Cool Technology | REtipster

188: Market Whisperer Marco Santarelli’s Lessons on Real Estate, Business, and Success

Seth Williams — Tue, 16 Jul 2024 13:00:32 +0000

Marco Santarelli is someone I look up to in the real estate industry. He's been in the business for a long time; he’s seen a lot of things, and he’s done some big deals that we can all learn from.

I’ve heard Marco present a couple of times at REWBCON, and every time he talks, I walk away with some BIG ‘aha’ moments that help me better understand the real estate market. This guy is a walking encyclopedia of knowledge!

Marco is an investor, author, and two-time Inc. 1000 entrepreneur. He runs Norada Real Estate Investments, which helps investors achieve financial freedom through smart, turnkey real estate opportunities. He’s also the voice behind the Passive Real Estate Investing podcast, a treasure trove of insights where he shares invaluable advice, strategies, and the latest trends in real estate investing.

Links and Resources

Key Takeaways

In this episode, you will:

Recognize that failures are opportunities to learn valuable lessons that can lead to future success.
Learn to time business ventures carefully by assessing market conditions and competitor landscapes.
Understand the need to prioritize profitability over revenue alone for long-term business viability.
Discover insights on the current state of the real estate market and why you should be optimistic about its future.
Get valuable tips on identifying trends and opportunities in real estate and deciding accordingly.

Episode Transcription

Editor's note: This transcript has been lightly edited for clarity.

Episode Transcript

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Seth: Hey folks, how's it going? This is Seth Williams. You're listening to the REtipster podcast. This is episode 188.

Today, I'm really excited because I get to talk to Marco Santarelli. Marco is someone I really look up to in the real estate industry. This guy has been in the business for a long time. He's seen a lot of things. He's done some big deals. I've heard Marco present a couple of times at REWBCON and every time he talks, I walk away with some big aha moments that help me understand the real estate market better. This guy is like a walking encyclopedia of knowledge.

And Marco is an investor, an author, a two-time Inc. 1000 entrepreneur. He runs Norada Real Estate Investments, a company that helps investors achieve financial freedom through smart turnkey real estate opportunities. And today, he's going to share his wisdom and experience with us.

Marco, thanks so much for being here. How are you doing?

Marco: I'm good, Seth. How are you?

Seth: I'm very good. So yeah, I wasn't joking when I said I was excited to talk to you because I've watched you and respected you for a long time. And I think people are going to learn a lot from whatever we talk about here. So maybe we can just kind of start where a lot of these conversations start.

If somebody has not heard of you, tell me a little bit about your journey. Like when did you get into real estate investing? How long have you been at it? What drew you into the niche of real estate that you're currently in?

Marco: Well, the short story is basically this. I fell in love with investing in real estate when I was a teenager. It's a weird thing to say, but I just looked around and I realized I wanted to be financially free. I called it being “rich” back then, but not really understanding what rich meant and what being wealthy meant and all that kind of stuff.

But ultimately, I just wanted to live life on my own terms and have time freedom. So for me, that was just being rich.

But today I look back and I realize, okay, I just want to be financially free. And that gives me the time freedom. But I discovered that as a teenager. And then, when I turned 18, I bought my first rental property. And it's a pretty young age for becoming a real estate investor. But I knew what I wanted. I just had to wait till I could qualify for financing.

So I had to be an adult. And that means I had to be 18. So I started when I was 18 years old. But yeah, that's how I got started in real estate. Slow at first. Then I bought a second property. I got my real estate license and started selling real estate to better understand it and to make money because every real estate agent thinks that they can make a lot of money through real estate commissions. So that was kind of the path I was taking at the time.

And that didn't last for too long because I hated being a chauffeur and carting people around in the backseat of my car, showing them houses. But I've always had a love for business, entrepreneurship, and investing. And everything I've done since then through an interesting winding journey of successes and failures have been through businesses, entrepreneurship, investing in anything and everything from oil and gas to crypto to cannabis to real estate, you name it. I just found out over the years where my strengths and interests lie. And I just started to focus more and more on that.

And so I love business. I love real estate. I love technology and technology-based businesses. And I love passive income and something that real estate is great for in terms of providing us passive income, tax benefits, and the ability to not only preserve our wealth, but to grow it over time. And that's why I focus on those two things.

And really, if you step back and you look at my journey, it was all about building businesses, scalable and viable businesses to generate income and take that income and invest it into income-producing assets and business, other business ventures. So you just kind of stack on your successes and leverage the income and the profit you make from your businesses into growing it into more profitable business ventures.

And that’s what I’ve done over the years. It’s just building on one success after another. Not all of them are successes. I've had failures too.

Seth: You've had failures. No way. That's impossible.

Marco: If you don't have failures. I don't see how you could be successful.

Seth: Yeah. I think, Seth Godin said if failure isn't an option, then neither is success. Something to that effect.

Marco: Yeah. I think it's something to that effect. I've heard it said that you can learn at least 10 times more from a failure than you can from a success.

Seth: Yeah.

Marco: There's not a lot you can get from a success other than just knowing exactly what you should be repeating and continuing to keep having that success. But when you have a failure, you can look at everything that has gone wrong and what was going right and learn how to change what you're doing, your systems, your processes, whatever it may be, your marketing, your operations and do things better.

So there's far more to be learned by a failure. In fact, if you have a failure and you walk away, not learning anything from it, you've actually completely failed. Because a failure can be a success by learning lessons from the failure in order to know what to do and what not to do the next time.

Seth: Well, I appreciate you talking about that and just mentioning failures because that's something that I feel like nobody talks about in these interviews. So I'm curious, what is an example of a failure you've had and what happened to make it fall apart? What were some of the lessons you learned from whatever that was?

Marco: Well, there's probably many. The first one that popped into my mind was back in the dot-com days. So let's just talk about that. It's not necessarily real estate-related, but it's just being an entrepreneur and wanting to build something and make money or be profitable or be rich.

So back in the late 1990s, in the dot-com era, when everybody was trying to make a fortune with the dawn of the internet and where that was going, that was the new frontier. Two business partners and I got together to form a dot-com business. It was actually the offshoot of a brick-and-mortar business, an online business, a publishing business. And so we wanted to create the Costco for the club industry.

When I say club, I mean golf clubs, country clubs, even city clubs and whatnot. They buy everything from toilet paper to tractors, food and beverage, you name it. Like, if you go to a country club or any kind of golf club, anything and everything that's there is something that they have to purchase.

And so my cousin, he had this media business and he published a magazine to the industry. And so we decided to launch a dot-com business. So we started raising capital from venture capital lenders or investors in Northern California, we ultimately raised a total of $9.5 million. And we built this company up to 105 employees.

And operationally, it was doing well. But from a marketing and sales perspective, it was failing. We weren't generating enough revenue and profit to keep the business going, to sustain it for a long period of time. Which was typically not a problem back in those days. Because if you had essentially a dot-com business, venture capitalists would continue to fund your ventures until you got profitable or you went public or you had some sort of exit or liquidity event, which made it profitable for everybody.

Well, that's the path we were on. We were on the path to an IPO, to taking the company public, and then everybody would have an exit. Long story short, the stock market crashed. And at that point, everybody got cold feet. So all the investors, as in the venture or capital investors, they basically put brakes on providing any more funding. And so we had no more funding. We had a burn rate of over $100,000 a month and we didn't have the capital to keep going and sustain the business.

So, ultimately, we just had to fold the business. We had to close shop and we laid off all 105 people. I was the third employee. I was the partner and I was the third last to leave. So it was kind of a sad last few months, if you will, just having to let everybody go.

Anyway, that's a failure, but it was a good idea. It was just too early. It was too much, too soon, too early. And if we had started six months earlier, we probably would have gotten to that publicly traded level of having an IPO and offering, and just been sitting on a whole bunch of cash because of the liquidity event from that. Or at least in part, because you can't sell all your shares right away.

But it was a failure, not because of something we did wrong. It's a failure because of poor timing, a stock market crash, and maybe it was a great idea, but just too soon.

Seth: Yeah. So it seems llike,in terms of like a lesson, it's almost like there was no lesson because you couldn't have known that, it wasn't really your fault. It's not like you made a mistake. Is that the universe was not working well with you at that point in time, right? Or was there something you could have done differently with the limited knowledge you had back then?

Marco: Well, there's always something to learn if you dig deep enough.

Number one, the importance of timing. If you have a good idea, you have to make sure that you're entering the market and executing on your marketing plan and whatever your strategic plan is at the right time and executing fast enough and hitting your milestones soon enough.

Because if you don't do that, that six months’ difference, from starting six months earlier and being able to hit our milestones, our target dates for taking the company public six months sooner, made all the difference from making no money and losing money to having made millions of dollars. Timing is so critical in a lot of ventures.

Two, it makes you look at the importance of revenue and the importance of profitability. If you have revenue but no profit, you don't have a sustainable business. You won't be able to survive for very long because you're going to be burning whatever you have in your coffers, your bank account. So you have to consider revenue, but you have to consider profitability. You have to consider your expenses. You have to consider what your profit margins are and how soon you can get to profitability.

Because if you don't have a profitable business, it's not sustainable. If it's not sustainable, you'll never get to a viable business where you have all the systems and operations and procedures in place to continue running that business and actually walk away with it and let the business keep running without you being there.

So you start to look at these things in terms of timelines.

Seth: Yeah, that's the tricky balance with business. On one extreme, you could say, I just want to do good for the world and money doesn't matter. But you can't do that. You got to think about the revenue and the profitability.

But, I don't know, it's kind of like it loses its soul when you don't actually have a greater purpose or mission behind it. But finding that sweet spot where you're doing good for the world and you're making good money from it, that's kind of like the Holy Grail everybody's looking for. It's not always easy to find that.

Marco: No, it's true. And you're talking about purpose, and it's good to have purpose in a business.

Today, with the business ventures that I'm involved in and with several of my business partners, purpose is a central focus. We give back. In some of our companies, some of our businesses, we give back 10%. We contribute or donate 10% of the profit to charitable nonprofit ventures.

And the one specifically that my partners are building that I'm involved in is called Impact Others. And it actually has a website called impactothers.com. And we have people making donations as little as $25.

But what we're doing is we have projects all around the world where we're providing communities, needy communities, with clean, drinkable water, often from wells that they don't have. Like they just don't have water. You know, water is a struggle, basic thing. But clean, drinkable water, food on a daily basis, training the locals in entrepreneurship so they can be self-sustaining, learn how to run a small solopreneur business and be sustainable. So now they can feed themselves and their families. Schooling, like education for the children in the community and make that a sustainable part of it.

And so these projects can be anywhere from $20,000 to $100,000. And so, the donations that we bring in just go to funding those projects. And we put each project on the website so they can see, oh, here, this one's in Ghana or this one's in Pakistan or in India. And this is a $50,000 project. And here's what we're building out. So that's the purpose. Like, that's the give back part of it all.

Seth: It's awesome. I'll link to impactothers.com in the show notes, retipster.com/188, if anybody wants to check that out.

So Marco, the things that you've talked about the past couple of years at REWBCON is why you are bullish on real estate. And in other words, like things are looking up. It's going well. It's going to keep going well.

I'm curious why, because that's something I think I needed to hear a lot last year. And you gave really good sound reasons for that. It's something a lot of people are constantly wondering about. Like, is the bottom going to fall out next year? Is it all going to go horribly wrong? So what are your reasons for why things are looking up?

Marco: Well, there's a lot to say about that.

Seth: Try to summarize in 30 seconds if you can.

Marco: Yeah.

Seth: I'm just kidding.

Marco: Yeah, I'll try not to be long-winded, but we can kind of do a little bit of a deep dive in two or three of those areas.

Basically, it's this. It's if you consider what Jon Gray said, who's the president of Blackstone, very smart guy. I mean, he's the guy who started Invitation Homes back in 2012. And they've just been one of the largest, if not the largest purchaser of single-family homes in and around the United States for the longest time. Very, very smart guy. He's probably got a net worth of $7 billion, according to Bloomberg. So he's not a schlep. He's a very successful person.

And Blackstone, as a company, brings in between $100 and $200 billion of capital a year, if not more. They bring in a lot of money. So they put that money to work. And a lot of what they've been focused on is residential real estate And back in January of 2022, in the Wall Street Journal, he said, never in his 30-year career has he seen real estate fundamentals as strong as they were two years ago, like two years ago around this time. And that's pretty much still true to this day.

So Jon, at the Blackstone earnings call they had in late January of this year, he basically said that the overall backdrop in the U.S. is a housing shortage. And that's namely in the single-family space, like the residential but single-family space. And that's the area that they've been focused on for a long, long time. And these guys spend lots of time and they put a lot of resources and people and money into doing research around the country and figuring out what the heck is going on.

So this kind of spills over into the multifamily space like duplexes, triplexes, fourplexes and even small-to medium-sized apartment buildings, which is kind of where Blackstone is moving towards. It's not just single-family homes, but in the duplex, fourplex and small apartment space, because there's such a lack of inventory for residential real estate. That kind of sets the stage of what is going on.

But at the core of it, it's really about fundamentals, like the macroeconomics of it. And that's just supply and demand, economics 101. When you look at our existing housing supply, what inventory is available, the inventory that's available right now is floating somewhere around 1 to 1.1 million units.

Now, that sounds like a lot, but that is actually almost at the historic low. Because if you go back to 1982, the historical average of our existing housing supply is about 2.2 million units. That's how many units we need per year to supply the existing demand for sales and new households, new household formations in the country because of organic growth and immigration.

And if we don't have 2.2 million units, and you'll see different numbers on this, you'll see 2.5, 2.7. The point is still the same. If we don't have that number of household units per year, then we're in a deficit. And that just means that each and every year we are getting further and further behind in terms of how much housing we actually need.

So this is a perpetual problem where we have housing demand exceeding the existing supply. Now, granted, it's improved over the last two, three years, because builders have just hit the gas pedal and started to create more and more new housing construction, like new housing units, which is great. It's helped.

But if you look at housing inventory from the oversupply or undersupply perspective, and you look at what's for sale, what's for rent, how many permits are being pulled versus how much new housing stock is actually being built by builders, you actually get a more interesting number. You will see that housing is actually undersupplied right now by about 2.1 million units.

So that is a pretty serious problem. Having higher mortgage rates as of late over the last year adds fuel to that fire, that problem, because it lowers affordability. Fewer people can qualify for housing to buy their own place. They're forced into the rental pool, which is not a bad problem if you are a real estate investor and you own a portfolio or you're building a portfolio, great. That pushes rental prices up, which lowers affordability for renters.

But it's good for you as an investor because it means more rent, more revenue, more profit from your real estate portfolio. It also pushes real estate prices up, which is price appreciation, which means your properties are actually valued at larger amounts, like larger dollars. So when you're on that side of the fence or on that side of the equation, it's better for you, but it still creates a problem.

