Make These 7 Investments & NEVER WORK AGAIN

if you don't want to ever have to worry about money again and if you don't want to have to rely on a job to earn money then there are seven places that you need to invest your money and i'm going to be going over all seven of these places today what's up everybody i am desperately sing from the minoritymindset.com where money minds rethink rich being financially free or wealthy means you have enough cash flow coming in from your investments and assets to cover your daily expenses now the problem with that is when most people talk about creating this cash flow they say one or two things either you got to go out and just buy some cash flow producing real estate or you got to buy stocks that pay dividends the problem is what happens if all of your tenants stop paying rent what if the government introduces some new moratorium so now your tenants don't have to pay you rent or what happens if the stock market crashes and companies slash their dividends and you were relying on this one stream of income this is why you need to know how to invest your money nobody can predict the future nobody knows what's going to happen tomorrow but what you need to do is be financially educated and prepare for anything i love real estate and i also love stocks but i also know that nothing can go straight up forever and every asset class goes through their own cycles sometimes real estate is going to be producing cash flow and make profits hand over fist sometimes it's going to be the stock market sometimes it's going to be other places so what you need to do is instead of trying to guess what is the best thing to do you need to be the person that's financially educated and can win in any economic situation so if you never want to have to worry about going to work to get another paycheck then there are seven investments that you need to make that way you have money coming in even if the economy is booming even if the economy is going sideways and even if the economy is crashing down so let's jump into number one but before we do that i need you to do me a quick favor and smash the thumbs up button below and if you haven't already be sure to join our free discord server called the guac talk community because as we all know extra guac is truly a symbol of extra wealth and in this free community you can chat with other minority mindset thinkers about the stock market the real estate market the cryptocurrency market and all things building wealth this community is completely free if you want to join our minority mindset community i'll put the link to where you can do that in the description below the first investment you need to make is in real estate but not just any real estate cash flow producing real estate this is not the home that you live in and this is not a home that you're going to flip because when most people talk about making money in real estate they assume that you have to buy a home like this and let's just assume that you buy this home for 150 000 and now the way that you make money people assume is you have to hope that you can sell this property for 200 250 000 so you can walk away with your 100 000 check now this is great if you get this type of appreciation that's fine but i want you to get paid while you wait so what i want you to do when we talk about owning real estate and more specifically cash flow producing real estate what you need to do is you want to buy this property something like this for 150 000 and now what you want to do is instead of just trying to sell it for 250 you want to take this property rent it out to somebody else for fifteen hundred dollars a month so you move in a family who's going to live here and in exchange for them living in this asset that you own in exchange for you giving them this value which is the home they're gonna pay you fifteen hundred dollars a month now i know some of you might be thinking a hundred and fifty thousand dollars for a home where in the world am i gonna find 150 000 home well if you look outside of your city and maybe if you look outside of your state you will be able to buy a home for 150 000 even in today's market that you can rent out for 1500 a month i have done this many times so this is very possible and now you will have a tenant that's living in this property that's not only paying for your home they can help you pay for your mortgage they can pay for your taxes they'll pay for all your expenses and they'll put some money in your pocket every single month now real estate investing isn't easy every real estate investor has to go through hurdles every real estate investor has to go through roadblocks there is a learning curve that you have to go over and it's tough because now you got to know the real estate agents you got to know the contractors you need to know the attorneys you need to know the building inspectors you need to know the city officials so there's a lot of people that you have to meet and there is a learning curve that you have to go through but once you go through the learning curve real estate investing can become much more passive i own quite a few real estate properties and i don't manage any of my real estate i don't know who my tenants are i have a property management company that manages my properties and they make sure the tenants pay they make sure the bills are paid and they're the ones that put the checks into my bank account every single month real estate is my favorite place to invest because when you invest in real estate you can produce consistent and predictable cash flow and you get tax breaks real estate offers some of the biggest and best tax breaks that a tax code has to offer the reason why i know that is because i'm a licensed attorney and although i am a licensed attorney i'm not your attorney so if you have specific tax questions talk to a professional in your area but real estate investors get huge tax breaks which allow you to now make this money at the end of the year you could have ten thousand dollars worth of profit in your bank account but because you made this money from your real estate investments from this type of passive income you could tell the government hey yeah i made ten thousand dollars with the profits but i'm only gonna pay you taxes on five thousand dollars worth of income so you showed the government hey i made ten thousand less of profit but i only have five thousand dollars with the taxable income so you're only paying taxes on five thousand dollars and all that extra money is yours so you get to pay less in taxes you get to produce this consistent cash flow that is predictable and your money is hopefully in an appreciating asset if you're buying real estate in a place that's growing when more businesses coming in well now the value of your real estate is going to go up too and now you own the asset so as property values go up so do rental values now you're getting paid while you wait instead of just waiting for your property to go up in value from 150 000 to 250 000 you get a 1500 check every single month and as property values go up your rental values will go up too and so now you're getting paid while you wait the first property that i ever bought wasn't a home that i lived in myself it was a small 1 000 square foot condo that i rented out it was a rental property i leased it out for 600 a month and after going through my learning curve this property started paying me somewhere between 250 and 350 a month in profit and