Episode Transcript
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Speaker 1 (00:00):
Welcome everyone to the Great Hicks Show. I'm Greg Kick,
Certified Financial Planner CFP is the lingo, and Wanda Cooper
a very good financial advisor, and we are here today
on the Great Kicks Show. Bo Nicholson, our other sidekick,
is not here today, but that's okay. We're talking today
about real estate investing. We've been on our trend here
(00:21):
the last few weeks on stocks and mutual funds and
the tools that we use to invest. Real estate is
a big, big section of that market of investing, and
we're going to spend a lot of time on that today.
We have some really cool ideas you may have never
thought about too. But Wanda and I and Bow always
starts the first segment of The Great Kicks Show talking
(00:42):
about what's going on today and things that matter that
affect your life and your future and your decision making
and so forth. And Wanda, it's big, not vacation, but
it's big graduation time for high school and college.
Speaker 2 (01:01):
Congratulations.
Speaker 1 (01:02):
Yes, we do want to. You know, we have tons
of clients that have kids or grandkids. Yeah, and it's
like a big launching thing and it's really cool. But anyway,
I read this really cool article in Wall Street Journal
about career advice for the class of twenty twenty five,
and a lot of times people forget some of the
(01:26):
most basic things. So anyway, this is a guy, Matthew Hennessy,
and I just wanted to read a little bit of
his couple of paragraphs. And this is for the younger
people listening, and also for the older adults that are
trying to help younger people get their eye on the
ball and get going for the real world out there
that you've gone to college and high school to get into. Okay,
(01:50):
here it is. Here's the quote of Matthew Hennessy. I
once read a profile of a famous politician whose mother
gave him some excellent career advice quote, do the job
that's in front of you, and the future will take
care of itself. That's true, as I frequently remind myself,
but it goes only so far. Not all luck is
good luck. Bad things happen too. People get sick, they die.
(02:13):
Even when things are going well, people get distracted and
discourage and lose sight of their goals. They run out
of time to achieve them when things go wrong, as
they inevitably will focus on the things you can control,
be on time, be of good cheer, be helpful. The
way you get ahead at work is to take things
off the plate of the person above you on the
(02:33):
organizational chart. It's easy to figure out what those things are. Watch,
pay attention. It's fine to offer your own ideas, but
consider this, No one ever listen himself out.
Speaker 3 (02:47):
Of a job.
Speaker 1 (02:48):
I love that great advice for you, guys.
Speaker 3 (02:52):
Great.
Speaker 2 (02:52):
I think every firm and rawle he should probably share
that in a sales meeting.
Speaker 3 (02:56):
Honestly, that's right.
Speaker 1 (02:58):
And you know, it reminds me of something that we
emphasize in our business, you know. And we're a small
business in the big world financial resource management. We have
three advisors, three administrators and seven or eight hundred clients,
but we emphasized service a lot. And one thing I
really love as the owner of the company is the
(03:21):
feedback I get. And why do you do too? I
think how many times clients say thank you so much
for helping me, or I heard it twice this week
thanks for looking after me, and that is a big deal.
Speaker 2 (03:35):
Well, it's about relationship building, that's the bottom line. I mean.
I even called a client last night about eight o'clock
to a situation she had happened, and I was concerned
about it and I called her and she was like,
I can't believe you're calling me at night. I said, well,
I had you in my mind and I wanted to
make sure that things were okay. And you know that
(03:56):
had everything to do with I care about her. She's
been a long time client, so you know that makes
the difference. But anyway, Greg, I was reading in the
Wall Street Journal today. It's so funny. We're talking about
real estate. They were talking about the housing market and
first time home buyers are downsizing, you know, they're not
buying the bigger homes anymore, and probably because mortgage rates
(04:20):
are still high, you know. But they went on to
say that newly built homes have been getting smaller since
the pandemic. So I thought it was kind of interesting
that we were in a show today. And the other
interesting thing I read, and this is so true. The
Gen X generation everything is a recession indicator, you know.
And I hear that. I hear that from this generation.
(04:41):
You know, egg price is high. Oh, we're in a recession.
And I'm thinking, you know, I raised a family too,
and I remember, and I've told you this before every January,
because when you're raising a family and you're on a budget,
you know when prices change every January. And this was
before you could place grocery orders online. You literally went
(05:02):
to the grocery store, which was my most hated trip
because you never know what the prices were going to
be and you were living on a budget. So every
January when I my first trip to the grocery store,
I spent twenty dollars more every time for the same things. So,
you know, were we having a recession every January? But
(05:25):
I found it interesting that the gen xers and they
do the gen zs. I hear this from that that generation,
we're in a recession, and I'm like, no, we're not.
You know, there are things that seem recessionary because prices
were so high, but egg prices are coming down, folks,
So we're not in a recession over eggs.
Speaker 3 (05:44):
I know. Well.
Speaker 1 (05:45):
And the youngest generation of adults too, the graduates of
college and so forth. Today, they have grown up in
unusual times. The COVID year was the most bizarre thing
that had happened in over one hundred years as far
as a disease. They kicked them out of school. They
made them wear a mask, they put the.
Speaker 2 (06:06):
Fear of God.
Speaker 1 (06:09):
Yeah, and now we know the truth came out. Of course,
the people that like I never forget going to the
beach for a weekend during COVID and nobody down there
wore a mask. All the restaurants were open and we
went in and ate. We didn't wear a mask either.
So it's sad that the fear mongering that went on,
(06:30):
not only by the government but just in general, and
then all the cultural shocks they've gone through, with the
woke stuff and the gender thing going around and all
of that. I can see where that young adult generation
is struggling mightily just to get bearings.
Speaker 3 (06:48):
You know.
Speaker 1 (06:49):
Railings on the bridge is what I call it. You know,
if you don't have railings on the bridge, you get
afraid to drive across the bridge. And I feel like
that young adult situation is in that category. They've got
a lot to go to get comfortable with life.
Speaker 2 (07:02):
Yeah, they've been through some hard stuff, that's for sure.
I remember the graduates of that year, there were three
or four in our circle of friends, and we literally
did graduation pictures for them at the lake and did
a small graduation ceremony for them. I mean, they missed
all of that and how sad. So they you know,
(07:24):
they have a lack of trust now for everything. Yes,
and I think that generation themselves thought we were over
hyping it. I really do. And I don't mean to
be offensive, but we were. It's a travesty because I think,
you know, there were some states that were led appropriately,
like Florida and South Carolina. You know, you didn't have
(07:45):
to wear a mask and restaurants and things like that.
But yet here in North Carolina, we allowed people to
go to Low's, but we didn't allow them to go
to the mom and pop. And that's sad. That's so sad.
So I hope that we will not follow the pigs
off the cliff. If you will, you know where the
pigs were thrown off the cliff. I hope we don't
(08:06):
do that again. I hope we'll be smarter and challenge
things that we hear.
Speaker 3 (08:11):
That's right.
Speaker 1 (08:12):
And the good thing about it is if people are resilient,
just like this guy in the article on Wall Street Journal,
just do what's in front of you, do it well,
serve people, and you will rise to the top. It's automatic.
And I love the fact. You know another thing about graduates.
This year, a lot of small colleges are struggling because
(08:32):
people are not going to college anymore. They're choosing another
career path in the so called blue collar, which I
think is kind of funny. But the bricklayers, the car mechanics,
the electricians of the world. We can't survive without those people.
And now people are realizing if you do a good
job in any skill like that, you are going to
(08:54):
make good money one day and you're going to always
be needed.
Speaker 3 (08:57):
You'll never be unemployed. Love that.
Speaker 1 (09:01):
Younger adults are finally getting that. That's like the old
American style, kind of like you and I grew up
in wander where everything worked out as long as you
put your mind to it and worked hard, and so
just do it, do it well, develop a skill and
you'll be rewarded. So with that, we're going to take
a break. That was a nice philosophy opening, which we
(09:21):
don't do very often, but sometimes we need to stay tuned.
We're going to talk about real estate investing in some
really cool ideas. Welcome back to the second segment of
the Great Hicks Show. We're glad you tuned in. If
you're listening on radio, you're in the Raleigh market Raleigh,
North Carolina. It's two o'clock every Saturday and Sunday afternoon.
We do two shows on the weekend. And then if
you're at the Crystal Coast in the Atlantic Beach, Poorhead City, Newburn,
(09:46):
Jacksonville area, that's one of our favorite places, one of
our offices that are down there with a beautiful view.
But anyway, those times are unique. At seven am on Saturday,
and that's for early risers at the beach, and then
at three o'clock on Sunday afternoon, and then we're on podcasts.
So just type in your favorite podcast location, type in
(10:08):
the Greg Hicks Show, and boom, all of a sudden,
it'll come up. Now when you go on to the podcast,
there's a list of topics that you can choose. Today
we're talking about real estate investing. But we cover probably
fifty or sixty topics per year and revise and reformed
(10:30):
the show. We create new shows a few shows every year,
and we just.
Speaker 3 (10:34):
Try to cover the broad array.
Speaker 1 (10:36):
Of things in financial planning, and I think that's one
of the things that makes our shows unique. We don't
beat a dead horse we don't talk about the same product.
We talk about a lot of things, and everything we
do on our show is from our experience with clients,
so there's nothing We don't try to hype anything, or
exaggerate anything or make claims that aren't true. We try
(10:59):
to do the best thing we can to explain it
to you. And then it's so fun, Wander. You know
this when when a radio caller calls. By the way,
the number to call is nine one, nine eight five
six nineteen sixty eight. I love it when radio callers
call because they'll say I was listening to you and
y'all said this, And so the idea is, we don't
(11:20):
we record our shows. We don't do live broadcasts. We
used to do one and I did. But I like
it because we can focus on the education for clients
to learn.
