Every successful real estate investor has a mentor. Get your mentor here: www.freedommentor.com/apprentice

There are a lot of amature real estate investors on KZfaq; Phil is *not* one of them. This guy knows what's going on.

"You're gonna have to watch this again cuz I'm gonna keep flying" 😂😂😂😂😂🤣

Hi Phil...all my admiration and respect for what you do. Blessings for you and all your family! We know that helocs are something difficult to get with a rental because of its risky nature but plocs are also revolving, with simple interest and no closing costs. What if you payoff the amortized mortgage loan by shunting at a 6 month period interval with a 25 to 30k plocs which are revolving and simple interest in order to substitute the amortized compound interest for the simple one. You can put in the ploc the cashflow quantity you will be shunting toward the loan. Using that method, you can have the benefit to pay it off in like 5 to 7 years depending on how much is the loan quantity, your cashflow and the shunting amount you decide. You will never lose your cashflow by doing so because remember that plocs are revolving and you will save thousands of dollars in interest and the best thing by using bank's money. Thank you for your time and passion!

good videos Phil. You have first class public speaking skills. I'm going to listen to all your vids

I absolutely love this video, Phil. As always, you break things down so we simpletons can understand (even if we have to rewind to hear it again). Thanks for sharing!

Another Video with Great Information. Thanks Phil. I'll definitely have to watch this one a couple more times. A lot of good information to digest.

Watched biggerpockets video with the same question and it was about 5 minutes long with no real answer. You go into it for 20 minutes with actual numbers and facts. Amazing

Phil, I truly appreciate you sharing your extensive knowledge in real estate investing. This video is very informative!

So powerful! Thank you for teaching about depreciation! I'm about to buy both of your books because your level of detail is immense. I can only imagine what's in the text. I just put a multifamily under contract that already fully rented. I am 100% financed and have paid $0 towards this purchase. This one is for me. The next is for my LLC. Keep up the excellent work and I'll spread the word about your books. Thank you again.

Nice video thanks for breaking it down But you forgot to mention closing costs on the bank loans and also the time spent applying for the loan which can sometimes be huge.

Thank you for the in depth explanation! The thing with the depreciation blew my mind! You broke it down perfectly. Look forward to watching more videos :)

Buy "subject to" I believe keeps the previous owners on the hook for their loans especially if you bought with seller financing

I would not ever want to get into an argument about real estate with Phil. This dude knows his shizit. Thanks Phil for sharing your knowledge.

Great content. I wonder though about your comment about great CAP rate as reason to not finance. Even if the CAP rate is huge if you can arbitrage the financing on the property in question into another deal it is still superior to finance. The comparison is between paying 5% and what ELSE you can do with that money. In fact great CAP rate properties are exactly the ones to finance to the MAX to find other great CAP rate deals, while selling lower CAP rate properties. This is especially true when you start getting into portfolio loans and you have exposure to interest rates.

You're the best Phil! I'm making it a point to watch every single one of your videos!

Thank you Phil. I will be checking out your other videos and books.

Respect sir, thank you for helping out a fellow investor; I am an active Realtor in Utah for Keller Williams and I invest in properties on the side and I am working on some flip projects as well at the moment; this video is highly accurate and very applicable knowledge. Thanks for the knowledge! Peace!

This formula was shown to me by my brother years ago. I'm not sure who came up with it but it's the divisible or multiplayer number that makes the formula work out pretty accurately.

Great points. I look at my risk tolerance also, which admittedly is very low in this economic environment today. Paid off to me means that when the market tanks in Florida here again fairly soon, then I can survive a 50% loss in rents like 08/09 etc where others can not, and then I just buy more when the prices get near the bottom again with in reason.. 4 months rent reserve is a great rule, but I almost never see anyone do it..lol. People should follow your rule on that minimum if they want a bank loan.

Hey Phil, apart from your tax leins video, I think this is one of the most valuable videos you have created. That's not saying your other videos are not good too, they are. Anyways, thanks for sharing all this.