this was completely passive because i handed over the keys to a property management company and they did all the work now i had to go through a learning curve the beginning part was not easy i was spending a lot of time meeting people learning how the process works on the phone even with tenants trying to figure out how this whole real estate investing thing worked but once i got the hang of it now this is putting 250 to 350 in my pocket every single month and i still own that condo today and today is leased for 850 a month this is why real estate is my favorite place to invest because now you can stack this income you can stack the cash flow so now i started thinking if every property that i own every unit pays me 250 a month in profit then what i need to do is i need to figure out how i can acquire 10 units so i can have 2500 a month coming into my pocket and if i can get a hundred units there's 25 000 a month of consistent passive cash flow coming into my pocket every single month and if i'm thinking even bigger if i can go out and buy a thousand units that means i'm gonna be making something around 250 000 a month in consistent passive cash flow and this 250 000 a month i can keep in my pocket i don't got to pay the same taxes that a doctor would on this 250 000 because now i'm making my money for my investments so i get new deductions i get new tax breaks that people who are earning their money from their job don't this is why real estate is so powerful because not only do you get this cash flow you get tax breaks and you can get this appreciation which is completely passive on your side if you know how to invest your money for the long term does this mean that real estate is completely risk-free no you saw what happened in 2008 when people who were highly leveraged who didn't know what they were doing got burned by the system this is why you want to be a smart real estate investor and manage your property smartly and buy properties that are producing positive cash flow that are paying you to own them what happened before the 2008 crash was people were buying properties where now they rent the property out and they would be losing money every single month because the hope was in two or three years you'll be able to raise rents and now when you raise rents you will finally be profitable so people were buying losing investment properties on the hopes that rental rates would rise fast enough over the years that way eventually this property would be profitable and even if it wasn't property values were skyrocketing so you can just cash out refinance and pull some of your equity out of the deal well you know how that story ended the whole bubble burst so you want to be a smart real estate investor own properties with equity in the deal and buy properties that are producing positive cash flow i'm looking for a minimum seven percent cash on cash return on my money meaning for every hundred thousand dollars i invest or for every dollar i invest i want to get seven percent back every single year so if i invest a hundred thousand dollars i better be making seven thousand dollars in cash flow a year if i invest a dollar i better be making seven cents a year in positive cash flow the second investment that you need to make if you never want to have to worry about going to work again is you need to own a cash flow producing business everybody if you want to become wealthy needs to own a business now listen to what i said very carefully if you live in a first world country and you want to become wealthy you need to own a business but that doesn't mean that you need to start a business and that doesn't mean that you should be operating a business actually most people should not be starting a business and most people should not be operating businesses they don't have it in them to run or operate or start a business but what everybody can do is own a business though our tax system and our society works you get benefited if you own the business and you get punished if you work for the business so what you need to do is you need to own a business that doesn't mean that you shouldn't have a job most people should be working most people should not be running their own business because they don't have the skill they don't have the expertise they don't have the drive necessary and the risk tolerance to run and operate their own business but even if you don't have that you can still own a business that's producing cash flow and be the owner of the business that way you get the benefits of owning the business without having to run it now there's two reasons why you want to own these type of businesses the first reason is for the income or we'll call it the cash flow in this case and the second reason are the tax benefits and depending on the strategy that you have to own these businesses you can get one the other or both of them the way most people's finances look is you go to work you get paid and then you pay taxes and then you gotta spend whatever is left on your vacations on your car on your home and everything in between but if you have a business you can kind of flip things around because now you can spend money using pre-tax dollars as long as it's for the business and then you only got to pay taxes on whatever's left recently i was just in chicago and now i got to go to arizona and austin texas and i had to go for business but they also were kind of like vacations because now i got to go see chicago i'm gonna go see arizona when i get to go see austin texas but i get to go there using pre-tax dollars because i gotta go for the business and i get to go there and eat at nice restaurants which are business meetings which are again pre-tax dollars and now i get to take this money and tell the government hey i made this much money but i had to go to chicago i had to go to arizona i had to go to austin had to eat in these places i had to have a hotel in these places and now with whatever money is left that's the money i pay taxes on for most people is flipped you make money you pay taxes and then you would have to find the cash to go to straight chicago or arizona or austin and so when we talk about the tax benefits of owning a business now the benefits that you're getting is you get to spend money using pre-tax dollars and then you only have to pay taxes on whatever is left so you want to spend as much of that pre-tax dollars as possible assuming it's for real business needs but you have the benefit now and the ability to spend money before you pay taxes you don't have that option if you're an employee second on the cash flow side if you own an established business that's profitable well now if you own a price of it you will get your share of the profits every single year so now you get your piece of the profits and you're doing this as the owner of the business rather than the operator of the business that's why it's important not just for you to work in a business but for you to know how to own a business and there's a few ways that you can do that you can go out and buy a physical business there's a ton of websites online which show you businesses that are for sale the key here is you want to make sure you're buying a business that doesn't require you to operate the business you want to own a business that you can hire someone else to operate it for you you can buy something like a hotel or you can buy a franchise remember you want to own a cash flow producing business that doesn't require you to