The David Greene Show: Store Cash, Build Wealth, Buy Wise - Episode 18

Release Date: November 12, 2024

Welcome to Episode 18 of Real Talk Real Estate with David Greene. In this episode, David tackles a variety of pressing topics in the real estate world, providing actionable insights and expert advice to help listeners navigate the complexities of building wealth through real estate investing. From managing investments alongside a real estate career to strategic financial planning in uncertain economic times, this episode is packed with valuable information for both novice and seasoned investors.

Episode Overview

David Green opens the show by highlighting the unique approach of his podcast—delivering practical, tactical information without the fluff, interviews, or sales pitches typical of other real estate podcasts. He emphasizes the importance of community engagement and announces exciting developments, including his upcoming real estate brokerage, Coast to Coast Real Estate, and new content tailored for real estate agents.

Notable Quote:

"Every dollar that we spend is a vote that we cast." — David Green [00:00]

Listener Questions & Expert Advice

1. Balancing Team Leadership and Personal Investing

Questioner: Margie from St. George, Utah
Timestamp: [03:44]

Margie, a seasoned realtor and new team leader, struggles with balancing her role as an agent and her passion for investing. She shares experiences where she prioritized investors over her own investments, resulting in missed opportunities.

David's Response: David introduces the concept of the reticular activating system—the subconscious filter that determines what information reaches our conscious mind. He advises Margie to implement a flowchart strategy to decide whether to invest personally or pass deals to her network. Key steps include:

1. Assess the Deal Type: Determine if it's a flip, BRRRR (Buy, Rehab, Rent, Refinance, Repeat), or wholesale.
2. Financial Capacity: Ensure she has the funds to proceed or explore financing options like using other people's money.
3. Synergy Creation: Allocate deals in a way that benefits both her personal investments and her team, fostering mutual growth.

Notable Quote:

"Training your reticular activating system to serve you correctly is a massively important part of being successful." — David Green [04:43]

2. Optimal Places to Store Capital

Questioner: Brian from San Diego
Timestamp: [11:39]

Brian seeks advice on where to keep his savings for a down payment, concerned about inflation eroding his savings in a traditional savings account.

David's Response: David acknowledges the challenge but explains that maintaining liquidity is crucial for managing multiple properties and business expenses. He suggests:

• HELOC Strategy: Use a Home Equity Line of Credit (HELOC) to keep funds within the property's equity, thereby saving on mortgage interest rather than earning minimal interest in a savings account.
• Avoid High-Risk Investments: Caution against placing savings in volatile markets like stocks or cryptocurrencies due to the risk of needing funds suddenly.

Notable Quote:

"There’s not a whole lot of options as to where you can put that money... the juice is not worth the squeeze." — David Green [09:00]

3. Advice for Older Investors Facing Financial PTSD

Questioner: Kara from Rural Tennessee
Timestamp: [10:53]

Kara expresses concerns about building wealth later in life, especially after experiencing the 2008 real estate crash, leading to financial conservatism and fear-based paralysis.

David's Response: David encourages a balanced approach—being conservative in some areas while being aggressive in others. He emphasizes:

• Incremental Growth: Building wealth gradually rather than seeking rapid gains.
• Mindset Shift: Overcoming fear by focusing on what can be controlled, such as personal efforts to increase income and make strategic investments.
• Adaptability: Encouraging continual learning and adapting strategies to current market conditions.

Notable Quote:

"The safest and best way to build wealth or hit success is slowly, incrementally, over time." — David Green [11:39]

4. Managing Problematic Rental Properties and Refinancing Decisions

Questioner: Daniel from Ithaca, New York
Timestamp: [16:00]

Daniel describes a situation where a rental property in Gainesville, Florida, is burdened by a HELOC and asks whether he should sell or refinance his rental and upcoming primary residence.

David's Response: David advises caution with HELOCs, especially when used for purchasing additional properties. He recommends:

• Prioritize Financial Stability: Keep the primary residence and focus on paying off the HELOC before taking on more debt.
• Live-In Flip Strategy: Enhance and sell the primary residence to pay off the HELOC, ensuring a manageable financial situation.
• Avoid Further Leverage: Refrain from using HELOCs for new investments unless absolutely necessary and financially sustainable.

