The Professionalist Real Estate Investing Podcast

Real Estate Investing for Beginners: The Only Guide You Need to Know

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Tony:

Welcome to the Professionals Real Estate Investing Podcast. I'm with my guy, mr Rocky himself. Hey, thanks for having me again. Oh, yeah, I'm glad I have you on this one for my hiccup, which is a quick story. I did this podcast by myself and what happened? I listened to myself. It was really good the night that I did it and then the next following day, no audio. So this time I got backup. But hey, I know exactly when he used to be said even better, with you here, all right. So today is going to be real estate investing A through Z, everything that you have to deal with with real estate investing. Saying you know, it says that existing home sales have reached that 4 point a little bit over 4 million, you know, seasonally adjusted rate since May of this year. It said JP Morgan Research expects hold prices to rise by 3% overall in 2025. Always going up, always. You're never going to see it go down, ever at all. If it goes down, down.

Tony:

The next year go up twice, probably right and then, um, uh, basically, especially with real estate, we're just going to teach everybody some full aside what's all involved, because there's so much to deal with. You know what is real estate investing, how to go about acquiring it. You know acquiring it. And then the main thing, the last different subject but the last one definitely is my favorite which is going to be the mindset, because if you don't have the right mindset, how are you going to go about doing this? So you have to shift your thinking, all right. So what is real estate investing? Real estate investing involves purchasing, owning, managing, renting or selling real estate for profit. That is what real estate investing is Like. If you're not making anything to help with you know, basically like generational wealth or even offsetting your taxes then what are you doing it for? You have to know exactly what your why is, especially when it comes to real estate investing.

Rocky:

For sure.

Tony:

And then you have we're going to break down the real estate. So you got the residential properties. Residential properties they deal with one, two, three, four. That's what it does in the sector of real estate investing. Now that deals with a conventional loan We'll talk more about conventional loan but then commercial deals with five properties and up, and I know you were trying to get in that. Well, you were trying to, but I know you're going to get in a duplex.

Rocky:

That's the plan. I moved from single-fiving homes to duplexes within like the myself get one Running from like the first year, like no, I'm going to try to get a single Now. Before it was all just tax benefits, but now it's like well, tax benefits and you know actual generational wealth at the end of it, which is selling the list, though it's actually a lot better. So if one door is vacant, you have another door that's covering Exactly that helped covering the mortgage trust. But yeah, just the overall benefit of having more than one door for one loan. Was it just made more sense? Yes, it does.

Tony:

Because it's always said that the more doors the better. You don't have to deal with one door, because that one door I mean if a person lives in that house, then they move out. You have to get somebody in there as quick as possible, because, no matter what that mortgage, that price tag, it goes on every month. Well, I think.

Rocky:

I was watching a video. I was watching a video of all these people that started off, even some of the people you had interviewing. All of them started off at one point. Yeah, they had a single family home rental and then eventually, if they stayed after time, after being comfortable and learning the stuff, they moved up to duplexes and compartments and all this stuff. And in my head I'm like, okay, what stopped me from just starting kind of off where they started off? But, knowing what I know, why am I doing the single family home?

Rocky:

I was just doing the math on it and there was no reason for me not to just start off in duplex. You're still going to do the same same kind of a mortgage for it. You still the same kind of renting, leasing out for these, uh, for the doors. But why not do right? Why not do two, three, four, a duplex and they basically maybe apartments or whatever the wild? Why always start with one door? Cause you're kind of, once you do it, you're locked in for one door. A lot of seniors, once you do it, you're locked in for one door, you're locked in one.

Rocky:

Something happens. That's the problem versus having to do place or four place If something happens to one, like, say, someone moves out or whatever, you have three people paying the extra half instead of you having to pay the whole thing. Okay, that's good. And then the tax benefits on top of that is even better, because the more the bigger your property, the bigger you're going, the more money you make it, but there's more deductions that you will be able to claim. So in my mind I was like okay, not only am I getting the bigger deductions for tax benefits, it's almost like a safety built in that one person gets banked, the one door is banked. You have some other person helping at least we have. So the LTA have that.

Rocky:

Versus like, okay, single-file, someone moves out, you got to rent it ASAP, you got to get that thing turned over. Someone has to you make to keep your profit out. So I'm like, ah, yeah, so now tell me shit. Now I'm like I need a duplex. I'm not even looking at single finals anymore, Unless it's a super good deal. Yes, it's something that's in the right location, location, location, right, I would do it. But right now everything has shifted to a duplex.

Tony:

If I could four plays would be amazing but that's a whole different thing. I just moved out from a single family home to a duplex. You just graduate and actually the more you do, the easier it gets actually.

Rocky:

It's the same exact system or the same exact way of getting a single family home when you're doing a duplex.

Tony:

The only thing is you're just going toplex.

Rocky:

Yes, the only thing is you're doing you're just going to be ripped out to two, three, four people versus one. You're just doing that. So you went from like, okay, I'm gonna just be a single family, you know, single door, uh, investor, to boom. Now you're. You'd have. You have four people moved in to four4. They making you know X amount of money.

Tony:

But, like you said, if someone moves out, at least you don't have to pay to that full rate. You have a cushion.

Rocky:

Yeah, and your deduction is going to be a lot better. The property you buy is going to be. Hopefully, depending on the property you buy, it's going to be the what's it called, the appraisal or the property value is going to be a lot more. Yes, right, because if you think a single five-year home goes up, yes, a duplex, that's a nice duplex, a four-plex, whatever it should be going up too Overall. I mean, the more you can get into the better. But there's, you know, is higher risk. Figure out how to get the money, yeah, and stuff like that. But yeah, that's it is. Yeah, I changed that, I changed man, I changed that.

Tony:

This is what I need. Yeah, when a commercial property is it? You know it goes from five, five doors or more, uh, office buildings, retail space, warehouse, industrial, those are commercial properties. And then you have land improvements, raw land, developed, lots, agriculture I know that off the top of my head. I did talk to someone from. I do know I don't know a lot of places that do that. Basically you can purchase land, help you get the loan to purchase land, but I do know US Bank they do help out in that. Yeah, if there's nothing on the property, you can't. And I know some of them have a structure where that if you have like a two-year window, like so, basically you have the land but you have to build something on the land. Oh really, yeah, okay.

Rocky:

They do have that. The only thing that turned me off as for land for just like an investment property, because I was like, oh, I'm going to buy some land, I'll throw, like you know, like one of those, like little homes oh yeah, the main homes, something like that, yes, it's just like if you don't do nothing with it, like they said for two years, you're still paying property tax.

Rocky:

Yes, you are, you're still. You know, depending on if it's a fire zone or stuff like that, you got a tree or something on there. You want to protect all that. You got to pay insurance and stuff, all that stuff. So it's like you're paying all these stuff, these fees and stuff on it on literally just a piece of land.

Tony:

Yeah, there's no structure, no structure.

Rocky:

Yeah, it's not no structure, no such thing like uh, you really gotta have a game plan when you do that for sure yes, you do, we definitely do I thought about that you did oh yeah oh goodness, all right.

Tony:

And then investment strategies. You know deeper dive buy and hold strategy? Uh, because, like I said, when it comes to your why, you want to know, you want to know what's your why into this. So, basically, you know your average annual return. That's definitely something critical when it comes to buy and hold strategy. Your typical cash on cash return, depreciation benefits, like all these factor in when it comes to performance of buy and hold strategy.