So with these higher mortgage rates, they've been squeezing the market and squeezing people out of the buying pool and into the rental pool, which means that it's helpful because it lowers demand for housing, which is already constrained. But we're still seeing a downward trend in terms of housing inventory. That's a bad thing.

But that is turning around. Mortgage rates are coming down. They will continue to come down slowly over time. We will ultimately see this problem resolve itself based on current trends by about 2030. So we're still about six to eight years away before we see an equalization or normalization in the market. But that's subject to change too. There's a lot of factors that can come into play in terms of mortgage rates, people's credit, the amount of debt they carry, meaning how affordable, how well they can afford housing.

But the point of all that is this, lack of supply, strong demand, it's creating constraint in the market. So if you're a real estate investor, it's great for you. And this is why I'm bullish because we do have a lot of opportunity in the housing space, whether you're a builder, an investor, a flipper, whatever it might be.

So I can pause there. There's a couple other reasons I'm bullish, but fundamentally speaking, that's the big one.

Seth: So on that, a lot of people in our audience are land investors and many of them, the way that they work with land is they buy larger parcels of land and then subdivide them to create more parcels that they can then be built upon. It kind of goes hand in hand with the housing market and how much building is going on.

But I'm curious for like developers and subdividers and people like this who help create new inventory, what would be some warning signs to see on the horizon, whether it's one year or five years or 10 years from now? Like, what can we be looking at to say, this may be coming to an end pretty soon. Maybe we should slow up or we should stop working so hard as trying to create new inventory. Any ideas what the warning signs would be?

Marco: Are they subdividing the land to create buildable lots?

Seth: Usually, yeah.

Marco: So this is for residential?

Seth: Yeah. I mean, sometimes it's a major subdivide, where they take a big parcel and turn it into hundreds of smaller ones. Other ttimes,it's taking like a 40-acre parcel and turning it into four 10-acre parcels. But usually the idea is that something will be built there in the near future.

Marco: The best thing you could do as a real estate investor in general (it doesn't matter whether you're involved in land or not; it's irrelevant) but stay focused on housing trends.

In fact, that is so important to me. I actually spent five figures for the domain name housingtrends.com. That's how important it is to me. I'm actually building a site that's going to help land developers, land investors, residential investors. I'm building a tool. There'll be free content, but it's subscription-based tool that provide all kinds of data and analytics for people looking at what's going on in a state, a metro area, a subdivision, a zip code or a street. So you can see where supply and demand sits and pricing trends and all that kind of stuff.

So what I'm trying to say is you've got to stay focused on trends. If you stay focused on trends, you'll know what's going on. And trends can be price trends, sales trends, and a good one for land investors, land speculators, land flippers, or land developers are the number of permits being pulled by builders in an area.

If builders are not pulling permits or making permit applications, that's telling you that demand is waning or demand has gone away. But if builders are moving in into an area and they're pulling permits and they're wanting to build, they're planning to build in the next 6 to 12 months because they're pulling permits, that's a good sign. It just means that there's going to be demand for land and buildable lots and whatnot.

And you could position yourself to potentially sell that land to more of the smaller boutique builders, not just the D.R. Hortons or the Stanley Martins of the world. But you can look at the custom home builders or the small boutique builders because they don't want to buy land and put it on their books. They want to build a house on a parcel of land that's either pre-sold to a buyer or that they're going to buy at the last minute to build a house that they just sold to a buyer that wants to build it in the area.

So now they've got the buyer, they've got the deposit, they've got everything they need. They just have to lock down the land that they're going to be building on. So that's kind of a strategy.

Seth: I remember when I was building my storage facility, that was one thing I looked at kind of for a different purpose, but just to make sure there's no competitors being built at the same time I was building mine. I called the township and asked to see any permits they might have. And it was kind of a process. I'd put in a FOIA request and pay money and all this stuff.

So, how do you do that at scale? And is there some website that shows you all the permits being pulled and how much does that cost and how much is too much or not enough?

And even just in general, like your REWBCON presentation, there's so much information you look at to stay on top of these trends. Like, where do you even begin? What do you look at and how do you make sense of these trends?

Marco: Permanent information, it depends on the county. I mean, it's county by county. A lot of it is available at the county level. Sometimes it requires manual work, but that type of information is free.

But there are content aggregators. I can't name one off the top of my head. The data I buy is kind of from a private institution. It's very expensive data but they already aggregated the information from other sources. I don't know what all the other sources are, but I will say this: you could do a Google search and find information about permits being pulled.

I’m not sure what you would type in, like new building permit applications, new building permit trends, you'll probably go down a rabbit hole. You'll probably start to find some some websites and articles that provide that type of information. I think Zillow or Redfin or maybe Realtor.com has that information or had it at one time. They actually published existing home inventory and new home inventory. And then tied to that, they had building permit applications.

I will say this. I know the information is out there and it's available and it's probably available from multiple sites. It's just a matter of some Google searches to find it. But that information is available. I know I've seen it on many websites.

Seth: I know on Land ID, you can see where the developments are and who the developers are. I don't know if that's like building permits per se, but you can at least get an idea of, like, who's building in what areas of the city, that kind of thing.

Marco: Yeah. I know that information is available because the data service that I subscribe to, which is over $3,000 a month (it's not cheap), provides that information on a community basis, like down to the community level. So you can see who's pulling the permits and how many are being pulled, right down to the community level.

So that information exists. I know it's out there. It's just how it's presented or packaged.

Seth: So this other data that you look at for your REWBCON presentation, like understanding the current inventory throughout the country. How much stuff have you looked at to come up with that? Is there some website you're following or something, or does it just take you hundreds of hours to pull that information together?

Marco: No, there's all kinds of websites out there.

And again, it goes back to doing Google searches, but every website out there has similar information, but also different information. And sometimes it's the same data, but they present it differently.

Like Neighborhood Scout is a website that I helped shape. I have no interest in it. I'm not an owner. It got bought out by CoreLogic. So Neighborhood Scout is one. Then there are chunks of information available from Zillow, Redfin, Realtor.com. They aggregate a bunch of information. John Burns Real Estate Consulting has some information on their social media platform.

Seth: I'm linking to all this stuff in the show notes again for all the listeners out there.

Marco: Yeah, Altos, A-L-T-O-S. Altos Research is also a good site. They have a lot of good information and they pull from all the MLS sources around the country.

Seth: Nice.

Marco: Not the actual data. Well, they pull data, but they pull the trends from that data. The government websites aggregates all the statistics.

Datausa.io is another one. The National Association of Realtors has tons of information. Harvard. It publishes a lot of great information as well.

Seth: So that's the kind of stuff you look at when you're trying to make sense of what's going on nationwide?

Marco: Yeah, that's some of it. Believe me, there's tons of it. ApartmentLlist.com used to publish rent-based data. U.S. Bureau of Labor Statistics. That's the one I was thinking of. So U.S. Bureau of Labor Statistics has mountains, mountains of data. So it takes a little effort to kind of weed through it. That's another one. So that's BLS.gov, the Bureau of Labor Statistics.

Statista is kind of a mess of information, but you can find some very interesting research and insight there.

The Milken Institute used to publish information. I don't know if they still do, but they used to publish a lot of information. There are so many others.

Like, I mean, Google's almost your best friend. And just typing in search phrases that are clear and specific, and it'll just take you to a whole bunch of places that you can go down rapidly.

Seth: Yeah, I've heard of some of those. I have not heard of all of them, but that's great info to start with.

That's a funny thing with the Google. It's almost kind of like a forum sometimes where it's like, this is good info, but like, how do you really know when it's the best or the right info or if that person really knows what they're talking about? So it's helpful to hear from you the specific places you check out.

Marco: Yeah, those are many of them.

And then there's a bunch of them that are paid subscriptions. Like you won't get any kind of information, but they’re warehouses of massive data, like they have an unbelievable amount of data on every single property in the country. It's just a crazy aggregate.

And those are the people that I'm talking to in order to build the website. I ultimately want to build that housingtrends.com. I'm going to license the data and then use that data to create the maps and analytics and trends and reporting and stuff that I want to provide to real investors, ultimately.

I mean, that's more of a pet project for me. It's not something I need to do. I just don't have the time for it.

Seth: No, that sounds super valuable.

Marco: I want to do it just as a pet project.

Seth: Man, that's awesome.

So like, are there any particular challenges you see investors facing today or that they will face in the next few years? And how do you think they're going to overcome those?

Marco: Yeah. One challenge is just the lack of available inventory.

If you roll back to pre-COVID, it wasn't that difficult. It was getting more difficult to find inventory, but it wasn't that difficult. But then things got tighter and tighter and inventory kept dropping while demand continued to increase. So one challenge is finding enough inventory for your purposes.

But as I mentioned to you before, and something I said in my keynote presentation at the conference, is when I get asked the question, “Is now a good time to be buying real estate?” And my answer to that is yes, it's always a good time to be buying real estate.

And it's not because it's not a question of when; it's a question of where. There are always opportunities. The United States is made up of over 500 metropolitan statistical areas, and they're all broken up into sub-markets and then areas and then neighborhoods and communities and whatnot. So there's something going on everywhere all the time.

And so there are always opportunities. It's just a matter of, where is their inventory? Where do the numbers make sense? And where can you find a deal that will make sense—carry itself, has positive cash flow, has growth potential, is in a market that has stability, is in a market that has jobs and ideally job growth, and a market that has population growth. If you have those two things, you've really licked 70% of your decisions.

And then as long as you're in a good community, like a neighborhood, like what I'll classify as a B, B-plus, A-minus type of neighborhood, you've probably mitigated 80% of your investment risk. When you you have those factors in play, don't start with the property. Start with the market and the neighborhood.

The market is the most important deciding factor in where to look. The neighborhood is where you mitigate your risk because you want a strong rental pool. You want high desirability in that neighborhood. You want the numbers to make sense. You want it to be, relatively speaking, low crime, a desirable area. And then you look at the property, the condition of the property, and the numbers on the property. A lot of investors actually do it backwards.

They start with the property and then really kind of neglect the neighborhood or don't pay a lot of attention to the neighborhood. And the market is kind of an afterthought. So top-down approach.

Seth: That makes a ton of sense. So if you were talking to 18-year-old Marco today, if he were to come into the future and sit in your office right now, are there like top one or two or three markets you would tell yourself to go look at right now?

And why is that? Like, are there any specific places that you know off the top of your head? Yeah, this is a good market because of this. And this is how I know that because I went to this website and it told me this.

Marco: If you're asking me about the best markets or the top markets to invest in, first of all, you have to understand that my company, Norada Real Estate Investments, is in 25 markets. So when I try to narrow those 25 markets down to three, I can pick any three and they're all fine. They're all good, but for different reasons. Some are more prone to appreciation potential. Some markets are better suited for cash flow and cash-on-cash return.

And so when we're talking to an investor or when an investor is talking to an investment counselor at our company, we're going to ask questions and figure out what's most important to them. Is it the cash flow? Is it the immediate returns, cash-on-cash? Or is it price growth or appreciation potential in the years to come? Are they short-term, long-term investors? We'll kind of figure out where their head's at and what their investment goals are.

So I can answer that question basically in different ways, depending on what you're looking for.

Seth: Is your housing trends software going to do that? Like ask questions? Like, do you care more about appreciation or cash flow? And based on those answers, here you go, look at these markets. Is that kind of where that would be going?

Marco: It won't ask you the questions, but it'll answer the questions. That's part of the reason why I want to do it is just to help people zero in on starting with this country that's massive, that has 500 MSAs, and then zero down on markets that make sense.

So when we look at the markets right now, you can look at the top markets in the country and about 80% or 81% of them, we would rank as either in normal home market conditions, like supply and demand and sales are normal. It's basically normal inventory, normal sales cycle, normal everything. They're either normal, strong, or very strong.

Most markets today are back into the normal state. They used to be strong or very strong in terms of sales, the number of sales, sales briskness, the lack of inventory, price appreciation trends. That's what we saw for years, especially over COVID.

Like COVID, 2020 and 2021 were crazy years. We saw an average of about 20% appreciation on a nationwide basis, two years in a row. And that's just unsustainable and crazy when you stop to think about it. Things have normalized since then, obviously. But today, most of the markets, about 80% of them, are what we would classify normal or strong.

And so right now, from a sales perspective, like market conditions, Charlotte, is what we would call a strong market. Although I don't recommend anything in California, LA and Riverside are relatively strong in terms of property sales, but most of the country has a normal market. And a lot of the markets that we've been focused on are the Midwest, pockets of the Northeast, a good portion of the Southeast, heavily into Florida. To a lesser degree now, Texas, just because prices have appreciated so much relative to rents.

But the Midwest, Indianapolis is a perennial market. Kansas City, Missouri is a perennial market for us and great for investors. We've been in Kansas City for almost 20 years straight now. It's just a perennial market for us.

We're in many markets within Florida, in and out of markets like Jacksonville, Cape Coral, that whole southwestern corridor. To a lesser degree, Orlando. Can't get anything in Atlanta right now. Memphis, Tennessee is a strong market for us as well; we have a lot of inventory so we've we're in and out of that market when we get inventory. But we're always bullish for the Memphis area.

Seth: When you're deciding on these markets, do you have a checklist of, “We got to get answers to these 10 questions and this will tell us yes or no to this market because of this.” Do you have something like that?

Marco: It's basically this. Is there inventory in the market? Do the numbers make sense in the market? A lot of people refer to it as the price, like the rent-to-value ratio or the price to rent ratio. If you can't buy, San Francisco won't make sense. Why buy a one-bedroom place for a million dollars that you can only rent for about $4,000? That 0.4% rent ratio, it's not going to work. It won't cash flow. Like you'll be upside down.

And then you also have kind of higher risk of downside side price declines rather than upside. If you look at a market like Kansas City, Missouri, or Memphis, or some of the Ohio markets that we're in, you can get $150,000 property. Like a single-family, three-bedroom detached home for, I'm talking between 100,000 and 200,000, but call it 150,000, that will rent for $1,300 or $1,400 a month. The numbers work. It will cash flow. It will carry itself. It's in a good neighborhood. It's in a relatively strong market. It's not like a great market for strong price appreciation looking into the future, but it's a market that will do well. It'll carry itself.

So we look for good markets. Where there's inventory, the numbers make sense at the metro level. There's job stability, ideally job growth, population growth, ideally. If it's a flat market, that's fine because you're going to be in a desirable neighborhood.

You want a property that is either new, like- new construction, or like new, meaning there's no deferred maintenance. It's what we call turnkey inventory, turnkey real estate. So it's new or like-new. So no deferred maintenance.

Like I said before, the numbers make sense. It's got a rate of return. Turn it's in a good area good neighborhood. That's a very important thing. I would say a B-plus type of neighborhood, bread and butter, it's a cross between white collar and blue collar employees, large rental pool, low crime, good not great but good schools.

That's kind of your middle of the bell curve type of area, so the bread and butter communities, which are, for me, B, B-plus, A-minus graded neighborhoods. They don't have to be premium areas, luxury areas, and they don't have to be in war zones. You want to stay away from that.

