Episode Transcript
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Speaker 1 (00:00):
The following is a peed commercial program on ninety four
to three WSC. The views expressed by the host of
this program do not necessarily reflect the views of iHeartMedia
ninety four to three WSC, it's advertisers, sponsors, or management.
This is The Real Estate Show with Rick Willis, a
show about home sales, mortgage issues, investing in everything about
the American dream and that means a lot as someone
(00:22):
who enjoys radio and really enjoys your program and now
The Real Estate Show with Rick Willis on ninety four
to three WSC.
Speaker 2 (00:31):
Welcome, Welcome to the Rick Willis Real Estate Show, folks.
My name is Rick Willis. I am a local real
estate broker here in the Greater Charleston area. I've been
doing the show now for over twenty years, each and
every weekend, and it's a pleasure to have you listening today.
(00:55):
For those of you that have not listened to the
show before, we talk about buying real estate, selling real estate,
investing in real estate. Occasionally we talk about renting real estate. Now,
those of you that are listening, know that before the
(01:16):
show is over, I'll give you several opportunities to get
my contact info. In the event you decide that you
would like to pick my brain further for an initial consultation,
or that you would like to entertain the possibility of
working with me to help you buy or sell real estate.
(01:36):
But right now, let's just jump into talking about the
real estate market. Now. I think we've turned a corner
here in Charleston on the real estate market. And when
I say turn a corner, here's what I mean. For
the past twenty years since I've been doing this show,
(01:57):
usually the first thing that I do when I start
the show is I tell you the number of active
residential listings that are on the market for sale. Again.
We started to show back in two thousand and three,
and we've been doing it ever since, so about twenty
five years now, twenty two years, I guess. And way
(02:21):
back in the day when I started doing the show,
there were I don't know, something in the vicinity of
five or six thousand active residential listings. Then in two
thousand and seven, two thousand and eight, we had a recession.
It impacted the stock market, it impacted real estate values,
(02:46):
and the market place declined for a little bit. And
when the marketplace declined in sales, the inventory went up
to over ten thousand active residential listings in multiple Listing. Now,
after the pandemic, excuse me, so, after the decline of
(03:06):
the marketplace started coming back in twenty ten and eleven,
the number of active listings started decreasing from that magic
number of ten thousand active listings, and we got down
during the pandemic to less than one thousand active listings
(03:28):
for sale in the Greater Charleston Multiple Listing service. Well,
pandemic ended and the number of active listings started increasing,
and as of about a month ago, we were at
fifty three hundred active residential listings fifty four hundred here
(03:49):
in the Greater Charleston area MLS. As of this morning,
when I'm recording this show, I turned on my computer
and found that there was five thousand and thirteen active
residential listings. Now what does that mean. It means that
(04:09):
the number of active listings has now started to reverse itself.
Where after the pandemic it's kept increasing, increasing, increasing, Now
for the last couple of weeks it's declined. The number
of active listings has declined, which means more people are
buying than putting their homes on the market for sale.
(04:31):
And that's a good thing if you're a seller. It's
a good thing if you're a buyer. We are told
that the balance is about six thousand, that if we
had six thousand active listings, neither the buyer nor the
seller has an advantage. Now, we have about two to
(04:57):
four percent appreciation rate on average right now in the
Greater Charleston area, and there are some areas where it's
over ten percent and other areas where the prices are
actually declining, but overall, on average where two to four
percent appreciation. Now, when you're considering buying property, you need
(05:22):
to look at that because for some of you, you've
been waiting for the interest rates to drop. And I
want to make some comments about that. You've been waiting
for the interest rates to decline before you buy, and
it might be that it's costing you money by waiting
for the rates to decline. Now, if you've been keeping
(05:44):
your ears open and your eyes open, you'll see that.
During the last several weeks, there's some creative proposals that
have been proposed by the Trump administration to make housing
more affordable. Those options is what they call a portable mortgage,
(06:05):
whereby instead of the loan being attached to the property.
The loan is being attached to the person, So if
they want to sell and buy another property, they can
in effect move their existing mortgage with them to the
next property. Kind of a creative idea. And if there's
(06:25):
all these people that have sub four percent mortgages out
there that are not putting their homes on the market
for sale because they don't want to give up that
low mortgage rate, and I can't blame them. I think
i'd hold onto the house too if I had a
sub four percent interest rate. Now that being said, there
(06:46):
are people that have a lot of equity in their properties.
And depending upon the amount of equity you have, even
if you have to go out and get a new
loan at five and a half to six percent, if
your loan balance is not going to be that high,
I go buy yourself a brand new house. And when
I say a new house, meaning another house doesn't have
(07:06):
to be new construction, of course. So the other creative
idea is to have a fifty year mortgage. Now I
was told that when that was proposed to fifty year mortgage,
Dave Ramsey got hospitalized. He almost had a stroke. Now
(07:27):
Dave Ramsey is a proponent of getting out of debt.
In fact, he brags on his program and in his
seminars about hollering when you have your home paid off.
He lets people do a screen on his show, I'm
out of debt, including my mortgage, got it paid off? Well,
(07:49):
you know what, Warren Buffett, who is a net worth
of one hundred and fifty billion dollars, said, one of
the best investments you can ever make right in the
in the marketplace we're in is to have a thirty
year fixed rate mortgage. Now, Warren Buffett is a money
guy who understands investing. God bless Dave Ramsey. He's the
(08:14):
guy who focuses on getting people out of debt. And
there's a distinction, folks, between what is called good bet
debt and bad debt. Good debt is where you have
debt on an appreciating asset. Bad debt is things like
a credit card or a car payment, whereby the asset
itself is to crent, cliining in value or has no
(08:37):
value to improve your net worth. So, in real estate,
one of the secrets of becoming wealthy is to have debt.
You look for debt when you buy real estate. If
you have a lot of cash. You want a mortgage,
even at six percent. You want a mortgage why because
you can own more real estate by having a mortgage
(09:00):
than paying all cash. So a fifty year mortgage, what
does Rick Willis think about that? I love the idea.
Why because the monthly payment would decline substantially. And nobody
keeps a house for fifty years anyway. The average person,
by the way, turns over their loan every seven to
(09:22):
nine years, and people oftentimes resell their properties before that
seven to nine year period, so they're not going to
keep it fifty years and pay all that interest anyway.
So if you have a choice of a thirty year
loan or a fifty year loan, always take the fifty
(09:43):
year loan. You see, there's something called inflation, and the
longer you have your mortgage in an inflationary economy, the
lower the value of the dollar that you're paying it
back with. Said differently, if inflation is four percent and
you're paying it back ten years from now and it's
(10:05):
the same dollar is worth forty percent less in value
ten years from now than it is today. So you're
repaying the loan with dollars that are worthless money now
the secret of real estate is to start your equity snowball.
(10:27):
And I'll come back and talk about the equity snowball
in just a couple minutes. But I did want to
let you know that if you want to contact me
to help you doing any consulting about buying, selling, or investing,
reach out to me Rick Wellis directly eight four three
three two seven three zero one seven, text me, call me,
(10:50):
let's have a consultation, or email me Rickatrickwillis dot com.
I look forward to talking with you individually to see
how I can provide some value add added information to
your decision. Thank you very much, and I'll be back
right after the break. Folks, you want to learn about
(11:13):
real estate for retirement and you want to build your
retirement income around income producing property. Also, if you have
kids that you want to put through college, you don't
want to save money for their college education. You want
to invest in real estate where you can get a
twenty percent plus return on your money safely, instead of
(11:34):
the small amount of money that you'll get by putting
it into a savings account or a five twenty nine plan. Folks,
investing in real estate is a specialty of mine. Helping
people buy and sell real estate is a specialty of mind.
So call me eight four three three two seven three
(11:55):
zero one seven email me our Willis team at gmail
dot com. It would be my pleasure to speak with
you individually. I look forward to talking with you. Welcome back,
Welcome back to the second segment of today's Rick Willis
(12:15):
Real Estate Show. Well, folks, those of you that have
known me for many years, and some of you have
been listening for the full twenty years that I've been
on the radio, those of you that know me may
not be aware that two years ago plus I had
a stroke and the stroke disabled the left side of
(12:37):
my body. So I'm not as mobile as I used
to be, but it didn't affect my brain, I don't believe.