Rocky:

All these factor in when it comes to performance of buying a whole strategy, that's probably the most commonly used one for the average person, the average person making a decent amount of money. You're not going to unless you're a flipper. You can be an average good income and buy a home and flip it and all that stuff. But man, they said to flip a home, to buy a home, to flip it, you know six months, maybe you know six months a year, something like that. So I was saying to actually buy it close, buy it close, all that, everything, actually have it, do your rentals, uh, improvements, and then put it back on the market and then finally sell it. You know it's I wouldn't say six, six months to a year, but they're getting a little work and that's.

Rocky:

And that's fast to say. If you had a roof leak or something like that, or financial problems, you can't get guys in there to do whatever it is. You know, you're just waiting for the waste to be done and that's if just as one problem. Then you have another problem, another problem. So you know that unfortunately can't hold, and the whole time you waiting to sell it or flip it, you're paying the, the fee, you're paying the, the mortgage, you paying all that insurance and stuff on this stuff too.

Tony:

So yeah, I'm glad you said so. I'll bring that up right now. The fix, the flip strategy says, you know, average gross profit margins between these. These are numbers, are just general, they're not specifically between 26 to 28 percent. And then typical holding period for six months, like you were speaking about success rate 60 to 70 profitable flips. And then the average, you know, renovation cost 20 to 25 percent purchase price. Yeah, because when it comes to the fix and flip, yeah, it's just a matter. Like me and you saw that early, everything's about speed. How much time is it going to take?

Rocky:

Yes, Sometimes, if it, if the price is right, the house is right, location is right, yes, so they can't flip it quick enough there, then their profits start dwelling down. Yeah, I've seen people, I've seen podcasts, where they're like, yeah, that'd be a great deal, great house, but it took too long to flip it because of getting permits or whatever the case is. And they're just like we ended up losing money because it took forever to finally flip it. So once they do the math, they're like it wasn't worth it.

Tony:

It was worth their time and effort unless you hold.

Rocky:

I think they actually ended up holding it because to make a loan back we had to hold it for like 5 years. They'll triple the money back after they sell it and everything with appreciation and everything, but they're not holding it. Holding is probably the best I, I think, for just long term.

Tony:

Yeah, especially, you know, because you know rents, they never go down, they always go up. Go up 10% a year in California, exactly yeah. And then you got the BRRRR, the BRRRR strategy. Pace Moore, he's a boy, I tell you he'd be loving the BRRRR strategy. It's the Boy, I tell you he'd be loving the BRRRR strategy. The method is buy, rehab, rent, refinance, repeat. Yeah, that's a great way, too Great strategy to use also. So purchase a stressed property with cash or hard money. Renovate to increase value and rental income, rent to establish cash flow. Refinance to pull over invested capital. Repeat process with recycled capital. So you just keep on recycling that, yeah, recycling that, and then that capital. Eventually, I mean, it's going to get so big where you're like you know I need to move on to something bigger. Yep, that's what it's going to come down to.

Rocky:

Yeah, I think the hardest part about the whole burn method is the rehab part. Yes, because you can get a loan, you can buy a house. But if you don't know exactly what needs to be done, how is it going to be done? You can like, oh, yeah, it just needs a roof. Yeah, no, I don't know. You find a contractor, you take spare of them, they come check it out, they do their little assessment. Oh, it cost you this much. You're like, okay, 20 grand. Okay, I think that sounds all right. And then you don't do your due diligence and find another contractor to see, and it could have found out it was only like 10 grand to do it. So you like that part. I feel like that's probably the hardest part is once you, because once you, once the rehab wants to say it needs a new roof, it needs, uh, maybe some plumbing work and a new paint job and something that's jb boy, you're gonna get it. Go right, yeah.

Rocky:

But a lot of people are like, oh, who do I call what actually needs to be done? You know what? Can I save money? Do you really need the top notch um, uh, paint job in the house or you just need a quick uh, you know flat gray or something like that. Like I think I think people, that's what I do, that's all I get worried about when I buy. I thought I would buy a slipper. I was like, oh, what exactly am I getting into?

Tony:

exactly right. And then I also, when you were saying, I was thinking also two supplies, like what about? What about the supply demand of something in the short and out? It's out for three to four months, like what?

Rocky:

are you doing what?

Tony:

is going to pee your back the minute.

Rocky:

The rehab is the hard five. You're just sitting there waiting for the roof to come. It'll be in two weeks. You're like two weeks, all right, I guess I'll just sit here and it'll take a day or two to get done. It's like, oh man, you're just sitting there waiting. If you're impatient like me, man, oh dude, wait two weeks. So you know that's all that needs to be done. Put it back on the mortgage.

Rocky:

Yes, there's different strategies of doing it. I guess when we were looking at houses one time, they said we're going to paint the house and do the roof. It's not done yet. You can buy it, we can do the whole process of buying it and as we're buying it, we'll get those done. So those those little things can speed up too. Like it was in the contract, like we gonna, the roof is going to get down. It's just the guy that, that the companies that are going to do it. They have that, don't have room or time to do it right now, but if you buy his house, house it will get down. Like that's the contract. So that's a different way to kind of speeding up the thing. But again it's like, yeah, maybe they'll come.

Tony:

yeah, right, exactly right, maybe unforeseen occurrence happens and they're like hold on, now we're how we're gonna be out, how many weeks or how many months you bought a house and the roof is still got a hole in it. Oh yeah, I said no, this, this process not going to happen.

Rocky:

Yeah, don't buy a car in a camp, right? Don't buy a boat that don't float Exactly right. Don't buy a house that has a hole in the roof.

Tony:

And the next one is oh, this is Mr Marcus Harvey's thing right here the wholesaling. So apply distressed properties under market value contract directly with sellers, sign contracts to investors or I said investor buyers and then you earn your fees you know, it could be, it could be from any amount with what's negotiable right there and then, yeah, the wholesale is actually you. Basically, if you see a distressed home and if you know an investor that wants to be a part of the contract and they will stipulate how everything is structured, and then when, it sells you'll get paid.

Rocky:

That's, that's that's probably like the, not the, the smoothest way of doing it without actually getting into rehab and doing all the inspection stuff. You're basically just making it easier for the investor to buy right? Yes, yes, you are Like that one house down my road. Yes, oh yeah, I remember that one. Yes, let's say yes, I'll sell it to you.

Tony:

Ooh, wouldn't have been a good investor and that's exactly what it comes up. So, yes, like even mailing People, you know it comes up on selling. Yes, Like even even um mailing. So what? This gentleman right here, Mr Rocky, he actually has seen a distressed home and it was distressed All right. Um, there was no, I don't know what was living in the pool and it was, uh, weeds everywhere and it was in a nice, it was a nice area, nice community, and it was just a sore thumb where it was at right there. And, uh, he got a hold of me and I was able to get the address of the of the owner. So we're praying that the address is correct and you mailed it out and she did get in contact with that we live in california and the and the owner lived in texas.

Rocky:

Yes, and it was like her mother or something like that shit. It was a inherited property she had. Yes, it was, and she wanted I want to say I don't know, she wanted made like 300k or something like that yeah, it was, yes, and it was somewhere around there. And then you and your guy were like, no, this thing is like 250 max because of the warning to go through yes so it was a difference of 50 000.

