Hey there everyone, let’s get straight to it. One of the videos I created six months ago that I was really happy with was something I called the Hard Truths. One of the things I did on the airplane on the way back from Houston was revisit that idea. It kind of twisted it a little bit. Let me share that with you real quick and we’ll talk about it. I think there are a lot of Hard Truths, but we’re going to talk about 10 of them. These might be a little in your face, but I don’t mean to be rude and I don’t mean to call anybody’s baby ugly. I do want them to shock you a little bit, at least some of them. I want to talk about them and I want you to tell me which one you don’t agree with and which one you do agree with.

      Let’s try to get lots of comments on this. I’m also thinking this might be one of those videos that you need to share with your network because a lot of people think about money. But we don’t talk about money. So send this to your significant other, send this to your kids, send this to your Facebook friends, and let’s have some conversations about money. And again, in these 10, tell me which one you don’t like in which one you do. Let’s get started.

      Here’s one of the things that is just a mathematical truth. We talk about $1 million like it’s hard to get. The reality is if you make 50k a year, you will earn $1 million. Now you won’t keep a million because there are taxes and there’s spending, which you will see is a big topic for later. But let’s not act like $1 million is this huge thing. It certainly was in the 1960s and 70s, but we’ve had so much inflation lately that $1 million is not what it used to be. If we’re going to talk about numbers, let’s talk about 10 million now. Not a million, right? You will earn $1 million over 20 years if you average 50k, and that’s pretty amazing. All right, here’s one. This is for the Dave Ramsey fans out there. I believe it’s hard to save your way to a better financial future at these ridiculously low-interest rates. With interest rates under 2%, it’s just hard, man.

     I think inflation is running higher than 2%, so you’re losing. I’m not saying it’s impossible, I’m saying it’s boring. It’s risky and man, it’s hard. It is hard to save $1 million. You can have ups and downs in the market, you can have some family emergencies, and once you start taking away chunks, it’s just hard. You don’t get it back. Time is so valuable. It’s just hard, right? But it’s not impossible. So, Dave Ramsey, you’re right. It is absolutely possible. It’s just too hard, too time-consuming, and there are frankly better ways when interest rates are this ridiculously low.

     All right, this might be my favorite. This might shock a lot of people, but most of you have a spending problem, you don’t have an income problem. You have a spending problem and yes, I know you watching this may say,”No, I don’t. My significant other does.” Sorry, your family unit has a spending problem. You need to get better at understanding what needs versus wants are, and believe me, I didn’t get this for a decade. I satisfied all my wants and had nothing to show for it when I turned 30. Rich dad, poor dad, right? I’ve given it credit all the time. You have to give credit to the person that shook you loose. Needs versus wants. Stop it.

      We have a spending problem in the U.S., not an income problem. Think about that. That’s most of you, let’s be fair. Some people have an income problem, but most people watching this, I’m guessing have a spending problem. Here’s one, (and I lacked this for a long time) many of you lack confidence in yourselves. You want to go out and pay some guru. You think if you take $10,000 and put it on some mastermind or something that you’re going to have confidence by osmosis. Yeah, it’s possible, but I think you could do it a lot cheaper. I give out daily content on this channel, more than one video a day these days. I’m trying to build confidence, but where real confidence comes from is doing the work. I did a video the other day about a student. What do “A” students do first? You listen to instructions, you follow directions, and you execute.

      If you want to figure out this real estate investing thing, stop this video now and go to the link in the video description box. I have a course that will show you exactly how I learned my market, how I compare deals, and how students are changing their lives. Do yourself a favor, save 20 bucks. Use the coupon code BOOK20. The link is in the description. It’ll be $179 for less, one month’s cash flow. You can change your life by building confidence in your self through repetition and simple math. I hope you take advantage of that.

