The ULTIMATE Guide to Getting Started in Real Estate

How do you turn this into a whole bunch of this? Guys, my name is Kris Krohn. Today, we're talking about how you get started in the game of real estate. If it's day one for you and you're saying, I want to be a millionaire through the game of real estate, I'm going to show you how I did that by the age of 26. But frankly, I'm going to show you how to do it even faster than me. I'm turning dreams into reality. Listen, I get it. Look at how unattractive real estate can sometimes look. But you see, when I see that, when I see that run-down property, when I see that run-down fence, can you smell it? Smells like money. Oh, that smells so good. Because the reality is someone hasn't taken care of that. Real estate is really just a game of solving problems. And when someone's got a problem that's really big and you can solve it for them, you usually get paid with a whole bunch of that. Well, my friend. Today, I'm here to be your mentor and get you started in the game of real estate. Because I got to tell you, it can be really intimidating at first. There's all this new jargon, there's this new language. There's so many ideas. Real estate can mean so many different things. So, today, my goal is to make it really simple and give you an introduction on the ideas and thoughts that literally can lead you down a road to making millions of dollars. What do you think of my pad here? It's pretty nice. Actually feel a little bit like Mr. Rogers showing off the neighborhood in his house. Do you remember that? This is a nice house. What I like about it is I like the pool, I like the lights. What you're really looking at here though is a single family home. This is a home that someone buys to live in. They're going to put their kids in bedrooms. They're going to have dogs and cats. They're going to live their life. This is just one form of real estate. But check out all the others. See what we got here? You got residential real estate. This is where people reside. You've got commercial real estate where businesses reside. And you've got industrial real estate where crap gets made. This is like the messy stuff. All of them are forms of real estate. And all of them sit on land. And technically, right now where you sit or stand, you're on a piece of real estate right now. But already my friend, we are introducing one of the most important and sometimes most difficult question to answer. What kind of real estate should I get involved with? Like for example, Donald Trump. He owned commercial real estate, hotels, skyrises, casinos. And obviously, that worked out pretty well for him to the tune of billions of dollars. I've got a buddy who literally has hundreds of millions of dollars churning and burning through industrial parks like metal warehouses and junkyards and things like that. There's people out there that can get into like business parks or other people that might want to get into trailer parks. Reality is there's a lot of different kinds of real estate. And what I want to do is I want to share with you my opinion based on a billion dollars worth of real estate and deals that I've done on the very best kind of real estate for a beginner. And frankly, for the seasoned investor as well. You know, I think it could be really easy for you watching this video right now and think, man, I feel a little embarrassed to really kind of ask what should I be pursuing or what real estate is best. And I'm going to tell you right now, I'm a big fan of single-family real estate. Residential real estate. Things like this. But not because it's entry-level or like the least expensive real estate. Frankly, it's the real estate that I make the most money on. Check this one out. Residential real estate generates high and reliable cash flow. The most obvious advantage of residential real estate is the sheer amount of cash flow that it could potentially generate. Unlike other types of businesses, the income from a residential property is relatively predictable and stable. Let me show you what this looks like. Let's just say that I could buy this really simple single-family house. Assuming it's 3 bedrooms, 2 bathrooms. Like super entry-level. Let's just say that I could buy this house for $200,000. And the bank is going to put up frankly most of the money. It's not going to cost me a whole lot. In fact, if I move into the house, I might just be putting down like a small 3% down payment. And 3% of $200,000, guess what? That is $6,000. So, frankly, you can turn a little bit of money into a lot of money. But when I say why single-family and how can this lead to millions of dollars, if all you did was rent out this home or do one of my lease option systems that I'll tell you about in just a little bit, you see over a little bit of time, this house is going to keep going up in value. And if someday, this house goes from $200,000 to being worth $300,000, guess what I can do? I can sell this house and basically, I'm going to clear the difference between $200,000 and $300,000. I'm going to make a million bucks. Or I could go to the bank and do a refinance and the bank could actually give me some of that money and I could still hold on to the house. But for just a moment, if you bought 10 of these tiny little homes, held them for 5-10 years and sold all 10 of them and made 100,000 on each one of them. What is 100,000 times 10? Well, that's my friend how you get to a million dollars. Check this out. Did you know that since 1965, they've been tracking on average how much real estate goes up with time. In fact, this comes from the US Census Bureau. And it says, wow, this is interesting. Despite any of these recessions, there's this force in the market that keeps making the prices