Thanks Phil, I appreciate you taking the time to teach.

I love this Phil, Your videos has helped me a lot... thanks for this!!!

Love your videos. Do you have any videos specifically for brand new real estate agents/realotors on how to succeed at being an agent and using those Commision checks to support being an investor.

If you have cash own assets outright, factor property taxes, insurance etc into the equation.Set aside some money for 'reserves' and you will have a piece of mind.Cant put a price on that.

Thank you for sharing so much knowledge! u r the man!

i like what he says at the end if you are buying high cap rate properties then it makes more sense to just pay cash.

I can watch your videos all day long ! thanks

Hi Phil, I'm learning English to get in your program. I really appreciate your videos and I''ll like to say thank you. With you not only I'm learning about Real Estate business also I'm learning English LOL. I like to ask you something Should someone who is looking for a house to live (just one house) take your program?

Dear Phil: Love your videos BTW I own a rental in Seminole Co, FL; Does my cost basis for depreciation increase after a Cashout Refi?

Phil, thank you for your advices, but let me ask you a question. I have some properties free and clear, why I need to borrow money from them, what kind of benefit is on it?

Wow, this is great! I learned so much here. Will definitely be following

Thank you for making this so clear

Very good lecture I ever take. Maybe I need to study indepth further on the subject when I move on. Thanks.

Thanks alot i learned so much..im a Real Estate seller here in the philippines..God Bless..

People like Phill are very rare in the world! Thanks Phill keep posting 💟

Phil thanks so much for you value!! Can you talk about building a 4plex residential with a construction to permanent loan? Is it worth it?

Egwenejs, thank you for that info. Makes sense and now it's even more absolute to me. Thanx again.

Hi Phil just had a question for you what do you think my chances are of getting a house that has already been bid on and contingency that they sell theirs in two weeks or it goes back on the market I really want to get this house what do you think my chances are do you think I have a good chance of possibly getting this house. Oh by the way I live in Michigan your videos are very informative I've learned a lot thank you you're very smart

In some states (example: Virginia...) you will be exempt from paying property taxes if you are 65 years old or older.

great lessons on real estate. Phil is an expert in real estate - by far the best teacher too.

thank bro for all the information, you are the best..

Good information to apply, wish I knew before owning rental property

In the UK, we have the same system as Canada where you can only get 5 year fixed rate maximum. Have found best thing to do is to a) make sure the property is still positive cash flow at Bank of England 15% base rate. b) have more like 12 months reserves to give yourself more breathing space if interest rates rocket. What else do you suggest? Thanks for another great video!

I am new subscriber. I love your video. Thanks!

The 1% rule doesn't work. The rule of 15 is best to go by. Say a 2 bedroom house avgs $1400 in said neighborhood. Take $1400 x 12 x 15= $252,000.00. That would mean that house is prolly worth that much. Same formula backwards to understand what the rent should be. $252,000.00 / by 12 / 15 = $1,400.00. Works almost every time. That's the formula I use to purchase or rent my properties.

love the humor you throw in!

Saw you at Disney on the Carousel! Was like where did I see that guy before? Ha ha Didn't want to bug you with your family. Thanks for the great videos!

What about depreciation recapture ? when selling

Phil Pustejovsky have you done a video on non recourse loans

man that depreciation pro....blew me away. you really pay no tax!

Thanks Phil, another great video. I understand the CAP rates and ConC return, but was wondering whether, when financing a property, do you have a minimum hard dollar cash flow amount you like or expect to see as a rule of thumb from a given investment? Example, is a property with $200-300/mo cash flow too little to pursue?

just one extra payment a year will knock off around 5 years off the total...take your monthly payment divide by 12 and send that extra each month..more if you can.. build equity quicker to get the next property.