So I'm still able to speak, still able to do consulting,
still able to advise you and help you. Now. Thank god,
my wife is also a licensed realter, so she and
I together can still become a whole person and help
(12:59):
you in the buying or selling of property. So I
want you to make sure you understand that although I'm
physically challenged, I've got some help to work with, and
I've got other real estate agents that are in our
company that also support me and help you if you're
(13:19):
looking to buy or sell property. Now, I mentioned right
before the break, I was going to talk to you
about what is called an equity snowball. Folks, you have
to understand that buying a home is not simply a
place to live. It's also an investment. My wife and
(13:44):
I have owned about six houses between us, and what
we know is we look back when we first started
and every time you sell a home and you buy
another one, you're gaining more equity than you would if
you didn't sell the house or refinance the house. So
(14:05):
you want to make sure you understand that there's a
lot of people out there that are millionaires in their
net worth based on the equity that's in their house,
and you want to get started as early as possible. Now,
the statistics out there right now for the last twelve
months have been at the average person who buys a
(14:26):
home is age forty. In the last twelve months, that's
the first time buyer, and that would be amazing that
it's that old. I bought my first house when I
was in my twenties. My wife did also second marriage,
and most of the people that I know that own
(14:49):
a home today started in their twenties and thirties. Buying
real estate. You want to get started as early as
possible because time works in your favor in the world
world of real estate. You see, the ideal time to
buy real estate was yesterday, And when you look back
(15:10):
a couple of years from now, the ideal time to
have bought real estate would be yesterday. So in lieu
of yesterday, here we are today. It's two thy and
twenty five, and you want to make sure you get
your snowball going now. For those people listening to me
(15:30):
that may be single or have no kids, you don't
want to wait until such time as you save up
enough money for the ideal home in the ideal school
district to raise your family. You want to go buy something.
I meet single people all the time that are renting.
(15:53):
That's just simply say I'm not ready to buy a home. Well,
I would say to you, why aren't you? If you're renting,
you're already making a payment. Why not have a payment
that goes to something that you're building equity in. You see,
when you compare what you're paying in rent to what
your monthly payment would be if you bought a home, well,
(16:15):
it's going to be a higher monthly payment when you
own a home that it's going to be when you rent.
Probably Now. The difference is you can change where you
decide to buy the home. So you might normally want
the three to four hundred thousand dollars single family detached home,
but you look at the monthly payment there and say,
(16:36):
I need to save more money or I need to wait. No,
you don't save money. You don't wait. You go buy
what you can afford right now and let the magic
of time work in your favor. Now. I met a
gentleman in twenty nineteen named Tevs. Tevas is now a
(16:58):
license to real estate a with me. But when I
met Tevas, he was living at home and I said
to Tevs, do you own a house? He said no.
I said would you like to? He said yes. I said, well,
what do you think about the idea of a duplex
where you could buy the property, live in one side
(17:20):
and rent out the other to subsidize your payment. He said,
I like that idea long story short. Twenty nineteen, Tevis
went under contract in Somerville and he bought a duplex,
two units side by side. He moved into one unit
(17:41):
and had a tenant in the other side. Now fast forward,
here we are six years later. Tevas has got probably
two hundred thousand dollars of equity in that property that
he bought in twenty nineteen. Now what's important to know
(18:01):
about the story is this could be you. He's never
going to save two hundred thousand dollars, but he's got
two hundred thousand dollars in equity. And he got married
and his wife didn't want to live in half of
a duplex, so they went and bought a single family
detached residence. And then, of course the unit that Tevis
(18:23):
was living in, he turned around and rented that and
has a several hundred dollars per month positive cash flow. Now, folks,
if you're not going to buy something that's the ideal home,
buy something that you can convert to a rental property,
and instead of looking for a home to live in,
(18:44):
look for a temporary spot that you can call home
for a short period of time, and then you build
up some equity in that property and you can either
resell that property or better yet, keep it as a
long term rental for your retirement. When I talk to
people in their twenties or thirties, it's very easy for
(19:05):
me to show them on paper. You know, you buy
a house today with minimal down payment, you have a
thirty year loan, and if you never make an additional payment,
but you turn around and you rent that property, that
property is going to be worth at least double by
the time your mortgage is paid. So if you're buying
(19:25):
a lower priced townhouse, let's say between two hundred and
fifty and three hundred thousand dollars, or a single family
home and that same price point, it's not what you want,
not ideal, not where you'd choose to spend a lot
of years, but you buy there anyway, and then what
(19:46):
you discover is that by the time you're fifty five,
sixty years old, sixty five years old, it's paid for
if you kept it the whole time, and that becomes
part of your retirement. Folks, you want to build your
retirement around income producing real estate. You do not want
(20:08):
to build your retirement around the paper assets that are
offered by Wall Street and in the stock market. You
see a four to oh one k is a con
job if you compare it to what you can do
with the same money in real estate. You see, there's
no leverage point. When you use a retirement account, you
(20:30):
have money that you're putting into that account with no leverage.
Now what do I mean when I say no leverage?
What I mean is when you buy real estate, it's
possible to buy for zero down payment. About three different ways.
You can buy for zero down VA loan, USDA loan,
(20:52):
and FHA loan and some other kind of subsidized housing
for low income people can also be purchased no cash.
And for those of you that have a few dings
on your credit we're not high credit scores, you might
(21:14):
want to go out and use FAHA financing to get
in for three percent down. And you can even get
a second mortgage attached to your FAHA loan to get
in for a zero down payment. Folks, you want to
get your equity snowball. Going buy something and through a
combination of part of your monthly payment is paying the
(21:36):
principle down combine with the appreciation, your net monthly in
payment is going to be less than what you're paying
in rent. Folks, you have to look at a house
not just as a place to live, but an investment.
Make sure you understand that when you listen to somebody
like myself, make sure you understand that when you go
(21:58):
look at properties, make sure you're looking at something that
is going to be a good investment, not only a
place to live. Folks, I want to remind you that
I do this show one hour every week. When I'm
not doing this show, I'm an active, practicing real estate
broker who, together with my wife Charlene, we help people buy,
(22:21):
we help people sell, we help people invest all over
the greater Charleston area. So if you're thinking of buying,
thinking of selling, or just want a free consultation, please
reach out to me Rick Willis eight four three three
two seven three zero one seven or email me Rickatrickwillis
(22:44):
dot com. Now, folks, there's a lot of you listening
that have heard this show before and you've said to yourself,
you know, I really ought to be contacting this guy,
and you've procrastinated it, you've put it off. Well, it's
time to take action right now. Now, go ahead and
make the call, make the text right now. I'll return
(23:05):
your call at a certain point in time and will
set up a meeting. But don't procrastinate reaching out to me.
Folks will be right back after this break. Folks, you
want to learn about real estate for retirement, and you
want to build your retirement income around income producing property. Also,
(23:26):
if you have kids that you want to put through college,
you don't want to save money for their college education.
You want to invest in real estate where you can
get a twenty percent plus return on your money safely,
instead of the small amount of money that you'll get
by putting it into a savings account or a five
(23:46):
point twenty nine plan. Folks, investing in real estate is
a specialty of mind. Helping people buy and sell real
estate is a specialty of mind. So call me eight
four three three two seven three zero one seven email
me our Willis team at gmail dot com. It would
(24:06):
be my pleasure to speak with you individually. I look
forward to talking with you. Welcome back, Welcome back to Charleston.
Welcome back to the third segment of today's Rick Willis
Real Estate Show. Well, folks, I don't often talk about
(24:28):
individual properties for sale, but I'm going to mention a
few right now because I think they're awful special properties.
One property I want to mention to you is located
in Summerville and has got some acreage with it. Now,
it's always special for the right buyer to have some
extra land other than just a small plot of land.
(24:52):
You can be in Somerville in a very advantageous location.
It's about ten minutes from downtown, in about ten minutes
from the interstate, and you could have one property under
four hundred thousand dollars with one point six acres of
land and another property right next to it with two
(25:17):
point six acres of land. So together these two properties
have over four acres of land. In case you're listening
and you have an extended family or some people that
you would like to invite to join you as a neighbor. Now,
when you have extra land like that, what can you
do with it? Well, one property already has a detached
(25:43):
garage on it. A contractor came out and looked at
that garage and said, for less than fifteen thousand dollars,
he could convert that garage to a dwelling unit, put
a kitchen and a bathroom in it, some insulation in it,
and it would be ready to go as a dwelling.
(26:04):
It could be an extra bedroom, mother in law suite,
or have you heard of airbnb or VRBO short term rental.
