bucks. Now it’s 16 bucks. If you go to Whole Foods right now and buy a beautiful organic avocado, it’s gonna be two and a quarter dollars. You know, I know, we know, in 10 years, it’s gonna be $4. You have inflation in the US. How will anybody be stupid enough to give you a loan that will never ever keep with inflation, and always stay the same? If that were to be true, it would be the biggest financial gift in the world. But it’s not possible. Because you probably are stupid, and you don’t know what you’re talking about.” When they look on their little phones and do a little search, they see that we really have a 30-year fixed-rate loan that even got the attention of the great Warren Buffett.

Then they say “Why don’t the Americans run out every day, and drop everything to get a 30-year fixed-rate loan on single-family homes? It’ll completely change their future in the long term.”

My answer is “I don’t know, but I’m trying to change that.” That’s been my message for decades, guys. And now, life expectancies are increasing. So I’m even more impassioned to share with everyone how these can be their best long-term investments. It isn’t hard, and once you know, once you see that this is a simple path to wealth, you can’t deny it.

There’s a lady in Berkeley across the bay from me, her name is Dr. Jennifer Doudna. She won the Nobel Prize last year for the development of CRISPR. It’s an acronym C.R.I.S.P.R. Basically, it’s a gene editor like Microsoft Word for genes. Just that alone could make life expectancy 10, 15, 20 years longer. So people might live to be quite old. And I ask people, “How exactly are you planning to finance all these decades?” Single-family homes with a 30-year fixed-rate loan will easily take care of that. It is never too late to start. When I explain that utilizing the 30-year fixed-rate loan and getting rental properties can be the best long-term investments, people can leap to think of a 30-year long investment but starting in your sixties will pay great dividends in your seventies.

Very important. Not a joke. I talk about it so much. You should probably read my book on Amazon, and you can also check out the TV show that I was invited to do about it called Remote Control Retirement Riches.

How do real estate investments do during different economic times, states and fluctuations?

I sort of look at the US economy on a timeline, and I divide it into three parts. Part one is the normal part, a decent balance between supply and demand, the US economy is generally fine. That’s the normal time, that’s probably a good portion of the time.

The second division I make on my timeline is: The US economy is in a boom when property prices go up like crazy, through the roof. When people sell, they get multiple offers. As we’ve seen, during the pandemic, in many markets, prices are going up, and people are making 20 offers on a house in the same week— that’s a boom.

And then the third division I make is: when the US economy is in a bust. A time of recession or something of that nature. And we have seen a powerful example of that, in the economic times of the Great Recession of 2008- 2010. For me, it was even 2011. That’s how it went for real estate.

There is no way to enjoy the benefits of real estate if you don’t own any real estate no matter the economic times! Buying single-family homes and holding them for the long term, putting a mere downpayment, and getting a 30-year fixed-rate loan, is always a strategy that’s going to be very powerful for our long-term futures. Obviously, you need to consider the economic times you’re in. It’s good not to buy exactly at the peak of a boom, but even those work when you keep them for the long term.

Obviously, it’s very good to buy in the depths of a bust, when there’s a recession, the economic times creates a huge impact on the population, and their buying habits and prices get super low. That’s an opportunity to buy. But even during regular economic times now, there are some things that are very counterintuitive. My investors bought more than 10,000 homes over 38 years, I myself as a person bought hundreds. So I can talk from experience. Some of the things are not intuitive. Let me give you an example:

