When I first started investing, I listened to all the real estate gurus and anyone who came recommended. The only course I ever bought was John Schaub's. He was practical and his way made sense to me. That was many years ago and his advice is still timeless. He has a solid understanding of what it takes to think outside the box. Great interview! Thanks Coach!
I bought Johns book Buying Right and did buy two houses, paid for now. Makes all the difference at age 72 getting the rent. Jim Napier said get ten houses. Ten would be better, all paid for now. Get your name on something and get it paid off. Thanks to John Schaub and Jimmy Napier.
Great information. I'm also interested in how you would handle the business structure when starting out. How would you structure the ownership on your first property, given what you know now?
I formed an LLC for my first deal in my business. But even if it's in your name, get a separate bank account and credit card. Keep food records. Get good insurance. Those are the basics you need
Hi coach great content ! Do you do personal one on one calls to help guide investors who don’t know what should be next step? I know it depends on all the variables but just asking thanks!
With making content and doing a coaching program (Rental Property Mastery) right now, I don't have any time available for individual consults. But I do lots of 1-1 and group coaching inside of Rental Property Mastery, and I think it's a better value than 1-1 coaching from me anyway. No pressure but here's the link: coachcarson.com/rpm-yt
Coach, I have viewed many real estate investors and RUclipsrs, I must admit that for me you are the best. I just bought your book “The Small and Mighty Real Estate Investor”, best book, I can’t put it down. Thanks for these inspiring videos and great interviewing.
Does he ever explain who would be responsible for paying for repairs or turnover costs? Would the investor and the deal finder/manager split the costs or would the investor be responsible?
Amazing interview! Where can we find more info on the deal John explains from 31:30 to 34:05 -- sounds really interesting but I'm not sure I understood all the details. Thanks in advance!
He was talking about a joint venture where the 2 partners own a property together "as tenants in common." It's a type of shared ownership of a property. In the example, his money partner buys the property using their cash and credit. And then the partner deeds (transfers title) for a 50% interest in the property to John (the entrepreneur/deal-finder/manager). But the money partner invested $40,000 down to buy the property. To get 50% ownership, John owes him half that or $20,000. So, John gives the money partner an I.O.U (aka a promissory note/debt) for $20,000 with no interest and no payments for - let's say - 10 years. This means John must pay him back $20k in 10 years or sooner. In the end, the money partner gets a passive investment on a good property. John - the entrepreneur - gets to own half of a deal with none of his own cash. They both win as the property goes up in value and cash flow increases. Hope that helps!
Ok so let's say you do buy a house in cali at like $600k. It'll just always go up? So in 20yrs it'll be like $3.5m? I just dont see how everything will constantly go up in value but nvr down
Fed prints money. The odds of them stopping is very low. Unless we see depreciation, everything goes up in price over time as the value of the dollar gets weaker
Yeah but how is single family easier or even the same amount of management than multifamilies? I own both and there’s no way you can tell me that 4 single families is just as easy to manage as a 4 plex? You got 4 roofs, boiler, mortgages, insurance policies, bills. How is it not easier to manage a 4 plex. Please do a video on this. Thanks!
It's about tenant management. When a house tenant stays for 5 or 10 years that is MANY times less work than an apartment tenant who leaves every 1.5 to 2 years. There are definitely efficiencies on multiunit. But the tenant's are less self sufficient. At least for me, it makes a night and day difference in time spent on management.
Not sure that I believe only having had $100 when y’all started. My attorney charged me 3x that just to review a contract and give input the first time. If you did seller financing and partnerships and all that in the early days without legal advice, sure maybe, but doesn’t sounds like an approach I would recommend. Legal council is important with creative approaches and is not cheap.
My business partner and I each put in $500 in the beginning. We used that to create an LLC, which in 2003 we found an attorney to do for a few hundred bucks. We also reinvested a lot of our early profits in education and consulting with experts. So, that's where we got a lot of our contracts and advice. I agree legal and business council is important!
not sure! I think it'll help with deep data analysis and trends. But at least in my world, buying properties and getting money is still a human-to-human thing. So, I think AI will just supplement that for now.