You could probably generate over one thousand dollars a month
in additional income from a fifteen thousand dollars investment. And
you can even borrow that money for that fifteen thousand
(26:25):
dollars and wouldn't have to come out of pocket. But
the nice thing about this property is it's got one
point six acres of land and there's no covenants, there's
no restrictions. You can have your RV there, you can
have your boat there, do whatever you want there. And
the zoning allows you to have two separate dwelling units
(26:49):
on the same property and the same thing with the
house next to it that's got over two acres of
land unrestricted in terms of no covenants, no restrictions, have
your boat, have your camper. You see, when you've got
several acres of land, Folks, you can have chickens, you
could raise cattle there, you can have horses. You can
(27:11):
convert your property into making money. And again if you've
seen have you ever checked out Amazon where they're selling
tiny houses, They've got some incredible tiny homes. If you
have some acreage around where you are and they permit
you to have another dwelling unit on the property. It's
(27:31):
a no brainer to me. Go to Amazon, you find
these properties that are out there anywhere from fifteen thousand
to thirty thousand, and you buy a whole kit and
it comes almost it's not pre assembled. But they even
have folding houses nowadays that you can take with you
if you relocate and move. These are not mobile homes
(27:55):
that per se. They're actually houses that sit on a
foundation that can be folded up or moved if you
so choose to do. So, what I'm trying to say
to you is there's a lot of you listening that
are not looking for land, and you can make some
additional money off of the land even if you go
(28:15):
in and just start growing your own crops. So in
this day and age, land is a good thing to have,
and if you have any interest in such a property,
you want to reach out to me. Another property that
you might have an interest in, it's kind of unusual,
is in a place called Utahville, which is outpass Cross
(28:38):
on the other side of Berkeley County up toward Lake Marion,
and this particular property has a structure on it that
is about nine hundred square feet in need of total repair,
but it's only priced at seventy thousand dollars. So how
would you like to have one point three acres and
(28:59):
the house that you could fix up? If you chose
to or hire a contractor to fix up, you could
rent it out or have it as a second home,
or live in it as a permanent home. Again, it's
out a past cross near the lakes in a place
called Utahville. So if you have an interest in such
(29:22):
a fixer upper that you could add value even and
resell and flip it, you reach out to me so
I can tell you more about that. Folks, you want
to buy something if it's not going to be your
ideal home to live in, which is great. If it is,
then you buy something rather than saying I'm going to
(29:42):
wait and save more money. Well, you can't save enough
money to catch up with the appreciation that you're losing
and a tax benefits that you're losing. You see, if
you're a person who files a schedule where you have
your your expenses, you can take off your income tax,
(30:04):
taxes and insurance on a property or tax deductible. So
you always have to look at the after tax effects
of owning real estate and if you own income producing property,
you have another tax savings called depreciation, which is a
paper loss. You see, if you buy yourself a property
(30:26):
and you run it, not only do you have income
coming in from it, but you make money four different
ways when you have an income producing property. One way
you make money is cash flow income from the property
from your tenant. Another way that you make money is
that you have principle pay down. The part of your
(30:47):
mortgage payment is reducing your principle. Another way that you
make money when you have income producing real estate is
through depreciation. Now here's how appreciation works. IRS says, when
you own a property that you don't live in, you
can take the part of the property that is the
(31:09):
sticks and the bricks and divide it by twenty seven
point five years and depreciate that structure and take one
twenty seventh one twenty seven point five percent of that
property's value and write it off on your income tax.
So you can do that for twenty seven point five
(31:33):
years and say, if you're paying less income tax. That's
the same as getting a return on investment, isn't it.
So Again, when you own income producing property, you get
a return on investment by way of cash flow, principle
pay down, tax deduction, and the final way you get
a return on investment is appreciation. Now, if I told
(31:59):
you there was a savings account that you could put
money in where you could get a guaranteed five to
seven percent, how many of you would put a few
bucks into that savings account? Well, I'm guessing I'm talking
to people write this minute that have money in those accounts.
We see in real estate, if you bought that investment property,
(32:23):
you're getting a guaranteed return of five to seven percent
to a combination of the tax deduction and the principle
build up. That's right. I use the word guaranteed. It's
not a risk that the combination of When you look
at the cash that you need to invest to buy
a rental property, you're going to get five to seven
(32:44):
percent return on the cash you invested if the property
never appreciated and if you never got any cash flow
out of the property. But when you start looking at
the return on investment, it's much better to have your
money in an income producing property than a four to
oh one k or an ira. Again, I mentioned that
(33:06):
before the last break, you have no leverage point when
you put money in a four to oh one k
or ira. I am writing a book on the subject
of investing in real estate, and I went and did
a little homework and did a little research. It's amazing
the kind of information you can get with chat, GBT
(33:27):
and the internet. I asked my telephone, which was connected
to the internet, I said, what is the average annual
rate of return that people receive on retirement accounts? And
it came back and said, well, in good years, it's
eight to twelve percent. Eight to twelve percent in good years,
(33:48):
and that doesn't include corrections in the market, and it
doesn't include administrative and management fees that are subtracted from
the return. So when you look at money that's being
subtracted for fees, and when you look at the realistic
expectation that there are always going to be market corrections
(34:09):
in the stock market, what you find is that something
less than ten percent is the annual return that people
are getting on their retirement account. And when I sit
down with people about income producing real estate, I can
easily show them that you're getting twenty to thirty percent
(34:30):
annual return on your investment with the same dollars that
you have in a paper asset that you could be
in a tangible asset that you're getting a tax derection
from equity build up and you're getting appreciation on that
same dollar and hopefully cash flow. Folks, why would you
(34:54):
settle for a paper asset or you can get eight
to twelve percent when you can get a tangible asset,
or you're going to get twenty to thirty percent return
annually on your money. Folks. The only reason you don't
believe this is you haven't sat down with me and
have me take out a calculator and pen and paper
(35:17):
and show you how this works. If you would like
to do that, I want you to reach out to
me so I can meet with you. You see, if
you really, really, really really understand investment property, you'll want
to have your whole retirement income based on owning investment property,
cash flowing positive cash flow income producing real estate. You
(35:42):
don't want your money in the stock market. I met
with some people this past week that had heard my
radio show in past years, and they kept telling themselves,
we really need to meet with this guy, we need
to meet with this guy. Well, finally they picked up
the phone. I don't remember whether they called me or
(36:02):
whether they texted me or emailed me, but they said, Rick,
we've been hearing your show and talking about investing in
real estate long enough. We need to come see you.
Long story short, we set an appointment. We met this
past week, and we've got a game plan for them
moving forward to have a very secure retirement using real
(36:25):
estate instead of the stock market. You see, a question
that I would ask you is the following, what are
you going to do with that pile of money that
you're saving up for in your retirement account? And folks,
we're going to come back after this break and talk
more about that. This is Rick Willis, and I want
you to call me eight four three three two seven
(36:48):
three zero one seven or email me please, and let's meet.
Let's have a conversation Rick Willis eight four three three
two seven three zero one seven or email Rickatrickwillis dot com. Folks,
I look forward to speaking with you, and we'll finish
up right after this break. Folks, you want to learn
(37:11):
about real estate for retirement and you want to build
your retirement income around income producing property. Also, if you
have kids that you want to put through college, you
don't want to save money for their college education. You
want to invest in real estate where you can get
a twenty percent plus return on your money safely, instead
(37:32):
of the small amount of money that you'll get by
putting it into a savings account or a five twenty
nine plan. Folks, investing in real estate is a specialty
of mine. Helping people buy and sell real estate is
a specialty of mine. So call me eight four three
three two seven three zero one seven email me our
(37:56):
Willis team at gmail dot com. It would be my
pleasure to speak with you individually. I look forward to
talking with you. Welcome back, Welcome back to the fourth
and final segment of today's Rick Willis Real Estate Show. Well, folks,
(38:18):
we were talking before the break about retirement. We were
talking about using real estate as the primary source of
your income in retirement, and I'm going to suggest to
you that you would want to have your money in
an asset that you control, not that the greater economy
can control. Said differently, when times are good, you have
(38:43):
tenant income coming in from Reynolds. When times are bad,
the same people still pay their rent. But not true
necessarily with your assets. The average person who's putting money
in a retirement account. When I ask them when you
reach the magic aid that you can take your money
out of the retirement account, what are you going to
(39:03):
do with it? Now? If you listen to the traditional
financial advisor, they talk about having enough money to pay
yourself X dollars per year for this number of years. Well,
I say to you, why do you want to spend
your principal? Why aren't you taking the principle that you
would normally spend down in retirement and before you retire,
(39:27):
Why aren't you putting that same money into some income
producing real estate so that when you do retire, you
have income coming in from that property and you don't
have to then go out and try to buy real estate.