     Some people are just too confident in themselves. You’ve had the Midas touch, you’ve skated through life and never made a mistake. Mom and dad back you up on everything. I don’t know, but sometimes you just jump to the craps table and put everything on 17 and throw the dice, and maybe it’s worked out for you a couple of times. You hit 17 in a row twice. You are full of it now, right? You’re happy. Then you roll it again and boom, you’ve lost everything. You’ve got to measure confidence. I think I actually, the first time I drafted this, actually used the word cocky, but let’s just use the word confidence. Don’t be overconfident in yourself. I still am. I still try not to be overconfident in myself after doing this for nearly 20 years because one thing that will happen when you get too overconfident and you think you figured it out: the real estate market will change and crush you. I believe this is happening right now in 2019 to a lot of flippers, especially flippers in the Bay area. They got overconfident, they bought too much inventory and they are hurting big time.

       Here’s another, the herd mentality usually ends badly. Watch out it is happening again and out of state investing in syndications. Have you ever heard about the tulip mania in the 1800s? Well, I personally have experienced something just as crazy twice. Once in the .com stock boom, where companies were being overvalued for eyeballs and clicks, not profit, stupid, lost lots of money. Saw it again in single-family homes. This time I got smarter, I saw the herd and found something else and got out of the way just in time. It is happening today without of state investing in syndications. People are investing in markets they don’t know and don’t visit because unemployment in the economy is the best it has ever been. It will work until it doesn’t and then when it doesn’t, it’s going to hurt. It’s going to hurt bad. It’s going to hurt really, really bad. I don’t like saying this, I’ve just seen it and I see it coming and maybe I’ll save a couple of you or this will be documented for posterity and we can say I’m right in a few years.

      Time and consistent effort are the greatest impact on wealth. I just did a video earlier today, I don’t know if it’ll post before or after this one, talking about the phases of a buy and hold investor. It’s not money that makes a buy and hold investor wealthy, it’s time. It’s mortgage pay down, its appreciation and consistent effort. It’s buying the next one and buying the next one and buying the next one. That’s what makes you wealthy. It’s not starting with a lot of money. You can get there. We got there with $40,000 nearly 20 years ago.

      Oh man. The first five years… whoa. It feels like nothing is happening. It’s like you’re looking at a hose or a faucet and it’s like a drip and then some months the drips don’t show up. It’s like, wait where did those go. Right? Water heater broke. Sorry man. Eviction. Sorry. Tenant move. Tenant left at night. Sorry, man. First five years, what’s going on? This is where most people give up, but if you conservatively finance, you hold for the long term. Those first five years will be a joke in the big scheme of things, but you gotta get through them. Lots of people don’t, man. Bad things happen. You choose to be in the real estate game. You’re in the people business. Bad things happen. Mother nature happens, stuff happens.

      All right? The good far outweighs the bad. I’m here to tell you that no matter who you are, myself included, bad stuff happens. Expect it, roll with it. Don’t let it crush you again. You want to hear about bad things. Read this book and hear about the horrible experience we had with our first tenant. That’ll tell you bad things happen. You got this. Believe in you. If you do the work, you build the confidence. You understand how to compare deals. You’re committed to a journey. You’ve got this. You can’t go wrong, right? You got this. You can do it. Believe in yourself. So those are the 10, I hope you liked them. Again, let me know which one you liked, which one you hated. Share this with your friends. We need to talk about money. We need to talk about investing more. I’d love to hear from you. Let me know which ones I missed. Do you have your one or two money truths? I’d love to hear from you. Leave comments, subscribe, share. Let’s let’s grow this channel together. All right, everybody have a great day.

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       Hey everyone, how are you doing today? I was talking with a friend about real estate investing and comparing deals, and I was really trying to help them understand the simple math behind how I compare deals. But it wasn’t clicking. So I told him what I would do is go back and I try to create a video for him that could be shared with everyone. We kind of call it a quiz, you know. Can you do the math guy, can you figure it out? So I built a real simple quiz: Can you calculate the return? Then I actually break down my spreadsheet in detail so you can see exactly how I do it, kind of in three phases. I broke the spreadsheet down.