With higher price properties where rent-to-price ratio isn't as good, you have to get financing at much better rates in order to buy with lower down payments. This normally comes from sellers (seller financing, lease options) or partners who can put bigger down payments or accept below average cash flow for a piece of the future growth. Those are the only ways I know to buy with less down. SOMEONE is always putting more than $50,000 into it, but it doesn't have to be you.
How does he buy cheaper houses in good location without any money, where the sellers are desperate to sell below the fair market and finance it for him? He also finds partners who pay for everything and he gets half of the cash flow and the profits??? I wonder there are such naive people around.
No naive people. Investors get a good return. Sellers get a quick solution with a trustworthy person. Neighbors get an owner and tenants who care about their property. Lots of wins there.
He, you, or any entrepreneur gets paid by solving people's problems and making them happy. No one stays in business long (or in same town for long) duping people.
Thank you for your response Coach. It seems all too good to be true. It’s pretty competitive out there. People are willing to pay closer to fair market price. I guess I need people like you and John to help me to find such deals 😉
@@ahsenchaudhrymdit's not easy to find the good deals. You may need to talk to dozens of sellers and make 10 or 20 offers to get a good one (at least early on). But you get momentum and it gets easier. Good luck and thanks for watching.
Very few deals will be found on the MLS. Wholesalers will have some, they keep track of defaults and scour for potential deals like poorly kept homes. They get their names out there, get homes under contract and assign the rights. The bank lobby has made a lot of strategies illegal or due on sale. Some of this guys advice will send you to the poor house. Most strategies only work with a good housing supply which we dont have and wont have for quite a while. Right now too many investors too few deals. I wonder how many of his deals ended with a loss. That can be devastating and life changing for a new investor. If it sounds too good to be true. Easier to sell the dream of quick riches. You can do it too I'll show you how.
It does take work. They don't fall into your lap. But this video shows some of my favorite ways: ruclips.net/video/cL_Xw-vPqRI/видео.html If you work at those methods and always searching MLS diligently, you'll find good deals.
Step 1: be a boomer Step 2: buy any piece of property for $8,000 Step 3: wait 30 years and sell your piece of property for 20-30x more than what you paid for it Step 4: tell everyone how to invest and not complain about interest rates
@@CoachChadCarson the average sale price in 1985 was around $100k with an average household income of $24k. Fast forward to 2024, the average home price was $495k with an average salary of $60k. What does that mean? Salaries doubled but house prices quadrupled. I’m not saying it’s impossible to invest now but the barrier to entry in the 80’s was way lower than it is now. You’d only need $20k as a down payment back then to buy an investment home, now you’d need $80k.
I think you make a good case that barrier to entry is higher now, although today's relatively lower interest rates reduce today's price/salary disparity compared to 1980s. But one other factor that made it easier in 80s was many assumable mortgages without qualifying (now there are due on sale clauses). But I still think it's not as bleak as the picture you originally painted. For a long term investor, barriers to entry aren't always a bad thing because it reduces competition for those who figure it out. The trick is thinking outside the box, being patient, and using our financial resourcefulness. Complaining just stiffles creativity and let's us off the hook from seeking opportunities. I know many investors who are buying rentals - in this market - with this kind of mindset.
he's good, but he has an ego. he'll put his houses against buffet stocks any day? Buffets accomplishments make Mr. Schaubs investments pale in comparison. Buffet probably makes more $ on dividends and interest in a day than this guy makes in an entire year.
Thank you for the comment. In my opinion, he didn't make that comment out of ego. He just said it to emphasize the power of simple investments like rental properties. Warren Buffett has averaged over 22% annual returns in his career. And he has done it with a relatively low level of risk. But for the average investor (like me, John, others), it's much easier to match or exceed those Buffett-like returns with small, residential rental properties than trying to buy stocks or even Berkshire Hathaway itself. That's what I think John was saying.
@@CoachChadCarson Hey there, thanks for your reply as well! I'm liking your content! I am involved in both, residential real estate and stock equity investing. I'm still not sure its "easier" to match or exceed buffet-like returns with real estate. In both, you have to have a good vetting/selection process, which I know you teach, but generally, RE investments are certainly more work than stocks and thus, not as "easy". While purchasing property is easy to understand, that doesn't mean the work of maintaining properties, especially rental properties, is easy. Owning properties requires much more sweat equity than purchasing stock or stock investments like mutual funds or ETFs is what I'm thinking.