work in the business every single day you probably will have to spend some time managing the business making sure that the business is running but you don't want to be the person standing behind the cashier every single day you want to own a business that's producing cash flow that you don't have to work at every single day the alternative to owning the entire business is to own a partial ownership share in a business so this could mean that you and a few friends are gonna go out and buy a business or you can go on the stock market and buy shares of a cash flow producing business that means a business that is profitable we'll talk more about growth companies a little bit but this is something that's a little bit more stable you're not going to get the same tax benefits if you just own stock in the company as if you would if you owned the physical business but you still do get other tax benefits from the money that you make in the stock market because the money that you make in the stock market is taxed at a lower rate than the money you make from your job the whole idea here is you want to invest into the companies that are producing value that are generating cash flow so you want to own a piece of the companies or you want to own the company that's making this money that when these companies make money so do you the key here is you don't want to be the person operating the business you want to be the person owning the business the third investment that you need to make is a passive investment into the stock market so in the second point we were talking about making a more active investment in the stock market because if you're investing in the stock market and number two well then you were looking for undervalued companies you're researching companies that you want to own for the long term here i'm talking about passively investing some money into the stock market that way you have ownership in the economy as the economy grows so does your wealth so the way that this works for me is i have a pie like this and i have a few different etfs in the pie and every single week money is automatically pulled out of my bank account and it goes into my passive stock market account and it's distributed into this pie among the different etfs and etf is an exchange traded fund and it gives the exposure to a whole bunch of stocks so now instead of me trying to find the best stock for me to invest in i have these etfs i do invest in individual companies individual stocks like i talked about at number two but this is a separate strategy that i have in addition to that so that's money that i already have in the market and that's cash that i put in when i find a good company that i want to invest in in addition to that every single week i have money that leaves my bank account that automatically goes into these etfs that gives me exposure to the broad general stock market the whole idea being i'm just putting money into the market because i believe in the future of our economy and have a belief in the future of our economy i believe in the future of our stock market so this is completely passive of my mind this happens every single week every wednesday i think it is money is pulled out of my account and it goes into the market doesn't matter what day it happens we just want to make sure it's consistent and now all i'm doing here is i'm building a separate investment account completely passively i don't got to do any work to let it happen and every single week this account grows bigger and bigger and bigger so this cash isn't sitting in my savings it's just going right into the market and as the market grows so does my account the key here is what happens if the market goes down oh i don't change anything the market goes down i keep letting this thing happen passively the market goes up i keep letting it happen passively i let it happen consistently and i let it happen passively because now all i'm doing is i'm putting money in the market and i'm letting the market do its thing i use a platform called m1 finance who's also a sponsor of the minority mindset to do this and the reason why i like m1 finance is because it's super simple and it's completely passive i just said that every wednesday i want money to leave my account i set which etfs i want to own and then every single week and one finance will automatically pull the money out of my account and i'll automatically invest it into my pie of etfs using whatever distribution i want so you don't have to do 25 25 25 25 you could do 10 40 50 whatever you want to do and you can just set how many etfs or stocks you want to invest in and now this is passively investing for you every single week or every single month or whatever frequency that you want so i like it because how easy and simple it is and it's an easy way for you to constantly keep investing your money in the market that way you can let the market do its thing you can use whatever platform you want do your own research see what you like best but if you want to learn more about m1 finance and you want to see how you can start investing your money like this for free i'll put the link to how you can learn more and start investing with m1 finance for free in the description below minority mindset is a paid partner from m1 finance so if you use them we will get compensated but there's no additional cost to you the reason why this is important is because you want to have some real diversification when most people talk about diversification they have no idea what they're talking about they say something like oh i have a growth mutual fund and i have a blue chip mutual fund or etf and some diversified but all of your money is in paper assets all of your money is in the stock market so if the stock market crashes or something happens to the stock market which can happen overnight you can see the stock market fall by 50 percent in just a day if that happens well not all of your portfolio doesn't matter if it's blue chip or growth or whatever it is is going to go down and so you want to have some diversification you got to have the real assets like real estate you want to own a real business and now you have your past investments which give you exposure to the general economy in the general stock market which we've seen over the last century grow by somewhere between eight to ten percent a year the fourth investment that you need to own is in growth companies and number two i talked about cash flow producing companies these are more of your established companies that are producing profits number three i talked about owning etfs that we get general exposure to the stock market this is all about owning the startups the innovators the growing companies personally i've been putting more of my time to learn more and starting to invest more into these companies this doesn't have to be in the stock market again you can invest directly into startups or you can invest in startups that are new stocks on the stock market the whole idea here is you want to be investing in some of the innovation because times are changing our world is changing our economy is changing money is changing and so if you want to be on the forefront of that you need to own a piece of these growth companies and there's a couple ways that you can do that either you can know these companies directly and you can invest in them kind of like what you see happen in shark tank so now you own some equity in these startup companies you can work with