Here is a summary of Raymond Aaron’s interview with Ozzie Jurock. Ozzie Jurock is a great international teacher that has built up his own investment portfolio of real estate. He is an investor adviser with a LOT of great credentials. I suggest you listen to it yourself, but if not, here are my aunty notes:
Real estate empowers you to have passive income.
Find out who you are. Shark (grave dancer, going for tax sales, foreclosures, auctions, can do deal anywhere, finding the deals), Flipper (can do deal anywhere, short term transactions, always concerned with the deal. Bird dogs, wholesalers, full service buys/rehabs/sells), Investor (interested in creating passive income, liberates because is long term strategy).
A financial crisis is not an economic crisis. High cost of things is the result of the debasement of all currencies today.
Look at 5 things when investing in real estate:
1. Inflationary or Deflationary environment – currently we are creating money out of thin air. Although the government is saying we are only in a 2% inflation rate, real world prices are much higher. Inflation increases all things up in value. Shifting hard assets (i.e. real estate) during inflation.
2. Inward Migration – people moving in.
3. Affordability – price you can pay, rental income that can make your payments.
4. Interest rate – low is great, making leverage excellent. Never ever speculate the length of term you hold your mortgage more than 5 years.
5. Demand and Supply – if demand is coming down and supply going up, adjust. Want demand and supply in balance.
Local conditions: employment rate, diversified industries, new ideas, new highways, vacancy rate, expense to income ratio.
Best deals come in bad markets where everyone is running from them.
1% rule – the rent is 1% of the purchase price. This rule will ensure all the mortgages, bills are paid.
Walmart rule – follow Walmart – if they open a store, good place to buy since they have already done the market research.
Property management needs to be treated like a business. Need full contact management – face to face between tenants and manager, between you and manager. Check credit report, references. Understand tenant has right of enjoyment, but you have the right to get the house back as it was. Be creative (2 months free but in the 12th and 24th month), create good environment.
Nothing Down deals – find the deals first, money comes easily after that. Find a good mortgage broker, whatever the interest rate is in the “window”, it can always be beat by 1 1/2%, must be able to haggle. Commercial lending is more difficult right now, but there are mortgage brokers that provide funding. Mortgage brokers are one of the pillars of your investing plan.
Long term investing for cash flow, find joint venture partners – share in the profits and portfolio.
Doesn’t matter what the market is. Boom of retirees is moving toward the west coast. Interesting thoughts about some specific US markets, some of the info is old so will not summarize here.
Buy the A & B properties, not the C or lower properties. Must look at the property to get the complete picture.
Markets have dual income retiree with accumulated wealth.
When property values go up too much, they also go down too much.
realestatetalks.com worldwide site for discussions between other likeminded investors.
ozziejurock.com about Ozzie
for more content, search “ozzie real estate” on you tube for videos.
Action steps:
1. Pick an area, do research, become familiar, get realtor from that area, assemble your pillars – attorney, accountant, mortgage broker, realtor, property manager.
2. Start now. Understanding is not learning. Usually just 5% actually do something – the way to truly learning is to do something. Commit, perform, measure, analyze and adjust, measure again.
3. Success is unnatural, achieved by the minority of people. Dream big, have written goals, put deadlines on your goals. Keys for success are Enthusiasm (Greek word for the god within), Focus (not just positive thinking, write major points), Learning, Discipline, Accountability (people don’t do what you expect, but they do what you inspect).
4. Have action steps that you control and will follow.