hey welcome back in this video I'm gonna
share with you what is in my opinion the
second best investment for high returns
okay I know in the last video we talked
about stocks I'm gonna kind of briefly
summarize that up and then today we're
gonna talk about real estate I love real
estate it's provided some of the best
returns I've ever seen and I'll show you
why I prefer real estate as opposed to
stocks even though my background is in
stocks and you know I have a bunch of
long-term investments at trade options
and I worked at an investment bank but
when I started learning about real
estate
I figured out the power of certain
aspects of real estate that will help me
achieve my financial goals okay so
have to know you have to understand what
you're getting into you have to do your
research you have to know what you're
investing in and have a strategy and a
goal in mind okay with with stocks I
only invest in stocks that I totally
understand right if I you know I find
investing in Facebook Amazon those types
of stocks I understand their business
model I understand
how they earn revenue and I look at
their balance sheet you know if you
don't really understand it then you know
you're probably better off not investing
your money or just putting your money
into like an index fund or something
like that with real estate same thing
same thing applies you have to know your
market you have to know the area and at
the end of it all you have to know your
financial goal for me my goal is to have
enough passive income meaning I'm not
spending any time or effort working for
this money have enough passive income to
cover my lifestyle all my bills travel
luxury things all that right so with
that in mind you have to have a number
of like how much assets how much in real
estate or stocks are both do I have to
own to be able to make be making that
type of income passively okay stop okay
let's kind of summarize what why I like
Sox stocks have provided a in the
history of the stock market overall with
inflate adjusted for inflation it
provided a roughly 7% return year after
year okay 7% ROI
I like stocks also because they're super
liquid meaning you can sell a stock
today right at any moment this the stock
market is open you can sell your stock
if you need to right super liquid but
also that comes into play you have to
know your strategy because if you're you
know if you get fearful and you just
sell your stock at a loss that's also a
bad thing
stocks are super liquid Davis you know
roughly a 7% return on investment
year-over-year obviously Facebook Amazon
those types of you know high growth
stocks provide higher returns but also
higher risk to reward ratio right you
know my returns on Amazon and Facebook
in the past several just few years are
already up over 80% so obviously
phenomenal returns that are bigger than
7% but real estate I absolutely love
because there's tax advantages right tax
advantages and there's cash flow I spelt
that wrong but cash flow okay so I'm
looking at a few properties right now on
East Coast and the good thing about real
estate is you get monthly cash flow if
you purchase a property for the long
term in a good area and you rent it out
you get monthly cash flow okay and
returns in real estate are gonna look
like this I'm gonna show you kind of a
deal that I'm working out right now I'm
gonna put be putting 60,000 down on a
deal okay
so that's a that's another thing you
most most of the time you need cash to
be able to invest in real estate I know
there's deals where you can use other
people's money but in my opinion I think
it's best if you use your own cash at
first when you're first getting into
real estate that's just my opinion
though so 60,000 down on a let's just
say a $250,000 property
on a $250,000 property okay let's just
say you're we can rent this out on a
monthly basis for about 1,500 right
1,500 rent or so we're gonna say 500 and
positive cash flow and then a thousand
that goes towards the mortgage right
because we have to take out a mortgage
in order to get this house because we're
only putting 60,000 down which is
roughly I think that's around 25% okay
and you know on most properties you
could put 20% down I do a little bit
higher so that the cash flow is higher
so 500 cash cash on cash and then a
thousand in equity right that could
because you're not paying the mortgage
your renter is paying the mortgage right
so you're building equity every month
into that home because you know add it
on top of your 60,000 every month 1,000
so you're at 61 62 63 for every month
that goes by that there's a renter
paying your mortgage then you get an
additional $500 in cash that you can
take spend or reinvest into other
properties or reinvest into this
property right so fifteen fifteen
hundred dollars rent on getting a
thousand dollars in equity every single
month which is roughly if you look at
you know this 60,000 that I put down I'm
getting about a 20% return right sorry
let me erase this that's 20% annually
right just from that mortgage bit in
equity right 20% in equity every year in
cash I'm getting about a 10% return all
right this is a 10% return so overall if
you look at it on that standpoint like
that's a 30% return right
you know staying saying that the house
stays the same level and value right so
the returns are a lot higher a lot
higher here then the sp500 now there are
particular stocks that you know go up
like fifty to a hundred percent in a
year sure but for the overall market
you're gonna see roughly a seven percent
return and for real estate you're gonna
have this cash flow which I really
absolutely love I love the monthly cash