@@t33sher I'm an equities and stock guy, too (though much heavier in real estate). Yes, rental properties are more work than equities. But with a mature portfolio (i.e. not in growth/acquisition mode), I average 2 hours/week on my real estate. I have students who spend 4 hours per month with fewer properties. I consider it passive enough. And most importantly, I consider it worth that extra time because my equity in real estate investments have grown much faster and more consistently than my passive index funds. But I still don't think it's for everyone. It takes a certain temperament to be a rental investor. There are plenty of ways to succeed out there! Thanks for watching and for the good questions!
When I first started investing, I listened to all the real estate gurus and anyone who came recommended. The only course I ever bought was John Schaub's. He was practical and his way made sense to me. That was many years ago and his advice is still timeless. He has a solid understanding of what it takes to think outside the box. Great interview! Thanks Coach!
thanks for sharing your story with John! Agree 100%. Practical and has a long-term perspective.
Coach's responses in the comments are top tier. I've never seen that much engagement at that quality.
My pleasure! Glad it's helpful.
I bought Johns book Buying Right and did buy two houses, paid for now. Makes all the difference at age 72 getting the rent. Jim Napier said get ten houses. Ten would be better, all paid for now. Get your name on something and get it paid off. Thanks to John Schaub and Jimmy Napier.
Two classic, helpful teachers. I have both their books on my shelf!
In the 80’s, the median price/income ratio was X2.5, now the ratio is X6.25 (here in PNW) It’s not all about interest rates.
good point!
Exactly. No one talks about this.... and it's everything.
Great guest, but the host is awesome keeping the guest focused on answering the questions 👍
thank you!
This was great; incisive and forthright !
Maintenance is more than 20% gross income. Plan on 30-50% on multi family
Great information and guest! I learned that it's important to learn and adapt to changing conditions in order to find opportunities.
Exactly! Adapting is the kry word. Maintain your goals and investing principles, but adapt your techniques.
This is the best advice I’ve heard on RUclips it parallels the advice I’ve heard from my father who bought in the 70-80’s as well
Timeless info.
Thanks Dion! I always learn a lot talking to John
Great information. I'm also interested in how you would handle the business structure when starting out. How would you structure the ownership on your first property, given what you know now?
I formed an LLC for my first deal in my business. But even if it's in your name, get a separate bank account and credit card. Keep food records. Get good insurance. Those are the basics you need
What does the cost sheet look like on buying 10 properties today, starting out? I sense times may have changed …
Excellent work
Hi coach great content ! Do you do personal one on one calls to help guide investors who don’t know what should be next step? I know it depends on all the variables but just asking thanks!
With making content and doing a coaching program (Rental Property Mastery) right now, I don't have any time available for individual consults. But I do lots of 1-1 and group coaching inside of Rental Property Mastery, and I think it's a better value than 1-1 coaching from me anyway. No pressure but here's the link: coachcarson.com/rpm-yt
Excellent interview with an excellent guest. You've got yourself a new subscriber.
Welcome aboard! Thanks for the sub!
Coach, I have viewed many real estate investors and RUclipsrs, I must admit that for me you are the best. I just bought your book “The Small and Mighty Real Estate Investor”, best book, I can’t put it down. Thanks for these inspiring videos and great interviewing.
Very helpful Thank you for sharing
Forgot to comment yesterday and thank you gents.
Now sending this to an investor friend.
Thanks dudes
Thanks for watching and sharing! 🙌
Does he ever explain who would be responsible for paying for repairs or turnover costs? Would the investor and the deal finder/manager split the costs or would the investor be responsible?
Amazing interview! Where can we find more info on the deal John explains from 31:30 to 34:05 -- sounds really interesting but I'm not sure I understood all the details. Thanks in advance!
He was talking about a joint venture where the 2 partners own a property together "as tenants in common." It's a type of shared ownership of a property.