Speaker 2 (11:30):
Well, they're so close to us. I've had a radio
listeners call and this is my voicemail. Hey, Wanda, this
is Joe. Call me back. I'll be like, and now
I'll get him on the phone. Wanda, I've been listening
to you since two thousand and five. I love your show.
I feel like I know you well. Obviously you felt
like you did because you left me.
Speaker 3 (11:49):
You have me your first name.
Speaker 1 (11:51):
I know, but we love that and if you want
to talk to us in person, that's really the best
way to do it. And there's something about when you're
talking to a financial advice it's the relationship that matters.
It's like anything like who is the doctor you trust,
who is your mechanic for your car that you trust,
who's the repair man or woman that you trust. It's
(12:13):
the same thing with financial advice. Who do you really trust?
And if you are, maybe you're in a relationship with
a financial advisor and there's something doesn't quite feel right.
I mentioned that because we have people say that to
us sometimes and it may not be that they're a
bad person, but it's just that trust thing or whatever
it is. So come to us and we'll give you
(12:34):
a second opinion, and we're very open and honest. We're
not going to twist your arm and try to drag
you down the hall. We're going to just listen to
your needs and tell you what we see, and if
you want more feedback, you can come for a second meeting.
So many many times from radio listeners, we'll have an
initial meeting and then a second meeting and then you'll
have a more informed feeling and idea of what we do,
(12:56):
and then you can make a good decision. So call
us at nine one, nine, eight, five, six, nineteen sixty
eight now winded today. The last few weeks we've talked
about mutual funds, ETF funds stocks. Next week we're talking
about alternative investments, which is really a unique thing. And
by the way, one alternative investment has hit home runs
the last year gold Gold bullyon.
Speaker 2 (13:18):
Real estate can be alternative depending on what you're doing.
Speaker 3 (13:20):
Yeah, that's right.
Speaker 1 (13:22):
So in real estate, everybody kind of has an intuitive
idea of what it is because most people buy a
home or rent a home or rent an apartment. So
real estate is literally a big factor in everybody's life.
But how do we treat it when it comes to investing,
And believe it or not, there's multiple ways to do
(13:43):
it in the real estate world. And if you look
at the history of investments, let's say there's anywhere from
seven to ten investment categories that we all use. Real
estate is probably the second or third best overall return.
Stocks would be first, right, But real estate is actually
(14:05):
a good investment.
Speaker 2 (14:06):
It is. But you know, and what's interesting. In the
second half of the show, we're going to really talk
about some interesting real estate ideas, and I'm excited about that,
so I hope you'll stay with us on that because
there's some interesting things with real estate that you can do,
especially when you're trying to sell a big piece of
your real estate. But anyway, the thing about real estate
investing that I find Greg, I've had clients from years
(14:30):
ago make their wealth by owning real estate and selling
one property and going to another or adding to their properties,
have an investment portfolios. We had one of your clients
was like eighty some years old still owning rental duplexes.
That was the key in the eighties. It was duplexes.
And I couldn't And every now and then she would
(14:54):
call me full withdrawals, and I go, look, don't you
think it's time to because you already took fifteen thousand
out a couple of weeks ago to do this, and
now you're taking twenty And she said, no, I want
to keep my real estate. And I could see the
writing on the wall that she was getting to the
age it was just getting too much. But that's the
(15:14):
thing about real estate. It's good until it isn't.
Speaker 1 (15:18):
And you're talking like the lack of liquidity is one
of the risks of owning.
Speaker 2 (15:22):
Real estate, right, And the thing is you can get
to the stage of your journey that it's too much
to handle, it's too much to manage yourself and fix
things and that kind of thing. And then when you
have to hire a property manager, which she did, but
what she was noticing is she was netting less. So
(15:43):
when you get to that stage and maybe time to
look at unloading some of the real estate, you know,
because it gets burdensome to go fix a water heater
or send somebody that you know to fix it, you know,
send a good old boy. When you have to hire
a property manager, there goes some of your your game,
you know, that's right.
Speaker 1 (16:02):
Yeah, yeah, And it's like any investment, there's rewards and
there's risk, and that's one of the risk is lack
of liquidity and the phone call late at night to
come and fix the water heater. I had had a
wonderful client. I still have her. Her husband was brilliant
at real estate and he amassed a pretty pretty big
nest egg for sure. Unexpectedly he passed away and she
(16:27):
did not manage the real estate. So she had it
was like a crash course to preserve her wealth and
her income and keep those rental properties full. And so
it became a mighty, mighty struggle for her. She ended
up the same thing you said, hired a management company.
They took fifteen percent or so off the top. But again,
(16:49):
she's talked about it several times about still the struggle,
and so we've tried to help her just sell off
parts and parts and soon get down to more man things.
Speaker 2 (17:00):
But don't you think it was easier back in the
eighties to acquire property at a reasonable price and make
and create Well, I'm not so sure today because like
beach property is still elevating flated, yeah value, and lake property.
I mean I had a friend that said that netted
(17:20):
about four hundred thousand from selling some property, and and
her goal was to find property on the lake. I said,
you're not going to find property on lake for four
hundred So it's out there somewhere. I said, no, it's not.
Speaker 3 (17:31):
A little pond behind the farm.
Speaker 2 (17:33):
I was familiar with the lake area. And yeah, years
ago it was easier. But today, if you get lake
front property or six hundred and fifty thousand, I'd be surprised.
Speaker 3 (17:46):
Yeah, that's the deal.
Speaker 1 (17:47):
Yeah, the inflationary value of real estate, and that's one
that's a blessing and a curse. If you've owned real
estate in the last five years, the average home price
has gone up forty percent. Well so has your rentals exactly.
So that's a good thing. But like you say, it's
like anything in investing, when do you buy and when
do you sell? So if you're a buyer today, it's
(18:08):
maybe not a great time to get into real estate,
but inevitably.
Speaker 2 (18:11):
There's a seller's market right now.
Speaker 1 (18:13):
Yeah, there'll be a recession, interest rates may go down.
Everything goes in cycles, including the value of real estate.
So the proper timing is I mean investing. I've told
this the clients for years. Timing is almost as important
as what you buy, what you invest in. You. If
you invest at the right time, it's like awesome. If
(18:33):
you don't, you can lose your shirt.
Speaker 2 (18:35):
Right, and buying real estate, even for primary homes back
what was it two years ago when it seemed like
things were just way up there and interest rates were
going up and people were still mortgaging, you know, buying
a house and getting a mortgage at eight percent. I
mean that. I mean, I just don't know how long
it'll take you to make back your investment that way,
(18:56):
but you know, maybe you know, refinance over time and
things like that. But I was real concern for some
of these young people that bought this, still concern for them.
They bought this elevated real estate and still did eight
percent mortgages and have four thousand dollars mortgage payments as
they're starting out. That's just unreal to me.
Speaker 3 (19:14):
Yeah, that's right. Now.
Speaker 1 (19:16):
The good thing is, and Wanda would agree with this
for sure. Everybody should own real estate somewhere, because whenever
you talk about the concept of diversifying, real estate is
always on my target.
Speaker 3 (19:28):
Every time I do.
Speaker 1 (19:28):
A proposal for a new perspective client, I have real
estate in there every time. Now, when Wanda and Bo
and I put in real estate is an option, we
don't expect you to run and buy a piece of
land by the lake. There's a lot of cool waste
about real estate, and some of it we mentioned while ago.
One of the risk of land or a rental is
(19:49):
the lack of liquidity if you need it. But the
good news is over time, over the history of investing,
there's something called reachs real estate investment trust that are
very liquid. It's just like a stock, but they can
target what kind of real estate. So for example, let's
say you want to own Marriott Hotels, Well maybe Marriott
(20:11):
has a reate real estate Investment trust or wine and
now over the years have bought heavily into medical properties
like doctor's offices or assisted living things that are not
going to go out of business. And you can buy
real estate, get a dividend, and the dividend is the
magic and the sauce. And we'll talk about that after
we take this break. We'll be right back. Welcome back
(20:32):
to the second half of the Great Hicks Show. We're
so glad you tuned in. I'm here with Wanda Cooper,
financial Advisor. I'm a certified financial planner, and Bo Nicholson
or other sidekicks is off.
Speaker 3 (20:42):
Today.
Speaker 1 (20:43):
We have a business called Financial Resource Management. We started
forty years ago. Wind Up, we still.
Speaker 2 (20:50):
Got to talk about fortynniversary.
Speaker 3 (20:52):
I was so young and redheaded.
Speaker 2 (20:53):
Back then, I was young and less wrinkling.
Speaker 1 (20:56):
It's right, you had two little kids when I first
met you. Winda, but Anyway, we're glad you tuned in.
Why didn't I have been in the business a while.
Bow is a little younger than us, of course, but anyway,
we're glad you tuned in. We love doing our radio show,
Why Didn't. I've been on the radio a long time,
and our listeners are fantastic. Some of you out there,
I know are listening that have been listening for years
(21:19):
because we get phone calls from people like that. And
then some of you are brand new. Maybe you know
North Carolina and Raleigh air particular, and the beach area
is such a hot growth area. You may be from
another state or another town and you're just tuning into
us for the very first time. The Greg Hicks Show
is archived on the Raleigh radio station one oh one
(21:39):
point six.
Speaker 3 (21:42):
Yeah I knew that one.
Speaker 2 (21:43):
We're one one six point.
Speaker 1 (21:45):
One FM Talk, and you can click on their website
and click on the Greg Hicks Show and scroll down
and go back and listen to any topic we've discussed.
Speaker 2 (21:54):
On the podcast.
Speaker 1 (21:55):
Podcasts so and they're all archives. So if you have
a topic you're like, WHOA, I need to know something.
I just inherited the money or I just left a job, I.
Speaker 3 (22:03):
Want to roll over.
Speaker 2 (22:04):
I got real estate to sale.
