Real Estate Crash Course – Millennial Money – Alexandra Gonzalez-Ganoza

“The difference between rich people and poor people is which way their cash is flowing.”

If generating cash flow through real estate is your path to creating a life of financial independence, then the time to act is now.

You might be wondering, “But Alex, real estate is at an all-time high, and interest rates are through the roof!” Success in real estate isn’t just about buy low, sell high.

In fact, the strategies I’m going to talk about today are cash-flowing opportunities that can weather any financial storm.

Facebook: @RobertKiyosaki

Twitter: @TheRealKiyosaki

Instagram: @TheRealKiyosaki

Foreign [Music] The difference between rich people and Poor people is Which Way their cash is Flowing if generating cash flow through Real estate is your path to creating a Life of financial Independence then the Time to act is now You might be wondering but Alex real Estate is at an all-time high interest Rates are through the roof Guys success in real estate isn’t just About Buy Low and sell High In fact the strategies I’m going to talk To you about today are cash flowing Opportunities that can weather any Financial storm Welcome back to another Millennial money I’m your host Alexandra gonzaleza There’s one simple rule when it comes to Success in real estate it takes a Different mindset than working 40 hours Per week week after week One of the best ways to begin earning Money without working a nine to five or Even getting a second job is through Investing So guys as we know there’s various asset Classes to choose from there’s paper Assets right like stocks bonds and Mutual funds there’s also Commodities Like gold silver oil gas or even corn And then there’s business so either you Own a business or someone else’s and

Then there’s also of course Cryptocurrency but today I’m going to Focus on my very favorite asset class Which is real estate investing And you might be wondering why real Estate investing is my Top Choice And besides having a family full of Real Estate Investors there’s two reasons to Invest in real estate the first of Course is for cash flow which we talk About all the time here at Richton it’s An ongoing stream of income you receive From an investment like the rent you Collect from a rental property And then the second is capital gains the One-time profit you earn from the sale Of an investment And if it’s done right rental real Estate property that produces a positive Cash flow could be your ticket to Financial Freedom Whether you invest in a single family Home or a shopping center it’s really an Amazing way to build ongoing income That’s not rely on your current job Which as we know and as we’ve repeated Many times here at Rich Dad that could Disappear with no notice no one’s Protected from that So the secret to getting rich with real Estate is to invest for cash flow Because even if the market goes up or go Or if it goes down you’re not worried About the price of Real Estate

I want you guys to take a look at this Clip from Kim Kiyosaki where she Describes the difference between Investing For Cash Flow and Investing For capital gains There’s two things people can invest in One is capital gains and one is cash Flow So capital gains is you buy a stock for Twenty dollars it goes to thirty dollars You sell it your profit is called Capital gains okay you buy a house for a Hundred thousand dollars you put twenty Thousand fix it all up you sell it for 150 000 your profit is called capital Gains so anytime To realize capital gains you must sell Something Okay you must sell So most people they will they’re looking For a market that’s going to go up Okay they always want the market to go Up because if I buy here I want the Price to go up and then I sell and then I get a profit and that’s called capital Gains cash flow on the other hand which Is my favorite two words cash flow is Let’s say I buy a stock that pays a Dividend every quarter so that dividend I buy the stock that money stays there And I get a dividend every quarter that Is cash flow to me or my number one Asset is real estate I love real estate Rental properties I started with a

Little one bedroom two bath house and in Real estate you I buy the say the first House I bought I bought it it was 1989 It was forty five thousand dollars so I Put five thousand dollars down I had a Loan I rented it out and every month I would Collect the rent I pay the mortgage I’d Pay the expenses and the bottom result Was 25 positive cash flow So cash flow comes from rental Properties cash flow may come from a Business you invest in somebody’s Business and every month every quarter Every year it throws off a distribution To you that’s called Cash Flow So cash flow is more of a you buy it and You hold it where capital gains is you Sell it okay so and it’s awesome because At the first time I ever even heard About capital gains or cash flows when I Was a little girl and we played the cash Flow board game for kids yes pay Attention to what Kim just said In that Clip guys rewind if you need to because It’s extremely valuable When Investing For Cash Flow you’re only Concerned that it keeps producing cash Flow With a cash flow strategy you guys can Write any of the Market’s highs and lows And that’s why we call Kim the queen of Cash flow A lot of people get upset when we say

