Investment for beginners

What Warren Buffett Said About the 30-Year Loan, and Why I Agree

I think that we would all agree that if Warren Buffett gives financial advice, it is going to be worth listening to. He has been one of the richest men in the world for many years now, and his unconventional financial wisdom means that he is widely considered to be the most successful investor of the 20th century. So, without doubt, it feels great to have one of my ideas validated by Warren Buffett himself. Watch this to know which one. 

Warren Buffett and the 30-year loan.

In a very recent article by Maurie Backman titled Warren Buffett’s 5 Best Pieces of Money Advice, Buffett said that he is a big fan of financing a home with a 30-year mortgage, especially when rates are low. 
“When you take out a long-term loan, you buy yourself flexibility by not locking yourself into the higher payments that come with a shorter-term loan.”
According to him, with interest rates as low as 2% it is a no brainer that people should finance their real estate purchase using this instrument. This low rate spread out over a 30-year period makes it an incredibly attractive option. And guess what? I agree!
I’ve been advising my clients and viewers on the same lines.
I had engaged in some personal correspondence with Warren Buffett sometime in 2012. This was after the recession, and at the time he had written to me that he was interested in buying 70,000 to 100,000 homes for Berkshire. He told me that he wanted to get a 30-year loan to finance each of the homes he bought. In his view, with only a 20% down-payment requirement, it really didn’t get any better! No wonder the 30-year loan recommendation happens to be one of his top five financial tips.

Why I recommend 

the 30-year loan.

I have myself relied on the 30-year loan to invest in real estate over the years, and it has worked really well for me. I advise my clients to do the same because I believe it is a gift that no American should refuse – and it has worked really well for them as well. Believe me, foreigners can hardly believe that such a long term, fixed rate loan is actually available to Americans!
The reasons why I – and world famous experts like Buffett – recommend this loan are easy to understand. With low interest rates and fixed repayment amounts spread out over 30 years, this loan becomes easier and easier to repay. Inflation and rising cost of living do not impact the amount you pay each month; it remains the same. So at the end of say 10 or 15 years, the amount you’re paying each month seems to be little more than a fancy dinner somewhere!
Now there is a catch of course. Warren Buffett wanted to finance thousands of homes with the 30-year loan, but there is a limit to how many loans you can take out. Each individual can take out no more than 10 of these loans. A married couple can get 20 loans between them. So how do you buy more homes as I advise you to do? There is a way. This is also one of the topics we will talk about at our next online Property Expo, and you are most welcome to attend.

Investing in Real Estate with ICG Means Amazing Service – But What Will It Cost You?

 
So, here’s a question I get asked often by investors, after I’ve explained the advantages of working with ICG: what will it cost me? When I explain how, in most cases, it’s going to cost them nothing, the next question is something like – what’s the catch? Or, then how does ICG make its money? These are legitimate questions, because we all know, there’s no such thing as a free lunch. The answer is, yes, ICG does get paid. However, it isn’t you, dear investor, that pays us.

The ICG Real Estate Advantage.

When you work with us at ICG, you are introduced to a whole network of builders, realtors, property managers and even financers. You are given a variety of options and there is always someone there to show you the ropes. I have worked long and hard to simplify the process of real estate investing for my clients, and it works – whether an investor wants to buy one or one hundred homes!
It’s a self-sustaining system, as I explain in this short video. There are a lot of people that are beholden to ICG for bringing buyers and customers their way. It is these people who share their commission with us: realtors, property management teams and so on. However, there are times when buyers have to pay a small amount – as in the case of the Raleigh-Durham area. Here, commissions are really low right now and buyers are having to make up the difference in terms of the brokerage.

Can you afford not to have the ICG advantage?

I think of my own property portfolio as the best advertisement for ICG Real Estate. People see how well I have secured my own financial future and they want ICG to do that for them! We deal in volumes – while the amounts that we make from our various business partners may not be large amounts, it all adds up to a lot.
So really the question you should be asking is not, can I afford to work with ICG, but can I afford to not work with ICG? Check out this episode to know what it’s all about, and check out ICG Events to find out about exciting real estate investment opportunities that you cannot afford to miss.

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

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

It is never too late to invest in real estate.

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

Invest in the Sun Belt states.

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

Let inflation be your friend.

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

Workforce Millionaire

ICG 1-Day Live Expo 12-5-20

ICG 1-Day LIVE Online Expo–Sept, 12, 2020

Adiel Gorel: Updates. Covid-19. Strategies. Financing. Interest Rates. The Economy.