The right time to buy real estate, folks, is before
you retire, not waiting until after you retire. Now that
(39:49):
being said, those of you that have retirement accounts right now,
do you know it's possible for you to invest your
four to ho one k in real estate you own individually.
Doesn't have to be anriit or something with stock market.
You can go out and use it. But what might
be required of you is to change custodians. So wherever
(40:14):
you now have your retirement account, you may have to
change custodians to what is called a self directed retirement account,
where that same account can buy gold, it can buy silver,
it can buy real estate if you wanted to, you
can buy cryptocurrency. At the end of the day, you
(40:34):
do not want to have your money in the stock
market where it's can go up or down or sideways
and you have no control over it. Now, people might
be saying, well, this past year has been a great
year for the stock market, and you're right, it has
been a great year for the stock market. But you
(40:56):
don't look at one year or a short term for
making decisions of where you have your money for retirement.
You need to play the long game, and probably the
best long game that I know of is income producing
real estate. Folks, most of you talk about investing, and
(41:18):
what you're really doing is you're speculating. Now, let me
take you back to this other gentleman that I spoke
about a half hour ago. His name was Warren Buffett.
Warren Buffett is a gentleman in the US who has
a net worth of one hundred and fifty billion dollars
(41:38):
billion with a B. Warren Buffett. When he's asked, what
is the difference between speculating and investing. He answers the following.
He says, speculating is owning an asset that has to
go up in value and then be resold for more
(41:59):
than what you paid for to make a profit. That's
called speculating. And by the way, that's the pure definition
of owning a stock or a mutual fund, buying something
that has to go up in value and then resold
to make a profit. Now, the definition of investing, okay, folks,
(42:24):
we're talking about the difference between speculating and investing, and
Warren Buffett's definition of investing is owning an asset that
does not need to be resold in order to make
a profit. Now, Warren Buffett buys companies, and when he
buys a company, he buys companies that make a profit,
(42:48):
or he puts money into companies to have them make
a profit. So he looks at owning certain stocks as
lifetime ownership. He owns shares of American Express, he owns
shares of Coca Cola, and he owns shares of other companies,
(43:12):
and he bought them at a price that is significantly
less than they're worth now. But he has these profit companies,
and he has dividends that he gets from these companies. Now,
you don't have enough money to retire off the dividends
from these same companies, but he does so. In real estate,
(43:35):
you can buy a property, have a positive cash flow
while you own it, and it never needs to be
resold to make a profit. Folks, the ideal way to
leverage real estate is you buy a property, you allow
it to go up in value, and a combination of
(43:56):
the principal paydown and the increase in value at a
certain point in time in the future, you will refinance
that property. Now that's particularly valid today because we have
rates that are going to be coming down. The Federal
Reserve is going to be meeting again shortly, and the
expectation is there'll be a drop in the interest rates.
(44:20):
The long term picture I believe for interest rates. What
I say long term meaning the next several years, is
we're going to see a declining interst rate market. But
you don't wait for that before you buy, because the
price keeps going up. You buy now. You get your
(44:40):
return on investment from your principal paydown, and you get
your return investment from your tax deduction, and hopefully you
get your positive cash flow from the property, and at
a certain point in time in the future, you put
a brand new mortgage on that property and you pull
(45:02):
money out tax free. Refinanced proceeds are not even reported
on an internal revenue service form? Are you aware of that?
And you use the You use the refinance proceeds to
buy additional income producing real estate, and you keep that
(45:22):
process going, and you keep duplicating that process. So with
you when you have cash, rather than putting a lot
of cash into a property or paying cash, you get
a leverage and a mortgage, and your tenants will pay
your mortgage off eventually. And if your tenants don't pay
(45:43):
it off, you want enough real estate so that at
a certain point in time you can sell half of
your properties use the equity from those properties you sell
to pay off the other half. But you never reach
into your pocket and pay off property that has a
mortgage on it. You let the tenant do it, and
(46:04):
you let the appreciation of the property do it. Now,
when you get to a certain point in time with
your equity, you may choose to resell the property and
pay no taxes on your gain and pay no taxes
on what is called the recapture because you're going to
sell the property using what is called a ten thirty
(46:27):
one exchange, whereby the money that you would normally receive
when you sell it is placed into an ESCRO account
with an intermediary approved by the Internal Revenue Service, and
then you're going to use those funds to leverage and
go out and buy some more appreciating assets. That's how
you build your net worth, that's how you build your
(46:49):
retirement income. Folks, you just need to get the snowball going.
So I told you a story earlier about Tevis who
bought a due play at age nineteen excuse me, in
twenty nineteen, and I mentioned to you that he now
has a couple hundred thousand dollars of equity in that.
(47:10):
You see, if he sold that respective property, he could
go out and buy himself an eight hundred thousand dollars
property at twenty five percent down payment and leverage that
into having a million dollars of real estate, still being
in his early thirties, and the tenants will pay down
that mortgage for him, and he can use that as
(47:33):
his primary retirement income. I told you, folks that I
met with some folks that had listened to my show
for many years. When we spoke this week, they mentioned
that they had a house that was paid for in Goldsboro,
North Carolina. Now they were proud of the fact that
(47:54):
they had no mortgage on that property. Now, when I
heard they had no mortgage on the property, they were
very proud of it, and it depressed me. You see,
you don't want to own property with a lot of
equity in it when you're building your net worth and
building your retirement income. In their particular case, I asked them,
(48:16):
I said, well, what would the house be worth today?
They responded and said probably two hundred and twenty five thousand.
I said, and what is your rental income? Answer? Thirteen
hundred dollars a month. And I said to them, you're
not nearly getting enough income for the assets that you have,
for the equity that you have. You need to be
(48:37):
able to leverage that equity better. Now we talked about
them selling the property on a ten thirty one exchange
and reinvesting the property the money in the Greater Charleston area.
Let me place it very simply for you, two hundred
and twenty five thousand dollars property. Let's assume they did
(49:00):
sell it let's assume they netted two hundred thousand at
twenty five percent down payment. They could take two hundred
thousand and buy eight hundred thousand dollars worth of real estate.
That's what you do when you have a lot of equity,
you leverage it. Again, why would you do that? Well,
(49:21):
right now, they have appreciation working on two hundred and
twenty five thousand. If they sold the property reinvested, it
didn't pay any taxes because they used a ten thirty
one exchange. And if they put twenty percent down and
they bought five single family homes with that two hundred thousand,
(49:44):
they would then have a million dollars worth of real estate,
and at their ages, that real estate would be enough
to retire on if they allowed appreciation and the principle
pay down to work on their be half, folks, it's
mathematical with real estate, and you control it. When you
(50:06):
have your money in the stock market a four to
oh one k, you don't. You're not in control, and
you don't know what the market's going to be doing
in future years. Those of you that are Donald Trump fans, well,
he's only going to have three more years in office.
And if you're buying real estate, you're buying it for
(50:27):
the long term, and if you have a four to
oh one k or ira, you might have several decades
to go before you get to the other end of that.
You want to make sure you have your money in
the most secure place possible, which is income producing real estate.
And it might be that you buy a single family home.
(50:49):
It might be that you buy a townhouse. It might
be that you buy a mobile home park. It might
be that you buy a commercial property. Depending upon your income,
come in, your assets and your cash available. Meet with me, folks,
and I can tell you what we can do with
your assets. You want to make sure you have an
(51:09):
individual consultation with me so I can give you personal guidance.
Your friend in the business is not going to offer
you the same guidance I can give you. And I
promise you that you don't want to go to your
financial advisor and ask them about real estate investing. Why
because they don't know what I know. I'm an expert
(51:30):
at it. I give no advice on paper assets, the
stock market, or annuities. They should not be giving you
advice on real estate. And if you ask them what
kind of real estate they own, it's not their primary residence.
The answer is going to surprise you. They do not
know what they're doing, and I do not know what
(51:51):
I'm doing advising you in paper assets, So don't listen
to me. If I should advise you, folks, reach out
to me. Let's have a private consultation. Rick Willis eight
four three three two seven three zero one seven, call me,
text me my email address Rickatrickwillis dot com. Folks, if
(52:13):
you're a homeowner, occupant buyer, I've done this a thousand times.
I can help you. I can keep you out of trouble.
I can help you get a goodbye. If you're thinking
in terms of investing in real estate, I don't believe
there's anybody in this town that has more experience than
I do through a combination of what properties they've owned,
(52:34):
personally and representing other people in investing. Folks, I look
forward to speaking with you and have a great weekend.