I'm not a big fan of like the low, lower-middle income areas like the C-class neighborhoods. They look good on paper and they can do well, it's just I find that, over time, they can be expensive because of the high cost of the turnovers and the damage that could be done or left behind by by tenants. It's just you're dealing with a different demographic, a different class of tenants, so for me I like being in those B-class neighborhoods. So that's kind of the checklist.

And then of course, if you're not self-managing, having a great full service professional property management company—not an individual, but a professional company, a management company that manages your properties. You could self-manage. It's not a problem. You can do that.

So that would be the checklist. And that's exactly what we walk investors through.

Seth: Yeah. So when you sell a turnkey rental, do you have a property manager picked out already that kind of meets that criteria? Because I know that's a common issue I hear from a lot of people, and I’ve experienced it myself, where some property managers are terrible. So how do you make sure you get a good one?

Marco: Yeah. So being a turnkey property provider, we provide everything for the investor and, at no cost, we don't charge for our service.

So we've got an inventory of properties in 25 markets. The management is tied in with it, but you don't have to use that property manager. You can use any property manager you want. You can self-manage it if you want. We just provide it for you, someone or a company that we work with, that we've vetted, that we know we can provide the financing and everything else.

But with the property management company, again, like I emphasize, full-service professional management, a lot of property management companies go off of reputation, meaning that you want to look into their track record and reputation. And that's not that hard to find. You'll find all kinds of information online as well as reviews. You can also ask them for references. Of course, they're going to give you their best references, but nonetheless, it's good to know.

Talk to the team, talk to more than one person, interview more than one person from the company. Talk to the owner if you can, talk to the leasing agent, talk to the maintenance coordinator. Just get a feel for how their systems and operations are and what kind of operating procedures they have in place. Because it's kind of like a marriage, they want to work with you ideally and you want to work with them, but you want to make sure it's the right fit, and you want to understand how they work, what they can and can't do.

Seth: And just one last question. So I heard you say a few times, you got to make sure that there's inventory in the market. So what do you mean by that? What is enough inventory? Is there a certain ratio or number you're looking for to be like, okay, that is officially enough. Now I can go there versus that's not enough.

Marco: It's not a number, exactly. It's really just if that market checks the boxes in terms of the rent-to-price ratio, meaning that there are areas within that market where the numbers will work.

You can't get something that will make sense. Cash flow has a positive cap rate, the cash-on-cash return. You want to make sure that there's enough available inventory for sale that you can actually pick something or find something. Because if something goes on for sale in that market, in the bread and butter communities, and there are five offers the day it's listed, you're going to have a hell of a time getting a property there. It’s a numbers game. You'll ultimately get something.

But if you're competing, if inventory is low, there's not a lot for sale and you're competing against a lot of people who are wanting to buy whatever comes up for sale, it's going to be a difficult market to try and get something with the numbers that you want to get them at. You may be forced to pay over the fair market value, and that's only okay if the number still makes sense and it's a market that presents strong appreciation potential. Because if you have to pay a little bit over market, that market will quickly catch up to what you've overpaid if you're paying over fair market value.

So it's not necessarily a bad thing, but it's easier to work in a market where there is lots of available inventory, which is why we like places like Memphis, Tennessee, Kansas City, Missouri, Indianapolis, pockets in the Northeast, for example, some of the secondary markets in Pennsylvania, the Ohio markets like Cleveland, Cincinnati, to a much lesser degree, Akron and Toledo. But there's definitely inventory in those markets.

Seth: Yeah. Like you said earlier, it's not like you're getting on Zillow, looking in Cleveland and say, okay, good. There's 400 properties. I'm all set. It's more about, I'm going to crunch the numbers on a number of properties, see if the numbers work. If they work, if I can actually get this property, that's how I know there's inventory. It's not necessarily about the number of properties on the market. Is that accurate?

Marco: Yeah. Another way of saying that is if I can't find properties that make sense for me, the numbers work, it's in the right areas, it's available for sale, I can make an offer and I have a good chance of getting it or buying it, or if it's new construction, of course, getting it from a builder, then yeah, then inventory is going to be tight.

And there are degrees of tightness. How difficult is it going to be to get that ideal property that you want to add to your portfolio?

Seth: That's a good distinction to make. Because in the land business, a lot of parallels there in terms of choosing market and figuring out what is the sold to for sale ratio and how many days on the market are these properties there.

But in order to even go there, you need to already have some assumptions made about how much am I going to be offering for these properties? What's my plan for them? Am I going to be improving them in some way or not? Because that totally can change the course of what's acceptable for you or not. So it's kind of a holistic thing that you gotta take several different things into account.

But I want to switch gears just a little bit, talk about kind of your personal experience and advice for investors. Cause I know you've been in this business for a long time. You've seen a lot of things, you've talked to a lot of people and I know you've even done these kind of interviews quite a bit on podcasts and you've got your own podcast.

And I'm curious, when you get interviewed like this, or when you listen to other interviews and conversations about this business, what's something you think people talk about too much? And what's one thing you think they don't talk about enough?

Marco: Oh, wow. Never been asked that before. That's an interesting question.

What do they talk too much about? I don't know if there's any one thing that's too much, but a common question is like, what are the hot markets?

Seth: That seems to be what I asked you about.

Marco: Yeah. People who are not really well-seasoned will always ask, well, what's the hot market? My response is, how do you define a hot market? What's hot to you? Is it price growth, rent growth, sales activity, available inventory?

The thing that all the investors are talking about what's hot today in terms of investor interest, what are they tweeting about versus something else. Define a hot market? Hot in terms of cash flow, hot in terms of appreciation, that can mean different things to different people. And so I see that being kicked around a lot.

Sometimes people refer to it as best, not necessarily the hot market, but what's the best market. That's what's talked about a lot because obviously that's what people are interested in. Where should I be investing? What's the best market that I should be investing in right now?

Seth: I've heard it said that for every complex question, there is an answer that is clear, simple, and wrong. So I think maybe that's what's going on is people just don't want to think too hard about it. They want you to just give them an easy button and they'll realize the complexity involved and understand some of this stuff.

Marco: A hundred percent. Yeah, everybody wants the easy button. That's probably the thing, I think, has been talked about the most or too much. What was the other part of your question?

Seth: What's one thing you don't think they talk about enough?

Marco: Maybe it's some of the things we talked about, just the fundamentals and the principles, like what should I focus on? What is my checklist? How should I be approaching real estate investing?

Like, for me I have all these rules like, and one of them is like taking a top-down approach. Don't be presented a whole bunch of properties and evaluate the property. And then look at other factors around it, more big picture, start with the market. I call it the funnel approach. Start with the metro area, the markets within it, the neighborhoods, and then the property. And then you build your team around you, your property manager, your lender, etc.

Taking that top-down approach will assure that you have a high degree of success.

Seth: What is something that you hear novice real estate investors or critics of real estate investing complain about that makes you roll your eyes?

Marco: Damn, that's a good question. I wish I had known these questions beforehand.

Seth: My goal was to stump you.

Marco: I think the biggest thing that makes me cringe is what I call real estate speculators. They think they're investors, but they're not. They're gamblers. And they speculate on the market. And that’s their sole focus.

My pseudo-cousin is an example of this. He's just been lucky or fortunate because he's been in markets that have just been experiencing hypergrowth. So he's done well from an equity perspective, but not from a cash flow perspective. And it's just investing in the so-called hot markets, markets that are experiencing strong growth and price appreciation.

But if that's your sole focus and you've got blinders on, you're not considering all the other factors that you should be considering, then I refer to you as a real estate speculator, not a real estate investor.

A real estate investor is focused on sustainability and cash flow. So they've got the cash flow. They've got cash flow to carry the property in the short term and forever, but they know that they're in markets that have growth and appreciation potential. So they're going to make out well in the years to come.

That's investing smart and strategically rather than just focused on rolling the dice at a craps table and saying, “Yeah, you know what, I should be able to flip this house in a year and make 50 grand on it,” or something like that if they wanted to sell it.

So that's a mistake a lot of investors make, but especially made in the early 2000s, like leading up to 2006 and the housing crash. That's where a lot of mistakes were made and a lot of investors were left with their shorts down when the water went down because they couldn't carry the property. They bought a property, went up fast in value, and then the market turned and then that equity disappeared and dried. Then they were upside down. They owed more than the house was worth, what they could sell it for, and they couldn't carry it.

If they were able to keep that property and carry it for the next three, four years, they would have made out okay. They would have come out on the other side whole and then would have made gains in terms of appreciation from that point forward. But because they had negative cash flow, they couldn't afford to keep it. They couldn't carry it. And they were forced to sell, liquidate, foreclose, or file bankruptcy.

Seth: Now that you've gotten this far in your business and your career, you're successful. I don't know what your PFS looks like, but I presume you've made plenty of money in your career. You're in a place where a lot of people would dream of being.

And now that you're on this side of the fence, what's something that really is everything you thought it would be? And then, what are some dreams that you had early on that turned out to be maybe false hopes or just harsh realities of the business?

Marco: Well, I guess the more success you gain and the more financial freedom you have, the more things you can do that are more fun projects.

Like we were talking about this before with with Broadway, it just gives you the freedom and flexibility to do other things. Some of them being passion projects or investments that are beyond what you started with. For me, it was business and real estate. And then that ventured out into me creating Norada Capital.

Norada Capital Management is my private equity firm, but it's an investment fund. So investors are investing every day, but certainly every week, to make 12% and 15% gains. And we arbitrage that capital and I can build things, build business ventures and projects and whatnot that I want to do. Not that I need to do, but that I enjoy, understand, have fun and can make more money and then contribute back to impact others, for example, or other purpose-based projects or purpose-based endeavors.

I think the first goal for a lot of people probably should be to be financially independent, which means that you've got your monthly expenses covered. And beyond that when you 2-5x that income, if you need $5,000 a month to live and cover everything and be okay, like completely sustainable, then you should look at at least 2x-ing that, get to $10,000 a month. Now you're financially free.

When you're 2x or 3x, you're financially free. When you cover your nut at $5,000 a month, you're financially independent. You can get to 2x to 3x that. That's financial freedom. And if you get 5x to 10x that, that's when I consider a person to be truly wealthy. Now you shouldn't have very many concerns at all.

And you have a lot of time freedom to be able to do what you want, when you want, with who you want, how you want. And you can make a real difference. You can do things that can change the world, impact the world.

Which is like what we're doing with our Aspire tour events every month in different cities around the country. We bring in up to 4,000 or more people at each event. It's crazy. We're just providing people with all kinds of incredible content and education to build themselves personally, financially, and otherwise.

Seth: You've got a lot going on. You do all kinds of stuff, don't you? How do you juggle all this? How do you keep it all straight in your head?

Marco: A team. You can't just do it all by yourself. You have to hire the right people to help. You have to have the right partners and then the right team of people to help you execute and build.

You come up with the ideas and the vision. You build the right team around you to make it happen. And then you bring on the team, whether they're employees or contractors or outside staff or whatever it may be. You bring in the people that can execute and fulfill that vision.

Seth: How much of this stuff would you say runs without you? Like you could literally die tomorrow and this stuff would keep going without you. Is any of it like that? Or do you have to like kind of check in every week or every month or something? How much involvement is required from you at this point?

Marco: I'd say 80% of it is sustainable. The other 20%, either I need to be involved or I choose to be involved. And it's usually both. Usually those are tied together.

I don't want to let go completely. I don't want to be a control freak. I want to have some level of control and I want to know what's going on and be able to conduct and direct what's going on. So I want to feel that I have some level of impact and control over it, but I don't want to be micromanaging or a control freak and directing everything because then there's no point in having a team.

Seth: Yeah. To some extent, it's almost like if you don't want to play any role in it, then why is it there at all, you know? Like, why don't you shut the whole thing down? So there kind of has to be that balance of, you're sort of there but it doesn't need you necessarily to exist.

Marco: That, actually, is ideal. Building a real estate portfolio is a great example of this. If you can build a real estate portfolio that is profitable, cash flows, is sustainable, and doesn't require your time and attention on a daily weekly or monthly basis (especially if you have a manager managing it like a management company), then you can go on a vacation for a year. You can disappear for a year and come back a year later and everything should be running smoothly.

You might have someone as a backup in case your team or your property managers need to contact someone and you choose to make yourself not available. At least give someone the knowledge and authority to make decisions on your behalf while you're away. And under that scenario, theoretically, you could disappear for an entire year and come back and everything should be just as good, if not better, than when you left.

Seth: So this is kind of a random thing, but I noticed as I was preparing for this interview, I saw you had posted something on LinkedIn or Twitter or something. There was this quote that said, “You don't have to be extreme. You just have to be consistent.”

And I think I know why you feel this way. The statement makes perfect sense to me, but I'm curious if there are any situations in life where you do have to be extreme or when your life or career really does boil down to one key moment.

If so, what situations do you think that would be true?

Marco: You need to be extreme when you are required to hustle to get something launched.

I like to use the analogy of a rocket getting off the launch pad. When you first launch a rocket, it requires a lot of fuel and energy to get it moving. When you watch a rocket lift off, it moves up slowly off that launch pad. It looks like it's almost not even moving, but you're burning the most amount of fuel at that point in time to get it off the launch pad.

And then slowly, as you keep pushing it and burning that fuel and putting a lot of energy into it, it starts to move and accelerate faster and faster, until you ultimately are going hundreds of miles an hour. And then ultimately, you get into orbit, where it requires the least amount of energy. But now you're in orbit and you've built this thing. You've launched the rocket. You've got this thing going.

So that's when you have to be really aggressive and be hard and strong.

You know, it makes me think of David Goggins. He would say… He's one of the guys we have at our events each month at Aspire.

Seth: Oh, cool.

Marco: He just broke his leg. Well, not on purpose, but I was just looking at his cast.

Seth; Are you sure he didn't do it on purpose? Seems like he would do that kind of thing.

Marco: Well, it was a choice, but he had to get his leg fixed and they had to break his bone in order to fix it. So the pictures weren't pretty. But the guy’s a machine.

Seth: Does this stem from his experience in the Navy SEALs when he messed up his knee and had to tread water or something like that? Any correlation?

Marco: Yeah. He's had knee damage for a long time.

But one thing I like quoting him on is he would say, “Stay hard, mother*****r.” You can finish that sentence. But you do in the beginning. You need to stay hard and aggressive and not let up. You need to push with all your might and energy to get that rocket off the launch pad, because if you can do that, then the longer you go, the easier it becomes, the more sustainable and profitable your ventures are.

The first property you buy is going to be the hardest one. It’s got the steepest learning curve. It's going to be the most unnerving and stressful. The second one will be a little bit less. So the third one will be much easier. The fourth one will be even easier than that.

So you've got to push hard and build that momentum. And then, as you go, you'll realize, oh, damn, this wasn't so hard. You know, when you look back, it shouldn't have been as stressful as I'd let it be.

Seth: So this is the Aspire Tour. Is that right? I think I found that on Instagram.