Speaker 1 (22:05):
Real estate. That's our topic today. So we change topics
every week for the purpose of educating you the listener,
and you can call us and meet. We love meeting
with people. If you have never met a financial advisor,
or maybe you have one and you're not quite sure
it's working out so well, call us at nine one,
nine eight five six nineteen sixty eight. We will repeat
(22:26):
that number periodically because sometimes as you're listening in the car,
at work or whatever you're doing, we know that a
lot of people don't listen to the whole hour, So
we're going to mention that phone number off and on.
Now today we're targeting real estate. And by the way,
we mentioned changing topics. Next week we're going to talk
about alternative investments, including gold and other things. But alternative
(22:49):
investment simply means something other than a stock, bond, mutual fund,
or cash in real estate. Some forms of real estate
are alternative investments. So when Win and I were just
taking the break while ago, we mentioned that some people
we always diversify client assets into some portion of real
(23:11):
estate five percent, ten percent, maybe even fifteen sometimes. But
the reason we do it is. It's been proven in
studies that if you're in real estate inside the mix
of your investments, it lowers volatility and increases return slightly.
So we're all about that. We talked right before the break.
Most one of the risks of real estate is not liquid.
(23:32):
If you own property, a house, land, whatever, you can't
just run out and cash it in tomorrow. However, there's
something called real estate investment trust reaped r e it.
You'll hear that term sometimes. What is a rate? It's
simply a way of incorporating real estate. And it's liquid.
There's there's non liquid reates, and there's liquid. So Wind
(23:53):
and Bow and I use liquid reates a lot. And
I mentioned that there's several cool things about it. They say,
just like a stock, so you can target like WYDA
and I like to target medical property, real estate. Some
people like hotels, some people like residential. There's residential rates.
The beautiful thing about that the incorporation is they're required
(24:17):
by law to pay out ninety percent of their earnings
to stockholders. And guess what that means a dividend. That
means a monthly or quarterly cash flow dividend. And we
regularly do reachs that are paying four or five six,
some of them seven percent a year dividend pay and
(24:37):
you have the potential growth built in, just like any
kind of real estate. So and there's, by the way,
there's mutual funds as well that have even more diversification.
So if you want to invest in real estate and
you're not going to run out and buy a piece
of land or a.
Speaker 3 (24:53):
Rental property, check out the rep market. It's really neat.
Speaker 2 (24:56):
Well there's unlisted ones and publicly traded. Yeah, go either way,
and the public of the unlisted ones eventually do go public,
so you will have collected the dividend the whole time
and then potentially you know, growth, yeah, gain yeah. So.
And the other thing about real estate is particularly rental property,
is the or investment property is the tax advantages. There's
(25:20):
so much more tax advantages than owning your own home. Now,
I'm not sure what the tax advantagy is to owning
your own home because we've got that standard deduction that's
so high. So unless you've bought a real jumbo type
of house and mortgage that you may not have enough
interest deduction to write off because of the giant deduction.
So it's hard to know if the primary home is
(25:41):
a write off for you or not. But investment property
still has the operating expenses, mortgage interest, interest, property taxes, depreciation,
all of that, those things which you do with the
office condo that we have, So you are very much
aware of the tax benefit.
Speaker 1 (25:59):
Yeah, and want to I'm glad you brought that up,
because back to the uh, the RI I T stocks.
The corporate style is called a pass through business pass through?
Speaker 3 (26:13):
What does that mean?
Speaker 1 (26:14):
All the right offs you just mentioned, the real estate taxes,
the improvements, all that stuff. If you own rental property privately,
you get to claim that against your income as a
write off. Well, guess what the dividend. Let's say you
buy at on the stock market and the dividend is
six percent, the taxable part of that may only be
three percent because, and here's the word pass through, all
(26:38):
those write offs that the company gets running real estate,
they are passed directly to the shareholder. So so outside
of an IRA investment, the red stocks are terrific tax shelters.
You're getting You're getting nice dividends and paying taxes on
maybe a third or a half of it. Who doesn't
like that?
Speaker 2 (26:58):
I love that exactly now.
Speaker 3 (27:00):
You have to.
Speaker 1 (27:01):
It's very tricky though, and we don't want to get
into detail, but your accountants can help you with this.
The right off the government the IRS looks at right
offs as a reduction of cost basis.
Speaker 3 (27:13):
Heads up. If you bought a two.
Speaker 1 (27:15):
Hundred thousand rental property and held it thirty years and
now it's worth four hundred thousand, you have been getting
tax right offs all along the way. That's been reducing
your original cost basis.
Speaker 3 (27:26):
So when you.
Speaker 1 (27:27):
Sell your you've been holding forever, you're going to sell
it for four hundred grand, you're going to find out
that you're going to have four hundred thousand of capital gains,
not two hundred because the write offs have been passed
down through there. So anyway, it's too complicated to share
if fully, but just be alert when you sell real
estate property, rental property, particularly, your cost basis is going
(27:50):
down every year.
Speaker 2 (27:50):
Yeah. So that brings me to the next point that
we might want to start talking about is, I know
we have listeners out there that own, you know, a
lot of property, maybe through a business or maybe you've
just acquired property over the years inheritance, inheritance, whatever, and
it's not primary, it's investment. So when you go to
(28:12):
sell that, like you said, it's going to be a
huge tax event. So what are the strategies for that. Well,
there's ten thirty one exchanges and there's also what's called
ten thirty one exchange and upread. So we talked about reads,
and there's a way to do that through a ten
thirty one exchange. So let's talk about that just a
little to get a teaser out there.
Speaker 1 (28:32):
Yeah, yeah, Now why didn't I have done ten thirty
one exchanges over time?
Speaker 3 (28:38):
People?
Speaker 1 (28:38):
You know, like, let's say you had an old piece
of land you inherited forty years ago, and it was
worth one hundred thousand, and now if you sell, it's
worth five hundred and what holds you back is you're
going to have a capital gain of four hundred thousand,
approximately twenty percent or so cap gain tax. So you
don't want to get four hundred thousand and have to
(28:59):
write a check for eighty or ninety or one hundred
grand to the government. So a ten thirty one exchange
means you can take that value. Let's say you get
five hundred thousand dollars, you can transfer that to a
new real estate investment property, and that's the rule. You
got to do that, and it carries it forward to
(29:21):
the new property, so you don't pay taxes. You don't
get your cash either, but you don't but you don't
have to pay tax. Yes, and that's a big deal
for people because a lot of times I have rant
into lots of clients that that are literally paralyzed.
Speaker 3 (29:38):
They're hung up. They know they need to sell.
Speaker 1 (29:42):
Maybe they're retiring and they need the cash. They know
they need to sell the old property, but they just
can't do it. They can't figure out how to do it.
So anyway, the ten thirty one is a way to
defer the cap gain and then if you own it
when you die, your kids inherit it at the new
cost basis, so they don't pay the capital game tax
if they sell the property. So anyway, it's it's a
(30:04):
really interesting thing. Now there's all kinds of rules. You
have to have an intermediaria. You can't you can't sell
the property and collect the dollars and then go out.
In ten thirty one it you have to have an
intermediara to hold the money you have. You have a
time limit to identify the new property and to close
on the new property. So there are restrictions. I wouldn't
(30:25):
I don't. I wouldn't do it by the seat of
your pants. You're going to get in trouble, so make
sure you plan ahead. But I would encourage you if
you're in that situation of you know, you need to
sell some property and you're hung up on the cap gains,
call wand to me or both nine one, nine, eight
five six nineteen sixty eight. Let us explain the ten
thirty one exchange.
Speaker 2 (30:44):
And then let's say why people would do that. I
mean lots of times clients own commercial real estate and
lots of it warehouses or whatever, and their children may
not want to take that over exactly. So you bring
your children in to the picture and say, hey, we're
going to sell this, and this is what we're going
to do, and you do the ten thirty one exchange,
(31:05):
and maybe you still want warehouse property, you can do
that with a ten thirty one exchange. You now don't
own the real estate except for the tenth through the
ten thirty one. You're not having to do any upkeep
and things like that anymore, or improvements or landlord or
anything like that. So you're just collecting the benefit and
(31:27):
sometimes when you head into retirement, that's all you want
to do.
Speaker 3 (31:30):
Right.
Speaker 1 (31:31):
The other case where we've had with clients is it's
a piece of rall l in so there's no income
and now you're retiring and you would love to take
that five hundred grand or that million dollars and create
cash flow. Yes, so you know that's the way to
do it is to kind of release yourself. You buy
a piece of raw in, You take a piece of
raw in, and you put it into say, let's say
(31:55):
a hotel or an apartment complex in a ten thirty
golf community and then yeah, and then you get cash
flow every month, and you don't have to pay the
cap gains tax, so you're just deferring it. And then
there's a second jump, and this is almost too sophisticated
to talk about, but you can do a ten thirty
one into a DST, which is a Delaware statutory trust,
(32:17):
and you hold it two years and then you put
it in an upright and then all of a sudden
you have shares and you can sell it as you
need it. You're not hung up with it. Yeah, it's
very detailed and complicated.
Speaker 2 (32:28):
Let's talk about a little more at the next.
Speaker 1 (32:30):
The next break, we're going to take one now and
come back and finish our discussion on the ten thirty
one exchange. Welcome back to the last segment of The
Great Kicks Show today. I'm here with Wanda Cooper. We're
both advisors and financial advisors. I'm a CFP with financial
Resource Management in our business headquartered in.
Speaker 3 (32:45):
Rodley, North Carolina.
Speaker 1 (32:46):
What a great town, and also in office right on
the Atlantic Beach Causeway with.
Speaker 3 (32:50):
A beautiful view.
Speaker 1 (32:52):
We welcome you to our show. We've been on a
roll here the last few weeks talking about investments. Next
week we're going to talk about alternative investments, which are
really interesting things, things that aren't the normal stock, bond
or mutual fund. And I think you'll enjoy the show.