      You’re going to get a sample of the deal, a spreadsheet that I use and still use today. This is in my course, so only my students get this. But we’re going to sort of break it down because again, I’m here to help. I don’t think math should be the problem. I don’t want math to scare you or freak you out. I’m not one of those people that try to crush you with this huge spreadsheet. I think people do that, I just don’t know why they do it. I guess they think that the more complex the better it is. However, I think there’s too many variables sometimes and that’s not always the way to go. So we’re going to give you two questions just to see if you can run the basic math.

      After that, we’re going to break my spreadsheet down in detail and then we’re going to see if you have any questions. I will be sharing a PowerPoint just because I found that to be the best for numbers so you can stop the video whenever you’d would like, so I’m going to call this a quiz. Hopefully that doesn’t scare you, right? I was just gonna say there’s no right or wrong answers, but it’s math. So there is right and wrong answers, but we’ll go from there. No harm, no foul. Let’s get started- so can you earn 6% a yield or return on this house and this just happens to be a house that I think has actually been flipped and sold. I’ve done some walkthrough videos on it anyways. It’s just a stock picture. Right? So if you were going to earn 6%, what would you need to know? What do you think you would need to know? Well, obviously purchase price would be helpful, as well as rent because you need income. What are the monthly expenses, right? From mortgage payments to property management, to insurance, taxes, reserves, and all of that stuff.

      Anything else you think you’d need to know? Well, one of the things that you’ll see in my calculations is how much cash did you put down. I don’t just mean the deposit or a down payment, but it’s closing costs and it’s also make ready. This house here is what you call pride of ownership. So make ready a zero. But what if this house was 200k and needed 30k in work? You should include the 30k because it’s how much cash do you need to put down to own and have a functioning or producing asset? If you put 50k down and it needs 30k in work, you have to calculate $80,000 in that example. The down payment plus make-ready costs and closing costs, which for this example we’ll just assume are zero.

      In reality, they often run about $2,000. Let’s take a look at what we’re doing. We’re gonna play a game. We’re going to call it the, “What If” game. Let’s say this house (the one we just saw) cost you 200k. You put $50,000 down whether that’s for the down payment, closing costs, make-ready, right? If 50k went out of your account, how much estimated yearly cash flow do you need to be able to earn 6%? Maybe stop the video here if you want to try to take your calculator out or your phone and do the math. Again, you’ve spent $50,000 out of pocket. So how much cash do you need to earn to earn 6% again. Stop the video because I’m going to give you the answer.

      The answer is $3,000. You simply take 6% times 50k and that will give you $3,000. Then what you do is you take $3,000 divided by 12 because rentals produce net income every month. So you would need to have net $250 a month in this example if your only question was, “I have to spend 50k and I want to make 6%, how do I do that?” That means subtracting all costs, mortgage payment, property management, taxes, insurance reserves, all those things. You have to net $250 every month to earn a 6% yield in this case.

      Now let’s try a different one. Let’s say in this case the house costs 150k. Your out of pocket is 40k what is your estimated yield if the monthly cashflow is 150 right? After all expenses, mortgage payments, taxes, insurance, reserves, utilities, whatever it is for you, if you’ve calculated your net at 150 what is your yield? Again, stop the video if you want to do the math, but here’s the answer: First off, you take the 150 times 12 right? Cause you want to get a yearly number. So that’s 1,800. Then, you take 1,800 divided by 40,000 which was your out-of-pocket, and that is going to give you a decimal or a reading of 0.045. Turn that into a percentage by multiplying by 100% and you get 4.5% in this case. We took the estimated cash flow and calculated our yield. In the earlier example we’re saying, “Hey, if I’m putting this out there, how much cashflow do I need?” So again, these are all just examples that you should be comfortable with, but let me break down the spreadsheet for you. The reality is, I use this spreadsheet to compare all of my deals. My spreadsheets are very simple. I use this to compare a one bedroom house with a 20-unit apartment building.

      I still use this exact spreadsheet today. I believe a lot of people over-complicate spreadsheets and how to compare deals. It’s very easy to do. Excel is very, very powerful and there is so much vocabulary in real estate that you can easily add too much. I believe it’s a very simple thing, it’s just how much of my cash goes out and how much cash comes back. That’s how my simple mind works. When you follow my model and start playing with it in your market, you’ll get to understand which variables have the biggest impact on your return. Often it’s pretty surprising. You will see sometimes that cheap properties have a downside because they consume too much cash and they’d just drive down your yield. So here’s the spreadsheet, I broke it into three parts because frankly, the font was too small.

