Building Your Net Worth using Real Estate

www.freedomment... Building your net worth using real estate

[@samann9]

real estate is an IDEAL vehicle for building wealth. i did it with medical office buildings.

[@DonteeWeaver]

Should you buy property as a sole proprietor or build your net worth as a LLC? Just wondering if I would personally hold my portfolio or would everything but held as a company?

[@freedom_mentor]

This video answers that question: kzbin.info/www/bejne/jHLZkJ2QjLp_aas

[@oldskoolfunk71]

Thanks for all your valuable videos Phil, You are a great motivator and provide great content, Your videos are PURE FIRE (fuel) for the entrepreneur. To all the big thinkers and dream chasers time to get in attack mode and crush it! No fear and no giving up. God bless you and the family Phil.

[@cihatecicek]

In a country like Turkey average mortgage is wise for 7-10 years after 11 to 20 it is not worth to continue from 10 years on does not drop monthly installments worthwhile due to high interest rates. So cashflow system does not work and you have to add cash on top of monthly rentals. But good side is, as your mortgage is fixed rate in a highly devaluing money after 3-4 years house appreciates %50 ..so you have to scew the formula to sell one house every 3 years to provide down payment and strength to support money for the coming new 3-4 year projects. If you sell a property keeping 5 years you pay ZERO income taxes. I take all your ideas but develop for the local market .. like bank mortgage loan leverage extremely powerful here .. we have %20 down payment in general but a new law passed for energy efficient A group housing 10% and 15% for B grade energy efficient housing is accepted which I believe is good green incentive

[@miguelsampaio6717]

This is the man, I am a small Portuguese investor, this gentleman is the best adviser I have had.

[@robertaakins7514]

Phil I have been thinking about going into flipping houses for several years now and never felt secure enough to do it because I am the primary provider for my household. This was very informative and made me think about things within the business that I never thought about. Thanks a bunch for this.

[@33ladyRAM]

LMBO "that's not fancy!" Love it and thank you so much for sharing your wisdom.

[@VANPEDDLER65]

Phil, Really like this short video. It sums up and clarifies "KEY ITEMS" concerning real estate investing.

[@Grod77711]

Amazing content Phil!!!!! Realest Investor on KZbin🙏🏼🙌🏼🙌🏼

[@pearlkuntz]

Hi Phil, I never thought watching a video on real estate investment will so much fun, BUT IT IS!!! Thanks for sharing all of your real estate wisdom on KZbin,

[@solutions4life822]

Thanks Phil. My goal is just to end up having a place to call home ,but I have really had fun flipping .. These videos have changed my life and make me very humble and grateful that God has placed amazing people in my life.

[@UltimateBargains]

In terms of what is "strong cash flow", I look at the Debt Coverage Ratio (DCR) that is the ratio of the Net Operating Income (NOI) divided by the annual debt service. I structure my offers to provide at least DCR 1.50 to tolerate recessionary pressure on income and expense.

[@larrymoore6640]

Another great video. What I like is your down to earth explanations and your use of the white board. Absolutely right about its about cash flow and in two of our houses neighborhood changes.

[@jamesrattenborg]

Now in Oregon they are allowing duplexes to be sold as two separate homes. Duplex values used to be based on the income they produced this will soon end nationwide when they allow all duplexes to be sold as two separate homes. This is bad for new people getting into real estate, but good for those who own duplexes who will be able to double the selling price on them. States will also benefit because they will now be able to double their tax revenues on the property.

[@erichunter4723]

Thanks Phil I will be taking your advise to build my own Net Worth in Real Estate

[@SeekingTruth11.11]

Love your videos Phil!! So much information and you make it fun to watch and learn

[@alexcarter5974]

Thank you for taking the time to explain these basic concepts.

[@Tykoon25]

Thank u for alway taking the time to respond n educate us!! Ur a unique guy few people do wat u do

[@arthurstein-tarnowski4732]

Perfectly executed non imposing insight.

