As a Finance MBA I have to say that this is a much watch video for anyone that has owned an investment property for 2+ years and is focused on equity/wealth growth. Return on Equity is the #1 metric to measure and is often times forgotten about. Thanks for the reminder and simple overview.

@BuildingWealthWithRealEstate

Жыл бұрын

Thank you! Yea it’s a powerful concept. Took me a long time to figure out

Step 1 - learn about real estate Step 2 - something something Step 3 - profit!

@niknik5380

Жыл бұрын

😂

@GD-oz7uy

Жыл бұрын

😂

@Meeeechy

Жыл бұрын

That’s what I gathered 😅

@alvinsingh9750

Жыл бұрын

I did that step but missing profit part..

@vincentslusser9205

Жыл бұрын

😂

you completely skipped the important stuff, you had 87% of your house paid off in supposedly 4 years, you weren't clear on that, then sure, you had plenty of equity for a 1031 exchange, which btw you skipped realtor / title fees etc to list it... this video is why people get in trouble in real estate...

@BuildingWealthWithRealEstate

Жыл бұрын

It’s hard to go into every detail in a video. The few percent in transactions costs are pretty insignificant. Happy to share any details you want 1031ing into a higher cap rate property at a 25% down payment. Isn’t typically what causes people to get into trouble

@BuildingWealthWithRealEstate

Жыл бұрын

The hour long underwriting videos out people to sleep!

@AberrantArt

Жыл бұрын

​@Chris Lopez those are my favorite. The underwriting and thought process, numbers, details.

@felipesanin1808

Жыл бұрын

@@BuildingWealthWithRealEstate actually these are the ones we need to see, they are the most important ones

@O1CTV

Жыл бұрын

Obviously there are fees throughout the real estate process. They can’t hold your hand and spend every video explaining every detail. Do some due diligence, it’s your investment after all.

Great simplified video on ROE. Thank you for the info.

@BuildingWealthWithRealEstate

Жыл бұрын

You are welcome! Took my 6 Months to figure it out!

Great video, Chris. ROE is extremely important for people to understand...took me a long time to really understand and one thing that helped is just looking at it from the perspective of opportunity cost (seems like people generally understand that concept but rarely apply it to REI). In other words, the equity tied up in a property has an opportunity cost, so you should regularly (once/yr) be re-evaluating that property's performance from the perspective of opportunity cost (or in other words, would your money be working harder for you in some other way). Another concept that you preach that you mention but gloss over is when you are regularly re-evaluating your property's performance, you need to look at it in today's numbers and answer the question: "would I re-buy this property today with these numbers?"... Keep up the great work Chris!

@beneinspahr5408

Жыл бұрын

in other words... make sure every dollar is working it's a$$ off for you!

@BuildingWealthWithRealEstate

Жыл бұрын

well said! We should add a metric "Return on headache too!"

Great video! This really breaks it down for investors of all experience levels. Thanks Chris!

Super Great information! Thanks for sharing with BP community!

Thanks for this new information on ROE.

@BuildingWealthWithRealEstate

Жыл бұрын

you're welcome!

ROE is an efficiency of capital metric but also is a risk measurement. High equity is low risk low return, low equity is often high risk, high return. So depending on how eager you are to grow, should determine your equity approach.

@BuildingWealthWithRealEstate

Жыл бұрын

Yes. It depends what phase of life you're in: INCOME or GROWTH. I'm in growth, as are most people watching the video. I wanted growth. Always keep high cash reserve es to offset any bumps or crashes

I'm confused how you did $100m yearly from 9 properties and 4 businesses. It seems pretty vague. can you explain further details in the income from each business and real estate property. I somewhat understand you start small real estate and 1031 into bigger and bigger. I just dont get how you do $100m yearly.

@BuildingWealthWithRealEstate

Жыл бұрын

I'll try my best to explain a KZread comment. The goal of the video is to teach about ROE and how it helped me scale from 1-9 doors. I used the ROE concept and my ability to teach and model. to help others. Which drove a lot of biz growth and other opportunities. The businesses are separate entities and income: Brokerage - $100mm/yr in sales - the majority are investors. Every month I have clients optimize ROE. We do a lot of transactions in Colorado.

@BuildingWealthWithRealEstate

Жыл бұрын

From the concepts and brokerage, that lead to being recruited as General Partner for capital raising in a RE Private Equity firm. In our first year, we raised about $40mm, with a lot of it coming from investors equities in their properties.

@BuildingWealthWithRealEstate

Жыл бұрын

In fact, I had so much demand and interest from this concept, that we start building software 2.5 years ago to model (say bye bye to spreadsheets!)

Thanks for the information.

You contradict yourself when you say building equity is bad yet you use the NOI from your paid off properties to demonstrate how fast you scale.

Would love to see the extended version please

I like having just one maximum size property at any given time. Different locations more paperwork more overhead imo. Next step will end up being 2 fourplexes into a commercial 12+ units ideally.

@BuildingWealthWithRealEstate

Жыл бұрын

Devi's advocate: I've had the same thought for efficiency and scale, but then no diversification. All the eggs are in one basket if something happens to property or specific neighborhood. How to balance that risk?

