Why Do People Invest In Real Estate? | 5 Reasons

Why Do People Invest In Real Estate? | 5 Reasons

Why do people actually invest in real
estate? I mean, wouldn’t it be a lot easier just to put your money in a 401k
or an IRA and just let your money do its thing or accumulate in the stock market?
But the reality is, there’s all these millionaires that real estate creates.
And everyday, people are jumping on the real estate bandwagon. Today, I want to
explore the top 5 reasons why they’re doing that. Alright. So, let’s jump into this. Today,
I’m going to be sharing with you 5 specific reasons why people actually
jump and get involved in the game of real estate. And before I share these
with you, if you’re new to the channel, make sure you take a moment to subscribe
and ring the bell. Every day I come up with a brand new
video. My story for those of you that don’t know me, I bought my first 25 homes
when I was in college after I found out I couldn’t be a doctor. Not smart enough.
And bottom line is I found a way to command my own financial future. Those 25
homes produced a 6-figure residual income. I quit my job. And since then I’ve
been living life on my terms, my way. So, years ago, I started to create this
YouTube channel because I was helping thousands of people basically duplicate
and replicate exactly what I’ve been up to. So, subscribe and ring that bell if
you want to get more videos like this. Designed to help you have the brightest
financial future possible. So, reason number 1 that I wanted to connect with
you on. When people get involved in real estate, it’s because they start after a
while looking at their 401K and IRA and realizing that on the 30-year average,
these accounts are producing about a 5% ROI. And bottom line is you can
have great years but you can have years where you lose it all. And a 5% average
ROI is not going to be enough for you to get where you want. It’s not going to be
enough for you to actually retire. In fact, the average person… The median
person at age in their 60s has a 401k with $62,000 in it. So,
we’re not talking a lot of money. A high, $192,000. Again, not a lot of money. So reason number 1 today why people
actually jump in the game of real estate is they’re looking for an alternative to
the 401K that is not getting them where they want to go. The second reason why
people get in the game of real estate it’s because for the first time in their
life, they can buy an asset that will actually pay them money. There’s actually
money left over to put in your pocket. Which means that you’re not just
accumulating money for some day. That some day has come and arrived and it is
now. I bought my very first home. I had a $500 month cash flow on it. And I
remember when I put that in the bank, I thought, “Man, I was so poor at the time. An
extra $500 so meaningful.” It reflected at my earning
point like working at least a full-time week that I no longer had to do because
I was getting paid. And in the third month of getting that check, my brand-new
wife basically said, “Kris, we need to do this again and again?” Cash flow is a huge
reason why people get in the game of real estate. And it makes sense that if
you buy home after home after home after home. And they’re each producing a cash
flow. If you get enough homes, you’re going to live more of the life that you
want. And you’re not gonna be waiting for some retirement day. Now, let me actually
show you what that looks like for some of you don’t understand. Let’s say that
you purchase a house and you’re collecting $1,500 a month of rent from
let’s just call it your property manager. But let’s say that your mortgage… Meaning
your loan and what you actually own the house. Let’s say that that’s closer to
$1,200 a month. Well, you’re collecting 1,500 every month.
You’re paying out the door $1,200 for your mortgage and all your expenses. And
then there’s this mysterious $300 a month that’s left over and you’re
wondering, “What do I do with that money?” Well, some of it should be saved because
the future will… You know, the property in the future will have breakdowns and
repairs and things like that. But you’re going to find that there’s an account that
can build up. And that leftover money is for you to enjoy right now. The third
reason why people get in the game of real estate is because they’re looking
for tax write-offs. And the reality is is that IRAs and some of the other
concepts that people use for tax savings, simply aren’t really providing a whole
lot of tax benefit. Real estate on the other hand in America at least, from the
time that the Constitution was written was designed to protect and benefit
landowners. And today, I haven’t found any tax write-off to be greater than what
you can have with actually owning real estate. And I’ll share with you why.
There’s actually a couple of reasons. The first one is… And probably the most
important is this word right here called depreciation. Now, what depreciation
really means is that the government is assuming that when you buy an asset like
this iPad. In time, it becomes obsolete. And if I’m using it for business,
they give me a schedule at which I can write off every year part of this iPad.
And so that by the time it’s useless to me and I buy a new one, I’ve been able to
write off the whole experience. Well, it’s the
same thing in real estate. I get to take an asset and depreciate it. Now, for those
of you if that’s a new word, it means that this house is going to be valued.
Not the land but the structure of the house is going to be valued. And they’re
going to allow you to write it off in most instances over 28 and a
half years. Well, that means that if we’re talking about 100,000-dollar
property, that’s going to equate to roughly $3,000 a year.
And here’s what that means: It means that if I have a positive cash flow on this
property of.. In the other example I showed you. $300 a month
right here. Well, $300 a month is about $3,600 a year. If I get to depreciate $3,000, it means that
that 3,000 goes against the income. And almost all of it is