The following is a peed commercial program on ninety four
to three WSC. The views expressed by the host of
this program do not necessarily reflect the views of iHeartMedia
ninety four to three WSC, it's advertisers, sponsors, or management.
This is The Real Estate Show with Rick Willis, a
show about home sales, mortgage issues, investing in everything about
the American dream and that means a lot as someone
(00:22):
who enjoys radio and really enjoys your program and now
The Real Estate Show with Rick Willis on ninety four
to three WSC.
Speaker 2 (00:31):
Welcome, Welcome to the Rick Willis Real Estate Show, folks.
My name is Rick Willis. I am a local real
estate broker here in the Greater Charleston area. I've been
doing the show now for over twenty years, each and
every weekend, and it's a pleasure to have you listening today.
(00:55):
For those of you that have not listened to the
show before, we talk about buying real estate, selling real estate,
investing in real estate. Occasionally we talk about renting real estate. Now,
those of you that are listening, know that before the
(01:16):
show is over, I'll give you several opportunities to get
my contact info. In the event you decide that you
would like to pick my brain further for an initial consultation,
or that you would like to entertain the possibility of
working with me to help you buy or sell real estate.
(01:36):
But right now, let's just jump into talking about the
real estate market. Now. I think we've turned a corner
here in Charleston on the real estate market. And when
I say turn a corner, here's what I mean. For
the past twenty years since I've been doing this show,
(01:57):
usually the first thing that I do when I start
the show is I tell you the number of active
residential listings that are on the market for sale. Again.
We started to show back in two thousand and three,
and we've been doing it ever since, so about twenty
five years now, twenty two years, I guess. And way
(02:21):
back in the day when I started doing the show,
there were I don't know, something in the vicinity of
five or six thousand active residential listings. Then in two
thousand and seven, two thousand and eight, we had a recession.
It impacted the stock market, it impacted real estate values,
(02:46):
and the market place declined for a little bit. And
when the marketplace declined in sales, the inventory went up
to over ten thousand active residential listings in multiple Listing. Now,
after the pandemic, excuse me, so, after the decline of
(03:06):
the marketplace started coming back in twenty ten and eleven,
the number of active listings started decreasing from that magic
number of ten thousand active listings, and we got down
during the pandemic to less than one thousand active listings
(03:28):
for sale in the Greater Charleston Multiple Listing service. Well,
pandemic ended and the number of active listings started increasing,
and as of about a month ago, we were at
fifty three hundred active residential listings fifty four hundred here
(03:49):
in the Greater Charleston area MLS. As of this morning,
when I'm recording this show, I turned on my computer
and found that there was five thousand and thirteen active
residential listings. Now what does that mean. It means that
(04:09):
the number of active listings has now started to reverse itself.
Where after the pandemic it's kept increasing, increasing, increasing, Now
for the last couple of weeks it's declined. The number
of active listings has declined, which means more people are
buying than putting their homes on the market for sale.
(04:31):
And that's a good thing if you're a seller. It's
a good thing if you're a buyer. We are told
that the balance is about six thousand, that if we
had six thousand active listings, neither the buyer nor the
seller has an advantage. Now, we have about two to
(04:57):
four percent appreciation rate on average right now in the
Greater Charleston area, and there are some areas where it's
over ten percent and other areas where the prices are
actually declining, but overall, on average where two to four
percent appreciation. Now, when you're considering buying property, you need
(05:22):
to look at that because for some of you, you've
been waiting for the interest rates to drop. And I
want to make some comments about that. You've been waiting
for the interest rates to decline before you buy, and
it might be that it's costing you money by waiting
for the rates to decline. Now, if you've been keeping
(05:44):
your ears open and your eyes open, you'll see that.
During the last several weeks, there's some creative proposals that
have been proposed by the Trump administration to make housing
more affordable. Those options is what they call a portable mortgage,
(06:05):
whereby instead of the loan being attached to the property.
The loan is being attached to the person, So if
they want to sell and buy another property, they can
in effect move their existing mortgage with them to the
next property. Kind of a creative idea. And if there's
(06:25):
all these people that have sub four percent mortgages out
there that are not putting their homes on the market
for sale because they don't want to give up that
low mortgage rate, and I can't blame them. I think
i'd hold onto the house too if I had a
sub four percent interest rate. Now that being said, there
(06:46):
are people that have a lot of equity in their properties.
And depending upon the amount of equity you have, even
if you have to go out and get a new
loan at five and a half to six percent, if
your loan balance is not going to be that high,
I go buy yourself a brand new house. And when
I say a new house, meaning another house doesn't have
(07:06):
to be new construction, of course. So the other creative
idea is to have a fifty year mortgage. Now I
was told that when that was proposed to fifty year mortgage,
Dave Ramsey got hospitalized. He almost had a stroke. Now
(07:27):
Dave Ramsey is a proponent of getting out of debt.
In fact, he brags on his program and in his
seminars about hollering when you have your home paid off.
He lets people do a screen on his show, I'm
out of debt, including my mortgage, got it paid off? Well,
(07:49):
you know what, Warren Buffett, who is a net worth
of one hundred and fifty billion dollars, said, one of
the best investments you can ever make right in the
in the marketplace we're in is to have a thirty
year fixed rate mortgage. Now, Warren Buffett is a money
guy who understands investing. God bless Dave Ramsey. He's the
(08:14):
guy who focuses on getting people out of debt. And
there's a distinction, folks, between what is called good bet
debt and bad debt. Good debt is where you have
debt on an appreciating asset. Bad debt is things like
a credit card or a car payment, whereby the asset
itself is to crent, cliining in value or has no
(08:37):
value to improve your net worth. So, in real estate,
one of the secrets of becoming wealthy is to have debt.
You look for debt when you buy real estate. If
you have a lot of cash. You want a mortgage,
even at six percent. You want a mortgage why because
you can own more real estate by having a mortgage
(09:00):
than paying all cash. So a fifty year mortgage, what
does Rick Willis think about that? I love the idea.
Why because the monthly payment would decline substantially. And nobody
keeps a house for fifty years anyway. The average person,
by the way, turns over their loan every seven to
(09:22):
nine years, and people oftentimes resell their properties before that
seven to nine year period, so they're not going to
keep it fifty years and pay all that interest anyway.
So if you have a choice of a thirty year
loan or a fifty year loan, always take the fifty
(09:43):
year loan. You see, there's something called inflation, and the
longer you have your mortgage in an inflationary economy, the
lower the value of the dollar that you're paying it
back with. Said differently, if inflation is four percent and
you're paying it back ten years from now and it's
(10:05):
the same dollar is worth forty percent less in value
ten years from now than it is today. So you're
repaying the loan with dollars that are worthless money now
the secret of real estate is to start your equity snowball.
(10:27):
And I'll come back and talk about the equity snowball
in just a couple minutes. But I did want to
let you know that if you want to contact me
to help you doing any consulting about buying, selling, or investing,
reach out to me Rick Wellis directly eight four three
three two seven three zero one seven, text me, call me,
(10:50):
let's have a consultation, or email me Rickatrickwillis dot com.
I look forward to talking with you individually to see
how I can provide some value add added information to
your decision. Thank you very much, and I'll be back
right after the break. Folks, you want to learn about
(11:13):
real estate for retirement and you want to build your
retirement income around income producing property. Also, if you have
kids that you want to put through college, you don't
want to save money for their college education. You want
to invest in real estate where you can get a
twenty percent plus return on your money safely, instead of
(11:34):
the small amount of money that you'll get by putting
it into a savings account or a five twenty nine plan. Folks,
investing in real estate is a specialty of mine. Helping
people buy and sell real estate is a specialty of mind.
So call me eight four three three two seven three
(11:55):
zero one seven email me our Willis team at gmail
dot com. It would be my pleasure to speak with
you individually. I look forward to talking with you. Welcome back,
Welcome back to the second segment of today's Rick Willis
(12:15):
Real Estate Show. Well, folks, those of you that have
known me for many years, and some of you have
been listening for the full twenty years that I've been
on the radio, those of you that know me may
not be aware that two years ago plus I had
a stroke and the stroke disabled the left side of
(12:37):
my body. So I'm not as mobile as I used
to be, but it didn't affect my brain, I don't believe.
