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Real Estate Investing for Beginners: Expectation vs Reality

7236 ratings | 247427 views
Let’s debunk some common myths about real estate investing, and share what it’s ACTUALLY like, no sugar coating - enjoy! Add me on Snapchat / Instagram: GPStephan Jeremy’s Channel: https://www.youtube.com/channel/UCnMn36GT_H0X-w5_ckLtlgQ Financial Growth Conference: https://financial-education2.teachable.com/p/building-wealth-conference-2019-presented-by-financial-education Join the private Real Estate Facebook Group: https://www.facebook.com/groups/therealestatemillionairemastermind/ The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $120 million in sales: https://goo.gl/UFpi4c First expectation: Real estate investing is passive. The reality is that creating the type of rental property to the point where it’s passive income takes a LOT of work. But the work is, at times, still ongoing. Eventually you’ll have a vacancy. Eventually you’ll need to fix things up again. Nothing will last forever. Sure, you can get a property manager who’ll handle much of this for you - but you will need to do SOME work yourself, even if it’s as small as choosing between finishes or approving bids on work. It won’t be an insane amount of work, but it will be something. So yes, real estate CAN be fairly passive…but it’s not passive if you don’t put in the work UPFRONT. Second Expectation: In order to invest in real estate, you need to do the repairs yourself or be a good handyman. The reality is that I can’t do anything besides change a lightbulb. While I do know some landlords who do the work themselves to save the money, this is absolutely not a requirement - and depending on how much your time is worth, it’s often cheaper just to pay someone else to do it the right way. It’s also worth noting that since all these repairs are a write off, you can write off the costs against your income…but, if you do the work YOURSELF, you cannot deduct the cost of YOUR OWN LABOR. Third Expectation: It takes a lot of money to start. The reality is that it often takes 10%-25% down to begin investing in real estate. This COULD be a lot depending on your definition of “ a lot,” and also on your area. Buying a property in Los Angeles would be significantly more expensive than in Kentucky, for instance. Where one person might be able to buy a property for $20,000 down, someone else might need $200,000. Fourth Expectation is that it’s often like the TV shows. The Reality is that it’s NOTHING like what they portray on TV. Oftentimes those TV shows will be loosely scripted around creating drama and creating a show that’s actually interesting enough to watch all the way through. Every episode needs a goal, a problem that arises, a solution to that problem, and then a resolution at the end. The real life problems that come up just aren’t that exciting or interesting. It’s often boring and mundane. The fifth expectation is that you’ll make a lot of money investing in real estate. The reality is that oftentimes one property won’t make you rich. Most mom and pop landlords won’t make a lot early on, but as they scale up, they can earn a significant amount of money from a lot of smaller sources. This is how many landlords start making money, enough to quit their jobs and invest in real estate full time. It’s growing your portfolio over one or two DECADES and accumulating those properties that might make you only $900 a month….but buy one of those every 18 months, and in 15 years you’re making $9000 per MONTH. That’s how most landlords make their money, and make a LOT of it. But the beginning will be slow and frustrating until you begin adding more and more to your portfolio. For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at [email protected] Suggested reading: The Millionaire Real Estate Agent: http://goo.gl/TPTSVC Your money or your life: https://goo.gl/fmlaJR The Millionaire Real Estate Investor: https://goo.gl/sV9xtl How to Win Friends and Influence People: https://goo.gl/1f3Meq Think and grow rich: https://goo.gl/SSKlyu Awaken the giant within: https://goo.gl/niIAEI The Book on Rental Property Investing: https://goo.gl/qtJqFq Favorite Credit Cards: Chase Sapphire Reserve - https://goo.gl/sT68EC American Express Platinum - https://goo.gl/C9n4e3
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Text Comments (786)
alfriedar (7 hours ago)
The bs starts at... trust me guys...
alfriedar (7 hours ago)
This a commercial on how to market yourself to get a lot of viewers...I had a three units, managed 8 others...bad tenants from hell, over charging contractors...lousy owners ...half these guys will make more money off of you than any of their ‘deals’
Rick Johnson (18 hours ago)
Investing has let me get out of the ditch - I got lucky when I found fixedandsold when I was totally at rock bottom. It's the only model that let's you use a credit card to invest so you're totally secured and I still get 10% to 20% returns. Ask or message : https://youtu.be/IdCEn7eWtsQ
generic whiteguy (1 day ago)
Here in Norway taxes are high and prices are unbelievable... Not in a good way.. what do I doo
Dominic Commisso (3 days ago)
Teddy told me to like and sub so it happened. Simple as that.
