Best Real Estate Investing Advice Ever

When I find myself in a recorded interview environment, which I often do as a financial educator, I don’t usually know the questions coming my way until the interviewer opens his or her mouth.  I’ve got to think on my feet.  I improvise.  I do my best to sound intelligent even though the answer to the question still hasn’t fully formed in my head.  It’s a lot like being a jazz musician, or the parent of an inquisitive young child who asks difficult questions you didn’t see coming.  After several dozen radio, TV, and newspaper interviews, talking to the media has gotten easier.  Responding to my child’s difficult questions… well, I’m still practicing that one.

In my interview today as a guest on the “Best Real Estate Investing Advice Ever,” the host of the show, Joe Fairless, ended the show with what he called the “lightning round” where he asked some rapid fire questions:

What your best real estate investing advice ever?
What book has given you the best real estate investing advice ever?
What event or audio program has given you the best real estate investing advice ever?
What’s the best real estate investment you’ve ever made?

If I had a week to prepare, I could talk for hours responding to each of these questions. Maybe for the sake of brevity, radio guests don’t get time to prepare their answers.  Or maybe it’s exciting to hear each guest drool into the microphone while trying to form a coherent thought!

If you’ve been following my investment blog and videos for any length of time, you can guess my best real estate investing advice ever:  “Buy Hassle-Free, positive cashflow property whose CAP rate is higher than your long term fixed interest rate and get as much of this positive arbitrage debt as possible.”   A Hassle-Free property is a property you understand.  You won’t lose sleep at night  because you own it. That usually means buying new or like-new single-family houses, but it can also mean buying net-leased shopping centers, self-storage, billboards, leased land, or any other cashflow producing piece of real estate that YOU understand and feel comfortable with.  I generally steer new and part time investors towards like-new houses because of the incredibly attractive long-term fixed interest rate financing available for rental houses compared to other investment properties.

On the “Best Real Estate Investing Advice Ever Podcast”, I said the most helpful book I’ve ever read was “Think and Grow Rich” by Napoleon Hill.   What I should have said, “Think and Grow Rich is the best TITLE I’ve ever read.”  The book itself is awkward to read and a little bit cryptic at times.  But, the idea that I can grow rich if I only think the way  rich people think is powerful for me.  It also turned out to be true!

After the “Best Real Estate Investing Advice Ever Podcast” recording was over, though, I texted the host of the show  – Joe Fairless – that I wished I could change my answer.   I wish I had said the most helpful book I’ve ever read is “The Clipper Ship Strategy” from the Uncle Eric series by Richard Maybury.  Unless you run in homeschooling circles, you probably aren’t familiar with this great book.  It is an easy and quick read written at an 8th grade reading level.  Although this book doesn’t contain the “Best Real Estate Investing Advice Ever”, the concepts in the book were nevertheless profoundly helpful to my business philosophy.  The general concept is that clipper ships are much faster than cargo ships, but they also hold a lot less cargo.   If you can be quick to market like a clipper ship, you will make a lot more profit than a cargo ship that enjoys cost efficiencies but is very slow to get to market.   Remember in the 1990s when they piled Cabbage Patch dolls into the seats of 747’s so they could fly from China to the US in time to meet Christmas demand?   The Cabbage Patch dolls that arrived a month after the Christmas rush were cheaper to produce but also sold for less than half as much. That’s a great example of the clipper ship strategy in action.  Now go read the book!  You can buy it on Amazon or through Blue Stocking Press and you’ll probably read it in one or two afternoons.

The event / audio program that changed my life is undoubtedly the “2003 Weekend Event: Excelling In The New Millennium” featuring Jim Rohn, Dennis Waitley, Brian Tracy, Zig Ziglar, and Charlie “Tremendous” Jones.   I remember listening to that audio program over and over and over again while driving to my job as a band director from 2003-2005.  And since I retired from being a band director in 2005 as a self-made real estate millionaire, the program must have worked!  As I listened to that CD set, I knew I was literally reprogramming how I looked at the world.  Listening to programs like this one in the car every day for years changed my thinking, which changed my actions, which changed my peer group, which changed my life.  Sometimes the best real estate investing advice comes from non-real estate places.  Turn off the radio in your car and put on some programming that will challenge you to think about creating a life by design!

When asked about the best real estate deal I’ve ever done, I was stumped.  People ask me for my best real estate investing advice all the time, but there was something intimidating by the addition of the word “ever”.  It’s a good thing this wasn’t live radio because I just sat there in silence like a deer in the headlights.  There were so many voices in my head competing for attention all at once.  Do I talk about the deal where I made a ton of money…    Do I talk about the deal where I lost a ton of money but learned so much from the experience… Do I talk about the high profile deals that sound so impressive… Do I talk about the low money down deal that brings in a cashflow stream every month and follows the principals of Hassle-Free Cashflow Investing…  dozens of ideas were flowing through my brain at a mile a minute. The host said, “David, are you still there? Did you hear the question?”  I rallied and talked about a specific deal that teaches some of my best real estate investing advice but is a rarely used investing concept called “over-financing” a property.  The concept of “over-financing” is to buy a property at a steep discount but then take out a loan against the property based on its market value so your loan is greater than the purchase price.  I’ve “over-financed” several properties in my life.  It generally means that you not only bought a property at a great value, but you get cash back at the close of escrow.   These deals are few and far between and it generally means that you’ve put in a lot of sweat equity into finding and/or financing a deal creatively.  I was able to buy a piece of land for $50 that was worth $100 and I got a $60 loan on the property (60% LTV) which means I put $10 of cash in my pocket at closing. Then I had a nice piece of land to develop for a nice profit in the future!

Here’s some more of my best real estate investing advice that I wish I had included in my guest appearance on the “Best Real Estate Investing Advice Ever Podcast”: (1) if you’re afraid of the stock market, you should be!,  (2) if you are afraid of debt, you’re doing it wrong, (3) if you think you can, you can, (4) if you think you can’t, you’re also correct.

I hope these ideas and those found on my blog will be helpful to you in your quest for financial freedom and the best real estate investing advice ever.

If you are looking for opportunities for investing, you aren’t alone!  There are currently more investors than good deals at this time in the market cycle.  You’ve got to look harder for good deals now than you did in 2011!  One of the values of being connected to a company like ours is that our investor relationships and media presence give us access to quality investment property throughout all investment cycles.  If you are looking for investment property, don’t keep it a secret;  be sure to give us a call and see what we can do to earn your business!

CLICK HERE TO LISTEN TO THE RECORDING OF THE PODCAST

All the best,

David Campbell – professional investor and founder of Hassle-Free Cashflow Investing

866-931-9149 ext 1

David@HasslefreeCashflowInvesting.com

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