Rocky:

I want to say right, roughly, that if she would have said, even if she, I think, I think, did you, didn't he count off for, like you know, complying and go like 260 or something yeah, we did, and she was like no, I want three.

Tony:

She was front of me with what she wanted.

Rocky:

I think I think eventually you know the numbers didn't work out I think he actually eventually sold.

Tony:

I want to say it did sell for like $293 or something like that, but like thing she had to do was say yay, yes, yes, and it's still, and that method still works, of mailing. Yeah, I was really when you told me that I was surprised, because did she, she called you? Did she call you, she called?

Rocky:

me? Yes, I think she called you. She called and left a message, a message, a text message saying I got your miss, I got your, your letter, your mail, I'm so, so I live in texas. I think she did say hey, today, you know I'm I'm interested in taking an offer, but your offers too. Uh, this is a number to contact me or stem a cell. And then I gave that information to you and your guy and the us said it's offer and then it was yeah, it just couldn't meet on the offer number. But the fact that we found a distressed loan, a nice loan worth, and we have it, yes, we sent out a contact information just to whoever was the owner of the thing, sent it out to whoever and we got a response back. That's like cold knocking on the doors.

Rocky:

Yeah, the best way the whole school way. That's like just find out, and then I think I'm going to say a week or two later it was all in texting. Then they got the text and they said, hey, that's your letter.

Tony:

Yeah, so actually it was a quick fun.

Rocky:

Isn't that crazy. Anyway, it went from like we always she had to say yes to that game to. You guys were like let's move on it, right. Yeah, because that location, location of the game, the perfect location. Pool, car garage.

Tony:

Did it have a hot tub in there? It didn't have a hot tub. Koozie, yeah, in the enclosed. Enclosed, yeah, and two and a half At least two car garage oh man yeah if you were to throw like a like a hundred thing into it.

Rocky:

You would like max profit. Oh yes, you could have max profit that thing. It would have been like it went from the slum of the neighborhood to probably like one of the best homes.

Tony:

Well yeah, it would have brought the property value up for all the homes around here.

Rocky:

But now, if that has moved in there, they're doing the re-empowerment, but they're living there.

Tony:

Yes, they are.

Rocky:

That's another strength. Yes, it is.

Tony:

And then you got the active we won't concentrate on this too much whether it's the active and passive investing, the RITs, which is a real estate investment trust. Those usually are done by the stock market. So there's RITs that deal with multifamily and you can do a part of that. The other part is the syndication, which I love.

Tony:

The syndication, basically is just a pool of people and they put their money up in it. They have people who orchestrate, concentrate as to what type of uh property, um that they're investing in, and then they'll keep you an accurate report of what's going on, uh, with with the investment, and then they always have an exit strategy. See there, it's usually like majority of times these are five years or seven years, and then you know you can get that lending back to fit everything back, and then you can invest in something else.

Rocky:

That's probably the most like passive way to deal with it. Yes, here's, here's. You know X amount of money end of this year. Depending on how long the contract is a year, five years, whatever the plan is They'll say this is exactly how much you're going to get paid. If everything goes well, which usually it's pretty safe because you have these syndications.

Tony:

You know what? People who have a history of knowing what's going on, they're credible. They know people who have a history of knowing what's going on they're credible. They know they have a portfolio of what, what things they have purchased throughout time. Yeah, I'm lovely getting one. Yeah, that's, that's my.

Rocky:

That's my main thing right there just get keep every year, just getting another, one, another one. Like you know, the hardest thing about those though you gotta, you gotta come up with, you gotta come up with a good amount of capital the lowest I've seen is twenty five thousand dollars and then it goes up there and the average I've seen is seventy five thousand.

Tony:

Yeah, and for people who want to, if you have a linkedin profile, this is a gym right here. If you have a linkedin profile and you're an investor and you don't have a LinkedIn profile set one up, you can get contacts all the time. I definitely do. I've had a few offers coming. I have an offer basically that's going on right now. It's down in Southern California. It's actually commercial. It's Walgreens a few others. It's actually commercial. It's a Walgreens a few others and they actually send you a portfolio of everything that's dealt with the neighborhood. What the crime is, they send you everything that you need to know about that atmosphere of where they're investing at, where you need to invest at to get into one. So I would say the gym is definitely LinkedIn. I even talked to someone about that. I would say the gym is definitely LinkedIn. I even talked to someone about that and he's like if it wasn't for LinkedIn, they wouldn't have been investing like the heavy, like they should be, yeah, just vetting them and like looking at their company.

Rocky:

So that's probably the biggest thing, because if someone told you, hey, look, no-transcript, but it's, within five years, you're going to triple it, and this is money that, if you're not really touching, you really want to invest it. You want to be made passive and not do nothing with it. It's probably the best way to go about it. Yeah, say this way, but for me you can get scammed left and right on this day, cause there's people like yeah, I'm color.

Rocky:

good ass, they can do it, they. They're going to do a whole website, set all this big stuff up do all this big stuff? And then you know you drop. You're like, okay, send this money here and you never hear them again. You think the whole time you might get invested. That's why the if you find a good syndication, an actual people that are going to do that, then oh my God, you might yeah it is.

Tony:

And I think, too, you also got to do your fiduciary duty and make sure that. I mean, when you're kicking down that much money like that right there at investing, you want to make sure everything's good. You want to talk to people like hey, I want to see what your portfolio is. You don't have to show me everything, but I want to see two or three deals, at least what you've done. Yeah, Then, and then we can talk further. Yeah, I think that's the best way.

Rocky:

Yeah, Hard find. It's not hard find it's education. Just find one that you're comfortable with.

Tony:

Yeah, the next one is I'll. I'll deal with the. The next one when it comes to building a team, which is definitely huge. The first one it says real estate investor and it says investor focus, which is true, because there's some real estate agents that just straight real estate, that's it. But then there's some real estate agents that circle around and they're like, okay, I know real estate and then I know about the investing part. I know what's needed to help out whoever needs help with the investing part. I know what's needed to help out whoever needs help with the investing part. And also, do this too Deal with an agent who is going to meet your needs, because there's a lot of agents out there that are just for that commission. Yeah, I'm not even going lie. I work with some. I worked with someone where they're just like they already was thinking about their commissioning before the transaction was complete yeah and they wanted.

Tony:

They were trying to push everything, but you want somebody that's going to be compassionate, that's going to meet your needs and they're going to go above and beyond to help you to and and. When you do that, like that speaks volumes. Because when you treat them that certain way, what's going to happen? Word of mouth. Word of mouth is the biggest ever to help it out anyone's business. Because they're like hold on, I work with this realtor and check this out. This is what he did for me.

Tony:

He's going to do the same thing for you and, before you know it, you're like well, how did I attract so much business For me? He's going to do the same thing for you and, before you know it, you're like well, how did I attract so much business? Why? Because, as I always say, like even I say it all the time I say you know, show some Southern hospitality. You show hospitality to the fullest, helping them out with all their needs. Yeah, and that's going to help out a whole lot. And then the next one would be we was talking about this earlier a mortgage lender or broker for definitely for your needs, because there's so many people out there, that's they're always concentrating on. You know well, we need to get this done because I need to get this commission. Yeah, no, you need to help out everyone to the fullest. Don't worry about everybody knows we all need to make an income, but don't let that be your focus, because if you concentrate just on helping that person, the income is going to come.

Rocky:

Yeah.

Tony:

It's just plain and simple like that.