The more you learn about investments, the more you can
diversify and feel comfortable with it. And also there are
(33:14):
investments that meet specific needs. So why and I were
just talking before the break on if you have an
old piece of property that's either a rental property or
a peace of land or whatever, it's real estate and
investment in real estate and it's appreciated dramatically, or you're
retiring and now you're like, how do I get out
of this without paying a gazillion dollars in taxes? You
(33:35):
can do several ideas. One is a ten thirty one exchange,
and then there's something called a DST which you can
put your ten thirty one property capital gains in there,
hold it for a couple of years, and then put
it in what's called an uprach. Now we're getting into
the weeds of sophistication, so I would highly encourage you
to call me or wand or about if you're in
(33:57):
that situation. But the interesting thing I think about the
upreach the upread, you lose your quote personal control over
the property because the red the upreaed is in multiple properties,
so you're broadly diversified. But guess what you get a
dividend and now it's in shares. So let's say you
(34:20):
needed fifty thousand dollars.
Speaker 2 (34:23):
For a tax bill or a brand new car or.
Speaker 3 (34:26):
Whatever it is.
Speaker 1 (34:28):
You can just sell instead of your million dollar property
that's over here in the upright now, you just sell
fifty thousand words with shares and pay capital games on fifty.
Speaker 2 (34:37):
Yeah, you delayed taxes and.
Speaker 1 (34:40):
Then when you die, your kids inherited without having to
pay capital games. I mean, so if you're if you're
an owner of land, highly appreciated land, property, rentals, whatever
in the real estate world, it is call us at
nine one, nine, eight, five six, nineteen sixty eight and
ask for Greg and Wander or both and we'll we'll
just we have literature. By the way, we can show
(35:01):
you exactly how it works. It'll take a lot of
the mystery out. And if you're hearing this for the
first time, why there's other things too. There's there's opportunity
zones they're called and that's another capital gains from there.
Speaker 2 (35:16):
We just didn't Raleigh, actually.
Speaker 1 (35:18):
We just go you can go look at it. It's
called may m A u v E. It's right beside
the Red hat Amphitheater. It's a beautiful apartment property that
just open and it's an opportunity zone. So the investors
that are in it, and some of our investors and
our clients did it. They delay, they they sold something.
(35:39):
And by the way, opportunity zone doesn't have to be
real estate sales. Some of my clients sold appreciated stock
and put.
Speaker 3 (35:48):
The capital gain deferring.
Speaker 1 (35:50):
It in the OP zone, and it's it's also detailed.
It's basically you get you get dividend income from rental
if you hold it for ten years, which they will
the OP zone. The federal regulation is when they sell
it for a game, you do not pay capital gains tax.
So it's a ten year old but a lot of
clients are fine with that.
Speaker 3 (36:10):
I'm good with that.
Speaker 2 (36:11):
You're not doing everything in it.
Speaker 1 (36:13):
Yeah, But anyway, the OP zone is another again, another
angle that might be helpful if you love.
Speaker 2 (36:20):
Real estate absolutely well, and there's so much more with
real estate that you know is good. It's just you shouldn't.
You shouldn't have everything in real estate, as some people
are learning now. But and you know, there are creative ways,
like greg is just discussed with the upraate and the
ten thirty one exchange, you know, but basically you can
(36:42):
sell your property and just pay taxes. But I don't
know many people that want to do that. So and
let's talk about a little bit about there's things like
interest only mortgages that people sometimes will ask me about.
I try to just discourage that, but they still are around,
primarily for mortgages. So yes, there's there. They're still there.
(37:03):
But I just I'm a little hesitant. I did a
lot of that in banking because I had you know,
real estate developers and things like that. But I really
discourage it because anything can happen. Bad things happen sometimes
and put you in a position that you you've got
to refinance or whatever. But and then there's reverse mortgages.
That's a part of real estate too. Yeah, it's a
(37:26):
great idea when it when it when it works, and
it's a good thing to do, like if you've got,
you know, real estate that's highly appreciated, like your home.
We have lots of people have million dollar homes paid
for now they need to go into a facility. One
of them needs to go into a facility. So and
this is the biggest asset they have. So looking at
a reverse mortgage to help pay for that is not
(37:47):
a bad idea. And I think you've done one.
Speaker 3 (37:50):
I've done a few.
Speaker 1 (37:50):
Yeah, it's for people, you nail that one. It's for
people that they're older. You have to be sixty two
or I think it is. But you're kind of burning
through your assets and you're like, good night, I'm sitting
on a million or eight hundred thousand dollars house, but
it doesn't produce any income. So reverse mortgage you pay
(38:11):
an upfront fee.
Speaker 3 (38:12):
That's it can be.
Speaker 2 (38:13):
Expensive fee to a facility ten you are.
Speaker 1 (38:16):
Yeah, you're gonna pay ten or twelve or fifteen thousand
up front. But here's what happens. Let's say you have
a million dollar house. You'll get access to like six
hundred thousand or seven hundred of cash, and you can
do it different ways. You can get a monthly check.
You almost have it's almost like a you can have
a checkbook that almost feels a little bit like a
(38:37):
money market where you can write a check against home
equity reverse mortgage equity loan now, and so you do that,
all of a sudden, you've got a lot of liquidity
from a house you own, which, as you said, Wanda,
sometimes it's your biggest asset. And then it takes away
all that pressure of living expenses. So now if the
(38:57):
only catch is if you have to go to a
nursing home and you're gonna it's it becomes more clear
you can't come back to live in your home, then
then you're going to have to refinance or sell. If
you die with a reverse mortgage. By the way, your
kids inherit the house. Of course they can sell it
and pay the reverse mortgage off, or they can refinance
(39:20):
and keep it and just start a new mortgage so she's.
Speaker 2 (39:22):
Living at home that the reverse mortgage can stay in.
Speaker 3 (39:25):
It's fantastic.
Speaker 1 (39:26):
Yeah, it's We've done a few to where it just
it just saved the day. It just allowed the person
to keep living their normal lifestyle and have plenty of
cash flow and not and not worry about it. Right,
as long as you don't go to a nursing home,
you basically are in your house until you pass away.
So I mean, for the right person, it's it's a
(39:47):
valuable thing and the great use of an asset that's
worth a lot of money.
Speaker 2 (39:52):
Absolutely. I've also seen people that wanted to buy a
piece of land. Maybe it was their their goal some
days to have a place at the beach or place
in the mountains or place of the lake. And they've
got this opportunity to own this land now. And you know,
instead of just financing the land or paying cash, you
(40:12):
can do a home equity loan, which I do encourage
because you can write off the interest. But and home
equity loan makes sense to do that. I don't encourage
people to do home equity loans to buy cars and
things like that, but to buy a piece of property
and use the asset that you have could be a
wise thing to do, especially if it's a goal that
(40:33):
you have for the future. So I do encourage that sometimes.
Speaker 1 (40:37):
You know, I personally did that one We have a
little condo down at the Beach area, and one time.
Speaker 3 (40:44):
I did that.
Speaker 1 (40:45):
Actually I actually did it in the other direction. I
borrowed a home equity loan off my condo to help
pay down my mortgage in Raleigh. So the one thing
good about real estate over history, it does appreciate, sometimes dramatically,
like the last five years, but in a Raleigh area
you're probably going to get what five six seven percent growth,
(41:07):
probably all along the way except in recessions. So real
estate can become a really neat investment over time. You
just have to be patient. But it works. And so
building your net worth is a good thing. Real estate
absolutely one way or the other, whether it's liquid stocks
with a ret or land or rental property, or just
(41:29):
a second home. Some people just second home. I would
have never speaking of second homes. I would have never
believed how our kindo has gone up in the last
twenty years. It's just shocking to me. Better than the
stock market. Actually, who knew, rightnew?
Speaker 2 (41:46):
Well, I've seen people buy real estate. In fact, we
stayed my son fishes professionally with the National Professional Fishing League,
and we went to Lake Norman and there was a
community there that was tiny holmes. Oh well, and this
person had acquired several of them. So he's building, he's
building his real estate nest egg, but he airbnb's them.
(42:10):
And think about it, Think about how clever that is
because it's a tiny home number one, so not a
lot of upkey. It's on city water, so nothing you know,
to break there unless the city fixes it. And it's
it's tiny, so what can go wrong. I mean, there's
not a whole lot of painting. And I looked around.
(42:31):
I thought, you know, this would be a great real
estate investment because when people travel, especially at our age,
we don't need a big house. We don't want to
stay in a hotel. You know. Typically airbnbs are cleaner
in my mind, you know, especially if they're rated, and
these were five star rated. And we took a walk
around and all of them were manicured perfectly and not
(42:54):
huge and face the water. I mean, think about it.
Speaker 3 (42:57):
They bought.
Speaker 2 (42:58):
What they did was they bought a plot of and
they made the most use of it.
Speaker 3 (43:02):
I love that, I know.
Speaker 2 (43:04):
So those are things that real estate can give you.
And this person in this particular area owned like three
or four of them, so when one fell through, she
was able to give us another one. So it was
kind of kind of cool, and it was reasonable one
hundred and forty dollars a night. It was just it
was cool. I just love the idea. So see, that's
what real estate can do for you, is all these
(43:24):
neat little things like that.
Speaker 3 (43:26):
Yeah.
Speaker 1 (43:27):
Yeah, it's a great cash flow possibility. It has tax benefits,
and I love the fact that private owning private property
was the United States of America allowed that the first
country in the history of the world anybody can own
real estate. Love it, Go USA. And with that, we're
going to have to wrap our show up. Remember our
(43:47):
number to call nine one, nine, eight five six, nineteen
sixty eight, and remember this. It's your money, it's your future,
don't blow it. Advisory services through couple of investment advisory
services LLCs securities offered through Capital Investment Group, Bank member
Finra and SIPIC one thousand et six Forks Road, Raleigh,
North Carolina nine one nine eight three one twenty three seventy.
Speaker 3 (44:07):
Past performance is not indicative of future results.