      If I had it all on one sheet, my first portion would be how much cash is required. Just breaking it down left to right. I usually put a street name just so I can identify it. I talk about the property type (again, not required but I put it in there). What’s the price? Usually I start with what’s the asking price and then I play with my numbers and I come back to what I can offer, but let’s just say a price down payment. I’ve assumed 30% in this example for repair costs, I’m assuming it’s turnkey or ready to go. I’ve assumed closing cost of $2,000. And then that’s just a cumulation of total cash in this case, 39,500 for this one bedroom house costing 125. When you’re a student of mine, you play with this, you get the spreadsheet, a d it all becomes second nature because you’ll be walked through it video after video.

      Now here’s the next portion of the spreadsheet: Expenses. Because again, we are trying to get to a net number. So you’re going to have a mortgage payment, you’re going to have taxes and insurance, and you’re going to have property management. It could be zero. If you self-manage you’re going to have expenses and reserves and your basic, you know, add what makes sense, right? I never owned anything that has snow, but if you have snow removal or yard or whatever, add those things. You want to have reserves, you want to budget for things, because this is going to be a model that you run to get monthly expenses. And then the final one is sort of where it all comes to bear. We go after and get the monthly rent.

      We calculate the monthly cashflow which is a rent minus all of those expenses from the previous slide. I do turn that into a yearly cashflow number because that’s how I compare things. I take a monthly cashflow times 12 and then there’s the yield. It’s yearly cash flow divided by out-of-pocket cash, which you saw in here. In this case, total cash was $39,500, so that’s how this yield happens. In the end, students learn how to leverage this simple deal spreadsheet and the same one I use for all my deals, they now get to model the spreadsheet to their own market. I’ve been very clear, I only know one market of any depth, but they’ll get to put in their rents, their interest rates, their property management fees, all of their expenses. The spreadsheet does become theirs because it’s now modeled for their business in their markets.

      The whole goal of the course in section two is to understand how yield is impacted by adjusting other variables. Does mortgage payment truly have my mortgage interest? Does going from 4 to 3.9 have a huge impact on your yield compared to $10,000 less of make-ready? No, the $10,000 will have a bigger impact on yield because that’s real cash. A savings of whatever it was, 0.3% on mortgage rate. We’ll bring your mortgage payment down, increased cashflow, and what would that be? Maybe $20, $30 a month. So it doesn’t really impact it as much. A lot of times people get aha moments when they go in and understand what really impacts yield. Again, I can’t say this enough, I use this for yield calculations too. Go after one bedroom houses, right? Small, 600 square feet, all the way up to 20-unit apartment buildings.

       I’m only interested in how hard my cash is working. If you buy a cheap property that needs 30k, you must calculate and leverage that 30k as well because that cash is going out. As I document in our book, that was a big mistake I made in the beginning because I wasn’t appreciating the cash. I started just by understanding the down payment, but including make-ready costs is an important factor that I certainly missed my first year of investing. Expected yearly cashflow is the thing, it’s the return. It’s how hard is your cash working, and in my opinion, that’s the only thing that matters. Sometimes a small house is best. Sometimes it’s a fourplex and sometimes it’s an apartment. I could tell you today in my market, it’s not apartments and fourplexes and houses are the best investment today.

      That could always change going forward. I started using this model 15 years ago and I’ve used it in the upmarket, I’ve used it in a downmarket and I’m using it today as well. I believe that yield, what I use to compare deals is the great equalizer because yield will tell me and tell my students how hard their cash is working. That’s how I compare deals. It’s simple. Maybe you were hoping it was more complicated than that, but it’s not. I am curious, how do you compare deals? When you’re looking at five different things that you could buy, what do you use? Is it price per square foot? Is it gross rent multiplier? Is it cap rate? What do you use? I’m always curious to see what people use. Hopefully, that made sense. Again, I do really believe that the math should not be the hardest part of real estate investing.