flow I love that paycheck coming in
every single month that's really nice
but the downside is you know real estate
is not as liquid it's gonna take some
time to get out of if you need to sell a
house today it's definitely gonna take
you know at least a week to sell right
considering them you know real estate
market is hot but it's gonna take some
time to sell over here you can sell with
a click of a button on your computer but
the thing is real estate is just a whole
different vehicle right it's a whole
different vehicle and it's paying you
monthly cash flow so that's the thing
that I like that I don't get in stocks
most stocks I mean this is the lowest
dividend payouts ever in history right
most companies don't even pay a dividend
so you know you're not getting that
quarterly cash flow only you're only
getting the price appreciation so you
have to actually sell the stock in order
to gain that return right whereas real
estate I'm getting the return in cash
10% a year on my money you know every
single month cash flow okay the tax
advantages with real estate and we'll
get into that too stocks you don't
really you don't have a tax advantage
okay if you're investing sixty thousand
in a just a normal investment you know
on TD Ameritrade if you're investing
sixty thousand you're gonna get taxed on
any capital gains you have now if you
put it in IRA or a SEP IRA or a Roth IRA
that's a different story because the
taxes are deferred until a later amount
in time or you pay the taxes up front
you don't pay him later in time but
those types of accounts are different
right 401k that kind of stuff though
there's tax advantages there I'm not a
tax person though
but tax advantages on the real estate it
you can expense anything that goes down
to the property like for instance one of
my properties had you know broken washer
and dryer right it's gonna cost a
thousand bucks to replace I get to
expense that so I don't have to pay the
taxes on that money you can also you
know expense and yeah anything that goes
wrong with property you can expense and
I mean that's that's kind of the nice
part about real estate is because you
get to expense anything that has to be
fixed or any type of investment right
also the gains on the property and we
didn't even talk about this this is just
the cash returns in the equity return
but we didn't even consider the
appreciation in the actual home if
you're getting into a hot area like over
in on the East Coast there's some hot
areas in South Carolina and North
Carolina Virginia areas like that you
can see you know in upwards of you know
I would say three to seven percent just
on home price appreciation okay so I
didn't even factor that in so obviously
you can do your homework there and look
at properties and how much they've
appreciated over time you can use Zillow
stuff like that but real estate is
something that I'm I just got into not
too long ago about a year ago and I'm
continuing to move on this and obviously
it's good to get people in your circle
that actually know what they're doing in
real estate like I'm not the expert I
have you know property managers that I
work with
I've Realtors that I work with and
investors that I work with so that I
don't have to do the homework I mean I
do my homework but I let them you know
teach me these things right now let them
teach me these things but overall the
best part about real estate is that if
you put let's just say you put 60
thousand down I get the returns of a
$250,000
so instead of a $60,000 a step we're in
socks if I invest sixty thousand in
stocks I only get the appreciation of
sixty thousand right so that's another
thing to consider I'm getting the
appreciation on something that I don't
fully own like I get the appreciation on
a higher value amount than the amount I
put down because your partner in these
deals are the bank's right you're
working with the bank's so you know the
banks are lending you the money and they
know that you know the deal is gonna
work out so that's that's why they lend
you the money because they're making
money on the deal you're making money on
the deal and overall you're making money
on an asset that is worth more than the
cash that you put down so I hope that
this video helps it's just something
that you know I've learned recently in
the past and I've kind of wanted to
share this with you because prior to
this I didn't like when I worked at the
investment bank I didn't know much about
about real estate
I thought socks were the best way to go
and that was the only way but when I
actually did my homework I read a bunch
of books about real estate investing and
I met a lot of people and now I'm in it
in that space I kind of see both sides
all right I see the advantages of both
sides but again I am in both I don't
think that you know you should not
diversify I think diversification is
always good right like always diversify
your streams of income have multiple
streams of income same thing goes with
investments I think that stocks are
great but I also think real estate is
great and vice versa okay I don't think
any one of these is bad I think you can
if you know the market you do your
homework and you have people in your
circle that know more than you about
these two things then you could be in an
advantageous you know step so hopefully
you enjoyed this video give it a thumbs
up if you enjoyed it comment down below
what you think what do you think is real
estate better our stocks better what's
your opinion I'd like to know and
comment comment down below and I'll
answer back so I hope you enjoyed this
one and take care
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