crowdfunding platforms which allow retail investors regular people to invest into these startup companies who are looking for investments or you can look at some of these startups on the stock market this investment is a high risk investment so what that means is there's a big possibility that you can lose all of your money you can invest your money into a startup that thinks that they're going to be the next amazon or the thinks they're going to be the next tesla but then they can go completely bankrupt because they don't know how to manage their money or they don't have a very good product or people just don't like the company but the upside with these higher risk investments is you also have the opportunity to make a whole lot more money because this is one of the few investments where you can see 100x returns because now you're investing in companies that are growing that are innovating and they have the opportunity to grab a whole lot more market share if you're just starting off as an investor this is probably not the first place you want to invest you want to learn the ropes you want to start generating cash flow you need to know how investing works once you start to build more of your wealth and you're looking for more diversification and you want to be a little bit more risky then you can start looking here one of the easiest ways to mitigate your risk is just to learn you got to learn about how some of these companies work you need to understand the industry you need to know where you want to invest it took me a lot of time to understand how some of these startups work how to value them to understand what type of companies i want to be invested in and what industries i want to be invested in i'm still learning every single day but this is something that comes with a lot more risk and the opportunity to make a whole lot more money and this is something that you want to pay attention to as an investment for yourself the way you make money here is you're buying a piece of ownership into a company while they're still small and your goal is that they're going to grow bigger and they're going to be acquired by a larger company or they're going to go public they're going to get an ipo and now you have the ability to sell your shares so you might be buying your shares at two dollars a share and when somebody comes and acquires this company or if they go public you're hoping that now you'll be able to sell their shares for twenty dollars a share or two hundred dollars a share it really just depends on the company again high risk high potential reward the fifth investment that you need to own is real money or otherwise known as gold and silver our dollars are fiat currency meaning they are just pieces of paper that are printed by the government and the federal reserve bank now this is good if you understand money and if you're financially educated because it creates more inflation which means if you own assets if you own the means of production you get to make more money it's not so good news for the unfinancially educated because now you're the one that's paying the price through inflation also known as a hidden tax now i don't say this to scare people but if you run into a situation where you print too much money well then the dollars that you print become worthless because people no longer just want to work for paper they want real money everything has a lifespan from people to economies and the thing that has caused many great civilizations and many great powerful economies to crash in history has been excessive money printing the ancient roman empire had an economy built off of silver but then when the government didn't have enough silver to expand their operations to expand their military presence to invest into their own community that's when they started debasing the silvers they started mixing their silver with other metals and people realized eventually that this silver that they were getting the fake silver wasn't real money so then people wanted more money and in the beginning this printing of fake money helped the economy and the civilization grow very quickly because now the government had access to more money and they were able to give this money to people and people were willing to work but eventually people no longer wanted this fake money and that's when the civilization came crumbling down as you're building your wealth you want to think about having some insurance against your investments and against yourself and against the government society in case they print too much money by having some real money having some physical gold having some physical silver this is something physical and tangible that you want to own the real asset of you want to own the physical gold you want to own the physical silver the idea behind these is not to get a huge return on your money the whole idea behind this is now you have insurance against the worst case scenario type of situation you have insurance against the economy blowing up in your insurance against the dollar just being completely inflated and losing its value so this is something that you want to have as a hedge as insurance that you own as a real money now again there's a time and place for everything the first thing you want to do is not take all of your extra cash and go out and buy some gold the first thing you want to do is you want to start generating some cash flow as you build your wealth as you build your cash flow as you become financially free now you really want to start insuring your wealth and that's when you need to start owning some of these commodities and you want to own the physical asset the sixth investment that you want to own is some cryptocurrency so the whole idea behind cryptocurrency is it's a movement of people wanting to move away from the fiat currency from our dollars because of all the reasons that i just talked about our dollars can be easily manipulated by the government the better is their bank by just printing money this you can't really do that so easily the whole idea behind cryptocurrency is a decentralized worldwide digital currency meaning it's the same currency one bitcoin in america is the same as one bitcoin in japan and it's the same as one bitcoin in mexico and is the same as one bitcoin in india so it's decentralized you can use it anywhere in the world now at the time of recording this video you can't just walk into any store and go offer to pay with bitcoin or ethereum or cardano but you have to imagine that as time goes on and as people open up their minds to cryptocurrency as people understand the powers of blockchain that is going to be much more widely used and accepted the concern that i have with cryptocurrency is you have a lot of people buying cryptocurrency with the hopes of getting rich quick when i buy cryptocurrency my goal is not to see a massive return on my investment my goal is to own an asset my goal is to own another commodity something like gold and silver it's kind of like another insurance it's another currency another form of money that i want to own and i want to own this for the long term there's a lot of power and value that you get from the blockchain technology that's underlying cryptocurrency i'm not going to go over all that blockchain stuff in this video but the whole idea here is this is the people's money people are moving towards cryptocurrency because they want to move away from fiat currency they want to move away from their reliance on the