In this video, Lou Brown digs into Bitcoin. Watch this video and learn what you should pay attention to if you want to put your money where it will work the hardest for you.
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0:12 – Introduction – “Let’s Talk About The Bitcoin Craze”
1:10 – Congratulations! New Certified Affordable Housing Providers!
6:10 – Bitcoin vs. Real Estate Viewer’s comments & questions for Lou
17:23 – Is it really possible to buy houses for $10?
21:03 – Lou’s Tip Of the Week
23:03 – www.WealthBuilderWorkshop.Online – July 10th
29:00 – Lou’s final thoughts – Real Estate Rocks, Bitcoin is in the Tank!
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Having Tenants Leave Your Property in Better Condition than When You Gave It to Them
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Listen to our Podcast:
Scott Paton (06:31):
All right. So everybody’s talking about Bitcoin. It just seems the last time I looked, it was like $5,000 and everyone went nuts.
I have to tell you, Lou, when Bitcoin is hot, I get tons of friend requests from people all over the world and if I accept, the first thing they ask me is, “Have you heard of Bitcoin?” And I go, “No.” And then they go, “Well, it’s hot. And if you want to give me some money, I can guarantee $500 a week, $700 a day forever.” And I go, “Thank you very much, next.”
What do you think of this whole Bitcoin thing and how does it relate to the real estate business?
Lou Brown (07:26):
There’s been things over 40 years buying, holding, and selling real estate. During that time, I’ve seen lots of shiny new things come along. Certainly things that looked good at the time and there’s always been stocks come along and you say, “Hey, if you invest in this stock…” Now this is a new technology. This is a new trend. You can make lots of money and that’s true. That’s absolutely true.
One of the things that I’ve always thought about though there’s trends, there are ups and downs. There’s roller coasters. There’s things that occur within our economy. You can believe what you want to, but there are men manufactured. Our economy is manipulated. And if you don’t believe that you need to do some further research, well, I believe that’s true with Bitcoin and any other opportunities that might come down the pike as well.
Now, one thing that I like is real estate. I like income producing real estate, and we talk about stocks. Well, you might get a quarterly dividend, you might get an annual dividend, you might get no dividend at all because some companies keep all the money inside the company. They don’t pay out any dividends so that they can reinvest it in other technologies, other companies and so on.
They really don’t give any return on the investment. You’re betting on the possibilities, the appreciation of what might happen with that stock. For a lot of people, it’s speculation. It should be speculation. To me, it’s Las Vegas — roll the dice and take a chance. For some people they bet their life savings for other people it’s entertainment. And that’s more of what I look at is if I’m going to do anything in Vegas regarding gambling a hundred percent entertainment to me, I’m not doing it for an income stream.
You might want to buy some Bitcoin just for entertainment purposes but what I like is single family homes. Now, imagine that I can buy Bitcoin for $60,000. Well, I can buy a house in certain parts of this country for $60,000 and even less. What’s fascinating about that is there’s people for those houses and I love offering our Path to Home Ownership plan, where we help deserving families, regardless of credit or financial background to end up with home ownership.
One of the great things about that is when my customer moves in, I get a big fat paycheck because I’m usually getting a rent to own or an owner finance down-payment coming in from those folks. Every month that they are living there, I’m getting a dividend. Now, some stocks, they give you quarterly or annual dividends and some don’t give you any dividends at all.
My investments are giving me monthly dividends and I really liked that. I like the fact that I can line up buyers for my properties in advance, with payment money in advance. It’s a very attractive way that we can help people to advance their world and really support them in that process as well.
As you think through investing on the possibility of Bitcoin and its sisters and brothers, there’s a lot of different offshoots that have come from that you might want to consider what the stability can be with investing in real estate. The stability for me is that everybody needs a home. Everybody doesn’t need Bitcoin but everybody needs a home.
Of course, the idea of Bitcoin is that you’re going to be able to use it for certain purchases and that certain businesses are going to start taking Bitcoin in payment. I know that Elon Musk said that he would take Bitcoin and before he said he wouldn’t take Bitcoin for four Teslas. Well, when he said he would take it all of a sudden the price skyrocketed, and when he said he wouldn’t take it, boom! The price goes back down. But that could have been on purpose. My friend that could have been absolutely on purpose so that when the crash occurred, it could be repurchased at a lower price.
It just doesn’t happen that way with houses. You know, when I have a customer and I know how much payment that customer has, and I know what that customer can afford on a monthly basis. Now I can go buy a property. I can buy it. Right? I can buy it cheap. I can make a spread on that and I can make an income on that. And to me, that makes a whole lot more sense than something that we would speculate on.
Scott Paton (12:41):
And I think Bitcoin is the latest thing to bring out the greed in people.
This last month, it’s just gone down. It crashed and it came back up. It’s exciting if you love to gamble, it’s not exciting if you want a steady income and you don’t have to worry about paying and you don’t want to have to worry about paying your mortgage or your monthly expenses, because what normally happens with people that don’t know anything about what they’re getting into.