Marco: Well, the website is Aspire with an A, AspireTour.com. A-S-P-I-R-E, Aspire. You know, like I aspire to be something bigger, better, greater than I am.

Seth: Yeah. Got that. Sweet. Yeah. I'll put that in the show notes too. It sounds fascinating.

Marco: So we usually post two or three months in advance on the website. Like we'll always add cities. We might have four or five of them there. The closest we just finished was Denver two days ago. It was Dallas before that. LA and then Dallas before that. The next one closest to you is probably New York.

Seth: Okay.

Marco: Maybe there's another closer market. But we just signed the agreement about a month ago for Madison Square Garden for July 20th.

Seth: Wow. Wait, what role do you play in this? Did you start this or are you a co-founder?

Marco: Yeah, I'm a co-founder. I'm essentially a one-third partner. So I have two partners building out Aspire and our money is mastermind and our real estate mastermind, which is called Level Up Real Estate.

The Aspire event is really to get 2,000, 3,000, 4,000, 5,000 people in a room and just feed them tons of great information, content, value, personal development, business development, entrepreneurship, real estate education, and entertainment all in one full day. And then from there, if they love what they learn, they love what they see, we give them the opportunity to attend our master classes, our mastermind. They can go further down the rabbit hole with us, but they're going to get a ton of value and entertainment at the Aspire event.

Seth: Yeah, that's awesome. I'm looking at it now, there's a lot of big names that have been involved with that, so that sounds pretty cool. I'd have to check that out.

Marco: Yeah, if you, as my friend, want to attend any of them, just let me know. I'll give you VIP access as my guest.

Seth: I appreciate that. It's very, very kind of you. Yeah. I'll let you know if I'm ever able to fit that in.

I know we're coming up on our time limit here. One last thing I just wanted to mention, this is something a lot of people might not know about you. I know we kind of mentioned a little bit earlier, but you are a Broadway producer and co-producer, right? Your productions include, correct me if I'm wrong, A Beautiful Noise, Broadway Vacation, Harmony, Joy, The Devil Wears Prada, and Here Lies Love, among others. Is that right? And how did you get into that work and why?

Marco: Yeah, those are six of them. I think I'm involved in about 11 or 12 of them. We just had opening night last month for The Notebook, based on the movie and the book, which was phenomenal. I highly recommend The Notebook. It's such a great production.

And then if you remember the band The Who with Pete Townsend, so they have all kinds of great songs. But Tommy was one of the characters in one of their songs that you remember, Pinball. But anyway, we just opened up Tommy a couple of weeks ago. We had opening night for that. And that's a great, great production as well.

Seth: And you actually like one of the financiers of this, like you invest in the production and pay for it to get up and running. Is that right?

Marco: Yeah. I'm one of the co-producers. So, you have three levels, if you want, from an investment perspective in Broadway productions. And I'm talking in general terms, generally speaking, you have the lead producers, who are typically the general partners. Like if you had a real estate syndication, you have the GPs and LPs. So the GPs are typically the lead producers that could be one person or two or three individuals. And they're usually the ones that bring it all together, make the story come together, bring in the initial team to get that production off the ground.

Then they will bring in the investment capital needed through co-producers, which are often associates and people that they know in the industry and whatnot. And so the co-producers typically come in with bigger numbers as an investment and they're usually the people listed above the title. So you'll have the title like, Sister Act is another production that I’m in. You'll see Sister Act or Broadway Vacation, or The Devil Wears Prada, and above that you'll see a small batch of names. Those are the co-producers. And then, right above the co-producers you'll see one two or three names and those are the lead producers.

And then anybody else that could potentially be making an investment or just simply referred to as investors, they don't show up anywhere, but they've got a piece of the production in terms of an investment perspective.

Seth: So how much does it cost to, for you to do that kind of thing? Like per production? And what kind of return would you normally expect out of that kind of thing?

Marco: Well, it's an interesting question. You're actually asking me two fun fact questions. To invest in Broadway, it depends on the production, the amount of capital being raised, and the lead producers.

Some Broadway productions, off Broadway or smaller productions, can be $3-5 million total capital raise. Most of them are between $10 and $20 million. The larger ones, like the much larger expensive ones, can be $30 million-plus, but most of the productions I'm involved in are like $15 to $25 million.

The investment will depend on, again, the lead producer in the production, but the minimum investment is typically between $50,000 and $100,000. And then there's often no cap. It's just until they fulfill their capital raise. But I don't go in for $50,000. Like if I'm going to be involved, it'll be six figures. My largest one was seven figures as an investment.

So it took me a while to get my head wrapped around that years ago. Because if you're coming from the real estate space, an investment in a film or a Broadway or theatrical production does not make sense to you if you've got the mindset of a real estate investor. Because you don't get returns right away.

Your first goal, first of all, if you're going to write a check, you write the check as if you're never going to see that check again. The risk is pretty high, like about seven out of 10 productions will lose money. You won't recoup your investment. You'll lose money on it. Two out of 10, you should recoup your investment and maybe make some money.

And then it's to be determined how long you're going to make a return because it really comes down to how long that production's running. And then about one out of 10 will be like a Wicked or Hamilton or Phantom of the Opera or something like that, where it'll just run for years until you just want to shut it down. And those are big moneymakers. So those could be astronomical, like they'll just print money for years.

But it is a high level of risk. And you have to know that going in not every production makes money, a lot of them will lose money. But the rates of return can be anywhere from negative to zero to 10% to 30% on your money. And then the ones that run for years on end can be a lot more than that; they can 2x, 3x, 4x, 5x your initial investment.

Seth: So like, what's your track record? I don't know if you're open to sharing that, but like, do you lose money a lot? And if so, why do you keep doing this? Is it just fun for you?

Marco: Well, it is fun. It's sexy. It's entertaining. I like the arts. I support the arts. I love theater. I fell in love with musicals and theater long, long ago when I first saw Phantom of the Opera almost 30 years ago.

Seth: Did you see it in Toronto?

Marco: No, good guess, though. But it was actually in Calgary. The first time I saw it was Calgary, Canada. And then I saw it again in New York. And then I saw it again in Orange County, California.

I know one of the Phantom singers who played at the opera. We had him sing at Aspire actually a few times as entertainment right after lunch as people were coming back from their lunch. Yeah.

So it's a fun industry. You definitely will have your losses and successes. You should never invest in theatrical productions or Broadway if you're only planning to invest in one production because odds are stacked against you to not recoup your investment. So you have to go wide, not just deep in one.

Seth: Marco, thank you again so much for spending your time with me. I know we're at our time limit here. If people want to work with you in any way, I know you've got several websites. I'll link to all of them in the show notes. Again, retipster.com/188. But if there's one particular place you would drive them to, where would that be?

Marco: Probably just my personal website because I link to Norada Real Estate. I link to Norada Capital. I link to all the things I'm doing from there. So it's just my name, MarcoSantarelli.com. Just my full name, MarcoSantarelli.com.

And just as a side note, my Instagram, I couldn't get Marco Santarelli, so it had to be MarcoGSantarelli, my middle initial. But yeah, you can follow me on Instagram as well at MarcoGSantarelli.

Seth: Thanks again, Marco. Appreciate it. And hopefully we'll talk again soon.

Marco: Thank you so much, Seth. This has been fun. I appreciate your time today.

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The post 188: Market Whisperer Marco Santarelli’s Lessons on Real Estate, Business, and Success appeared first on REtipster.

The REtipster Forum Is Back!

Seth Williams — Thu, 09 May 2024 13:00:24 +0000

It's been four years since we first launched the REtipster Forum. It's been quite the journey so far as thousands of users have joined and added their voices to our growing community.

Visit the Updated Forum!

We recently made some major updates to give this online community a huge facelift, and I wanted to take a moment to let you know about what's new!

History of the REtipster Forum

When the forum first went live in 2020, the software we chose for this forum turned out to be problematic.

Not long after we launched it, we learned that the software was creating some big SEO issues for REtipster.com as a whole. As a result, we had to lock the forum down and make it visible only to registered, logged-in users.

This was a big disappointment at the time because our biggest goal with this forum was to grow our community and attract new voices worldwide. By making it private, many people couldn't find us as we wanted them to!

Fast-forward to 2024. After four years of limping along with the wrong software, I finally bit the bullet. I invested a sizeable amount of money in migrating our community to a new forum software. So far, it's been a huge breath of fresh air!

This new forum allows all the same users to log back in (after resetting their passwords) and pick up where they left off.

Join the Party!

If you haven't visited our forum in a while, you should check it out!

And if you haven't been to our forum before, this is your formal invitation to join the party!

This is an incredible group of people, with thousands of registered users, and it's only going to get better now that we're working with a vastly improved platform.

Give, and You Will Receive

I learned years ago that when you give more of yourself, your ideas, your time, and encouragement to others, it will return to you in spades. Don't hold back from giving to your fellow forum members; good fortune will come back to you.

Complete Your Profile

Whether you create a new account or log back into your existing account, be sure to complete your profile! Let the community know your real name, where you're from, your website URL (if you have one), your specialties, and what kind of value you can bring to the community.

Just click on your profile to get started.

From within your account, you can add your bio, where you're located, add your website URL, and let the community know your interests and areas of expertise.

This isn't the place to hide behind an obscure username or fake picture. It's a place to be real so you can network effectively, ask for help, and offer help to others so we can all get better at what we do!

Share Your Experiences

If you've done a recent deal or learned a huge business lesson (from a huge success or a disastrous failure), share it on the forum! Many people stand to benefit from your experience, and you can quickly become a well-known and respected community member through your willingness to help others do better.

Ask a Question

Chances are, you're stuck on something. If a person is actively trying to move forward in the real estate business, they're likely stuck on something, and if they aren't currently, they will be soon. There are no dumb questions. If you're confused about something, dozens of other members have the same questions.

This is a safe place to ask those questions! You might be surprised at some of the brilliant feedback you'll get from other members.

Post a Review

Think about the latest real estate-related thing you paid money for. If there's a product, service, software, book, course, or anything else you have recent experience with, let our community know your experience! Other people need to see if you had a great or terrible experience with it.

Check out the Reviews & Recommendations section and post your experiences here.

Doc Swap

Do you have a valuable contract, disclosure, affidavit, letter, or other template that has been useful to you? Are you looking for some examples from other members of our community?

Be sure to visit the Doc Swap section of our forum, where all members are free to request and share the most valuable documents in their arsenal!

Network Like a Pro

Want to connect with other investors in your market or find out who you can help with your professional services?

Check out the Networking category, where you can discover other aspiring real estate investors who are either in your same geographic area and/or working in the same niches and specialties as you!

Build a Reputation. Make a Name for Yourself.

Remember that everything you post on this forum can boost your career, reputation, and respect among others in the real estate industry. Leave thoughtful, well-articulated, and helpful responses. Ask well-thought-out questions that show the community you've spent time and energy thinking through the issues ahead of time.

What Can't You Do?

Like any good forum, there are some ground rules you should know about.

These general guidelines should be followed to keep this forum a helpful, meaningful, and safe discussion place.

No Self-Promotion of Spam

This forum is not the place to advertise your site, property listings, or affiliate links. Any self-promotion for your products, services, paid content, and irrelevant links aren't allowed. Doing so will often result in removal from the forum.

Be Specific and Helpful

This is a place to ask well-articulated questions about specific issues and offer direct and useful feedback. Open-ended announcements, requests for deals, vague or incoherent comments, or generally unhelpful “noise” will be removed.

Be Kind and Courteous

Treat everyone with respect. Healthy debates are natural, but kindness is required. Bullying or rudeness of any kind isn't allowed, and degrading comments about race, religion, culture, sexual orientation, gender, or identity will not be tolerated.

Create Your Account!

With that said, I want you to drop whatever you're doing and create your free account on the forum!

This community only works if YOU get involved, so put this tool to good use and help add value to the community!

When you join, announce yourself in New Member Introductions and tell me you're there (you can tag me at @retipsterseth). I hope to hear from you soon!

The post The REtipster Forum Is Back! appeared first on REtipster.

Fundrise Review 2024: What Happened to My $1,000 Investment After 7 Years?

Seth Williams — Tue, 30 Apr 2024 13:00:18 +0000

Disclaimer: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on REtipster.com. All opinions are my own. The information contained herein neither constitutes an offer for nor a solicitation of interest in any securities offering; however, if an indication of interest is provided, it may be withdrawn or revoked, without obligation or commitment of any kind prior to being accepted following the qualification or effectiveness of the applicable offering document, and any offer, solicitation or sale of any securities will be made only by means of an offering circular, private placement memorandum, or prospectus. No money or other consideration is hereby being solicited, and will not be accepted without such potential investor having been provided the applicable offering document. Joining the Fundrise Platform neither constitutes an indication of interest in any offering nor involves any obligation or commitment of any kind. The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found at www.fundrise.com/oc.

Get Started With Fundrise

In 2017, I made a video and blog post explaining how Fundrise works.

As part of this review, I decided to invest $1,000 of my own money with the company so people could see exactly how it worked, and we could check in on that investment each year to see the results.

Since then, I’ve been tracking the progress and returns from that investment by putting together annual video updates showing the dividends and how much the money has grown.

My goal with these annual reviews isn’t to convince anyone to invest with Fundrise. My goal is to inform you of this investment strategy and the unique fact that you don’t need to be an accredited investor to participate.

What Is Fundrise?

Fundrise is a real estate investing platform that allows investors to invest smaller amounts of money into not a single property, but into “pools” of real estate.

It makes real estate investing accessible to a broader audience by allowing investors to contribute smaller amounts than traditional real estate investments.

People invest with Fundrise mainly for convenience, lower entry costs, and the potential to earn passive income through real estate. Real estate is often considered a stable investment compared to more volatile markets like stocks.

The First Year With Zero Principal Left

After withdrawing my original $1,000 principal investment in 2022, this is the second year I've seen how the remaining re-invested dividends continue to grow (or shrink) on their own.

Of course, my investment performance doesn’t determine YOUR returns if you decide to invest with Fundrise. Every eREIT performs differently, and the performance will vary each year.

Even so, this review will offer insights into how Fundrise performs as a company, specifically compared to other investment options like the stock market, mutual funds, or similar websites.

It's a lot of fun to see the actual returns on this investment and not just a theoretical picture of what's supposed to happen.

Fundrise Performance Update for 2024

When I first invested my $1,000 six years ago, I told Fundrise to automatically reinvest all of my dividends (rather than sending them to my bank account). This is a big part of why $752.78 of “value” is left in the account. This number would be substantially lower if I didn't reinvest these dividends.

Get Started With Fundrise

As of April 22, 2024, the leftover funds after withdrawing my original $1,000 investment (with all dividends automatically reinvested) haven't done particularly well.

Runaway inflation, followed by continued higher interest rates, has taken its toll on the U.S. real estate market, and it shows in its performance over the past year. This is the second year I've ever seen any of these numbers go backward, and I wouldn't be surprised if this trend continues in the short term.