      I try to keep it simple. I use this every day, so hopefully, that made sense. I’d love to hear from you. What do you use? If you have any questions about this, let me know. Remember, if you get the course use the coupon code book BOOK20, so you get $20 off and an autographed book. In conclusion, the math shouldn’t be the problem. You need to learn your market, you need to consistently look at it and then the math just becomes second nature. So hopefully that makes sense. Let me know what you think. Take care, and have fun.

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Meet Kevin goes from Jamba Juice to Real Estate Millionaire ? https://youtu.be/_9WtK5XxzZo Bay Area Real Estate in Trouble (Real Talk #87) https://youtu.be/zzSUCAo6iW8

Thoughts on the Bay Area Real Estate Market | Buy or Sell? ? https://youtu.be/eoeH0bUJYa0

From Zero to 19 Doors with Julie Holly ?️ https://youtu.be/zsc7YX69AEI Syndicator

Calls His Shot and Exits the Market with $25M Portfolio Sale ? https://youtu.be/Pmxk19pUSd0

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     ​In my daily financial update or financial news video, I wanted to record a second video about some financing changes that I learned about yesterday evening when a when an investor and friend called me in a, in a panic, you know, about, about what was going on. So let’s kind of set the stage this, this change does impact the market that I research and follow, which is Fresno, California. I suspect it impacts all of California given the lender that’s involved. But really for anyone in the country, realize that if you’re executing the borough strategy by repair, rent, refi, repeat that, that I’ve always talked about, you have to make sure the exit is secure, right? Which means the refi, right? The burst strategy breaks down. If you can’t exit, get your money back, either your money or your private investor’s money and it can lead to some very uncomfortable situations.

     So let me set the stage again, this is for my market likely for California, but, but really needs to be paid attention to across the country. Cause when financing rules changes that are overnight and a bird project is not overnight. So in my market, I’ve known dozens of investors to leverage an institution called cash call mortgage. I’ve actually used them. They are by no means the cheapest as far as fees and interest rates, but they have proven time and time again to execute the refinance for investors. And the rules were pretty simple. There a, there was no seasoning period. So if you found a good deal and you could get it cleaned up and rent it in 45 days, you could go to cash call assuming everything else was okay and execute the refinance, which you mean appraisal. And on all of that, I’ve known several somewhere between five and 10 investors just in my little market that had routinely exited bird projects in under 90 days, which is wicked fast.

     Unfortunately, one of the rules just changed. And, and I learned about it last night and now cash call is going to require a six month seasoning period. So they want the owner to own the property for at least six months. And I suspect, again, I haven’t read it specifically, I suspect they’re actually going to want to see the property leased for six months. So that could mean an eight-month hold. Which interesting. This may not seem like a lot, or an issue, but it is, especially if you are executing Burr with private money, right? If you were budgeting, let’s call it three months, hold time at 10 or 12% or whatever you’re paying and now you’ve got to hold it six to eight months, that hurts at a minimum, your profit is going to be impacted. For some of you would probably make the deal not worth it.

     So that’s, that’s an interesting change and frankly I was always shocked that cash call would routinely refi these. So it doesn’t surprise me that the rules changed. But they did. And I think some people are going to get caught with projects that were maybe skinny that they thought they could get in and out of quickly that now they’re already in. Right? They can’t go back. And use the rules during the, which when they acquired it, they have to use the rules that today. So that’s the first rule that changed. The second one is I, you know, a lot of people are executing these bird projects inside of LLCs, limited liability companies. Many of these LLCs have multiple members. The person that called me last night, for example, had two members of the LLC. And now what cash call is going to require is if you’re doing the refi, they want both of the members of the LLC to sign for the loan, right?