🔥 🔥 🔥 content, much needed as I’m buying a 7unit thank you

@BuildingWealthWithRealEstate

Жыл бұрын

Congrats!! 1031 exchange? Optimizing equity!?

@realestateba

Жыл бұрын

@@BuildingWealthWithRealEstate neither, it's $130k purchase and has a valuation of $900k based on rents, but it's vacant currently so time to value add to raise rents!

@BuildingWealthWithRealEstate

Жыл бұрын

@@realestateba nice! So you're creating it :) rock on!

Yes! Please expand on the content of this video.

@BuildingWealthWithRealEstate

Жыл бұрын

❤

Great video. Thanks for the insight!

5:48 when he finally tells us

This is a great video, thank you for simplifying

You’re such a G, you just got my subscription.

I did the same thing when I was 22. Thank god for the Rich Dad book. Great video. I'm glad you clarified the difference between $10,000 a month (Gross) and $10,000 a month NET, spendable dollars!

@BuildingWealthWithRealEstate

Жыл бұрын

Yes to RDPD. That booked changed my life! Didn't give the details, but changed my mindset

Great video

Very nice, I did the same thing only I was in debt when I started.

Would like a video on the 4 ways please!

@BuildingWealthWithRealEstate

Жыл бұрын

Woohoo!!! Let’s do it!!

@obie1coby

Жыл бұрын

Appreciation, principle pay down, cashflow, and depreciation.

Great stuff Chris, you have an amazing story, and this story illustrates the power of 1031 and recycling capital to achieve an higher ROE

4 ways to make money in real estate video PLEASE !

Great, thanks a lot.

Great video! And contrary to the nagative comments in here, you really encourage people to go study it more and more, and that this was just a quick video so you could start to grasp the concept. Keep up the good work!

@BuildingWealthWithRealEstate

Жыл бұрын

Thank you! Glad you enjoyed it

I want a full video

Yes please make a video of the 4 way to make money in RS

@BuildingWealthWithRealEstate

Жыл бұрын

Yes!!

🎉🎉🎉thanks

Real life monopoly - great way to explain it!

that's thr first time I have hac ROE exolained that way,very eye opening.

@BuildingWealthWithRealEstate

Жыл бұрын

Awesome! I'm glad to hear. It took me a long time to wrap my head around it.

Please expand and explain how you paid the principal off so quickly?

I'd love to see 4 ways to make money in RE.

@BuildingWealthWithRealEstate

Жыл бұрын

Will start working on it with BP!

How did you find a condo for 0% down???

@BuildingWealthWithRealEstate

Жыл бұрын

It was a deal off the MLS. I had a private investor give me a 15 yr note at 5%. Combination of relationship and low yields at the time 2011 ish. Me and the condo were an attractive investment

Good in theory. I need more nuts and bolts.

@BuildingWealthWithRealEstate

Жыл бұрын

me too! :) Part of the game

Make a video breaking down the 4 revenue streams of real estate.

You could talk about how you bought your condo with 0% down?

Great video but I don't see how you count depreciation as income. Maybe if you calculated your tax savings per year because of the depreciation that could be counted as income. But you don't get a dollar-for-dollar tax-saving for depreciation it just lowers your taxable income. I could probably benefit from a more in-depth video on that topic.

@BuildingWealthWithRealEstate

Жыл бұрын

Yes, that’s how you want to calculate. It’s the most complicated part of real estate. It’ll save you paying taxes, Or if you do some advance strategies, you can get a tax refund with it. Look up the cost seg video with Yonah Weiss I did on here a year or two ago

@Adrian-yi8fl

Жыл бұрын

@@BuildingWealthWithRealEstate thanks I'll check it out!

It's not Columbia it's Colombia.........jejejejejejejeje I saw that hat. Love it. Tuning in from Bogota. Cheers!

What did you pay for the 4 plexus?

I have 2 rentals that I bought in the 2008/10 recession in Reno NV. $170k property with $40 down from my equity in my home. Now I want to invest $200k on 2 properties but the cheaper 3bed,2bat,2car is $340k in a minus fair shape 20 minutes out of the city & very little inventory. My payments would be around $2000 a month & the rent will be that much so no cash flow. Does not make $ sense. Those are real numbers & real reality here in Reno NV.

Yeah lots of holes and confusion. I appreciate your enthusiasm though.

how did you put $0 down? And did you have to get a PMI?

@JonathanLewismusician

9 ай бұрын

I know that there are lending programs with banks that will allow you to get a property with 0 down and no PMI. Only certain properties in certain areas that are designated by the bank will be approved for that type of financing. Then typically one of the requirements is that you don’t own any other property.

please go over how you bought your first deal with no down payment.

@BuildingWealthWithRealEstate

Жыл бұрын

It was part luck, market conditions, and having wealth individuals TRUST me It was an MLS deal. I couldn't get a traditional loan at the time. I started tapping into my network. An older, wealthier couple who wanted income jumped at at the chance. INCOME was their focus. At the time, bonds / CD's weren't paying much. a 5% return fro them on a real estate asset that was $200k 3 years before with someone they highly trusted (me), was a great investment for me. It was all about finding a win/win.. FYI - this was the only deal I bought for $0 down. I'm not a creative finance buying guy

@ayshapm7321

Жыл бұрын

@@BuildingWealthWithRealEstate thank you for the information

Kind of vague in a few spots in this explanation.

