this is six things you're looking for when you buy a piece of real estate if these six things do not exist you're not going to buy the piece of real estate these are my criteria for buying real estate I have actually have an extended list but I'm going show tell you the short list real quick to keep things very very simple number one cash flow D if it don't cash flow positive I never buy it listen to me I never buy it period in the story if it cost um $10,000 a month for the mortgage
the property insurance the running of the property everything like yeah you take everything basically you take all the rent less all the expenses uh less the interest in principle you take all those things if this number is not positive don't do it okay these are the different reasons see insurance I'm sorry um the stock market doesn't cap cash flow Bitcoin doesn't cash flow silver doesn't cash flow gold doesn't cash flow a business cash flows but the problem with a business cash flow is you're having to work the business you got to work it to earn
it okay real estate is passive cash flow and that is the number one reason you want to do it number two and I'm GNA give you one senior reason above all these number two is you want appreciation so just because just because it cash flows doesn't mean I'll buy it it has to appreciate as well if it will go up in value over time okay you guys that are in North Dakota South Dakota uh Iowa anywhere where there's job booms maybe you had a big job boom something Freak happened outside of Austin Texas South and
East and Tesla went over there look if nobody follows Elon out there bro that's going to be a boom and bus Market North Dakota Fargo has been a boom and bus market for years uh people moved to Boeing uh not Boeing uh uh Idaho uh Boise Boise they flooded out of California to boisey will they stay there I don't think so but maybe if they do cool you get appreciation if they don't stay you got a problem number three you want depreciation okay and next to depreciation you want to write accelerated I want to accelerate
this depreciation I want to put it on steroids I don't want to write it off over 27 years a home is depreciated over 27 years you buy a house for $270,000 every year you get a $10,000 depreciation an apartment building four units okay $270,000 the same price I can deduct probably $140,000 of that in the year I buy it I could own it for one day and get a write off a depreciation of $140,000 which means my cash flow from the asset these are connected my cash flow from the asset will not be taxed for
the first four or five years I own it okay number four tax deferment there's a thing called a 1031 okay uh my company's actually working on creating a 1031 exchange or what's called a DST DST so that you could sell your property my buddy just sold a storage property for $8 million storage is great by the way storage retail RV parks RV parks RV parks enormous I'm looking at a guy's RV uh uh he's got a massive RV collection pads where he just gets the passive income passive income you got the appreciation not a lot
of depreciation not a lot because it's an RV Pad but my buddy sells the storage units he makes $8 million he can move that 8 million into a like kind exchange or 1031 and not pay taxes and on that thing defer them literally forever not pay taxes okay number five you want to be able to finance or refinance these properties uh one of the biggest I've ever had in my life was refinancing a piece of property I had own owned for five or six years uh me and Jared me and Jared bought a deal how
much was that deal Jared $4 million yeah $4 $4 million I bought that deal with $300,000 down how much did you put Jared $150 he put $150,000 down okay I put the rest down we bought this deal this was in 201 2012 2012 in 2013 we refinanced the property we owed 3.6 million it was on my schedule of assets he was my partner in the deal okay I didn't do the whole deal I did I did part of it with him and uh I got 90 grand back he put $150,000 down and a year later
got $90,000 back this is a refinance right if you're taking notes or a recapitalization of his investment number six way to make money in real estate is to sell it the worst way is number six the biggest mistake I ever made in real estate was not getting started second biggest mistake was going too small third biggest mistake was buying too few properties okay like I didn't follow it up I should have stayed in the neighborhood number four biggest mistake I ever made was selling any of my real estate [Music] a
