Most Productive Rental Properties

[@freedom_mentor]

Acquire the highest productivity rental properties with the help of a mentor. Get your mentor here: www.freedommentor.com/apprentice

[@brendayourlender]

Thank you Phil for another video. I'm always learning from you! If I get discouraged, I watch another one of your videos. I was a school teacher that decided to invest in real estate. I started watching your videos in order to get up the courage to buy my first rental in December 2019. Now, I'm up to 18 rentals (short term and long term), and I resigned form teaching. When I get discouraged about going forward, I watch another video. You help keep me motivated! I hope to do an apprenticeship with you some day.

[@mike20855]

congrats on your success 👍

[@Michael-vc2cs]

"You also have to be unrealistic!" I really needed this statement today. Thank you so much brother! I need to remember that trials often bring blessings and success comes after going through them sometimes. I am tempted to stop thinking creatively but I have to keep thinking outside the box no matter what.

[@brandonhooper7748]

This is the best advice (excellence) that you've given Phil it's great.

[@freedom_mentor]

Appreciate it. Glad you really enjoyed it.

[@emptyneverland4478]

Right when im out of ideas you post a video. Gonna refinance a duplex to buy another multi, hopefully this steers me on the right path.

[@stephenshifflett]

Always enjoy your videos and come away with great ideas. I have been doing very hands-off (albeit very slow) building of equity in two rental properties for 15 years. Hands-off and slow because I've been teaching and traveling overseas while my houses have grown equity. In my meager experience, I have found these points to be most useful: 1) don't rent to the first people to come by...due diligence is key 2) establish great relationships with repair people in the area; 3) establish great relationships with a tried and true realtor who knows people in the community After 15 years I've got it now so that I maybe shoot emails every few months to take care of any problems. Often my renters hand off to family members or friends. Now I'm in the process of moving back to the States and I'm going to buy more units with built equity and employ some of these ideas Phil has put forward...especially multi-family homes and short-term rental. Thanks so much Phil!

[@path4129]

Great video phill I just created a deal like this. I strategically renovated a single family with guest house into 4 nice seperate units, furnished and renting to traveling nurses, I've learned alot from you and feel I'm on the right track after watching this. Im working an arbitrage play next with a guy out of state who cant use his land much, placing trailers, gonna try to create a glamping experience with occasional events I think it will be a hit

[@TheLeadAttorney]

I love your content; I’ve been following you for years. I have a question. Do you offer consultations?

[@freedom_mentor]

Thanks for watching. I actually don't do consultations. Instead, I do full blown mentorships. However, I answer quick questions here in the KZbin comments and people email me at [e-mail] too. My challenge is that helping someone in this business is usually tough with a quick 15-30 minute consult. I prefer to teach someone how to make a watch before helping them fix their broken watch; because usually, it's best to throw way that old broken watch and go get a much better one. I once had a television producer reach out to me about having me star in an HGTV/DIY show that rescued bad real estate deals. It was going to be like "Bar Rescue", only for house flipping. The producer just couldn't get his head wrapped around the idea that while Restaurants & Bars can be rescued, bad house flips can't. If the investor already paid too much for it and already spent too much on worthless renovations, then it couldn't be rescued. I explained that it all started with getting the right deal and that took the most education/mentoring. Thanks again for reaching out and feel free to email me.

[@Dud-in9iu]

@@freedom_mentor This is why I follow your channel, you don't sell out to make a quick buck. You always provide sound wisdom based on actual real world experience.

[@josephcastellino7791]

Thank you Phil !!!! Please keep sharing 🙏

[@nikhilgupta3297]

Excellent video Phil, so much to the point insight about alternative use and smartly finding loopholes in property laws to suit ur project..I've been doing so in India in student housing and multi family homes ...new area I'm working on is learning on purchasing big industrial plot on the outskirts of the city and turning them into a warehouse , learning the procedure of the same ..will try to buy one definitely this year and converting it...thanks for the insights ur videos definitely motive the viewers..

[@christopheperron-martel4089]

Great video on the right mindset of a productive real estate investor for rental properties. Take care Phil !

[@THATGUY50551]

Thanks Phil for your expertise , have been listening to you for quite some time, and have learned a lot about rental property. I am getting into a market that I have never been in before dealing with low income people, I am finding it to be very profitable, I buy off market properties at a very low price and rent them to people with low income. Thus far I am making a profit of 35% on my investments. Been in rental business for thirty five yrs. this is a new game for me , i find it very profitable. Thanks for the KZbin videos!