So I'm still able to speak, still able to do consulting,
still able to advise you and help you. Now. Thank god,
my wife is also a licensed realter, so she and
I together can still become a whole person and help
(12:59):
you in the buying or selling of property. So I
want you to make sure you understand that although I'm
physically challenged, I've got some help to work with, and
I've got other real estate agents that are in our
company that also support me and help you if you're
(13:19):
looking to buy or sell property. Now, I mentioned right
before the break, I was going to talk to you
about what is called an equity snowball. Folks, you have
to understand that buying a home is not simply a
place to live. It's also an investment. My wife and
(13:44):
I have owned about six houses between us, and what
we know is we look back when we first started
and every time you sell a home and you buy
another one, you're gaining more equity than you would if
you didn't sell the house or refinance the house. So
(14:05):
you want to make sure you understand that there's a
lot of people out there that are millionaires in their
net worth based on the equity that's in their house,
and you want to get started as early as possible. Now,
the statistics out there right now for the last twelve
months have been at the average person who buys a
(14:26):
home is age forty. In the last twelve months, that's
the first time buyer, and that would be amazing that
it's that old. I bought my first house when I
was in my twenties. My wife did also second marriage,
and most of the people that I know that own
(14:49):
a home today started in their twenties and thirties. Buying
real estate. You want to get started as early as
possible because time works in your favor in the world
world of real estate. You see, the ideal time to
buy real estate was yesterday, And when you look back
(15:10):
a couple of years from now, the ideal time to
have bought real estate would be yesterday. So in lieu
of yesterday, here we are today. It's two thy and
twenty five, and you want to make sure you get
your snowball going now. For those people listening to me
(15:30):
that may be single or have no kids, you don't
want to wait until such time as you save up
enough money for the ideal home in the ideal school
district to raise your family. You want to go buy something.
I meet single people all the time that are renting.
(15:53):
That's just simply say I'm not ready to buy a home. Well,
I would say to you, why aren't you? If you're renting,
you're already making a payment. Why not have a payment
that goes to something that you're building equity in. You see,
when you compare what you're paying in rent to what
your monthly payment would be if you bought a home, well,
(16:15):
it's going to be a higher monthly payment when you
own a home that it's going to be when you rent.
Probably Now. The difference is you can change where you
decide to buy the home. So you might normally want
the three to four hundred thousand dollars single family detached home,
but you look at the monthly payment there and say,
(16:36):
I need to save more money or I need to wait. No,
you don't save money. You don't wait. You go buy
what you can afford right now and let the magic
of time work in your favor. Now. I met a
gentleman in twenty nineteen named Tevs. Tevas is now a
(16:58):
license to real estate a with me. But when I
met Tevas, he was living at home and I said
to Tevs, do you own a house? He said no.
I said would you like to? He said yes. I said, well,
what do you think about the idea of a duplex
where you could buy the property, live in one side
(17:20):
and rent out the other to subsidize your payment. He said,
I like that idea long story short. Twenty nineteen, Tevis
went under contract in Somerville and he bought a duplex,
two units side by side. He moved into one unit
(17:41):
and had a tenant in the other side. Now fast forward,
here we are six years later. Tevas has got probably
two hundred thousand dollars of equity in that property that
he bought in twenty nineteen. Now what's important to know
(18:01):
about the story is this could be you. He's never
going to save two hundred thousand dollars, but he's got
two hundred thousand dollars in equity. And he got married
and his wife didn't want to live in half of
a duplex, so they went and bought a single family
detached residence. And then, of course the unit that Tevis
(18:23):
was living in, he turned around and rented that and
has a several hundred dollars per month positive cash flow. Now, folks,
if you're not going to buy something that's the ideal home,
buy something that you can convert to a rental property,
and instead of looking for a home to live in,
(18:44):
look for a temporary spot that you can call home
for a short period of time, and then you build
up some equity in that property and you can either
resell that property or better yet, keep it as a
long term rental for your retirement. When I talk to
people in their twenties or thirties, it's very easy for
(19:05):
me to show them on paper. You know, you buy
a house today with minimal down payment, you have a
thirty year loan, and if you never make an additional payment,
but you turn around and you rent that property, that
property is going to be worth at least double by
the time your mortgage is paid. So if you're buying
(19:25):
a lower priced townhouse, let's say between two hundred and
fifty and three hundred thousand dollars, or a single family
home and that same price point, it's not what you want,
not ideal, not where you'd choose to spend a lot
of years, but you buy there anyway, and then what
(19:46):
you discover is that by the time you're fifty five,
sixty years old, sixty five years old, it's paid for
if you kept it the whole time, and that becomes
part of your retirement. Folks, you want to build your
retirement around income producing real estate. You do not want
(20:08):
to build your retirement around the paper assets that are
offered by Wall Street and in the stock market. You
see a four to oh one k is a con
job if you compare it to what you can do
with the same money in real estate. You see, there's
no leverage point. When you use a retirement account, you
(20:30):
have money that you're putting into that account with no leverage.
Now what do I mean when I say no leverage?
What I mean is when you buy real estate, it's
possible to buy for zero down payment. About three different ways.
You can buy for zero down VA loan, USDA loan,
(20:52):
and FHA loan and some other kind of subsidized housing
for low income people can also be purchased no cash.
And for those of you that have a few dings
on your credit we're not high credit scores, you might
(21:14):
want to go out and use FAHA financing to get
in for three percent down. And you can even get
a second mortgage attached to your FAHA loan to get
in for a zero down payment. Folks, you want to
get your equity snowball. Going buy something and through a
combination of part of your monthly payment is paying the
(21:36):
principle down combine with the appreciation, your net monthly in
payment is going to be less than what you're paying
in rent. Folks, you have to look at a house
not just as a place to live, but an investment.
Make sure you understand that when you listen to somebody
like myself, make sure you understand that when you go
(21:58):
look at properties, make sure you're looking at something that
is going to be a good investment, not only a
place to live. Folks, I want to remind you that
I do this show one hour every week. When I'm
not doing this show, I'm an active, practicing real estate
broker who, together with my wife Charlene, we help people buy,
(22:21):
we help people sell, we help people invest all over
the greater Charleston area. So if you're thinking of buying,
thinking of selling, or just want a free consultation, please
reach out to me Rick Willis eight four three three
two seven three zero one seven or email me Rickatrickwillis
(22:44):
dot com. Now, folks, there's a lot of you listening
that have heard this show before and you've said to yourself,
you know, I really ought to be contacting this guy,
and you've procrastinated it, you've put it off. Well, it's
time to take action right now. Now, go ahead and
make the call, make the text right now. I'll return
(23:05):
your call at a certain point in time and will
set up a meeting. But don't procrastinate reaching out to me.
Folks will be right back after this break. Folks, you
want to learn about real estate for retirement, and you
want to build your retirement income around income producing property. Also,
(23:26):
if you have kids that you want to put through college,
you don't want to save money for their college education.
You want to invest in real estate where you can
get a twenty percent plus return on your money safely,
instead of the small amount of money that you'll get
by putting it into a savings account or a five
(23:46):
point twenty nine plan. Folks, investing in real estate is
a specialty of mind. Helping people buy and sell real
estate is a specialty of mind. So call me eight
four three three two seven three zero one seven email
me our Willis team at gmail dot com. It would
(24:06):
be my pleasure to speak with you individually. I look
forward to talking with you. Welcome back, Welcome back to Charleston.
Welcome back to the third segment of today's Rick Willis
Real Estate Show. Well, folks, I don't often talk about
(24:28):
individual properties for sale, but I'm going to mention a
few right now because I think they're awful special properties.
One property I want to mention to you is located
in Summerville and has got some acreage with it. Now,
it's always special for the right buyer to have some
extra land other than just a small plot of land.
(24:52):
You can be in Somerville in a very advantageous location.
It's about ten minutes from downtown, in about ten minutes
from the interstate, and you could have one property under
four hundred thousand dollars with one point six acres of
land and another property right next to it with two
(25:17):
point six acres of land. So together these two properties
have over four acres of land. In case you're listening
and you have an extended family or some people that
you would like to invite to join you as a neighbor. Now,
when you have extra land like that, what can you
do with it? Well, one property already has a detached
(25:43):
garage on it. A contractor came out and looked at
that garage and said, for less than fifteen thousand dollars,
he could convert that garage to a dwelling unit, put
a kitchen and a bathroom in it, some insulation in it,
and it would be ready to go as a dwelling.
(26:04):
It could be an extra bedroom, mother in law suite,
or have you heard of airbnb or VRBO short term rental.