[@PeytonOBrienMagic]

Phil, how are you renting it out? I thought you disagreed with rental properties...

[@freedom_mentor]

I LOVE rental property and own millions of dollars of it. BUT, I cringe at the thought of traditional rentals. They are so inefficient. This video explains what is an efficient way to handle rentals: kzbin.info/www/bejne/rarSoHxrf55ki68

[@dhawkins0000able]

Phil, Ever hear of using a HELOC instead of fixed rate mortgage to buy a home? Apparently, the loan is structured with daily compound. So if you have your paycheck deposited, and only drawdown (withdraw) your expenses you will pay far less interest. A HELOC calculator has a $150,000 loan paid off in 8 years. This works with $20k/yr disposable income that is applied to paydown the HELOC.

[@freedom_mentor]

+dhawkins0000able That's a really cool concept. In the real world, it wouldn't be intelligent to take your extra disposable cash and pay it off, but instead, to use a portion of the rental income to do so. And about the biggest risk on a HELOC is that the interest could rise; whereas a 30 year fixed rate loan won't change for 30 years.

[@abiodunbada441]

Hi Phil, you said you are not in support of 15years and below mortage? My question is that, is it not better to rush paying off your loan, so that you get out of the bundage earlier, since you cannot predict the future?

[@freedom_mentor]

Bondage? Why do you think the borrower of a long term, fixed rate loan secured against a high return on investment asset is bondage? It's quite the opposite. The lender is the one in bondage. You have the freedom of the asset without having tied up all your cash to have that freedom.

[@marcocepeda2303]

Hey Phil, great video! Thank you for sharing your insight. You probably covered this in the video, but on calculating your net worth would I take the home value - the loan? Or put in what the NOI cashflow is at the end of the year. I'm trying to create an annual net worth statement for myself and want to do it right. Appreciate your time and help. Also wanted to let you know that I've been watching your other videos and they're awesome! Been learning a lot. My notebook is full of key points you made. Really appreciate you taking the time to teach us about real estate.

[@freedom_mentor]

You can certainly calculate your Net Worth as a summation of the equity in all of your properties. I think Net Worth calculations are flawed because Net Worth doesn't equal wealth. One calculation that is helpful to determine is the following: How many months could you survive if you were unable to work, starting today? A summation of the total cash you have available and the incoming passive cash flow would give you that answer.

[@OmranSheikh]

This is a very good video. Big concepts touched upon briefly.

[@dominicgl]

This Video was Awesome ! Great Job Phil !!!!

[@rann127]

a really good teacher give it your time

[@222222e]

Hey Phil should I start a LLC before I purchase a property. I want to use my rental income to grow a business, and flip properties for my personal income since I don't need much to live off. I just don't know how and where to start in real estate SMH

[@freedom_mentor]

+222222e You can. Or you can wait until you are about to close on your first property to establish a legal entity.

[@222222e]

+Phil Pustejovsky Thanks so much

[@Tykoon25]

How is the depreciation price determined is it on the current value of the home because as you know prices have gone up at least 100k in my area..?? Or is it depreciated at the purchase price? Example if I bought my home for 100k divide that by 27.5 an get that deprecated price deducted from my yearly rent or since I bought at 100k an now worth 200k can I do 200k divide by 27.5 an use that amount

[@freedom_mentor]

Actually, you take what you paid for it, minus the value of the land (which doesn't depreciate, only the structure does) and then divide by 27.5 years. An accountant could give you an even better understanding of the concept of depreciation.

[@smokeysmoke268]

Im watching how to turn a little into a lot RIGHT now, but still let me know your thoughts please.. than you Phil

[@lovejoy2830]

Thanks Phil

[@jcjimenez5327]

Hi Phil what would by an ideal cash flow after expenses and thanks for the video...

[@freedom_mentor]

+Juan Jimenez 20% of gross rent or more

[@jamesbanks2050]

Is cash flow generated by rentals considered income for a financial institution to loan new monies to an individual?

[@freedom_mentor]

+James Banks Yes.