Welcome everyone to the Great Hicks Show. I'm Greg Kick,
Certified Financial Planner CFP is the lingo, and Wanda Cooper
a very good financial advisor, and we are here today
on the Great Kicks Show. Bo Nicholson, our other sidekick,
is not here today, but that's okay. We're talking today
about real estate investing. We've been on our trend here
(00:21):
the last few weeks on stocks and mutual funds and
the tools that we use to invest. Real estate is
a big, big section of that market of investing, and
we're going to spend a lot of time on that today.
We have some really cool ideas you may have never
thought about too. But Wanda and I and Bow always
starts the first segment of The Great Kicks Show talking
(00:42):
about what's going on today and things that matter that
affect your life and your future and your decision making
and so forth. And Wanda, it's big, not vacation, but
it's big graduation time for high school and college.
Speaker 2 (01:01):
Congratulations.
Speaker 1 (01:02):
Yes, we do want to. You know, we have tons
of clients that have kids or grandkids. Yeah, and it's
like a big launching thing and it's really cool. But anyway,
I read this really cool article in Wall Street Journal
about career advice for the class of twenty twenty five,
and a lot of times people forget some of the
(01:26):
most basic things. So anyway, this is a guy, Matthew Hennessy,
and I just wanted to read a little bit of
his couple of paragraphs. And this is for the younger
people listening, and also for the older adults that are
trying to help younger people get their eye on the
ball and get going for the real world out there
that you've gone to college and high school to get into. Okay,
(01:50):
here it is. Here's the quote of Matthew Hennessy. I
once read a profile of a famous politician whose mother
gave him some excellent career advice quote, do the job
that's in front of you, and the future will take
care of itself. That's true, as I frequently remind myself,
but it goes only so far. Not all luck is
good luck. Bad things happen too. People get sick, they die.
(02:13):
Even when things are going well, people get distracted and
discourage and lose sight of their goals. They run out
of time to achieve them when things go wrong, as
they inevitably will focus on the things you can control,
be on time, be of good cheer, be helpful. The
way you get ahead at work is to take things
off the plate of the person above you on the
(02:33):
organizational chart. It's easy to figure out what those things are. Watch,
pay attention. It's fine to offer your own ideas, but
consider this, No one ever listen himself out.
Speaker 3 (02:47):
Of a job.
Speaker 1 (02:48):
I love that great advice for you, guys.
Speaker 3 (02:52):
Great.
Speaker 2 (02:52):
I think every firm and rawle he should probably share
that in a sales meeting.
Speaker 3 (02:56):
Honestly, that's right.
Speaker 1 (02:58):
And you know, it reminds me of something that we
emphasize in our business, you know. And we're a small
business in the big world financial resource management. We have
three advisors, three administrators and seven or eight hundred clients,
but we emphasized service a lot. And one thing I
really love as the owner of the company is the
(03:21):
feedback I get. And why do you do too? I
think how many times clients say thank you so much
for helping me, or I heard it twice this week
thanks for looking after me, and that is a big deal.
Speaker 2 (03:35):
Well, it's about relationship building, that's the bottom line. I mean.
I even called a client last night about eight o'clock
to a situation she had happened, and I was concerned
about it and I called her and she was like,
I can't believe you're calling me at night. I said, well,
I had you in my mind and I wanted to
make sure that things were okay. And you know that
(03:56):
had everything to do with I care about her. She's
been a long time client, so you know that makes
the difference. But anyway, Greg, I was reading in the
Wall Street Journal today. It's so funny. We're talking about
real estate. They were talking about the housing market and
first time home buyers are downsizing, you know, they're not
buying the bigger homes anymore, and probably because mortgage rates
(04:20):
are still high, you know. But they went on to
say that newly built homes have been getting smaller since
the pandemic. So I thought it was kind of interesting
that we were in a show today. And the other
interesting thing I read, and this is so true. The
Gen X generation everything is a recession indicator, you know.
And I hear that. I hear that from this generation.
(04:41):
You know, egg price is high. Oh, we're in a recession.
And I'm thinking, you know, I raised a family too,
and I remember, and I've told you this before every January,
because when you're raising a family and you're on a budget,
you know when prices change every January. And this was
before you could place grocery orders online. You literally went
(05:02):
to the grocery store, which was my most hated trip
because you never know what the prices were going to
be and you were living on a budget. So every
January when I my first trip to the grocery store,
I spent twenty dollars more every time for the same things. So,
you know, were we having a recession every January? But
(05:25):
I found it interesting that the gen xers and they
do the gen zs. I hear this from that that generation,
we're in a recession, and I'm like, no, we're not.
You know, there are things that seem recessionary because prices
were so high, but egg prices are coming down, folks,
So we're not in a recession over eggs.
Speaker 3 (05:44):
I know. Well.
Speaker 1 (05:45):
And the youngest generation of adults too, the graduates of
college and so forth. Today, they have grown up in
unusual times. The COVID year was the most bizarre thing
that had happened in over one hundred years as far
as a disease. They kicked them out of school. They
made them wear a mask, they put the.
Speaker 2 (06:06):
Fear of God.
Speaker 1 (06:09):
Yeah, and now we know the truth came out. Of course,
the people that like I never forget going to the
beach for a weekend during COVID and nobody down there
wore a mask. All the restaurants were open and we
went in and ate. We didn't wear a mask either.
So it's sad that the fear mongering that went on,
(06:30):
not only by the government but just in general, and
then all the cultural shocks they've gone through, with the
woke stuff and the gender thing going around and all
of that. I can see where that young adult generation
is struggling mightily just to get bearings.
Speaker 3 (06:48):
You know.
Speaker 1 (06:49):
Railings on the bridge is what I call it. You know,
if you don't have railings on the bridge, you get
afraid to drive across the bridge. And I feel like
that young adult situation is in that category. They've got
a lot to go to get comfortable with life.
Speaker 2 (07:02):
Yeah, they've been through some hard stuff, that's for sure.
I remember the graduates of that year, there were three
or four in our circle of friends, and we literally
did graduation pictures for them at the lake and did
a small graduation ceremony for them. I mean, they missed
all of that and how sad. So they you know,
(07:24):
they have a lack of trust now for everything. Yes,
and I think that generation themselves thought we were over
hyping it. I really do. And I don't mean to
be offensive, but we were. It's a travesty because I think,
you know, there were some states that were led appropriately,
like Florida and South Carolina. You know, you didn't have
(07:45):
to wear a mask and restaurants and things like that.
But yet here in North Carolina, we allowed people to
go to Low's, but we didn't allow them to go
to the mom and pop. And that's sad. That's so sad.
So I hope that we will not follow the pigs
off the cliff. If you will, you know where the
pigs were thrown off the cliff. I hope we don't
(08:06):
do that again. I hope we'll be smarter and challenge
things that we hear.
Speaker 3 (08:11):
That's right.
Speaker 1 (08:12):
And the good thing about it is if people are resilient,
just like this guy in the article on Wall Street Journal,
just do what's in front of you, do it well,
serve people, and you will rise to the top. It's automatic.
And I love the fact. You know another thing about graduates.
This year, a lot of small colleges are struggling because
(08:32):
people are not going to college anymore. They're choosing another
career path in the so called blue collar, which I
think is kind of funny. But the bricklayers, the car mechanics,
the electricians of the world. We can't survive without those people.
And now people are realizing if you do a good
job in any skill like that, you are going to
(08:54):
make good money one day and you're going to always
be needed.
Speaker 3 (08:57):
You'll never be unemployed. Love that.
Speaker 1 (09:01):
Younger adults are finally getting that. That's like the old
American style, kind of like you and I grew up
in wander where everything worked out as long as you
put your mind to it and worked hard, and so
just do it, do it well, develop a skill and
you'll be rewarded. So with that, we're going to take
a break. That was a nice philosophy opening, which we
(09:21):
don't do very often, but sometimes we need to stay tuned.
We're going to talk about real estate investing in some
really cool ideas. Welcome back to the second segment of
the Great Hicks Show. We're glad you tuned in. If
you're listening on radio, you're in the Raleigh market Raleigh,
North Carolina. It's two o'clock every Saturday and Sunday afternoon.
We do two shows on the weekend. And then if
you're at the Crystal Coast in the Atlantic Beach, Poorhead City, Newburn,
(09:46):
Jacksonville area, that's one of our favorite places, one of
our offices that are down there with a beautiful view.
But anyway, those times are unique. At seven am on Saturday,
and that's for early risers at the beach, and then
at three o'clock on Sunday afternoon, and then we're on podcasts.
So just type in your favorite podcast location, type in
(10:08):
the Greg Hicks Show, and boom, all of a sudden,
it'll come up. Now when you go on to the podcast,
there's a list of topics that you can choose. Today
we're talking about real estate investing. But we cover probably
fifty or sixty topics per year and revise and reformed
(10:30):
the show. We create new shows a few shows every year,
and we just.
Speaker 3 (10:34):
Try to cover the broad array.
Speaker 1 (10:36):
Of things in financial planning, and I think that's one
of the things that makes our shows unique. We don't
beat a dead horse we don't talk about the same product.
We talk about a lot of things, and everything we
do on our show is from our experience with clients,
so there's nothing We don't try to hype anything, or
exaggerate anything or make claims that aren't true. We try
(10:59):
to do the best thing we can to explain it
to you. And then it's so fun, Wander. You know
this when when a radio caller calls. By the way,
the number to call is nine one, nine eight five
six nineteen sixty eight. I love it when radio callers
call because they'll say I was listening to you and
y'all said this, And so the idea is, we don't
(11:20):
we record our shows. We don't do live broadcasts. We
used to do one and I did. But I like
it because we can focus on the education for clients
to learn.
Speaker 2 (11:30):
Well, they're so close to us. I've had a radio
listeners call and this is my voicemail. Hey, Wanda, this
is Joe. Call me back. I'll be like, and now
I'll get him on the phone. Wanda, I've been listening
to you since two thousand and five. I love your show.