You could probably generate over one thousand dollars a month
in additional income from a fifteen thousand dollars investment. And
you can even borrow that money for that fifteen thousand
(26:25):
dollars and wouldn't have to come out of pocket. But
the nice thing about this property is it's got one
point six acres of land and there's no covenants, there's
no restrictions. You can have your RV there, you can
have your boat there, do whatever you want there. And
the zoning allows you to have two separate dwelling units
(26:49):
on the same property and the same thing with the
house next to it that's got over two acres of
land unrestricted in terms of no covenants, no restrictions, have
your boat, have your camper. You see, when you've got
several acres of land, Folks, you can have chickens, you
could raise cattle there, you can have horses. You can
(27:11):
convert your property into making money. And again if you've
seen have you ever checked out Amazon where they're selling
tiny houses, They've got some incredible tiny homes. If you
have some acreage around where you are and they permit
you to have another dwelling unit on the property. It's
(27:31):
a no brainer to me. Go to Amazon, you find
these properties that are out there anywhere from fifteen thousand
to thirty thousand, and you buy a whole kit and
it comes almost it's not pre assembled. But they even
have folding houses nowadays that you can take with you
if you relocate and move. These are not mobile homes
(27:55):
that per se. They're actually houses that sit on a
foundation that can be folded up or moved if you
so choose to do. So, what I'm trying to say
to you is there's a lot of you listening that
are not looking for land, and you can make some
additional money off of the land even if you go
(28:15):
in and just start growing your own crops. So in
this day and age, land is a good thing to have,
and if you have any interest in such a property,
you want to reach out to me. Another property that
you might have an interest in, it's kind of unusual,
is in a place called Utahville, which is outpass Cross
(28:38):
on the other side of Berkeley County up toward Lake Marion,
and this particular property has a structure on it that
is about nine hundred square feet in need of total repair,
but it's only priced at seventy thousand dollars. So how
would you like to have one point three acres and
(28:59):
the house that you could fix up? If you chose
to or hire a contractor to fix up, you could
rent it out or have it as a second home,
or live in it as a permanent home. Again, it's
out a past cross near the lakes in a place
called Utahville. So if you have an interest in such
(29:22):
a fixer upper that you could add value even and
resell and flip it, you reach out to me so
I can tell you more about that. Folks, you want
to buy something if it's not going to be your
ideal home to live in, which is great. If it is,
then you buy something rather than saying I'm going to
(29:42):
wait and save more money. Well, you can't save enough
money to catch up with the appreciation that you're losing
and a tax benefits that you're losing. You see, if
you're a person who files a schedule where you have
your your expenses, you can take off your income tax,
(30:04):
taxes and insurance on a property or tax deductible. So
you always have to look at the after tax effects
of owning real estate and if you own income producing property,
you have another tax savings called depreciation, which is a
paper loss. You see, if you buy yourself a property
(30:26):
and you run it, not only do you have income
coming in from it, but you make money four different
ways when you have an income producing property. One way
you make money is cash flow income from the property
from your tenant. Another way that you make money is
that you have principle pay down. The part of your
(30:47):
mortgage payment is reducing your principle. Another way that you
make money when you have income producing real estate is
through depreciation. Now here's how appreciation works. IRS says, when
you own a property that you don't live in, you
can take the part of the property that is the
(31:09):
sticks and the bricks and divide it by twenty seven
point five years and depreciate that structure and take one
twenty seventh one twenty seven point five percent of that
property's value and write it off on your income tax.
So you can do that for twenty seven point five
(31:33):
years and say, if you're paying less income tax. That's
the same as getting a return on investment, isn't it.
So Again, when you own income producing property, you get
a return on investment by way of cash flow, principle
pay down, tax deduction, and the final way you get
a return on investment is appreciation. Now, if I told
(31:59):
you there was a savings account that you could put
money in where you could get a guaranteed five to
seven percent, how many of you would put a few
bucks into that savings account? Well, I'm guessing I'm talking
to people write this minute that have money in those accounts.
We see in real estate, if you bought that investment property,
(32:23):
you're getting a guaranteed return of five to seven percent
to a combination of the tax deduction and the principle
build up. That's right. I use the word guaranteed. It's
not a risk that the combination of When you look
at the cash that you need to invest to buy
a rental property, you're going to get five to seven
(32:44):
percent return on the cash you invested if the property
never appreciated and if you never got any cash flow
out of the property. But when you start looking at
the return on investment, it's much better to have your
money in an income producing property than a four to
oh one k or an ira. Again, I mentioned that
(33:06):
before the last break, you have no leverage point when
you put money in a four to oh one k
or ira. I am writing a book on the subject
of investing in real estate, and I went and did
a little homework and did a little research. It's amazing
the kind of information you can get with chat, GBT
(33:27):
and the internet. I asked my telephone, which was connected
to the internet, I said, what is the average annual
rate of return that people receive on retirement accounts? And
it came back and said, well, in good years, it's
eight to twelve percent. Eight to twelve percent in good years,
(33:48):
and that doesn't include corrections in the market, and it
doesn't include administrative and management fees that are subtracted from
the return. So when you look at money that's being
subtracted for fees, and when you look at the realistic
expectation that there are always going to be market corrections
(34:09):
in the stock market, what you find is that something
less than ten percent is the annual return that people
are getting on their retirement account. And when I sit
down with people about income producing real estate, I can
easily show them that you're getting twenty to thirty percent
(34:30):
annual return on your investment with the same dollars that
you have in a paper asset that you could be
in a tangible asset that you're getting a tax derection
from equity build up and you're getting appreciation on that
same dollar and hopefully cash flow. Folks, why would you
(34:54):
settle for a paper asset or you can get eight
to twelve percent when you can get a tangible asset,
or you're going to get twenty to thirty percent return
annually on your money. Folks. The only reason you don't
believe this is you haven't sat down with me and
have me take out a calculator and pen and paper
(35:17):
and show you how this works. If you would like
to do that, I want you to reach out to
me so I can meet with you. You see, if
you really, really, really really understand investment property, you'll want
to have your whole retirement income based on owning investment property,
cash flowing positive cash flow income producing real estate. You
(35:42):
don't want your money in the stock market. I met
with some people this past week that had heard my
radio show in past years, and they kept telling themselves,
we really need to meet with this guy, we need
to meet with this guy. Well, finally they picked up
the phone. I don't remember whether they called me or
(36:02):
whether they texted me or emailed me, but they said, Rick,
we've been hearing your show and talking about investing in
real estate long enough. We need to come see you.
Long story short, we set an appointment. We met this
past week, and we've got a game plan for them
moving forward to have a very secure retirement using real
(36:25):
estate instead of the stock market. You see, a question
that I would ask you is the following, what are
you going to do with that pile of money that
you're saving up for in your retirement account? And folks,
we're going to come back after this break and talk
more about that. This is Rick Willis, and I want
you to call me eight four three three two seven
(36:48):
three zero one seven or email me please, and let's meet.
Let's have a conversation Rick Willis eight four three three
two seven three zero one seven or email Rickatrickwillis dot com. Folks,
I look forward to speaking with you, and we'll finish
up right after this break. Folks, you want to learn
(37:11):
about real estate for retirement and you want to build
your retirement income around income producing property. Also, if you
have kids that you want to put through college, you
don't want to save money for their college education. You
want to invest in real estate where you can get
a twenty percent plus return on your money safely, instead
(37:32):
of the small amount of money that you'll get by
putting it into a savings account or a five twenty
nine plan. Folks, investing in real estate is a specialty
of mine. Helping people buy and sell real estate is
a specialty of mine. So call me eight four three
three two seven three zero one seven email me our
(37:56):
Willis team at gmail dot com. It would be my
pleasure to speak with you individually. I look forward to
talking with you. Welcome back, Welcome back to the fourth
and final segment of today's Rick Willis Real Estate Show. Well, folks,
(38:18):
we were talking before the break about retirement. We were
talking about using real estate as the primary source of
your income in retirement, and I'm going to suggest to
you that you would want to have your money in
an asset that you control, not that the greater economy
can control. Said differently, when times are good, you have
(38:43):
tenant income coming in from Reynolds. When times are bad,
the same people still pay their rent. But not true
necessarily with your assets. The average person who's putting money
in a retirement account. When I ask them when you
reach the magic aid that you can take your money
out of the retirement account, what are you going to
(39:03):
do with it? Now? If you listen to the traditional
financial advisor, they talk about having enough money to pay
yourself X dollars per year for this number of years. Well,
I say to you, why do you want to spend
your principal? Why aren't you taking the principle that you
would normally spend down in retirement and before you retire,
(39:27):
Why aren't you putting that same money into some income
producing real estate so that when you do retire, you
have income coming in from that property and you don't
have to then go out and try to buy real estate.
