Epic Real Estate Investing - Is Real Estate a Good Investment in 2019 | 548

Episode Date: December 21, 2018

Many of you are asking if the next year will be a good year for real estate investing. Well, it's always a good time to do it and 2019 is no exception. The market conditions are not the main indicators of whether or not you’ll make a good investment in 2019. Stay with us and learn what actually has the biggest impact on your success, how you can get your passive income to exceed your expenses, and what investing really means. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, rock star, Matt here from Epic Real Estate. And is 2019 going to be a good year to invest in real estate? I mean, that's the question on top of everybody's mind right now. And that's what we're going to cover today on this episode, a Financial Freedom Friday. Okay, so it's this time of year that I get to interact with family and friends more times than usually. And you're probably the same. And a lot of the RIA's clients, they become close friends.

mind and there's just a lot of mingling going on right now. And because of what I do on a daily basis, invest in real estate, the question has come up already more than once. Is 2019 going to be a good year? Is it going to be a good year to invest in real estate? Should I get in the market or should I wait for the crash? That's the question or those are the questions that are circulating in everyone's conversation. And, you know, my answer, it always surprises people. And so let's go over that. So the time to invest in real estate has more to do with someone's circumstances than it does the market conditions, meaning do you know what you're doing? So whether the big question around your circumstances probably has more to do with the timing than the actual market conditions are going to impact when you decide to get in. So a few things that you want to look at first is with regard to impacting your circumstances.

One, you got to invest in yourself. You have to invest in your education. You have to invest in your personal development. you have to invest in your environment, be intentional about creating your environment, be intentional about who you spend your time with, find a mentor maybe two, pay one if you have to. If you know what you're doing and you've got the right people around you, it's always a good time to invest in real estate. So that's number one, invest in yourself.

Number two, invest in your business. And this is what I mean, is to properly invest in real estate, you're going to need money. You're going to need access to capital. It doesn't always have to be your money. It could be someone else's money. But just in the world of business, it tends to create money and create those types of situations. So whether you have, you know, you have a little small flower shop down the street or you own a car wash or you have a little Amazon store or maybe a Shopify store, whatever it may be, or maybe it's flipping houses. Maybe you're wholesaling houses.

That's a business also. So you need to make an investment in your business to increase your cash so you can properly invest it into real estate. Now, the third thing you want to do is you want to invest in a safe, high-yield, low-risk asset. And that would be real estate. All right. So let me go over this with you. And this is why. Real estate has four profit centers, right?

Has four profit centers. Let me write these down for you. Right. So there is, we have appreciation. We've got, oops. We've got depreciation. Right? We've got cash flow and we've got amortization. So the big question that comes around real estate is a good time to invest. Is 2019 going to be a good time?

It has more to do with people thinking investing is buying low, selling high, flipping properties. If that's your idea of investing, that's not investing. What that is, that's trading, right? The other part of timing the market, people are thinking about appreciation, right? If I buy now, is my property going to continue to appreciate? This, again, not investing. It's speculation. Appreciation is the icing on the cake. These three right here, these are the cake.

This is where the real investing happens. So we've got depreciation. If you want to escape the rat race and you want to get your passive income to exceed your expenses, you can do it in a few different ways. One, you can just focus on your passive income and get it to rise above your monthly expenses, or you can focus on your expenses and push it down as low as you can to make that rise in your cash flow a lot easier. Or you can do it both at the same time. But really decreasing your expenses is going to be some part of that formula.

And if you're going to do that, I recommend you work from big to small, meaning start with your biggest expenses first rather than start with that small little cup of coffee. you're going to quit your lattes every day to try and forward your financial freedom journey. Let's start with the big ones. Okay? Let's make a real big impact. And depreciation, your taxes, it's your biggest expense in life. Real estate, just by owning it, is automatically going to start cutting into that.

So depreciation, very important into your investing. Second part, cash flow, right? We need the passive income. We need to put some money in to purchase the real estate, and then this gives us money on a monthly basis. So cash flow, that's investing. Third thing, amortization, I think this is probably the biggest one. The one that most people don't understand or if they do understand it, they don't give it as much attention as it deserves.

What amortization is, it's the paying down of the debt on your property. And if your property is an income property, meaning somebody is living in the property or using the property and paying you for its use, every time you get that money, you have to pay the debt on your property. what that does is it decreases how much you owe on the property, increasing your equity, increasing your ownership. But it's not you buying the property. It's whoever's paying you for the right to use your property.

So this is your real investing. So as you go into investing, make it your intent to hold forever. It's never your intent to sell. You're going into buy and hold. It's Warren Buffett who said his favorite holding period is forever. That's what you call a clue. Now there might be a situation where it comes along where you have to sell. There might be a situation where you need to sell or it might be something that makes sense to sell because you're going to sell this and buy something even better.

But it should always be your intention to hold. That's true investing. And with that all in mind, it's always a good time to invest in real estate. In 2019, absolutely no different. So the question that you really have to ask yourself is, where are you going to invest next? next. Is it going to be in yourself? Is it going to be in your business or is it going to be in real estate? So if you like what you heard or you know somebody else that might benefit from this, feel free to share it. Otherwise, I'll see you next week on another episode of Financial Freedom Friday.

Take care. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.