real estate investing

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

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

It is never too late to invest in real estate.

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

Invest in the Sun Belt states.

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

Let inflation be your friend.

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

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

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

You can buy anywhere.

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

Anyone can invest in real estate.

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

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

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

Non-Qualifying Mortgage – your secret for success.

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

Initial negative cash flows? No problem!

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

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

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

I recommend not graduating.

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

The IRR (Internal Rate of Return) is important.

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

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

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

What is ICG and who is Adiel Gorel?

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

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

All You Need To Know About Buying a Single Family Home


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

There’s no rush.

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

How to buy a single family home right now.

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

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.

End Investment Fear with a New Real-Estate Solution

On September 29th, 2008, the United States witnessed a financial disaster that would eventually overtake the globe. The Dow Jones Industrial Average fell 777.68 points after Congress refused the bank bailout bill. Seemingly overnight, the nation’s sense of security was swept off its feet. By 2009, 861,664 families lost their homes and foreclosing rates increased by 225% in two years.  Ten years later, the effects have slowly dwindled away, but the fear persists as noted by the 23% of young prospective homeowners who see homeownership as a “bigger financial risk”, despite the market’s correction.

Eliminating real-estate investment fears, president of the International Capital Group, Adiel Gorel shares the minimum-risk/maximum-return solution:  Remote Control Retirement Riches, the investment strategy designed for even the most inexperienced investor. As millions of Americans turn away from retirement plans and Social Security, find a simple solution in our upcoming broadcast discussing Single-Family Rental Homes.

Make an Investment with Confidence – not Fear

Owning multiple homes post-2008 may seem counterintuitive to financial stability. However, for the past 30 years, Gorel has developed and shared the Single-Family Rental Homes investment plan, assisting busy and inexperienced families to plan for their future without compromising the present. Explore a wealth-building strategy that has previously led to:

  • Paid-Off College Tuitions
  • Paid-Off Mortgages
  • Paid-Off Home Renovations
  • Healthcare Emergency Funds
  • Investor’s Tax Benefits

Join Adiel Gorel in our upcoming broadcast, July 25 at 1:00 pm PST on KQED, to discover how to create multimillion-dollar rental single-family home portfolios using real-estate markets throughout the U.S. Learn about helpful loans and investment tips that support retirement riches regardless an investor’s age. Also, since real-estate investments involve several markets nationwide, you can implement methods at your own pace, maximizing your control over your investments while reaping benefits with minimal time constraints.

Erase your own investments fears and start planning the future with confidence. Follow us on KQED on the dates listed below to learn more at our interactive seminar. Visit our Membership Area for more detailed information and insights into becoming a home investor without becoming a full-time real estate mogul or hired landlord.

Upcoming Broadcasts:      

  • KQED Plus: Sat, Jul 13, 2019 — 3:00pm 
  • KQED 9: Thu, Jul 25, 2019 — 1:00pm
  • KQED Plus: Thu, Jul 25, 2019 — 10:30pm
  • KQED Plus: Fri, Jul 26, 2019 — 4:30am
  • KQED Plus: Sat, Aug 10, 2019 — 10:30am

Wisely Putting Down Payments on Single-Family Rental Home Purchases

A few times a week I talk to investors planning on putting a large down payment on the purchase of a single-family rental home. The goal is to have a better “cash flow”. It may sound logical – the greater the down payment, the smaller the loan, and hence the monthly payments. However, the foundational piece of buying rental homes in the United States is the “gift” called “the 30-year fixed rate loan”. This loan sounds like a miracle to most foreigners, since neither the monthly payment nor the mortgage balance EVER keeps up with the cost of living around the world, while everything else does.

The magical 30-year fixed rate loan

The 30-year fixed-rate loan is at the heart of life transformation for investors when the homes are held for 10 years or more (preferably over 15). The loan keeps getting eroded by inflation (or CPI– the cost of living), while the home, rent, and everything else keeps requiring more dollars to buy (hence in dollars, their value goes up – even without intrinsic appreciation). The 30-year fixed rate loan starts looking quite puny after 12, 14, 16 years. It may be years before it is paid off, but since it never keeps up with the cost of living, inflation hammers the real value of the loan.

These loans are a great financial gift, with future-changing potential. Why, then, would you want to make the gift smaller? Especially at today’s low rates? The answer is, you don’t. A larger down payment will mean the magical loan will be smaller.

May be wise not to exceed 20% down payment

This is not fully utilizing the power of the fixed-rate loan, and it means the borrower has expended more of their scarcest resource: cash! Even very wealthy people, who can afford to put down a large down payment or buy for cash, choose to put down less money. They do this to leverage their cash with the 30-year fixed-rate loan.

I think that in normal cases, a 20% down payment should not be exceeded. The small additional cash flow due to having a smaller loan is insignificant at the present time. Right now, your main “cash flow” should come from your own earnings (salary). It is later in life during retirement that the rental homes can replace your income.

In cases of big 1031 exchanges, with not enough properties to identify, or in cases of not being able to get the FNMA loan anymore, then larger down payments are merited and that is a different blog post. I still think the down payments should be less, rather than more, in any circumstance. Currently, in our Membership area on our website, we have podcasts and a webinar that discuss loans and cash flow in depth. You can learn more about it at icgre.com/members

Setting Up an LLC With Single-Family Rental Home Purchases

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

The 30-Year Fixed Rate Loan

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

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

Multi-Member LLC

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

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

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

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

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

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

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