Does Cash Flow Still Exist in Real Estate Investing?

Message from Tom & Nick

Well, we finally did it!

We've wanted a big group picture with Rock Star Inner Circle (RSIC) members for years.

And now that the group has grown, it's been harder to accomplish than you'd think!

But a few weeks back at the first ever "Rock Star Networking Bonanza" we pulled it off.

See all those people up there? Some of those people are new members, others have been with us since 2007!!

And there's many more members than in that picture...that's less than half the RSIC membership!

Our first ever event for RSIC members was in the basement of the Holiday Inn at Bronte Road and QEW in Oakville.

We think there were about 60-80 people there total.

To see how far this has all come feels somewhat surreal.

And the best part is this...

We're all here for a higher mission than simply investing in real estate. We're all trying to live life on our own terms. And that brings out the best in all of us.

The discussions we have between each other are very often much more than real estate. They're about life, personal development, time management, goals, family, kids, relationships, health, fitnessvacations and vacation homes.

It's amazing.

But that doesn't mean we don't take real estate seriously.

Are right now the #1 question coming up from new investors is this:

Does cash flow still exist with real estate investing in Ontario?

And it's a little funny.

We've had this questions thrown our way in the year 2000, 2004, 2008, 2010, 2012, 2016 etc. etc. etc.

The short answer is yes, it still exists.

Just this month we had an investor close on a 4-plex that is cash flowing $2,500/month.

Another investor has a student rental that he filled with tenants and was getting $600/month but changed the lawn maintenance plan and is up to almost $700/month.

And there is a property by Western University that will cash flow north of $1,000 a month...the property managers said they'll have tenants for it almost immediately after closing.

We just recorded a podcast with an investor who is using Airbnb and Airbnb arbitrage to generate over $1,000 a month on multiple properties here in Ontario.

Now are some investors tight, right now? Absolutely.

If you were on a variable rate mortgage and it's skyrocketed, you're probably screaming about it. We are...we have multiple properties on variable rates and it's tough right now.

Somehow, we have one we locked in a 2.74% rate on, which is not normal for us to lock in rates...and it's been glorious with that rate!

The thing with real estate is there is so much nuance.

We have properties we've owned for over a decade with variable rates on them and the mortgage is small, so it's not that big of a deal.

We have one property that we ran as rent-to-own, then student rentals and now as a straight rental...with the opportunity to duplex it if we choose and possibly add a Garden Suite on in the future.

Check out this video with Anthony Molinaro on the Rock Star team with a walk through of one of his student rental properties. He breaks down all the numbers at the end:

With real estate, you have flexibility. It's why we like single family homes so much.

With single-family, we have the most flexibility and the most liquidity.

We can use many different strategies on them. So when the market changes we can be flexible and adaptable.

And if we're stuck in a property that has negative cash flow for a period of time we need to lean on our own liquidity (cash savings or bucket #1).

For years, we've shared with investors that our survival technique is a "3 Bucket Strategy"

Bucket 1: You need liquid cash for emergencies, to take advantage of good opportunities.

Bucket 2: You need gold or Bitcoin for your long term savings. We prefer Bitcoin.

Bucket 3: You need revenue generating, cash flowing assets in your life because you can't eat equity all the time. You need the stream or streams of income. For years now we've been saying that income will be the unicorn of this decade.

Next week, we're going to hop on Zoom and go over all the strategies that you can use with single family homes.

Nick and I will take an hour to explain how we'd look at real estate investing if we were starting today.

It's a 90-Minute Introductory Training Class followed by a live Q&A period with both of us.

So you can ask any question you'd like. In the past we've answered well over 100 questions on these things.

And I think this may be the last time we do this for the summer!

You can grab a spot and register for the class here. Class takes place on Zoom next Tuesday June 27, at 7:00pm.

We're off to Italy and Croatia for a month each with the families's party time!!

That's us living life on our terms...hanging out with the families in Europe, on the Adriatic Sea.

We're collecting a bunch of inflation and economic data that is showing a sharp decline in everything. Let's see how long these central bankers talk tough about rates.

We have a sneaky suspicion they'll be changing their tune sooner than they're letting on.

Time will tell.

That's it for this week, enjoy the sunshine!

It's a short life...don't get stuck doing stuff you don't want to life on your terms!!

And thanks to all the Rock Star members who have supported this mission over the years! We are forever grateful!

Tom & Nick

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