      So they’re both on the hook for the loan as well. Historically, what this partnership would do is they would go, this one’s yours, this one’s mine, this one’s yours, this one’s mine. So it would just, it would just alternate between the partners who would sign in, be on the hook for the loan. Again, I understand why cash call would do this. But it’s going to make multiple-member LLCs and, you know, just the thought of the future more complicated for folks. You know, are they going to set up multiple LLCs? And have additional costs for that. Are they going to be less likely to partner now? Right? There are all these things that could come in when the rules change, and again, a bird project is somewhere between three and nine months in duration. So there are lots of projects already committed and spent that now they have to think about the exit differently, but that’s not the biggest change.

     Here’s the biggest change, and I think this is going to hurt and I think this is going to hurt a lot of people. Again in my market and likely in California cash call mortgage, the minimum loan they would do with 75 grand was 75 grand, right? They wouldn’t touch the things at 50 grand or anything below that. So if you think about a 75 K loan, that means the house would have to appraise at 107 grand, just over 107 grand at a 70% LTV. So they would, the property appraises at one Oh seven the existing owners take 30% equity and then the bank would do the loan at 70% that’s how that would work. Unfortunately, cash call has come out and said, we are no longer doing loans under a hundred K think about that. So the minimum loan they would do up until last week, probably right before or after Thanksgiving was 75 K and I have some of these, some of the loans that I realized were between 75 and a hundred they do not want those loans anymore.

      The minimum now is 100k so where before the house had to appraise for 107 at a 70% LTV. Now the house has to appraise for 142 now some of you are watching this, you’re like, what are you, what are you worried about? Oh, I mean 142 grand. Isn’t that every house around? No, it’s not a, there are plenty of areas in Fresno where you know you could get a house under 200k even after fully repaired. It’s going to be an older house built in the 50s and small footprint and all of that. But unfortunately, what this means now is again, the people executing the burst strategy who are counting on cash call mortgage to do the refinance, and they were hoping for a minimum loan between 75 and 100 grand are stuck because cash call doesn’t want that loan now.

      So what’s going to happen? So I think there’s going to be a lot fewer transactions because the seasoning period, right more before people were getting in and out in less than 90 days, now it’s going to take six to eight months. That’s going to slow down. You know, purchases and refi and recycling capital. It’s made it less profitable because now you have six to eight months of carrying costs. Verse three, and you’ve just changed the game because of the loan limits, right? Raising the low, the minimum loan from 75 to a hundred K is going to impact Fresno.

      Now it’s possible some other lender comes in and takes us up. I doubt it, at least in the short term, a cash call was kind of the one game in town for lots of people in Fresno executing the burger strategy. So there is going to be a lot of people watching this in Fresno going, Oh shoot, what do I do now? I think in the short term, a lot of these projects that were going on that we’re looking at executing Burr, I think they’re just going to list and sell them. They’re going to, they’re going to take their small profit and be done, which is not a horrible outcome. It’s nice to have options, but I think the Fresno area is going to see a lot less improvement. I think cash call changing, this is going to impact the revitalization of some communities in Fresno where, you know, it was just starting to improve and neighborhoods were getting hit and flooded with remodels and you know, the pride of ownership and all of this stuff.

      So it is unfortunate that this is going to change. But this is why in my previous videos talking about Burr, I was always so focused on the exit, right? There are so many failure points potentially in a Burr, but the most important to get right is your exit cause you want your capital back or you want your investor’s capital back. And unfortunately, if you were depending on cash call, we got to look somewhere else. If you’re between those 75 and a hundred K or a value, probably better said between 107 in one 42 right? So used to be able to get out with an appraisal of one Oh seven now the appraisal needs to say one 42 and that just takes a whole swath of real estate out of the market. So a couple of things. If you’re executing Burr in California and you are using someone other than cash call, do me a favor, leave the comments below.