2021 was the best year at 20.4%, and 2023 was the worst at (12.6%). So far, 2024 seems to be on a slightly better track. I doubt it will be a stellar year, but we won't know until the year ends.

The screenshots above were taken on April 22, 2024 (a few days after I recorded the video above). April 22 isn't even a full four months into the 12-month calendar, which is part of why the 2024 year-to-date earnings look disproportionately smaller compared to the previous years.

Is 71.3% a decent return over the past seven years?

Considering I spent no time or energy stressing over property managers, tenants, contractors, lenders, or anything else, I can't say I'm disappointed.

I certainly could have made much more money over this time if I had put this money into my land investing business, for instance, but the advantage of something like Fundrise is that it's passive.

The more lucrative real estate investments typically require much more thought, effort, and risk, whereas something like Fundrise. At the same time, it has its share of risk, too (as we saw in 2023 alone), and requires absolutely no time or energy from me, which is a nice advantage.

Fundrise's appeal isn't in the high returns. The appeal is the passive nature of this investment and the fact that it requires nothing besides the initial dollars I put into it.

The Biggest Drawbacks to Fundrise

As many people have mentioned in the YouTube comments over the years (and I would have to agree), the biggest drawback to investing with Fundrise is the fact that I can't quickly or easily cash in my shares before the five-year holding period unless I want to pay the penalty for redeeming the shares early.

This five-year penalty also applies every time I automatically reinvest my quarterly dividends. For example, if I reinvest a dividend in year three, I have to wait five years from the date of that investment before I can redeem those shares. So, it creates this constant five-year waiting period every time new dollars go into their system.

When you compare this lack of liquidity with the stock market, Fundrise looks less appealing.

On the same coin, there is something to be said for diversifying your investments into the real estate sector instead of staying strictly with the stock market, as most “normal” investors do. Even if the returns aren't substantially higher, there is value in simply having your dollars spread out among different asset classes.

Should You Invest With Fundrise?

I'm not here to give you investment advice; I'm here to share my Fundrise investment story so you can understand the real-world consequences (for better or worse) of investing in these kinds of eREITs.

If you're wondering whether this is a good time to start with Fundrise, I think there is something to be said for entering something like this during a down cycle, which we seem to be in the middle of and possibly coming out of. Again, it's difficult to say for sure at the time of this writing).

Fundrise seems well aware of where things are at and where they seem to be going. You can find this in their Newsfeed, where they regularly post their findings, research, and explain how things are going.

It's important to remember that while Fundrise offers an accessible and comparatively low-effort way to dip into real estate investing, it's not without its risks and limitations, particularly in liquidity and fluctuating returns.

Get Started With Fundrise

Whether you invest with Fundrise or not, make sure it aligns with your financial goals and risk tolerance.

Stay curious, stay informed, and, as always, invest wisely.

The post Fundrise Review 2024: What Happened to My $1,000 Investment After 7 Years? appeared first on REtipster.

The Hidden Link: Mastering QR Codes for Real Estate Success

Seth Williams — Tue, 02 Apr 2024 13:00:49 +0000

You've probably seen QR codes on billboards, business cards, magazine ads, and many other places for years now.

They're nothing new, but people and companies are becoming more creative with where and how to use them.

Now that QR codes are more commonly used than ever and the average person knows how to scan them with their phone, with a little creativity and planning, there's a new world of opportunities to engage with our potential clients and customers!

QR Codes: What Are They Good For?

QR codes (a.k.a., quick response codes) are incredibly versatile and can trigger all kinds of actions from a person's mobile device. For example, if you've ever interacted with a QR code, you probably know its most common use is to send people to a website.

It may not be obvious at first, but this is actually a big deal!

Think about it—you can send someone anywhere. Why limit yourself to your website's homepage? You can use it instead to communicate with your ideal customer in creative, unconventional, and interesting ways.

Here are some ideas I was able to think of:

Send them a short video of yourself, telling them about what you do and how you can help them.
Create a new page on your website designed to greet a person and explain certain details they need to know.
Create a pre-written text to prompt potential customers to reach out to you and start a new conversation.
Send them an email opt-in form with more details about what you can do for them (perfect for building an email list).
Send them a form explaining how you can help and what information you need, then, collect that information from them (this is what I do on my buying website).

Wherever you send someone with your QR code, keep their journey in mind and acknowledge how they got there.

For example, if you created a QR code and placed it on your business card, your landing page could say,

“It was nice to meet you!”

If you created a unique QR code and placed it on your mail piece, your landing page could say,

“I see you got our postcard!”

If you created a unique QR code and placed it on your PowerPoint slide, your landing page could say,

“Thanks for attending the presentation!”

Don't just send them to a generic page with no personality. Treat them like real people (which they are) and usher them through the next stage of your conversation with them.

Present a QR code well, and it can lead your prospects to your desired outcome.

Common Ways to Use QR Codes

Sending someone to a web address offers a lot of possibilities, but that's only the tip of the iceberg.

There are billions and billions of ways QR codes can be used by realtors, real estate investors, and professionals in many other industries.

Here are some popular ways they're used:

1. Dial a Phone Number

QR codes are also a great way to get prospective clients to call you. Whether you send these callers to a pre-recorded voicemail message or answer the calls live, this can be way easier than manually making people type in your phone number.

2. Send a Pre-Written Text to Your Number

This is a brilliant use of QR codes. If you want your prospects to take the first step toward working with you, it's extremely easy to have them scan your code, populate a pre-written message (one you wrote), and send it to your number. After they scan the code, all they have to do is tap Send!

On the other end of this number, you could have it prompt them to join an email list, have a live conversation with you, or even communicate with a chatbot.

The beautiful thing is that when they send the message first, they're effectively opting in. This means you can talk freely with them and say whatever you want without having to adhere to the strict texting regulations that most carriers have.

3. Send a Pre-Written Email

Like the texting example above, you can also have a QR code trigger your prospects to send a pre-written email to whatever address you want it to!

It's the same idea behind the SMS approach; you're just using email instead of texting as your medium of choice.

You could also apply this to WhatsApp, which can be particularly useful if you communicate with people outside the United States.

4. Linking to Social Media Accounts

QR codes are a great way to send people directly to your online social profiles so they can like, follow, subscribe to, and connect with you on social media.

Unfortunately, QR codes are ugly, but luckily, you can tweak the appearance of your QR codes quite a bit. This goes for the colors you use, the images you incorporate, and even the shapes that make up the design.

Here are four designs I created for free through QRcode-monkey.com.

Pretty cool, huh?

Creative Ways to Use QR Codes

But we've barely begun to scratch the surface. QR codes can be much more than just directing people to a website, email, or a social media account.

Here are other unique ways to use QR codes.

PDF or ebook downloads
YouTube videos
Google Maps locations
PayPal “Buy Now” Links
Image files
Dropbox, Google Drive, or OneDrive links
Contact details
Attendance tracking
App store downloads
View business locations
Directions to any location (starting from the user's location)
Promotions, discounts, raffles, and giveaways
Issuing receipts
Calendar invites
Online storefronts, menus, or product lists
Geofencing (see the geographic location from where a person scanned your code)

And the list goes on and on and on.

You can even create dynamic QR codes. This means you can edit an existing QR code in the future and change the type and/or the information it contains. If you change your mind about what a particular code will make the user do, go ahead—make it happen!

Where to Place QR Codes

And it gets even better. You can put QR codes on virtually anything.

As long as people can see the QR code through their phone camera, they can go where you want them to go and do what you want them to do.

Here are a few practical and creative places you can place a QR code:

Postcards
Letters
Business cards
Websites
PowerPoint presentations
YouTube videos
Company logos
Social media profiles
Craigslist listings
T-shirts
Car magnets
Stickers
Napkins
Billboards
Temporary tattoos
Permanent tattoos (if you're really hardcore)
Trade show booths
“For Sale By Owner” signs
Bandit signs
Within blog posts
Coffee mugs
Tickets, passes, and admission bracelets
Nametags
Shipping boxes
Bus stops and subway stations
Print advertisements
Product packaging

Heck, try this one on for size:

In an effort to boost tourism the Xinhua village in China built a giant QR code from 130,000 trees so it can be scanned by passing planes.
byu/ADarkcid ininterestingasfuck

Too big? How about a QR code that's 2% of an inch, which is nigh-invisible, and can be used to deter forgeries and enhance security?

The possibilities are endless.

Placing QR Codes Correctly (and in a Practical Way)

For many years, most people didn't understand QR codes or what to do with them. You might even remember that camera phones back then didn't support it natively, so you had to download a separate QR code scanner app to scan one.

Fortunately, we're leaps and bounds away from those dark, unenlightened times. These days, you can simply open your camera app, point it at the QR code, and voila!

Even so, if you want to ensure everyone understands how to use your QR code, it doesn't hurt to hold their hand a little. QR codes obviously don't make sense to human eyes, so we don't know what's really behind them (or where they're leading us).

For example, suppose you see this on the side of a bus one day, with no context or explanation:

Would you stop what you're doing, reach for your phone, and try to scan this thing?

I wouldn't.

If I have no idea what it's about, what it will do, and no compelling reason to engage with it, why would I exert any effort to scan this thing? Worse, it could be a phishing link out to scam me of my personal or financial information. No way.

Even if people understand how to use a QR code, they need a compelling reason to take out their phone and scan it. They also need to trust the source to some degree—again, that the QR is safe, and you're not out to get them.

One subtle way to encourage people to use your QR code is to give them some instructions. Even just including the words “SCAN ME” somewhere with the image is better than nothing.

Here are a few examples:

Note: Most of the QR codes in this blog post were created for FREE with QRCode Monkey.

Be Smart About QR Codes

QR codes are brilliant little pieces of technology, but they're only as brilliant as you are.

Think carefully about how you're going to use them. Remember, people are going to scan your QR code on their phone, which means you need to keep a few key things in mind:

If you're sending people to a website, it must be mobile-friendly.
You should only display the QR code where people will have an adequate wifi or phone signal.
You should only show QR codes that can be easily and safely scanned. For example, it isn't a good idea to put these on a billboard next to a highway since people won't be able to scan them safely while driving.
Ensure the QR code image is large and clear enough that any modern phone with a camera can scan it.

Most QR codes are pretty ugly, to begin with, so it's also smart to consider where and how you will incorporate them into the overall aesthetic of the object or image and whether they will stand out or blend in with its surroundings.

How to Generate QR Codes for Free

Do a quick Google search, and you'll find many free sites that will help you create your QR codes for free. I tested a few out, and they all seemed to work pretty well. Here are a few I've had a good experience with:

QRcode-monkey.com – This is my favorite one. It's easy to use and you can easily customize your QR code. No account is required.

QR-code-generator.com – Another solid QR code generator that offers many different options and variations on what the code looks like and what it does, although a free account is required to use the site. It also has some impressive QR code tracking functionality built into it.

BeaconStac – Another great resource for creating QR codes in seconds. Use them to send people to a website URL, call a phone number, send an SMS message, send an email, save a VCard, and more.

Have you used QR codes for anything in your business? What did you use it for? Where did you place the code? Did you get any worthwhile results from it? Let us know in the forum!

The post The Hidden Link: Mastering QR Codes for Real Estate Success appeared first on REtipster.

Why Everyone Is Switching to Relay: Uncover the Hidden Benefits

Seth Williams — Tue, 19 Mar 2024 13:00:28 +0000

Get Started With Relay!

One of the most important best practices for any new business owner is to keep personal and company finances completely separate. Not only does it help stay organized, but mixing the two can cause all sorts of legal and tax issues down the road.

When I started my first business and began sorting out my banking situation, I thought,

“Do I use my personal account? Maybe I should open something new at the same bank?”

When I tried opening a business account with the same bank where I had my personal accounts, I quickly realized that most banks aren't great for small businesses.

Anytime I wanted to do something even slightly outside the norm, like open a new account, it felt like an ordeal. And don't even get me started on all the random fees they charged!

Some banks and credit unions may be fine for personal use, but that doesn't mean they're set up to best serve the unique needs of a small business owner.

The Search for Business Banking Begins

Clearly, I needed to find a better banking solution tailored to my needs. But it seemed like every bank had some kind of drawback, whether it was high minimum balances, fees for everything, or just not having the tools I needed to manage my finances properly.

You might be tricked into thinking you have to compromise, but that's why you need to know about Relay.

At first, I wasn't sure what exactly they were. A bank? Not quite.

What Is Relay?

Relay is a business banking and money management platform. That may sound like a mouthful, but it’s basically a service where you manage your money and decide where it will sit. It allows you to manage your business’s cash flow and clearly understand what you’re earning, spending, and saving.

If you’ve seen our review of Mercury, Relay is a similar concept. While Relay itself is not a bank, your money is FDIC-insured through its banking partner, Thread Bank. Like Mercury, Relay is completely designed for startups and has no physical branches.

And here’s the kicker—for most intents and purposes, it's fee-free!

There are some random things that come with very minimal fees (like domestic and international wires), but even then, it's very cheap (we're talking $5-$10). Otherwise, any transaction you make with Relay is free, there are no minimum balance requirements, and their website and mobile app are a joy to use!

Getting Started With Relay

Everyone appreciates simplicity and ease, and Relay does this by making account creation as easy and as straightforward as possible. You can do everything completely online, whether you’re on a computer or your phone. Relay has an intuitive mobile app that allows you to do everything you need without switching to another app.

But unlike other banks that make the signup process feel like you're renewing your driver's license at the DMV on a busy Monday, Relay has turned this into an easy, seamless, interactive experience with questions and little prompts. You can sign up in less than 10 minutes, and I was shocked at how it almost felt fun.

Setting up your business profile and linking to an existing, outside bank account is also incredibly smooth. Relay integrates seamlessly with popular accounting software from the get-go, such as QuickBooks or Xero. The ability to easily tie everything together in one place will be a huge relief for you and your accountant.

Plus, this integration is also optimized for accountants and bookkeepers since Relay has a few features that make it easier for these professionals to use the platform. If you want to get paid (or pay someone using Relay), it also integrates with many leading payment processors like PayPal, Stripe, Gusto, and others.

Check out this video where I recorded myself setting up my account with Relay, and you'll see how easy it is!

Get Started With Relay!

The process might differ slightly if you’re not a U.S. citizen or resident, but it's not difficult. You just need your employer identification number (EIN) and LLC registration.

Compare this to traditional banks, which require a social security number and a physical visit, and you’ll wonder why most banks aren’t doing it this way.

Features That Won Me Over

As I started using and exploring Relay more, I discovered many features that blew me away.

Being able to open up to 20 checking accounts and two savings accounts with one click was amazing, especially considering how hard I've seen other banks make this process.

And since it’s easy to open a new account in seconds, it can save you a ton of time when you own multiple properties in one LLC, for example.

This ease is also a match made in heaven for cash flow frameworks that use multiple accounts, such as Profit First. Which is funny, because Relay is the actual banking partner of Profit First, and you can see why—it’s made to automate percentage allocations every week, for instance, as you adjust your earnings and pay yourself first.

