Passive Real Estate Investing

Passive investing in syndicated deals gives beginning real estate investors opportunities they used to only dream about. We all have to start somewhere, but some of us start with far less capital than others. Syndicated deals can give beginning investors the chance to break into the crowded real estate market. Passive Investing in Syndicated Deals: Getting the Best Deals for Your Money In this article: The Basics of Syndicated Deals What a Successful Real Estate Executive Says Getting to Know Joe Fairless How Joe Fairless Started His Career in Real Estate Jumping into Syndicated Deals Syndicated Deals: What are They? Why Comparative Real Estate Market Analysis is Important How to Find and Close Syndicated Deals Syndicated Deals: What to Watch Out For Pros and Cons of Syndicated Deals Other Ways of Finding Syndicated Deals Residential Investment Properties vs. Syndicated Deals Reading Up on Real Estate The Basics of Syndicated Deals In this episode, we explore syndicated deals and how they compare to smaller 1-4 unit residential properties. Passive investing in syndicated deals involves cooperating with other partners. Syndication occurs when investors combine their money to purchase properties they would not be able to afford by themselves. Together, they cover the costs of the property and share its profits. Read on to learn more about passive investment in syndicated deals and other real estate topics in today's interview with Joe Fairless! What a Successful Real Estate Executive Says From being the youngest vice president of a New York City ad agency to creating a company that in six months controlled over $7,000,000 of property, Joe Fairless lives up to his Fearless Fairless nickname. He’s the host of the popular podcast, Best Real Estate Investing Advice Ever show, and is closing on a 250-unit apartment this summer worth over $14,000,000. We also take a look at another available turnkey investment property in our Deal of the Day segment. - - - - - - - Download your FREE copy of: The Ultimate Guide to Passive Real Estate Investing. SUBSCRIBE ON ITUNES  |  Stitcher  |  Podcast Feed Click here to give us a RATING & REVIEW Passive Investing in Syndicated Deals – Joe Fairless We have a great show today. We're going to be talking about syndications. I have an excellent guest who's had an amazing success story. Today's guest is Joe Fairless. From being the youngest vice president of a New York City ad agency to creating a company that in six months controlled over $7 million of property, Joe Fairless lives up to his Fearless Fairless nickname. He's the host of the popular podcast, Best Real Estate Investing Advice Ever Show, and is closing on a 250-unit apartment this summer worth over $14 million. He's on the Alumni Advisory Board for Texas Tech University and the Board of Directors for Junior Achievements. Joe, welcome to the show. Thank you so much, Marco. I am glad to be here. It's great to have you. I have to be honest with you, I'm really excited to have you as a guest because not only do you guys have a great podcast, and I really don't know how you put out one episode every day, I don't know where you find the time, but you have a great success story. I'm really excited to have you on. I'm glad to be on the show. Really quick on how I have the time, I just prioritize it because I've seen that the daily podcast is incredibly valuable from a friendship and from a business standpoint. Really, it makes room for itself. Getting to Know Joe Fairless Those relationships you could really leverage and there’s probably a small percentage of those pe...