Graham Stephan (3 days ago)
Haha thanks!!
Bryan chambers (4 days ago)
Hello, is there any real estate investor looking for funding for their real investment deal at an affordable interest rate? Reach out to with your financial needs at [email protected]
One of the #BESTinvestmentvideo
Graham Stephan (5 days ago)
Animus Spero (6 days ago)
Graham Stephan (6 days ago)
Ryan Bianchi (6 days ago)
cheaper to pay someone else to do it? So you pay $300 for a repair man to receive the less than $45 in tax benefits? That statement does not make sense. Worse use of your time? Maybe. But spending money just to get a tax write off is silly. If you want a tax refund, send me $1.00, I'll give you a "tax return " of .50, that is a 50% return!
Joseph Snyder (6 days ago)
“Oh my god I did not see that happening”
Marcos Otanez (7 days ago)
Wish I was that dog 😁
Edson Filipe (8 days ago)
Graham Stephan (8 days ago)
thanks for watching!
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custom_man (9 days ago)
People in real estate make me sick. It's something any idiot could do if their income/credit was approved. Renters pay 100% for the property but investors get to keep the property and all the investors had to do was be in the good graces of the banks. Investors say it's hard work to boost their self esteem. In reality it's one of the easiest jobs that exists and they are spoiled. Boo Hoo you spent some of your time looking at properties, people who are renters spend their time looking at properties too but it's for a place to live not a place to take advantage of those who need a place to live.
Anthony Balsano (7 days ago)
Marcel Simon (10 days ago)
I am in college right now and I don't see my self making 100k a year my whole life I feel like there is way better opportunities. Is there a way I can invest in you personally? Is that possible to invest in people not companies?
Graham Stephan (10 days ago)
Ahhh thanks man, no way to invest in me personally 😂
Khalidah Kamal (10 days ago)
11:45 LMAO!!!! Oh Yeah!!! That was the best.
Graham Stephan (10 days ago)
Ryan Me (11 days ago)
When are we gonna see more teddy?
Graham Stephan (11 days ago)
Soon!! I gotta bring him back!
Ryan Me (11 days ago)
Like and sibscribe? Any thing for you teddy...
Graham Stephan (11 days ago)
joshua sanchez (13 days ago)
That dog sure knows how to be on film
Graham Stephan (13 days ago)
He's a natural!
Mike Mill (13 days ago)
I honestly lol’d at the 900$ a month part
Jonathan Zanzuri (16 days ago)
Hey graham, you said you can't write off your own repairs, but if you own a company the specializes in repairs, can you write that off on your own personal taxes since it is the company, not you doing the repairs?
CMO Vlogs (19 days ago)
Excellent video pal! Thanks for sharing your personal experiences!
Graham Stephan (19 days ago)
Thanks for watching!
Kunal Thadhani (20 days ago)
is it just me. or did he managed to get someone else's like within the first 54 seconds because that dog wanted it ? :P <3
Graham Stephan (20 days ago)
Malcolm Ritell (21 days ago)
Thank you for the reality check. Not knowing some of these things can really make a person nervous. However, how am I suppose to find these homes and actually obtain them in order to sell or rent them ?
This Is Game (24 days ago)
It's free real estate.
Graham Stephan (23 days ago)
max bottaro (26 days ago)
How did you net 900 on a 1250 gross? Even with no mortgage, you'll have cap expenses, taxes, vacancies etc. Usually noi is about 50% of gross, thats b4 debt service. I call bs
Martin Reedus (26 days ago)
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Auxie- (26 days ago)
Teddy krueger givem a nightmare
Graham Stephan (26 days ago)
Andrew B (28 days ago)
$900/month is a serious return. Everything in my area that's cash flowing with 20% down is closer to $200-$300/month after expenses. That's a difference between only needing 4 properties to quit my day job vs needing 15.
Graham Stephan (28 days ago)
The $900/mo was bought cash for about $60k + renovation, so that’s why the return was pretty high!