Rocky:

but you want to be trustworthy in everything that you do and you don't want a bad name out there in any type of way, my story with my mortgage broker is that I was talking to him when I was trying to get the qualified for my loan for the duplex. I talked to one that was great. He was coaxing me as if I was trying to like cheat the system or trying to not live into, you know, not use the property. From what I said it was and I'm like I don't know what his deal was. But he's like you want to have a home, you want to buy a second home? I was like yes, he said for a vested property. I was like maybe are you going to use that for an invested property? I was like maybe, I don't know yet, I might have a family member living there with me, but I want to buy a second home just in case.

Rocky:

And he was asking me questions as if I was going to use it strictly for a rental property. I was like no, I don't know yet, but I want to buy a second home. There should be no problem of me buying two, three, four homes, right? I was like what's your? What was his deal about trying to? He wanted me to write a letter saying why I'm buying a home. I was like what I've never heard about this. I didn't have to do that when I bought my first home. Why would I have to write a letter to an Underwriter just to make sure that I was going to buy the second home and live in it? I was like so what's the deal? What's your angle?

Tony:

Where are you coming from?

Rocky:

And then I talked to another lender because I was like, oh, this is weird, and I was like, is there a problem? I talked to no lender and I was like, is there a problem with me buying a second home? She's like, uh, no, she's like there's no reason for you to have to write us a letter of why you're buying. Boom, it's like you're buying, you buy two, three, four, five homes. It doesn't matter what you're buying for, because that's once you, once we sell you the home and the loan goes through everything, you do whatever you want with it. I was like that's what I thought too, but I don't know, I don't know what his, his deal was. But yeah, I ended up not going with that bro, just because he was questioning my motives of buying the home. And I was a little and I was like I didn't want to deal with this guy.

Rocky:

I don't, I don't know, I don't know his deal was, but you don't know what and then I went from with two other or two other uh loan officers and ask them some questions Like is there a problem with me trying to buy another home? Like do I have to show, uh, get a letters and prove why I'm one of a second home? They're like no, there's like once. Like if you buy a second home, that's fine, you do whatever you want with the other one. It's just nice to know what you're going to do with it. But there's no reason why you should be like friend or what. Yeah, that shouldn't be, that shouldn't be a requirement.

Rocky:

So I was just dealing with that extra stuff and you know I don't know, yeah, and some kind of a notion, pre-assertion of me, or something like that. I don't know, but that was weird.

Tony:

yeah, so that basically telling everybody, all realtors, all mortgage brokers, slash lenders, they're not built the same? Yeah, that's what it's saying, right now.

Rocky:

Secondly, it was so nice. She was like oh, I'll see when I buy another home. A lot of people care about the first month. She's super excited for me. She's like I don't see no problem, you have the income for you, you have great credit. She's like I don't see no problem with you getting approved and I don't see no reason of us getting this deal going unless you say yay to the property. I was like I like this person.

Tony:

I'm going to stick with her.

Rocky:

Just from her personality versus the other ones, like questioning the other guy, questioning can I afford it, what's it for how many people? Yeah, who's going to be living there? I was like what. I've never heard a loan officer ask me all these extra stuff. I'm like why does it matter who's going to live there? I like I'm going to buy it and whoever we all live there is going to live there. I'm going to Exactly. That's my problem. Yeah, deal with that. I don't know if they can.

Tony:

So best scenario find someone credible, someone that relates to you, someone that you're comfortable with. When it comes down to a mortgage broker, slash lender. The next one is the CPA, the real estate specialist. So, like I said, the last time I cast I tried to do by myself, but then I lost the audio. The last time I cast, I tried to do by myself, but then I lost the audio. What I was talking about is I was mentioning to you about this one, especially like a quick story about our tax lady.

Tony:

Oh yeah, she's amazing, and the person I was doing my taxes for I was paying him a couple hundred dollars more, and so you led me to the direction of water the right way and I was able to use the one we've been using for the past few years. You definitely want to find the right CPA that deals with real estate, especially with depreciation, cause a lot of people don't know how depreciation works tax strategy, the entity structure, guidance with a woman when I'm talking about that, it's the LLC or the C, the F4. Yeah, yeah, that's what they I mean. And then, like, people don't know this, but when you pay for the CPA, that's actually a business expense, and then the next following year you can use it as a business expense, and I don't think a lot of people know that.

Rocky:

So you gotta, you gotta eat the first year, right, you have to eat the first year, but then the second year is a write-off, write-off, write-off. So as long as you have your llc, you can always write off your tax expenses. If you have your llc mixed in with your personal income, then every single year from the first year, you're right. You, you're basically getting your um, you're getting it back. Getting back, yeah, deductions and stuff, exactly. Yeah, I'm getting a good. Like our tax lady. She didn't have to really go into um, what all we needed, because we knew enough to like, hey, there's deductions that I have, I know, I know I get deductions for my home office. I'm not gonna get this, this and for this, this and this. My mom always does that. And she was like, yeah, you sure do. And she's like, yeah, give me the numbers. She knew exactly what we were talking about. We gave her the numbers, she plugged them in. It was good. And people, if you go to a tax person, just a random, your.

Tony:

HR blog.

Rocky:

Whatever tax places you go to, they're so used to just doing the average person that has no LLC, no business expenses, no, nothing, and they do their taxes and they're done for her. She knew what to ask. You have an LLC, right? How are you going to pay the annual fee? Here's the coupon or the receipt to pay your annual fee for your LLC. Oh, the business business for this and this and this. You have this right, or you don't. Like, she's telling us all this stuff and she doesn't want to miss it because the worst thing you want to do is have to amend your taxes.

Rocky:

But if you come in to someone that doesn't know or doesn't deal with it all the time, they're not going to ask you for it, they're just going to. Okay, you gave me this, the numbers, I'm going to plug them in and that's good to go. And you're thinking, okay, like I'm pretty sure there's something, there's a deduction, an appreciation or something I got to do and you'll never know because the person's not used to it. So you go to the person tax person that does it, that's a reputable one and that has a what's it called? It has an EA or CPA. Yeah, their actual tax represent is that if something happens to you, your taxes, if something happens, your numbers run. They can actually represent you and be like no, we did their taxes, this is exactly what we did, and file that for you with the fee. But they have that background. Yes, they do. Versus, you go onto Instagram, blog, whatever you put your numbers in, ai generates the stuff for you and that's it. So if they mess up, it's on you. You have to go find a CPA, find someone else to actually crush the numbers again and figure out what happened.

Rocky:

But for us, our lady has all of her stuff. She can pull up whenever she needs to and give us the paperwork. So there's someone oh, she's almost like a secretary to our taxes. They're like, hey, this I got. I got a letter from the IRS uh, to one scale saying that I did file a text from. So like never sell, sell, sell. And I was like I don't know about this at all and I call them a tax layer. Yup, instead of just calling it, it should not, it should not block or whoever. Whatever the place for is AI generate tag places. They're not going to have an online 800. They can have 800 numbers say, click, sell, so let's talk. So no, they're in a two hours later, you might. You might tell someone yeah, we actually have it's. Actually you pay more, but what she's able to do and uh and do for us is worth it.

Tony:

Cause she was able to.

Rocky:

she was able to like oh yeah, we deal with this. She's a whole long, we already did that. She made a photo call and was the very thing that sent it, faxed it the right way, and it was all said and done Back from the IRS, which is great, oh, and you could sleep at night.

