Franchising & Real Estate | Second Life Method Podcast FRE | 2LM
LaunchPod Media inc.
66 episodes
7 months ago
Join host Kelly Maxwell as he explores proven strategies, shares his success stories, and features conversations with industry experts who have mastered the art of global real estate investing. Tag along and discover how offshore real estate can be a game changer in your financial future. This podcast is designed to be your ultimate guide in learning all you need to know about investing in real estate, dealing with offshore assets, and becoming a top-tier property manager. You can also expect to learn valuable insights on other related topics like franchising and building generational wealth. Tune in each week to unleash the power of the foreign market and grow your cash flow today!
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Join host Kelly Maxwell as he explores proven strategies, shares his success stories, and features conversations with industry experts who have mastered the art of global real estate investing. Tag along and discover how offshore real estate can be a game changer in your financial future. This podcast is designed to be your ultimate guide in learning all you need to know about investing in real estate, dealing with offshore assets, and becoming a top-tier property manager. You can also expect to learn valuable insights on other related topics like franchising and building generational wealth. Tune in each week to unleash the power of the foreign market and grow your cash flow today!
In this episode of the Second Life Method Podcast, host Kelly Maxwell delves into the metaphorical 'spider bites'—the uncomfortable truths and challenges—that entrepreneurs often face on their journey to growth. Drawing parallels between the unexpected pain of a spider bite and the unforeseen hurdles in business, Kelly offers insights into navigating these challenges effectively.
In today’s episode, Kelly discusses poverty and how it affects the financial mindset of people all around the world. While you don’t have control over where you start in life, you do have control over where you go and this episode will break down some of the fundamental components that make escaping poverty possible. Ultimately, achieving financial freedom is possible for anyone!
04:32 Why you should care about different perspectives 15:33 The pitfalls of poverty 26:38 A glimmer of hope 34:58 How to break free 43:13 Takeaways
“There are a lot of poor and middle class people who our school system and a lack of financial education have left undisciplined and uninformed on the topic of money. The poor and middle class consumers tend to part with their money much more easily than the wealthy consumers do.” 17:06
In today’s episode, Kelly talks about what to consider when investing in real estate for both new and seasoned investors. Making good investment decisions will help you avoid future financial trouble and ensure that you get the biggest return on your investment. Maybe you’re buying your very first house for you and your family. Or maybe you already own several single-family homes and are ready to start investing in real estate. The categories discussed in this episode will help you on your path to greater financial freedom and success.
02:11 The impact of home ownership on society 15:43 Buying your first property 24:08 Having a team of professionals 30:55 What types of properties to buy 34:07 Location, location, location 39:51 Property condition 44:20 The profitability of the property 45:38 Property price 55:53 Keep leveling up and learning on your investing journey
“You ought to have 6 months of mortgage payments and insurance payments set aside… You should keep cash reserves. If you go with a property that’s too expensive, it’s not hard to understand how you could get underwater financially if you couldn’t get it rented or if something happens. So it’s nice to have a little extra money in the bank for a cushion to give you time to make a play.” 46:21
In this episode Kelly talks about the importance of communication and putting your ego aside in order to nourish relationships. Speaking without ego is so you don’t make enemies everywhere you go and call attention to yourself, and then listening without defense means you can listen to someone who maybe you have offended in a way that will cause your relationship to be better and improve as you get into new territory with these people by being open minded and learning to listen without taking offense, or launching a campaign to defend why you were right and they were wrong. As you put these principles into practice that Kelly discusses here, you’ll find that your relationships and even success in business and networking begin to improve.
A difficult scenario to imagine with Kelly 1:30
Imagine the time has come to apologize 6:00
Here is what most average leaders with some authority do 7:25
Productive conversation can resolve issues and help develop mutual respect 15:20
Story from Kelly’s dentist 20:00
Kelly supports small business and premium service 29:00
Ego is the enemy to your success 34:00
Focus on what people want to hear 46:25
“There are two main things to keep in mind when it comes time to talk to this person. Like I said, remember to speak without ego, and listen without defense. When you talk, you’re going to listen without defense and not arm your argument against them, preparing a campaign against them about why you’re right and they’re wrong, and that you’re the leader. You’re actually taking in the data and listening without defense. You’re trying not to be offended.” 15:20
Kelly is doing a follow-up on the Depreciation episode from yesterday and talking about 1031 tax exchange, which means essentially you pay no taxes when you sell a property and technically you postpone the tax, including any of the taxes associated with depreciation. This is not like a tax free situation, but rather you’re postponing the taxes you will need to pay and “kicking the can” down the road for that payment to a later date. You’ve gotta do everything right and there’s a whole etiquette, so listen to Kelly discuss this topic to understand what you need to know about this concept.