Alfred Aidoo (29 days ago)
4:57 , this is where Economics comes in. We treat such cost as "Opportunity Cost". Whiles Accounting will ignore such cost, economics will include it!, I love it!
Graham Stephan (29 days ago)
Sky Taylor (30 days ago)
You explain things well and simple. I think you're gonna do really well in life. Great job bro
console gamer (1 month ago)
If I could make $900 dollars a month I could quit my job that's basically tripled. Where I live If I worked a low 12h job 5 days a week, I would only be making around $300/month
Jennifer Lyon (24 days ago)
console gamer need A realtor Contact Mike cryptojojo05 @gmail.com
Arlene Forde (1 month ago)
I only pressed the like button because of Teddy! He’s so cute!
Graham Stephan (1 month ago)
Haha isn’t he??
Koac (1 month ago)
Your dog needs a haircut... right now.
Graham Stephan (1 month ago)
Evan Yearwood (1 month ago)
Teddy got me to subscribe and smash the like button!
Graham Stephan (1 month ago)
Awww thanks!
Kai Liang (1 month ago)
Great video thank you
Graham Stephan (1 month ago)
Thanks Kai!
Goldon Night (1 month ago)
0:44 no shit
Jefferson Hayward (1 month ago)
I’m trying to learn more ( taxes, mortgages, interest rates). Where should I start? I’m 20 years old almost finishing college with a nursing degree and I want to invest in real estate.
Jennifer Lyon (24 days ago)
Jefferson Hayward need a realtor ? I’ve been working with Mike Lovren for several years He’s a good and honest man he’ll put you through Email : cryptojojo05 @gmail.com Text +1(307)4290623
Jefferson Hayward (1 month ago)
Thank you!
Graham Stephan (1 month ago)
Tarabas Naoh (1 month ago)
Thanks for being truthful.. glad to know I'm not the only one struggling..
Graham Stephan (1 month ago)
David Martinez (1 month ago)
Kentuckyyyyyyy letsgetit
Graham Stephan (1 month ago)
no (1 month ago)
Not sure I get the logic of how you can get additional property every 1.5 years? We're talking about loans, right? You're collecting the next downpayment during that time, but not paying older ones off entirely? I've maxed out with 2 loans, not sure bank will give me another, even if they did, how will I get the next one? Of course i'm from Europe, here we can have monthly loan payments up to 40% of your income, after that go figure.
Graham Stephan (1 month ago)
If your previous property cash flows, that previous loan services itself and you can get a new one. But maybe this is more of a US thing!
Yak Motley (1 month ago)
Great video! Ive learned this the hard way. There are always bumps at the beginning!
Graham Stephan (1 month ago)
I agree!
ElectricDarkMatter007 (1 month ago)
Hey Graham buddy , I’m not trying to troll you but at 11:30 teddy seems to be chasing some bug 🐜 . Might wanna call an exterminator. They say where’s there’s one there’s MORE ! 😂😅 Appreciate the content though 👍🏼👍🏼
Graham Stephan (1 month ago)
Haha good eye...this is my garage, so insects get in from time to time!
OpenHouseLV (1 month ago)
Hi Graham, great video, thank you for sharing from your side!
Graham Stephan (1 month ago)
Clay Browning (1 month ago)
Some very helpful information here. Thank you!
Graham Stephan (1 month ago)
heera malik (1 month ago)
Hi dear, what's about this article:: https://kylesitlerct.com/real-estate-investment-strategies-2018/ Can you please tell me, how work in real estate outside of america.
Edwin Gutierrez (1 month ago)
5 years to have a 1 million networth, is no where near a long investment. And thank god too
Anthony Davis (1 month ago)
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Simple Mo (1 month ago)
hello Stephan thank yo for this video! The bank landed me 500k cad my problem is the property here only generate around 200 to 300 profit pe month...can you give me an advice please!
William Valverde (1 month ago)
I'm interested in knowing how, after deducting expenses, one can keep $900 off of one single property.. that seems like a lot??
Graham Stephan (1 month ago)
No mortgage! That was bought cash.
Billy Hills (1 month ago)
Thank you
Graham Stephan (1 month ago)
thanks for watching!
