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Entire video summed up for my real estate investing –
SO FAR, I have INVESTED ROUGHLY $756,000 OUT OF POCKET through down payments and renovations…and that made me a total of $2,158,800 in profit through home appreciation, rent, and mortgage payment. That works out to be just under $270,000 per year, ON AVERAGE, each and every year in profit.
That also works out to be an OVERALL return of 285% for my real estate investments between 2012 and 2020. Obviously, most of that money was invested between 2016 and 2019…but, still, that’s our average.
In terms of cashflow from this…my NET return between rent and mortgage equity is about $9400 per month, so on that $756,000 originally invested…that works out to be a 14.92% annual cash return on my money, NOT accounting for home appreciation.
HOWEVER:
One, real estate is a leveraged investment – meaning, I can BORROW most of the money I need from the bank at a low interest rate, and that will increase my returns. This is something that’s not as COMMON to do with the stock market, and you certainly don’t get the tax benefits of depreciation and a locked in interest rate like you do with owning a house.
Two, real estate is a lot of work – this was not a PASSIVE investment, BY ANY MEANS, until it gets rented out – and even then, it still requires a little work from time to time. These were all deals I spent a considerable amount of time finding and fixing up – so, it’s a little unfair to compare that with stock market investing which is nearly entirely passive if you just buy an index fund and hold it.
Three, I’m comparing this with an SP500 index fund…which, lets be real, is a safe and stable investment long term without much upfront work. But, had I picked individual stocks and gotten lucky….I would have made MORE money during that same timeframe.
So, at the end of the day…based on all of this, YES – picking individual stocks CAN make you more money, OR you could end up losing more money. But, real estate, CAN be a relatively safe and stable return compared to a broad index fund, IF you’re willing to put in the work, and ONLY buy properties with potential for IMMEDIATE upside.
Real estate investing can be absolutely phenomenal, and now that I’ve added up my total returns…it makes me want to continue buying just EVEN MORE REAL ESTATE…and smash the like button! 🙂
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
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You have good content I like your channel
Video on short selling deals?
Real talk no click bait in very video
Appreciate you brother🙌
By Oct 2, 2020, I more than tripled my principles of $50,000-$60,000 since Nov 2019 by investing in the stock market.
Why is bad to buy in cash?? Btw, love your videos <3
Get a man who looks at you like Graham does every time he says, “detail.”
Could you explain why paying cash for realestate is a very bad idea? Thank you
Graham I love you dude, and I always smash the like button for you. But honestly I’m a little frustrated at what you’re doing here. I’m really happy it worked out for you, and especially since you have the YouTube income now, I’m sure you’ll be okay. But the statistics that go with people that build their real estate portfolio with debt is just not good. It may work for a while but too many people get carried away and the number of people that are still successful after 10 years is just very very small. I have a lot of respect for your hustle and grind, but telling other people to do what you did I just don’t agree with. You did a video on how what you’re doing is different from what dave Ramsey did, and yes you’re doing different mortgages, but the risk is still there because what happens if your tenants don’t pay? Or anything else happens? Debt=risk and nobody can argue with the fact that playing the credit game and building wealth with debt just does not work out MOST of the time. Again, I’m happy for you brother and I’m glad you did it, but you are very very rare and I wish people watching these videos knew that. Love you man!