The definition of a 1031 or like-kind exchange 1:50
An example 2:50
QI and high cost 4:50
“So why the high cost and what is QI? Well legally, you need what’s known as a qualified intermediary who holds the proceeds from the sale of your property and will assist you in acquiring the replacement property and following all these timeline requirements. This is not the time to give your brother’s friend’s attorney a chance, OK?”
You’re probably wondering how on Earth the government is supposed to pay you to invest. Depreciation is one of investors’ and accountants’ best kept secrets for saving money at tax time, as well as helping people keep their wealth. The government provides a financial incentive for you to invest in housing and real estate, so if you wanna know how that works and how you can be paid to invest in real estate too, stay tuned for this episode. Kelly is reaching kind of a long stream of technical episodes he’s been putting out about calculating investments, learning to see value, and calculate income streams, and do things that other investors cannot, or choose not to do. This gives you an edge and raises your level of awareness, letting him cover the territory, and then you can operate within the input that he gives you.
Depreciation 3:25
Definition 6:40
Depreciation rate 12:00
As a form of income 18:40
The contents degrade more than the land itself 25:30
Depreciation recapture 27:45
“Depreciation is one of investors and accountants’ best kept secrets for saving money at tax time, OK? Not to mention helping folks keep more of their wealth. It’s a big way to earn and for the government to pay you, or give you a financial incentive to invest in housing.” 3:25
In this episode Kelly talks about how much profit goes into your pocket when you sell an investment property. It’s starting to be tax time again, so gain on sale is something you will want to understand. It is the taxable profit that is realized during the sale of a real estate asset or property. Because gain on sale is a pre tax measure, the actual amount of money that an investor takes home beyond the gain of sale depends upon his or her own personal tax rate and will require further calculation. If your tax rate is low, you’ll put more money in your pocket when you sell, and if it’s high you’ll put less money in your pocket in the end.
What gain on sale actually is 1:15
Why you should care 2:10
The formula 3:20
“Selling price minus the adjusted basis equals your gain on sale. You gotta look at depreciation, so how much you can take, how much you’ve taken so far on the property, if any. After tax, gain on sale, or simply gain, is expressed like this. You must take the depreciation credits and the IRS recognizes that it wears out over time and they acknowledge that financially by allowing you to depreciate deductions on your taxes.” 3:27
Today Kelly talks about the adjusted basis. This is a simple calculation that’ll help you understand more clearly what your position is in a given deal. What your REAL position is, both in a financial sense for the purpose of calculating profits and taxes, but also to learn to identify value and gain an advantage in a deal where other investors can’t identify that value, or you’re seeing things that they don’t see. It’s these little details and subtleties, especially in the tax code, that make investors so rich and help them avoid paying taxes and keep more of their money.
Keep this at the back of your mind 1:50
Current formula and calculating 2:55
Finding that unfair advantage 6:20
This will pay off for you 8:20
“You may have heard that investors on a higher level seek leverage and this is true because it gives them an unfair advantage from the very beginning. That’s what we’re talking about today is finding that unfair advantage.” 6:20
In this episode, we’re going to understand capitalization rate, and what makes a good deal and why. A commercial property, like an office building or apartment complex, is valued according to how much income the property makes, minus its expenses. Residential properties, such as singles homes, are valued differently, basing things on how much people are willing to pay and how much financing the bank will give to the lendee. Investors, brokers, and banks use the term cap rate in every day investing to refer to the relationship between how much properties make each year in income relative to their overall sales price of kind of what the properties are going for.
The definition of cap rate 2:15
An example of cap rate 3:45
Low cap rate 8:15
High cap rate scenario 10:00
Average cap rate 12:05
Hot spots in the market 14:15
“You’ll need to calculate the cap rate yourself, okay? On each property that you examine, compare it to the market basis, then pass it through the filter of your own experience, and the filter of the deals you’ve done, and use your instincts. If it meets all those requirements, then great. If not, then keep looking. Do your due diligence on the property and find out what the exact cap rate is on the property you’re interested in, and then make the decision whether or not to invest.” 18:35
Today’s episode is a lot of fun. Kelly talks all about Net Operating Income and millions and millions of dollars, how those real estate investors who invest in commercial and multi family apartments end up with millions of dollars of what seems like liquid cash that they can go invest wherever they want. How do they do that? NOI is one of the most important calculations you will make as an investor and will be how you repeat what they do.
Examples of operating expenses 2:05
Formula for calculating NOI 3:25
Ways to increase NOI 11:40
Grant Cardone's “$60 Million Dollar Deal" 12:10
Ways to avoid decreasing NOI 13:50
The real reason investors care so much about NOI 14:40
Protect your reputation 18:25
Commercial Property 20:20
“Investors who invest in commercial properties like we’ve talked about guys, are buying the income stream. That’s all. No white picket fence, no emotional attachment, just income and value, and it’s all demonstrated by the numbers, Net Operating Income being the basis.” 25:45
Have you ever thought about making an infinite financial return on your investments? Kelly had never thought about it either until he read it in investing books and he started to hear this term, infinite return, and he became very fascinated. So today he has a very special episode for you all on the break-even point, the moment in which we cross over and start to head over into Spring and Summer after the darker months.