government they want to move away from the reliance on the federal reserve bank because these entities these institutions have the power to manipulate the value of your dollars they can manipulate the value of your savings and so because of that people are moving their money to cryptocurrency and so that's why you want to have another hedge here by owning some of this cryptocurrency and the seventh investment that you need to make that we never have to worry about getting money from a job again is you need to invest in your own education especially your financial education i spend a lot of money thousands of dollars every single year on books on courses maybe seminars maybe coaches or consultants this is money that i'm investing in myself because you have to understand what's going on and there are people out there that know more than you so instead of you trying to figure it out yourself you can just pay someone somewhere between twenty dollars and maybe twenty thousand dollars depending on what it is to help them teach you what it is that you need to know from them now i also want you to be a little bit careful when it comes to investing in your education because there's a whole industry of people that are selling this whole concept of get rich quick schemes on the internet that way you get excited about the idea of going from zero to six figures a month in 60 days if you just pay this person 997 dollars if you want to be investing in your education you need to be investing for a specific purpose what are you learning how do you do are you learning how to build a business with e-commerce are you learning how to invest in real estate are you learning how to invest in the stock market if so then this might be something worthwhile for you to invest in and you want to make sure that the person teaching you is actually doing what they teach you don't really get that in school you don't have teachers that do what they teach these teachers are just teachers so you want to make sure that if you're paying for education especially financial education you're learning from a teacher that actually knows what they're doing and that has actually done what you want to do this single investment will help you get better returns on every other investment class that i just talked about because it will teach you how to be a better real estate investor it'll teach you how to be a better stock market investor it can teach you how to understand cryptocurrency better it'll teach you how to understand commodities it'll teach you how to manage your money it'll teach you how to be better with your money how to grow with your money and how to create new streams of income this is something that you have to be investing in that way you can lower your time to learn something because if you're just trying to do it yourself you can learn how to do anything but you can learn a whole lot faster if you just pay someone to teach you what they learned from their mistakes if you enjoyed what you saw so far then you're gonna love this i released this video on youtube a number of years ago where i walked you through my worst real estate deal ever right before i sold this property i called this my nightmare property because this property gave me so many headaches and it was the only deal that i have lost money on to date normally i don't buy real estate to flip it or sell it but this property gave me so many headaches that i just needed to get rid of this property and get rid of this pain if you haven't seen that video yet i'm gonna link it for you in the description below that way you can really understand what happened so i released that video years ago and i sold that property like a week after recording that video and i tried to forget about the property because that one left me with a lot of nightmares but youtube being youtube brought that video back to life and has been sharing it a lot recently so i wanted to use this video as an opportunity to dive deeper into what happened that way you can learn from my mistakes and really understand why that was my worst deal ever so let me start with a little bit of backstory because i got into real estate kind of really indirectly no one in my family was a real estate investor i didn't know any real estate investors but i wanted to get involved in real estate because i was reading all these money management books and these investment books and every one of these books said that wealthy people invest in real estate i had no idea what that meant but i figured hmm if i want to be wealthy i should invest in real estate too i started college when the 2008 real estate crash was happening and during that time i was starting an event planning business that really started to take off so i was hosting these college events and i was making good money while i was in college i went to school in michigan and michigan was hit hard by the 2008 crash because the whole michigan economy almost relied entirely on the automotive industry so when the automotive industry crashed and the real estate industry crashed michigan was slammed and so homes that were once selling for 150 000 were selling from below 15 000 in like the blink of an eye now i didn't know anything about real estate investing and i had nobody to talk to about real estate investing so i just decided to jump in with both feet and i bought my first property when i was 19 years old it was a small condo and i paid like eight thousand dollars for it that was the whole price that wasn't the down payment i paid eight thousand dollars to buy this condo and i leased it for like 600 a month and i was like wow this real estate investing thing is pretty cool back then this didn't seem like an amazing deal at the time i just thought that was normal because i had no idea what normal was this was my first time ever learning about real estate or real estate investing and so i had never seen anything else this was what i just thought was normal so i created the system in my mind where anytime i made money i would use it to buy real estate that way i can create this passive income this cash flow so i hired a property management company and this property management company turned out to not be a real property management company there were a lot of real estate scams happening during the 2008 crash and so this property management company i hired wasn't a real property management company and they connected me to a contractor who was not licensed the property management company was not licensed they told me they were and they connected me to a contractor that told me was licensed but was not licensed so now i'm working with this contractor who told me he was licensed but was not licensed and i was using this contractor to renovate my properties now to be fair the contractor was a good guy he had a good heart he was a nice person but he ran into some financial trouble that i didn't know about long story short this contractor told me that i need to start buying some real estate in detroit because property values were so cheap in detroit and i could buy something for less than twenty thousand dollars put in very little work and i could sell it for double the price or i could rent it out for seven hundred dollars to a thousand dollars a month i was still going to college full-time and i was running this event planning business and i had done two deals to date and nothing major had gone wrong to this point so i figured okay let's do it you find me a deal so the