of real estate go up. Do you know what it is? It's baby-making. People make babies, population increases, people move to America. My dad was a German immigrant. And the more people we have, the more houses that we need. So, more people create this demand saying, we demand more homes be built. And so then someone has to supply those homes. And that's when we get into the conversation of supply and demand. Supply and demand with population increase in America has done this. It's averaged an annual increase of 4.58% every year since 1965. How crazy is that? And how much money does that make you? Let's go back to the example of a $200,000 house. If I buy this house and if I were to just round up that it goes up 4.58% every year, let's just say it's going up 5% every year. What is 5% of $200,000? That is 10 grand. Literally. Just by owning that house, you're going to become $10,000 wealthier on paper. That's why after 10 years, 10 years of 10 grand, that's not even factoring in compound interest. There's my $100,000 that I was just telling you about. 10 homes, 10 years. Single-family basic entry level like that? Dude, that's how you become an easy millionaire. And this my friend is why I'm such a fan of what I call American dream real estate. I'm not talking about mansions or multi-million dollar homes. I'm talking about tiny little single family homes that have 3 bedrooms, 2 bathrooms. This is where a couple has maybe 1 or 2 kids. Maybe they've got a dog. They got a place that they can call home. It is the real estate that is in highest demand across the country. More people want this than any other kind of real estate. Because you know what? Every new investor shares the same fear-based fantasy. What if I buy a house and no one rents it? You know what? That's why I like playing in a sector where there's all of this demand and everyone wants to move in and have this real estate. Now, check this out. I discovered that there is a sweet spot in the game of real estate. Because I've learned that higher the price, higher the risk. And so, if you're going to get involved in the game of real estate, the last thing that you want to do is buy real estate that can hurt you. I've met many people over the years that didn't know what they were doing. They weren't following my advice. They went and bought an expensive home. Maybe a 3, 4, 500 thousand dollar home. And then they quickly found out that for the cost of the mortgage, they couldn't collect enough rent to pay for it. And they were coming out of pocket every month. That's why I want to show you this graph from a book I wrote. The straight path to real estate wealth. And here's what it really defines. Over time, if you take a look at the cost of real estate, it goes up in value. And if you were to take a minimum 3-bedroom home and if you were to go buy real estate below the median, meaning usually 250 grand, you're going to find a sweet spot of the highest level of cash flow. But if you go above the median, over 250 or 300 grand, that cash flow dwindles, dwindles, dwindles until there's none left because you hit what's called a break-even point. Let me give you an example. I buy a million-dollar home. There's no way that someone is willing to rent that million-dollar home for what the mortgage is going to cost you. But if I stick with the simple little 3- bedroom, 2-bathroom home, I'm actually going to pick up my highest percentage of cash flow positive. So, if you're going to play single-family real estate, don't buy the expensive stuff and never buy above the median. But Kris, I missed the boat. Where I live, real estate is really expensive. I get it. If you live in the big cities, if you live in New York, if you live in LA, you need to understand that real estate in California is not the same as real estate for example in Tennessee. It's different all across the country. The national median usually hovers around 250 or $300,000. If you're buying single-family homes above 250 or $300,000, I don't think it's going to be a wise investment in the long run. So, if you live in those areas, that might be a great place for you to live or buy a home just for you. And you can do okay on that. But when it comes to investing, you're going to have to find a way to go into the markets where you can make a lot more money, a lot easier. And don't worry. At the end of this video, I'll show you how you can tap into that. Well, now you know that single-family might be the best kind of real estate for you to start with and frankly even end with. That's why I've never left it alone even after 4,000 deals. But there's so many different strategies that you still need to be aware of. For example, you could do a rental on the property. Or you could do this thing called a lease option. Or you could wholesale the property which means I'm going to get it under contract at a good deal and then I'm going to collect a 5 or 10 thousand dollar fee for giving it to an investor that wants to deal with it long term. I could fix it up and flip it and see if I can turn a big profit. There's so many different ways of doing real estate. What I want to do right now is I want to share with you of all the strategies the one that I think is best. Now, I need you to understand something. You're not alone. It can feel scary the idea of just jumping into real estate and if you make a mistake, it could cost you tens of thousands of dollars. Best thing you can honestly do is get educated. Read books. In fact, if you haven't already, subscribe to this channel because guess what? Multiple times every week, I drop videos just like this to teach you how to be a ninja at the game of owning your own financial future and making money. So, subscribe. And check this out. I went through the