When they get in it drops, it’s kind of a whiplash thing. I think it goes up, everyone gets excited. The market is great: we’re going to take everybody’s money that drops like crazy. The market revised the people that were burnt, stayed out. Then a new group of people come in and away it goes. I know a person who bought at 20,000 about a year and a half ago before the last collapse.
Scott Paton (14:17):
This person bought at 20,000, it dropped to 5,000. He lost 15,000 and that was all the money that he had. All you hear is sobbing. And then last week a friend of mine said, “What should I do on Bitcoin? I’m a Bitcoin expert. I don’t know what you should do. But they bought at 60 and it was 35.” And I said, “Well, what can you do except hold onto it and hope it comes back one day and that’s a terrible way to live your life.”
Lou Brown (14:45):
Like I said, if you want to speculate, if you want to have some entertainment, you can do that just so you have something to look at. I am entertained by real estate on a daily basis. I don’t really have a good reason to do anything else.
Scott Paton (15:05):
I think that people are paying $60,000 for electrons, whereas, when you can spend $60,000 and you’ve got four walls, a roof, a basement, a floor, and some land around you, I think that’s a far better way to spend your money.
Lou Brown (15:23):
Something that people need not want. Nice people need shelter. This thing about you putting your coin in a wallet and you, this wallet has a key and if you ever forget your key or lose your key, you’ll never get it back. You can’t get it from anywhere. It’s like dropping your wallet to the bottom of the ocean. You’re never going to say it again. I don’t like that. I like a house, it has a deed. I can trade that deed. I can borrow against that deed makes a whole lot more sense to me.
Scott Paton (16:03):
You actually reminded me of a commercial and it’s this nice soft music. They show this guy and he’s calm. He gets out of bed. He has his coffee. He walks every morning to what he calls his thinking place and there’s this beautiful scenery, these canyons and he gets up on the top of this canyon. You see the canyon below him and the sun is shining. It’s peaceful. But then it changes to the reason that he bought Bitcoin at 50 cents and he cannot remember his password.
He’s a multimillionaire, he’s got tens of millions of dollars, and he’s the only one in his family to be a multimillionaire. Then he’s got like, he can’t remember the password. It’s hilarious.
Every day is a new day when you’re getting older. You might not remember what you remembered yesterday.
In our world, what happens is that you talk with sellers, you get the details about their existing financing. You discover that by the time you get through all the costs to sell the property, you actually end up with a number. Once you take into account the mortgage on the property, you actually end up with a negative number. If it’s a negative number, that’s an opportunity to buy the house for what we call $10, which is consideration on a contract.
In many cases, sellers will actually pay you to buy their house. Now, why would they do that because of the numbers? If you don’t believe it’s possible for a seller to pay you to buy their house, just call any title company that you know in your local area and ask them the question. Do you ever see people come to a closing with a check where they actually have to pay to sell their house?
What you’ll hear is only all the time. So as a result of that issue coming up for people, we know that when we sit down with a seller and counsel with them and educate them on the costs to sell. Generally speaking, when they see those numbers, they’re going to accept those numbers and know that they’re real.
When you get and take into account an existing mortgage on the property, then buying it for $10 is absolutely possible. Now, the other possibility also is bad paperwork. Sometimes banks played some games and some shenanigans with a lot of people’s homes. And when we look at the paperwork, we actually discover that the paperwork is bad. That can create an opportunity for a settlement at a later date and sometimes people don’t have the time, energy, or money to defend in a lawsuit like that.
They will go ahead and sell you. They’re upside down houses, the bank loans $700,000, but it’s only worth $500,000. So there’s a big loss in there for somebody. People sometimes are ready to go on with their lives. They don’t want to deal with this anymore. If you’ll take it on, that’s another example of a $10 house where you take it on and now you negotiate, you take on their litigation rights, they actually sell you their litigation rights and then you litigate with the bank to determine a number that will be agreeable to both of you. That process can take years. In fact, and a lot of sellers just say, “Look, if you’ll take this off my hands for $10, I’ll be happy with that.”
Scott Paton (21:01):
Lou, what is your tip? And I think it has to do with not waiting for things to crash since Bitcoin has crashed.
Lou Brown (21:14):
Well, don’t wait is my tip of the week. The interesting thing I’m hearing from people, “Hey, Lou, I’m getting geared up for the big crash. I’m doing this, I’m doing that.” Nope. They’ll tell me different things. I’m a coach and I coach a lot of my clients on building amazing multi-million dollar businesses. That’s really what I get excited about is helping people build a business and doing what we’re doing and duplicating the business that we have and being able to copy that and say, “I’m doing this in my local market as well. I’m helping people to end up with home ownership.” and when you’ve got the long-term philosophy, and let’s say, you’ve got the perspective of the timeframe that I have going into my fifth real estate cycle. Now I know what I know and what I know is that it’s never a bad time to invest in real estate.
It’s always the right time to invest in real estate. And by that, with our business model, we’re finding the buyers before we buy so you can’t really mess that up. If you’re finding a buyer with payment money that can afford a certain amount on a monthly basis, then going and finding that property and making a spread in between, that’s a pretty solid business model that does not say you should wait until later because later is sometimes never. Now is the right time to invest in real estate. My advice — don’t wait.