Investing In Real Estate With Lex Levinrad Lex Levinrad

On today's podcast episode, I talk about buying your first rental property. Buying a rental is a lot easier than you think, and you should consider doing it as soon as possible because buying rentals is the path to wealth and financial freedom.
What prevents many new real estate investors from buying their first rental is limiting beliefs or obstacles that they believe that they have that prevent them from buying a rental property. This podcast episode will hopefully clear that up for you. 
Another issue I see with rental properties is that some beginners think that buying a rental will create enormous amounts of cash flow for them. When they realize that they are only making a few hundred dollars a month and they are faced with maintenance, repairs, tenant headaches and evictions they get depondent and they quit and sell their property. I see this all of the time. And the reason that this happens is because they don't understand the long term wealth building that buying rental properties and holding those rental properties creates. They thought they would get rich from cash flow today. They didn't understand that the true benefit comes from buying the house at a discount, creating equity (wealth) and then holding the real estate long term to create more equity and more wealth until the house is owned free and clear with no mortgage. At that point ALL of the rental income is income for the owner of the property FOREVER. 
I illustrate this by using an example of my coaching student Dale who purchased his first rental property a few months ago in Melbourne Florida for $94,000. He found this property by mailing out 7,000 postcards to motivated sellers. This was the only house that he purchased from that mailing. I loaned him $80,000 so his out of pocket cost was $14,000 plus closing costs and fees. 
The repairs to make this property rent ready were around $12,000. After the property was repaired and ready to rent, Dale found a Section 8 tenant that would pay $1,850 per month. He then went to a mortgage broker to get an appraisal and the house appraised for $194,000 ($100,000 higher than his purchase price).

On investment properties, most lenders lend 75% of appraisal so in this case it was $145,500. After he paid me back the $80,000 he had almost $60,000 in cash left over which was more than enough to pay himself back for the down payment and the repair costs and closing costs. Essentially this was a no money down deal for Dale. 
Let's look at his current situation:
Appraisal Value $194,000
Loan Amount $145,500
Equity in the Property $49,500
Dale has essentally increased his networth by $50,000 by buying ONE rental property. But it gets much better than that because if he holds that property the value of the property will double in just 15 years. So will the rent. So 15 years from now he will own a free and clear $400,000 property that is paying rent of $4,000 a month. That translates into almost $50,000 per year in income from ONE rental property. Imagine if he had 5 rental properties. Or 10! This is how you need to look at financial freedom. Calculate how much money you need per month or per year to be financially free forever and to not have a job. Then divide that amount by $4,000 (from Dale's example" and that is how many rentals you will need to own in order to achieve your goal of financial freedom. If you need $12,000 a month or $144,000 a year then that is just 3 rental properties! 
The concept that I explained above is called Buy, Repair, Rent and Refinance or BRRR. It will benefit you financially to understand this concept because it is the foundation of investing in real estate. If you can find motivated sellers that will sell you a house for 50% of what that house is worth, you can buy unlimited real estate with no money down. And if you hold that real estate long term you will become a millionare. It's really that simple. I have a "Buying Rentals and Building Wealth Boot Camp coming up. Make sur

On today's podcast I talk about creating a life of financial freedom. 
I think this is a very approriate time for me to be talking about this becauase last week I returned from a two month trip to the Bahamas where I was living on my catamaran. 
I was interviewed by my students Fred and Andy on Sunday night on an IG Live that they were hosting, and one of their main questions on that interview revolved around how to create financial freedom, and what it means to build your life by design and to have a freedom lifestyle.  
But their real question was "How do you manage to be off the grid in the Bahamas for two months and still have your real estate business run so efficiently? So I thought I would talk about this concept of financial freedom on today's podcast episode. 
Building a life by design means having intent in how you want to live your life, and then creating that life and that lifestlye by purposely planning for it. Learning how to invest in real estate and building a real estate business that buys and sells real estate is the best vehicle to help you achieve financial freedom. 
If you have any questions, leave them in the comments.
Enjoy the podcast!
 

