These are the biggest myths and lies when it comes to real estate investing, and my unbiased perspectives when it comes investing in real estate - enjoy! Add me on Instagram: GPStephan
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The first myth I hear is that “Renting a house is a bad idea - it’s always better to own your home.” Well, the thing is, when it comes to this, there’s absolutely not a one-size-fits-all approach. And these are the situations where I’d say people are better off RENTING instead of BUYING:
The first is that if they’re new to an area and don’t know if they’re going to like living there. In this case, you’re better off renting until you get to understand the area and figure out where you really want to be. This one is pretty self explanatory.
The second is if they don’t intend to keep the home for more than about 4-5 years. Here’s the reality. Holding real estate for 1-5 years is not a long enough time to guarantee you’ll have a positive return. We’ve been lucky to see a huge surge of appreciation over the last 7 years, but this is not normal and we’ve just come out of the worst recession we’ve seen in a long time. Realistically, your house is not going to be going up in value 10% per year…So this is why I recommend that people buy a home, who plan to hold on to it FOR AT LEAST 5-7 YEARS…this gives you the highest chance to rebound from any fluctuations in price. Anything under that, and you’re likely better off just renting.
The third reason you’d be better off renting is if you have a better use for your capital than tying it up in real estate. Real estate is great for solid, long term wealth preservation and growth…but it doesn’t compare to investing that money in your own business in terms of ROI. So for most people who run their own cash flowing business, they prefer to LEASE and have as much free cashflow left over as possible to re-invest.
The next myth that is SUPER COMMOM is that YOU CAN’T FIND A GOOD DEAL BUYING A HOUSE ON THE MLS. The truth is that the source of the deal does NOT matter, at all. I’ve seen INCREDIBLE deals come up on the MLS, and because they were improperly advertised, they were overlooked and an investor was able to scoop in with a great deal. It’s more important to actually find a good deal, than to focus on the SOURCE of that deal.
The next real estate investing “myth” out there is that having more units equals more profit….again, this is something I hear A LOT and it’s a misconception that I’d absolutely like to clear up. Lets make it very clear: Having more units does NOT mean you will make more money. Just because you have 10 units doesn’t mean that is a better investment than something with 2 units. When it comes to identifying a good investment, ALL that matter is how much money it makes after expenses, and how much you buy it for….that’s IT. I’ve seen HOUSES that are better investments than 10 unit buildings…and I’ve seen some 10 unit buildings as better investments as houses. It all comes down to the price you buy them for, that’s it.
The next misconception when it comes to real estate is that you can TIME THE MARKET. Yes, if you can time the market, you’re going to do REALLY well. But that’s not what real estate is about: you buy on how much cashflow you make every month, and how much equity you can get on the deal based on the facts of TODAY. It’s more important that you find the right deal TODAY, than hope the market crashes AND you buy in at the perfect time.
And finally, the last real estate myth we’re told is that it’s a full time job investing in real estate. And this one is a little yes, and a little no. When it comes to real estate investing, it can really be as hands on or hands off as you’d like…you can work as hard as you want, or outsource as much as you want as long as your rental numbers are strong enough.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
Favorite Credit Cards:
Chase Ink 100k Bonus Point Offer - https://www.referyourchasecard.com/21/ZVSGGIXM8U
American Express Platinum - http://refer.amex.us/GRAHASOxHd?XLINK=MYCP
Here is my Comprehensive, Step By Step guide on Real estate investing:
70% OFF UNTIL SUNDAY -The Real Estate Investing Blueprint: https://bit.ly/2W5tZZs
GET $50 OFF FOR A LIMITED TIME WITH COUPON CODE: THANKYOU50
The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $125 million in sales: https://goo.gl/UFpi4c
GET THE MERCH: http://www.GrahamStephanStore.com/
The first myth I hear is that “Renting a house is a bad idea - it’s always better to own your home.” Well, the thing is, when it comes to this, there’s absolutely not a one-size-fits-all approach. And these are the situations where I’d say people are better off RENTING instead of BUYING:
The first is that if they’re new to an area and don’t know if they’re going to like living there. In this case, you’re better off renting until you get to understand the area and figure out where you really want to be. This one is pretty self explanatory.
The second is if they don’t intend to keep the home for more than about 4-5 years. Here’s the reality. Holding real estate for 1-5 years is not a long enough time to guarantee you’ll have a positive return. We’ve been lucky to see a huge surge of appreciation over the last 7 years, but this is not normal and we’ve just come out of the worst recession we’ve seen in a long time. Realistically, your house is not going to be going up in value 10% per year…So this is why I recommend that people buy a home, who plan to hold on to it FOR AT LEAST 5-7 YEARS…this gives you the highest chance to rebound from any fluctuations in price. Anything under that, and you’re likely better off just renting.
The third reason you’d be better off renting is if you have a better use for your capital than tying it up in real estate. Real estate is great for solid, long term wealth preservation and growth…but it doesn’t compare to investing that money in your own business in terms of ROI. So for most people who run their own cash flowing business, they prefer to LEASE and have as much free cashflow left over as possible to re-invest.
The next myth that is SUPER COMMOM is that YOU CAN’T FIND A GOOD DEAL BUYING A HOUSE ON THE MLS. The truth is that the source of the deal does NOT matter, at all. I’ve seen INCREDIBLE deals come up on the MLS, and because they were improperly advertised, they were overlooked and an investor was able to scoop in with a great deal. It’s more important to actually find a good deal, than to focus on the SOURCE of that deal.
