@Jeff M prices do go up. And what you’re talking about is only a single factor in why prices do actually go up. They also go up due to things like demand (eg people want to live in a good school area and the housing supply in that area is finite) and the fact that there are interest rates (the price of money).
The rate of return on using the bank’s money is greater than the cost of using the bank’s money (interest rate). Debt is not taxed, so you use “good debt” to raise your net worth faster
@Surellow commercial loans are veritable interest loans which are going up right now causing his hotels not to cash flow. I don’t remember the number but he has to personally put in millions every month to make the loan payments. He is selling off a lot of his cars to make the payments. Interest rates continue to rise on these commercial investments.
@mjlaramore Its possible you are correct.. i mean if you look closely he has been different in the last few months than like a year ago, i mean why would a man worth 500 million dollars be doing ads on his channel like how much would he make from that ad
@Graham Stephan
My understanding though is that if at any point in his life one of those properties goes into foreclosure, he will immediately owe capital gains taxes on all that money he already pocketed and spent, all the way back to the first property he exchanged. Can you confirm?
I know a lot of people who watch your channel don’t like debt. But that is the advantage of real estate over other asset classes. You use other people’s money to make money. Similar to arbitrage, I get a loan at a low rate, and provide rentals at a higher rate of return and pocket the difference, mostly on paper, until i refinance at least. I am close to two million dollars in debt yet I am a millionaire. I got there by using the bank’s money. I still believe in being leveraged as much as is feasible, with the only concern being stable levels of cashflow and healthy cash reserves. This man knows what he is doing.
A way that I like to look at debt is a force multiplier. If magnifies the return on investment, either gain or loss. It also magnifies risk, but risk can be managed.
@MRkriegs It actually is… Google “The arbitrage between your interest rate and market return” or interest rate arbitrage.
Arbitrage is when there is a price difference between an asset, and one way to look at real estate investing, specifically in my case, rentals, is the difference between my interest rate and the rate of return of the rental.
I agree that it is a very creative use of the term arbitrage, but I didn’t invent it nor am I the first to use it that way.
@TheNativeTwo I understand it’s not a term specifically used or created by u. Car dealers buying from manufacturers and up selling to consumers, credit card companies paying in full and charging interest on those consumer purchases, the vast majority of all debt fuelled investing would all fall under that term. That completely destroys the descriptive nature of the term and is way too loose to be a reasonable term to use in that instance. Just my thoughts. Cheers
@MRkriegs I think it has always been meant more of an analogy rather than a descriptive term, but I see your point. Especially since the way I used it was closer to descriptive than analogous.
@TheNativeTwono you’re good, the guy is clueless since he thought you created the word arbitrage. Holding mostly many SFR, commercial space, a few high $ airbnbs, etc, what’s your favorite? I know guys worth $50M that stick to buying and selling debt products only, and guys worth $50M that buy and sell real estate and cars only. I’m just a young grasshopper making some bucks doing flips, so it’s interesting to see all the different paths people take in this world
@no rev limits you are either very dumb because he clearly over 50 and everyone hopes of making it to that age. Or you’re either trolling him for the cough in the short 😂 either way I get a good laugh from
This.
Real estate is an objectively disgusting market. Remember fellas, these people made housing unaffordable for young people and it’s gonna be even much worse for the coming generations.
Every bank loan has an interest. So what that means is you borrow money to buy a property. Rent that property so that you can pay the interest and your expenses. And one day when you pay the loan the money your property is making is fully yours to use + the property is yours.
@sicktipper95 this tactic is one recession away, one “note call” away from debt to income ratios becoming way outta whack. 1039 and equity loans are great in a bull market but no one makes YT shorts on the multi millionaires that cant afford to gas the lambo.
@Austin only an idiot buys a property that’s not positive cash flowing. Even in a recession the properties should still cash flow if you selected properly. I was terrified during Covid that my tenants were going to take advantage of the “get out of rent free cards” I got extremely lucky. Not everyone goes broke in a recession
@Kevin Exactly, so many people here don’t understand that if a property has positive cash flow the debt isn’t that big of a deal and will eventually pay itself off even if the property loses value in a bear market.
@Géminis duerme yeah man that’s why you have to be rich or have some money before getting into real estate .It could turn into a risky investment very quickly
So you can hold the property, pay taxes on the rental income, do a cash out refi and not pay taxes on the cash out, but continue paying taxes on the rental income, or sell it and do the 1031 exchange into a larger property. You can’t do a 1031 into a lesser valued property.
