"DO THIS TO BUY REAL ESTATE WITH NO MONEY DOWN" | Robert Kiyosaki ft.Ken McElroy

said real estate is wealth those that control the real estate control the world and you will find that today so i do not you know most people invest in the stock market i don't invest in the stock market i also don't pay taxes and i don't use my own money why real estate so i'm not saying you should invest in real estate but if you understand the word real estate from espanol real estate is real royal estate royal estate that's why the rich invest in real estate okay royal even today even in cyberspace it's called intellectual property real estate all right so it's very very different so i signed up signed my name sat down the course three days later at the end of the course he was a great instructor because he was a real real estate investor he didn't need the money and that's when you know the guy is real because he was you could tell he didn't need the money he liked teaching he liked inspiring people it's just like my rich dad says you don't need the money so then the next thing he said at the end of the program he says when you leave this program it's three days friday saturday sunday he says your education begins now what you do at the end as kenny says you get through the process of the three days and you start again that's the process so he says at the end when you end monday morning your job is to look at a hundred properties a hundred properties in 90 days take everything i've taught you and look at 100 properties that was the start so naturally 30 guys and 30 guys 35 guys in the class y'all say okay yeah well i'll do it we all break into little teams and as you know by tuesday they'll quit because they're too busy you know they got to the school they didn't start here again but there's three or four other guys and i we stayed through it and we went to went to real estate agents went through the little files it was really antiquated ways of mls multiple listing services we're looking for little dinky deals small deals because that's all we could afford we didn't have any money so i kept looking you know good knocking on doors at real estate agents and you know realtors they're not the best investors are they no no they're only focused on commissions normally and i go knock on the door to the first thing they say to me you can't do that here this is hawaii you can do that in mainland in california nebraska but you can't deal with here in hawaii i was desperate this guy says well i got what you're looking for on the island of maui now most people think maui is too expensive how can that be how can maui be affordable but that's your block so i flew over to maui i found this little one bedroom wipe one bath a condo right in uh kanapali the richest place on earth a little one bedroom one bath condo for 18 thousand dollars with holy mackerel the property was a little condominium one bedroom one bath [Music] eighteen thousand dollars u.s it was on the beach of maui the reason the price was so low is the market had crashed smart investors always wait for the crash so this thing crashed i had to look at 100 properties once i left the class three-day class i had to look at 100 properties in 90 days and write a one-page report on each of those properties as my instructor said to me when i left that three-day class i was 26 years old and the instructor says your education begins when you leave the class as your education will begin when you leave this class so with this here the instructor said i had to borrow buy the investment for zero money okay zero money most people will tell you i can't invest because i don't have money that's a loser [Music] please understand this this was 1974. the dollar had just gone off the gold standard everything was coming up fast so i had to figure out how to buy it for zero the reason i say that is most poor people like padre pobre always says i can't afford it i know some of you right now saying well i can't afford it i don't have time i have children i have a job i have bills to pay and it is those excuses that keep you poor if you do not change that talk in your head you will always be the poor person so there was about 32 in my class three days long i think only three people completed the exercise we went we looked at a hundred properties wrote a one-page report at the end of the 90 days in 100 properties this was the best property so i went back to the person and it was in bankruptcy it was right on the beach just as pretty as this beach here and he said i had to have two thousand dollars down this is called equity again it's the language of money so i have equity the bank was going to lend me 6 000 in [Music] debt okay that was the deal now i had the 2000 in cash but the name of the game or the exercise was could i buy it for zero so what i did was i paid for this property [Music] with a credit card so now it was one hundred percent debt [Music] with that hundred percent debt i made 25 000 a month [Music] i was a free human being i never needed money again if you can make money with no money that is called [Music] an infinite return you see the best thing about doing those hundred deals is i was learning to think about debt is good as long as you have in your mind that debt is bad i want to use my equity your roi goes down that's a good point and there is bad debt of course bad debt would be credit card debt or or if almost costing me 25 yeah exactly right yeah so there are there's definitely debt that you don't want to get into but we're talking about debt that's paid by a tenant yeah you know debt that's paid off by somebody else so that's a that's a really important point so if you're borrowing money you're going to want to make sure that