The things that you can do in the us are crazy! There’s nothing like this in my country
I think this is good advice, but better for people who are closer to retirement or want to invest long term. My opinion for young people is you need to be both a dividend investor and a growth investor, and you can let the market determine your allocation. For example I just got a 1000% gain on Tesla and then pulled 85% of the money out and went into a load of more stable dividend stocks like AT & T. So I would say diversify, but also use those growth opportunities to build the capital to invest in the dividend payers (or in cash flowing real estate)
. Ever since i started working with my Financial adviser Lorna i’ve been able to understand the basic market cheats and made amazing profits under her guidance
Agreed! Finally someone said it. I’m 28 and I feel like if I lost $10k so what? Ppl spend that on foolishness anyways. I’ve only been serious about investing for 2 years and trading since March. This has been my best month since September has historically been a red month. It’s all about risk management. I grew up a risk taker, so I can handle seeing my account down big and not sweat because I have conviction about my decisions. Made over 3000% on calls and puts last week ($NKE, $COST, $APPL, $KODK, $NKLA). I’ve spent money on stupid things like most ppl, so my whole mentality is if I go broke might as well go broke investing. We need to encourage more risk taking when young because realistically doesn’t take long to get a loss back. Honestly I’m glad you said this, Would also love to work with your advisor. Could you be kind enough to drop her info? hopefully we can get more ppl discussing this. I plan on retiring in 13 yrs, so for now I’m taking risk and buying income “dividends” .
Good advice its gives you both plays, and after u realize and take the gains on the growth stock, the dividend stock would be the safe play.
@Ibrahim Khalil Thanks, some nice picks you got there, I work with Lorna Rose Sabbia met her through a family friend and investing with her is probably the best decision i’ve made my whole life. You can get across to her directly on TeIegram at tradewith_lorna
I totally agree, dividends sometimes don’t make past the rate of inflation. I try to mix it up between dividends, growth stocks, dreamfire52 and fundrise. Otherwise, it might take 30 years to get to a point where dividends are paying out a decent amount to live on.
Houses were so cheap back then :(((((( I wish I was born earlier 😭
I’m over here making 300 bucks a day thinking I was doing ok… 😪
274 a day is 6 figures. You are doing great! Keep going and keep growing. Follow this advice. I started 2 years ago and U have no complaints other than my taxes are now more complicated!
Great content but it’s annoying to have so many ad breaks AND Graham talk about ads during the actual video as well
Graham, you should but at least 15-25% of your money in stocks.
Lol that one slip up was hilarious. Thank you for keeping it in the video
Hey Graham.
2.45 you said Apple when you should have said Amazon.
Anyways… Amazing content mate..
Fan here from London.
College really did pay off for me. You need to use time value of money formulas to accuratley determine how much deal each is worth; especially in any property with a mortgage.
yea college was not worth knowing that
You left out 2 big expenses in your calculation:
1. Property Taxes
2. Mortgage Interest
Oh but you can’t time market. And, when it bottoms out and you come with your sad 15% down hoping to get in the game, the big guys send their all cash 10 day close offer right behind yours.
So do you not pay Propety taxes? I feel like there are lots of taxes on million dollar properties
I get the money coming from rent but the amount gained from appreciation can’t be considered because the houses were bought at a time that offered strongly great deals. I don’t think (I can be wrong of course) that you can get those deals that will appreciate like that so fast right now.
Imagine being one of Graham’s tenants and thinking, “you made how much?!”
what are the best ways to screen tenants ive watched alot of your videos and i dont think you have touch base on this topic.
Hey graham do you have property managers or do you attend to the properties on your own
Graham – this video would be more helpful if you walk us through how you were able to put hundreds of thousands of dollars down on a multiple properties in one year (when you’re “starting out”)… Also, based on the income per property you mention, where the hell do you find margins like that in today’s world?? I live in Colorado and after putting 20% down on a property you only yield between $200-$300 of margin after mortgage, taxes, etc., which is not bad but unless I did the math wrong, your margins seem WAY high. I think breaking this down (on a MONTHLY basis) would be very helpful.
Smashed that like 🙌
Make sure the cap rate is 10% and up!
How much is property #4 rented for per month? We need the real details meow please.
ggs
Hindsight is 2020, hindsight is now.
More hand movements than Trump.
He said he was being conservative but he was LYING. HE DIDNT EVEN TAKE INFLAAATION INTO ACCOUNT!!😤🙄
P. S this is a joke
Why couldn’t you sue the first guy? Would it have been more to sue than to just repair it?
