Why Investing In Real Estate Is Stupid

Why Investing In Real Estate Is Stupid


Investing in real estate might be the
dumbest thing you ever do. I lost a million dollars on a single
transaction. I have lost money in real estate. And for a guy who’s bought
thousands of homes, I want to be the first to tell you that most people
should not be in the game of real estate. Especially with the way that they tackle
it. My name is Kris Krohn and today, I am going to be talking about how you would
build wealth intelligently through real estate. But frankly, all the people who
shouldn’t be in it, to find out if you’re one of them. You know, I love telling the truth but
truthfully this one hurts a little bit. I mean, I’ve created so much wealth through
real estate. It has created such a wonderful life for me. But I actually
believe that real estate is bad news for most people. And that’s because of how
most people get caught up in the game of real estate, right? I mean either it’s
through an infomercial or some kind of ad that you see on the internet.
Something pops up and all of a sudden, you see that goofball missing teeth that
tells you about the millions of dollars that they made in real estate as a
testimonial. And before you know it, you’ve caught this bug. Because someone
is selling this get rich dream crap that feels so alluring. Because… Let’s be
honest. Most of us are stuck in a rat race. Most of us are busy living a life
that we’re actually not really enjoying, that we’re not really connected with.
Part of us just wants to dream about having a better life. We dream about
having more about traveling more. We dream about a nicer home or a nicer car.
There’s a time for many of us where that’s really really important. And so,
you capture the right moment with the right real estate advertisement. The
right video and all of a sudden, you are hooked and you’re thinking to yourself,
I’m going to go out there and do real estate. Now, this is where it actually
gets really bad news for you. The problem that a lot of people have is when they
get into real estate, they don’t get a mentor, they don’t get a coach and they
make assumptions. And by the way, I paid a million dollars for what I’m about to
tell you. I kid you not. From one of my mentors. The most dangerous information
is what you don’t know. And what most people don’t know when real estate is
actually going to crush them and leave them in a really hurtful place. You see,
what they do is they go out there and they’re like, “I want to be an investor.
And if I buy real estate, things will be better off for me.” So, what do they do is
they go out and they buy a house.”And they don’t put a whole lot of thought
necessarily into is it a good deal. Because they don’t even know what a good
deal is. And before you know that, they do one of 2 things. (1) They become a
landlord. And this basically means that they have a mortgage and they need to
get the house rented. And in the course of getting the mortgage and getting it
rented, depending on how much they put down, depending on the price of the home
most people buy a home that is too expensive. And as a result, when they try
to rent it out, they’re really close to a break-even. But
even when you get to a break-even, you have expenses because you have things
like repairs. And so, you might have started off with saying, “Hey, I’ve got a
mortgage that I need to cover that is $1400 a month.” I actually rent this home
for $1,500 a month because I didn’t really know what I was doing. So, I have
$100 more I’m collecting a month in the mortgage. But then, the fridge goes out or
the a/c unit doesn’t work. Or you can’t get it rented out. So, you have to like do
carpet and paint. And before you know it, you’re upside down in the house and
you’re paying more money. Well, you can get on a fast track. Especially if you
put the wrong tenant in there. So, easy to do that. When you’re brand-new, it’s so
easy for you to be taken advantage of. Because a renter that is struggling
financially, what they’re going to do is they’re going to test their waters and
figure out “Who can I be flexible with?” They can’t be flexible with their cell
phone service. Because if they don’t pay their cell phone bill,
it just gets shut off. But they know you. They’ve had a conversation. And you seem
like a pretty nice person. Because you’re not a professional at this. They without
training our farm or superior in their professionality than you. And that
victimhood had a hard month is going to rise to the surface. And all of a sudden,
they’re going to put you between a rock and a hard place trying to get you to make
favors on them. And they’ll find out if they have flexibility with you and this
is the biggest expense in their life, they’re going to push on you every single
time they have a hardship. And before you know it, you become in the landlord real
estate business what we call a “Don’t-wanter”. A “Don’t-wanter” is someone that
basically has real estate. They got it because they thought it would do good
things for them. And then because they don’t know what they’re doing and it
didn’t do good things for them they get burned out and they get really upset. Now,
apologize if you’re watching this video and you’re like, that happened to me. I
hope it hasn’t happened to you yet. Today’s video is really more about “If
you are in that situation what can you do?” But more importantly, how do you avoid
getting in that situation at all? Before I share that with you, another
scenario that is pretty typical in the game of real estate is people will buy a
home and they’ll say to themselves, I’m going to do this thing called a flip. Now,