During times in the US Economy of recession, rentals are more stable and better than during any other time. How could that be? Well, let’s take a case. Let’s say that you own a rental home, and there’s a family of tenants living in your home. They’ve been dreaming about buying their own home and saving up for a down payment. In fact, they were ready, at the end of the lease, to give you notice and say “we’re leaving, because we are buying our own home”. And you will have a vacant home which you will rerent. All good. Now a shift in the economic times, say a recession comes, so the discussion in that household (which always seems to start with the word, honey”, goes like this: “Honey, I know we were planning on buying a home, but now there’s a recession, and I’m really scared. I could lose my job, or you could lose your job. We’re not buying a home, it’s too risky in these economic times. We need to save.” But of course, they have kids, they need a place to live, and so they remain as tenants. Multiply this scenario by a few million, and you get that during recession actually, rentals are more stable and better than during other periods. When are the rentals the worst and the weakest? during booms! Because when there’s a boom, the media likes to fan the flames like, “oh my god, prices are going up. This guy bought a property and sold it a month later for 50,000 more!” Everybody said, “Oh, honey, let’s buy a home, we want to be rich, too.” And so they leave you during the boom to buy their own home and perhaps another one, and rents are actually the least stable, but your properties go up in value during the boom, so no complaints there. It’s interesting that during the boom that happened as a result of the pandemic, we haven’t seen that. Because the US Economy is still seen as a big unknown, to be revealed as to what economic times we’re living in. Also many tenants became afraid to rent in apartment complexes, and share the same elevator because of COVID, that tenants were seeking to rent single-family homes in large quantities. So during the boom, the property boom that came during the pandemic, not only did the prices go up like crazy, but rentals became super strong, because of the fear of the virus and not wanting to live so close to their neighbors.

What to do if you have a rental property, and there’s a recession?

Sometimes the mere idea that the recession is coming could drop the value, even below the value of the mortgage balance. So now you say “Oh my god, my property’s underwater.” And then you feel like, “Oh my god, I need to give my property to the bank. I need to let them foreclose.” That’s how people lose money. But remember, recession economics is a time of opportunity. While we’re living in recession economics, the rental is actually good, and your mortgage is still getting paid every month. So the best strategy to maximize recession economics is to do the single act that is the hardest act for human beings to do: Nothing, you do nothing.

You can toss and turn, but just let it sit there. That’s a very profound point. So much so, that sometimes I even talk about the power of doing nothing, relating it to long-term investments.

In the short term, markets will always fluctuate. Over the long-term, they steadily go up. On average the rising rate is 1.5 times the cost of living. You don’t have to chart the markets, or obsess over recession economics, just hold steady and keep your sights set on the long-term.

You buy a nice home in the sunbelt states, in metropolitan areas that are nice and new, get a 30-year fixed-rate loan, and then you do nothing. Just let it sit there, and when you revisit it in 10 or 12 or 14 years, you’re going to be quite happy to have held on during recession economics. And then you’re going to say one sentence that I’ve heard my entire career and I hear every day, “I should have bought more.” Even I say that, and I bought a lot. So again, real estate investments behave in a different way than you might think, especially during different economic cycles.

How do I educate myself on managing rental properties?

Well, the answer is actually very short: You don’t. Why should you spend your time managing rental properties that you own? Let me give you a quick analogy:

I’m perfectly capable of cleaning my home. Yeah, I could clean it myself, but will I do a good job? Probably not as good as some people. I could do an okay job. Do I clean my own home? No, I don’t. I hire cleaners, who are professionals. They know how to clean my home a lot better than me. I always like to say, if I were managing rental properties, taking care of my own rental homes, of which I have many, I wouldn’t be on this video right now, or leading this event, or writing my book…I’d be hunched over a toilet, fixing it for my tenants. That is not acceptable to me. So how do you manage your property? You let a professional management company in the market where you own the property, manage it for you. A company preferably that has done business with us by managing rental properties on 1000s of homes, and they really care about you because they care about us and they will be so happy managing rental properties all day every day. I like to call the system that I created Remote Control Retirement, and it’s the reason I have 1000s of people who bought homes who live across the ocean 1000s of miles away and aren’t expected to hop on a plane to fix the leaky faucet. The local property management takes care of everything. You don’t need to educate yourself on managing rental properties. In my opinion it’s a waste of time. I myself would not be able to have a life if I were managing all the large number of properties that I personally own. I have property managers to do it. Property management companies typically charge a fee of 7% to 10% of the gross rent collected, plus a leasing fee for managing rental properties. Over the long term, never having to deal with tenants or maintenance, or monitoring the local market…it’s more than worth it for you to pay them. You may already be paying more for your phone bill each month, and really, it’s the renters who are covering the cost.