Tony:

I was like you could sleep at night Come back again for sure.

Rocky:

Yeah, I said. I said, uh, my buddy had a, uh, uh, you went to a reputable tax person and they messed up my taxes probably three or four times because they just got to put this in or put the depreciation, they just got to put the deductions in. It was just. However they did it, they finally reconciled it and they got it done. And then the numbers still for me. I don't know too much about taxes, but the numbers still did not look right to me. I was like, look, take it to my tax people and just have them re-amend it, because I appreciate you can amend this a couple times and they amended it and he's still going to get. They amended it and he's going to get money back. This is a year, two years ago or, yeah, about two years ago, something like that at least he gets money back.

Rocky:

He doesn't oh are you kidding me, like how horrible is that? Yeah, going through that many times go somewhere that you think is reputable and that know their stuff and they just mess up. That's right, that's right, that's right. It's like dude.

Rocky:

Yes yeah, now you find a good one. It's just like a doctor you find a good doctor. Yeah, you'll stick with them to the end. Exactly that's what we got, and I'm technically she's young, she's, she's always there, she's always helpful and she's gonna be there for a minute, easy, just to get a hold of easy too easy. Yeah, perfect, she's a phone call away. Always.

Tony:

She's like yeah yeah, the next one we deal with is um, we're not taxed. It's sold to us. But when it comes to that, well and this is another one that goes together with it is credit requirements. You know, you got your conventional loan. It says here, it says 720 or for best rates, but the better your credit score is, the better your interest rate is going to be.

Rocky:

That's what it comes down to and that's what.

Tony:

And then you got your fha loans. Um, it says 580 minimum, but then 640 with three and a half down. The fha is really good right there. Then you got your va loans, which anybody who is a veteran you would love to get a VA loan, because why there's no minimum down and they usually deal with the score of like 620 right there. So those are the requirements, and I was when I was talking.

Tony:

I was talking on the podcast that did come out, and I remember saying this, talking on the podcast that did come out, and I remember saying this if you want to work on your credit, and I was telling you about the AI, ai is so powerful right now Like everybody needs to wake up to it. I remember Pace Mori was saying, like in a couple of years, that if you're not basically on that wagon with AI, then you're going to be left behind. That only thing I would say different. What he said is I say, pace, I want to say you might be wrong. I love you to death, but I think, if you're not on board in the next six months, because AI is changing as we speak right now, every second, every day, I can't even keep up with everything that it has.

Tony:

But what I'm getting at is, if your credit needs to be fixed, you actually can upload your credit a report in AI and you can tell it with the best description possible. Tell it like, hey, I need to fix my credit at such and such score, how do I go about it? It will actually bring up what needs to be fixed on your report. Oh yeah, to get what you want. So that is a great tool to use. As to getting your credit where you need to be to get yourself into real estate investing, yeah, there's people that do that.

Rocky:

There's people that do that. They say, like you know, debt consolidation, yes, they'll come in and the AI will actually say you can do these are your options. Yes, is that what we're coming at? And the AI was actually saying you can do these are your options. Yes, these are your credit, your debt. It's like you know, if you focus on paying this, you put on this. You can help. This is the best way to get your credit up. It's special, your debt down, all that stuff. But but, yeah, there's people that do it that actually help you get a better credit score. They basically tell you how to get it and stuff and what kind of programs and levels of stuff you can get to help it starts paying off to help increase your credit score. But, yeah, ai, now you just plug it in and say how do you fix it? Where do I start? And they'll tell you you can do it straight at home.

Tony:

You don't even really have to call anybody, and it's getting stronger and stronger.

Tony:

So right now I know there's a gentleman I listen to on YouTube and he said right now we're at check GPT 4.0,. I believe he said wait till check GPT 5.0 comes out. Your mind is going to be blown away. That's what it's going to do. And then I throw it off top of what I talk about, ai, because a lot of stuff in real estate, even real estate investing, is dealt with AI. If a company, if you have a business that has about maybe you know, 20, 25 people in HR, they have systems in place that one person can basically run in HR with one person. Like the programs right now is incredible. What's going on. Like one, for instance, kodi. You know Kodi used to be huge and everything AI has got done, the lockdown already. They said basically, maybe maybe in a year or two there will be a need for a coder because ai is so precise at coding it's unreal. Yeah, so if use any tools, I'll say use any tools that you can, especially when it comes to the ai for real estate investing.

Rocky:

Yeah.

Tony:

Because that's what all these companies are. If they're not using it, they're doing it in little increments and they have a lot. They're using it a lot right now.

Rocky:

You can buy a whole home without talking to one person. It's like the mortgage broker, like, I think the only reason they would need a mortgage broker is to make sure they're dealing with a real person, a real buyer, because you can just plug in the numbers, your income, everything, send all the paperwork, the necessary numbers they need, and they put okay, you approved for this loan this much, you know you approved for this much. Your rate would be this. I'll send that and go look for a house everybody's paying for speed.

Tony:

That's what it Like. I said, everybody's paying for speed. That's what it's coming down to. Everyone's paying for speed. The faster you can get it, the better.

Rocky:

Yeah.

Tony:

That's what this war of what AI comes in Like how fast can you get it? How fast and how accurate and how credible can you get it?

Rocky:

Yeah.

Tony:

Yeah, and then you got I'm just going to skip a couple things Cause, like I said, I got a book here of all different types and, um, I know I'm gonna have Marcus on this seat. Whatever we'll touch base with, I'll touch base with him. Do, when you, when you deal with real estate investing also, you also want to do with due diligence. You want to make sure, because I mean how we was talking about with properties and everything you want to do your due diligence, um like with the roof. How long is that? How long was the last time that roof's been repaired um plumbing? My thing, my, my with you is definitely the roofing mine's as huge as the plumbing because it's outside, yeah, so anything, anything out of sight, especially plumbing.

Tony:

All right, like, how, how long is these pipes? What type of materials pipes underneath, how long? Like, is there any tree close by these pipes? That is shifting the pipes, which is going to be a huge problem. All that comes into place, like the hvac system, electrical. Electrical is huge, because that's another thing that's out of sight. Also, that's into the walls and everything. And then you got well, of course, like I said, the plumbing. Um, the other part of the due diligence is the financial um due diligence, the rent rolls verification. That's huge because that's how you raise your rents. Like there's some place I bet you stuff. To this very day, rent hasn't been raised up for the loans.

Rocky:

That's what happened when we looked at that duplex. Oh yes, we looked at duplex. I'm like dude. I'm just looking at the duplex from an outsider and investor, going like dude. Those duplexes should be renting anywhere from like 18 to 2000 per duplex on east side, because there, you know, it was a three-bedroom, two-bath, two-car garage, a covered patio, very, very nice neighborhood and I was like at a minimum, 18 to 2,000, maybe even more. Yeah, let's say 18 to 2,000. And then we looked at the rent rolls they're paying only $1,500.

Rocky:

I was paying 1,500 and I was like paying like 15, 50 or something like that per unit.

Rocky:

I was like, oh my God, there's a lot of meat on that bone if we get down private To grow up and I'm pretty sure we're looking at it and I don't know what page it was that you sent me, but they were getting ready. The people that were living there were getting ready to leave, so that's like the best opportunity to come in there, do some rehab and make it look more presentable. Give a reason why you're going to raise the rent up. Oh, yes. And then boom, now you're in the money, now you're renting exactly where it needs to be at, with you know the area and everything, and then you're making money.