On today's podcast episode, I talk about the current state of the real estate market and where I think the market is heading. 
One of the questions I get asked the most is "what do you think of the market right now" or "do you think the real estate market will crash. This podcast episode answers those questions. 
Disclaimer: I cannot predict what will happen. No one can. There are too many unknown variables like war, interest rates, the Fed, the dollar, stock and bond markets, etc. However what I can tell you is my opinion on what I see and how I interpret it. That is what this episode is about. 
Prices have moved exponentially higher. I was looking today at houses that were worth $150,000 in 2000 that are now on the MLS at $300,000. In many markets, prices have doubled in two years. So be very careful of listening to the "Case Shiller Home Price Index" and other data that is put out by mainstream companies because a lot of this data is skewed because it's an "average" or "median" of the entire country.
Different cities and different States have completely different demographics, population growth, job growth and demand (or supply). Averaging this data gives us a big picture. But we cannot invest in our local market with data based on the entire U.S. Real estate is local. If my market is Port St Lucie, FL I am not interested in what is happening in Phoenix, Seattle, San Diego or Philadelphia. I doubt prices in Buffalo or North Dakota doubled in the past two years. Because no one is moving there. But people are moving to Florida. Florida has been hot and Covid exacerbated that. The past two years have been absolutely insane and it seems like everyone in the U.S. was trying to move to Florida. For that reason many people that are local do not see a problem in our local market. However based on my own research I am seeing some cracks forming. 
What I am seeing on the ground is a little disturbing. 1/4 of the listings of the homes on the MLS in some cities are new construction homes built by builders in the past few years. Many of these were "build to rent" homes which were supposed to be purchased by hedge funds and private equity funds (and home buyers). But demand has dried up. No one predicted that rates would move from 3% to 6 1/2%. So these builders are sitting on excess inventory and have had to slash prices.
At the same time, their biggest buyers are drying up too. Many of the largest single family home buyer funds are not buying any more and have ceased their buying operation until they can get a handle on this market (and their inventory). Offerpad, Open Door and other iBuyers are hurting. Some of these operations even have going concern situations (Offerpad just dropped below $1 a share today). Invitation Homes and American Homes For Rent and most of the large Hedge funds have stopped buying too. They stopped buying around July/August of last year. Some only stopped buying at the end of last year. Now they know there is a problem.
So if the largest private equity and hedge funds, titans like Invitation Homes and American Homes for rent are not buying then what are they doing. According to my research they are selling. They are reducing the homes on their balance sheet and they are increasing cash reserves because they know what is coming. Goldman Sachs put out a report just last week of 4 cities that could see a 2008 type of decline. Those were San Diego, Phoenix, San Jose, and Austin. None of those cities are in Florida, but often when troubles start in hot markets like Phoenix, that pain spreads to other cities and towns (and States). And prices being marked down affects their balance sheet, their financing and how much lenders are willing to lend.
It looks to me like the smart money (Wall Street) is not buying houses and is selling houses. So So my question is who is going to buy all of these houses? The first time home buyer has seen rates moved from 3% to 61/2% in the past 12 months. The average home

On today's Podcast, I interview my friend Brandon Bateman about Pay Per Click (PPC) and SEO For motivated sellers. I first met Brandon at my Collective Genius mastermind when I was introduced to him by a mutual friend. Brandon is running the PPC and SEO campaigns for some of the biggest real estate investors in the country (including many of my friends in my mastermind). Since we spoke about motivated seller marketing on the last podcast episode on this show, I thought it would be a great time to ask Brandon to come on to the podcast so that he could share some of his PPC and SEO Wisdom with all of my listeners. This episode is packed with a lot of information related to marketing to motivated sellers. We talk about Google Ads (PPC), Facebook Ads, Search Engine Optimization (SEO), website design and many other concepts related to motivated seller marketing. Brandon is an expert in PPC and SEO, so get out your notepad and make sure you take some good notes from this podcast episode! OUR REAL ESTATE TRAINING PROGRAMS If you are brand new to real estate and want to learn more about our real estate training programs, investing in real estate, buying rental properties, wholesaling real estate, and fixing and flipping houses then please register using the free webinar training links below: FREE WHOLESALING TRAINING https://www.lexlevinrad.com/webinar FREE FIXING AND FLIPPING TRAINING If you want to learn how to fix and flip houses, I have a free fixing and flipping houses training webinar at this link: https://www.lexlevinrad.com/fixandflipwebinar DON'T FORGET TO SUBSCRIBE TO THIS PODCAST TO BE NOTIFIED OF UPDATES SUBSCRIBE TO MY YOUTUBE CHANNEL http://www.youtube.com/lexlevinrad?sub_confirmation=1 CONNECT WITH ME ONLINE http://www.lexlevinrad.com http://www.facebook.com/lexlevinradrealestate http://www.twitter.com/lexlevinrad http://www.instagram.com/lexlevinrad http://www.linkedin.com/in/lexlevinrad http://www.pinterest.com/lexlevinrad http://tiktok.com/@lexlevinrad/ DOWNLOAD A FREE COPY OF MY BOOK ON WHOLESALING BANK OWNED PROPERTIES For more real estate tips about property investment, investing in real estate, and how to start wholesaling, download a FREE copy of my best-selling book "Wholesaling Bank Owned Properties" at https://www.lexlevinrad.com