Inflation normally results from government policies which create inflationary pressures.  The result of inflation can be best described as more money chasing fewer resources.  The sad reality is that for most people inflation truly is detrimental and a silent theft. Real estate investors are in a unique situation whereby they actually benefit from inflation.  The only ‘hedge’ against inflation that we are aware of that works consistently over time, in any market, and any economy is real estate.  But how? When you understand what inflation is, and how it benefits you as a real estate investor, you will want to build your real estate portfolio to take advantage of these powerful wealth building concepts. In this episode we explore inflation and why it's your friend.  We also give you five (5) simple strategies to benefit from inflation in any market. We also take a look at another turnkey investment property available in our Deal of the Day segment. - - - - - - - Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. SUBSCRIBE ON ITUNES | Stitcher | Podcast Feed Give us a Rating & Review   5 Strategies to Benefit from Inflation Today, we are going to be talking about the exciting subject of inflation. Now, before you turn this off or shake your head and wonder how inflation can be exciting, keep listening because you will find out that inflation is actually your friend. You will see how it can be profitable for you in real estate. Let’s just lay a little bit of background here. The American economy has been bumping along pretty much since 2008. We haven’t really had a real economic recovery. Real estate markets have seen some activity here, especially in the last three to five years. We’ve seen considerable appreciation in many markets. But outside of the real estate sector, the economy has been relatively sluggish. This has forced the government to step in with various monetary policies that have done nothing more than create pent-up inflation. Some people are seeing it. We do have a bit of a deflationary environment, so you do see prices in some things like oil, recently, gasoline, technology coming down. But for the most part, if you look at your daily expenses, energy, housing, food, various consumer goods, those prices have been going up, so we do have an inflationary environment. At the same time, we have government policies that are creating pent-up inflation that we haven’t seen fully bloom at this point in time. The fear is that in the years to come, that could bring on rampant inflation. I am not a big fan of these government policies, the quantitative easing, the money printing that the Federal Reserve has been on, let’s call it a massive binge, since 2008. Inflation is just one of those things that are a reality. Now, when investors hear the word inflation, in fact, when the general population hears the word inflation, for many, it just sends shivers down their spine. They just hear inflation and they just think that everything is going to be more expensive. That it’s eroding their savings. It’s going to make saving for retirement even more difficult. Those things are generally true, but that doom and gloom is not all that inflation is about. Inflation is much more than that. If you are on the right side of the equation, you can benefit from inflation. At the end of the day, inflation’s effects are pervasive and they’re very subtle. Most people don’t realize that inflation is eating away at their purchasing power every year, but it is there. What you do is see a shrinking pay check. You see your purchasing power of your income get eroded, and that just translates to increasing costs for gas, energy, housing, food and other essentials. Let's dive in and take a closer at inflation.

  Classifying a neighborhood by “type”, or what many investors refer to as a “grade”, is typically nothing more than a subjective description.  Although most people will have a general idea of what is being referred to, in my experience it is usually nothing more than a qualitative rather than quantitative description. Because of that ambiguity, we’ve developed a proprietary, simple grading system that we use with all our investment-grade properties.  In this episode we help you to better understand neighborhood types. We also take a look at another turnkey investment property available in our Deal of the Day segment. - - - - - - - Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. SUBSCRIBE ON ITUNES | Stitcher | Podcast Feed Give us a Rating & Review Choosing the Right Neighborhood Hello. Welcome back to another episode of Passive Real Estate Investing. I'm your host, Marco Santarelli. This is the show where busy people like you learn how to build substantial passive income and create wealth for the long term. Thanks for joining us again. Today's show is very important. It's about choosing the right neighborhood and how do you go about doing that. This is an important topic. A lot of people talk about neighborhoods and how they qualify them or grade them, but classifying a neighborhood by type varies from investor to investor. In fact, what many investors refer to as a grade is typically nothing more than a subjective description. Although most people will have a pretty general idea of what is being referred to, in my experience, it is usually nothing more than a qualitative rather than a quantitative description. The fact is, is there's no formal definition out there of what a neighborhood type or neighborhood grade is. In fact, if you go back to episode number four where I talk about turnkey real estate investing and turnkey real estate investments, even there I have talked about there not being a formal definition of what turnkey real estate and real estate investments are. Everybody has a different idea or definition of what that might be. In an effort to level the playing field and define what that is, I've gone into some detail about that in episode four. If you haven't listened to that, be sure to take a listen. With this ambiguity, we've, over the years, developed a somewhat proprietary but simple grading system that we use to grade all of our investment grade properties. To help you better understand this, I'm going to go over a basic overview and describe each of the neighborhood types and the grading system and what it means so you have an idea of what it should mean in case you don't know. If you have your own idea, I'm sure this is going to be fairly similar to your existing model or paradigm of neighborhood grading. Hopefully, this will help you to better understand how to look at a neighborhood and grade it or put it into some sort of spectrum in order to compare one neighborhood from another and what may be a good choice versus what may be a bad choice. Ultimately, this comes down to what is your investment criteria. If you know what your goals are, you have a strategy, you've defined what your criteria is, finding the properties that fit that criteria to meet your goals becomes infinitely easier. Let's begin by describing the low income neighborhoods. These are typically what we call C and D grade neighborhoods. These low income neighborhoods generally have a large portion of their residence on government assistance. For example, the section eight housing program. The ratio of renters to owner occupied homes in these areas are often greater than 50% and more often they're as high as 80%. A C grade neighborhood would probably be 50 to 60, 70% tenant occupied.