Rocky:

But yeah, if you go in there and they're already paying $2,000 a month of rent, you think you're going to raise it more. You can't raise it more than 10%. No, that year rent you think you're gonna raise it more. You can't raise it more than 10 percent. No, that that year, the the next year, you can't even go in there unless you have the significant reason why to raise it, like I don't know, upgrading everything from the appliances, the lights, the paint roof. There you can probably make a case, but california, yeah, nowhere in 10 percent no, and I'll.

Tony:

Yeah, I remember you telling me that. Because that part where you said, oh, the information, that's another side of a good realtor. Why? Because I remember that situation of that remark. That remark was in the private remarks that the, that solo, was moving out on one of the sides. Yep, so I'm like hold on, they're moving out, not that none of them was space and opportunity. Yep, you could upgrade what you need to. Why? Because there's no tenants on that side right there. Yeah, because the hardest thing for real thinking about it.

Rocky:

If you bought a rental property, a duplex, something like that, and there's people living there already and you want to upgrade, it's going to be hard because, who knows, they'll live in there for five, six years or whatever the case may be.

Rocky:

You know, you gotta, you know maybe put them up in a hotel to upgrade some things or whatever. The case is like, uh, but if they're already moving now, you know making place, that is nothing but opportunity. And play a meat on that bone to to raise that uh, the, the rent to the way it should be at. Oh man, I was like the best case now.

Tony:

But yes, is what it is. Yeah, so yeah, the, the conventional investment loans, the um, the fannie mae there's so many. Look, I'm not going to break this all down completely, especially when it comes to that mortgage part, but I know I mean you've talked a lot. There's a lot of programs out there. Like you need to talk to someone that you're comfortable with, especially in that that lending, that lending category, because that can help you out so much.

Rocky:

Your broker should know all this. Should should your broker should know all the opportunities that you can apply to ClFly for with your income and with your credit score, because I remember they wanted to lock me in the conventional.

Rocky:

I was like hey what about the FHA thing? What about this first-time buyer thing? Is that even a thing? We started talking about everything. I was like I heard about this five-arm thing, ten-arm thing, what's that mean? And she helped break it down to him like, oh, so you can lock it in with an adjustable rate, how's that work? Does it change every year, every month? How's that work?

Rocky:

And depending if the market's doing great, that might be the best option. If you're going to only have it for a couple years or the real private is selling, I'm just If the loan fits your um, you know your goal for the house or for the property. It's always good to exploit those, exploit us. Because you don't want to get locked in the conventional loan and high rate they pay all this money for, you know five years and you only want to keep the rental property for, let's say, three years. It's like, hey, let's get an FHA. You know you'll pay a lot less up front, but you pay a lot less up front. This rate might be a little higher, but like does that? Because the property is going to rent out and cancel you more than what you would be paying on a conventional loan. A conventional loan might be good, because it'll stay like that, locked in rate for, you know, 30 years. But if you're not going to stay there for 30 years, then why worry about the interest rate when someone else is going to pay for it?

Rocky:

Yeah, true, you know, but if you want to stay in it for a long-term hold, right then that third year is going to leave a lot more interesting or a lot more beneficial holding for third years and keeping locked in that low interest rate. If you get a low interest rate versus an FHA that can fluctuate a little bit, you know you're paying a lot more interest. You might be making more money on the river probably, but at the end of the year you might be paying a lot more interest and you're not really going to be making an annual increase of your ROI because you're paying a lot more interest than a conventional.

Tony:

Yeah.

Rocky:

There's always a little.

Tony:

Thinking about it I was like, yeah, break that down real quick, there's so much to it. And then, um, the one that definitely you know, especially with taxes, the tax incentives benefits, the depreciation benefits. Uh, the basic structure. So residential real properties they depreciate over 27 and a half years. Commercial properties they depreciate over 39 and a half years. Commercial properties they depreciate over 39 years. And then the land value excluded from depreciation and a straight line depreciation method. So it gives a calculation of an example. So say, like, if the property was $275,000, the depreciable basis is $225,000. So the annual depreciation of $225,000, and it's going to be for a residential, that your annual depreciation each year is $8,182. Yeah, like that's amazing Depreciation is amazing. Yeah, like that's amazing Depreciation is amazing.

Rocky:

Yeah, so whatever money you make that year let's say your depreciation is 30 grand a year and you made 24,000 in rental income that they're paying you and you depreciate 30,000, it's going to look like you didn't make nothing. You made zero that year. Matter of fact, the government owe you money, or?

Rocky:

owe you more deductions and you are. You know you made zero that year even though someone is paying, probably paid the same, made $2,000 a month, paid this for you for a year, so $24,000. So someone paid you $24,000. So they someone paid you 24,000 to live in your rental property and you're able to write all that off as if you made zero. So you have to pay zero taxes on what you just made and then, depending on your annual, depending on what you made on your job or if you had a job, you know you can use the extra six, six, six percent or six thousand uh on your um deduction into your uh w-2. So yes, so we can lower your, your tax, your tax. So you paid, you paid so much in taxes. It's me if you paid six thousand dollars over in taxes but then you got the appreciation of six thousand, you use that. The government's gonna be like you know what we owe you money this year because you pay way more in taxes.

Tony:

So yeah, and I believe I'm not a tax assaulter, but I believe because I've studied about that and from what I've studied is say, if the government owes you money, that it gets carried over to the next year. It gets carried over to the next year, which, well, that's still a good cushion right there. Yeah, january 1st or whatever that year, you already got that cushion already applied.

Rocky:

Yeah, it helps lower you to a different tax bracket for the money you made over that tax tax bracket and instead of paying, you know, 24, 24, 26 percent on whatever money you made over that tax bracket, now you're you haven't touched that tax bracket. Now you're only paying like the 22 yes, so yeah it, it.

Rocky:

It. Just once you start with you, like for me, once you start with you, like realizing how much you're paying in taxes right, because they take. That's why I take state and federal route, and so it's good to take that all out before you actually see the money in your account. When you realize how much you pay in taxes and what that really means is you made a hundred thousand this year net, you know, or a hundred thousand um um annual, annual, but you only net really like 70, because you, how do you get that money back?

Rocky:

Right you have to find ways to pay less in taxes so you can actually get more money you make. So, what's the best way to do that? Get a round profit, get something that's going to help lower your taxable income and make money at the same time. Yes, that's the best way.

Rocky:

That's the only way you always have to think about how much money you're losing versus how much money you could be making. You're like, man, how do I do that? And that's what really got me. I'm making so much money now and I'm losing so much. Or I'm paying so much in taxes and you're telling me I'm not going to ever see that money, ever, ever again. No, how can we lower that?

Tony:

Because we're always going to have to pay federal taxes. That's why a lot of people they like moving to the Midwest, the South and especially those states that have no state income tax. Yeah, that's one tax they don't have to worry about. Now they make up that tax somewhere or another in different forms and ways, but at least they don't have. They're like you know what. At least I don't have that state income tax, but that federal always gonna federal man has to, that's federal is a killer.

Tony:

I'm off topic, I I, because you know I love sports and like some of these contracts that I see and they break it down like here's how much federal is, how much our state is, and I'm like that federal, I'm just like. My heart is like, oh God, I could pay that much fence and federal rate there. The state's not really a killer, but that federal is definitely a killer when it comes to taxes.