The risk is ruining your life and being in massive debt. Most “entrepreneurs” I know have really shitty personal lives and make no time for people because they are “on the grind”.
Is anyone going to speak on the issue that he said he has a 500million net worth but owes the banks 250 million OR more. He hasnt been paying anything off just moving the money around. Now the interest on that 250 million is like 4-5 maybe more% he will have to sell almost half to pay the banks back or start making payments. Hes like 90% there he just needed to pay more off
When people say they owe money and are rich . They have 30 years to pay it back , they have mortgages on these buildings and pay the monthly bill every time lol. Let’s say they pay 500k a month for mortgage payments you best believe they buildings make more than 500k a month 😂.That’s what Debt means , don’t think they are living paycheck to paycheck
So since he refinanced it just means he has more spending power .He doesn’t make money when he refinances he makes it when he buys a new property with that money .If it’s a 10 million loan & you cash out refinance for 20 million you get 10 million plus 10 million in cash . But you have to be careful since you do have to put your property as collateral and if you don’t know what your doing you could end up broke .
@Else worth The way I see it is the bank is lending you 10M. It’s borrowed money that you have to pay interests on and return. Correct me if I am wrong.
Tax free earners are always fat. Nothing to their life. Why work if I can get it for free, while new families are struggling to pay their bills. This people bring nothing to the society.
Full Video Here: https://youtu.be/Z2kM-zKRSsk
Hi Graham
And thats why the rich will never pay more taxes 🤣🤣
He still pays taxes because he is always whining about it in his videos
Thank god for that 🙂
He paid more in taxes in one year than your whole family tree in its lifetime. I hope he gets around taxes as much as he can taxation is theft.
Money printing is why real estate has been so lucrative. Prices do not go up, only the money supply gets expanded.
Horrible take
@Stephen Colicanthanks for the constructive input
Accurate, but the only way to participate (positively) in that expanding mlney supply is buying assets, like real estate.
@Mars Mars! 🥂
@Jeff M prices do go up. And what you’re talking about is only a single factor in why prices do actually go up. They also go up due to things like demand (eg people want to live in a good school area and the housing supply in that area is finite) and the fact that there are interest rates (the price of money).
it’s low level compared to juggling act with companies basically you can do a form of this but instead of housing it’s companies lol
Lol they left that disgusting cough at the end – gross.
Can somebody explain the advantage of using bank loans even though they have to be paid back?
The rate of return on using the bank’s money is greater than the cost of using the bank’s money (interest rate). Debt is not taxed, so you use “good debt” to raise your net worth faster
You constantly borrow money till you die
Yes and then that is when the step step up basis kick in his children will get the assets without capital gains tax
Take loans out on value of your assets, buy stuff with that money, because you theoretically could pay it all back unless your assets tank
Yes. Its called REFINANCE. Look it up.
I can’t wait for Jesus to come back and end this gambling circus.
Why don’t you do it instead of him?
That cough at the end from years of smoking cigars
@Matt Cigars specifically. Smoking probable.
No
Best part was the cough hands down b
He’s here for a good time not for a long time.
Newports to be exact
And now he’s about to go bankrupt
How and why?
As far as im aware his net worth keeps growing quickly hes at around 450 million right now but maybe im wrong you can clarify
@Surellow commercial loans are veritable interest loans which are going up right now causing his hotels not to cash flow. I don’t remember the number but he has to personally put in millions every month to make the loan payments. He is selling off a lot of his cars to make the payments. Interest rates continue to rise on these commercial investments.
@mjlaramore Its possible you are correct.. i mean if you look closely he has been different in the last few months than like a year ago, i mean why would a man worth 500 million dollars be doing ads on his channel like how much would he make from that ad
Bussiness can go bankrupt another thing is personal bankruptcy
Crisp
@Graham Stephan
My understanding though is that if at any point in his life one of those properties goes into foreclosure, he will immediately owe capital gains taxes on all that money he already pocketed and spent, all the way back to the first property he exchanged. Can you confirm?
No not really. It’s more complicated than that
@TheNativeTwo Can you explain? Do you not owe on the difference between the defaulted loan amount and the original basis?
Yea but if youre not stupid then it doesnt go into foreclosure. So.. Dont be stupid.
@JD Lovecall a CPA lol
@Janoy Cresva
A Cpa told me that.
That cough said it all
Wdym? Please explain, I didn’t understand
If YKYK😂
I like how he kept the cough in the short aswell 🤣
😂😂😂
Doesnt that deferment eventually pile up by the time your done? How does the back tax owed not end up more than the money you liquidate?
