In this week’s episode of The Law Practice Doctor, Sam Gaylord interviews Jason Hartman, who is the founder and CEO of Platinum Properties Investment Network, The Hartman Media Company, and the Jason Hartman Foundation. During this episode, Sam and Jason talk passive income, the three types of real estate markets, the rent to value ratio, and what it means to be a direct investor.
Main Questions Asked:
- What is a direct investor?
- What are some ways people can look to be a direct investor?
- What should first time investors be thinking?
Key Lessons Learned:
Why Real Estate?
- We are in an environment where you can’t make anything on saving money due to taxes and inflation.
- Jason doesn’t advise on investing in Wall Street. People should be a direct investor and control what you put your money in.
- Income property is a multidimensional asset class. You make money from the appreciation, income, leverage, and tax benefits.
- Real estate is the most historically proven asset class in the world.
- Real estate is the most tax-favored asset in America.
- The closest thing to passive income is as follows:
1) Buying and owning income properties.
2) Lending and owning the notes, mortgages, or land contracts on the properties.
Three Types of Markets
- Prices chug along quietly.
- These are seen as boring but make sense for investing.
- Example markets include Memphis, Atlanta, Little Rock, Kansas City, Indianapolis Chicago Suburbs, and Columbus.
- More expensive areas.
- These markets have highs and lows.
- Example markets include the North East, South Florida, and California.
- This is a blend of the two markets.
- The cash flow doesn't work as well in the linear and cyclical markets because the properties get too expensive and the rents don’t match the markets.
- Example markets include Phoenix, Las Vegas, and Atlanta.
The Rent to Value Ratio
- The aim is to get 1% of the value of the property per month.
- If the property is worth $100K, then the monthly rent should be $1K per month in rent.
- The cyclical markets are too expensive, so a $500K property will rent for $2.5K per month, which is 0.5%.
- If you have relinquished control of your money, make the call and regain control.
- The property must make sense the day you buy it. If it doesn’t, then don’t buy it.
- When it comes to property, nothing spectacular should have to happen in order to make a nice return on your investment.
The Best Deals
- Single-family homes.
- Apartment buildings.
- Owning the paper – Making hard money loans on properties or buying notes or land contracts and owning the paper. These are easier and simpler but have lower returns.
- Your own business.
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Links to Resources Mentioned
Platinum Properties Investment Network
Creating Wealth Show
The Longevity and Biohacking Show
The Hartman Media Company
Jason Hartman Foundation