It seems you’ve had some good luck beginning with hosting that open house that resulted in a substantial commission & it appears to me the harder you worked writing offers that didn’t materialize to learning your neighborhoods & improving the properties you purchased the luckier you got. You’ve earned every penny & put in the time & effort – Congratulations & best wishes on your upcoming move to Vegas. You are a good example for Malenials to follow
Congratulations on your business investments… property here in the UK is somewhat volatile …
That RENT IS DUE HAD ME WEEK💀😂😂
I like his videos but all the commercials are fucking are annoying !
It’s no joke, back in 2010 I bought a rental property for $60K and the mortgage payment was only $515 and I charge $1200 in rent and the renters paid it off for me in 5 yrs. It’s 2020 and I have made $65K in profit just from the rent and the property is now worth $165K.
I would like to know the properties. Like how many rooms? How big in total? Tenants for single, duo or family?
What is so unique about Graham is his honesty, I learn a lot from his experiences.
Leave a message through my gmail realgrahamstephan tor inside tips and guidance
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10:24 you forgot to edit it???
It seems like your renovation price is increasing every property…
Is it just me or does he look like Tom cruise…
Morale of the story , Have tons of money to buy a ton of properties in a year .
So did he buy the 1 and the second property cash ?
16:03
Another strong video.
Can I reach you for some personal advice about investing $1.9 million that I will get from my 457K plan?
He would play the drums…
The tired aries correlatively overflow because cuticle undoubtedly consider as a far pot. wet, determined cobweb
So for home #6 how did you put only 115k down on a home with an 835k sale price? I thought Investments require 25% down?
How are you able to finance an investment property with so little down? All of the banks near me want 20% down on an investment property even with my great credit score.
Why is it a big no no to pay cash for a house? Is it because of inflation?
That algorithm figure was legit creepy
The tax breaks you get is so much better than stocks.
Saving on starbucks to buy the lotus lol
Could you do this “on the side” from a full time job?
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Hey Graham i was just wondering do you do the renovations yourself?
Idk about Graham but most people hire people to do significant work (like electrics) but will do decorating themselves. If they are richer they might get people to do everything and vice versa.
Do you mean gross rental income? I’m not seeing how you could net that much money in 8 years if you have to pay all your mortgages and your bills.
i heard you say you used your savings to buy the first house, so after that, how did you afford to buy more houses in the same year?
Bro, I live in San Bernardino!! How wild
I been watching you for a few years now
How can I do that ? 🥺🥺
Thanks for commenting,I will refer you to my trade analyst and accountant to make good income, go more on digital assets
How much do you make in cash flow vs paying down mortgage?
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It’s crazy how these house are 500k and they would be 120 where I live
Love the transparency, thank you Graham
Why is paying cash a no-no? Is it because you tied up most of you money into that on investment? What if you paid 59k in cash and you had a lot more than that in cash leftover?
If you actually do the math, the cash flow from all the properties you could buy if you finance them, versus putting all the money in one property, is higher. All the profit centers are higher with financing versus paying cash, and when you finance, the bank is holding more of the risk than you are.
Its not illegal to grow stuff lol
Hi Graham
Love the video! Do you buy your real estate with an LLC?
Thanks
Graham, on these rental properties, did you renovate them yourself or did you pay contractors to fix them up?
Question, Based off your videos on income/youtube revenue. why not just pay off all your houses cash? You have the cash flow. Why even bother with a mortgage. Maybe this can be a video. Thank you very much! Also, I gave a thumbs up and subscribed.
Instead of paying off current properties, when the tenants are paying the mortgage off with their payments, use that money to buy more properties. Leveraging allows for higher returns and keeps the risk level lower (when it’s not all your money in the pot).