I would like to know too
Once you liquidate you pay taxes on the profit you make when you finally sell. Even better never sell and just die then you don’t ever pay. Lol
It doesn’t pile up, you just pay taxes when you decide to take a profit from your investments
Eventually the loans come due.
That’s why you have the renters pay for it.
I know a lot of people who watch your channel don’t like debt. But that is the advantage of real estate over other asset classes. You use other people’s money to make money. Similar to arbitrage, I get a loan at a low rate, and provide rentals at a higher rate of return and pocket the difference, mostly on paper, until i refinance at least. I am close to two million dollars in debt yet I am a millionaire. I got there by using the bank’s money. I still believe in being leveraged as much as is feasible, with the only concern being stable levels of cashflow and healthy cash reserves. This man knows what he is doing.
A way that I like to look at debt is a force multiplier. If magnifies the return on investment, either gain or loss. It also magnifies risk, but risk can be managed.
That’s literally not what arbitrage is. Just fyi
@MRkriegs It actually is… Google “The arbitrage between your interest rate and market return” or interest rate arbitrage.
Arbitrage is when there is a price difference between an asset, and one way to look at real estate investing, specifically in my case, rentals, is the difference between my interest rate and the rate of return of the rental.
I agree that it is a very creative use of the term arbitrage, but I didn’t invent it nor am I the first to use it that way.
@TheNativeTwo I understand it’s not a term specifically used or created by u. Car dealers buying from manufacturers and up selling to consumers, credit card companies paying in full and charging interest on those consumer purchases, the vast majority of all debt fuelled investing would all fall under that term. That completely destroys the descriptive nature of the term and is way too loose to be a reasonable term to use in that instance. Just my thoughts. Cheers
@MRkriegs I think it has always been meant more of an analogy rather than a descriptive term, but I see your point. Especially since the way I used it was closer to descriptive than analogous.
Thanks, I will correct it.
@TheNativeTwono you’re good, the guy is clueless since he thought you created the word arbitrage. Holding mostly many SFR, commercial space, a few high $ airbnbs, etc, what’s your favorite? I know guys worth $50M that stick to buying and selling debt products only, and guys worth $50M that buy and sell real estate and cars only. I’m just a young grasshopper making some bucks doing flips, so it’s interesting to see all the different paths people take in this world
What does 1031 into another transaction mean?
It’s a tax Deferment tool when you set funds aside on a sold property to acquire another investment property with those funds
Idk for sure but I’d imagine there’s something that’s not exactly legal going on there
What he explained is all legal
The lifestyle of debt.
That cough is throat cancer creeping up
Well The world is coming to an End, be on the look out for the Next big opportunity guys
Was calling BS until I heard that cough.
Look up ben mallah
@simple uploads I know haha I was the one who edited this video.
That cough in the end 💀
Why? Have u never caughed?
That cough 💀
My guy put down the Romeo and Julieta cigar
Bro is irl tony soprano he doesn’t have to
The lesson: What’s wealth if you don’t have your health.
He has a mansion
@no rev limits you are either very dumb because he clearly over 50 and everyone hopes of making it to that age. Or you’re either trolling him for the cough in the short 😂 either way I get a good laugh from
This.
@Zondowhat’s the point tho?
@LolGamezHis point is at least his family doesn’t have to hear him coughing at home.
So, Ponzi. Got it.
Real estate is an objectively disgusting market. Remember fellas, these people made housing unaffordable for young people and it’s gonna be even much worse for the coming generations.
Ben mallah is hilarious and is very knowledged on real estate he j ows what he’s taking about
When he said *CHKAUUUUUUUU* _i felt that_
😂😂😂😂😂
lol the cough at the end
So when interest rates go
Up he goes kapoof
Not if he has a loan with a fixed, single interest rate.
The comment section is full of jealous haters
The cough tho 😅
Ben is AWESOME
Smart
Doesn’t that just mean you owe for the loan? Like you gotta pay that back
Every bank loan has an interest. So what that means is you borrow money to buy a property. Rent that property so that you can pay the interest and your expenses. And one day when you pay the loan the money your property is making is fully yours to use + the property is yours.
Someone has yet to explain to me how this isnt a house of cards
What do you mean?
@sicktipper95 this tactic is one recession away, one “note call” away from debt to income ratios becoming way outta whack. 1039 and equity loans are great in a bull market but no one makes YT shorts on the multi millionaires that cant afford to gas the lambo.