painstaking work of comparing the top strategies in real estate. In fact, I have compared all 30 and what I'm about to tell you is going to make you the most money if you do this in your backyard right now. Some of the top strategies include rentals. Meaning, I'm going to buy this house and I'm just going to rent it out. Or I'm going to buy a home to flip it. Or I'm going to buy a home and instead of rent it, I'm going to do this thing called a lease option or rent-to-own. I'm going to put a family in this home that eventually wants to buy it from me. Or you can do something I call the straight path system. Wrote a book about it. The book is free. You can click the link below. It's there for you. And here's what I ultimately found out. I value my time. Don't you? Like if you're going to do real estate, do you want the real estate that's going to take all the time or the least time? Or effort? Do you want it to be hard or easy? Super risky or not so risky? Do you want it to provide a service and create value for people? The market. Do you want it to work in good markets, bad markets? Do you want it to be profitable? And how many profit centers does this actually have? Now, the reason why I put this matrix together is because it helped me identify the single best strategy which you're about to find out to help you on your journey of making your first million dollars in real estate. You see, rentals is kind of like a part-time job. And fix and flips when it comes to time, hyper excessive. Lease options however, when you put a family in and you say, you're responsible. You fix it up. This is your home for the future. You're going to be buying it. It ends up requiring the least amount of time. So, that's really important for you to know. Or effort. Rentals are kind of like a part-time job. Fix and flips is a full-time job. These options are minimal. Service, market volatility, profitability. You weigh all of these factors out and I'm going to share with you right now the strategy with the least time, the least effort, the least risk and make the most money. If it's in your backyard, you're going to learn how to do a special kind of lease option. I call it compassionate financing. And again, if you click the link in my book below, my book is free. I'll ship it out to you and I'll just walk you through how you buy homes and instead of just renting them, you make twice as much money helping those families in the next few years actually buy the home. So, there my friend is an important shortcut for you. Ultimately, as you get in the game of real estate, here's the 3 rules that you need to remember. Number 1, pick a strategy. I've suggested that it's lease options in your backyard on entry-level single-family homes price below the median. You know what all that means now. Number 2, you pick a mentor. Do not make the number one mistake which is I'm going to put my head down, read a book and I'm going to do this all by myself. You want someone watching your 6. You want someone that can evaluate the numbers and just make sure you're not screwing this thing up. And then of course number 3, you copy their system. In other words, do not reinvent a wheel. Someone's already made millions of dollars. If you said, Kris, I want to do apartments like Grant Cardone. The dude has made so much money in that game, you should just get his system and copy it. Stop copying me! And then you just copycat. Because I tell you right now, how the smart people get wealthy, they don't invent anything. They just take what's proven, they take what works and then just do it. Speaking of which, I hope today's video rocked your world and got you started in the game of real estate. I'm just one person's perspective. But if you liked it, make sure you subscribe and like the video. More importantly, I've got a handbook that I'll give you for free on how I retired at the age of 26 and made my first 1.6 million dollars. And I'm going to tell you since then, I have multiplied that portfolio so many times over. This book also comes with something really cool called a free game plan. This is someone certified and trained for my team. I get thousands of requests every month for people saying, hey Kris, be my mentor. Help me out. I can't be in every place at once. That's why I make these videos. But I promise you that if you click the link below and you pick up a free copy of this book, you are going to get a phone call from my team and they're going to say, hey, Kris wanted me to call you and do a free game plan. Tell me where you're at. Are you young? Are you a teenager? Are you older? Are you tired of your career? Are you trying to get out of it? Are you just trying to make a million bucks? Like, where are your priorities at? Are you working too hard and getting paid too little? And they've been trained to basically step in your shoes as if they were me and tell you exactly what I would do. So, today you're getting the book for free. But just when you get that phone call or get a text from my team, respond because they're just going to spend a little bit of time for free just saying, hey, if Kris Krohn were in your shoes, this is exactly what he would do to make his first million dollars as fast as possible. And I hope that's valuable for you. Hey, thank you so much for watching today's video. I hope I was able to deliver what you were looking for. And if you want to know more, then I would check out this video over here. I pick up my CEO and drive him around in my limo basically showing him the first deals I did and how I made that million bucks. That would fit in my living room. Do you guys have kids at this point? No kids. So, it's just you and Collin. It's just me and my wife. Oh, that's cute. Alright, dude. Check it out.