  What’s the difference between a linear real estate market and a cyclical market? Is one better than the other? Today we explore the different market types and what they mean to you as a real estate investor. We also take a quick look at a turnkey property available in one of our linear markets with great cash-flow and high rates of return. We also take a look at a real world example available today from www.NoradaRealEstate.com. - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help us reach new listeners. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. Understanding Linear and Cyclical Markets Welcome back to another episode of Passive Real Estate Investing. I'm your host, Marco Santarelli. This is the show where busy people like you learn how to build substantial passive income while creating wealth for the long term. Thanks for joining us. If this is your first time here, welcome. If not, we're glad to have you back. Today's show is about something that I talk about on a very regular basis. Something that most people understand conceptually but a lot of people still don't completely understand. This is really important if you're a real estate investor, especially when you're in the early stages of selecting what markets to invest in. This is the concept of linear and cyclical real estate markets. Cyclical markets are real estate markets that tend to have larger price moves up and down over the years. Property values will move up and down like a roller coaster and they have noticeable peaks and troughs. They are essentially the shooting stars of the housing market. These are the markets that have the booms and busts. The length of the cycle can vary from market to market because, as you know, all real estate is local. That's the saying in real estate. These cycles can last from seven to ten years from end to end. Many of these cyclical markets are found along the east and west coast of the United States where the household incomes are higher and land for new construction is in short supply. Good examples would be coastal markets along the coast of California, New York, New Jersey, as well as many parts of Florida, from Miami on up north. When conditions are ripe and the annual housing price gains in these areas go up, you can see 20 to as much as 30% or more in property values in a single year. These are crazy rates of appreciation and they are absolutely not sustainable. You may remember back in 2005, 2006, we've seen appreciation rates in southwest Florida, in the areas like Lee County go up 32 to 40% in a single year. There were two years back to back where they had large double digit returns. We all know what happened. Years later, that market became one of the ground zeros of the foreclosure crisis. Las Vegas, Phoenix, Riverside, California, southwest Florida, these were areas that had some of the largest number of foreclosures. We saw property values increase dramatically and then come crashing down. These local booms burn themselves out by pushing prices to unaffordable levels. When those prices get to those unaffordable levels, very few, if any, people can afford to buy the median priced home. At that point, what happens is buyers dry up, there's an excess amount of supply and that equilibrium no longer exists. The pendulum swings from one end to the other and property values come crashing down since there's no one to buy these properties because of the lack of demand. You get a galette of inventory. I often refer to these markets as bubble markets because they appreciate in value so dramatically in a relatively short period of time but they come crashing down ...