contractor found me a home for sale for 17 000 and he told me that we could renovate this property for less than five thousand dollars and after that i'd be able to rent it out and make a great return now typically when i purchase a property i have my own private property inspector walk through the property and i have the city come out and they walk through the property with me that way i can see exactly what works needs to be done but i trusted my contractor and he said you know what you don't need to worry about doing any of that just trust me with the money and i will make sure that this property makes you a ton of money big big big mistake this property gave me my real-life mba i didn't have any real formal business experience minus running a business i was going to school thinking i was going to be a doctor i didn't know any investors i had no investing experience i just jumped right in and this was how i learned i'm a trusting person by nature i try to be honest and i hope that people will be honest with me but this contractor turns out he wanted me to buy this property not just because i would be able to make money but because he was having financial issues and he was hoping that this property would be a way for him to make some money to cover his financial expenses so he pushed me to buy this home that way i'd write him a check to do the repairs so he'd have some money to pay his back bills now i know what you're probably thinking oh just breathe these are just beginner mistakes i can't believe you didn't know that even a baby would know better than to do that yeah you're right i probably should have known better but i didn't and this was how i learned and this property set me up to be able to do much bigger deals and commercial deals and multi-family deals in the future profitably because i learned what not to do this is what the numbers look like i bought the property for seventeen thousand dollars and the contractor told me that i'd be able to renovate the property and get it read ready for between five thousand and fifty five hundred dollars so let's assume that i had to pay fifty five hundred dollars to get it right ready that means this property would have cost me all in right around 22 500 i would be able to rent this property now for 750 dollars a month so if assuming i have to pay out half of my rental income and expenses so this is taxes insurance maintenance vacancy costs if i pay out half of this in my expenses that would leave me with a 20 annual return on my cash just from cash flow a 20 cash on cash return on your money is an amazing deal which is why i figured this sounds pretty good the first problem was it cost me way more than 5 500 to get this property rent ready as soon as i gave my contractor the check to start working i don't think i gave him the full check it was probably like two to three thousand dollars i stopped hearing from him i didn't have a contract between me and the contractor i just told him what work i wanted to get done and he told me it'd be five thousand fifty five hundred dollars and so i said fine wrote him a check and i thought that'd be it because this is what we've done in the past and it had worked no problem but this is where things started to come up because now he was having his own financial issues so he stopped showing up the work shouldn't have taken longer than a couple weeks max but we were months into the property and it was almost as if nothing has started yet and this was getting really expensive because when you own a property you have to pay property taxes and insurance and every month that the property is not leased out you are losing out on rent and so i am paying for all these costs out of my pocket and nothing is being done so it is getting expensive and so this is when i started to get really irritated and i had to come up with a solution either i keep badgering my contractor to do the work or i just got to eat up the cost and find somebody else to do the work well i found somebody else who could do the work and they told me that they'd be willing to do the work essentially for free as long as i pay for the materials and as long as i give them the home to stay in for a few months and so i figured okay this is not going to cost me as much money out of pocket so i'll just let them stay in the home do the work at their own pace and i'll have the property rent ready in just a few months and i won't have to pay that much more money out of my pocket this opened up a whole new can of worms because this person was staying in my property rent free and he didn't have a lease and he wasn't doing any work and on top of all that we opened up the system at home depot where he could buy things on my account and i figured he'd be buying things from home depot to do the work at my property but he was buying things from home depot to do work at other people's properties that way he could save some more money so now i was stuck again luckily i found a new property management company to hire and these people were way more competent than the first property management company i hired so i told them what was going on and we came up with a plan to evict this person who was living in my property and not doing any work so now after all the headache we finally get this contractor out and the property isn't way worse shape now than it was to begin with because this contractor who was living in the property just destroyed the property i mean everything was wrong he kept his dog in the property and didn't take care of it and there was dog crap literally everywhere throughout the property it was bad and so now we have this completely destroyed house that i have lost a ton of money on already that i have to figure out what to do with so now i'll learn my lesson and i only work with licensed and insured contractors who are a little bit more expensive but they're way better and they're way more reliable and getting things done and done on time so now it's probably been a year since i bought the property and the property is finally getting renovated and things are looking good but remember i did not do a private property inspection when i purchased the property so i didn't know actually what was wrong with the property i just trusted my contractor's word but the cosmetics of the property like the way the property looks is looking good but then we see that the water and the sewage system isn't draining properly turns out that before we purchase this property somebody took bags of cement and poured it down the main drains that way the piping from the property to the main sewage lines of the city were completely blocked with cement so now we found a new problem that was completely avoidable because if you get a private property inspection before you purchase a property i'll talk more about this a little bit later in this video but a private property inspections job is for somebody to walk through your property and find all the issues with your property like the plumbing issues and the mechanical issues and the electrical issues before you buy the property so you know what you're getting into before you buy it anyways now i have to pay thousands of dollars to bust out the cement in the basement to pull out the piping and to redo all the plumbing from the house to the main sewage drains that way we can have water flow from the house out of the house now the property is looking good because we did all the cosmetic upgrades and the water is finally working