The right time to buy real estate, folks, is before
you retire, not waiting until after you retire. Now that
(39:49):
being said, those of you that have retirement accounts right now,
do you know it's possible for you to invest your
four to ho one k in real estate you own individually.
Doesn't have to be anriit or something with stock market.
You can go out and use it. But what might
be required of you is to change custodians. So wherever
(40:14):
you now have your retirement account, you may have to
change custodians to what is called a self directed retirement account,
where that same account can buy gold, it can buy silver,
it can buy real estate if you wanted to, you
can buy cryptocurrency. At the end of the day, you
(40:34):
do not want to have your money in the stock
market where it's can go up or down or sideways
and you have no control over it. Now, people might
be saying, well, this past year has been a great
year for the stock market, and you're right, it has
been a great year for the stock market. But you
(40:56):
don't look at one year or a short term for
making decisions of where you have your money for retirement.
You need to play the long game, and probably the
best long game that I know of is income producing
real estate. Folks, most of you talk about investing, and
(41:18):
what you're really doing is you're speculating. Now, let me
take you back to this other gentleman that I spoke
about a half hour ago. His name was Warren Buffett.
Warren Buffett is a gentleman in the US who has
a net worth of one hundred and fifty billion dollars
(41:38):
billion with a B. Warren Buffett. When he's asked, what
is the difference between speculating and investing. He answers the following.
He says, speculating is owning an asset that has to
go up in value and then be resold for more
(41:59):
than what you paid for to make a profit. That's
called speculating. And by the way, that's the pure definition
of owning a stock or a mutual fund, buying something
that has to go up in value and then resold
to make a profit. Now, the definition of investing, okay, folks,
(42:24):
we're talking about the difference between speculating and investing, and
Warren Buffett's definition of investing is owning an asset that
does not need to be resold in order to make
a profit. Now, Warren Buffett buys companies, and when he
buys a company, he buys companies that make a profit,
(42:48):
or he puts money into companies to have them make
a profit. So he looks at owning certain stocks as
lifetime ownership. He owns shares of American Express, he owns
shares of Coca Cola, and he owns shares of other companies,
(43:12):
and he bought them at a price that is significantly
less than they're worth now. But he has these profit companies,
and he has dividends that he gets from these companies. Now,
you don't have enough money to retire off the dividends
from these same companies, but he does so. In real estate,
(43:35):
you can buy a property, have a positive cash flow
while you own it, and it never needs to be
resold to make a profit. Folks, the ideal way to
leverage real estate is you buy a property, you allow
it to go up in value, and a combination of
(43:56):
the principal paydown and the increase in value at a
certain point in time in the future, you will refinance
that property. Now that's particularly valid today because we have
rates that are going to be coming down. The Federal
Reserve is going to be meeting again shortly, and the
expectation is there'll be a drop in the interest rates.
(44:20):
The long term picture I believe for interest rates. What
I say long term meaning the next several years, is
we're going to see a declining interst rate market. But
you don't wait for that before you buy, because the
price keeps going up. You buy now. You get your
(44:40):
return on investment from your principal paydown, and you get
your return investment from your tax deduction, and hopefully you
get your positive cash flow from the property, and at
a certain point in time in the future, you put
a brand new mortgage on that property and you pull
(45:02):
money out tax free. Refinanced proceeds are not even reported
on an internal revenue service form? Are you aware of that?
And you use the You use the refinance proceeds to
buy additional income producing real estate, and you keep that
(45:22):
process going, and you keep duplicating that process. So with
you when you have cash, rather than putting a lot
of cash into a property or paying cash, you get
a leverage and a mortgage, and your tenants will pay
your mortgage off eventually. And if your tenants don't pay
(45:43):
it off, you want enough real estate so that at
a certain point in time you can sell half of
your properties use the equity from those properties you sell
to pay off the other half. But you never reach
into your pocket and pay off property that has a
mortgage on it. You let the tenant do it, and
(46:04):
you let the appreciation of the property do it. Now,
when you get to a certain point in time with
your equity, you may choose to resell the property and
pay no taxes on your gain and pay no taxes
on what is called the recapture because you're going to
sell the property using what is called a ten thirty
(46:27):
one exchange, whereby the money that you would normally receive
when you sell it is placed into an ESCRO account
with an intermediary approved by the Internal Revenue Service, and
then you're going to use those funds to leverage and
go out and buy some more appreciating assets. That's how
you build your net worth, that's how you build your
(46:49):
retirement income. Folks, you just need to get the snowball going.
So I told you a story earlier about Tevis who
bought a due play at age nineteen excuse me, in
twenty nineteen, and I mentioned to you that he now
has a couple hundred thousand dollars of equity in that.
(47:10):
You see, if he sold that respective property, he could
go out and buy himself an eight hundred thousand dollars
property at twenty five percent down payment and leverage that
into having a million dollars of real estate, still being
in his early thirties, and the tenants will pay down
that mortgage for him, and he can use that as
(47:33):
his primary retirement income. I told you, folks that I
met with some folks that had listened to my show
for many years. When we spoke this week, they mentioned
that they had a house that was paid for in Goldsboro,
North Carolina. Now they were proud of the fact that
(47:54):
they had no mortgage on that property. Now, when I
heard they had no mortgage on the property, they were
very proud of it, and it depressed me. You see,
you don't want to own property with a lot of
equity in it when you're building your net worth and
building your retirement income. In their particular case, I asked them,
(48:16):
I said, well, what would the house be worth today?
They responded and said probably two hundred and twenty five thousand.
I said, and what is your rental income? Answer? Thirteen
hundred dollars a month. And I said to them, you're
not nearly getting enough income for the assets that you have,
for the equity that you have. You need to be
(48:37):
able to leverage that equity better. Now we talked about
them selling the property on a ten thirty one exchange
and reinvesting the property the money in the Greater Charleston area.
Let me place it very simply for you, two hundred
and twenty five thousand dollars property. Let's assume they did
(49:00):
sell it let's assume they netted two hundred thousand at
twenty five percent down payment. They could take two hundred
thousand and buy eight hundred thousand dollars worth of real estate.
That's what you do when you have a lot of equity,
you leverage it. Again, why would you do that? Well,
(49:21):
right now, they have appreciation working on two hundred and
twenty five thousand. If they sold the property reinvested, it
didn't pay any taxes because they used a ten thirty
one exchange. And if they put twenty percent down and
they bought five single family homes with that two hundred thousand,
(49:44):
they would then have a million dollars worth of real estate,
and at their ages, that real estate would be enough
to retire on if they allowed appreciation and the principle
pay down to work on their be half, folks, it's
mathematical with real estate, and you control it. When you
(50:06):
have your money in the stock market a four to
oh one k, you don't. You're not in control, and
you don't know what the market's going to be doing
in future years. Those of you that are Donald Trump fans, well,
he's only going to have three more years in office.
And if you're buying real estate, you're buying it for
(50:27):
the long term, and if you have a four to
oh one k or ira, you might have several decades
to go before you get to the other end of that.
You want to make sure you have your money in
the most secure place possible, which is income producing real estate.
And it might be that you buy a single family home.
(50:49):
It might be that you buy a townhouse. It might
be that you buy a mobile home park. It might
be that you buy a commercial property. Depending upon your income,
come in, your assets and your cash available. Meet with me, folks,
and I can tell you what we can do with
your assets. You want to make sure you have an
(51:09):
individual consultation with me so I can give you personal guidance.
Your friend in the business is not going to offer
you the same guidance I can give you. And I
promise you that you don't want to go to your
financial advisor and ask them about real estate investing. Why
because they don't know what I know. I'm an expert
(51:30):
at it. I give no advice on paper assets, the
stock market, or annuities. They should not be giving you
advice on real estate. And if you ask them what
kind of real estate they own, it's not their primary residence.
The answer is going to surprise you. They do not
know what they're doing, and I do not know what
(51:51):
I'm doing advising you in paper assets, So don't listen
to me. If I should advise you, folks, reach out
to me. Let's have a private consultation. Rick Willis eight
four three three two seven three zero one seven, call me,
text me my email address Rickatrickwillis dot com. Folks, if
(52:13):
you're a homeowner, occupant buyer, I've done this a thousand times.
I can help you. I can keep you out of trouble.
I can help you get a goodbye. If you're thinking
in terms of investing in real estate, I don't believe
there's anybody in this town that has more experience than
I do through a combination of what properties they've owned,
(52:34):
personally and representing other people in investing. Folks, I look
forward to speaking with you and have a great weekend.
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