completely written off. I throw in a couple other tax benefits of owning real
estate as a business. And before you know it,
I’ve brought money into my life but I’m not paying taxes on it. You can do that
in real estate in ways that you can’t do it almost anywhere else. Now, there’s
other tax benefits. But I think that’s the most noteworthy and important one
that we’re going to talk about for the length of today’s video. The fourth
reason why people get in the game of real estate is because of how real
estate performs with time. It’s a real asset, its physical. It’s something that
you can actually touch. And for that reason and because they’re not making
more of it, as long as population continues to rise, there’s always going
to be a demand for more houses. And that means that real estate becomes more
valuable with time. Let me show you what that looks like. This is from the US
Census Bureau. And this is showing from 1963 to 2019. This is the value of real
estate with time. Now, we can see in 2008 that we had a major correction. Much like
you would have seen back during the Great Depression. But other than that,
look at what real estate does. It continues to climb. It continues to
increase in value. In fact, if we were to average out the entire growth since 1963,
you’re actually looking at an average annual increase of 4.58%. Now, for just a moment, let’s just add that up to a couple of things
because I think that it’s important for you to understand the full ROI of what
we’re talking about. I talked about getting a cash flow. Let’s say that that
cash flow based on my investment to buy a
property is producing me 7% ROI, just on the cash flow. But let’s just say
that also the appreciation that I was just talking about is at 4.5%. And on top
of that, you understand that when you make your mortgage payment every single
month, that a poor part of that is actually going towards the actual
principal. That principal is on average going to be around on an entry level
single-family home about 5%. And I’m going to call that principal reduction. Now,
you’re not going to get this money now. But when you sell the house, you’re going to
realize this money. If I were to just add these up, the ROI from the cash flow, my
appreciation, my principal reduction, I find myself at 16.5% ROI. By the way, at 16.5% ROI, am i outperforming the
stock market? Yes, I am massively outperforming the stock market. Which is
why people really consider the game of real estate.
The final takeaway and the fifth reason why people get in the game of real
estate is because it really is a way for you to achieve financial freedom. You
know, there are many of us that are working a job that we really like. We’ve
got passion for it. But the most of us don’t have that luxury. Most of us sort
of doing something that we don’t enjoy that much. And you know when you’re in
your 20s, listen, you can adjust to it and you can get used to it. When you’re in
your 30s, you might be busy traveling or building a family,
getting married. But when you get in your 40s and 50s, that’s what a lot of people
start rethinking the strategy and thinking. You know, it’s not so much that
we don’t want to work. But if you’re doing work that you don’t really enjoy,
that’s problematic. And real estate has the ability to actually create a level
of financial freedom for you. In fact, if you buy a number of houses and I’m going to
tell you right now… By the time you’re in your 50s or 60s, if you lived in that
same house for 20 or 30 of those years, you’re going to look at your growth
and you’re going to say, “Man, if I had a time machine, I would go back in time and I
would buy more houses.” In fact, if I have a quarter million dollars of net worth
because of this one house, if I bought four, I’d have a million dollars. If I’d
bought 8, 2 million dollars, right? And so, people can start realizing that
real estate is this thing that can sit in the background. Done correctly, I
always have to throw it in there. There’s a lot of ways to do it the wrong way
which I’ll address in just a moment with a free gift for you. And this financial
freedom is a dream that keeps people alive and functioning at work. In fact
for me, I was able to achieve that financial independence in 4 and a
half years. I did it fast because I was really motivated. Some people motivate
and they do it even faster than that. And other people say, “Hey, I like my career.
I like my job. So, I’m just going to do this over maybe in the next 20 years or
30 years.” But I can’t rely solely on an IRA or a 401K or the stock market.
Because bottom line is it doesn’t produce enough aggressive growth for me
about to be able to retire and get where I want. I want to thank you guys for
watching today’s video. Today has been in your service sharing with you the 5
reasons why people get in the game of real estate. This is my gift for you
today if you are joining me. If you don’t have a copy of this book, I get enough
for them from the printer that I actually share these for free. You don’t
have to pay the $20. I do ask that when you click on the link below that you do
cover the shipping. And that way I can get it sent out to you. This book will
reveal not just the 5 reasons that I talked about. It’s what you’d actually do
to start building real estate wealth right now. And in addition to that, I have a
video that’s about to come up showing how I did it by the age of 26. You’ll
find the information here and you’ll certainly find it in that next video.
Click the link below and I look forward to joining you on tomorrow’s video.

4 thoughts on “Why Do People Invest In Real Estate? | 5 Reasons

  1. Great video
    I would love to get into real estate but am currently to young to buy a property myself and that is why I am invested in stocks at the moment
    I also have a YouTube channel about stocks
    Anyways great video you have really changed my outlook about realestate

Leave a Reply

Your email address will not be published. Required fields are marked *