[@donaldcrawford1742]

Thanks Phil.

[@michelebixby8377]

Thank you! I enjoyed your video!

[@N0body247]

Hi phil, Thank you for your videos I just stumbling onto you as I am thinking of doing real estate in Florida, You have explained more in your 8 videos i have seen so far than the 3 day seminars i have been too, Keep up the amazing work. Thanks again You just gained a new subscriber :)

[@TheTraeTube]

Should I go to school to learn more about real estate? And or you a real estate agent or investor?

[@freedom_mentor]

+jason luu Watch this: kzbin.info/www/bejne/bae2apWXqNprq8U

[@Hozebeast]

Hey Mr. Phil. This is Daniel in Donelson. I have a question for you. I don't know if you remember me, but I had a tree fall through my house, and after a year and 2 months, I finally moved back in..!.. Anyway, I added a 4th bedroom and now the house is worth a pretty penny and I don't know what to do..?? Can I sell it, make about 130k net, and put that down as a down payment for a small apartment complex?? Would you recommend this? Or should I buy a cheap house cash? What are you thoughts??

[@freedom_mentor]

Get a HELOC so you can keep the house and invest the equity in a very high return on investment property

[@jocelynjamero4032]

Would buying a preselling condominium (not yet constructed) be a good investment? With a good payment schedule for the downpayment?

[@freedom_mentor]

Almost, with exception, NO. This video describes why you have to be so careful of buying condos, in general: kzbin.info/www/bejne/fGeVmHWbd8SDmpY and furthermore, buying pre-construction is a gamble on the guess that the property will appreciate; which it may not. Please read my book "Real Estate Investing Gone Bad".

[@ziggy8757]

great video phil, thanks, ive learned alot

[@OneOnOneBro]

Great video! What percentage is considered CASH FLOW STRONG?

[@freedom_mentor]

+OneOnOneBro 25% of gross or more

[@OneOnOneBro]

Thanks for the info and your quick response

[@merlyn0006]

What it's better to invest a few single family home or one complex apt with 6 units ?

[@freedom_mentor]

Depends

[@coltonrandell1354]

+Phil Pustejovsky is there a video on this?

[@freedom_mentor]

My good friend Peter Harris has a video on why he loves Commercial over Residential: kzbin.info/www/bejne/opeckIaFj8mCoNU

[@iandaous]

Hi Phil, My wife and I invest in real estate… together we have two duplexes, and a triplex, and looking to purchase more property. My wife feels we are too heavily invested in real estate. She is correct depending on how you look at it, If you look at our personal balance sheet, I would guess that we have about: 1.5% in cash 17.5% in stocks, bonds, retirement, etc… 76.6% in Real estate Equity 4.4% in Precious metals. Of all those assets, it’s the real estate that is making the most money… all properties are cash flow positive. So my question to you is, how do you truly diversify yourself in investments, and how much real estate is too much? Thank You, Ian

[@freedom_mentor]

I diversify within real estate :)

[@turk162940]

Hey Phil, How do you feel about buying homes near Colleges for students to rent?

[@freedom_mentor]

turk162940 Love it

[@scorpiomonet]

I have watched a handfull of your videos and feel encouraged as if it peiced all my irons in the fire of bussiness together and made the big picture clearer. So esentaly Im enjoying your videos thus far and finding them helpfull. Im just curious about a monor point that may have been left out in this video when you discuss leverage and start writing on the roof of the house that it leaves out that you will be paying intrest on that amount you borrowed or leveraged and it would eat up esentally that percentage made you taljed about.If the value of a home increases anualy by about 3% but you are paying about 3% intrest on the loan does it not kind of end up a wash? Also how does inflation tie into this senerio also? Lets say you bought the home outright and it increases in value by 3% anually, by time you factor in a roughly historical 3% average inflation does that not also end up a wash and thus its more of a store of value then a generator of value? If you combine the two it would seem to actually be a loss of about 3%? It would seem to me that the key is to buy properties under market value to gain profit and that flipping or renting them is the real key to turning profit? Really liked your video on being a landlord. Great insight on that, Id love to see more on that topic!