Starting a new business 1:40
Finding the best info and break-even point 2:45
Infinite return 13:40
Smaller service companies can get going easier 19:45
“When you reach the break even point, the money that left the business equals exactly the money entering the business…Now, only now, are you in the black financially. You have recuperated your capital so it can now be invested somewhere else. Every dollar that comes into the business now is stone cold profit.” 13:50
In this episode, Kelly wanted to show you a very useful investment trick that you can use the next time you’re out looking for properties, which is called the Rule of 72’s. This is kind of an older trick used mostly by a lot of the veterans of investing, but the definition is the rule of 72’s allows the investor to calculate the approximate number of years it’s going to take for an investment property to double in value at a particular rate of compound interest. So if you’re trying to figure out how many years it’s going to take for your property to double in value, this is the trick for you.
How it works 2:00
Contact Kelly to grow your wealth 11:15
Kelly’s experience with rapid growth 16:25
Let your mind wander 18:00
Join the movement 20:00
“Tulum is truly special, it’s something about the Mayan culture, but that whole area down there at the border of Belise, that whole corridor is all opening up, and it’s got some of the most pristine beaches and protected beaches in the world, so we can expect some parts of it to grow, and some parts of it to be protected and be absolutely pristine for tourism for many many years to come.” 20:40
This is a topic that makes investors very nervous, but we must reckon with it. Kelly gets questioned all the time about how much cash someone should put aside for a rainy day in real estate. The words vacancy and credit loss make their ears sting, so today Kelly talks about exactly how much money someone should put aside for that inevitable situation where a tenant fails to pay rent.
You are entitled to 100% of the financial good along with the bad 2:30
An example 4:40
When vacancy and credit loss savings really help 10:00
Clean your properties 16:25
“Do your maintenance, do you cleaning, CLEAN. And please place mats outside your doors, especially in the winter if you’re in North America and in the Spring, when all of that soil and dirt is tracked into the building and property owners just pretend that dirt doesn’t come into the building.” 16:30
This is something that has bothered Kelly for a while. It’s about manners and ethics, and don’t make a fool of yourself out there, which a lot of people end up doing. It’s a trap that many fall into where they brag about charging a client a lot of money for something they did very little work for. What you SHOULD be doing is looking to see if you actually add value to your clients’ lives/businesses, which is the inverse of that behavior. You can’t build a solid clientele and business by ripping off your clients. That kind of business just isn’t sustainable.
Add value 2:00
An example from Kelly’s life 3:00
Guys with money are secure 5:00
Why the wealthy buy expensive things 6:30
Gary Vaynerchuk vs Morgan Freeman 10:15
Exploiting new money 13:10
“I don’t feel good just gauging people and charging a whole bunch of money, unless there’s a lot of value, like when I sell a business model that will create money for you, or even a small business that’s already creating money. I don’t feel bad at all for that because you’re just paying me the money that is flowing into me, but it’s paying for your own future income.” 12:44
This is a shorter episode for you guys today. Kelly wants you to be getting out there investing, and building your money and empire. Listen to him explain this quick and easy napkin investment calculation metric to make a part of your due diligence process to help make your loans be more likely to be approved, which means you can buy more properties and make all the wealth and cashflow your little heart desires.
What is debt coverage ratio? 1:00
Using this with banks 2:55
An example 7:45
“Once you show this to the bank, or your mortgage broker shows this to lenders, your lenders and the banks are gonna look at your personal info, the assets, your credit profile, investment experience, corporate credit, how leveraged you are, whether you can safely service more debt, or whether or not the assets you’re considering acquiring can service their own debt.” 6:15
There are times when all the stress of career, family, the risks in the market, changes in the government, and everything that’s happening, it all just gets a little overwhelming. There are times, while running companies especially, when things start to really feel like a grind and it becomes really hard to just keep going in the path that you are going, in order to run a small-medium company. Despite all these issues, there still seems to be those individuals who just seem superhuman who reach this level of productivity that seems quite unobtainable to most. Listen to Kelly as he tells about how you can discover that momentum and use it to your own advantage.