Can I invest in real estate without using my own money?

Not only is the general answer, yes, but I have an entire chapter about How to invest without your money in my book, Remote Control Retirement Riches. It’s on Amazon. So when you buy a rental home, typically you’d put the down payment and get a loan, a 30-year fixed-rate loan, I hope. Now the down payment and how to invest without your money, there are several ways. Usually, the down payment does come from your own cash, and maybe you had enough cash to buy the home you bought, You like it so much you bought another home, and you put cash down on that one too. Now you ran out of money. You think, “oh well I can save for another down payment, later.” But that could take you a few years. Can you do something in the meantime? YES. Consider how to invest without your money. There are many ways. Here are just a couple of things:

I worked with a couple in the beginning of the 90s. At the time, our biggest market was the Phoenix metropolitan area, Maricopa County in Arizona.

This couple came to one of my events, and they really got it. They talked to me, they bought three homes, and they liked it very much. They saw what it can do for their future. But they ran out of money, and came to one of my events to investigate this very thing, “how to invest without your money.” This is a common occurrence for investors especially when they see the results and want to invest more.

He had a mother, who was a teacher and saved up a lot of money. She had it sitting in a savings account, paying very low interest rates. He told his mom, “Let me explain to you what we are trying to do. We’re trying to buy homes for our future. And here’s how it works. Read this book by Adiel…” She reads the book, wants to talk to me, and then he said, “Mom, how about you lend me a couple hundred thousand and I will pay you a higher interest rate on this, and it will be secured by our holdings. She agreed. In fact, this particular mother not only lent him a few hundred thousand, which she was happy to do because he paid her a high rate, but she even lent her credit to co-sign when banks were reluctant to lend to them, and they bought another 16 homes. This simple tactic completely changed their future. Completely. Their lives have been transformed in the future. That’s one way to invest without your own money, a very good way. Yes, but I already know the future because this was in the beginning of the 90s. So that’s one way: family members. Family members might lend you money, might participate with you in buying, they might co-sign for you… all of these are options for you to invest in rental properties, today. Here’s another answer to how to invest without your money. It’s actually what I did. When I was still an engineer in Silicon Valley, I was working at Hewlett Packard HP Labs, and I had the 401k. I talked to the administrator of the 401k, and I said, “can I borrow against my 401k?” And he said, “Absolutely, in fact, the interest is very low, because it’s considered a very secure investment.” The loan was secure because it was backed by my liquid 401k. So I took that money and used it as a down payment to buy a home. I could answer the How to invest without your money question with yet another opportunity for you. Here’s another possibility is you may have your own home, and since you now know the value of the 30-year fixed-rate loan, and how great it is, especially at this period, now when the rates are so low, some people say “Okay, look, I’ll get a bigger loan off my own home.” Of course, assuming I can afford it, assuming I can pay it at a low rate and use the extra money as a down payment to buy homes, or I can get a second loan against my home. You know, those are things that I’ve seen, there are many other possibilities, it’s up to you to decide exactly how to invest without your money but these are some of the top ways. Read the rest in my book. I’ll be happy to talk all about how to invest without your money more at our next event. You can register for free on our website, under Events.

What do property management firms do for the real estate investor?

Well, they should do everything for the real estate investor. If you’re wondering how much a property manager charges, typically companies charge a fee of 7% to 10% of the gross rent collected, plus a leasing fee. It starts from when you buy the home, they get the key. They go to the house and see if it needs anything to make it rentable. Since any real estate investor learning from me, is encouraged to buy brand new homes, they are usually ready to go. And the investor can immediately put the home up for rent, and start having the tenant pay off their mortgage. The property management firm advertises it, they put it in multiple channels, they show it, maybe they have a lockbox, or whatever else is used to enable leasing the home…And then once our real estate investor has seriously interested tenants, the property manager starts vetting them, which is very important. hey do employment verification, and run a credit report. They check with the previous landlord as to the tenant
S payment history. Some of them check not only with the current landlord of that tenant, but even the previous landlord to be extra careful. They do these verifications to protect your investment, and then they rent the home to the tenant. And from that point on, they collect the rent and they give you what you’ve earned.