Notable Quote:

"I prefer to see people take out HELOCs to improve properties they already have than to use that money for a down payment on a new one." — David Green [17:01]

5. Investing in High-Cost Areas: Tampa/St. Pete, Florida

Questioner: David from Tampa
Timestamp: [17:01]

David inquires about the viability of investing in the Tampa/St. Pete area amidst high taxes, home insurance, and flood insurance costs.

David's Response: David acknowledges the challenges but remains optimistic about Florida's long-term prospects:

• Short-Term Stagnation: Expect temporary stagnation in property values due to rising insurance costs and recent hurricanes.
• Long-Term Potential: Florida's attractive business environment and location will sustain its real estate market's growth over time.
• Strategic Moves: Suggest selling properties in currently struggling areas and reinvesting in more stable or emerging markets to capitalize on future growth.

Notable Quote:

"If I was you here, I'd be thinking I probably would sell in St. Pete and I'd put the money in a different state... Then buy something where I could force equity." — David Green [17:01]

Real News Report

David shifts focus to current events impacting the real estate market, discussing inflation trends and their implications on housing and the broader economy.

• Inflation Insights:

  • Despite headlines claiming inflation has "returned to normal," David argues that this doesn't equate to a reduction in actual prices but rather a slowdown in the rate of increase.
  • He uses an analogy comparing inflation to weight gain to illustrate how cumulative inflation remains a concern.
  • Emphasizes the importance of increasing income ("adding muscle") to offset inflationary pressures.

• Housing Market Predictions:

  • Contrasting opinions on the post-election housing market outlook.
  • Some experts predict a resurgence in 2025 as interest rates potentially decrease, while others remain cautious due to lingering high rates.
  • David advises preparing for both scenarios, emphasizing the importance of strategic planning regardless of market fluctuations.

• China's Real Estate Developments:

  • Discusses China's efforts to complete unfinished real estate projects by expanding the financial support whitelist.
  • David draws parallels to the U.S., predicting potential economic consequences like increased inflation due to stimulus measures.

Notable Quote:

"The only way is you can add more muscle to offset all that weight that you put on. So in this example, if inflation is putting on weight, adding muscle would be earning more income." — David Green [10:53]

Quick Hitters

In this segment, David addresses various quick questions and comments from listeners:

• Turnkey Investments: David reiterates his skepticism towards turnkey properties, citing unreliable cash flow and hidden costs associated with poor-quality turnkey deals.

  Notable Quote:

  "I've been doing this for about 10 years and I haven't had a story yet of a person that was happy with their turnkey." — David Green [21:00]

• HELOC Considerations: Reiterates the importance of prudent HELOC usage, especially for strategic investments like house hacking that can offset costs.

• Market Sentiments: Comments on listener feedback regarding current economic fears and the importance of proactive financial strategies.

Sneak Peek & Announcements

David concludes the episode with exciting updates and previews:

• Upcoming Book Release: Better Than Cash Flow—a comprehensive guide on analyzing real estate investments using multiple income streams.

  Call to Action:

  "If you want to come party, have a good time and celebrate the launch of this new book... send the word 'text'." — David Green [22:30]

• Property Management Services: Introduction of Coast to Coast Getaways Performance Property Management, seeking new clients tired of managing their properties independently.

• Community Engagement: Encourages listeners to join his mastermind group, Spartan League, and participate in upcoming events and consultations.

Notable Quote:

"We've got quite a few topics here including where equity should be moved, when equity should be moved, if a HELOC is the best option to buy new property..." — David Green [22:45]

Key Takeaways

1. Strategic Decision-Making: Implement structured processes, like flowcharts, to balance personal investments with professional obligations.
2. Financial Prudence: Prioritize liquidity for managing multiple properties and avoid high-risk investments unless thoroughly vetted.
3. Mindset Matters: Overcoming fear and adopting a growth-oriented mindset are crucial for long-term success in real estate investing.
4. Market Adaptability: Stay informed about market trends and be prepared to pivot strategies based on economic indicators and regional developments.
5. Community & Education: Engage with real estate communities and continuous learning to stay ahead in a dynamic market.

Final Thoughts

David Green wraps up the episode by emphasizing the importance of continual learning, strategic planning, and community support in achieving real estate success. He invites listeners to engage with the show, submit their questions, and participate in upcoming events and services to further enhance their real estate endeavors.

Notable Quote:

"I hope you laughed, I hope you thought, I hope you felt something and I hope you learned." — David Green [24:30]

For more insights and to stay updated with future episodes, visit davidgreen24.com and follow David on Instagram at @davidgreen24.