Rocky:

And you always hear that saying too, like why work more? Why work more? It doesn't take more taxes? Yeah, well, you work more because you're going to make more? Yeah, and no matter how much you work more, it's you the appropriate amount, right?

Tony:

yes, it's just the other point.

Rocky:

The real answer question is uh answer to that I work more is like work more.

Tony:

Find ways to lower your tax loan code yeah, and I tell people like, if you work more, do it for something. What's, what's your ultimate goal? Like, yeah, for sure I'm around people who are, man, they, they don't have it. They said that there's so many, there's been so many people. You have to have a side hustle to offset your taxes. You, you have to, because if you don't, you're just giving money, you're throwing money away. Like, do something, do something. Do do start like start a podcast, start something like lawn service starts. Do something to offset those taxes. Because, no matter what that's, I mean, what do they say? The two things, death and taxes, those are the only two things that will never, ever change.

Rocky:

Yeah, yeah I just want to open up my llc just so I can get some, uh, lower my tax income down. Yeah, is that the? It lowered enough to where it was actually because I made enough to where my LLC deductions actually made a difference? Yes, you know, I could actually see it dropped me down to a different tax rate and it helped me because I pay so much in taxes. But the amount I'm going to make now that every year I'm getting, I'm for sure getting money back because my deduction is lower, if I had a tax plan to go. So I pay, I still have, I still pay every paycheck, I still pay federal and state. You know, whatever the taxes are, I don't know what I make, but at the end of the year I've always got more money back because I paid more into it. Versus like you're not getting anything back, you paid exactly what you needed to pay and thank you.

Tony:

Exactly Right, I was like thank you, you paid your taxes For all your hard work Like anyone else.

Rocky:

Yeah, too bad to get more money back because of having a business, and using the deductions Definitely helped. It costs a little bit. I don't know how, and using the deductions definitely help. It costs a little bit, a little know-how. It's not hard to get one online, but you got to know that there's an annual fee. There's a very tax person that knows about deductions because you don't want to make a reason to get an LLC and a business to lower your taxable income, but you don't know exactly what deductions to deduct.

Tony:

Especially in this state because we have the highest annual, because there's certain other states there. It's not. It's not, it doesn't even cost that much. It's part of LLC. But this state is outrageous and everything Pretty sure. They're going to charge tax for us to breed pretty soon.

Rocky:

Yeah, yeah, yeah, there's a lot. There's a lot of new. There's a lot of little things to know when you open up LLC and red flags. You want to open up LLC, channel all your tax deductions and get red flags that have the RS on you. Yeah, I know, but once you get the hang of it, once you know what you're looking for and why you're doing it, yeah, it's almost a no-brainer not to use some of these tax deductions that anyone else is using, because with the business, you can write everything off. Yeah, our meetings for lunch or dinner or clothing mileage.

Rocky:

You can write everything off. Yes, you can you just got to make sure it's within your business.

Tony:

Definitely within your means. Yes, the biggest one when it comes to uh depreciation is that bonus depreciation. So now uh it, it started after January 19th of 2025 that bonus depreciation is at 100%.

Rocky:

Yeah, I saw that. That's that gem right there. I didn't get, I didn't get a dang problem, that's that that's that gem right there.

Tony:

I didn't get a dang problem. That's that gem right there. 100% depreciation, that is amazing. And then you have the 1031 exchange with the 1031. So basically say from a minute, rocky, he had a million-dollar property. He's like you know what, tony, I'm going to sell it. And they're like, okay, how much you buy it for? Buy it for $5.,000 and that's worth a million dollars. Okay, sell it for a million dollars, but he's got that property gains tax. So what's going to happen next? I'm going to buy him a property and get him in a contract in 45 days, because if you do not, you have a time period. If you do not get him in that 45-day identification period, he's got to pay all that capital gains tailback. That's huge, that's huge. So the 1031 is actually a great source to use, to leveraging especially that capital gains, because you don't want to pay that capital gains tax and that federal side, like you said, is going to be. It's gonna be outrageous.

Rocky:

someone asked me oh, how's that work if you, if you, bought a house for three hundred thousand and the property volume uh goes up and say you have a seven, five hundred thousand without you? Okay, so so you make it, and they lived there for x amount of years, so they make it over like two hundred thousand dollars profit if they sell his house. I'm like, yeah, that's great, you're gonna get it checked for that much, but then you're gonna pay taxes on that much. So I told them about that. You know there's a thing called 1031, that you buy a house and you can use all the profit. Uh, right, you gotta pay off whatever left on the loan, yeah, and then you take the profit and then, instead of just keeping it in the bank or something like that, you know, because you're going to buy another home Like, yeah, most likely you're going to buy another home.

Rocky:

It's like, if you do it in this timeframe, you can actually 1031 it and buy your new home and use all that profit in it. And then they're like well, how do I? I only want to use, like, if I made $200,000 in profit, I only want to use $100,000 to buy my home. Right, my new home, okay, and I was like yeah, but if you do it that way, you're still going to pay taxes on the $200,000. So what you need to do is to sell your home, take the profits and hopefully, within, let's say, four or five days, get yourself a contract in the house, put all that money towards your house, your new house, and then, once it's all said and done, your money's still there. You still have the $200,000. It's that tax. It's not moving anywhere and you're like well, how do I get?

Tony:

it.

Rocky:

It's like Dan, you get a HEL, that's how you get it. And they're like okay, but it's more steps. It might take a little while, but your money doesn't go nowhere. It doesn't go to taxes. You still have your money. And guess what? The best thing is if you had $200,000 and you knew, of all, you have equity in that home and you still only want to take $100,000. And you knew you have equity in that home and you still only want to take $100,000 out, and take up only $100,000 out. And guess what? It's a loan. So you know you'll get taxed on the loan. No, you're a fashion loan. And guess what? Your $200,000 is still in your home. This is a loan from your own loan, from your own house loan from your own house, exactly.

Rocky:

So you can technically still sell that house, the new house, and still make the money back, if that was the case, but you'll have $100,000 still. You're still having $200,000 into your new home. You'll have $100,000 in a loan and you can use that for whatever you need to do. Yes, you still have to pay back on that loan and, depending on your interest rate for the HELOC for that or whatever you need to do, yes, you still have to pay back on that loan and, depending on your interest rate for the HELOC, for whatever the case is, you'll still have to pay that back, but that's going to be a lot less than capital gains tax.

Tony:

That capital gains tax they will hurt your feelings when you look at how much they took out.

Rocky:

Yeah, and you're not getting that back. There's no way to get that back back.

Rocky:

It's just tax that you pay on anything uh any kind of profit you make, you should get it back. Yes, so why, not do my. It's a long route, there's a little bit of know-how that goes into it, but once you, once you actually sit down thinking about it oh, I'm not getting taxed on that and I still technically have it. And this is just a loan that payment should be pretty cheap, depending on what you use it for right if you want to buy a boat, that you might be losing money because the boats could have a buy fall there right.

Rocky:

But if you use that money to buy another right, I'm probably I talked to somebody about that.

Tony:

I gotta throw this off topic. I think I talked to somebody about that and I said I love boats. But then I said what? Now somebody told me about boats and all the maintenance and all the repairs and all the keep up and I'm like then why would I want a boat? That's what I said. I said why would I want a boat? I love, I love boats, but I didn't know how much maintenance and care it takes. And you have to stay on that too. You have to stay on that. Oh yeah, yeah, on that. Oh yeah, yeah.