On today's podcast episode I talk about marketing to motivated sellers. The main difference between new real estate investors, and expert real estate investors is the willingness to spend money on marketing. And this really boils down to understanding marketing costs and how marketing to motivated sellers really works. The first thing that you need to understand is cost per lead. If I mail out 10,000 postcards at a cost of 42 cents per postcard then my mail campaign cost me $4,200. If I get a response rate of 1/4 of 1 percent then that would work out to be 10,000 x 0.0025 which is 25 leads (sellers). If I spent $4,200 to generate those 25 seller leads, then my cost per lead is $4,200 divided by 25 which works out to be $168 per lead. So with that marketing campaign my cost per lead is $168. If after speaking to those 25 sellers, only 10 are truly motivated to sell and I decide to go on 10 seller appointments then the cost per seller appointment is $4,200 divided by 10 which is $420 per appointment. If I can close 1 out of 10 appointments then I would be able to buy 1 house and my cost per contract (house) would be $4,200. If I could buy 2 houses out of the 10 appointments then my cost per contract would be $2,100. Currently this is what our average cost per lead looks like for the past 30 days Pay Per Click $236 per lead Facebook Ads $78 per lead Direct Mail $203 per lead I find the most consistent deals to be from direct mail and pay per click (Google Ads) A good acquisitions rep can close one out of 7 to 10 leads. An average acquisitions rep can close one out of 15 rep. And a not so great acquisitions rep can close one out of 20 leads. If your average lead cost is $200 and it takes you 20 leads to close a deal then your cost per deal is $4,000. If you are good, you should be able to bring your cost per deal down to half of that. I have found that on average most deals cost around $3,000 to $5,000 once you factor in everything. If you add in overhead and payroll then that number can go up to $6,000 or more. But if you are just starting out, and you don't have overhead and staff you should be able to get a house under contract for a marketing spend of $5,000. So to be conservative, you should be willing to spend $5,000 to generate a deal. Let's look at it another way. If you are buying houses to fix and flip or keep as rentals from wholesalers that are marking a deal up $20,000 or $30,000 then you are paying $20,000 or $30,000 more for that house. You just don't feel it because you didn't spend the money in marketing to generate the contract. But if you had spent $5,000 to get that same house you would actually have saved yourself $25,000. That is how you should be looking at it. That's not to say that you shouldn't buy from wholesalers. You should buy any good deal you can find. But you will find more deals at better prices if you are marketing to motivated sellers directly. Do you want to be competing with every other cash buyer out there looking for deals from wholesalers? Or do you want to learn how to get deals yourself? At the end of the day, regardless of whether you are wholesaling, buying rentals, Airbnb's or fixing and flipping houses you are better off marketing to find the deal yourself since you will eliminate a lot of competition. And if you are going to be marketing to motivated sellers, then you need to understand that there is a cost to generating a contract. And you should be willing and able to spend that marketing money to generate those deals. If you are just starting out and you don't have a marketing budget yet then use guerilla marketing methods like bandit signs and driving for dollars to generate your first few deals. OUR REAL ESTATE TRAINING PROGRAMS If you are brand new to real estate and want to learn more about our real estate training programs, investing in real estate, buying rental properties, wholesaling real estate, and fixing and flipping houses then please register using the free webinar