Here’s EXACTLY why I chose to nearly invest everything into real estate, exactly what I look for in a property, and what makes it such a good investment in the first place - enjoy! Add me on Instagram: GPStephan
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Now one of the first, and main reasons I’ve chosen to invest in real estate is a very simple one, but also something not enough people fully appreciate: LEVERAGE.
This is the practice in which you borrow CHEAP money…that then goes and makes you MORE money somewhere else. That allows you to profit the difference between what you pay in interest, and what that money makes you.
Now secondly, another HUGELY important reason I invest in real estate…as well as pretty much everyone else out there, ever…is Cashflow.
This means that you’ll be getting a consistent amount of money returning to your pocket, each and every month, as your tenants pay you rent.
Third, lets talk about another HUGE benefit of real estate investing…and one of the topics I also dread the most…TAXES
Thankfully, real estate has some AMAZING tax benefits that often means you won’t be paying any taxes at all on the money you make…here’s what I mean:
First of all, basically EVERYTHING in real estate is a write off against your rental income…
For example, you can write off your mortgage interest as an expense…meaning that’s a tax write off.
The property taxes you pay…that’s also a tax write off.
Your cost to insure the property…that’s also a tax write off.
Any costs you spend repairing the property…that can also be a tax write off.
In addition to that, you also have what’s called: DEPRECIATION
This is a tax-loss strategy where you can depreciate the cost of the property over 27.5 years against your rental income…because, according to the IRS, the property is seen to be “losing value” over time as it ages and deteriorates, and you need to be compensated for that.
Now speaking of depreciation….lets flip it around, and talk about another MAJOR reason I invest in real estate…APPRECIATION.
Over the long term, your property should go up in value as demand increases, and as inflation causes everything around us to rise in price…including your property…and this means that, one day, it’ll be worth MORE than you bought it for.
Now speaking of all this money and property value talk...and not paying taxes legally talk….that brings us to one of my FAVORITE reasons to invest in real estate…and that would be the almighty CASH OUT REFINANCE.
It’s like saying “I have $100 worth of profit I want to use but it’s locked up, and I don’t want to unlock it otherwise I’ll pay taxes. So instead, I’ll borrow $100 from a bank, who then holds on to MY $100 in the event I don’t repay them…now I have $100 to spend, and I’m never taxed on that money.
Then, once you get that new mortgage…the same rules as above apply. The interest is a write off against your income, and it allows you to leverage that money to make even MORE money…viola! Real estate for the win!
This really only scratches the surface of how people make money doing this…other advantages include being able to buy a property below what it’s worth, being able to fix it up to increase its value and cashflow, not to mention the almighty 1031 exchange that allows to you defer taxes anytime you sell real estate to buy a similar property.
It’s really because of everything I just mentioned which is why I’ve put so much focus on real estate investing over the last almost 8 years!
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF
Tesla Referral Link: Get 2000 Supercharging Miles For Free: https://ts.la/stephan88194
Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1000): https://act.webull.com/k/Vowbik9Tm5he/main
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
Now one of the first, and main reasons I’ve chosen to invest in real estate is a very simple one, but also something not enough people fully appreciate: LEVERAGE.
This is the practice in which you borrow CHEAP money…that then goes and makes you MORE money somewhere else. That allows you to profit the difference between what you pay in interest, and what that money makes you.
Now secondly, another HUGELY important reason I invest in real estate…as well as pretty much everyone else out there, ever…is Cashflow.
This means that you’ll be getting a consistent amount of money returning to your pocket, each and every month, as your tenants pay you rent.
Third, lets talk about another HUGE benefit of real estate investing…and one of the topics I also dread the most…TAXES
Thankfully, real estate has some AMAZING tax benefits that often means you won’t be paying any taxes at all on the money you make…here’s what I mean:
First of all, basically EVERYTHING in real estate is a write off against your rental income…
For example, you can write off your mortgage interest as an expense…meaning that’s a tax write off.
The property taxes you pay…that’s also a tax write off.
Your cost to insure the property…that’s also a tax write off.
Any costs you spend repairing the property…that can also be a tax write off.
In addition to that, you also have what’s called: DEPRECIATION
This is a tax-loss strategy where you can depreciate the cost of the property over 27.5 years against your rental income…because, according to the IRS, the property is seen to be “losing value” over time as it ages and deteriorates, and you need to be compensated for that.