Your house is in an asset right And we’re not saying that you shouldn’t Buy a home to live in you can love your House I love my house right but it’s not An investment it’s simply a house and That’s a lesson we need to all learn It’s a liability If it appreciates of course that’s icing On the cake same with your Investments Right of course if they appreciate Awesome news but you don’t buy a house For appreciation And the common misconception is that a Strong housing market generates wealth For the middle class And in reality it doesn’t it generates Debt What do I mean by this So people don’t sell their homes to pay For things like college educations and Vacations they borrow against them Growing a liability by taking on more And more and more about that So you should only care whether it Provides cash flow every month And when we talk about real estate Investing it’s really the only sure way To build wealth and secure your Financial future there’s a reason why we See the most wealthy of the wealthy own Real estate and that’s where a lot of Their revenue comes in especially well Of course there’s also owning big Businesses right but we see a trend with

The rich of the rich and the wealthy of The wealthy that invest for in real Estate and they invest long term for Cash flow So why is real estate one of my favorite Asset classes Number one you guys can use other People’s money You get to leverage other people’s money To create a cash flow opportunity and That’s of course always ideal In the world of real estate investing It’s actually extremely common you might Only pay down 10 on a property have a Private party or a bank provide the rest Of the funding and you’re already Bringing in money So just think about this you can own a Five hundred thousand dollar property For just fifty thousand dollars and it Can be bringing in five thousand a month In cash flow I mean who wouldn’t want That right And then number two there’s appreciation This is the increase in value of the Property over time If you manage your property wall you Take care of your tenants you strategize You increase you can then increase your Rents right when the rent increases your Expenses go down this causes the Property to increase in value And the third one is control when you Own the property and it’s yours you have

Control over the income and expenses of Your property So if you’re able to have your property Cash flow it’s not subject to the ups And downs of the market Number four tax advantages there are Some real tax advantages to owning real Estate properties and it’s the reason Why we see Donald Trump or the Kiyosaki Say they don’t pay they pay zero in Taxes they don’t pay taxes and people Get upset well they do so through real Estate for example depreciation it’s Something you can write off as an Expense against your revenue and not to Mention the tax credits available if you Offer low-income housing or if you Restore a historical building When you’re looking at a tax credit it’s Directly deducted from the taxes you owe At the end of the year And lastly capital gains deferral this Is if you want to sell your property to Reinvest in a different property the Capital gains would then be deferred It’s also known as a 1031 exchange which You might have heard in those terms Which has certain requirements that need To be met and you know it’s pretty time Sensitive but that’s a topic for another Day a lesson for another Millennial Money But since I gave you the pros of real Estate I’m also going to give you the

Cons as well real estate investing is Not for everyone the risk may be too High for some people There’s a time lag it’s not like buying Crypto and having it automatically show Up in your wallet there’s offers there’s Counters there’s appraisals there’s Inspections financing these things all Take time This asset class isn’t liquid meaning You can’t just get in and out of a real Estate deal quickly Of the four major asset classes real Estate is the second most difficult Right after business And you also have to deal with vacancies And bad tenants And it’s time consuming it takes time to Find a good deal properties have to be Managed on a daily basis So this is my caution to you all there’s A ton of benefits to real estate Investing But you have to know what you’re getting Into Real estate isn’t a 30-minute reality TV Show like some of those some some of the Ones that we’ve seen on Netflix right it Takes real work and dedication And now we’ve covered the pros of real Estate let’s jump into another question We get a lot What are the essential steps needed for Being successful at real estate

Investing Step number one you definitely have to Establish your personal investment Philosophy There’s always a right owner for any Property which is why it’s key to Determine what kind of owner you are Before you ever invest any of your Hard-earned money or your investors Hard-earned money You know in the millennial generation we Talk a lot about lifestyle and what kind Of Lifestyle we want right Investing is a lifestyle and you have to Determine what kind of investing Lifestyle you want for your life Some of the questions you can start to Ask yourself to help you determine this Is What do you want real estate to do for You right Where do you want to go in your Investing Journey who do you want to Work with and what do you want to spend Your time doing It’s all about looking for what you want In life your mission as a real estate Investor is to make sure you understand Clearly who you are what you want out of Real estate and then make sure that what You acquire fits that mold Step number two you want to determine The market you want to be in A saying I like a lot from the real

Estate guys is live where you want to Live but invest where it makes sense And by the way if you don’t know who who They are look them up they’re incredibly Smart and Friends of Rich Dad Many people think they need to invest in Their own backyards and that can be a Good idea for some people right but it’s Not necessary in modern times like today Instead you should find a market that Meets the needs of your personal Investment philosophy like we Established before For instance if your personal investment Philosophy were to invest for monthly Cash flow which is highly suggested It would make no sense to invest in a Number of properties with an aggressive Highly leveraged debt ratio that allowed For no cash flow Nor would it make sense to invest in a High appreciation Market where prices Didn’t pencil out for positive cash flow Instead you would need to find the right Market that provides affordability and Cash flow even if it doesn’t appreciate Much For cash flow investors that’s a great Market for Flippers or appreciation Investors it’s a nightmare Market But you only know that if you understand What kind of investor you want to be Personally for my first investment Property I decided to find something