Some entrepreneurs seem superhuman 2:55
One of the great hacks which are hard to understand at first 5:35
You’re building something real 8:00
You can give yourself a raise 12:30
When the wheel starts turning 20:45
If you feel you’ve lost your momentum 24:10
“Business momentum is something that you’re intentionally stimulating. It’s also a force that’s carrying you, to use the ocean analogy, like a surfer on a wave. You’re a surfer on a wave, and your previous successes are that wave if they’re carrying you. It’s this thing you have to get going and if you do, it starts to work in your favor. But remember that only those who work for it and start something great can feel this power.” 9:15
Having a one million dollar net worth would make a huge difference for an individual and their family. Most people have thought about what it would be like to obtain that level of wealth, but most people haven’t actually considered the actual possibility of obtaining it. If you set the right goals and put in the right amount of effort, you can be the financial cornerstone for yourself and your family, on whom they can rely and feel a sense of security, and to whom they can look for wisdom and guidance in life. You may not reach that one million networth in a year, but you can get on the right path and lay the groundwork in a year that will lead you to $1M. “I’m OK with a little sweat and blood en route to victory.”
The road of business has not been easy 4:00
Have you really considered what a $1M net worth would be like? 7:00
Put yourself on the path to $1M 10:00
Devote yourself to financial education 14:30
Have an arena in which to define yourself 17:00
Create a viable commercial business 19:00
Pay your taxes on your business and earned income and use bank privileges 22:40
Measure your performance and get a good mentor 27:45
Develop a big WHY 30:20
“These traps are common to the middle class. These traps of prestige, the nice car, the nice house, the credit cards, the stuff that we get on loans that isn’t even ours. Very soon I’m gonna do an episode on credit cards and buying things on credit, and how to use them properly.” 26:13
As mentioned previously, Kelly was in Las Vegas for the ISSA show, which features all the biggest facilities, maintenance, and cleaning companies brands from across the world. He noticed there was a large amount of businesses there that were geared towards helping you run your service business on a mobile phone, using apps that would simplify operations. Kelly realized a lot of the tech CEOs were very anti-social, which therefore turned him off and only confirmed with him that he did not want to work with them.
Using apps to simplify business operations 2:00
Noticing tech CEOs antisocial behavior 4:45
At least make an attempt to sell 10:00
Look ahead and plant seeds, hire 13:45
“If you have the ability to talk to people and make them feel comfortable with you, so if you’re the guy standing there at the booth, people are talking to you and socializing with you, then you can sell anything. Remember ‘The medium is the message,’ So if you’re there and the guy likes you, he’s naturally gonna be interested in what you’re selling and people will want to deal with you. That’s not always something that can be taught, but you can develop it to a great extent. It’s a literal superpower when you master it, you can basically close anyone in person if you learn how to present and sell.” 10:15
Today Kelly is talking about an enormous investing hack that very few people talk about, which is making a list and writing down the things you have to do, and then do them one by one until you’re finished. He tells his franchisees this all the time. If they forget to do something, say the franchisee has maybe 3 or 4 main tasks that they really need to get done, to maybe onboard a new client, if they forget to do something on that list, his first question as a franchisor is “Did you write it down? Did you make a list?” and their answer will be no.
His first question as a franchisor 1:20
Simple business systems save us 4:00
How Kelly does it 8:00
“If you, say, make a list of potential clients to call, like 10 a day, each day, you’ll start to see results. So whether you’re talking to your clients, or making these outbound sales to try and get new clients, it’s all because you set this simple goal and used a daily list to accomplish it.” 5:40
In this episode, Kelly talks about the former Bigger Pockets host, David Greene, who a few years ago was let go from his host position, and then due to popular demand, started his own podcast, which soon became a hit show. The David Greene Show has broken into the top 10 business podcasts on Spotify and has done so on Apple Podcasts as well. Listen to Kelly discuss the direction and evolution that online education on investing has taken and why it’s good to be seeking the right kind of education as opposed to the junk that you can find everywhere out there.
The Big Pockets Brand and growth 3:30
Letting him go from the podcast 5:00
One of the problems with all this information online 7:30
Just read the bigger pockets books 11:00
Get faster results 15:50
Start with what’s free first 17:00
Ask yourself the real questions 25:00
“I would recommend that you get faster results by starting a small service business. Something with a reliable service like cleaning, or janitorial, landscaping, roofing, and use the cash proceeds to invest in real estate instead of trying to make all your wealth in real estate over time. Do both at the same time. Have a business that feeds the real estate investing.” 15:50
Franchising & Real Estate | Second Life Method Podcast FRE | 2LM
Join host Kelly Maxwell as he explores proven strategies, shares his success stories, and features conversations with industry experts who have mastered the art of global real estate investing. Tag along and discover how offshore real estate can be a game changer in your financial future. This podcast is designed to be your ultimate guide in learning all you need to know about investing in real estate, dealing with offshore assets, and becoming a top-tier property manager. You can also expect to learn valuable insights on other related topics like franchising and building generational wealth. Tune in each week to unleash the power of the foreign market and grow your cash flow today!