you have the rent to cover it one thing if i hadn't done this myself i would not understand what kenny said it was a 144 unit property that was existing that had it was 95 occupied with tenants so that was important piece and then next door it had another 10 acres and so the deal was is that i was going to build a second phase on the 10 acres and then we were going to have one property that was 256 units and so that's what we did so we took the first 144 units and and the land and we went to the bank and we got a construction loan to build the second phase and then we built the second phase and through management through good management we filled up the property and all and then we went back to the bank and we refinanced the whole project and got one loan on it so we use debt to build it we use debt to take out that construction debt as a matter of fact if you think about it the whole system is designed to use bank financing i mean you know all these hard people that are all these people that are working so hard are actually putting all their money into the bank well that those deposits are a liability they're an expense to the bank so if you put money in the bank it's an expense to the bank because they have to pay you interest i have 100 debt number you know my first property was eighteen thousand dollars i put two thousand dollars down with a credit card and i was making twenty five dollars a month i think that's the best example robert because essentially the what you did was you didn't use any of your own money so the only costs that you had was whatever your debt was and whatever your whatever it cost the eighteen hundred dollars on your on your credit card was right so i mean this is but the idea was not to make money the idea was to train my mind to think that i want a hundred percent debt most people i want to get auto debt i want to get out of debt i want to get out of debt and what what what we're saying here is the debt pays all your expenses and gives you some income that's really as simple as they get so we started with this so if i have no money in the deal it's 100 debt and making 25 dollars what is my return on investment it's infinite yeah it's this right yeah i mean you have you basically have no investment and you're making 25 a month the reason why we want so much debt is because if i'm borrowing right now i'm borrowing at say four or four and a half percent and inflation is say four four and a half percent then i'm using basically your money pension fund and you know uh uh mutual funds mutual funds save insurance savings i'm using your money to hedge inflation and buying buying assets so uh that's how the that's how the system works and that's how the wealthy get really wealthy can i give you one more thing where it takes absolutely no money or it does take some money but it does thinking uh about 15 years ago i wanted to i wanted to have a little ranch and kim says why they don't ranches don't cash flow right that's that's right yeah so i said they came off i can get a ranch for free would you be happy and she says show me you know yeah the point here is this it's only up here you know so i went i went wandering around all over the southwest and tombstone in bisbee arizona and all this i'm looking for a property i can get for free that was a challenge she said you can have as much land as you like as long as it's free because it doesn't cash flow it was 80 acres in bisbee arizona so i walked up to it i was looking at the property i knew it because it was beautiful properties tall mountains oak trees all over this little stream running through it and all this and the problem was it was a hundred and fifteen thousand dollars there's no property there's nothing no improvement no building on it except for there was a little road running through it like this and there was a little building here and this was a stagecoach depot at one time with wyatt earp and all those guys to go past this is tombstone arizona over here this is bisbee arizona here so i'm staying at this property and i said to the realtor he doesn't know what he was so hollis has probably been facilities oh 10 years i said what's wrong with it you know this question he says i don't know i looked around i said oh that's what's wrong with it the sign was down nobody could see that they drive by all day long they could never see the sign so i said are these guys do they really want to sell under he says yeah they're desperate and i said well where'd they live he says florida now all of this is good news i'm going okay this is good news it says okay make them an offer and kim's watch me say this this is the offer i'll pay you full price because by now they want the discount because they're not selling i'll give you a full price but i have to have this property for free and i will pay you in one year i'll pay the whole thing in one year so basically it's called i took a note right so i got a note for 115 000 i take control of this property this little building here i put 25 000 into it and this this was the stream was running like this through it and i built a little cabin right there so this and this we fixed the whole thing up and then about nine months later it was finished i put it up for sale and we sold that we sold 30 acres [Music] this house this stream i had 50 acres left and i sold this for 215 000. so at the end of the deal it's only going on in my head we get this we got that we got 50 acres and i put after expenses let's say about 80 80 000 in my pocket and i had that land for free so these guys are happy i'm happy got my 50 acres i never see it anymore still beautiful but that's how money is made from your head just by understanding things it's all education and