More affordable in Scottsdale Arizona as Opposed to Bricco Florida which I would Have loved to invest in but the prices Were too high for the budget and for the Kind of property I had in mind And this isn’t to say you can’t find a Good deal in Florida right you can find A good deal on any market we’ve talked About that here at Rich Dad but I found An ideal investment opportunity in Arizona I had studied the market long Enough to see the growth behind it and Find something that made sense based on My calculations my projections and what I felt comfortable with And that’s the number one thing I tell You guys I mean stepping out of your Comfort zone that’s what Entrepreneurship is about right but you Need to make decisions based off of your Calculated projections your numbers and Factually what makes sense for you And then number three assemble your team As Rich Dad said business and investing Are team sports and in order to be Successful in any Market especially ones You don’t live in you need to have the Right team Your team should include an attorney a CPA a bookkeeper which we know Kim and Robert have always said how important Their bookkeeper is a real estate agent And or broker and you should rely on Them heavily to give you their expert

Advice and what they know about your Market about the properties you’re going To be looking at This was key and was fundamental my Number one priority it was my first real Estate investment so I found a team I Trusted people I consider experts from Their fields and have having their Knowledge saved me a lot of time of Course I did extensive research on the People I chose for my team made sure That they were successful and people I Trusted because they were going to be in And out of the property right so part of Having them As qualified professionals you also need To make sure that they’ve proven great Success and that you can rely on them And without a team in place to give you Expert advice the chances of making a Mistake are massive And then step number four guys you have To purchase the right property Finally and only after determining your Personal investment philosophy finding The right market and assembling your Team should you then start looking at Properties We have to take a quick break but we’ll Be right back Feeling powerless over current events And your financial future Financial Freedom is your freedom Robert Kiyosaki Is the best-selling author of Rich Dad

Poor Dad over 40 million people have Taken Robert’s advice now it’s your turn Attend Roberts free virtual wealth Building event claim your free access Now at don’t wait access Is limited go to that’s Welcome back I’m your host Alexandra we Left off with the four steps to being Successful in real estate Let’s get into how you find the right Property Robert and Kim Kiyosaki always Recommends starting small when you first Start out And as Kim described she started out With a two bed one bath home for her First investment And I’m gonna give you some examples of Unexpected real estate options to invest In that are inexpensive and creative Investments for first-timers As you start to earn a return on your Investment you can then use that money To buy the next one and the next one and The next one which is the formula behind The rich which is what Robert and Kim Have used right they use the money from Their first investment and kept Reinvesting in multiple other properties To the point where now they have about 8 000 properties And if you desire you can graduate to Apartment buildings real estate shopping

Centers warehouses and more the sky’s The limit when it comes to real estate Investing opportunities So let’s take a look at some great Places to start And remember the lesson here is Investing For Cash Flow So number one of the unusual investment Vehicles or investment properties are Mobile homes over 20 million Americans Live in Mobile and manufactured homes That’s accounting for around 5.6 percent Of the population According to us today the number is Steadily increasing because mobile homes Are less expensive than traditional Residences so they are of course more Attainable Number two Billboards this one I Personally found extremely interesting I Don’t know if you guys knew this but Billboards are considered real estate Better yet their real estate without the Hassle of tenants and they’re a great Place to start because when the economy Is good they’re used and when the Economy is bad there’s still a lower Cost option for companies who want to Advertise you can make around a thousand To five thousand in rent per side per Month Number three vacation homes here’s an Interesting story for you guys an Employee at richside had always wanted

To own a cabin in the mountains so they Could escape the brutal Arizona summer Heat They didn’t like the idea of taking on a Mortgage for a second home so they did Some research and discovered a shortage Of rental properties in the area they Were looking at clearly they weren’t the Only ones with this plan this is Actually very common in Arizona guys Um people have we have snowbirds come in But then we also flee when there’s the Summer heat because of course we’re in The desert and no one wants to be in 120 Degrees But they ended up buying a house making It an income producing asset instead of A liability And they rent it out whenever they’re Not using it especially for people who Want to use it for skiing when she’s Here in Phoenix during the winter And number four Airbnb which was my Personal investing Choice many Travelers Love Airbnb as you guys know it’s a Website that helps Travelers find Comfortable accommodations that are Local authentic sustainable and Inclusive But these aren’t hotel rooms they’re People’s homes Travelers can rent out a Room or the entire property depending on The listing so they can feel more at Home in an intimate environment