In the example, his money partner buys the property using their cash and credit. And then the partner deeds (transfers title) for a 50% interest in the property to John (the entrepreneur/deal-finder/manager).
But the money partner invested $40,000 down to buy the property. To get 50% ownership, John owes him half that or $20,000. So, John gives the money partner an I.O.U (aka a promissory note/debt) for $20,000 with no interest and no payments for - let's say - 10 years. This means John must pay him back $20k in 10 years or sooner.
In the end, the money partner gets a passive investment on a good property. John - the entrepreneur - gets to own half of a deal with none of his own cash. They both win as the property goes up in value and cash flow increases.
Hope that helps!
@@CoachChadCarson Thanks a lot coach! That clarifies it quite a lot ❤
I think I'm gonna try this out, sounds like an amazing partnership format!
@@maraozI think it's one of the most useful strategies in today's market. Let me know how it goes!
Amazing explanation. I finally get it.
Excellenct content.
Thank you!
Ok so let's say you do buy a house in cali at like $600k. It'll just always go up? So in 20yrs it'll be like $3.5m?
I just dont see how everything will constantly go up in value but nvr down
Fed prints money. The odds of them stopping is very low. Unless we see depreciation, everything goes up in price over time as the value of the dollar gets weaker
The real give away is at 31 st min
Yeah but how is single family easier or even the same amount of management than multifamilies? I own both and there’s no way you can tell me that 4 single families is just as easy to manage as a 4 plex? You got 4 roofs, boiler, mortgages, insurance policies, bills. How is it not easier to manage a 4 plex. Please do a video on this. Thanks!
It's about tenant management. When a house tenant stays for 5 or 10 years that is MANY times less work than an apartment tenant who leaves every 1.5 to 2 years.
There are definitely efficiencies on multiunit. But the tenant's are less self sufficient. At least for me, it makes a night and day difference in time spent on management.
Not sure that I believe only having had $100 when y’all started. My attorney charged me 3x that just to review a contract and give input the first time. If you did seller financing and partnerships and all that in the early days without legal advice, sure maybe, but doesn’t sounds like an approach I would recommend. Legal council is important with creative approaches and is not cheap.
My business partner and I each put in $500 in the beginning. We used that to create an LLC, which in 2003 we found an attorney to do for a few hundred bucks.
We also reinvested a lot of our early profits in education and consulting with experts. So, that's where we got a lot of our contracts and advice. I agree legal and business council is important!
Feel like a lot of people have been saving on the sidelines past couple years. Gonna be high demand in the market soon.
Ho do you think AI will Affect real estate in the future?
not sure! I think it'll help with deep data analysis and trends.
But at least in my world, buying properties and getting money is still a human-to-human thing. So, I think AI will just supplement that for now.
I live in Staten Island NY, very difficult to find something. Where you only could put down $50,000 and deal pencil out.
With higher price properties where rent-to-price ratio isn't as good, you have to get financing at much better rates in order to buy with lower down payments. This normally comes from sellers (seller financing, lease options) or partners who can put bigger down payments or accept below average cash flow for a piece of the future growth.
Those are the only ways I know to buy with less down. SOMEONE is always putting more than $50,000 into it, but it doesn't have to be you.
You have to be more creative in expensive markets but $50k deals are there for sure. May require patience and creativity in terms of who you go after
How does he buy cheaper houses in good location without any money, where the sellers are desperate to sell below the fair market and finance it for him? He also finds partners who pay for everything and he gets half of the cash flow and the profits??? I wonder there are such naive people around.
No naive people. Investors get a good return. Sellers get a quick solution with a trustworthy person. Neighbors get an owner and tenants who care about their property.
Lots of wins there.
He, you, or any entrepreneur gets paid by solving people's problems and making them happy. No one stays in business long (or in same town for long) duping people.
Thank you for your response Coach. It seems all too good to be true. It’s pretty competitive out there. People are willing to pay closer to fair market price. I guess I need people like you and John to help me to find such deals 😉
@@ahsenchaudhrymdit's not easy to find the good deals. You may need to talk to dozens of sellers and make 10 or 20 offers to get a good one (at least early on). But you get momentum and it gets easier.