The next real estate investing “myth” out there is that having more units equals more profit….again, this is something I hear A LOT and it’s a misconception that I’d absolutely like to clear up. Lets make it very clear: Having more units does NOT mean you will make more money. Just because you have 10 units doesn’t mean that is a better investment than something with 2 units. When it comes to identifying a good investment, ALL that matter is how much money it makes after expenses, and how much you buy it for….that’s IT. I’ve seen HOUSES that are better investments than 10 unit buildings…and I’ve seen some 10 unit buildings as better investments as houses. It all comes down to the price you buy them for, that’s it.
The next misconception when it comes to real estate is that you can TIME THE MARKET. Yes, if you can time the market, you’re going to do REALLY well. But that’s not what real estate is about: you buy on how much cashflow you make every month, and how much equity you can get on the deal based on the facts of TODAY. It’s more important that you find the right deal TODAY, than hope the market crashes AND you buy in at the perfect time.
And finally, the last real estate myth we’re told is that it’s a full time job investing in real estate. And this one is a little yes, and a little no. When it comes to real estate investing, it can really be as hands on or hands off as you’d like…you can work as hard as you want, or outsource as much as you want as long as your rental numbers are strong enough.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
Favorite Credit Cards:
Chase Ink 100k Bonus Point Offer - https://www.referyourchasecard.com/21/ZVSGGIXM8U
American Express Platinum - http://refer.amex.us/GRAHASOxHd?XLINK=MYCP
These aren’t “myths” these are general rules of thumbs for the overall real estate game, for the vast majority of these are true but for the individual properties may not be
Please more videos of this please please
Okay so let's be real(Estate). 🤐
Love this Channel
❤️❤️❤️❤️❤️❤️
For market timers who is waiting for a little bit better deal: You don't need laser precision when timing the market, you are already getting 80%-90% of a good deal.
Dislike for all the ads. Really annoying.
Do you suggest to do Real Estate as side thing when I get out of High School or go straight into it like you ??
Now the crash is actually coming
What about more fuel units?
Can you recommend any agency's that rent affordably in the north LA area?
100 miles per gallon translation 5 liters = 100 miles that's pretty good but what was your Toyota prius
Can you make a video about wholesaling? I just graduated High School and I want to know if this is something that I can get into, I don’t believe those gurus out there that’s why Im asking you.
Myth 4: Timing the crash. The Feds keeping rates at 0% until 2022. Corona unemployment means half of renters (18-65) can’t pay rent.
Result: Tons of defaults on the horizon, while prices will [inflatedly] remain high.
“Ta ta today jr “ 😂👏
You buy because you can it’s your time not someone else’s.
play monopoly, 4 houses and a hotel. it might take you 15 years but it is worth it. mix it a bit with your own version of utilities.for risk management.
You should amend your 70% offer above as the link says my coupon / offer has expired. It's Thursday morning and it says it's good until Sunday. 🙁
Graham Im going to have to disagree if you are only living in the house for 5 years and you could get a 30 year fixed loan and once you move out find tenants to create cash flow from the property, just turn your starter hole into a rental property, I have seen it down many times
You are so cute
Got my Graham Stephan fix for the day. Thank you very much Graham.
Dada
The voice is a nice touch!
I need to get better at retail sales. Why do I keep watching things about realestate?!
NOTES
The Biggest Lies in Real Estate
1. The Myth: It's bad to rent a home
2. You can't find a deal on MLS
3. More units, more profits
4. Wait for a crash before buying
5. Investing is a full time job
1. The Myth: It's bad to rent a home
-Situations where renting is better than buying
A. If you're new to an area. Get to know the area, figure out where you want to be
B. If you don't plan to keep your home for more than 4-5 years.
i. Owning a home for 1-5 years will hurt you selling it back
ii. Buying and selling a home is very expensive. You tie up your down payment, you're responsible for taxes, maintenance, paying all closing costs (+1% to house.), selling, you pay another 6%
iii. When selling, to break even, you need to sell for 7%-8% higher
C. If you have better use for your money to all the business owners. Invest in yourself above all else
2. Myth: You can't find a deal on MLS
: Multiple Listing Service
A. The source of the deal does not matter.
3. Myth: The more units, the more profit
A. When it comes to identifying a good investment there 2 THINGS:
i. How much a property makes after expenses
ii. How much you buy it for
B. ROI at the end of the day.
C. Preferably, fewer units for more money is the sweat spot
D. The higher the price point, the less turn over, the less problems, higher quality tenants
4. Myth: Waiting for a crash before buying
A. Everyone thinks this.
B. If you do time it, you'll make a lot of money
C. What matters…
1. Cash flow.
2. How much equity you can make off it based off the facts of today.
D. The people who wait, never buy.
E. It's more important to wait, and buy the deal today, than wait potential years/decades, and buy when it crashes
5. Myth: Investing is a full time job
A. No it's not.
B. Know your market. Know a good deal. Know your numbers. Then you'll be alright
C. Outsource what you can
Get Real-Estate…LOL 😁
Great video bro! There is no real good time to buy. Every time is good time if your gonna live in it 10 years to raise a family or if it brings cash flow .
Thanks Graham for the educational talk on pros n cons of real estate 🙂
Ok, but I want that house in the thumbnail.
I never realized how funny you were until I listened at 1.5x
Graham, do you think you would be successful if you lived in the Midwest? Also, could you make a video on why people fail in real estate investing?