[@freedom_mentor]

Your analysis is not comparing apples to apples. A 3% interest rate mortgage is not washing out the 3% appreciation of the house.

[@Freedom0rBust]

Phil I want your advice. I have 1 SFR cashflow positive at +$600 after exp. ~40-45k in equity. I am thinking about selling it because I have around 37k in student loans and a car payment. Been listening to a lot of Ramsey lately... I'm torn because the house is in a good location and is cash flows nicely. But I want to be debt free! My thoughts are there will always been more deals and I should take the money and run right? What do you think? Thanks!

[@freedom_mentor]

Dave Ramsey is a terrific individual. What very few people recognize is that his message started in Tennessee, one of the poorest states in America. His message of NO DEBT works great for low income people. But as you start to climb the wealth ladder, some of his cookie-cutter advice breaks down. Your situation is a PERFECT example of the get-out-of-debt message breaking down, potentially. Why on earth would you get rid of a wonderful asset like that to pay off the lowest interest rate loan on the planet (a student loan)? If the cost of debt service is $200 per month for that student loan but your rental property brings in $600 per month, it would be completely irresponsible to sell it. Furthermore, the debt snowball approach must be done with rigorous discipline. The highest interest rate loans should be paid off first. And you may decide to not payoff the super low interest rate loan. Paying off debt for the sake of being debt free is not financially responsible in all cases. If you can earn 15%+ returns on your cash and you have a 3% interest loan, taking that cash to pay off that loan is a bad idea.

[@darryls8066]

Brad. This is probably not what you want to hear but I would do everything that I could to save my Cash Cow and be working 3 jobs to pay off that consumer debt crap...... 37k should be done in 6 months tops. I have been there done that and got the t-shirt. I am 100% DEBT FREE now and own several paid for rental properties generating great cash flow each month. I am currently looking for another one since I have money in the bank. YOU CAN DO THIS but you will have to miss some football games and after parties LOL. Ole Dave is spot on. Quote "if you want to live like no one else later, you have to live like no one else NOW" Make the sacrifices, dig deep man. No Whining. I want extra pepperoni on my pizza and do NOT throw my newspaper into the bushes by the porch! LOL

[@danielmontes7893]

Another great video thanks,

[@alexnick3367]

phil, I think your video on building your net worth is the best one so far,that I"ve whatched and the reason is so you can start bringing incom, Phil, I am thinking investing in land since I have a little to invest ,how can you make income on raw land?

[@freedom_mentor]

Lease it to a tenant.

[@zakerkabir2]

Hello Phil I believe that real estate is one of the best asset classes for many reasons. My question is how do we measure the level of success as an investor ? Is it in terms of positive equity, cash flow, location condition or size of the property? How do you measure the success level of an real estate investor?

[@freedom_mentor]

It's measured in if they reached their goals or not.

[@zakerkabir2]

Phil Pustejovsky I need to set some goals you got me thinking. Thanks for your time Phil.

[@villanuevaruth21]

Hi Phil, Just for curiosity, is it worth that you will be the bank of the owner of the house? You pay there mortgage then they will pay you instead.

[@freedom_mentor]

I don't understand the context of your question?

[@villanuevaruth21]

Sorry, but thank you for replying. Well its like I will invest and pay off there house for them and they will pay me instead.

[@Icemax1970]

What's the percentage of rent that you like to have as cash flow?

[@freedom_mentor]

Any rentals I own are 20% Cap or more and with a long term fixed rate mortgage, my cash on cash return is usually more than 40%. A few of my rentals have exceeded 50% cash on cash returns. As for the percentage of rent that is cash flow, that usually shakes out to be 50-60% of the gross rental income is cash flow.

[@akabillyba]

Great video Phil.

[@Endeavor545]

Liquid gold from the phil-mi-ster!

[@patriot7633]

Very Informative.