I feel like I know you well. Obviously you felt
like you did because you left me.
Speaker 3 (11:49):
You have me your first name.
Speaker 1 (11:51):
I know, but we love that and if you want
to talk to us in person, that's really the best
way to do it. And there's something about when you're
talking to a financial advice it's the relationship that matters.
It's like anything like who is the doctor you trust,
who is your mechanic for your car that you trust,
who's the repair man or woman that you trust. It's
(12:13):
the same thing with financial advice. Who do you really trust?
And if you are, maybe you're in a relationship with
a financial advisor and there's something doesn't quite feel right.
I mentioned that because we have people say that to
us sometimes and it may not be that they're a
bad person, but it's just that trust thing or whatever
it is. So come to us and we'll give you
(12:34):
a second opinion, and we're very open and honest. We're
not going to twist your arm and try to drag
you down the hall. We're going to just listen to
your needs and tell you what we see, and if
you want more feedback, you can come for a second meeting.
So many many times from radio listeners, we'll have an
initial meeting and then a second meeting and then you'll
have a more informed feeling and idea of what we do,
(12:56):
and then you can make a good decision. So call
us at nine one, nine, eight, five, six, nineteen sixty
eight now winded today. The last few weeks we've talked
about mutual funds, ETF funds stocks. Next week we're talking
about alternative investments, which is really a unique thing. And
by the way, one alternative investment has hit home runs
the last year gold Gold bullyon.
Speaker 2 (13:18):
Real estate can be alternative depending on what you're doing.
Speaker 3 (13:20):
Yeah, that's right.
Speaker 1 (13:22):
So in real estate, everybody kind of has an intuitive
idea of what it is because most people buy a
home or rent a home or rent an apartment. So
real estate is literally a big factor in everybody's life.
But how do we treat it when it comes to investing,
And believe it or not, there's multiple ways to do
(13:43):
it in the real estate world. And if you look
at the history of investments, let's say there's anywhere from
seven to ten investment categories that we all use. Real
estate is probably the second or third best overall return.
Stocks would be first, right, But real estate is actually
(14:05):
a good investment.
Speaker 2 (14:06):
It is. But you know, and what's interesting. In the
second half of the show, we're going to really talk
about some interesting real estate ideas, and I'm excited about that,
so I hope you'll stay with us on that because
there's some interesting things with real estate that you can do,
especially when you're trying to sell a big piece of
your real estate. But anyway, the thing about real estate
investing that I find Greg, I've had clients from years
(14:30):
ago make their wealth by owning real estate and selling
one property and going to another or adding to their properties,
have an investment portfolios. We had one of your clients
was like eighty some years old still owning rental duplexes.
That was the key in the eighties. It was duplexes.
And I couldn't And every now and then she would
(14:54):
call me full withdrawals, and I go, look, don't you
think it's time to because you already took fifteen thousand
out a couple of weeks ago to do this, and
now you're taking twenty And she said, no, I want
to keep my real estate. And I could see the
writing on the wall that she was getting to the
age it was just getting too much. But that's the
(15:14):
thing about real estate. It's good until it isn't.
Speaker 1 (15:18):
And you're talking like the lack of liquidity is one
of the risks of owning.
Speaker 2 (15:22):
Real estate, right, And the thing is you can get
to the stage of your journey that it's too much
to handle, it's too much to manage yourself and fix
things and that kind of thing. And then when you
have to hire a property manager, which she did, but
what she was noticing is she was netting less. So
(15:43):
when you get to that stage and maybe time to
look at unloading some of the real estate, you know,
because it gets burdensome to go fix a water heater
or send somebody that you know to fix it, you know,
send a good old boy. When you have to hire
a property manager, there goes some of your your game,
you know, that's right.
Speaker 1 (16:02):
Yeah, yeah, And it's like any investment, there's rewards and
there's risk, and that's one of the risk is lack
of liquidity and the phone call late at night to
come and fix the water heater. I had had a
wonderful client. I still have her. Her husband was brilliant
at real estate and he amassed a pretty pretty big
nest egg for sure. Unexpectedly he passed away and she
(16:27):
did not manage the real estate. So she had it
was like a crash course to preserve her wealth and
her income and keep those rental properties full. And so
it became a mighty, mighty struggle for her. She ended
up the same thing you said, hired a management company.
They took fifteen percent or so off the top. But again,
(16:49):
she's talked about it several times about still the struggle,
and so we've tried to help her just sell off
parts and parts and soon get down to more man things.
Speaker 2 (17:00):
But don't you think it was easier back in the
eighties to acquire property at a reasonable price and make
and create Well, I'm not so sure today because like
beach property is still elevating flated, yeah value, and lake property.
I mean I had a friend that said that netted
(17:20):
about four hundred thousand from selling some property, and and
her goal was to find property on the lake. I said,
you're not going to find property on lake for four
hundred So it's out there somewhere. I said, no, it's not.
Speaker 3 (17:31):
A little pond behind the farm.
Speaker 2 (17:33):
I was familiar with the lake area. And yeah, years
ago it was easier. But today, if you get lake
front property or six hundred and fifty thousand, I'd be surprised.
Speaker 3 (17:46):
Yeah, that's the deal.
Speaker 1 (17:47):
Yeah, the inflationary value of real estate, and that's one
that's a blessing and a curse. If you've owned real
estate in the last five years, the average home price
has gone up forty percent. Well so has your rentals exactly.
So that's a good thing. But like you say, it's
like anything in investing, when do you buy and when
do you sell? So if you're a buyer today, it's
(18:08):
maybe not a great time to get into real estate,
but inevitably.
Speaker 2 (18:11):
There's a seller's market right now.
Speaker 1 (18:13):
Yeah, there'll be a recession, interest rates may go down.
Everything goes in cycles, including the value of real estate.
So the proper timing is I mean investing. I've told
this the clients for years. Timing is almost as important
as what you buy, what you invest in. You. If
you invest at the right time, it's like awesome. If
(18:33):
you don't, you can lose your shirt.
Speaker 2 (18:35):
Right, and buying real estate, even for primary homes back
what was it two years ago when it seemed like
things were just way up there and interest rates were
going up and people were still mortgaging, you know, buying
a house and getting a mortgage at eight percent. I
mean that. I mean, I just don't know how long
it'll take you to make back your investment that way,
(18:56):
but you know, maybe you know, refinance over time and
things like that. But I was real concern for some
of these young people that bought this, still concern for them.
They bought this elevated real estate and still did eight
percent mortgages and have four thousand dollars mortgage payments as
they're starting out. That's just unreal to me.
Speaker 3 (19:14):
Yeah, that's right. Now.
Speaker 1 (19:16):
The good thing is, and Wanda would agree with this
for sure. Everybody should own real estate somewhere, because whenever
you talk about the concept of diversifying, real estate is
always on my target.
Speaker 3 (19:28):
Every time I do.
Speaker 1 (19:28):
A proposal for a new perspective client, I have real
estate in there every time. Now, when Wanda and Bo
and I put in real estate is an option, we
don't expect you to run and buy a piece of
land by the lake. There's a lot of cool waste
about real estate, and some of it we mentioned while ago.
One of the risk of land or a rental is
(19:49):
the lack of liquidity if you need it. But the
good news is over time, over the history of investing,
there's something called reachs real estate investment trust that are
very liquid. It's just like a stock, but they can
target what kind of real estate. So for example, let's
say you want to own Marriott Hotels, Well maybe Marriott
(20:11):
has a reate real estate Investment trust or wine and
now over the years have bought heavily into medical properties
like doctor's offices or assisted living things that are not
going to go out of business. And you can buy
real estate, get a dividend, and the dividend is the
magic and the sauce. And we'll talk about that after
we take this break. We'll be right back. Welcome back
(20:32):
to the second half of the Great Hicks Show. We're
so glad you tuned in. I'm here with Wanda Cooper,
financial Advisor. I'm a certified financial planner, and Bo Nicholson
or other sidekicks is off.
Speaker 3 (20:42):
Today.
Speaker 1 (20:43):
We have a business called Financial Resource Management. We started
forty years ago. Wind Up, we still.
Speaker 2 (20:50):
Got to talk about fortynniversary.
Speaker 3 (20:52):
I was so young and redheaded.
Speaker 2 (20:53):
Back then, I was young and less wrinkling.
Speaker 1 (20:56):
It's right, you had two little kids when I first
met you. Winda, but Anyway, we're glad you tuned in.
Why didn't I have been in the business a while.
Bow is a little younger than us, of course, but anyway,
we're glad you tuned in. We love doing our radio show,
Why Didn't. I've been on the radio a long time,
and our listeners are fantastic. Some of you out there,
I know are listening that have been listening for years
(21:19):
because we get phone calls from people like that. And
then some of you are brand new. Maybe you know
North Carolina and Raleigh air particular, and the beach area
is such a hot growth area. You may be from
another state or another town and you're just tuning into
us for the very first time. The Greg Hicks Show
is archived on the Raleigh radio station one oh one
(21:39):
point six.
Speaker 3 (21:42):
Yeah I knew that one.
Speaker 2 (21:43):
We're one one six point.
Speaker 1 (21:45):
One FM Talk, and you can click on their website
and click on the Greg Hicks Show and scroll down
and go back and listen to any topic we've discussed.
Speaker 2 (21:54):
On the podcast.
Speaker 1 (21:55):
Podcasts so and they're all archives. So if you have
a topic you're like, WHOA, I need to know something.
I just inherited the money or I just left a job, I.
Speaker 3 (22:03):
Want to roll over.
Speaker 2 (22:04):
I got real estate to sale.