@Austin only an idiot buys a property that’s not positive cash flowing. Even in a recession the properties should still cash flow if you selected properly. I was terrified during Covid that my tenants were going to take advantage of the “get out of rent free cards” I got extremely lucky. Not everyone goes broke in a recession
@Kevin Exactly, so many people here don’t understand that if a property has positive cash flow the debt isn’t that big of a deal and will eventually pay itself off even if the property loses value in a bear market.
Ben Mallaaaaaah!!!!!!
There’s a bubble
U still have to pay the loan back. Right? That’s a hell of a lot of debt
Yes but it pays itself by tenants paying rent .Basically the people who live in the building you own pay the debt .
@Else worth gotchya good debt vs bad debt. U just have to take the risk of managing the business
@Géminis duerme yeah man that’s why you have to be rich or have some money before getting into real estate .It could turn into a risky investment very quickly
@Else worth absolutely
That Coughs worth a million bucks 🎉
Actually, that is totally wrong and misleading.
Wait until he sells a property that doesn’t go into a 1031 exchange and the cash he gets from the sale is less than the tax on the gain.
@trevor Jackson, what if he never sells that doesn’t go into a 1031? Then he never pays tax on the gains.
So you can hold the property, pay taxes on the rental income, do a cash out refi and not pay taxes on the cash out, but continue paying taxes on the rental income, or sell it and do the 1031 exchange into a larger property. You can’t do a 1031 into a lesser valued property.
So basically max leverage and live off leverage. This guy will become a cautionary tale once commercial real estate and real estate TANKS
What if it doesn’t tank during the time he is alive? Also, I am sure he lived through the 2008 crises
I don’t get how this works
Statistically the most common way of becoming a millionaire is becoming an entrepreneur. I believe it’s 40 something percent. High risk, high reward.
Of course
Literally saw a short just before this saying the same thing
The risk is ruining your life and being in massive debt. Most “entrepreneurs” I know have really shitty personal lives and make no time for people because they are “on the grind”.
@Nothing nothings yep. Certainly carries some serious risks and it’s often not a pleasant life at least before you make it.
Damn with all that money didn’t think to buy one salad
So finance then buy it then refinance something you already own 🤔
Is anyone going to speak on the issue that he said he has a 500million net worth but owes the banks 250 million OR more. He hasnt been paying anything off just moving the money around. Now the interest on that 250 million is like 4-5 maybe more% he will have to sell almost half to pay the banks back or start making payments. Hes like 90% there he just needed to pay more off
When people say they owe money and are rich . They have 30 years to pay it back , they have mortgages on these buildings and pay the monthly bill every time lol. Let’s say they pay 500k a month for mortgage payments you best believe they buildings make more than 500k a month 😂.That’s what Debt means , don’t think they are living paycheck to paycheck
And just racking up Debt
What does it mean “i refinance and put money in my pocket”? Dont you owe the money you borrow from the bank?
So since he refinanced it just means he has more spending power .He doesn’t make money when he refinances he makes it when he buys a new property with that money .If it’s a 10 million loan & you cash out refinance for 20 million you get 10 million plus 10 million in cash . But you have to be careful since you do have to put your property as collateral and if you don’t know what your doing you could end up broke .
@Else worth The way I see it is the bank is lending you 10M. It’s borrowed money that you have to pay interests on and return. Correct me if I am wrong.
Something tells me that someone is going to inherit an unpayable debt.
That’s exactly what happens, it’s just a game of hot potato.
This guy just rode the realestate gravy train, nothing special.
Bruh why is every rich person disgusting?
U had to add that last part in there didn’t you😂
Can someone simplify this for my dumbass to understand?
It was the cough for me
🔥
First time I see Fat G
The government can’t tax debt.
That’s why I HELOC-ed my properties before I sold. Suck the money out tax free and pay it back after the sale.
Then, I bought McDonald’s
I have 50 million in the bank, coughs up a lung!
Hey can I rub your ego, in hopes it fuels my get rich scheme?
“Yes” -Probably this guy
Everyone focusing on the cough but not the fruit of the message
If you ever plan to sell a property and buy another property always always 1031 it. Never sell and buy seperately!
How’s the interest treatin ya big fellah?
YouTube comment sections used to be fun, now theyre just a bunch of whiny crybaby ass hatin comments.
I get it, yall are miserable af, but god damn..
Yeah but that leaves you exposed.
Tax free earners are always fat. Nothing to their life. Why work if I can get it for free, while new families are struggling to pay their bills. This people bring nothing to the society.