On that note, one of the hardest things about implementing Profit First is manually transferring money around to different accounts when each deposit hits your main account each day, week or month. Well, Relay has basically solved that problem with the different automations you can set up to happen whenever you want, and for however much you want transferred around to whichever accounts you want!

If you use Profit First in your business, you are going to LOVE Relay!

Get Started With Relay!

One downside of using most online banks is that it can be harder to work with cash because there isn't a bank branch nearby that you can visit whenever you need to.

While Relay doesn't have any branch locations, it is connected to the Allpoint ATM Network, which means you can withdraw cash from any Allpoint ATM location and even deposit cash into your bank account if you can find an Allpoint Plus ATM location!

You can find your nearest Allpoint ATM here.

Customer Support

Finally, if you ever get stuck on anything, you can talk to someone by phone if you need help (and this alone is a big deal).

Some software companies leave it to chatbots, or at the most, they might give you an email address they'll respond to within 24 hours on business days. But Relay has an actual manned customer service department. They’re in Canada, though, but interestingly, Relay’s banking partners are all in the U.S.

A Few Growing Pains

Now, Relay isn't without some limitations. One limitation is that check-writing functionality hasn't been rolled out yet. I hear it’s in the pipeline, but there’s no scheduled release for this feature as of this writing.

But if you need to send checks, you can order them from your Relay dashboard and mail them to your recipient, which can take 8–10 days, or you can simply get a company credit or debit card through Visa and pay your recipient this way.

They also implement transfer limits for new users. This is a security measure rather than a limitation, which should deter bad actors from using the platform to set up illegitimate or illegal businesses. You can always ask for an increase in transfer limits as you use the service properly, but the initial transfer limits may take some time to get used to.

Another potential drawback (depending on what you're looking for) is that if you’re looking for financial products like mortgages or HELOCs, Relay can't help you. I’m not sure if Relay will offer these kinds of banking products in the future, but if you’re looking for something like that, you'll have to shop around for a traditional brick-and-mortar bank or credit union instead.

The Bottom Line

After using Relay, I can confidently say they’re leveling the playing field. Handling finances is now streamlined and easy, and if you're a new business or tech company that rarely has a reason to visit a local bank branch in person, it's hard to think of many reasons not to consider something like Relay.

And I think many people on the internet agree. That said, while general sentiment has been positive, it doesn’t mean Relay has no critics. It remains to be seen how well they can continue to provide excellent service and value to their customers over time. But in my experience, Relay is an incredible service, and its customer support team is incredibly responsive and helpful if you find gaps in what they're offering.

And if you’re wondering, is there a special promotion going on right now with Relay? The good news is that there is! Click through the REtipster affiliate link to open an account. If you deposit at least $100 into your new account, Relay will give you an extra $50 for free.

Get Started With Relay!

If you’re going to open an account with Relay anyway, why not get some free money from the deal?

Before you go…

Relay is a solid option, but there are a lot of money management solutions out there. If you're curious about some alternatives worth considering, check out my review on Mercury, which offers a similar set of advantages with a few distinct differences.

The post Why Everyone Is Switching to Relay: Uncover the Hidden Benefits appeared first on REtipster.

Monetary Metals Review: Earn Passive Income on Your Gold & Silver

G. Brian Davis — Tue, 06 Feb 2024 14:00:12 +0000

Historically, precious metals have served as a hedge, a reserve, and a risk protection strategy. But you probably wouldn’t describe money held in gold as “put to work” on your behalf.

Take me, for example. I invest in real estate for cash flow, growth in value, diversification from stocks, and protection from inflation, among other reasons. And while precious metals offer three of those four, they’ve never offered cash flow.

That’s the beauty of Monetary Metals: it puts gold and silver to work to earn income.

If you like the idea of diversifying into alternative investments beyond real estate, read our full review below.

Monetary Metals Review

Summary

Monetary Metals holds your gold and silver with no vault or storage fees. Even better, they provide opportunities for you to invest your metals to earn interest on them through lease or bond offerings.

They put plenty of guardrails in place to protect your metals, and they've never had a single default or late payment. But they remain a relatively new and novel platform, and it's not necessarily easy to determine the risk of any given investment.

Get Started with Monetary Metals!

Pros

No vault or management fees
Interest net of fees
Perfect track record
Loss protections
Some liquidity
Free shipping available
Interest paid in kind
Completely passive

Cons

Few investment options
High minimum investment
Metal transaction fees
Risk difficult to determine

What Is Monetary Metals?

Monetary Metals is a market-maker that connects investors with companies that use precious metals in the course of their business. Examples include precious metals dealers, refiners, recyclers, jewelers, mints, and mining companies.

These businesses lease gold or silver from Monetary Metals—or more accurately, from you. You own the metals and simply lease them for use.

In exchange for leasing your investment metals, you collect interest. Think of it like a loan, except instead of lending dollars, you lend your gold and collect interest, also in gold. Monetary Metals finds the lessees and alerts you when new leases become available. You choose an amount to invest in any given lease or wait for the next one to come along.

Alternatively, Monetary Metals sometimes opens gold bonds for investment. The bond issuer borrows gold and repays you in gold. Gold bonds on Monetary Metals are only available to accredited investors, however.

How Monetary Metals Works

After creating an account and verifying your identity, you can then add gold or silver to your account in one of two ways:

You can buy metals directly on the platform (after wiring funds to your account).
Ship your physical gold or silver (free of charge under certain conditions).

The company earns money by charging a premium to lessees (usually 2% above the marketed interest rate) and not through vault fees. In other words, you don’t pay Monetary Metals—the company leasing the gold does.

On the other hand, you invest by browsing available leases and bonds. Each investment option displays the offered interest rate, the term, and the repayment frequency. Most leases pay monthly interest, but some pay quarterly.

Here’s what an actual account statement looks like:

When the lease ends, you can typically renew to reinvest with the same lessee (or not, if you’d rather withdraw your metals). In fact, you can usually withdraw your metals even mid-lease, because most leases oversubscribe. If you want to pull your gold out early, most often there’s a waiting list of other investors happy to step in.

Of course, that cuts both ways. When nearly every lease oversubscribes, that indicates a scarcity of investment options—more on that later.

Pros of Monetary Metals

Monetary Metals has a lot going for it.

Consider the following highlights that Monetary Markets makes for its platform:

No Vault or Management Fees

One of the downsides of owning physical metals is that you have to store them somewhere safe (read: totally not under your mattress).

Not a safe space to store anything in, guys.

The trouble is, plenty of banks and online vault services offer to store your gold or silver for you—at a cost. That cost eats into your returns. Many investors skirt the storage issue by investing in exchange-traded funds (ETFs) that own metals. But they simply swap one set of fees for another with annual fund fees.

Monetary Markets doesn’t charge any vault, storage, or management fees to hold your gold.

Interest Net of Fees

When you browse available investments on Monetary Metals, they advertise a specific interest rate. That’s what you earn, with no fees diluting it.

Monetary Metals charges a separate fee to lessees to create revenue, usually 2%. For example, at the time of this writing, Monetary Metals offers a silver lease paying 5% to investors. Presumably, the lessee is paying 7% total to lease that silver: 5% to the owners and 2% to Monetary Metals.

Perfect Track Record

Monetary Metals has batted a thousand on their leases and bonds—no investment has ever lost money.

For that matter, no investment has ever failed to pay interest. Of the 55 metals leases they've executed, every single one has repaid in full, with interest. The same goes for their gold bonds.

That doesn’t happen by accident. Monetary Metals has put strong protections in place to prevent losses.

Loss Protections

To begin with, Monetary Metals requires that lessees buy insurance policies protecting all leased metals. And that these policies list Monetary Metals as the beneficiary in the event of a claim. Monetary Metals also buys supplemental insurance as an additional layer of protection.

They further require lessees to sign both corporate and personal guarantees on the leases. If they were to default, all company assets and the principals’ personal assets would be subject to collection.

Finally, Monetary Metals also keeps a close eye on lessee financials with direct portal access and regular third-party audits.

All investments come with risk, but Monetary Metals has systematically worked to shield against risk from multiple directions.

(Some) Liquidity

If you need to pull your metals out of an investment mid-lease, Monetary Metals can usually accommodate you.

Most investments oversubscribe between 2 to 4 times their capacity, leaving a long waiting list of investors ready to step in if another pulls out mid-lease. So while liquidity isn’t guaranteed, investors can typically recall their gold or silver in an emergency.

Free Shipping From Residential U.S. Addresses

Have gold in a vault behind a painting in your home office?

Gold is heavy and expensive to ship, but Monetary Metals foots that bill for you. They provide a prepaid shipping label from any residential address in the U.S. if you opt to fund your account by shipping physical gold or silver. And they insure the shipment so it doesn’t get “lost in the mail.”

Interest Paid in Kind

You earn interest on the metal you invest, but not in U.S. dollars. Rather, on the metal that you've invested in.

For example, if you invest 100 ounces of gold in a lease that pays 5% interest, you’d close out the year with 105 ounces of gold. It doesn’t matter if the value of gold went up, down, or in squiggly lines that year—you collect interest in gold.

Completely Passive Investment

Once you click the “Invest” button, you don’t have to lift a finger again.

Which is something I’ve come to value more and more as I get older. When I was in my 20s, I had no problem with running around looking at properties, negotiating with contractors, screening tenants, or hassling with lenders, inspectors, and property managers.

Actually, that’s not entirely true; it was a pain even then.

But today, I only invest passively. That goes for real estate investments such as crowdfunding platforms and syndications, and it goes for stock index funds. And that’s why Monetary Metals is right up my alley.

Cons of Monetary Metals

All investments come with drawbacks and risks. So what are Monetary Metals’?

Lack of Investment Options

At the time of this writing, Monetary Metals only has one open investment: a silver lease. There are no gold leases or bonds available.

And when investments do become available, they typically oversubscribe quickly. That means you have to pay attention to email alerts from Monetary Metals and jump on investments ASAP.

It also means you just don’t have many options to choose from, limiting your opportunities to diversify.

High Minimum Investment

Monetary Metals requires a minimum investment of at least 10 ounces of gold or 1,000 ounces of silver.

In today’s prices, that comes to over $20,000 for gold or over $24,000 for silver. That’s not chump change, especially when most investors only put a relatively small percentage of their portfolio in precious metals as a defensive play. You can see how the price of gold per ounce has changed over the last decade below:

Gold prices over the last 10 years (adjusted for inflation). The gray bar in the middle represents the COVID-19 pandemic.

Metal Transaction Fees

If you opt to buy or sell precious metals directly on Monetary Metals’ platform, they charge a transaction fee.

Specifically, they charge a spread over and above the London Fix Price (or the spot price, depending on when the trade takes place). The spread surcharge depends on how much you buy or sell. Monetary Metals charges an extra 0.75% for transactions under $250,000, 0.55% for transactions between $250k to $1 million, and 0.40% for transactions over $1 million.

Risk Is Difficult to Determine

When you invest in a metal lease or bond, how do you know how risky the investment is?

Take the current silver lease offering. The lessee is AGA Bullion, described as “one of the largest precious metals companies in Turkey. AGA offers integrated precious metals solutions including assaying, refining, bullion trading, sourcing, logistics, and vaulting services. This lease will provide and finance their inventory.”

I don’t know anything about AGA Bullion—do you? For that matter, I don’t know anything about how difficult it is to recover money from a company in Turkey if something happens the insurance policy doesn’t cover.

As a layperson with little knowledge of the precious metals industry, I have little to go on besides Monetary Metals’ track record and the steps they take to limit risk. That makes it hard to assess just how much default risk comes with any given offering on their platform.

And that says nothing of the market risk of metal valuations dropping. But that’s a separate topic entirely.

How Monetary Metals Compares to Other Investment Platforms

I don’t know of any direct competitors to Monetary Metals or any other investment platforms offering precious metals leases and bonds. Still, we can still compare them to other alternative precious metals platforms or other real estate investment platforms.

Glint offers a debit card tied to your gold holdings. Every time you make a purchase, it deducts the value from your gold balance. It charges no transaction fees for debit card purchases in the U.S., and charges 0.5% for foreign transactions. That’s lower than the typical 1% to 3% foreign transaction fee for debit cards. However, Glint does charge a 0.02% monthly storage fee to hold your gold, which adds up in the long term.

For a more traditional gold storage option, Vaulted holds your metals for a 0.4% annual fee. You can buy and sell metals on the platform for a 1.8% transaction fee. And if you prefer, you can have Vaulted deliver your physical gold to you rather than store it for you.

Alternatively, you can invest in real estate crowdfunding platforms for fractional ownership of properties. Platforms like Arrived (full Arrived review) and Ark7 (full Ark7 review) let you buy shares in rental properties for as little as $20 to $100, and you get full cash flow, appreciation, and tax benefits. Arrived doesn’t offer liquidity, but Ark7 does offer a secondary market.

If you’d rather invest fractionally in larger properties, EquityMultiple (review) and Crowdstreet (review) let you do so. Expect higher minimum investments, but still potentially lower than Monetary Metals. That said, both restrict access to accredited investors and typically require long-term investments for equity.

Or you can invest in a fund that owns many properties, such as what Fundrise offers. You can check out our review in the YouTube video below.

Nor do the options end there. You can also invest small amounts in secured debts to earn fixed interest. My personal favorite option is Groundfloor (review), which has delivered remarkably consistent returns year-after-year averaging 9.5% to 10%.

Final Thoughts on Monetary Metals

To be candid, I’ve always been skeptical about precious metals as an investment. I don’t like the lack of income, and I don’t like how speculative it feels. The prices rise or fall based on fear of financial collapse or inflation, not based on the measurable value created by a company or property.

Monetary Metals makes a strong case for itself, however, by adding passive income to the returns on metals. It points to historical gold returns of 8.35% over the last 20 years, on top of which you can add 2% to 5% interest from gold leases or 5% to 19% on gold bonds.

Those combined returns sound spectacular for a “defensive” or “hedge” investment. But again, it’s hard to know for certain just how safe the gold leases or gold bonds are.

By all accounts, Monetary Metals has delivered on its promises of security. If you like precious metals as an investment class, check out their current offerings. Just be aware that you take on both default and market risks on the value of precious metals dropping.

The post Monetary Metals Review: Earn Passive Income on Your Gold & Silver appeared first on REtipster.

101 Ways to Find Off-Market Real Estate Deals in 2024

Seth Williams — Tue, 09 Jan 2024 14:00:43 +0000

Have you ever felt like everyone is fishing for the same real estate deals in the same pond?

Surely, there must be some secret “sweet spots” that remain undiscovered, right?

Welcome to the world of off-market real estate deals—where the best, biggest fish (or properties) aren’t publicly up for grabs, but if you can find the right people and situations, where sellers have a reason and motivation to sell at a deeply discounted price, you can still find those areas where no one else is looking.