[@mike20855]

i like those numbers. what state are you in? any trouble with tenants yet? Ive had a couple lowlifes who stopped paying but the majority have been fine

[@Dud-in9iu]

I think the mindset is the most important. I come across deals all the time because of having an open creative mind. I have actually found the most success in taking deals off of new investors hands. I recently closed on a duplex which another investor sold me. Long story short, the other investor was a traditional investor and ran out of money during the renovation. I was able to keep the house in forbearance during the renovation, rent out one side of the duplex, and turn it into a short-term rental. This year I did a cash out refinance so that I can have another set of lump sum cash for another multi-family deal. Overall, the renovation, closing costs, and down payment combined costed $42k, but the net cash flow plus cash out refinance after my first year gave me a net profit of $51k. The property now cash flows $1k/month after all expenses including mortgage. I saw the deal for what it was, but the traditional investor did not and gave up. Phil knows what he is talking about. I learned everything I know about real estate investing from his videos and books. No matter what I hear on the news or from other investors, I always reference back to see what Phil has on the subject then I go forward with what he says.

[@mike20855]

are you saying you're considering the amount taken out in the cash out refi as profit?

[@alfrednazari8395]

Phil, thank you , I couldn't agree with you more. I am an investor in NY metro area and its exactly what are are saying with a deferent scale.

[@born2leadproductions936]

Absolute gem of a video, thank you team!

[@r5yamaha]

Phil I read people thanking you for a great video. I'm here to tell you RE investing has improved my life style. Long term cash flow works and significant appreciation is a secondary benefit.

[@freedom_mentor]

You're so welcome! Amazing to hear. Have you acquired anymore rentals lately?

[@YagirlAutumn1418]

Thanks Phil for this video. Breaking down the numbers like you did really helped me to get an understanding about assessing rental properties. Also, it was helpful that you explained the need to have the reserves set aside for “just in case” situations. Knowing you have the 6 mo or more reserves established will help you sleep well at night. :)

[@TruckingwithBones]

Hey Phil great videos! I’ve been an off and on real estate investor for years and love it. Looking at being “on again”. You may already have a video out that I haven’t found on this subject. If not I’m curious about how you handle maintenance on your rental properties such as a “subject to“ property where you don’t have much profit between the rental income versus the mortgage.

[@freedom_mentor]

I consider thin margin Subject To deals as short or mid term rentals because I sell them on a Rent to Own. This video describes how I structure those deals: kzbin.info/www/bejne/npiXfGRolpmKkNE I move all maintenance responsibilities to the Tenant Buyer.

[@LordVader.66]

I'm looking at a condo in Sunny Isles. Partial ocean view and under 200k. Typically, they rent for 1200-1700/week depending on the season and they are always booked because of the area. I've almost over researched all the numbers on this building. Best part, it is on the beach

[@leroycarfrey7451]

How would you calculate "in it" if you own the property out right?

[@cameronmitchell694]

Storage units is one you can add

[@jwalk937]

I own a triplex that I lease to a non profit that houses aged out foster kids, It is now used as licensed transitional living grouphome with semi private rooms and my breakdown is NOI $45,000/ In it $315,000= 12 Productivity number. Thanks Phil

[@freedom_mentor]

That is FANTASTIC! Well done! Congratulations. That's how you do it right.

[@ignacioa3698]

Good stuff overall in your chanel! You have info specifically on the subject matter of coming up and securing down payments options?! What is good healthy down payment amount based on the numbers, and the different criteria, etc. When can you, or do you not have to, etc? Whether it's the traditional way and untraditional methods. Thanks!

[@freedom_mentor]

Acquiring highly productive rental property is an ongoing sideline investment activity that should be fueled by strong income generated from business or a very high paying profession. The following video explains what I believe to be the greatest shortcut in that process; which is is to operate a business as a creative real estate investor; due to some seldom understood IRS tax loopholes: kzbin.info/www/bejne/ZqHbcndmeZ54sJI

[@AleksandarPopivoda]

Phil, as always, great video. However, I don't get your point at 2:15. Why wouldn't I be able to get away with lower productivity than 12%, but with the asset that appreciates high? Once I do refinancing, let's say 80% LTV, the loan amount will be dependent on the newly appraised (appreciated) value, not the original Purchase price anymore. So, both I who bought with 8% productivity, and someone who bought it with 12% productivity, will pay the same mortgage, same NOI, and therefore have the same Cash Flow.

[@freedom_mentor]

The cash flow will be higher for more highly Productive properties. The problem with cash out refinances on many rental properties is that the new debt service eats up all net cash flow. That's why you need to only purchase highly productive properties to begin with; because the day is going to come when you want to cash out refi and if the property is unproductive, it doesn't matter how much it appraises for, you're stuck with not being able to cash out refi

[@craigslist8011]

​@@freedom_mentor Hi Phil, I am just about to take the real estate exam for getting my license. A couple requests. Any chance you could do a video on tips for how to pass the exam or a video like that. Also, any chance you could make a video more in depth on productivity with examples of real time properties or something like that? That would be awesome. Thank you!