so water can leave the home so now we're ready to get license for rental so i don't like to do things in a shady or illegal way i know a lot of people try to push the boundaries but i personally just don't like doing that and during this time after the 2008 real estate crash detroit was really struggling as a city and so lots of investors understood this and when they purchased properties to rent out many of them were not licensing their homes as rentals because the city just didn't have the resources to enforce this and i didn't want to do that it just didn't seem right to me so what i did was i decided to register my home as a rental with the city because i wanted to do it the right way like i used to go to those real estate investor conferences in my area and everybody would be talking and anyone i talked to who had rental properties in detroit none of them not a single one of them had registered the properties as rentals because they all said that it was a nightmare if you did that and there was no repercussions if you didn't register but i was worried about a tenant potentially slipping and following at this property and then suing me and then finding out during the lawsuit that this property is not registered for a rental and i don't want to have to deal with all that potential headache so i decided to get this property registered well the city building department at the time did not have a very coherent system on how to manage their rental properties it's gotten much better since then but back then it was not good the way it works is you go to the city you fill out a piece of paper and you pay a fee and you tell them that you want to use this property as an investment property but in order to do that the city is going to send out their inspectors and these inspectors are going to come to your property and they're going to tell you what repairs need to be done in order for this property to be good as a rental the problem was if you wanted to make any minor change at the property like even changing your smoke alarms or painting your windowsills you had to pay a 100 permit fee so anytime you had to make a minor change you had to pay a permanent fee first second these city inspectors didn't coordinate with each other one city inspector would say one thing and then a second city inspector would say something completely different and so it was so hard to get approved because you would do all the work and then a second city inspector will come out and say why did you do this and he would tell them well the first city inspector said this and just say nope and then they would find you because you didn't do the work right to their standards even though you did it to the first inspector standards and third to top it all off the city inspectors would give you work and renovations that made no sense just because they could so i ended up paying i don't know more than a thousand dollars for sure just in permit fees because anytime i had to paint the window or change the batteries i had to pay a hundred dollars and then city inspectors would come out and they would keep disagreeing on everything one of the most frustrating examples of this was the electrical riser on the back of a house so in the back of your home you have an electrical meter attached to that as an electrical riser one city inspector came out and said your electrical riser needs to be 15 feet high so we made that change we paid the permit fee and we made this electrical riser 15 feet and then the second inspector will come out and they said why is this riser 15 feet high i want it 12 feet high and we were like the first inspector just said we needed 15 feet high so now we have to start the process all over again i have to pay to fix the work i had to pay a permanent fee and now we have to pay the inspector to come out a third time just to review the electrical riser because they couldn't agree on the work in the first place and now when all these inspectors keep coming back again and again and again they just keep finding more work because this is how they're getting paid and so now inspectors would come and say you know what we need you to replace all the electrical inside the home why i don't know we just want you to do that and so then we ended up upgrading the entire electrical we upgraded and replaced the entire plumbing system throughout the entire house and we redid all the mechanical no matter how many times we asked why we could never get a justification for why we needed to do these repairs that were not necessary because these things were already new they were already functioning fine but the city kept telling us that we needed to upgrade it without any reason why then if that wasn't bad enough a new inspector comes out and he said that we needed to raise the elevation of the house why i have no idea but he thought that the house was too low and so he told us to raise the elevation of a house it is not cheap or easy to raise the elevation of a house and so now i was like you got to be out of your mind this was really early on in my career so i didn't have a ton of money and so anytime i made money i was funneling this money back into this property and anytime i made rental money for my other properties i was using all that cash to fund these repairs and it got to the point where my business bank account was exhausted and i had to literally i had a drawer of cash in my home like not a drawer of cash but i had a drawer where i kept my reserve cash and i had to dig into that drawer of cash whatever i had left because that was the only cash i had left to fund these repairs luckily this was back during the 2008 crash time when renovations and repairs were really cheap because contractors needed work but it was really expensive i think i ended up paying like 7 000 or 7 500 to raise the elevation of the home and it still doesn't make sense why but that's just something i had to do in order to get the property licensed so i could start making some money looking back my problem was i was young i was inexperienced and i had no way to fight back like if i was to redo this i would start working with an attorney early on who has experience dealing with the city because i was getting abused and i had no way to fight back and i didn't even know you could fight back but if i knew this now i would have hired an attorney and i would have disputed half of the stuff that way we could have actually figured out what needs to be done and why and i can start working with the higher ups in the city that way we can figure out what's really right and what's wrong i'm not just saying this because i am an attorney i'm saying this because if you have a good real estate attorney they have to be a specific real estate attorney who is very familiar with doing real estate deals because a real estate attorney can help you when it comes to buying the home they can help you with dealing with contractors and they can help you dealing with cities because sometimes cities are going to make your life very difficult and if you have a good attorney on your side they can help fight for you so now i've dealt with contractor issue after contractor issue i've dealt with the city and we're finally getting work done and it looks like we're finally getting ready to rent this property out and then the property got robbed somebody broke into the property and stole our hot water tank because they knew the home was vacant and so that was a whole new expense that we