These properties are like the secret gardens of the real estate world: hidden from the public eye and discovered only by those who know where to look or who have been told by those in the know.

Why elbow your way through the real estate crowd when you can dance to your own tune and find the deals others are missing?

If this sounds like your kind of party, I've got 101 tricks to get you there.

Direct Outreach & Visibility

Drive for Dollars: Cruise neighborhoods to spot distressed properties. Jot down addresses and send them personalized letters offering to buy.
Bandit Signs: Place signs in strategic locations advertising “We Buy Houses.” Ensure you're aware of local regulations about signage.
Direct Mail: Send postcards or letters to targeted homeowner lists offering to purchase their property.
Door Knocking: Directly approach homeowners. While it's bold, face-to-face interaction can yield genuine connections.
Networking: Attend events and join clubs or associations related to real estate. Mingling can lead to unexpected deal referrals.
Referrals: Ask friends, family, or professional contacts if they know anyone looking to sell.
Local Newspapers: Search for distressed sale ads or place your “looking to buy” ad.
Free & Paid Online Marketplaces: Websites like Craigslist or Facebook Marketplace often have properties listed below market value.
Social Media: Post regularly about your interest in buying properties; use targeted ads to reach potential sellers.
Billboards & Public Advertisements: Rent space to advertise your buying service. A constant presence can make you top-of-mind.
Digital Ads: Google and Facebook ads targeting local homeowners can yield leads.
Local Radio/TV: Run ads expressing your interest in buying properties. It reaches a broad audience. While you're at it, you could also try streaming online TV ads!
Walk the Neighborhood: This gives a casual, more personal approach than driving. Engage locals in conversations about the community and any available properties.
Local Festivals: Sponsor or set up a booth. Engage with attendees and spread the word about your buying interest.

Specialized Lists & Databases

Wholesalers: Establish relationships with local wholesalers. They are often the most active local real estate investors and can bring deals directly to you for a fee or markup.
Public Records: Review public property records for liens, divorces, or other indicators that suggest a potential sale. You can easily check for Lien, Bankruptcy and Divorce Status with a data service like PropStream.
Tax Delinquent Lists: Owners owing back taxes are often more motivated to sell at a discounted price, especially if you can make them a cash offer.
Eviction Records: Landlords with recent evictions might be tired and considering selling. Most eviction proceedings are a matter of public record. By visiting your local courthouse or accessing its online portal (if available), you can check for recent eviction filings. This will give you a list of property owners who have initiated the eviction process.
Expired MLS Listings: Approach sellers whose listings expired without a sale; they might still be eager to sell. In most areas, you'll need MLS access to find this information. If you don't have your own real estate license, you can work with a local agent or broker to help you.
Foreclosure Lists: Target homeowners in foreclosure or pre-foreclosure. Offer a solution before the bank takes over.
Abandoned Properties: Research ownership through public records and make an offer. You can also find these properties easily with PropStream. Just filter your list by Occupancy Status > Vacant.
Vacant House Data Feed: Online services can provide lists of vacant homes in your area. Tools like Property Radar and PropStream are perfect for finding houses where the mail is being returned to the sender.
PropTech Platforms: Websites like Mashvisor or BiggerPockets can offer insights or direct listings.
Code Violations: Houses with repeated code violations may have owners ready to sell. Code violations are often in the public records. Depending on the jurisdiction, you can access these records online or at the local city or county office. Most cities and municipalities have a building or code enforcement department that keeps track of properties with violations. Some jurisdictions might have this information available online, while for others, you might need to visit in person.
Quit Claim Deeds: These can indicate family transfers or problematic properties. Investigate further for potential deals. You can use a data service like DataTree to identify recent transactions with quit claim deeds. Just navigate down to Sale Information > Transaction Deed Type > Quit Claim Deed.
Reverse Mortgage Lists: Owners with reverse mortgages might be open to discussions about selling. Many jurisdictions require mortgage transactions, including reverse mortgages, to be recorded in public records. By checking these records, you might identify properties with reverse mortgages. You'll typically be searching for HUD's Home Equity Conversion Mortgages (HECMs), which comprise most reverse mortgages.

Engaging with Professionals & Institutions

Local Auctions: Attend and bid on properties. Auctions can sometimes provide properties at below-market values.
Banks (including REOs): Contact local banks to inquire about properties they've taken back, known as Real Estate Owned (REO) properties.
Bankruptcy Lawyers: Google your local area for bankruptcy attorneys and make connections with them. They often know clients who need to liquidate their assets. You can also find properties with owners going through bankruptcy through websites like Foreclosure.com.
Title Companies: They can provide insights on properties with cloudy titles that might be up for grabs soon.
Builders & Developers: Sometimes, they're willing to offload properties they purchased that no longer fit their immediate plans.
Pension Managers: These professionals are responsible for ensuring pension funds are appropriately invested and generate adequate returns for their members. They often have properties as part of larger portfolios and might sell some occasionally. LinkedIn is a valuable tool for identifying and connecting with pension managers. Use specific keywords related to pension management in your search.
Real Estate Agents: A good relationship can lead to first dibs on pocket listings.
Home Inspectors: They can tip you off on homes with issues that sellers might want to offload quickly.
Divorce Attorneys: Sadly, property sales often accompany separations. Attorneys can be a source of referrals.

Community & Social Engagements

Estate Sales: Approach families selling off assets of their deceased loved ones. They might be considering selling the property, too.
Local Real Estate Investor Associations: Join and network at your local REIA. Other investors might have overflow or properties they wish to offload.
Homeowners Associations: Find and engage board members. They often know about properties in distress or potential sales. Many states and municipalities have organizations or directories that list HOAs. An online search with your state or city name followed by “HOA directory” or “HOA association” can lead you to relevant platforms.
Public Speaking: Offer to speak at events on real estate topics. It establishes authority and attracts potential sellers.
Libraries: Offer free seminars on real estate topics. Engage with attendees and discuss potential deals.
Community Centers: Attend meetings and events. Engage with locals and subtly express interest in buying properties.
Historical Societies: Older homes might need too much upkeep for current owners. Websites like the American Association for State and Local History (AASLH) or PreservationDirectory.com list historical societies by state and region.
Local Charities: Donate or volunteer. Networking here can also yield unexpected leads. Housing and homelessness charities (e.g., Habitat for Humanity, local homeless shelters, housing coalitions) address housing insecurity or homelessness and often have insights into properties that may be available for sale or at risk of foreclosure.
Blogger Outreach: Collaborate with bloggers to write guest posts for them. It's a subtle way to advertise your interest in buying properties.
Trade Shows: Attend or exhibit. Network with attendees, gather leads or even find direct opportunities. Real estate investor expos, conferences, and conventions cater specifically to real estate investors. They are prime networking venues where you can connect with other investors, wholesalers, and industry professionals. Some examples are the BiggerPocket Conference, Best Ever Conference, the National Real Estate Investors Association Conference.
Home Shows: Similar to trade shows but specific to home products. Owners considering renovations might also consider selling.

Alternative & Niche Opportunities

FSBO (For Sale By Owner): Find and engage directly with owners who are avoiding realtors.
HUD Homes: Check listings of government-seized properties. They're often listed below market value.
Bird Dogs: Hire individuals to scout out potential deals and pay them a finder's fee.
Farm & Rural Listings: Sometimes overlooked by urban-focused investors. Rural properties can be slower to sell and may have motivated sellers.
Absentee Owners: Identify non-local property owners who might be tired of remotely managing a property. Absentee owners are easy to identify with online research tools like DataTree, PropStream, and Property Radar.
Flea Markets: Engage stall owners. Some may have or know of real estate for sale. Some vendors at flea markets are selling items from estate sales. If you come across sellers getting rid of a large number of household items, it might indicate financial distress, which could mean a potential off-market deal opportunity.
Utility Companies: Check for homes with long-term service cut-offs, which might indicate an abandoned or sellable property. While utility companies won't typically share specific addresses due to privacy rules, they might share aggregated data or general areas with a high number of service cut-offs. This can be a starting point for your research. In some areas, data related to water shut-offs or delinquencies might be accessible through public records. However, you'll likely need a valid reason for the request, and not all jurisdictions will make this data easily available.
Self-Storage Facilities: Owners might be storing after downsizing and could consider selling their former home. Local storage facility owners or managers might be willing to pass along your contact details to their clients. Regularly visit storage facilities, get to know the staff, and express your interest without being pushy. With permission, place flyers, business cards, or ads on bulletin boards in storage facilities. Your advertisement can focus on helping people sell their homes quickly or assisting with downsizing.
Residence Halls: Find student housing units within college and university campuses. Due to their close connections with faculty and community, university housing administrators might be privy to upcoming housing sales, especially as faculty retire or relocate. To find them, visit university websites for contact details, offer real estate workshops for staff or network at university events, and always prioritize relationship-building and respect in your interactions.
Local Art Galleries and Auction Houses: These venues frequently interact with estate sales, especially when artwork or valuable items are being sold off. The individuals handling these sales might be aware of properties that are being, or soon to be, listed, particularly if the sale of assets is related to downsizing, moving, or settling an estate. Engaging with gallery owners, auctioneers, or staff can provide leads about families or individuals looking to sell properties. Networking at gallery openings, art events, or auctions can be an avenue to establish these connections.
Surrounding Property Owners: If a property is of interest, contact neighboring owners. They might be willing to sell or know more about the target property.
Outreach to Former Clients: If you've been in business for a while, reach out to past clients. They might be ready for another transaction even if you haven't communicated recently. Especially if they had a good experience with you in the past, they may have an opportunity and would be happy to work with you again!
Virtual Assistants: Hire online assistants to scout platforms, listings, and forums for potential leads while you're working the other side of your business.

Engagement with Business & Commerce

Bill Collectors: Identify relevant collection agencies, focusing on agencies that handle significant debts, like mortgage companies, banks, or larger financial institutions, as these are more likely to be dealing with individuals who have real estate assets. Due to strict privacy laws like the Fair Debt Collection Practices Act (FDCPA) and regulations that protect consumer information, bill collectors won't divulge specific debtor details. Rather than asking for specific leads, build a relationship, let them know what you offer, and see if they'd be willing to pass along your contact information to those who might benefit.
Local Chamber of Commerce: Network with local business owners. They might have leads on commercial or residential properties.
Affordable Housing Programs: There are multiple affordable housing programs at the federal and state/local levels in the US (Section 8 Housing Choice Voucher Program, Low-Income Home Energy Assistance Program (LIHEAP), HUD Public Housing Program, etc.). These programs often have online directories where you can find contact details for administrators by state or city. They might know of properties being offloaded or coming up for sale.
Funeral Homes: Sensitive but potentially useful. Surviving executors of the deceased's estate might be looking to sell estate properties.
Neighbor Referrals: Using data services like DataTree or PropStream, find the contact information of owners in targeted areas, skip trace them to find their phone numbers and email addresses, and contact them to offer incentives for working with you.
REO Asset Managers: Engage those managing bank-owned properties. They often want to clear out inventory.
Property Management Companies: They might know landlords wanting to sell. You can find local property managers with a simple Google search and by networking at local real estate meetups and association meetings.
Small Local Banks and Credit Unions: Engage their property departments for leads on repossessions or unwanted assets.
Building Inspectors: Local building inspectors are aware of properties that might be facing code violations or might have structural issues. Owners of these properties might be more motivated to sell rather than deal with repairs or legal issues, especially if they lack the funds or interest to resolve the problems. Building strong relationships with inspectors can give you an advantage in finding these properties before they're widely known.

Online Platforms & Technology

Craigslist: Regularly check property listings and also post your own “Want to Buy” ads.
Virtual Real Estate Investment Groups & Forums: In the digital age, several online platforms allow real estate investors to discuss, share, and discover off-market deals. Websites like BiggerPockets, real estate sections of Reddit, or even specialized Facebook groups can be a goldmine for potential off-market opportunities. Investors, homeowners, or real estate professionals might often share listings, seek advice, or discuss potential sales before they hit the broader market.
Nextdoor: Engage with neighborhood-specific posts or listings.
Property Investment Forums: Participate in discussions. Often, members post properties or leads.
Mobile Apps for Investors: Platforms like DealMachine allow you to scout and contact owners directly.
Online Auction Websites: Websites like Auction.com, Bid4Assets, and even eBay will list properties for sale.

Networking & Personal Connections

Alumni Networks: If you attended a university, engage with your fellow alumni. Conversations can lead to property leads.
Retirement Homes: Engage administrators or residents at local retirement homes. They might know of properties recently vacated and up for sale.
Landlords: Attend landlord meetings or associations. Some might be tired and considering selling.
Co-working Spaces: Engage with startups or individuals at co-working spaces near you. They might have leads or direct opportunities.
Friends & Family: Always let them know what you do. Personal connections often yield the best referrals.
Sporting Clubs & Local Teams: Sponsor local teams and engage with members. Networking here can lead to unexpected opportunities.
Meetups or Investor Groups: Whether the local meetups are directly related to real estate or some ancillary interest, find ones you are interested in and attend regularly. Engage with fellow attendees for joint ventures or leads.

Leads through Services & Rentals

Rental Listings: Find local rental listings and contact the owner or property manager. Those property owners might be open to selling.
AirBnB or VRBO: Find and contract hosts. Some might be considering transitioning out of short-term rentals and selling.
Moving Companies: Local movers are aware of who is relocating and might have leads on homes to be sold.
Carpet Cleaners or Home Repair Personnel: These professionals are frequently contacted during the transition phase when houses are being bought and sold. They are often aware of homes being prepped for sale.

Local Government & Public Services

Planning & Zoning Department: Engage with staff about upcoming zoning changes, which might result in property sales.
Post Offices: They're privy to change-of-address forms and might have leads on vacated properties.
City Planning Office: Engage on information about future developments or neighborhoods seeing changes.
Fire Departments: They can provide information on
Public Utility Offices: Engage staff for data on properties with long-term utility non-usage.

Advertisements & Outreach

Local Magazines and Newspapers: Place ads to let people know you're looking to buy.
Community Newsletters: Sponsor or place ads. Localized outreach can yield great leads.
Church or Community Bulletins: Engage and advertise. Community members might approach with leads.
Local TV & Radio: Advertise during slots targeting homeowners.
SEO & Blogging: Optimize your website to attract sellers searching online for buyers.
Google AdWords: Run targeted ads for terms like “sell my house fast.”
YouTube Channel: Create content about buying properties. Interested sellers might engage directly.
Podcasting: Host or guest on real estate podcasts. Share contact details and buying interests.

Market Research & Analysis

MLS Alerts: Set alerts for specific property criteria. This helps in acting fast on potential deals.
Local Market Reports: Stay updated. Distressed markets can yield motivated sellers.
Property Listing Websites: Websites like Redfin or Trulia can offer insights on potential below-market deals.

Unearthing off-market real estate deals is both an art and a science. While the strategies mentioned above can significantly broaden your horizons, the key to success lies in your consistent effort, building relationships, and always approaching potential deals with integrity and the aim to create win-win scenarios.