  In today’s episode we discuss the importance of understanding and calculating a properties cash-flow and rates of return. Specifically we look at capitalization rates, cash-on-cash returns, and the total return on investment (ROI). A good understanding of these numbers are required to make smart investment decisions and to be able to properly compare one investment to another. We also take a look at a real world example available today from www.NoradaRealEstate.com. - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help us reach new listeners. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. Cash-Flow and Rates of Return Welcome back to Passive Real Estate Investing. I'm your host, Marco Santarelli. This is the show where busy people learn how to build substantial passive income and create wealth for the long term. If this is your first time here, welcome. We're glad to have you. If you're returning, welcome back. Today's show is about cash flow and rates of return. This is something that every investor needs to know. It's important to know how your properties performing for you. Or if you're analyzing a property because you're looking to purchase, then it's important that you know how to analyze that property to know what the rates of return are and to be able to compare property to other investment options that you have. This is a very important topic today. I'm going to break this down into two main sections, cash flow and then rates of return. Both are equally important because the rates of return come from the cash flow of that property. Let's begin by talking about cash flow. Cash flow is loosely defined as the income from a property that's left over after all expenses and bills are paid. That's a simplistic definition and it's not exactly correct. Let's break it down. Income is obvious, it's the gross rental income that comes from a property. If you have a property and it rents for $1,000 a month, that is your gross rental income. Now, assuming that comes in every month, that will be what is collected by you or your property manager and from there, you would deduct expenses. Sometimes you'll have other income coming in from a property. It's not that common but it is possible to have late fees from tenants who miss a payment or are late on their payment because rents are generally due on the first and late on the fifth. There may be a $50 or more late payment fee that will be charged and that's added income for you. Not all that common, but on larger properties and sometimes on fourplexes, you'll have income from a washer and dryer. For the most part, the income is made up of the gross rental income from that property. When it comes to expenses, there's a long list of potential expenses but there are few that you can't get around. The largest expense you typically have will be property taxes. Property taxes will vary from state to state, county to county. They're usually the highest expense and you can't get around them. Property taxes will vary from about one percent to as high as five percent. Texas, for example, will average somewhere around 2.2%. At the end of the day, property taxes are a mandatory expense that you will have. Some people are under the false belief that if you invest in a state or a market where property taxes are high, that may not be a good deal or it should be avoided because it cuts into your cash flow. That's not true because taxes are relative to the income. In most cases, again I use Texas as an example, you will find that even though you have higher property taxes relatively speaking, you also have higher income or rent.

  Today’s episode discussed what “Turnkey Real Estate Investing” is and further defines what a turnkey real estate investment is. A good understanding of this is important to make smart investment decisions and help avoid common pitfalls and traps investors make when buying these types of properties. We also discuss our 5-Point Success System to help you compare turnkey providers. Picking the right turnkey provider is not just about the property. We’ll also provide some tips, advice and comments on due diligence, rent guarantees, unnecessary fees, and the “2% Rule”. - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help us reach new listeners. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. Turnkey Real Estate Investing Explained Welcome to Passive Real Estate Investing. If this is your first time here, we're glad to have you. If this is not, then we're glad to have you back. Today's show is about turnkey real estate investing. This is a topic that's near and dear to my heart because I've been involved with turnkey investments for about eleven and a half years now. I started investing out of state in late 2003 and I've seen the good, the bad and the ugly. Back then, turnkey real estate investing wasn't really a subject matter or term that was kicked around too much by real estate investors. People would talk about passive real estate investments, rent ready real estate investments, turnkey real estate investments. It was loosely defined and it was a general understanding of what turnkey meant. It wasn't a topic that had that much attention. It does today. In fact, it's a hot topic. It's gained great popularity over the last ten years, especially over the last three or four. Today, it sees a lot of interest and controversy in real estate forums as well as other venues like real estate clubs. Why is this important? First of all, I want you to understand what turnkey real estate investing is as well as what a turnkey real estate property is. These are two different things as far as the way I look at it. I'm going to break that down for you today. You need to understand what it is and what it isn't in order for you to make better decisions. That's my second objective today, is to help you make smart decisions when it comes to passive real estate investments or turnkey real estate investments. Let's break it down into different definitions and get a good lay of the land and then we can connect all