Speaker 1 (22:05):
Real estate. That's our topic today. So we change topics
every week for the purpose of educating you the listener,
and you can call us and meet. We love meeting
with people. If you have never met a financial advisor,
or maybe you have one and you're not quite sure
it's working out so well, call us at nine one,
nine eight five six nineteen sixty eight. We will repeat
(22:26):
that number periodically because sometimes as you're listening in the car,
at work or whatever you're doing, we know that a
lot of people don't listen to the whole hour, So
we're going to mention that phone number off and on.
Now today we're targeting real estate. And by the way,
we mentioned changing topics. Next week we're going to talk
about alternative investments, including gold and other things. But alternative
(22:49):
investment simply means something other than a stock, bond, mutual fund,
or cash in real estate. Some forms of real estate
are alternative investments. So when Win and I were just
taking the break while ago, we mentioned that some people
we always diversify client assets into some portion of real
(23:11):
estate five percent, ten percent, maybe even fifteen sometimes. But
the reason we do it is. It's been proven in
studies that if you're in real estate inside the mix
of your investments, it lowers volatility and increases return slightly.
So we're all about that. We talked right before the break.
Most one of the risks of real estate is not liquid.
(23:32):
If you own property, a house, land, whatever, you can't
just run out and cash it in tomorrow. However, there's
something called real estate investment trust reaped r e it.
You'll hear that term sometimes. What is a rate? It's
simply a way of incorporating real estate. And it's liquid.
There's there's non liquid reates, and there's liquid. So Wind
(23:53):
and Bow and I use liquid reates a lot. And
I mentioned that there's several cool things about it. They say,
just like a stock, so you can target like WYDA
and I like to target medical property, real estate. Some
people like hotels, some people like residential. There's residential rates.
The beautiful thing about that the incorporation is they're required
(24:17):
by law to pay out ninety percent of their earnings
to stockholders. And guess what that means a dividend. That
means a monthly or quarterly cash flow dividend. And we
regularly do reachs that are paying four or five six,
some of them seven percent a year dividend pay and
(24:37):
you have the potential growth built in, just like any
kind of real estate. So and there's, by the way,
there's mutual funds as well that have even more diversification.
So if you want to invest in real estate and
you're not going to run out and buy a piece
of land or a.
Speaker 3 (24:53):
Rental property, check out the rep market. It's really neat.
Speaker 2 (24:56):
Well there's unlisted ones and publicly traded. Yeah, go either way,
and the public of the unlisted ones eventually do go public,
so you will have collected the dividend the whole time
and then potentially you know, growth, yeah, gain yeah. So.
And the other thing about real estate is particularly rental property,
is the or investment property is the tax advantages. There's
(25:20):
so much more tax advantages than owning your own home. Now,
I'm not sure what the tax advantagy is to owning
your own home because we've got that standard deduction that's
so high. So unless you've bought a real jumbo type
of house and mortgage that you may not have enough
interest deduction to write off because of the giant deduction.
So it's hard to know if the primary home is
(25:41):
a write off for you or not. But investment property
still has the operating expenses, mortgage interest, interest, property taxes, depreciation,
all of that, those things which you do with the
office condo that we have, So you are very much
aware of the tax benefit.
Speaker 1 (25:59):
Yeah, and want to I'm glad you brought that up,
because back to the uh, the RI I T stocks.
The corporate style is called a pass through business pass through?
Speaker 3 (26:13):
What does that mean?
Speaker 1 (26:14):
All the right offs you just mentioned, the real estate taxes,
the improvements, all that stuff. If you own rental property privately,
you get to claim that against your income as a
write off. Well, guess what the dividend. Let's say you
buy at on the stock market and the dividend is
six percent, the taxable part of that may only be
three percent because, and here's the word pass through, all
(26:38):
those write offs that the company gets running real estate,
they are passed directly to the shareholder. So so outside
of an IRA investment, the red stocks are terrific tax shelters.
You're getting You're getting nice dividends and paying taxes on
maybe a third or a half of it. Who doesn't
like that?
Speaker 2 (26:58):
I love that exactly now.
Speaker 3 (27:00):
You have to.
Speaker 1 (27:01):
It's very tricky though, and we don't want to get
into detail, but your accountants can help you with this.
The right off the government the IRS looks at right
offs as a reduction of cost basis.
Speaker 3 (27:13):
Heads up. If you bought a two.
Speaker 1 (27:15):
Hundred thousand rental property and held it thirty years and
now it's worth four hundred thousand, you have been getting
tax right offs all along the way. That's been reducing
your original cost basis.
Speaker 3 (27:26):
So when you.
Speaker 1 (27:27):
Sell your you've been holding forever, you're going to sell
it for four hundred grand, you're going to find out
that you're going to have four hundred thousand of capital gains,
not two hundred because the write offs have been passed
down through there. So anyway, it's too complicated to share
if fully, but just be alert when you sell real
estate property, rental property, particularly, your cost basis is going
(27:50):
down every year.
Speaker 2 (27:50):
Yeah. So that brings me to the next point that
we might want to start talking about is, I know
we have listeners out there that own, you know, a
lot of property, maybe through a business or maybe you've
just acquired property over the years inheritance, inheritance, whatever, and
it's not primary, it's investment. So when you go to
(28:12):
sell that, like you said, it's going to be a
huge tax event. So what are the strategies for that. Well,
there's ten thirty one exchanges and there's also what's called
ten thirty one exchange and upread. So we talked about reads,
and there's a way to do that through a ten
thirty one exchange. So let's talk about that just a
little to get a teaser out there.
Speaker 1 (28:32):
Yeah, yeah, Now why didn't I have done ten thirty
one exchanges over time?
Speaker 3 (28:38):
People?
Speaker 1 (28:38):
You know, like, let's say you had an old piece
of land you inherited forty years ago, and it was
worth one hundred thousand, and now if you sell, it's
worth five hundred and what holds you back is you're
going to have a capital gain of four hundred thousand,
approximately twenty percent or so cap gain tax. So you
don't want to get four hundred thousand and have to
(28:59):
write a check for eighty or ninety or one hundred
grand to the government. So a ten thirty one exchange
means you can take that value. Let's say you get
five hundred thousand dollars, you can transfer that to a
new real estate investment property, and that's the rule. You
got to do that, and it carries it forward to
(29:21):
the new property, so you don't pay taxes. You don't
get your cash either, but you don't but you don't
have to pay tax. Yes, and that's a big deal
for people because a lot of times I have rant
into lots of clients that that are literally paralyzed.
Speaker 3 (29:38):
They're hung up. They know they need to sell.
Speaker 1 (29:42):
Maybe they're retiring and they need the cash. They know
they need to sell the old property, but they just
can't do it. They can't figure out how to do it.
So anyway, the ten thirty one is a way to
defer the cap gain and then if you own it
when you die, your kids inherit it at the new
cost basis, so they don't pay the capital game tax
if they sell the property. So anyway, it's it's a
(30:04):
really interesting thing. Now there's all kinds of rules. You
have to have an intermediaria. You can't you can't sell
the property and collect the dollars and then go out.
In ten thirty one it you have to have an
intermediara to hold the money you have. You have a
time limit to identify the new property and to close
on the new property. So there are restrictions. I wouldn't
(30:25):
I don't. I wouldn't do it by the seat of
your pants. You're going to get in trouble, so make
sure you plan ahead. But I would encourage you if
you're in that situation of you know, you need to
sell some property and you're hung up on the cap gains,
call wand to me or both nine one, nine, eight
five six nineteen sixty eight. Let us explain the ten
thirty one exchange.
Speaker 2 (30:44):
And then let's say why people would do that. I
mean lots of times clients own commercial real estate and
lots of it warehouses or whatever, and their children may
not want to take that over exactly. So you bring
your children in to the picture and say, hey, we're
going to sell this, and this is what we're going
to do, and you do the ten thirty one exchange,
(31:05):
and maybe you still want warehouse property, you can do
that with a ten thirty one exchange. You now don't
own the real estate except for the tenth through the
ten thirty one. You're not having to do any upkeep
and things like that anymore, or improvements or landlord or
anything like that. So you're just collecting the benefit and
(31:27):
sometimes when you head into retirement, that's all you want
to do.
Speaker 3 (31:30):
Right.
Speaker 1 (31:31):
The other case where we've had with clients is it's
a piece of rall l in so there's no income
and now you're retiring and you would love to take
that five hundred grand or that million dollars and create
cash flow. Yes, so you know that's the way to
do it is to kind of release yourself. You buy
a piece of raw in, You take a piece of
raw in, and you put it into say, let's say
(31:55):
a hotel or an apartment complex in a ten thirty
golf community and then yeah, and then you get cash
flow every month, and you don't have to pay the
cap gains tax, so you're just deferring it. And then
there's a second jump, and this is almost too sophisticated
to talk about, but you can do a ten thirty
one into a DST, which is a Delaware statutory trust,
(32:17):
and you hold it two years and then you put
it in an upright and then all of a sudden
you have shares and you can sell it as you
need it. You're not hung up with it. Yeah, it's
very detailed and complicated.
Speaker 2 (32:28):
Let's talk about a little more at the next.
Speaker 1 (32:30):
The next break, we're going to take one now and
come back and finish our discussion on the ten thirty
one exchange. Welcome back to the last segment of The
Great Kicks Show today. I'm here with Wanda Cooper. We're
both advisors and financial advisors. I'm a CFP with financial
Resource Management in our business headquartered in.
Speaker 3 (32:45):
Rodley, North Carolina.
Speaker 1 (32:46):
What a great town, and also in office right on
the Atlantic Beach Causeway with.
Speaker 3 (32:50):
A beautiful view.
Speaker 1 (32:52):
We welcome you to our show. We've been on a
roll here the last few weeks talking about investments. Next
week we're going to talk about alternative investments, which are
really interesting things, things that aren't the normal stock, bond
or mutual fund. And I think you'll enjoy the show.