Remember, the real estate industry thrives on trust and reputation. By treating each potential seller with respect and transparency, you not only secure a deal today but lay the groundwork for more opportunities in the future. Happy hunting!

The post 101 Ways to Find Off-Market Real Estate Deals in 2024 appeared first on REtipster.

Droners Review: Elevating Your Land Listings With Drone Photography

Seth Williams — Tue, 14 Nov 2023 14:00:33 +0000

Have you ever found yourself scrolling through property listings, only to be captivated by those breathtaking aerial shots that give a bird's-eye view of the entire property?

Or perhaps you've been on the fence about purchasing a piece of land, wishing you could get a comprehensive look at its layout and surroundings before deciding. Wouldn't it be helpful to see what it looks like from the sky?

Enter Droners.io—a game-changer in real estate visuals. This online marketplace is your one-stop shop to find and hire skilled drone pilots who can capture stunning photos and videos of properties across the US.

Whether you're looking to drastically improve your property listings or want an extra set of “eyes in the sky” for your due diligence process, Droners.io can help! Dive in with me as we explore how this platform can be a land investor's best friend! 🚁📸

Why Drone Footage?

In the world of land investing, presentation is everything.

While ground-level photos can capture the essence of a property, drone footage can give your properties a unique and visually stunning perspective that can elevate your listing above the other noise in your market.

Imagine showcasing a vast expanse of land from a bird's-eye view, highlighting its topography, neighboring properties, surrounding area, and other unique features.

Sure, anyone can snap a picture of a dense forest or an open plain, and sometimes this is enough (I've sold hundreds of properties this way). But when we're talking about LAND, a type of property many buyers will pay arbitrarily high prices for based on its presentation, isn't it worth a few hundred extra bucks if your property can sell faster or at a higher price (or both) with the added allure of drone imagery?

How to Get Drone Footage?

Do you need to buy your own drone and drive out to your own properties to get these pictures yourself?

I suppose you could. But in most cases, even if you own a drone, you can save a ton of time and money by hiring a local, commercially licensed drone pilot to get these pictures for you.

You can find skilled drone pilots on numerous platforms. Droners.io is the one I hear of most often, but there are others, like Thumbtack, Bark, and Craigslist, where you can find these professionals as well.

How Much Does It Cost?

The cost of drone footage varies based on the pilot's expertise, location, and specific requirements. Typically, pilots charge between $75 to $150/hr.

When I buy drone footage like this, I plan on spending at least $300 for the job.

There is usually an additional cost if you require additional editing, such as music or subtitles.

Basic packages might start as low as $100 on platforms like Droners, but you'll usually be paying $200 to $300 (even higher) for more involved projects.

What Instructions Should You Provide?

When hiring a drone pilot, clarity is key. Here are some pointers on what you might need to specify:

Type and duration of footage (video, photos, or both).
Editing requirements (music, subtitles, etc.).
Desired quality (4K, 1080p, etc.).
The exact address or coordinates for airspace restrictions check.
Preferred timeframe or specific time of day.

For a detailed example of how to provide instructions, you can download an example right here!

When Should You Get Drone Footage?

The best time to get drone footage is after you get a signed contract from the seller but before closing the deal.

This timing allows you to use the footage for due diligence and when you create your property listing to sell.

While your property might look perfect from a satellite map, satellite pictures usually are not up-to-date. You could be looking at pictures from years ago, which tells you little about what the property looks like today.

Likewise, even if you hire a local photographer who takes pictures from the ground, these photos won't always show you what the neighboring properties look like, and that's where drone photography shines.

By ordering drone videos and photos during the due diligence phase, you'll be equipped with all the information you need and ready to market the property immediately after you purchase it!

Tricks of the Trade

Identifying your exact property boundaries in drone footage can be tricky, especially if the property is landlocked or lacks clear boundary lines in the nearby landscape.

To help potential buyers, consider asking your drone pilot to edit your video to include parcel lines or point out landmarks on your subject property.

While some drone photographers offer this as an added service, you can do it yourself using Google Earth and include this as an image or a supplement in your video. I'll explain how this works in this video:

This added touch enhances the viewer's experience and clarifies the property's dimensions and boundaries.

Conclusion

While drone photography isn't a strict necessity for every land deal, it's hard to deny this is a valuable visual asset that can significantly enhance your property's appeal to buyers. Not to mention, it can inform you about the property before you buy it!

Whether you're using it for due diligence or to sell your properties faster, the bird's-eye view from a drone offers a unique perspective that ground-level photos just cannot match.

The post Droners Review: Elevating Your Land Listings With Drone Photography appeared first on REtipster.

The Last Loan Calculator You’ll Ever Need! ➕➖✖️➗

Seth Williams — Thu, 02 Nov 2023 14:48:12 +0000

Once calculated, click “View Amortization Schedule” to see the results!

How Does the Loan Calculator Work?

If you're thinking about taking out a loan or extending a loan to someone else as a lender or seller financier, it's important to understand how to calculate the monthly payments and how long it will take you to repay the loan in full. This loan calculator from REtipster can help you do just that!

How to Use the Loan Calculator

To use the loan calculator, simply enter any three of these four variables:

Loan Amount: The amount of money being borrowed.
Interest Rate: The interest rate on the loan.
Loan Term: The number of months to pay off the loan.
Monthly Payment: The amount of each installment payment.

Once you have entered any three of these variables, click the button next to the remaining blank field to complete the equation! You can also view an amortization schedule, which shows every payment, along with the interest and principal paid over the life of the loan.

How the Loan Calculator Works

This loan calculator uses a mathematical formula called the amortization schedule to calculate your monthly payments. The amortization schedule takes into account the loan amount, interest rate, and loan term to determine how much of your payment goes towards interest and how much goes towards the principal.

With a normal amortization schedule, each month, a portion of your payment goes towards paying off the interest on the loan, and the remaining portion of your payment goes towards paying down the principal. As you pay the principal down, the interest you owe each month decreases. This is because the interest is calculated based on the remaining loan balance.

How to Use the Loan Calculator to Make Informed Loan Decisions

The loan calculator can be a valuable tool for making informed loan decisions on the fly. By using this loan calculator, you can:

Compare different loan offers to structure the best deal for both parties.
Determine how much you can afford to lend or borrow without overextending yourself financially.
Create a budget to ensure that you can afford your monthly loan payments.
Track the borrower's progress toward paying off the loan.

This tool is the perfect solution for quickly evaluating different loan scenarios and simply calculating the blank field (whichever one you leave blank). It's the easiest way to ‘solve for x' to see how to complete the loan amortization formula!

The post The Last Loan Calculator You’ll Ever Need! ➕➖✖️➗ appeared first on REtipster.

Banking With Mercury: A Hands-On Review for Startups

Seth Williams — Thu, 02 Nov 2023 13:00:56 +0000

Imagine this. You've been told to go through the complex and time-consuming process of opening a business bank account, only to find yourself drowning in paperwork and red tape. Meanwhile, your business banking tasks continue to pile up, causing frustration and confusion.

Sound familiar?

I remember the steps I had to go through when setting up my first business bank account. I had to visit my bank branch in person and fill out a small pile of paperwork, and the online banking system I had access to was archaic, with a mobile app that was clunky and cumbersome to use.

That was years ago before I knew of a better option.

Luckily, I found a new way to get through these steps in minutes without leaving my computer.

Mercury Review

4.9

Summary

Mercury offers a digital-first banking platform specifically designed for startups, simplifying the business banking process.

With streamlined applications, no monthly fees, and user-friendly features, it's a viable option for businesses primarily dealing in electronic funds.

Get Started With Mercury!

Pros

A digital-first platform for easy online access.
There are no monthly fees or minimum balance requirements.
Quick and simplified online application process.
Accessible to both U.S. citizens and foreign investors.
Automated transaction features available.
High-security measures, including two-factor authentication, encryption, and transaction monitoring.
Partnership with FDIC member banks, ensuring accounts are insured up to $5 million.
Support for business checking and savings accounts.

Cons

Limitations on transaction amounts for new accounts.
No support for cashier’s checks; online ordered checks take 7-10 days.
Absence of in-person customer support; response times for online support can take up to 24 hours.
Not suitable for businesses that deal heavily in cash or require frequent check-writing.

But before we get into that, why is it even an issue to begin with?

Why does it even matter that you have a business bank account? Can’t you just pour all your business’s earnings into your own personal bank account?

The Importance of a Separate Business Account

When you start a new business entity, having a separate business account is crucial, where all of your company's income and expenses flow separately from your personal bank account. Failing to do so can leave you open to tax and liability issues.

This is one thing many business owners found the hard way, so it’s NOT a good idea to skip this step.

But the question is—where should you open your business account?

Most people might assume they should keep working with the bank where their personal accounts are held, and this could work if you're already dealing with a good bank… but not all banks are created equal.

I learned the hard way that a good personal bank is not always the best fit for running a business. Many don't even have the best track record for being easy or cost-effective to work with.

What Is Mercury?

For the past few years, I've been hearing about this banking platform called Mercury, which is a digital-first banking platform built for startups.

Mercury's online banking platform simplifies and streamlines your business banking process, allowing you to focus on what truly matters—growing your business. They don’t have any physical branches, but that's the point!

What’s more, whether you're a U.S. citizen or a foreign investor, you can easily set up a business bank account with Mercury without any monthly fees or minimum balance requirements. They’ve made it simple for anyone to open a bank account with an online application process in as little as 10 minutes.

All that, combined with its incredible accessibility, makes it a game-changer for small business owners.

Although Mercury is still relatively new—with over 100,000 customers as of this writing—it has received substantial positive feedback with few complaints from customers who enjoy what it offers.

What Does Mercury Bank Offer?

Like many savings banks, Mercury offers business checking and savings accounts. However, the similarities end here—they don't offer personal accounts, loans, or mortgages.

However, Mercury said it hopes to expand its services to include traditional credit options soon, so that’s a plus.

But one reason for these odd limitations is that Mercury classifies itself as a tech company, not a bank.

Instead, it offers banking services through its partners, Choice Financial Group and Evolve Bank & Trust®. Both of these are U.S.-based FDIC member banks. This allows Mercury to insure accounts for up to $5 million, which is WAY more than the $250,000 of traditional banks.

Also, customers manage their accounts fully online. Don’t expect to drive to your nearest physical branch—Mercury eliminates a lot of overhead by allowing customers to interact with an online-only portal.

To help secure transactions, Mercury employs a host of security measures to safeguard your money, including two-factor authentication, encryption, and transaction monitoring.

Automation is also possible with the online service. For example, do you want to disburse funds to a separate account? You can set up automation rules to execute at scheduled intervals or when you need to. This is particularly useful if you fill up separate accounts (like in Profit First) or earmark funds for a special project or expense.

The nature of Mercury Bank makes it highly suited to businesses that don't deal heavily in cash or frequent check-writing, such as tech startups. But if you’re running a business that dabbles in physical cash flow or regularly collects cash from customers, you might need to look elsewhere; Mercury’s not there yet.

The Drawbacks of Mercury Bank

Sure, Mercury Bank offers convenience to many business owners (or introverts) who just want a bank that works, without having to talk to people. But it also helps to be aware of its limitations.

For example, Mercury has a glaring limit on transaction amounts, especially for new accounts. For example, a brand-new account is limited to $25k to $100k per transaction, depending on the transfer type.

Mercury also doesn’t support checks, nor can you get cashier's checks. If you need to send a check to somebody, you can use your account’s online dashboard and order a check from Mercury’s checking processor. This cumbersome method may take anywhere from a week to 10 days.

Third, you can’t deposit cash into your Mercury account. To deposit funds, you'll need to convert them into electronic funds before they can be deposited into your Mercury account. Similarly, you'll need a debit card to withdraw from Mercury and withdraw cash from an ATM.

Now, this will be a non-issue if you're an online e-commerce company or any business that doesn't need to deal with cash. However, if you run a convenience store, restaurant, retail outlet, or any other type of business that regularly accepts cold, hard cash as payment, then you may want to look elsewhere for your banking needs.

Finally, its all-online nature may not work for those who want real-time in-person support. Should you want one, response times for chat and email tickets can take up to 24 hours, so it’s not a feasible option if you need immediate assistance.

Mercury Wrapped

If you’re a small business owner and you feel pretty comfortable with your existing bank, you don’t have to use Mercury Bank if you don't want to.

But as a bonus, if you click the REtipster affiliate link below and deposit $10,000 within 90 days of opening up your account, Mercury will even give you $200 for free.

If you’re considering that, you can check out the video I made about how to set up a new account.

Get Started With Mercury!

This promo may not be around forever, but it’s a nice little incentive to try it when possible.

Before you go…

Mercury is a solid option, but there are a lot of money management solutions out there. If you're curious about the alternatives worth considering, check out my review on Relay, which offers a similar set of advantages with a few distinct differences.

The post Banking With Mercury: A Hands-On Review for Startups appeared first on REtipster.

Cool Technology | REtipster

188: Market Whisperer Marco Santarelli’s Lessons on Real Estate, Business, and Success

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Fundrise Review 2024: What Happened to My $1,000 Investment After 7 Years?

What Is Fundrise?

The First Year With Zero Principal Left

Fundrise Performance Update for 2024

The Biggest Drawbacks to Fundrise

Should You Invest With Fundrise?

The Hidden Link: Mastering QR Codes for Real Estate Success

QR Codes: What Are They Good For?

Common Ways to Use QR Codes

1. Dial a Phone Number

2. Send a Pre-Written Text to Your Number

3. Send a Pre-Written Email

4. Linking to Social Media Accounts

Creative Ways to Use QR Codes

Where to Place QR Codes

Placing QR Codes Correctly (and in a Practical Way)

Be Smart About QR Codes

How to Generate QR Codes for Free

Why Everyone Is Switching to Relay: Uncover the Hidden Benefits

The Search for Business Banking Begins

What Is Relay?

Getting Started With Relay

Features That Won Me Over

Customer Support

A Few Growing Pains

The Bottom Line

Before you go…

Monetary Metals Review: Earn Passive Income on Your Gold & Silver

Monetary Metals Review

What Is Monetary Metals?

How Monetary Metals Works

Pros of Monetary Metals

No Vault or Management Fees

Interest Net of Fees

Perfect Track Record

Loss Protections

(Some) Liquidity

Free Shipping From Residential U.S. Addresses

Interest Paid in Kind

Completely Passive Investment

Cons of Monetary Metals

Lack of Investment Options

High Minimum Investment

Metal Transaction Fees

Risk Is Difficult to Determine

How Monetary Metals Compares to Other Investment Platforms

Final Thoughts on Monetary Metals

101 Ways to Find Off-Market Real Estate Deals in 2024

Direct Outreach & Visibility

Specialized Lists & Databases

Engaging with Professionals & Institutions

Community & Social Engagements

Alternative & Niche Opportunities

Engagement with Business & Commerce

Online Platforms & Technology

Networking & Personal Connections

Leads through Services & Rentals