       I know there’s going to be lots of people looking at this looking for a plan B. There were so many people comfortable with cash call cause they always delivered when they needed it. Now with these rule changes, some people are going to get caught. So if you know of a lender in California doing a burst strategies below a hundred K minimum, leave the comments below. I know you will be helping a lot of people out. In addition to this, always pay attention to lending. As I told my friend yesterday evening, wait four months, it could change, but that doesn’t help somebody. My friend was looking to execute 10 roofies in the next 45 days. Now because of these changes in the limits, he can only do four. That’s a huge impact he had. He had done, I don’t know, probably 30, 35 already in the last 18 months he was looking to do another 10. But because of cash call rule changes, he can only do four. What’s he going to do with those other six? He might just sell them. He might hope for a, you know, a commercial lender. I don’t know. But we’re gonna work on it together and see what happens. So in the end, let me know what you think again, please. If you know of another lender other than cash call in California, leave it in the comments below. I know you help a lot of people have a great day and take care.

​?Grab Your Copy of My Book on Amazon
https://amzn.to/2X41yzh
✅ Learn More About Our Course Here!
http://bit.ly/ORATTcourse
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http://bit.ly/askzuber
Meet Kevin goes from Jamba Juice to Real Estate Millionaire ?
https://youtu.be/_9WtK5XxzZo
Bay Area Real Estate in Trouble (Real Talk #87)
https://youtu.be/zzSUCAo6iW8
Thoughts on the Bay Area Real Estate Market | Buy or Sell? ?
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       Hey there everyone, how are you doing? So one thing I wanted to do before we sort of head into the long weekend here is, maybe give you a picture of our first couple of years of real estate investing, right? So we started again back in 2003 we didn’t have a lot, we had about $40,000 in cash saved up between us, and I get asked all the time to kind of relive or paint or give a timeline of, of how we used or leverage that capital to grow. PR you know, a decent-sized portfolio. So I thought I’d do is just give you a flavor of it. You know, obviously, the full story is documented in our book one rental at a time and you can get that on Amazon. But why don’t we go and kind of give you the timeline and, and share with you, you know, how it all started.

       Cause it’s a, it’s fun. Yeah. So again, let me expand this out. So I did my best to go back and kind of relive the story, kind of what use frankly used Zillow to kind of document purchase dates and things of that nature. And basically highlight how we rolled from 2003 to 2007, how we turned $40,000 in cash into approximately 500K in net worth. Obviously, I use the word estimate because again, net worth is one of those numbers that I think is kind of squishy. You know, you could, you know, one appraiser could say this, another one can say that and you know, all of those details. So I did my best to kind of call that out where appropriate. Again, if you want to see the full story right, the full 15 years, you need to go ahead and get the book one rental at a time.

      It is on Amazon. It talks about all the things we did pre-crash, what saved us, how we leveraged the crash. You, you know, used it to buy a lot more stuff. And then finally what we did is the market return. So it’s, it’s a very detailed story of what we did and hopefully, you enjoy it, but this is how it all starts. So it started for us in 2003 when we finally realized that the Bay area though our home market, 30 minutes from our house wasn’t going to work. We had to look elsewhere. That’s when we decided to pursue Fresno. We didn’t buy our first property or it didn’t close on it until December of Oh three. So you will start to see these kinds of numbers repeat. So we bought a single-family home. This was a single-family home.

       One is, it will be referenced throughout this for 107. We bought it at the market. We didn’t know any different. We paid full retail and we used you know, $20,000 roughly as our down payment. Then we can move on to August of Oh four. We buy another single-family home for, you know, 110. We did buy this one under market. We estimate this to be about 20 K under market and we sent to learn that you don’t have to put 20% down, you can put 10% down again is 2004 pre-bubble, all of those things. So a couple of things. First note that it took us, you know, almost seven months or eight months to buy the next one. You know, we didn’t, we didn’t run out and you know, just by three riding a row you really do gotta read the book because we tell them a horrible story with our first rental that almost crushed us.

      You know, we almost stopped investing cause it was so painful. Thankfully Olivia gets all the, all the credit in the world for, you know, staying true to our plan and moving forward because as you will read in the book, I was unsure if we wanted to go do this again cause it was pretty painful. Then we did buy a third property. Again, this one for one 20. We did buy it a little smarter. Again, we thought it was about 30 K under market and we put 10% down. So, in the end, this is kinda how we broke down net worth through 2004. So we started with 40 K that was kind of actual, right? That’s, that was what we had. It was cash after our first purchase. We still were about 40 K, cause again, we didn’t buy it under the market.