[@A.GuyMedia]

Hi Phil, I live in Quebec, Canada and I am planning on moving in Florida after my 3 years in college. I am not sure yet if I am gonna do my university here on in the USA. Do you think that moving into the US to start into Real Estate investing is a good idea? And what should I do to start helping myself with knowledge now?

[@A.GuyMedia]

Pardon my writing.

[@freedom_mentor]

Real estate investing changed my financial life and now I live a life of freedom that everyone I have ever known growing up doesn't have. If that sounds exciting to you, perhaps you may want to pursue real estate. But there are drawbacks. You won't be normal and have a 9 to 5 job. It's different being your own boss and making your own rules. Some people don't like being different. They want to be like everyone else.

[@A.GuyMedia]

Phil Pustejovsky This is the exact opposite of what I want. I will pursue that dream no matter what. Do you have some advice for what i should do for now? And is it worth it for me to move in florida when I get 20 years old?

[@A.GuyMedia]

TheSkyProd 21*

[@zakerkabir2]

On average how many properties do landlords own? please thank you.

[@freedom_mentor]

+kabir I have absolutely no idea.

[@zakerkabir2]

+Phil Pustejovsky No problem thanks anyways. This is a bit irrelevant but in England changes to how landlords are taxed is having a big negative impact on cash flow. Could this be the future of real estate internationally?

[@freedom_mentor]

+kabir I have no idea

[@zakerkabir2]

+Phil Pustejovsky I think we just have to wait and see. Keep up the good work. Thanks again.

[@tommysena4904]

buying 5 bedrooms house is a good investments in the long run?

[@zhemin]

Probably something smaller in general is better for investment.

[@arsentabaku9139]

Great explanation! Maybe I misses it, but when your house value is increased by 3%, which means from 100k to 103k, and you own only 10% of this asset, how is that you won 30% of what you putted in? In my sight of view you will win 10% of the 3k. Thanks again.

[@freedom_mentor]

You own 100% of the asset; you invested $10,000 and when it goes up by $3,000, you created a 30% cash on cash return.

[@corehomeforthepropertyinve6833]

Thank you for sharing. Bank always a IDEAL leverage tool :)

[@tonyrosa7106]

Need you as my mentor !!! Just starting to read books on REI afraid to go out alone : /

[@tejpalsingh8438]

have you started yet?

[@j.d.rowlett2959]

Hi Phil-really great video! I have a condo valued at 265k and I owe 134k. I make 40k/yr with no other debts. Would you advise taking out a 10k loan against it to reinvest in a scenario like your video here? Or, would you advise a liquid down payment first? My goal is to go full time in residential and commercial investing. Really enjoy your videos and advice! Thanks, JD

[@freedom_mentor]

Leveraging that equity to invest in real estate is best described in this video: How to Turn a Little into a Lot with Real Estate PART 1 Taking out a Home Equity Line of Credit on some of that equity and wisely investing it would be a great way to launch your real estate investing empire.

[@jsiszero]

Wouldn't there also be a dark side to leverage you didn't mention? what if the house depreciates by 3%?

[@freedom_mentor]

You'll still be cashflowing and historically, over the long haul, real estate values at least keep pace with inflation

[@allenjones3397]

Thankyou so much! Learning a lot

[@truckintempo8065]

Phil how can i get approved for a line of credit for $5 Million ?

[@l854s]

Truckin' Tempo have 20%

[@joescars4075]

Phil Hi I hope all is well. What % do you set a side for maintenance, Vacancy and so on per Hold? Thanks I have been watching your video's I started flipping homes a year ago. Things are going well Slow and steady. Thanks

[@freedom_mentor]

Depends on age of the home, age of the improvements and what kind of rental it is, the location, etc

[@MarcusLeepapi]

Thanks a lot.