Nice vid, but how did u make money to buy the first house what did u do? How did u have 50k in cash, or am i missing something? I do know a way to make money but I will be mabye 22 or something when i have that money.? And did u do the renovation youreself bec thats my plan, if not how did u pay for people to do it,
is it youre stoks money lol?
and how did u buy three houses in 2012. u must have worked at a good payd job before u started?? tag me if u are maiking a vid or just write here. love u, keep going you are THE GOAT.
Hi sir im a 16 year old from South Africa i want to get into real estate and i think i know how to but i need a mentor (NOT A INVESTOR) please if you can if you willing take me under your wing
Thank u for ur tips brother…imma about to do a refi or Heloc pull $600,000 out my Los Angeles home and start my journey…thank you Graham! couldnt have learned this without ur advice
Taxes cut in to that profit a little bit. Don’t they?
You say invest in the S&P and I have done that for years and years but I am very worried at what is coming and I worry about my retirement and would like to diversify with some hard real assets that will be there come what may. I mean as interest rates drop bonds are worthless and eventually the stock market is going to explode as the feds print money like hot cakes.
Was there no maintenance, upkeep or repair costs or did I just miss where that is lumped in? Hard to imagine nothing went wrong in 9 years with any of the properties.
when his down payment is more money than my own house is worth👁💧👄💧👁
You may be in trouble once the market crashes again and folks won’t have jobs.
I have a question:
So how were you getting the cash to put a downpayment on the houses from? I know you got some cash from renting out those properties but if I’m not wrong I don’t think that would have been enough for the downpayments you were putting in for those houses. Thanks
@Graham Stephen, How about a drum solo outro one of these times?
Damn dude you really messed up on the first one damn that’s sad but I’m glad you got it all figured out and fixed now.
Hey Graham, love the videos! Could you do a video on whether landlords should create an LLC or not? Thanks!
…not talking about all the expenses of owning properties? roof leak, AC broken, replace dishwasher, yard work, etc. etc. etc.
Yes, the home value may appreciate, but that appreciation is contingent on the market. Including the appreciation into you ROI estimates (on each property) is a bit foolish, and ultimately misleading. The true value is the income from the investment. You only have the “value” of the home when you actually sell it… Yes, you can use that as leverage, but it is a fluid game… I see the end where you mention the actually ROI, but it is on borrowed money, which is also a bit dangerous (in case of a collapse, inflation, etc.)
just my two bits.
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Thanks for the feedback.
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Apple, Tesla, Apple sounds about right
Can someone explain to me why using a mortgage to buy real estate is better? I was taught that mortgages are pretty dangerous because you could lose all your money, then be struggling to pay off your mortgage, so in my eyes it’s better to just buy your house and own it. But I’d like to now if there are some benefits
Because when you use a mortgage, i.e. leverage, your returns can be multiplied. And, a lot of people think they’re more risky, but I think paying cash is riskier because it’s all your cash in the deal. When you get a mortgage, the bank is holding most of the risk and you’re keeping all the returns. That doesn’t mean you can just get any mortgage or loan you want and it will work, you have to know what you’re doing. For example, don’t get adjustable-rate mortgages. Those have gotten people in trouble. But if you know what you’re doing, returns can be infinitely higher using mortgages.
One question Graham. The amount of interests that you pay on the mortgages are not considered on those calculations?
Lol, how he bought so many properties in 2012😶?
next video intro, ” whats up luke, its your father here”
The Lotus Elise was your dream car? I see you’re a man of culture as well.
I’m starting to realize that I won’t be able to do this because even if I do have money saved houses are just too expensive right now. I’m in California and you won’t find an 80k home even in San Bernardino unless it’s a mobile home. Although what I have thought about is getting a trailer park and collecting rent on like 50 different mobile homes
Great video. Do you try to pay off your properties for the income or refi and use as leverage?
Hey Graham, Im an international student, i wonder if I am able to get mortage with my work visa in USA if i were gonna buy rental houses and build my portfolio over time? Thank you Graham!