Richard Fields (1 month ago)
Likes for Teddy
Graham Stephan (1 month ago)
thanks :)
Aura Companion (1 month ago)
what about store properties?
Aura Companion (1 month ago)
i went to my fathers holiday party with his uncle and he does real estate, he even gave me $100 when i got there, and im intrested.
Graham Stephan (1 month ago)
Kaitlyn Richard (1 month ago)
I do have a question! I hope you try and answer🤞🏽 how do you avoid being screwed over by tenants and how is this done the most legitimate way possible? Such as taxes and the government and such?
Kaitlyn Richard (1 month ago)
Graham Stephan what I meant. For an example, say you want to sell your rental property. The people that are renting, don’t want to move and in some cases they do have the right to stay. How do you avoid all the ugliness with that. Alot of people try to warn me with this problem. To go further into my other question. Say I want to buy another house. I’m making enough off a rental to buy another house. But as far as the banks know, I’m not... how do I make this a legit Business, a job. A job where I can file my taxes and have some kind of stub. Thanks for replying! Hope this makes sense..
Graham Stephan (1 month ago)
What do you mean by that?
Graham Stephan (2 months ago)
RealLife Money (2 months ago)
Nice exposed video haha. I like these real estate shows how they expect renovations to be so low like $1k and it turns into $10k 😂
Graham Stephan (2 months ago)
Just A Guy (2 months ago)
3:30 - You've gotta love what you're doing in order to do it well. There is no easy dollar. Additionally, if you don't have passion to make beautiful buildings and create excellent places for people to live, your energy won't be in it. These are huge investments. You all MUST have passion to do it well.
Graham Stephan (2 months ago)
Eddie Ward (2 months ago)
Globetrotter (2 months ago)
So far so good but since you haven’t experienced a down turn in real estate market, how do you plan to survive it? Rental in a depressed market can go down as well, how do you pay your mortgage in that situation?
Globetrotter (2 months ago)
Graham Stephan So how did you managed the downturn when rents couldn’t cover your mortgage?
Graham Stephan (2 months ago)
I started in 2008...so I experienced the very peak and the very bottom.
Rith Samros (2 months ago)
I am from Cambodia. I have big size potential land close to the city where I am looking for investor in real estate. If you are interested, pls contact me.
kepstein8888 (2 months ago)
Starts at 1:40
Graham Stephan (2 months ago)
marvn (2 months ago)
video starts at 1:38
Lisa Wascher (2 months ago)
what I don't get though is even if you are making 2-300 on each property with all costs included, if you have $1000 here and there for a water heater or a $3-4000 for an air conditioner a year how do you ever make any money? It seems like those "little" repairs that you mention wipe out any profit. I know you still have the equity and buy down. I own two rentals now and thinking of buying 4-6 condos and paying them off in less than 10 years to supplement my retirement. Putting all rent back into the pay down and have no roof or exterior maintenance issues to worry about.
Lisa Wascher (2 days ago)
+Jose Haro aww thanks you must have a really pretty fat toe! :)
Jose Haro (2 days ago)
Lisa Wascher You look like my fat toe
The Uber Successful (18 days ago)
Vet for excellent tenants only? No good Credit, lots of recommendations
Lisa Wascher (1 month ago)
+KFStreich rotten looking ones with only cosmetic rehab with lots of equity!
KFStreich (1 month ago)
The dog plus rehab is where the deals are
Arlen Pontes (2 months ago)
How do to I be a real state investidor?
Durl Tyson (2 months ago)
Lanos One (2 months ago)
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T Stanton (2 months ago)
With a va loan, would it make more sense to flip the first property then use the profit to put a 10-20% down payment on the next property?
T Stanton (2 months ago)
Graham Stephan thank you
Graham Stephan (2 months ago)
I personally wouldn’t. Flipping can be slightly too risky short term if you really don’t know what you’re doing. May as well take advantage of the VA loan long term.
Corey Meeker (2 months ago)
Hey Graham, I'd love to connect with you. I work for a commercial print and marketing company. 60% of our 8mil business serves real estate investors all over the USA. We have some mutually benefiting affiliate programs that could be of interest to you. Give me a ring Graham, then please delete this comment. 314 413 7878 name's Corey. I will look forward to hearing from you.
Financial Education channel brought me here!