Raleigh-Durham: New homes in the Research Triangle. Jan Wynns

Oklahoma City: New homes. Great Areas & Cash Flow. Low taxes. Joe Pryor

Orlando & Tampa. Growth corridors in Central Florida. Space Coast. Jean Gillen

EXPERT: 1031 Tax Deferred Exchange and Reverse Exchange. Weiming Peng

Atlanta: New homes in Atlanta Metro. Tyra Connor

Jacksonville: New homes in Jacksonville & Ocala. Brian Scrone

Baton Rouge: New homes, High Rents, Growth. Michelle Ruston

EXPERT: Insurance as 1st line of defense for the RE investor. Joyce Feldman

EXPERT: Tax updates and optimizations for investors. Joshua Cooper, CPA

Adiel Gorel: Recap of day. Extensive Q&A. Covid-19 . Loans. Inflation

The Best Real Estate Investing Advice Ever

I was interviewed by Joe Fairless on his Podcast “The Best Real Estate Investing Advice Ever”.

You can find my interview on Joe Fairless’ podcast website:  https://joefairless.com/best-ever-show-2/

My interview can be found under:  JF2152 or via a search on my name.

The interview title is:

JF2152: Which US Markets Shine for Rental Homes and Why With Adiel Gorel

Joe was a great interviewer, and I enjoyed our talk. I didn’t only discuss the best markets. I talked about the awesome power of the FIXED 30-year financing we get only in the U.S. (it doesn’t exist in other countries, to the best of my knowledge).

Getting a mortgage with a fixed rate means inflation becomes your best friend, as it constantly erodes the real value of your monthly payment, as well as your loan balance. You usually don’t have to wait for 30 years. About half way through the loan term, the balance of the loan usually looks like a joke, and so does the monthly payment. I go into more detail about this important (and overlooked) point in articles I had written, in my books, and in my television show, the PBS Special “Remote Control Retirement Riches”. I’d be happy to send you the articles, as well as a link to the PBS show. Just email us at info@icgre.com.

I talk about the future financial transformation that buying new single family homes as rentals in the right markets. You buy in a good area. Local brokers help you and local property managers handle the home for you.

Over the past 35+ years, thousands of investors have bought over 10,000 rental homes in the best markets in the country. We have people from across the ocean investing as well. Clearly, the idea is that local managers do the heavy lifting for you. Now you can be as busy as you probably are, and still build a future-changing portfolio.

We started with me as a busy Silicon Valley engineer. I needed managers to handle the properties for me. Now they help you as well.

Joe asked me towards the end about losing money. I forgot to tell the story of how I “lost” money by simply having to learn the “art of doing nothing”. It took a few recessions for me to finally learn that when a recession is in progress, the best action for the owner of a rental home to do is “nothing” (the hardest thing for us to do , or “not do”).

Until I learned how to do nothing, I got rid of homes during recessions, and while that was not a direct loss, it prevented me from benefiting from those homes in the future, to the tune of a lot of money.

I enjoyed the interview very much, and I hope you find it useful. I hope it can change your future.

May 16, 2020: 1-Day Online Expo

 

Adiel Gorel: Updates. Covid-19. Strategies. Financing. The Economy.

Tonya Debnam: Raleigh-Durham: New homes in the Research Triangle. Tonya Debnam

Joe Pryor: Oklahoma City: New homes. Great Areas & Cash Flow. Low taxes.

Jean Gillen: Orlando & Tampa. Growth corridors in Central Florida. Space Coast.

(EXPERT) Mary Joe Lafaye: Create reserves during Covid-19 w Reverse Mortgages.

Tyra Connor: Atlanta: New homes in Atlanta Metro

Brian Scrone: Jacksonville: New homes in Jacksonville & Ocala

Michelle Ruston: Baton Rouge: New homes, High Rents, Growth. Michelle Ruston

(EXPERT) Joe Merante : Make sure your credit does not suffer due to Covid-19

(EXPERT) Brett Lytle, Esq. : Asset Protection, entities. Covid-19 Risk avoidance.

Adiel Gorel: Recap of day. Extensive Q&A. Covid-19 Loans. Inflation.

Adiel Gorel on April and May 2020 Rent Collections

 

Adiel Gorel on the Online ICG 1-Day Expo

For more information or to register go to https://icgre.com/events/icg-real-estate-1-day-online-live-expo-saturday-may-16-2020

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