If the faucet is leaking, they send somebody to fix the leaking faucet. Everything that has to do with the rental of the property and the maintenance of the property is done by them. Suppose, God forbid, you bought a property in a bad area, and you have a bad tenant and they need to be evicted. Who does the eviction? The property manager uses local legal firms and initiates and follows through with the process. So as a real estate investor, you can rest easy because they take care of everything. As I said, I have 1000s of investors who live across the ocean. Some of them don’t even speak English very well. They can’t do anything from where they are. The property manager does everything for the international real estate investor and they will for you as well.

Is it hard managing rental properties?

Managing rental properties is not an easy job, you need to know what you’re doing. That’s why it’s best left to the professional management companies. Rental properties and all that it takes to manage them, and maximize the owner’s benefit from them are their expertise. I don’t spend a single hour of the day managing rental properties, I would make a pretty poor manager. I’m way too soft. I’m not an expert, at least not in the property management field. But I use property managers to manage my properties for me. And for them it’s not hard or easy— it’s what they do. They’re professional, and they have years of experience. They do it on a large scale. I call my method Remote Control Retirement Riches. I remotely contract property managers. Rental properties can make you money in the various markets throughout the US under the expertise of the property managers without you being there. That’s what I recommend that you do, too. So for you as an investor, or for me as an investor, no, it’s not hard managing rental properties, because somebody else does it.

How to find rental properties for sale near me? And what are the best places to invest in real estate?

It’s a bit unpredictable to know when your local market is appropriate for investing in. So the most important question isn’t about finding rental properties for sale near me, but finding good rental properties wherever it makes sense. I have a criteria which I’ll be happy to share with you. I wrote an article about it for an investment magazine called Not Surprisingly “Where to Buy.” If you’d like, I’ll be happy to send it to you. Please send us an email at to get it. We are happy to share that article and other ones with you if you want. I have some basic criteria for where we want to buy rental homes.

Criteria number one in finding rental properties to buy: I’ve been a student of the demographics in the US for decades, and to me, it’s very clear; even just the census shows that the growth is towards the sunbelt states and so many people hear that and immediately think sunbelt real estate… Florida. But this is not just about Florida. It’s about so many markets. To make it short, “don’t invest where the sun don’t shine”. So I mean, those sunshine-y states would be states like Nevada, Arizona, Texas, Oklahoma, Louisiana, Alabama, Georgia, and yes Florida… So, criteria number one for me is the sunbelt states rather than rental properties for sale near me, or in the northern part of the US.

Criteria number two in finding rental properties to buy: invest in a large metropolitan area. Why? Economic diversity, job diversity, industry diversity…And I always prefer the suburbs when finding rental properties to buy. They attract families with kids, which more often create stable situations. During the pandemic, the suburbs became the darling of the US economy. Everybody wanted the yard and an extra room for a home office. I’ve been loving the economics of investing in the suburbs for decades.

Criteria number three in finding rental properties to buy is: buy where the numbers work. What does that mean? It means there’s a decent ratio between rents and prices. During the pandemic, there were many markets in the sunbelt states where prices went up like crazy—Phoenix, where we used to buy quite a lot, is one of them. We bought 1000s of properties in the Phoenix Metro Area over the decades. Prices in Phoenix for our investment homes went up over 50% in a year and three quarters. During the pandemic rents also went up by about 15%-20%. This rendered Phoenix not an appropriate market to buy, as the ratio between prices and rates became untenable. Same is true for Vegas, Dallas, Austin, Houston, San Antonio, Huntsville, Nashville, Denver, Salt Lake City, Boise…All of these markets are out. So what’s in? We’ll be talking about 5-6 prime locations where we’re finding rental properties to buy at my next event. And in fact, I’ll invite the market teams to speak. How do you know that a new market is coming up? Join what I call our quick list. I call it the quick list because I send properties to it as quickly as I get them.

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