Tony:

So the last one, because there's like so much information but I won't break you down as much as possible and this is that that mindset of a successful investor said focus on cash flow. It says understand market cycles and timing. Huge market cycles and timing. That is that is huge to me. Everything's about timing. Everything's about timing. Right now, we know the interest rate where, where it's at, that's what it's going to probably be for the rest of the year and it was always set off top for 2025 that the interest rate was going to be where it's going to be at and if it did drop, it's going to drop like maybe a quarter. It might drop another quarter by the end of this year, but we don't know yet for sure.

Rocky:

Right now it's still sitting, I think, at the 6th or 7th. Right when I did my little, I took it to my loan. It was sitting around 6th or 7th.

Tony:

Yeah, I think it's 6.5. I think it's still in the 6th or 7th right now.

Rocky:

Which is pretty damn good If you can afford it.

Tony:

Like we talk about, exactly Like I, which is pretty dang good If you can afford it, like we talk about, exactly, and, like I said, it always comes down to the numbers too. And then it says it said avoid, you know, avoid. Don't chase market timing for quick gains, avoid emotional decision-making Me and you discussed that so much. People going off of emotions, that's the worst thing you can do. Focus on fundamentals over market sentiment. It says build well through consistent execution. And then you got, you know, you got the recovery phase, expansion phase, quick phase and contraction phase, different phases like rising demand, stable prices, high demand, rising prices, maximum prices, declining demand. So it's like these real estate market phases that that fluctuate. So you got you have to stay on top of that. And then, yeah, and then I'm not gonna go further and all this right here, but I will say the mindset is definitely the mindset shift is with investing real estate.

Tony:

Um, everybody has the minds, a lot, not everybody. A lot of people have the mindset, especially if they work a nine-to-five job. That's the mindset. We're lot, not everybody. A lot of people have the mindset, especially if they work a nine to five job. That's the mindset. Work a nine to five kind of like the co-cure, like in the cycle wheel all the time you got to have to break off of that and then shift your mindset to all right. What do I need to do? Because real estate investing period, like it, can change your life in everything that you do. Oh, you could go on vacation stuff all the time. If you do it right, you don't have to work in that work in that cubicle or at that desk or just break your back at working a job all the time. Like, real estate is there, there's always some. When it comes to real estate, it's always something for sale.

Rocky:

Yeah.

Tony:

So sell all the time, like it always always does with deals, with the numbers and everything that you want. What's your purpose and what your why is that's what it comes down to. And then like, um, I was going to tell you before, like, so I listened to this guy, sean from think media, and this, this ties in kind of like what I was just talking about. Like, if you want to do something like especially, you know, do a side hustle, or you want to tell people about your story, especially real estate investing, you're just in, just in light period. Yeah, so we was talking about you know. You know there's the, there's the instagram, there's a um, um, uh, there's a snap snapchat on facebook and YouTube. Youtube is huge, so everybody goes to YouTube if they want to repair on something Like a lot of people go in there for cars, for homes repairing and everything. Education too yeah, we get degrees Huge education.

Tony:

Yeah, I call it a YouTube degree. Yeah, I was going to ask you this question off top because I was going to ask you earlier. I was like, no, I'm gonna leave this for you. So how many hours do you think worldwide that youtube people watch, youtube, consuming wise in a day's time? Oh, I don't know. Just throw a number out there, just like just world, no, not at first just the world itself how many hours is consumed that people, that mankind watches YouTube in a day.

Rocky:

Oh, by trillions I would say trillions of hours, I mean in a day, in a day, in a day, I don't know. We're talking like a 24-hour yes, 24-hour period of time day, 24 hours. I don't know. I would say, at least I don't know six or seven hours like with, oh with like each person, like each person, or just just mankind itself, like I don't know, I don't know what I'm looking for. I would say billions of hours in total to get there.

Tony:

So yeah, so you're right, one billion hours is consumed per day watching YouTube and content creation. And because I was learning this through sean yesterday, because I watched him, like, if you want to get on board on like anything with podcasts, youtube, everything, sean from big media yep, he is that guy. So, content creation content creation is huge. From 19 I keep on saying 19 from 2021 to 2023, the content creation made what? $70 billion Not M, but B Billion dollars. And YouTube is owned by Google. A lot of people don't know that. And another gem Google pays Apple for being the number one search engine. I believe it's $9 billion a year.

Tony:

So, if you want to get on board, use YouTube as a great platform to tell your story, tell about your real estate, tell about anything that you do in life, like everyone needs to, everybody has a story and everybody not everybody's going to listen, but people are going to listen Because you got to think look how many billions of people we have on here on this earth.

Tony:

It just takes that one click oh, what's this? Everything is life changing and that's why we, that's why I did my best to do this structure right here with Real Estate Investing podcast, because a lot of people don't know about real estate investing, like they see a lot of commercials and everything but they don't know exactly what it entitles. So so, like today, I was doing my utmost with the time period that we do have to like, hey, this is how you go about in real estate investing. It's not really hard as long as you have a strong team. A realtor, uh, a mortgage lender status, broker those, definitely those two right there, you you will come on board strong and then it's just repetitious the more you do it, the better you go at doing it, because that's something that's just like in life, you know, the more you do something, the better you come with custom and you adjust to whatever you're doing and just just interested into.

Rocky:

If you're not interested in it, yeah, you're not gonna, you're not gonna be. Uh want to get into it. But once you start really lagging by and like reading up on it, it's like, oh, you start seeing the benefits, the pros of it. Yeah, it's always scary to try and do that stuff. Right, like you said, once you start getting into it, talking to people like a realtor, a mortgage broker, you're going to realize it's a lot more attainable than you think and you know people buy a house all the time. It's just like buying a house. The only big difference is you're not going to be living it out. Well, technically you probably could if it was duplex, but the biggest difference is you know someone's going to pay that investment down for you and if you might make a little money, that's your side, if you do it right, that's it and I was told, if you invest in a need, you'll never lose.

Tony:

People need a place to stay. People need a roof over their head, like that's what that is, because it needs. People need a roof over their head Like that's what that is when it comes to needs, like a roof over their head, food, like if you deal with a need, it will never go out of style, like that's just what it is. All right, mr Rocky, I'm glad I had you today. I'll have definitely me and Marcus will break down a little bit more for you. But that's how you get into real estate investing. You know, make sure you have a strong team, have a strong support system, um, and that's that's how. That's how you start off and then eventually you'll develop a love for it and before you know it, yeah you, you'll be doing random numbers up in your head while dreaming all the time I'm while dreaming, all the time I'm on Zillow, all the time.

Rocky:

Hey, what's the market look like now? Is it a good time? What's for sale?

Tony:

Exactly.

Rocky:

Yes, yeah, once you start thinking about, you know hopefully your algorithm on your Facebook YouTube all the time, because it gets me going all the time.

Tony:

Oh man, 90% of my pictures is nothing but real estate quotes and all different types of real estate of all. All right. So, yes, this is the Professional Real Estate Investing Podcast. If you'd like to be on the podcast, go to professionalsrealestateinvestingcom and submit your forms and everything. I will be having my new email come up very soon, in the next week or two, but you can definitely get me at the website and it's a pleasure and honor having you. Mr Rocky, thanks for having me. Man, hey, no problem, and everybody out there. God bless, thank you.