[@JPESQUIRE3]

Phil, fantastic videos as usual. Only problem (for me anyway) is that Im in the UK and roughly 20% of what you say/advise/experience etc isnt relevant here for obvious reasons. I know this isnt your fault and Ive even seen you make a disclaimer before that what you speak about applies to North America only. But you clearly know your stuff and I really like the way/process you go through this complex but attainable business. With this in mind, do you have an identical English twin out there with their own channel?! Failing that, any recommendations? Regardless, keep up the great videos, cheers. - JP

[@freedom_mentor]

What "20%" is not applicable? Please be specific too as I may be able to shed some light on what you bring up.

[@JPESQUIRE3]

Phil Pustejovsky Thanks for the reply. Various things you mention in vids such as Heloc, Section 8, Mortgage interest tax relief are all things that either dont exist here or have their own variations and dynamics. Dont get me wrong, I still find loads of the stuff you post fantastic and really helpful (Im a complete newbie and only found your channel when looking for personal financial advice). Also, capital/house price appreciation, generally has a different dynamic here, partly because of politics and partly because the "property ladder" is literally a religion in the UK - and thats not an exaggeration. Unless of course Im hearing noise and a much higher percentage of what you say/offer equally applies here? If so, ever thought about having a UK member on your mentor program? :) Again, thanks for the vids, keep them coming. - JP

[@dannyvcostarica]

Hey Phil! thank you so much for all the info, I read your book and i am initiating my first deal, would you be so kind to please send me the contracts? I am really afraid that if I make my own lease contracts I may screw it. If you can either send me the contracts or give me the link to download the I would really appreciate it!! thanks for everything!

[@freedom_mentor]

+Danny V Costa Rica Hire an attorney well versed in your local area's laws who also understands creative real estate to draft them for you.

[@dannyvcostarica]

+Phil Pustejovsky Hi!! Thanks I will! By the way. How do you deal with a seller who already has a couple of realtors working his property? When I published my first deal as Rent To own the realtors that are working with the seller called him and said that they were not going to continue working that property because I was already offering it as rent to own and that it would affect them when trying to sell the house the usual way. What can I do? can investors and realtors publish the same property at the same time?

[@bencobabe5416]

Inspired

[@TheFrog767]

👏👏👏💪stuff.

[@guillermone1]

I have been investing in Real Estate part time for the last 30 years while working full time at my job. I have been able to generate about $80,00 in cash flow with a net income of about $50,000 a year. I think it is enough money to live on and feel ready to leave my job and go into real estate full time. But I am afraid. I tried it once in 2007 and failed miserably. I had to go back to work again. That was 8 years ago. The beauty of real estate even if you do poorly, long term it always manages to bounce back. I am ready to try again. Most of my properties are paid in full, free and clear with a lot of equity and want to take a line of credit and use the money to invest. I also have some capital saved up but not enough. Is this a good idea or where should I invest.

[@freedom_mentor]

+guillermone1 Get very educated first, before pulling out equity in your existing properties to buy more real estate.

[@smokeysmoke268]

Phil Please Read: I'am a 23 yr old unemployed male living in so cal, I will be getting a check for 100K $ in less than a month due to a personal injury. This is my last payment and I have blown my money in the past. I want to make this money work for me the best possible way and invest it the smartest way possible, what do you think I should do with this money so i can make money and make enough to become more wealthier I have seen some of your videos on short term property flips, but for my first flip it will be a big investment, what are your thoughts? and what would you do in my shoes?. Thank you.. Your videos are amazing!!!

[@freedom_mentor]

Watch these two videos (if you haven't already): PART 1 kzbin.info/www/bejne/oHOahZh3iadnn6c and PART 2 kzbin.info/www/bejne/ima8g2Swg52Ap8U As you may already know, a fool and his money will soon be parted. Educate yourself and align yourself with the right people who will help you grow as an investor.

[@Sprint4serbia]

Damn Phil! Where has the hair gone?!

[@freedom_mentor]

I ask myself the same question these days :)

[@menaluciage3721]

i love u

[@BA-no1bq]

I feel like hes mrbeast's dad

[@henrylacks9979]

Great video, Phil.