The more you learn about investments, the more you can
diversify and feel comfortable with it. And also there are
(33:14):
investments that meet specific needs. So why and I were
just talking before the break on if you have an
old piece of property that's either a rental property or
a peace of land or whatever, it's real estate and
investment in real estate and it's appreciated dramatically, or you're
retiring and now you're like, how do I get out
of this without paying a gazillion dollars in taxes? You
(33:35):
can do several ideas. One is a ten thirty one exchange,
and then there's something called a DST which you can
put your ten thirty one property capital gains in there,
hold it for a couple of years, and then put
it in what's called an uprach. Now we're getting into
the weeds of sophistication, so I would highly encourage you
to call me or wand or about if you're in
(33:57):
that situation. But the interesting thing I think about the
upreach the upread, you lose your quote personal control over
the property because the red the upreaed is in multiple properties,
so you're broadly diversified. But guess what you get a
dividend and now it's in shares. So let's say you
(34:20):
needed fifty thousand dollars.
Speaker 2 (34:23):
For a tax bill or a brand new car or.
Speaker 3 (34:26):
Whatever it is.
Speaker 1 (34:28):
You can just sell instead of your million dollar property
that's over here in the upright now, you just sell
fifty thousand words with shares and pay capital games on fifty.
Speaker 2 (34:37):
Yeah, you delayed taxes and.
Speaker 1 (34:40):
Then when you die, your kids inherited without having to
pay capital games. I mean, so if you're if you're
an owner of land, highly appreciated land, property, rentals, whatever
in the real estate world, it is call us at
nine one, nine, eight, five six, nineteen sixty eight and
ask for Greg and Wander or both and we'll we'll
just we have literature. By the way, we can show
(35:01):
you exactly how it works. It'll take a lot of
the mystery out. And if you're hearing this for the
first time, why there's other things too. There's there's opportunity
zones they're called and that's another capital gains from there.
Speaker 2 (35:16):
We just didn't Raleigh, actually.
Speaker 1 (35:18):
We just go you can go look at it. It's
called may m A u v E. It's right beside
the Red hat Amphitheater. It's a beautiful apartment property that
just open and it's an opportunity zone. So the investors
that are in it, and some of our investors and
our clients did it. They delay, they they sold something.
(35:39):
And by the way, opportunity zone doesn't have to be
real estate sales. Some of my clients sold appreciated stock
and put.
Speaker 3 (35:48):
The capital gain deferring.
Speaker 1 (35:50):
It in the OP zone, and it's it's also detailed.
It's basically you get you get dividend income from rental
if you hold it for ten years, which they will
the OP zone. The federal regulation is when they sell
it for a game, you do not pay capital gains tax.
So it's a ten year old but a lot of
clients are fine with that.
Speaker 3 (36:10):
I'm good with that.
Speaker 2 (36:11):
You're not doing everything in it.
Speaker 1 (36:13):
Yeah, But anyway, the OP zone is another again, another
angle that might be helpful if you love.
Speaker 2 (36:20):
Real estate absolutely well, and there's so much more with
real estate that you know is good. It's just you shouldn't.
You shouldn't have everything in real estate, as some people
are learning now. But and you know, there are creative ways,
like greg is just discussed with the upraate and the
ten thirty one exchange, you know, but basically you can
(36:42):
sell your property and just pay taxes. But I don't
know many people that want to do that. So and
let's talk about a little bit about there's things like
interest only mortgages that people sometimes will ask me about.
I try to just discourage that, but they still are around,
primarily for mortgages. So yes, there's there. They're still there.
(37:03):
But I just I'm a little hesitant. I did a
lot of that in banking because I had you know,
real estate developers and things like that. But I really
discourage it because anything can happen. Bad things happen sometimes
and put you in a position that you you've got
to refinance or whatever. But and then there's reverse mortgages.
That's a part of real estate too. Yeah, it's a
(37:26):
great idea when it when it when it works, and
it's a good thing to do, like if you've got,
you know, real estate that's highly appreciated, like your home.
We have lots of people have million dollar homes paid
for now they need to go into a facility. One
of them needs to go into a facility. So and
this is the biggest asset they have. So looking at
a reverse mortgage to help pay for that is not
(37:47):
a bad idea. And I think you've done one.
Speaker 3 (37:50):
I've done a few.
Speaker 1 (37:50):
Yeah, it's for people, you nail that one. It's for
people that they're older. You have to be sixty two
or I think it is. But you're kind of burning
through your assets and you're like, good night, I'm sitting
on a million or eight hundred thousand dollars house, but
it doesn't produce any income. So reverse mortgage you pay
(38:11):
an upfront fee.
Speaker 3 (38:12):
That's it can be.
Speaker 2 (38:13):
Expensive fee to a facility ten you are.
Speaker 1 (38:16):
Yeah, you're gonna pay ten or twelve or fifteen thousand
up front. But here's what happens. Let's say you have
a million dollar house. You'll get access to like six
hundred thousand or seven hundred of cash, and you can
do it different ways. You can get a monthly check.
You almost have it's almost like a you can have
a checkbook that almost feels a little bit like a
(38:37):
money market where you can write a check against home
equity reverse mortgage equity loan now, and so you do that,
all of a sudden, you've got a lot of liquidity
from a house you own, which, as you said, Wanda,
sometimes it's your biggest asset. And then it takes away
all that pressure of living expenses. So now if the
(38:57):
only catch is if you have to go to a
nursing home and you're gonna it's it becomes more clear
you can't come back to live in your home, then
then you're going to have to refinance or sell. If
you die with a reverse mortgage. By the way, your
kids inherit the house. Of course they can sell it
and pay the reverse mortgage off, or they can refinance
(39:20):
and keep it and just start a new mortgage so she's.
Speaker 2 (39:22):
Living at home that the reverse mortgage can stay in.
Speaker 3 (39:25):
It's fantastic.
Speaker 1 (39:26):
Yeah, it's We've done a few to where it just
it just saved the day. It just allowed the person
to keep living their normal lifestyle and have plenty of
cash flow and not and not worry about it. Right,
as long as you don't go to a nursing home,
you basically are in your house until you pass away.
So I mean, for the right person, it's it's a
(39:47):
valuable thing and the great use of an asset that's
worth a lot of money.
Speaker 2 (39:52):
Absolutely. I've also seen people that wanted to buy a
piece of land. Maybe it was their their goal some
days to have a place at the beach or place
in the mountains or place of the lake. And they've
got this opportunity to own this land now. And you know,
instead of just financing the land or paying cash, you
(40:12):
can do a home equity loan, which I do encourage
because you can write off the interest. But and home
equity loan makes sense to do that. I don't encourage
people to do home equity loans to buy cars and
things like that, but to buy a piece of property
and use the asset that you have could be a
wise thing to do, especially if it's a goal that
(40:33):
you have for the future. So I do encourage that sometimes.
Speaker 1 (40:37):
You know, I personally did that one We have a
little condo down at the Beach area, and one time.
Speaker 3 (40:44):
I did that.
Speaker 1 (40:45):
Actually I actually did it in the other direction. I
borrowed a home equity loan off my condo to help
pay down my mortgage in Raleigh. So the one thing
good about real estate over history, it does appreciate, sometimes dramatically,
like the last five years, but in a Raleigh area
you're probably going to get what five six seven percent growth,
(41:07):
probably all along the way except in recessions. So real
estate can become a really neat investment over time. You
just have to be patient. But it works. And so
building your net worth is a good thing. Real estate
absolutely one way or the other, whether it's liquid stocks
with a ret or land or rental property, or just
(41:29):
a second home. Some people just second home. I would
have never speaking of second homes. I would have never
believed how our kindo has gone up in the last
twenty years. It's just shocking to me. Better than the
stock market. Actually, who knew, rightnew?
Speaker 2 (41:46):
Well, I've seen people buy real estate. In fact, we
stayed my son fishes professionally with the National Professional Fishing League,
and we went to Lake Norman and there was a
community there that was tiny holmes. Oh well, and this
person had acquired several of them. So he's building, he's
building his real estate nest egg, but he airbnb's them.
(42:10):
And think about it, Think about how clever that is
because it's a tiny home number one, so not a
lot of upkey. It's on city water, so nothing you know,
to break there unless the city fixes it. And it's
it's tiny, so what can go wrong. I mean, there's
not a whole lot of painting. And I looked around.
(42:31):
I thought, you know, this would be a great real
estate investment because when people travel, especially at our age,
we don't need a big house. We don't want to
stay in a hotel. You know. Typically airbnbs are cleaner
in my mind, you know, especially if they're rated, and
these were five star rated. And we took a walk
around and all of them were manicured perfectly and not
(42:54):
huge and face the water. I mean, think about it.
Speaker 3 (42:57):
They bought.
Speaker 2 (42:58):
What they did was they bought a plot of and
they made the most use of it.
Speaker 3 (43:02):
I love that, I know.
Speaker 2 (43:04):
So those are things that real estate can give you.
And this person in this particular area owned like three
or four of them, so when one fell through, she
was able to give us another one. So it was
kind of kind of cool, and it was reasonable one
hundred and forty dollars a night. It was just it
was cool. I just love the idea. So see, that's
what real estate can do for you, is all these
(43:24):
neat little things like that.
Speaker 3 (43:26):
Yeah.
Speaker 1 (43:27):
Yeah, it's a great cash flow possibility. It has tax benefits,
and I love the fact that private owning private property
was the United States of America allowed that the first
country in the history of the world anybody can own
real estate. Love it, Go USA. And with that, we're
going to have to wrap our show up. Remember our
(43:47):
number to call nine one, nine, eight five six, nineteen
sixty eight, and remember this. It's your money, it's your future,
don't blow it. Advisory services through couple of investment advisory
services LLCs securities offered through Capital Investment Group, Bank member
Finra and SIPIC one thousand et six Forks Road, Raleigh,
North Carolina nine one nine eight three one twenty three seventy.
Speaker 3 (44:07):
Past performance is not indicative of future results.
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