this here happens every day somewhere every single day that could be a mobile home park it could be a corner for a for a gas station on a commercial lot it could be a piece for apartments it could be a piece for a single family but this is how master plan developers make all their money they buy a big piece of land and then they sell off parcels to the individual builders and all the way down people are taking chunks and at the end you know who makes you know who's who pays for it all the consumer is whoever you know how however these guys on the 30 acres made their money or is actually pays for the whole project yeah well well this i i have to understand loan to value and all those things they talk about here but i knew this would be valued around this much with an improved house and this i knew the best i knew my target what i had to set it out for so these guys when got the loan they they paid they borrowed whatever they borrowed but i got the money here and i had the 50 acres the point here is done all the time the one point i just wanted to make was i think when i first started off in the business i i i wanted to just do it all myself and that was my biggest mistake was yeah i thought i needed to know everything about everything and and that actually uh prevented me from starting and so now i start going to these it's funny you go to these seminars and you go to these different places and you see these people that are all trying to do the same thing and they all have that spark inside of them and everybody leaves and they don't follow up with anybody and really inside of that room is really their own team so i would just encourage everybody to just start asking you don't need to know about financing you just need to find somebody who does and go ask questions and put them on your team and you don't need to even you don't even need to be a realtor uh you just need to find somebody who is and go find you know and you start you start putting this team together and the next thing you know as you start to meet that things start to happen momentum starts and and that's how you get the ball rolling and it truly is all about education and and you'll learn from other people but you know the last thing you want to have is for you to you to be the person who has to make all the decisions on everything and know everything because that will limit you severely we had this property as you would yep and it was pumping about 300 000 yeah so kim and i every year we're receiving three hundred thousand dollars in cash flow from the tenants income most of it tax-free yes because of depreciation and all that all those things you have to learn so 300 thousand dollars for most people is a lot of money the problem was kim and i had i think one million in it right yeah i think so we had one million equity in it so what kennedy did when he refinanced it he gave us our million back so kim and i got all of our million dollars back right yeah through refinance and we still have this right so we're receiving 300 000 with no money into a deal to me that's and that's a great deal yeah and people might ask how so there's a lot of things that happen inside of here one was that this was over a five or six year period the rents had gone up we had increased the value and during that time interest rates went down if you remember i think we borrowed the original at somewhere around seven percent and then we refinanced somewhere around five so so we actually saved on the loan on the on the interest rate of the loan and um so what we had was we had a property that was worth a lot more and it's still cash flowed very close to what a cash flow before and we got the million out and the million was tax free because it's a refinance so when you pull money out from when you put a new loan over an old loan and you pull that money out that's tax-free so with that million dollars we gave it back to kenny another deal money same process goes out goes out goes out and now it's huge yeah it's what we call the velocity of money so now at that point robert and kim were still in the deal they were still cash flowing and then that million was also at work somewhere else and so i'm not saying it's easy and all that but again it starts as a process yeah and it's funny people ask because now of course edgewood is infinite there's no investment in the property and it produces a great deal of cash flow you're raising the rents right that's right yeah we're raising the rents especially now in this market but now people come to us and say do you want to sell do you want to sell and and we're the the question is is why would we because it's producing all this cash flow and we have no investment so all it would do is create a taxable event so we don't want the money right i understand that right right yes there's millions of dollars in equity in the project but we're not interested in that we're interested in the cash flow it's a big difference in the way we think so i want you all to understand this starts here yes you know and if you don't start you don't go through the process and what i often times talk about it is when i went to flight school in florida i couldn't fly entered here came out pilot that's the process but if you don't go through the process you stay here but the most important thing is how we think your education begins now [Music]

Channel: Be Awakened

Views: 861,376

Rating: 4.9045148 out of 5

Keywords: robert kiyosaki, robert kiyosaki real estate investing, ken mcelroy, real estate investing, real estate business, real estate investor, financial advice, rich dad poor dad, property investment, property investment tips

Id: 7echUwnYMxI

Length: 20min 18sec (1218 seconds)

Published: Sat Dec 12 2020