[@philipperitchie382]

Do you know of a insurance compagnie in Canada (quebec) for student housing?

[@freedom_mentor]

No. But if I had to find one, I would contact an insurance broker that can write policies with many different carriers to go find one for me.

[@philipperitchie382]

@@freedom_mentor Thanks!

[@virooo17]

@Phil - Does the "In It" number include the loan amount OR is it the cash invested out of pocket in the deal? For example, I own a vacation rental that I bought Subject to. The loan amount is 240k. My cash out of pocketI is 75k including rehab, closing costs and holding costs. I'm cashflowing 3k/mo net after all costs. In this case, is the productivity rate 11.4% [36k/315k] or 48% [36k/75k]?

[@freedom_mentor]

You are "In It" $315,000. Well done on negotiating a Subject To on a property worthy of a vacation rental! Keep in mind that in this rapidly increasing interest rate environment, lenders are beginning to call Subject To loans due so you may need to be prepared to refinance if that happens.

[@hustlenation4779]

good stuff right here

[@freedom_mentor]

Thanks!

[@rogervanasten9303]

Phil, what If I owned the property for several years. Do I still use my all in purchase price from years ago with current NOI?

[@AleksandarPopivoda]

Yes, you do, plus all the capital expenses you put into property.

[@AberrantArt]

Phil, what resource do you recommend we use to learn what areas allow basements or ADUs to be rented out as a separate unit?

[@freedom_mentor]

That's a very good question! I have never contemplated a resource that would tell you what is going on with significant zoning laws changes, such as to allow single family dwellings to be duplexes. I would love to have that, though! What my people have done is to discover through news articles what is going on in their local area. They stay up to date in the world of real estate in their region and they follow any changes. That's what I do. I stay on top of Florida real estate news. I review every single article posted on FloridaRealtors.com, I review every potential law during the legislative sessions (there are two weeks left in the current one), and anywhere else I can get updates on real estate news in Florida. Meanwhile, my Apprentices keep me up to date on what is going on elsewhere (if it's significant). Your inquiry is quite sharp because this subject is where so much money is made. Being one step ahead of the rest by knowing the zoning and land use laws (and changes) better than most is where you will find your biggest opportunities.

[@AberrantArt]

@@freedom_mentor ❤thank you Phil.

[@Dan-ir5cq]

Hi Phil, Can you help me make a decision. I own a house free and clear in a strong rental market. My taxes are $4500 a year. The house is worth $1 million. It’s in good condition. I own it in my name but am thinking about putting it into a California LLC and renting it out. The thing is, since I can’t pull money out of it with the high interest rates, I don’t want to leave all the equity vulnerable to a lawsuit incentive and getting sued by tenets. There’s landlord protector insurance policies…or I could sell the house, but don’t know what to do. I am living in another house in Florida. Any suggestions? What would you do? It would rent it for $4000 a month.

[@freedom_mentor]

Why not sell it and take that $1M and buy a very productive rental property? Your $1M single family home in California would be an incredibly unproductive rental property. You're cap rate is less than 4%! You would make more money with less hassles by putting that $1M into a high yield savings account than owning that house.

[@johnsandlinjr]

What does the productivity rate prove? I’m not sure I understand this. Can a property have a large cash flow but a low productivity rate?

[@freedom_mentor]

Yes, a very low productivity property could generate a large cash flow, such as a 200 unit apartment building owned free and clear. However, that owner may actually be losing money each month due to inflation. Productivity rate proves the effectiveness of the investment, so you can borrow against it and still cash flow strong, or own it free and clear and cash flow extremely well.

[@johnsandlinjr]

@@freedom_mentor thank you for the clarification. Just playing devils advocate here, but isn’t everyone losing money due to inflation? Surely a landlord can’t raise everyone’s rate in step with the current inflation. That would be astronomical

[@freedom_mentor]

@@johnsandlinjr Oh, yes, they do and oh, yes, they can. My vacation rental rates are up more than 8% year over year. Rentals rates of my traditional rental units are up way more than 8%. It is astronomical but it is happening. Rental rates can keep pace and/or exceed inflation. The people losing money due to inflation have low productivity assets or are sitting on cash.

[@johnsandlinjr]

@@freedom_mentor or the working man, who is renting from someone who just told them their rent is going up 8% lol

[@freedom_mentor]

@@johnsandlinjr It's the harsh reality of this world. Landlords taxes have gone up, insurance has gone up, maintenance costs have skyrocketed, etc. In times of inflation, everyone is impacted; the tenant AND the landlord.

