1767 FBF: Predicting Market Trends, Financing through Debt, Reserve Ratios & Leverage
Today's Flash Back Friday is from episode 622, originally released last January 18, 2016.
This episode can be summed up by the popular saying \u201cEveryone is a genius in a bull market\u201d. Many financial hosts warn against taking on debt to build wealth. Jason clearly illustrates why we should be using fixed rate mortgage as a financing vehicle and outsourcing debt to tenants while enjoying the tax advantages.
Naresh is not a real estate investor, yet. He has come up with some basic, but necessary questions for Jason which will help him and all of you budding, soon to be real estate income property investors out there. Jason reminds us \u201creal estate is the most historically proven asset class\u201d and carefully lays out his answers in easy to understand, common sense terms.
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Key Takeaways:
Jason\u2019s editorial:
[3:05] Predicting market cycles would be easier if governments and central banks didn\u2019t interfere
[9:15] The business cycle is an economic concept which affects real estate
[10:54] The Reluctant Investor\u2019s Lament poem by Donald Weill
[18:26] Everybody\u2019s a genius in a bull market
[20:35] Our Investment Counselors are geographically independent, market-wide gatekeepers
[24:00] Our organization has relationships with local market specialists which give clients leverage
[27:35] New clients need at least 24% cash down when purchasing a property
[30:07] The rise of the \u201cdebt bigots\u201d
[33:38] Debt is a powerful thing, you must be wise with it
[35:15] Always use debt as leverage when purchasing real estate income properties
[38:49] A fixed rate mortgage guarantees your rate for 30 years plus tenants pay off your debt
[39:13] Podcast feeds are divided and education is free
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Mentions:
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