180: Appreciation vs. Cash Flow: What Do You Want Most?
Get Rich Education
Keith Weinhold
4.8 • 612 Ratings
🗓️ 27 June 2018
⏱️ 36 minutes
🧾️ Download transcript
Summary
#180: Stop looking at properties. (What?) I discuss.
Are you in real estate for appreciation, cash flow, or something else?
If you focus on cash flow, does that mean less appreciation, and vice versa?
We discuss when a market becomes "too hot to buy for cash flow" any longer.
The Midwest has more affordable property and better cash flow but less recession resilience.
Dallas-Fort Worth keeps showing appreciation potential, but cash flow is drying up.
When a market heats up, rents don't "keep up" proportionally to a property's market value.
We also discuss low appraisals. Appraisals are what the bank uses to verify the quality of their collateral.
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1) Grab my free E-book and Newsletter at: GetRichEducation.com/Book
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3) Read my new, best-selling paperback: getbook.at/7moneymyths
Listen to this week's show and learn:
00:54 Stop looking at properties. (What?)
03:36 The importance of cash flow, appreciation.
07:07 The Midwest: more affordable housing, better cash flow, but less recession resilience.
08:52 Dallas-Fort Worth's appreciation.
11:00 When a market becomes too hot.
14:48 "Lump Sum Cash Flow" defined.
16:23 With 5:1 leverage and 6% appreciation, $100K becomes $300K in five years.
18:22 Blended portfolio.
21:10 Median rent income vs. median housing value.
25:17 Why low appraisals can occur.
Resources Mentioned:
Dallas property: GetRichEducation.com/Dallas
Kansas City property: GetRichEducation.com/KC
St. Louis property: GetRichEducation.com/StLouis
Mortgage Loans: RidgeLendingGroup.com
Cash Flow Banking: ValhallaWealth.com
Transcript
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| 0:00.0 | Get Rich Education is brought to by Producer's Wealth and Ridge Lending Group. You're listening to the show that has created more passive income for people than nearly any show in the world. This is the powerful Get Rich Education. The President get rich education welcome welcome to gree this is get rich education episode 180 I'm your host, Keith Weinhold. |
| 0:38.0 | Today, we're talking about real estate appreciation versus real estate cash flow. |
| 0:43.4 | We're also going to discuss appraisals. |
| 0:45.8 | What happens when you get a low appraisal on a turnkey property and why exactly that can happen sometimes? |
| 0:52.1 | In comparing appreciation and cash flow, I'd like to back you up to the |
| 0:57.3 | beginning here. Okay, real estate investing begins with you. You are the most important thing. |
| 1:04.4 | Don't fall in love with property. In fact, stop looking at property completely for a minute if you have to. Yes, as an interested |
| 1:12.9 | real estate investor, you do need to stop looking at properties first. Because in real estate investing, |
| 1:19.8 | the property is only the fourth most important thing. I know that's counterintuitive, |
| 1:25.5 | but first ask yourself this question, what do I want most? |
| 1:31.1 | Do I want real estate to produce income for me? Do I not really need cash flow? So I want |
| 1:36.9 | appreciation the most. Am I in it for the tax advantages? Am I in it for lifestyle investing? |
| 1:43.4 | Or am I in this for some other reason? So answer that |
| 1:47.5 | question for yourself and your family first because you are the most important thing in |
| 1:53.8 | real estate investing. Secondly, the market is important, whether that's a geographic market or |
| 1:59.9 | whether we're talking about a use |
| 2:01.2 | type. The best market that fits the criterion that you want probably is not in the town |
| 2:08.5 | where you live. The third most important thing is the quality of your team, like your property |
| 2:14.4 | manager and maybe a good income property agent because a bad manager, |
| 2:18.8 | they will drive a great property into the ground. You see, if real estate doesn't work for you |
| 2:25.1 | and it isn't in a good market and it doesn't have a good communicative manager, well, if any of |
| 2:30.2 | those three don't work, then the property just doesn't matter. It will not perform for you. |
... |
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