Good luck and thanks for watching.
Very few deals will be found on the MLS. Wholesalers will have some, they keep track of defaults and scour for potential deals like poorly kept homes. They get their names out there, get homes under contract and assign the rights. The bank lobby has made a lot of strategies illegal or due on sale. Some of this guys advice will send you to the poor house. Most strategies only work with a good housing supply which we dont have and wont have for quite a while. Right now too many investors too few deals. I wonder how many of his deals ended with a loss. That can be devastating and life changing for a new investor. If it sounds too good to be true. Easier to sell the dream of quick riches. You can do it too I'll show you how.
How does one buy these properties under market value in today's market? How do you and John find these deals?
It does take work. They don't fall into your lap. But this video shows some of my favorite ways: ruclips.net/video/cL_Xw-vPqRI/видео.html
If you work at those methods and always searching MLS diligently, you'll find good deals.
Step 1: be a boomer
Step 2: buy any piece of property for $8,000
Step 3: wait 30 years and sell your piece of property for 20-30x more than what you paid for it
Step 4: tell everyone how to invest and not complain about interest rates
Interest rates were 2x higher in the 80's. Somehow they figured it out.
A better approach is to ask HOW they did it and apply those lessons today.
@@CoachChadCarson the average sale price in 1985 was around $100k with an average household income of $24k.
Fast forward to 2024, the average home price was $495k with an average salary of $60k.
What does that mean? Salaries doubled but house prices quadrupled. I’m not saying it’s impossible to invest now but the barrier to entry in the 80’s was way lower than it is now. You’d only need $20k as a down payment back then to buy an investment home, now you’d need $80k.
I think you make a good case that barrier to entry is higher now, although today's relatively lower interest rates reduce today's price/salary disparity compared to 1980s. But one other factor that made it easier in 80s was many assumable mortgages without qualifying (now there are due on sale clauses).
But I still think it's not as bleak as the picture you originally painted. For a long term investor, barriers to entry aren't always a bad thing because it reduces competition for those who figure it out.
The trick is thinking outside the box, being patient, and using our financial resourcefulness. Complaining just stiffles creativity and let's us off the hook from seeking opportunities.
I know many investors who are buying rentals - in this market - with this kind of mindset.
Should have bought houses instead of being unborn
he's good, but he has an ego. he'll put his houses against buffet stocks any day? Buffets accomplishments make Mr. Schaubs investments pale in comparison. Buffet probably makes more $ on dividends and interest in a day than this guy makes in an entire year.
Thank you for the comment. In my opinion, he didn't make that comment out of ego. He just said it to emphasize the power of simple investments like rental properties.
Warren Buffett has averaged over 22% annual returns in his career. And he has done it with a relatively low level of risk.
But for the average investor (like me, John, others), it's much easier to match or exceed those Buffett-like returns with small, residential rental properties than trying to buy stocks or even Berkshire Hathaway itself. That's what I think John was saying.
@@CoachChadCarson Hey there, thanks for your reply as well! I'm liking your content! I am involved in both, residential real estate and stock equity investing. I'm still not sure its "easier" to match or exceed buffet-like returns with real estate. In both, you have to have a good vetting/selection process, which I know you teach, but generally, RE investments are certainly more work than stocks and thus, not as "easy". While purchasing property is easy to understand, that doesn't mean the work of maintaining properties, especially rental properties, is easy. Owning properties requires much more sweat equity than purchasing stock or stock investments like mutual funds or ETFs is what I'm thinking.
@@t33sher I'm an equities and stock guy, too (though much heavier in real estate).
Yes, rental properties are more work than equities. But with a mature portfolio (i.e. not in growth/acquisition mode), I average 2 hours/week on my real estate. I have students who spend 4 hours per month with fewer properties.
I consider it passive enough.
And most importantly, I consider it worth that extra time because my equity in real estate investments have grown much faster and more consistently than my passive index funds.
But I still don't think it's for everyone. It takes a certain temperament to be a rental investor. There are plenty of ways to succeed out there!
Thanks for watching and for the good questions!
Leverage. That's the difference in real estate.
@@Koolken44 and reasonably safe leverage. That's unusual.