had to deal with you can see why i called this property a nightmare property because everything that could go wrong did go wrong but it taught me a lot at this point i've owned the property for years i haven't made a single penny from it and i've spent way more money on renovations on the home than i did actually purchasing the home but the home was finally ready to be rented out after years of headache so my management company rents out the home we got a tenant and now somebody's finally paying us 750 a month and things are finally looking good and i'm able to breathe again now a few months into the tenants living in the property a city inspector has the urge to go out and check on our property they don't have any reason to go out there because the property is fully licensed they don't tell us they're gonna go out there and they don't tell the property manager or the tenant that they're going to go out there they just wanted to go check up on it why i have no idea so they go to the property they knock on the door and it turns out we didn't know this was happening but it turns out the tenant was running an illegal babysitting operation so now the city inspector freaks out they find us and they tell us that we need to get rid of this tenant and so now the headaches start all over again at this point there's new fees i have to pay i have to kick out the tenant and at this point i'm just so fed up with the property i'm like you know what i'm just going to sell it that way i never have to deal with this property again now i do got to give credit what credit is due because there's been a lot of changes in the city of detroit since i dealt with this nightmare property and there's been a lot of upgrades in the city building department since then and the new supervisor for the building department actually saw my video the worst real estate deal ever and he reached out to me personally and said i apologize for all the things that you had to deal with and if you have any more issues just contact me directly you know the 2008 crash had so many implications like cities were on the verge of bankruptcy and so a lot of things just were not going right but i don't regret doing this deal one bit yeah i lost some sleep and yeah i lost some money but i look at it like the tuition i had to pay to understand how to be a good real estate investor because i learned so much and i made so many mistakes in one deal that it set me up to have the knowledge and have the experience to be able to do much bigger deals now plus when i do real estate deals now i'm very confident because i know that if i can overcome this nightmare property hurdle i can do any real estate deal so if i could leave you with like five lessons or take home points from this nightmare property number one is make sure you do your own due diligence know the area and know the property where you're buying do your research walk through the neighborhood understand is this a good area where you want to invest and do your due diligence in the property essentially you want to know is this property that you're buying in an area where money is flowing or money is leaving and the easiest way you can do that is just by going to the city hall and asking them are there new developments coming into this area if there's more developments coming that means there's more money flowing into the area where you're buying second please please do yourself a favor and get yourself a private property inspection anytime you buy a property i talked about this earlier in the video but a private property inspector's job is literally to walk through the entire property and the roof and to check out all the systems in the property the electrical the plumbing the mechanical to make sure they all work this might cost you a few hundred dollars but the five hundred dollars you paid to a private property inspector could save you tens of thousands of dollars in the future you want to make sure you do this inspection before you purchase the property so when you enter into a contract to buy a property whether it's a home or a commercial building you want to tell the owner that you have a contingency period maybe it's 10 days maybe it's 30 days where you can walk through the property and have your inspector walk through the property and see what repairs need to be done if you don't like what needs to be done then you can back out of the deal and that way you don't have to pay anything if i would have had my private property inspector walk through this property before i bought it i would have learned about the plumbing issues and chances are i wouldn't have bought this property now i never i never ever buy a property without doing a private property inspection first third get yourself a good real estate attorney and have them on your side throughout the entire real estate process so when it comes time for you to buy the property work with them when you're working with your contractor work with your attorney and when you're working with the city work with your attorney a good real estate attorney isn't cheap but spending that money upfront on an attorney could save you thousands and thousands of dollars in the back end fourth make your own investing decisions do not decide to invest in the area just because somebody else says it's an easy way for you to make money i'll be honest when i bought this nightmare property i bought it for all the wrong reasons i bought it because my contractor said that it'd be an easy way for me to make a lot of money but it wasn't make your own investing decisions because it's your money on the line not your contractors not your friends not your uncles is your money being invested so make sure you make your own decisions and don't let other people tell you how to spend your money and number five get the city involved before you actually buy the property so after you enter into a contract to buy a property whether it's a home or a multi-family or a commercial building you want to get the city involved and ask them to come out and tell you what repairs need to be done or ask them what needs to be done in order to get this property licensed that way you know everything before you actually purchase the property and if you find out that there's a lot of work that needs to be done to get approved by the city then you can back out of the deal before you actually spend a whole lot of money this is all part of the due diligence process because you want to know exactly what the work is going to be and exactly what's required and exactly what it's going to cost you before you start paying out the big checks thank you for watching if you enjoyed this video here's a video on things you should not do when you get paid and while you're at it download our free guide to investing your money in the stock market and as always keep hustling real estate investors back in the day used to say that companies will always need a place to work but then came the 2020 pandemic and then people realized that they can work from home which made office real estate not so attractive

Channel: Minority Mindset

Views: 1,410,779

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, finances, stock market, stocks 101, how to invest, money management, investing 101, building wealth, how to manage money, financial advice, investing, buying stocks, housing market, inflation, wealth, passive income, personal finance

Id: 7VwGYfcKSLc

Length: 47min 23sec (2843 seconds)

Published: Fri Sep 24 2021