what’s a flip? Buying a flip is like, “Hey, I purchased this house. I got it for 150,000. And I think it’s worth $200,000.”
And you’re thinking “Because I got it $50,000 below,
this is going to work out great for me. I’m really excited about this.” Here’s what
your inexperience hasn’t taught you. There’s $30,000 or
repairs. There’s going to be 15% of selling fees by the time that you sell
this. You might have to dock the value 10% to get it to move based on the
market timing. You might have over repaired it. You add all this stuff up
and if $50,000 here can actually turn very quickly into a 10 to
20 thousand dollar loss. I just showed you exactly how it happens and I
assure you this is something that happens. So, listen. Real estate
it’s brilliant done correctly. But done incorrectly, it’s a nightmare.
It sucks. It’s a it’s something that you just don’t want to be involved with. You
have some other options though. And what I want to do right now is I want to take
you through what those look like. Having been a professional investor long enough
to have done thousands of deals, what I want to do in the remainder of this
video is share with you a superior approach to doing real estate that will
keep you safe. What that really has to do with is “How do you put less money to
work? And how do you get yourself protected?” This is what it looks like: When you get in the game of real estate, one of the things that you want to be
aware of is “Am I going to actually be the implementer?” And this is for the
hands-on person. And if you’re really hands-on do-it-yourselfer –DIY, you are
super dangerous in the game of real estate and what you need is a mentor. You
need someone that literally can walk you through every step of the deal because
you might be handy. You might know how to fix things. But I’m telling you right now,
you don’t actually know how to crunch all of the numbers. And if you don’t, then
you can get upside-down and actually get hurt by your real estate. But I want to
speak to you that are saying, “I’m actually hands-off”. And hands-off is D-F-Y.
It stands for Done For You. And in that case, you don’t really need a mentor. What
you’re really looking for is a team that is experienced and they know what
they’re doing. You know the first secrets are really winning in the game of real
estate is understanding whether you’re really hands on or your hands off. Do you
want to be active and participatory or do you really want to be passive and let
it happen for you? Both options exist. In fact, one of the things that I’ve done is
I’ve helped thousands of investors all over the world access the best markets,
And those that don’t have any money or want to
passive, I show them how to get involved in real estate. Those that do or don’t
have money that want to be hands-off, I show them how to do real estate. So, at
the end of the day, no matter what situation you find yourself in, you got to
understand that there’s some options. You want to be in real estate. I want to be
clear. Real estate, if you look at from 1963 to 2019, real estate is averaging
4.58% appreciation. If you buy in the right
markets and you’re getting a 7% cash-on-cash return… Now, between the 4.5% and the 7, now you’re 11% ROI. Now, I’ve beaten
the S&P 500. Then you add on top of that the principle reduction. And some of the
other benefits. And you can quickly find yourself running over 20% of your on
your money. I Average 25%. And so, real estate is a really brilliant play as
long as you’ve got a mentor with the hands-on. Or whether you’ve got an
experienced team with a track record on the hands off. If you want to explore
what both of those paths look like, go ahead and click the link below. And you
can get with a member of my team where I can show you how to get mentoring on the
do-it-yourself. Or I can show you how to access a team they’ll allow you to be
passive and get all the benefits that real estate has to offer. Thank you guys
so much for watching today’s video. The link below will literally show you your
next steps get with the member of my team. They’ll create a custom game plan
for you that can basically show you what both of these options look like. So, you
can be in the game of real estate. Today’s video, the point don’t do it on
yourself. Don’t be a lone wolf. Because most of us are programmed to really
tackle life that way. That’s a great way to get spanked and get yourself into a
world of hurt. Don’t do that my friend. Make sure you are a subscriber. And if
you can do me a favor and smash that like button. That’s the one thing that
tells YouTube that this is a good video and it’s worthy content and worth
sharing. So, please share it with other people. Give it a like so that YouTube
will do that for me. So, we can help more people on their journey to financial
freedom.

13 thoughts on “Why Investing In Real Estate Is Stupid

  1. I like how Chris covers all the sides and not just the shiny side. His videos are more informative than sales like compared to other real estate youtube channels. I have ridiculous amount of respect for him. Especially how he has a new upload almost daily to explain all this stuff.

  2. In reality what it really boils down to is KNOWLEDGE. If your not knowledgeable in real estate start learning. You donโ€™t need to pay 2k or more for a course or a seminar to get knowledge because real estate is subjective. Everyone situation and personal life is different. Yes! Your personal life does have a affect on you buying real estate. Therefore you have to gear towards your situation at this present time.

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