      We didn’t know any different. So we were sitting on approximately 20 Kane cash and we had equity in that first purchase of 20 K. Moving forward again, after buying that second house we estimated our net worth to be about 80, which broke down 10 K in cash. That’s what we had left. We had 40 K now in the first home cause appreciation. And then we bought that third house again, we put 10 K down and we bought it for about 20 K under market. So our net worth after our second purchase was starting to you know, get close to a hundred K. And then finally, after purchasing our third one there in November we had no cash left. We were cash for our first house now was or was 40 K in equity.

      We thought our third one was 30 K and again, our fourth one, because we bought it under market was 40 K. So again, these are estimates. You know, I did the best I can. You can argue is it 90 K is at one 20. I don’t know. But this is where I thought we were sitting as of November 2004. So moving forward we do our first cash-out refi. Again, I talk about this a bunch in the book. We took a positive cash flow property and turned it negative. As you’ll see in the book, I call that an alligator. It’s very painful. Don’t ever do it. It was stupid, but I didn’t know any better. So we took 40 K out of that. We did very soon after that by single-family home four and single-family house five both were about 20 K in the market.

           And we put 10 K down heading into March of Oh six. We did another cash-out refi this time a little smarter. We didn’t create an, we made sure we had at least a little bit of cash flow. It didn’t always work, but at least that’s what we were thinking. So we pulled again cash out of our second single-family home of about 40 grand and then that helped us buy two more single-family homes. So we got up to single-family homes, six and single-family homes, seven both were about 20 K under market. And this time we had to put about 15 K down. So how does this all work out? So if we go back to July Oh five or the cashout refi, we, we went from zero cash to 40 K. Our net worth has gone up mainly because of equity.

         So we have 40 K cash, our single-family home one. We have 20 K left. Again, we had an appraisal. So you know, we still had that equity. As it turns out it was kind of false equity, but that’s where we were sitting on a single-family home and a single-family home. Two and three both have appreciated nicely. Do you want to go back and look at it? You can look at Fresno’s appreciation from like 2002 to 2007, it was double digits. And if you bought right, you could really do some special things back then. And as we move forward with the purchase of single-family homes, four and five, our net worth went up again. Cause again we bought it, right? We bought 20 can to market. And we put 10 K down. So our cash went down by 20 K. A single-family home one was 22, two and three where there’s still that 70. And then again, we bought a single-family home, four and five, right? 20 K under plus 10 K down.

           It’s heading forward March of Oh six. You know, time’s going by, appreciation is good on us. We are again pulling cash out. So we got a now 60 K cash after our second refi, a 40 K equity in house one 50 K in the house too now 90 [inaudible] in house, three 70 K in a house, four and 70 [inaudible] in house five. We then exceed half a million dollars because we buy houses six and seven, right? Our cash goes down to 30 K cause we had to put 15 K down each. You know, so we’re sitting with 30 K cash, 50K equity in house one 60 K in the house to 110 in house, three 90 K in house four 90 Kane house five. And then how S four and or how six and seven both were sitting on 40 K as we bought an under market and put some down.

           So again, this is how it, this is how it rolled. Three short years, 2003 to 2006. It was obviously a time of great appreciation. You know, again, check out the charts, kind of double digits, year on year on year. Again, and if you know our story at all it goes exponential from there. You know, we went from houses to apartments. We can talk about that. It’s all in the book. We can talk about hard money and private money, which is something we leveraged extensively again, all in the book. So again, if you’re looking to have a good read you want to read something that Forbes recommended is one of the top 15 books to read before you get started. We are a self-published author telling our story and you can find it on Amazon. Just either look up the title one rental at a time or just search by my name. So hopefully that makes sense. Hopefully, you saw that I tried to put out the full timeline details kind of kept trying to keep all the numbers straight and see how appreciation buying under market can really help you.

​        So hopefully that made sense. Hopefully, you enjoyed that. You have any questions you can leave comments below. Take care.

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