And what does this mean for you Depending on your circumstances you Could rent out your spare room if no One’s there if you don’t have a roommate And you’re comfortable with it you can Rent out your spare room or your entire House which can be extremely attractive To anyone who spends their Summers or Winters in another city And you can make daily or weekly income From this And this is what I personally found to Be the best fit for my lifestyle like we Were talking about earlier And as I mentioned before as well I Decided to move back to where I’m Originally from Florida but I had Researched the Arizona market for around Two to three years Finally I decided to invest in a Property in Scottsdale because I found It to be a great investment opportunity And even though I’m living in Florida I Still have clients and friends that I Would love to visit in Arizona Became a home for me after living there For six years So while I’m in Florida my property Generates cash flow but when I decide to Go visit Arizona for business or Pleasure or Nostalgia I still have a Place to stay and it was the best of Both worlds for me But that’s not to say that I didn’t get

Cold’s feet or that you know Unfortunate Events or uncomfortable situations Didn’t occur it can be extremely Intimidating And due to the extreme heat in Arizona Like we were talking about we Face very Low seasons But during High Seasons you can make Double the revenue which makes up for The low Seasons right you just need to Make the projections for the year Evaluate other properties and make sure That you’ll be re-compensating for those Low Seasons during the high months And it’s truly up to whatever makes you Feel the most comfortable would you Rather have a long-term tenant with Steady cash flow or would you like Something that provides double the Revenue and flexibility so you can stay In your own place but you do face a Couple of months of lower Revenue Now guys I know we can all get a little freaked Out when trying to find the right Property so you might be wondering how Do you know a good deal from a bad deal And as Kim would say it’s all about cash Flow The winning formula is to look for Properties that will yield cash flow And the potential for capital gains Because even though the primary focus is To find properties that cash flow it’s

Important to have options you always Want an Exit Plan And someday you might want to sell or Need to sell and wouldn’t it be nice to Do so for profit The second key to understanding if the Property you’re about to buy is a good Deal or bad deal first by determining The criteria under which all property Options must align you’ll always know Immediately if something is worth Investigating or not For instance Robert and Kim advised that One of your criterias should be to find A property close to your home And they feel this is extremely Important and should be a criteria for All beginners so that they can get to Know their neighborhood very well which Is much easier to do when you have easy Access to real-time info and when you Can just drive to the property Next look for properties with problems I know you guys weren’t expecting me to Say this but honestly one of the best Things you can do is find a property With a problem that you can solve a Rich Dad we call this problem properties You figure out how to fix that problem And you can instantly increase the value Of the property Ken mcroy has talked About this in the past as well And when Robert and Kim came across an Apartment building in Phoenix with a 37

Vacancy rate they could have easily Moved right along Instead they asked themselves the Following question How can we solve this problem It turned out the property was being run As a hotel and people could rent a fully Furnished apartment from anywhere from a Week to a year However clearly no one wants to be in Phoenix during the summer heat right So most of the units sat vacant during Those months so they did their research And they converted the property from Short-term hotel rentals to regular Long-term rental apartments Guys the vacancy rate went from 37 Percent To three percent and the property’s Value of course soared Some problems aren’t solvable and it’s Best to walk away or even run but if you Can find a creative solution to fix that Problem you’ll benefit big time just Like Robert and Kim did with this Investment And number four the criteria to finding The right property get in early or come In late It’s important to keep your pulse on the Market Why Because the early bird gets the worm When it comes to finding the best real

Estate investment deals Sellers want to do just that they want To sell so be ready to pounce with an Offer before your competitors Only after you determine it meets your Criteria Another strategy involves looking for Properties that have been sitting around The market for quite some time right These owners are motivated to sell often At a great deal because of course They’re losing money each month they own The property helping them offload that Burden can be a win-win situation And lastly negotiate based on numbers Not on emotions Have a maximum figure a figure you will Not go above under any circumstance and Keep that figure in mind before you Start negotiating When you reach that number you either Need to pull out of the deal or get Other concessions to make the purchase Of the property economically feasible For you and something you’re comfortable With so don’t fall in love with the Property because your emotions will get Involved and it’ll confuse your your Brain in the moment when you need to Negotiate instead you need to be ready To walk away from that deal if you can’t Come to a favorable understanding with The seller you’re in this deal to make Money and that’s it