You definitely have to keep an eye on your homeowner insurance co. They let my policy lapse unknown for me...I caught it...set a reminder on your phone...

key word: leverage

If you had $300k and you put $60k down (20%) on 5 houses you would get a 25% return, instead on the 20% that you would get back if you paid cash for one house. Plus there would be 5 house getting $50k cash flow plus Depreciation on 5 house $8,700 X 5 =$43,500 not one $8,700. If you could get the five loans at 5% and make them get 10% return. Five houses would go up in value in stead of just one.If we used this example. Am I right?

thanks it helping me understand the game so when I turn 19 I can get my lisence

Phil you are a great teacher

great video, can the property be transferred from a personal name to a llc? thanks

I own a rental in California. It's worth $295k paid off. I can only rent it out for &1700 a month. That is a far cry from 10% ROI. Looks great on a white board but not the reality here in California. That's a house in the hood too. Family's are a bit rougher on things in the hood so my maintenance is higher than avg. bought it off a friend 3 years ago for $105k cash. Best deal in my portfolio.

Do these principles apply to Australian market too.?

I'm sorry for the late question but I'm living in the UK and here you can get insurance to cover your rent when payments that are made late by tenants , and cover expenses with when evicting as well as emergency insurance which covers costs if a boiler breaks down . Im wondering if such insurance exists in the USA ?

God I love this guy and know I'll meet him one day though I'm here in Ghana but I have a question and want it answered fast where do I go. Thanks

I love your enthusiasm.

Good video. We haven't been taking advantage of the depreciation side of our rent houses. Could we start this year?? We bought them under on LLC.

One other benefit of all cash is you could probably get on good deals quicker and with lower prices right? Ex) you run into a property that's a good deal, "ill give you 5% lower than purchase price right now all cash"

I know you can deduct depreciation, but can you also deduct the mortgage interest as well for even more tax savings, or are they exclusive?

Thank u for being so generous to teach us all, but after I learn everything stop sharing these great video I need to limit my competition lol just kidding

Thank you for the pros and cons in getting a bank loan for real estate investing. I've been a real estate broker for over a year now and have sold my parents 10 investment properties. I'm only 20 and I've been telling my father to get loans out so he wouldn't have to use all his cash. These are very good points and maybe we can get more. I've watched your videos for awhile and you have taught me a lot especially in property management. I'm young and full of energy and I want my dad to purchase more properties. Can I become to aggressive and bite off more then I can chew??

Great content as always. Thanks 😊

Solid, right to the point information! 👍👍

hello, Phil if you have a property that you obtained subject 2, and it has equity can you pull the equity thru a bank loan?

I don't understand bank loan benefit #4. Whether you use debt or not doesn't change your cost basis (other than some costs from closing the loan which get added). Whether you use debt or not, you as a property owner can use depreciation to determine profit for tax purposes. Am I missing something? - thank you!

17:35 - 1. Yes, you still own the property. For the city to tax-foreclose on your property, you have to be several years in arrears on your property taxes. And if you fall that far behind on your property taxes, you're probably not responsible enough to be owning rental property, to begin with. 2. Your insurance agent will be blowing up your phone, trying to sell you another year of homeowner's insurance, each time your policy comes due for renewal. You don't have to worry about anyone else failing to remind you about your insurance needs.

Thank you Phil, love the vid🤗

Does a living trust protect you at all from any lawsuits? Also with a living trust when you pass away an your kids get the home is the property re assessed for property taxes?

Interesting....never understood depreciation.

How do you find the cost basis of the property for depreciation? No idea how much the land costs 🤷‍♂️

Great video your videos are so helpful! Correct me if I'm wrong I"m new to this but did you mean 1300 a year (not 1700) at 8:36?

I am a bit confuse about how you treat the cost basis. Unless the IRS treats the real estate assets different from other types of fixed assets, the costs of the property should be the same whether bought it with cash or loans - 300K if it has no land value on your example.