Now speaking of depreciation….lets flip it around, and talk about another MAJOR reason I invest in real estate…APPRECIATION.
Over the long term, your property should go up in value as demand increases, and as inflation causes everything around us to rise in price…including your property…and this means that, one day, it’ll be worth MORE than you bought it for.
Now speaking of all this money and property value talk...and not paying taxes legally talk….that brings us to one of my FAVORITE reasons to invest in real estate…and that would be the almighty CASH OUT REFINANCE.
It’s like saying “I have $100 worth of profit I want to use but it’s locked up, and I don’t want to unlock it otherwise I’ll pay taxes. So instead, I’ll borrow $100 from a bank, who then holds on to MY $100 in the event I don’t repay them…now I have $100 to spend, and I’m never taxed on that money.
Then, once you get that new mortgage…the same rules as above apply. The interest is a write off against your income, and it allows you to leverage that money to make even MORE money…viola! Real estate for the win!
This really only scratches the surface of how people make money doing this…other advantages include being able to buy a property below what it’s worth, being able to fix it up to increase its value and cashflow, not to mention the almighty 1031 exchange that allows to you defer taxes anytime you sell real estate to buy a similar property.
It’s really because of everything I just mentioned which is why I’ve put so much focus on real estate investing over the last almost 8 years!
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
California income tax 13.3 all the way up to 16.7
The best one out there.
Graham, one thing that I think would be helpful would be watching you evaluate home listings online. Hearing what you are thinking out loud, listening to you speculate on the cash flow/rental income/costs, and sharing your general evaluation style when analyzing a property at first glance.
What is the cash on cash return on a property makes you $1200 a month but cost you $0 now
You are my favorite youtuber!!
In L.A? I live in the Silicon Valley and 4 M is only two houses. I am thinking to invest in cheaper places like Bakersfield or Sac. What areas do you invest in?
Dont you pay the rental income towards the mortgage payments?
What do you think about 50-year mortgages vs 30-year? Pros, cons, opinions?
How do you guarantee that they will pay every month though? What if they rent from you for 5 months and then move out and you are stuck paying the mortgage for the next 3 months while you try and find a tenant. I’m 17 and trying to figure this out so I can invest in real estate
Does using property depreciation as a writeoff on your taxes effect the taxes you pay when you go to sell the property? (Ie if you've depreciated the property by 50% and you go to sell it do you still calculate the profit from the sale as sale price – price you paid for it, or do you have to use the depreciated value?)
Yes, please do share your journey. I’m following.
Do you know anything about tax lien investments? that would be a good video.
Thanks for this video. How much of your real estate investment is residential vs commercial rentals?
Link to following video?
Yes on start to finish real estate series!
Hey Graham, let me tell you that I have learned so much more from your videos than from any other source. You are really making the difference out there!
Also, I’m going for aerospace engineering and I love it but, I think it’s important to have a different source of income like real estate. But man, you are so successful because you are a real estate agent and you know all the secrets. So, how can a regular person like me be successful investing in real estate without knowing it all? Like, can I have you as a consultant when I’m ready to invest ;)?
Really love your content man!!!
where is the end-end journey of purchasing?
Make a video on you analyzing potential investment properties on Zillow or MLS.
Thoughts on eXp realty? I’m a new agent looking for a broker. Love your content!
Step by step videos would be great Graham, how you search, how you choose, how you buy / repair / rent / manage… Looking forward to it!
Please do the vlog!!!
Graham, if you live in the house u own. 1000 rental income paid to yourself is actually 2000 month saved… that's a 24% return
Vlog sounds epic
DO IT
Hey Graham, Next vid: How to sale your own house to avoid the commission fees? (in my case will be almost 26K) Also, what are your thoughts on those "home buying companies" like Opendoor, etc? are they legit and/or worth it to use? My house is been up for sale for over 3 months already. It won't sale due to reasons I can't fix. Desperate and exhausted! Thanks!
In your first rental example, you mention the interest but did not add the mortgage. Am I missing something?
Can someone help explain the leveraging your money part. I kind of understand that you make more money with the second option but don’t you have 300,000 to pay back? That’s why I’m confused . So is the second really a better choice ?