5 Ways To Make Money in Real Estate
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5 Ways To Make Money in Real Estate


Hey, my friends. Kris Krohn here and today
we’re talking about the five ways of making money in real estate and number
fifth is by far my favorite so hang tight and I’ll share it with you. So in this video,
I want to share with you five different ways of making money in real
estate. There are many ways of making money but today, I’m going to share five
very specific ones. Number one, appreciation. I mean, the good news about
real estate is if you look at what has happened with values over time, they tend
to what? They go up in value. You know, there are some people that don’t know
what to invest in and what they do is they take their cash and they hoard it
and they put it in the bank or they put it under their mattress.
Cash is one of the worst and most hated investments of all time. Why? Because our
dollar is not a good store value, it has a history of going down more than three
percent every year which means that for every hundred thousand dollars you have
in the bank, you’re losing over three thousand dollars a year just by keeping
it in cash which means that anything you put your money in needs to be able to
grow in value. Instead of losing value it needs to what? It needs to increase in
value so real estate ends up being this amazing hedge because guess what,
it’s outpacing inflation, it actually goes up historically more. Now how much
more? It varies from area to area, some areas are just three four five percent
here, some areas historically are six seven and eight percent a year, you’ll
have your burst scenarios that will grow by 20% but often the areas that
shoot up really high also what? They shoot down so we’re talking about the
average over time, we’re not talking about the highs and low. By the way, even
though this is the first way you can actually make money in real estate
something that you should be really aware of is the fact that if all you’re
doing is buying a home because it goes up in value, you can really get yourself
hurt if you need to sell your home in the short run because if you’re buying
that market inside of a bubble and then all of a sudden it goes down, it might
take years before it actually bounces back so yes, it appreciates on average
with time but you need to be careful on your timing if you’re just buying it
based on appreciation. I don’t recommend that. Okay, number two. Real estate is
actually an investment that produces a cash flow. This is weird because when you
put your money in a 401k or IRA’s or equities or the stock market,
guess what, you don’t get a cash flow, you’re buying an asset that you hope
what? Goes up in value with time. Real estate’s a little bit different, most
real estate projects like a rental, they actually spin off a cash flow so
actually after you’ve covered your liability like the debt or the mortgage,
there can be money left over. I mean, a good example of that would be you know,
buying a single-family home and I’ve got a thousand dollar obligation to the bank
every month but I’m renting it out for $1,500. Maybe there’s a couple hundred
dollars of expenses so there’s three hundred dollars positive cash flow every
month on that property so cash flow is a really great reason where I like to
invest in real estate. Okay, reason number three to be in real estate is that you
can make money through commissions or management fees. You know, the reality is
if you are going to play in the game of real estate, you could hold a realtor’s
license, a loan officer’s license, a title’s license, a property management foot you
know, you can be earning a property management fee, all of these things. Now
you can’t actually make money on all of them at once or at least the ones that
are regulated but you can on at least one of them which means that when you
buy real estate there’s room for a double dip and double dipping is kind of
cool in real estate because you know, like on several of my deals, I was a loan
officer and so I would write the mortgage with the bank and then I would
actually be able to charge and make four five six seven thousand dollars on a
basic single-family home for just writing the mortgage of it for some
people that’s a profit selling so that’s a third way of making money on your real
estate investing. The fourth way that you can make money on your real estate, it’s
not really my favorite but I think it’s worth mentioning because you might have
a project that can cash and bing on it which is through ancillary income like
for example, you might have apartment complex and you have vending machines or
you might have a laundromat that’s right next to it so sometimes your real estate
comes with these side benefits as something that you can tack on to the
project and you can pick up some extra money that way but fifth and by far my
hands-down favorite is what I call equity which is the money that you buy
on the property as you get at a discount. If I have a real estate deal that I’m
doing that’s worth a hundred thousand dollars and I get it for eighty thousand
dollars then I’m buying it 20% below market which also
just in this case happens to be $20,000 market and that $20,000 is what? Well, that’s equity because remember, I’m
buying it for 80, it has a value at a hundred thousand. That extra $20,000,
that’s just a benefit that I get for owning the project. If I had a goal
of paying off the property, guess what, it’s already one-fifth paid off, it’s
already 20% paid off just because I bought it smart. I’m clearly
biased on the things that I like most about real estate. If you want a turnkey
system for how you can really make the most money with the least time, least
effort, least risk then head on over to my website, it’s also in the link in the
description below and me my team will share with you how we can work together
on helping you crush it in real estate.

18 Comments

  • Manveer Sandhu

    Tip number 3 is really interesting and something im not familiar with, would appreciate another video going in more depth on that.👍

  • Stuart Johnson

    Hey Chris, I got my license and I’m thinking of doing the syndications to buy apartment buildings (Grant Cardone style) and getting commissions off the buy and sell side (after 2 years appreciation). Good way to double dip I think. Know anyone who does that?

  • Regenerative Entrepreneurs Podcast

    3% inflation is likely understated. There's a guy named John Williams who runs a site called ShadowStats, with the aim of exposing misrepresented figures put out by the government.

  • Sean Jackson

    so say you have a couple of rental properties and other investments, but still have leftover cash that you're saving .. where is a good place to keep that cash?

  • Wilkinson Tyler

    I just started watching your videos Kris. I think that you have an amazing strategies. I've watched maybe 20 videos of yours in the last 2 days. I'd like to know more.

  • Luka .ZG

    Hey love the videos. I have a question for you (or anyone else) who could answer. When you talk about #5 Equity: How to most precisely determine the market value of the property?

  • Devin H

    Quick question, if you buy a house that is worth 200k and you get it for 170k isn't the house now only worth 170k not 200k?

  • doctorgt3

    For anyone reading this: I am a passive investor who has capital to fund a portion of your next investment. Let me know if you are looking for a partner and we can set up a deal. Thanks.

  • Andre s

    Bought a house for $185k and the appraisal wrote down that the value of the house was $190k.
    I already invested 10k into the house to make it look nicer so I believe my house has to be in 200k+ margin

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