E08: Finding Opportunities in Real Estate, Metals, Oil, and Gas with Mauricio Rauld

If you’re thinking of investing in the energy, precious metals, real estate, or oil industry, it’s important to understand what you can expect. While risks are always involved in any investment, understanding these industries can help you make smarter choices and maximize your profits.

In this episode of the Passive Investing Show, J and Ashley are joined by Mauricio Rauld. They discuss the different asset classes you can invest in. They also tackle how you can leverage them to grow your wealth.

Here are some power takeaways from today’s conversation:

• Use precious metals as insurance.
• Leverage the tax benefits in real estate or oil & gas.
• The oil & gas industry is a cash flow play.
• Limit your personal guarantee.
• Grow your wealth through investing.

Episode Highlights:

[06:12] Using Precious Metals

Physical precious metals could be insurance. Liquidity is also possible because many capitalized institutions will loan to you on your goal. With that, you could extract equity without having to sell and incur high taxes.

[09:13] Minimizing Tax

Most passive real estate investors look to real estate because of the tax benefits. Aside from that, oil and gas are other assets that can mitigate tax problems. The depreciation component also contributes to the tax benefits.

[16:18] How the Oil and Gas Industry Works

Striking oil gives great rewards. But there’s high risk because if you don’t strike oil, the investment goes down to zero. Proven reserves involve extracting oil from lands that you already know have oil. Lastly, additional oil can be extracted from the land that has depleted oil.

Premier Law Group buys equipment and rents it out to oil companies. The group then has a working interest and share in the oil well profits.

[20:55] What to Expect in Investor Returns

You do not buy equipment and sell it for capital gain since it is a depreciating asset. So it is purely a cash flow play. But with oil and gas being in high demand, it cash flows nicely.  You just have to factor depreciation into the final return. There is also a significant risk in being a General Partner in a limited partnership.

Tax benefits get taken in the first year the equipment is put into service. Cash flow usually starts around six to nine months. The amount of cash flow depends on how much leverage you have.

[26:48] Exploring the Risks

As a General Partner, unlimited exposure might make you uncomfortable. But being a General Partner is only for a limited amount of time. Find a way to limit the personal guarantee to the amount of your investment so you will be safe if things go south.

[26:48] How to Find Oil and Gas Investments

Reach out to Mauricio, and he would be happy to make an introduction. Bitcoin has been on his radar for a while as an area he would potentially invest in. Change in the tax code is the biggest threat to his passive investment strategy. Accredited investor limits are likely to increase.

[38:58] Mauricio’s Final Advice

Building wealth is difficult, but putting your excess paycheck into active or passive investments will help you become more financially independent.

Notable Quote from the Episode: [39:17] “Your wages will make you a living, but your investments will make you a fortune.”

Resources Mentioned:

Premier Law Group

The Real Estate Syndication Show

The Passive Investing Show