@BuildingWealthWithRealEstate

Жыл бұрын

What spots? Happy to fill in details. Hard to get everything in a KZread video!

@BuildingWealthWithRealEstate

Жыл бұрын

Yea I’ve taught this in the past, every detail usually loses people. I went for conceptual. What areas do you want more on?

@magikmantrece

Жыл бұрын

@@BuildingWealthWithRealEstate I’m sure because I’m still new to this I also live in Denver and it just seems difficult here to get a deal like you have. It’s great content wouldn’t mind a longer video as well. Thanks for responding!

All good and dandy, but that "concept" won't work in Canada. There is no 1031 exchange here.

@BuildingWealthWithRealEstate

Жыл бұрын

I have no idea about the rules up there. Hopefully someone can share insight

Dedicated video please.

We want a Dedicated video 🙏

@BuildingWealthWithRealEstate

Жыл бұрын

Great! I can’t wait to record!

Hi what were your other business ? I’m new to this community . I have two businesses and one rental and a W-2 job. How do I get to 100million like you ? I need to set passive income goals, thank you .

@BuildingWealthWithRealEstate

Жыл бұрын

I'm asking BP if I can do a full video on it. In our first recording, I tried to go into details on the business side too. but it turned into "a numbers soup" that even my own editing team couldn't figure out. haha The ROE concept is one that very few investors understand. As an entrepreneur, I always look for ways to find untapped niches. ROE is a big one. I have a brokerage team in CO that does about $100mm a year in sales. The majority of transactions are investments, with many being equity optimization deals. Once the light bulb went off, I started telling every investor I could connect with.

@BuildingWealthWithRealEstate

Жыл бұрын

It buiild an amazing niche that lead me to building software to model it and becoming a General Partner in a RE Private Equity firm. We raised $40mm in our first year. With a lot coming from equity from rentals.

You skipped the main thing….How did you find the property? 😊

@BuildingWealthWithRealEstate

Жыл бұрын

ha! I debated not putting that in there. I wanted people to focus on ROE. It was part luck, market conditions, and having wealthy individuals TRUST me It was an MLS deal. I couldn't get a traditional loan at the time. I started tapping into my network. An older, wealthier couple who wanted income jumped at at the chance. INCOME was their focus. At the time, bonds / CD's weren't paying much. a 5% return fro them on a real estate asset that was $200k 3 years before with someone they highly trusted (me), was a great investment for me. It was all about finding a win/win.. FYI - this was the only deal I bought for $0 down. I'm not a creative finance buying guy

@serriegranville2424

Жыл бұрын

Thank you! Awesome story!😊

Good basic video. I just didn't see how the $0 turned into a 4-unit rental Property... Good plan though...

@BuildingWealthWithRealEstate

Жыл бұрын

I invested $0 into the condo. After 7 years, the condo has $180,000 in equity (appreciation+ debt paydown) I sold the condo to unlock the $180,000 to use as a 25% downpayment on.a fourplex. I posted a lot of numbers above in another comment. Check those out

@MeltingRubberZ28

Жыл бұрын

​@Chris Lopez what was the loan length that there was so much equity in that period of time?

@BuildingWealthWithRealEstate

Жыл бұрын

@@MeltingRubberZ28 0% down private loan at 5%, 15 year Amortization. About 35-40k from debt paydown. The rest from market appreciation. 2011-2018 period

@MeltingRubberZ28

Жыл бұрын

@@BuildingWealthWithRealEstate appreciate the insight bud

The music is competing with the voice.

I am not a fan of this video. Why would you just not get a heloc and keep your first place. This method assumes very good appreciation also. I think I will stick with commercial real estate.

Thank You for expounding as he should have done! Bigger Pockets shouldn't have allowed someone that is not telling all aspects.

Your video is not realistic. Most people cannot purchase any property with no money down. I'm done.

@films.byjules

Жыл бұрын

Foruntately the concept of ROE can be applied to any property you buy. The hard part IS just getting into your first property. But there are lot's of options out there to get into a property for very little down.I know Chris has had some clients get in for under 5k. So it IS possible. Don't get discouraged! :)

@BuildingWealthWithRealEstate

Жыл бұрын

Karen, I understand it can seem unrealistic, but a lot of people routinely do if. My point in the video wasn’t to talk about the amazing deal… but that no matter how you buy, you always run into the ROE problem!

@BuildingWealthWithRealEstate

Жыл бұрын

FYI since then I’ve bought zero properties with zero down. I got a little lucky on this one. Take it when you can. Also a friendly suggestion, don’t close off your mindset to finding amazing deals!

Had me again on the title

appreciation aka inflation

@BuildingWealthWithRealEstate

Жыл бұрын

they are not the same

You don’t know how hard it is to to get condo like the first your condo and you can pull out equity few years later.

Your a millionare but your wearing a t-shirt