🤔 there is 2 sides to this sword... 1 where I live you her a tax breake on a loan to buy propperty... 2 if you buy a house in cash you will get better cash flow back into you bank account....monny that you can save and use on downpaymeny on a New house you can rent out....well thats just my take on it ,dont know if its wrong or right guess thats up to pepole self how you do buisness... Good video 😉👍

leveraging loans, the name of the game

BUT, if you pay off the conventional loan, you still get the depreciation plus you get a better cash flow with no debt service. Using your example, with a 25% tax bracket, the paid off property gives you $16,050 in your pocket where the property with the loan will only get you $9,500.

You are amazing.I want you to be my mentor when I start investing

Hi Phil, I really enjoy your videos. Can you make a video about property taxes for investment properties (or do you already have one?)

Phil, What are ur thought on getting equity money from your rentals for other investments? What are the numbers that make it worth leveraging property when one ones it free and clear?

WoW, very good info....love the videos

I wish I knew about putting 30% down instead of 20% down. In the Houston area the rent rates have gone down 15%. So a house that was leasing for $1,750 in 2016 is now leasing for $1,495 a month. My Mortgage is $800 per month. My taxes went from $3,600 a year to $4,500 per year. By putting 10% more down would have reduced my Mortgage by $85 per month which would have covered the increase in taxes. Now instead of making $500 per month net I am down to $252 per month. The tenant is moving out next month so I will be selling the house.

So I have 4 investment properties. 2 have loans at 5.375% and 1 with 5.875% and the other is paid off. My primary is paid off so I’m doing a cash out refinance at 3.625% and paying off my investment properties. In turn I will have a total of 4 investment properties that I can do cash out refinances from in the future to buy my next deals

Good stuff thank you phil

I started investing 20 years ago and became obsessed with buying rental houses. I borrowed from banks, family, friends and some people from rental meetings. I got way over leveraged. I fought so hard through all the vacancies and high monthly bills and barely made it out alive! As time went on and land contract and mortgages started getting paid off I found myself in a better situation. As more time went on, I found myself and a really good financial situation. Now I feel like I can start leveraging again because now I'm paying more in income taxes because it's hard to not show all the rent I collect with only a few mortgages left over. I guess right now I'm torn between just paying heavy on the last few or borrow and buy more real estate. I constantly dwell on this over the last few months. I guess there's no right answer I'm starting to realize. I'm only 45 so I still feel pretty young. Thoughts?

one problem if interest rates rise, they can go reverse , also look what happened to dave ramsey, if interest rates were 15% this would interest me, because they would only go down but interest rates at 2% can only go up, i doubt you could fix 5% for 15 years minimum

Love how the video turned out. Can't believe it took me so long to post a comment on it but I had a million things going on. I'd like to suggest another topic I haven't seen most internet investment gurus tackle; Lead Paint. I'm sure you'll have some rather interesting insight into this topic considering your lengthy experience.

Would you treat a primary residence that you plan to live in the same way? Say there is a $350k home that you were interested in and you had the funds available. Would you pay cash or would you put 20% down and finance it on a 30 year fixed rate of 2.75%, and then invest the remaining cash?

Hi Phil, great video. However, I had a question about the bank loan portion. You said you can buy more because you’ll have more money to buy other properties, but wouldn’t it be hard to buy another property with another bank loan because of the debt to income ratio. Your debt would go up, which would hinder your buying power.

I would like to hear what you have to say specifically about the London UK market or similar very high priced residential property markets like Seattle or New york.

I personally will be mortgage free on my rental investment in 2019. Once mortgage free, the proceeds of the rental income will ho towards my residential mortgage, which I will aim to finish off within 10 years

I am not sure about this but I have heard that you have to pay taxes on the Depreciation you have claimed on the house when you sell it.

I have a low tolerance for debt. All o my homes so far have been cash. Although now I want to accelerate my portfolio so trying to get a HELOC to buy 3 homes. Problem is living a cash only life and now 47 hard to get a loan. My credit history is only 2 years old.

Hey Phil, in the example, shouldn't it be $1300 and $21300 for the depreciation? $10000 - 8700 =$1300 and 30000 - 8700 = 21300? I didn't understand where the extra $400 came from in the scenarios but I do understand how depreciation is a tax deductible item.