Graham Stephan (2 months ago)
hjt62092 (2 months ago)
An agent can help you weigh out all your options. Consider using one from a reputable company. https://www.homefindingworksheet.com/
Warren Ford (2 months ago)
Teddy needs a haircut bad.
Graham Stephan (2 months ago)
Nah Teddy is rockin' the rockstar look!
Luis M (2 months ago)
great video
Nathan Hobart (2 months ago)
Is that a man child ??
Graham Stephan (2 months ago)
Hunt Chaun (2 months ago)
Do you have to live near your properties that you are renting out
Lady Q (2 months ago)
if you wanna invest in stocks https://share.robinhood.com/shaquet
Great video thanks
Graham Stephan (2 months ago)
You got it!
Jorge O. (2 months ago)
Where do you get the cash to start investing?
Graham Stephan (2 months ago)
Solo Lolo (2 months ago)
1:35 Awww Teddy... that WAS cute. 🤗🤗
Graham Stephan (2 months ago)
Teddy is awesome!
Her Vue (3 months ago)
Hi Graham, I have a few questions. I don't know if you have the time to read comment on your YouTube video. Is there any other way I can ask you questions privately?
Sharkteeth 521 (3 months ago)
I like how realistic you are most youtubers act like it’s an instant return you broke it down and explained it thank you
Graham Stephan (3 months ago)
Thanks so much!
Yan Campos (3 months ago)
I didn't learn anything..
Graham Stephan (3 months ago)
Jason Cohen Pittsburgh (3 months ago)
Incredible video! Straightforward and honest.
Graham Stephan (3 months ago)
Richard Neal (3 months ago)
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Matthew Hernandez (3 months ago)
When it comes to the utility bills do you include that as part of the rent to cover those bills? Or do you do something else?
Andrew l (3 months ago)
I loved that- the expectation is it's a passive investment- NOT REALLY
Tony Montana (3 months ago)
Scoring some points with Betty. Get it graham
Graham Stephan (3 months ago)
yebudds (3 months ago)
$900 a month and what's the value of the property?
Graham Stephan (3 months ago)
$900/month is net, I rent it for $1400/mo right now. Value is around $220k-$250k.
finasterideag (3 months ago)
I have an llc company that invest in properties in Florida, California and Texas, we make investing pools, that way an average person with 50 thousand can be part of our projects making upper fixes in fresno, L.A, Houston, Miami and gain 15% in Roi, every 3 or 6 months, each project last 3 to 6 months. That is more than having your money in the bank. FINANCES capital USA LLC. Send me i private msg.
Robert Riordan (3 months ago)
It is passive income but keep in mind you got to borrow money repairs and get good renters days without renters RRMRCAPITALS.COM
Heatwave (3 months ago)
Noting valuable about this
Heatwave (3 months ago)
Graham Stephan ?
Heatwave (3 months ago)
I need to know the first step to make having 5 grand . What do I do
Heatwave (3 months ago)
He’s not telling me nothing . He’s talking about what he does personally about his life he’s not saying anything
Graham Stephan (3 months ago)
Harmless Solutions (3 months ago)
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John Nguyen (3 months ago)
did a flip in nc, got hit by florence. Tell me that's not exciting
Graham Stephan (3 months ago)
oh damn!
DHILLON84 (3 months ago)
If you write a book I’ll buy it
Graham Stephan (3 months ago)
One day!
Nigel Ash (3 months ago)
Hey Graham , Thanks for the videos. I have a question for you. Do you have any advice for people starting with no money or credit that really want to make it in real estate?
Graham Stephan (3 months ago)
Davidjonathan 20 (3 months ago)
I really I appreciate your realness u are the only one i trust on YouTube 😭😂
Graham Stephan (3 months ago)
ahh you got it!
subir ritchil (3 months ago)
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Daniel Walker (3 months ago)
Awesome Analysis. This video also very helpful for the beginner. https://www.youtube.com/watch?v=4F9rs0w8JjE
Slashima Games (3 months ago)
Thanks so much for this video! I am 14 years old am want to do this when I grow up. You do a great job at teaching!
Graham Stephan (3 months ago)
Matthew Bohorquez (3 months ago)
Great vid thanks.
Graham Stephan (3 months ago)
Thanks for watching!

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