[@arthurserna7859]

Phil, Can you run through the numbers of coming up with the productivity rate in a separate video? It would be helpful for a beginner like myself.

[@mike20855]

its NOI / initial investment. noi is net operating income which is revenue less expenses (excluding debt service i.e. mortgage payments). numbers are annual

[@craigslist8011]

​ @Phil Pustejovsky Hi Phil, I am just about to take the real estate exam for getting my license. A couple requests. Any chance you could do a video on tips for how to pass the exam or a video like that. Also, any chance you could make a video more in depth on productivity with examples of real time properties or something like that? That would be awesome. Thank you!

[@dhpitcher]

Phil I keep hearing u say off market properties but I dont understand this. Why would a seller not list their property versus just calling a realtor and quite possibly getting multiple offers many being over asking price?

[@freedom_mentor]

There are a thousand reasons

[@dhpitcher]

@@freedom_mentor Lol well ok Phil dont keep us in suspense here. What are some reasons?

[@freedom_mentor]

@@dhpitcher What's it matter? There are at least a thousand reasons why people want to sell their property without a real estate agent. I've built a fortune on that fact, as have my Apprentices.

[@jordanroberts7931]

One of the reasons is the seller avoids realtor fees.

[@jakewells4809]

So ur saying if my property pays 1000 in rent, my expenses are 650 per month and my total investment or cash outlay= 15% down plus 7K closing= 650\17,500..That is 3.7% am I doing this right..please advise

[@freedom_mentor]

If you have accounted for ALL expenses (estimated maintenance, saving for replacing roof/AC, etc); and all of those expenses are truly $650, then your net cash flow is $350 per month, or $4,200 per year. Therefore, if that property was a 12% productivity, then you would be "In It" at $35,000; meaning you paid $35,000 for the property, NOT you put down $35,000.

[@jakewells4809]

Do u have an email address I can reach out to u on for some guidance by chance??

[@alklapaxida850]

nice work pusti,,

[@StephentheInvestor]

Why are we changing terms? Doesn't that just confuse people? It's a Capitalization Rate or "cap" rate..

[@freedom_mentor]

I explain in the video how "Productivity Rate" is slightly different than Cap Rate.

[@avelinovaz3174]

Phil, I disagree with you on certain things. I’m a real estate investor in Danbury CT. I have not found or bought anything in a year now. There are 30 bidders at the auction now overpaying on every property. Years ago I could buy property at 70% it’s value, those days are over. Over 50% of the sales are cash buyers paying 5 to 10% over it’s asking price. How can I compete in this market?

[@TheNoobkiller3000]

Get the sellers to call you vs. you just showing up to an auction. Put up signs in the neighborhoods you want to target.

[@rolandledesma7753]

You're looking in the wrong market. Look outside the box, outside that market.

[@TimeGallon]

@@TheNoobkiller3000 signs saying what? I buy houses?

[@jayc4715]

👍

[@freedom_mentor]

Thanks!

[@ryanolson2430]

I have a property I built for 45k I can rent it for $900, im trying to decide to rent it, sell it, or build another house for 30k and have 1,800 Monty rental income.

[@FightStrategistMMA]

What size is the property?

[@thisismagacountry1318]

I'm thinking Duplexes in low to middle income areas and multiple unit apartments. No Section 8

[@mackes3683]

You wrote "Outliars", it should be "Outliers".

[@olyasorokina3780]

Nice shirt, Phil!

[@wilfredogonzalez1422]

Hey Phil.

[@freedom_mentor]

That was NOT me! That was a scammer. This is the REAL Phil Pustejovsky

[@theotto-man7839]

The proper term for productivity is ROI.

[@freedom_mentor]

Not necessarily. Return on Investment is how much you invested. If you borrow money, that equation changes, hence why I use the term "Productivity"

[@mattboronda6108]

When I talk to an agent they say no soliciting.What should I do?

[@freedom_mentor]

I've never heard of that! What are you saying to real estate agents?

[@davidporterrealestate]

I miss those first five seconds

[@freedom_mentor]

That was embarrassing :) I had to pull it and re-render

[@davidporterrealestate]

@@freedom_mentor 🙂

[@jayc4715]

If my property cost me 50k all in...and it nets 700 a month after taxes/insurance. BUT it's now worth $125k.. shoulmyd I keep it or sell it?

[@freedom_mentor]

Depends what your plans are. What do you want your next steps to be?

[@bluesky6985]

Make sure you get allodial title or you don't own the property