the dots. This will hopefully educate you to better understand this particular area of real estate investing. From there, I'll give you five point system that we use to compare turnkey providers and turnkey companies. You can use the same system in order for you to look around and decide on who you want to work with and who's the better choice for you to help you achieve your goals and your criteria. Regardless of where you choose to invest, there are two opposite ends of the investing spectrum when it comes to your involvement and required resources. On the one end, you have the do it yourself model or the do it yourself investment style, what I call active real estate investing. This is essentially a business where you're active involved, rolling up your sleeves, maybe getting your hands dirty. Do it yourself real estate investing puts all the risk and responsibility squarely on your shoulders. Typically, that involves everything from sourcing the property, acquiring it, funding it, renovating it, maybe managing it, selling it and coordinating literally every step in the process. Of course, it's not likely you'll be involved in every single piece of that process by yourself,

In this episode Marco discusses why real estate is the IDEAL investment. Real estate is the most historically proven wealth creator. In the episode we discuss what makes real estate the IDEAL investment.  We break down the five major elements of real estate and discuss when the best time to be investing is. - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help share the word. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. Why Real Estate is the IDEAL Investment Welcome to Passive Real Estate Investing. I'm your host Marco Santarelli. This is the show where busy people like you learn how to build substantial passive income while creating wealth for the long term. If you're new to the show, I encourage you to go back and listen to the first two episodes. I cover some foundational and introductory information there. If you're joining us again, welcome back. Why is real estate the ideal investment? Real estate has been the most historically proven wealth creator. More people, especially people in the middle class, have become millionaires and billionaires through real estate than any other investment in history. Back in 2012, Warren Buffett was interviewed on CNBC's Squawk Box and he said, and I quote, "If I had a way of buying a couple hundred thousand single family homes, I would load up on them." This really got a lot of people's attention, not just on Main Street but on Wall Street. In fact, since then, there have been a number of hedge funds that have come up with billions of dollars and invaded many markets across the country, starting with places like Phoenix moving east to Dallas, Houston, Atlanta. They just came in and they started buying up all they could possibly buy. They really didn't care about the rates of return as much as the fact that they wanted buy at a "low price" and just build up a portfolio. The problem with buying real estate at the institutional level and on such a grand scale is that it's very difficult to do. This market, the real estate market, is a very fragmented market. It's a fragmented industry. Every real estate market is local and every market has its own real estate agents and brokers. It has its own set of property managers and inspectors and whatnot. It's very difficult to manage this as an investment on a grand scale. But that's really an advantage for us as a real estate investor. We can take advantage of these inefficiencies of scale, this fragmentation. It helps us as real estate investors because it allows us what used to be called mom and pop investing. It allows us to really build a large business out of it or a really large real estate portfolio for ourselves so we have that passive income through the cash flow. Real estate is made up of many elements. It is not a simple one sided type of investment. Because of that, it makes real estate an ideal investment. Let me break that down. Why is it an ideal investment? Ideal is not just an adjective for real estate, it's also an acronym. Each letter in the word ideal represents a major benefit or factor of real estate. The I in ideal represents income. Income is probably the most important ingredient when it comes to real estate or any investment for that matter. Because if you don't have cash flow from an investment, it really isn't much of an investment in my book. Not all investments provide income. If you were to go out and buy, let's say, $100,000 or $10,000 worth of stock from the stock market, unless you bought a blue chip company stock that pays an annual or quarterly dividend, there really isn't any cash flow, there is no income.

In this episode Marco discussed his 10 Rules for Successful Real Estate Investing. After many years of successes and failures, Marco came up with the following rules of successful real estate investing.  These are the same rules he follows today and shares with investor clients at Norada Real Estate Investments. This is an important and foundational subject so be sure to listen.  You can also read the original article here:  10 Rules of Successful Real Estate Investing - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help share the word. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. 