James walks you through the difference investing in a primarily "home price appreciating market" (appreciation) compares to investing in a primarily "rent appreciating market" (cash flow). Taught via allegory about “Cash Flow” Brian versus “Appreciation” James.
“Cash Flow” Brian lives and invests in a real estate market where buying a property with 20% down starts with $100 per month in cash flow. Plus, rents are going up at the same rate as inflation, 3% per year. Property values in “Cash Flow” Brian’s market are not keeping pace with inflation; they are increasing at 1% per year. Properties become better cash flow deals over time because rents are going up faster than property values.
In the city over, “Appreciation” James is investing in a real estate market where he’s break-even for cash flow with 20% down payments. Property values are rising at the same rate as inflation, 3% per year. However, rents are lagging behind inflation and only increasing at 1% per year. Properties become worse cash flowing deals as time passes. Prices are going up a lot faster than rents.
“Cash Flow” Brian is making an extra $100 per month per rental he buys, but “Appreciation” James is making about $7,000 more per year in appreciation. Would you rather have an extra $1,200 per year or $7,000 per year? Which is better? Why?
Topics Covered
- COVID-19 Update
- The Past Does Not Equal The Future
- Home price appreciation across 552 real estate markets and the best and worst price appreciating US markets
- Rent appreciation across 552 markets and the best and worst rent appreciating US markets
- US inflation rates from 1914 through 2019
- Home price and rent appreciation rates for the major Colorado cities
- The allegory of “Cash Flow” Brian and “Appreciation” James with 20% down payments
- The allegory continues with 5% down payment Nomad™
- Selling properties and converting to stocks to achieve financial independence using 4% safe withdrawal rates
- Selling properties for cash flow as needed
- Cash out refinancing properties for cash flow as needed
- A look at risk of these different strategies
- An afterthought on investing in stocks instead of real estate
Class will be taught live on April 15, 2020 at 6 PM MST via webinar.
Use this link to RSVP:
https://bit.ly/3aal3rL
Here are small sampling of some of the charts shared in the class.
About Our FREE Investor Classes
James Orr and the Northern Colorado Real Estate Investor Group (NCREIG and pronounced "En Craig") have been teaching free real estate investor classes continuously in Northern Colorado since 2003. Come find out why over 1,400 real estate investors in the Fort Collins, Loveland, Greeley, Windsor area have joined our free real estate investor club... the oldest and largest in Northern Colorado... and still attend new weekly classes and/or listen to them on our podcast.
Looking forward to seeing at a free class soon.
Now teaching via webinar for investors in Denver, Longmont and Colorado Springs as well.