Now that you’ve set your criteria for Finding a good property now you have to Find the deal this is where everything Gets serious But what exactly are you looking for and Where do you find it here are the top Three ways to find the right deal Number one become a pro at reading Pro Forma’s a pro forma a Latin term right It means as a matter of form it’s a type Of financial statement for an investment Property but unlike a cash flow Statement representing current income And expenses a pro forma is a projection Of anticipated income and expenses Most proformas don’t show actual Operating numbers Ask the agent since it’s his or her job To gather that information on a pro Forma in order to market the property to Potential buyers and once you understand The basic elements you’ll always be able To get the information you need The numbers on a pro forma will tell you Whether a property qualifies for further Review and if it’s worth your time If you decide to pursue the property you Will then use the pro forma numbers as a Starting point for a financial analysis You can find the rich dad’s real estate Evaluator on our website and I’ll link It here below as well so you guys can Use these tools remember Guys these Tools are completely free and we create

Them exactly for this for beginners for People or for even Pros who want to use Our tools to make sure that they’re on The right path of investing so don’t Forget to grab it in the description Below And once you’ve done a financial Analysis you can begin looking for what Can be done to increase the value of the Given property Where’s the win right where’s the upside In this property for you as the buyer Can you increase the income can you Lower the expenses can you improve the Value with some simple fixing up maybe It’s changing the floors maybe it’s Changing the painting Can you build additional units on top of The property this is where you guys can Get extremely creative How can you best optimize this property And number three guys find the copyright A capitalization rate it’s commonly Referred to as a copyright it’s the noi Divided by the purchase price or the Value of the property the cap rate Excludes the amount of debt and it’s an Indicator of the value of the property For example let’s say you estimate that You’ll have an annual 34 000 noi and the Purchase price was 245 000. your cap Rate would be 13.87 now you might be asking what’s a Good cap rate many experts consider

Between five to ten percent to be a good Cap rate And the next thing you guys might be Thinking that little voice inside your Head I’m new to this how do I minimize risk Start small this is very important and I Can’t emphasize this enough when you’re Starting out you always start small Invest a lot of your time and a little Of your money in the first deal I practically spent three years looking For the right property initially by the First year I had found a property and Was a step away from closing the deal But a couple red flags popped up and I Just simply wasn’t comfortable with it And looking back I’m so grateful I Didn’t invest in it But I kept searching for yet another Year and a half and found a property That met all my requirements my budget The kind of style I was looking for the HOA I was looking into the location my Numbers my projections my calculations My budget what I was comfortable with so Don’t rush the process or don’t get Emotionally attached that’s when things Always go wrong the numbers will tell The story and that’s what truly matters Most people do just the opposite they Invest very little time and a lot of Money and then they wonder why they lose Robert and Kim talked about how they

Initially looked over a hundred Properties went to them researched them Calculated the numbers then they Shortened it down to 50 then they ended Up visiting 10 more I mean until they Found the one that then eventually Taught them the formula for their next And next and next deal when they wanted To keep reinvesting And you want to keep your risk small Because you’re on a learning curve why Would you risk a lot when there’s a lot To learn and you’re bound to make Mistakes everybody does even Robert and Kim experts all over in real estate make Mistakes But just remember it that mistakes Aren’t setbacks they’re really forward Steps in the learning process think of It like failing forward The fact that mistakes happen is one Reason that positive cash flow is Important right from the start and from The very beginning because it can help Buffer those mistakes For example two friends recently Purchased their first investment Property it was a fourplex Within a month of taking ownership the City issued a citation that demanded They paved their driveway They were able to pay for this Unexpected expense out of their cash Flow

This meant that the property paid for Their education not themselves Also know how much you can afford guys This means finding out how much it’s Going to cost you for the amount of cash Flow you want In other words what will it cost you to Get 15 20 or 30 return on your cash Investment Secondly remember that your primary Investment goal is to improve your Financial statement And ask yourself these questions about a Potential purchase If the tenant moves out of the property And it sits vacant how long can I afford It if there’s a costly maintenance Problem can I afford it this is another Reason to start small guys If my friends with the fourplex had Started with a 12 unit apartment Building that driveway would have cost Them way more and probably would have Caused a huge financial burden Rubber the purpose of real estate Investing is to solve your financial Problems and not give you bigger ones If you guys want the step-by-step Formula to grow your Airbnb you’ll be Very excited to see who our next guest Is Someone who has successfully exited the Route Race by generating passive income Through rental properties

And if you’re looking to become Your Own Boss create a second stream of income And learn more about Airbnb this next Show is for you Thank you guys so much for tuning in Don’t forget to grab the real estate Evaluator tool your ebook in the Description remember they’re free They’re for you we create them for this Amazing community and thank you guys so Much for being a part of the millennial Money Community I’ll see you guys soon [Music]

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