10 Rules for Successful Real Estate Investing Welcome the Passive Real Estate Investing. I'm your host, Marco Santarelli. This is our second episode of our exciting new show. This is the show where busy people like you learn how to build substantial passive income while creating wealth for the long term. If you're new and you missed the first show, I encourage you to go back and listen to that introduction. We cover passive real estate investing, what it is, how that compares to active real estate investing. It lays a good foundation of what the show is about and where we're going as well as an introduction about myself. Today we're going to talk about the ten rules for successful real estate investing. I find this to be very foundational and very important. After many years of successes and failures through acquisitions, dealing with tenants, managing myself, working with property managers, market ups, market downs, seeing speculation in the market, speculating myself, getting caught up in that whole frenzy back in the early 2000s and then riding down a deflating bubble, I've learned many, many things. Over the course of those years, I've come up with these rules for successful real estate investing. These are the same rules I follow today and they're the same rules that we share with clients at Norada Real Estate Investments, a company that I own and manage that sells turnkey investment properties nationwide here in the US. The first is educate yourself. This is critically important and probably the most important rule. Knowledge is the new currency. If you don't educate yourself, then you are doomed to follow other people's advice. That applies to almost everything, whether you're talking about equities and the stock market or real estate or anything else for that matter. I like what Robert Kiyosaki talks about. He breaks education down into three categories. There's academic education, and this is what we all go to school to learn, the important stuff, the basics, what teachers teach us. This foundation is the reading, writing, learning and learning about the functions in the world. Beyond that, there's professional education. This is what we learn to help become successful within our careers. This is usually the stuff we learn in college or trade schools or maybe even on the job. It's information that we use for our profession. A good example would be attorneys or CPAs or dentists or trades people, like a machinist. This is information and skills that we need to be successful at work, at our job. The third kind of education is what we call financial education. This is the type of education that teaches us what we should be doing with our money to be successful. In today's world, financial education is crucial, especially with the world, economy and recession or depression. However, our school systems don't teach us about financial education and so most people have never really been taught what they need to know in order to take control of their financial lives.

Welcome to our first episode of *Passive Real Estate Investing*.  We are excited to have you and look forward to many content-rich episodes. In this inaugural episode we take a minute to introduce our host, Marco Santarelli, as he shares his real estate investing journey which started at the age of 18.  We also lay out the goals for this podcast so you know where we will be taking you in future episodes. Enjoy the show! - - - - - - - - - - - - - - Subscribe on iTunes and Stitcher so you don’t miss an episode! Please remember to RATE and REVIEW our show to help share the word. Get your FREE copy of The Ultimate Guide to Passive Real Estate Investing. What Is Passive Real Estate Investing? Hello. Welcome to Passive Real Estate Investing. I'm your host, Marco Santarelli. This is a new show, a show where busy people like you learn how to build substantial passive income while creating wealth for the long term. If you desire to better yourself and desire to better your financial future, then this is the show for you. What's my goal with this podcast? It's to inspire you to start or continue building your real estate portfolio. It's to teach you proven strategies for making money with real estate in any market. It's to help you avoid the common and costly mistakes, many of which I've had and made myself over the years. It's to give you actionable tips and advice. It's to help put you on the road to financial freedom. Because without passive income, it's difficult or nearly impossible in today's environment to actually achieve true financial independence and retirement, however you define retirement. What is passive real estate investing? That's what this show is all about. In order to understand passive real estate investing, let's start by understanding what active real estate investing is. Active real estate investing is a do-it-yourself investment strategy. It involves your time, your capital, your risk. You are engaged and involved in the process, either entirely from beginning to end, or heavily in parts of the process as you go through it. It takes up a significant portion of your time and involvement. It's really you and your time working for cash. It's you that makes it happen. It's you that's involved. It's, in many ways, like a job, JOB. If you look at job as an acronym, for many people it means Just Over Broke. It still a job, whether you're self-employed or not. The primary objective is to generate chunks of cash. You do this through either assignments of contract or from the equity you build in a property, if you're rehabbing a property. I'll get to that in a minute here. The primary objective is to generate chunks of cash, piles of cash. It's really just a one or two time payment and that's it, there is no cash flow. Let me give you a few examples here. Wholesaling, although I don't really consider wholesaling by definition to be investing, because what wholesaling is, it's the assignment of a contract. It's not really selling a property, you're selling a contract that you have in tying up a property to another investor. You're getting an assignment fee. You're just controlling property, you don't technically own the property. There's many ways to wholesale. Some people drive various neighborhoods looking for distressed properties, other people are marketing through post cards and whatnot. But that whole process of wholesaling takes time, it takes some capital, it involves some risk, although not risk in the property but risk in lost time. That's wholesaling. Once you sign that contract, you get a chunk of cash. Another example of an active real estate investing strategy would be a quick flip. Some people like to look for properties that they could flip quickly.