Introduction to Real Estate Investing by Kris Krohn

Overview

• Presenter: Kris Krohn
• Topic: How to get started in real estate investing.
• Goal: Show how to become a millionaire through real estate.

Key Points

Why Real Estate?

• Real estate can appear unattractive, but distressed properties represent opportunities and potential money.
• Real estate is about problem-solving; solving big problems can lead to significant profits.

Types of Real Estate

• Residential: Where people live (high demand).
• Commercial: Where businesses operate.
• Industrial: Where products are made and stored.
• All types of real estate sit on land; everyone's on real estate.

Choosing the Right Type of Real Estate

• Consider personal interests and market demand.
• Examples of successful individuals like Donald Trump in commercial real estate and others in industrial parks.

Best Real Estate for Beginners

• Single Family Homes (SFHs):
  • High and reliable cash flow.
  • Predictable and stable income.
  • Ideal starter option and also suitable for seasoned investors.

Real-Life Example

• Example Property:
  • Purchase price: $200,000
  • Down payment: 3% ($6,000 if moving in).
  • Potential appreciation: Rising to $300,000.
  • Profit calculation: $100,000 net profit if sold at $300,000.
  • Holding multiple properties: Holding 10 homes could lead to $1 million in profit.

Historical Real Estate Trends

• U.S. Census Bureau Data:
  • Real estate has averaged a 4.58% annual increase in value since 1965.
  • Increased demand due to population growth drives higher prices.

Investment Strategy

• Price Appreciation:
• Annual increase ~5%.
• Example: $200,000 home appreciates $10,000/year.
• Long-term Profit:
• Over 10 years, this could mean $100,000 appreciation.
• Optimal Investment: Small, entry-level homes, especially those below the median price (around $250,000).
• Geographical Consideration: Different markets have different dynamics (e.g., high-priced markets vs. more affordable ones).

Risks and Mitigation

• Avoid high-priced homes due to higher risk and lower likelihood of covering mortgage costs with rent.
• Stick below the median price point for optimal cash flow.

Real Estate Strategies

• Lease Options:
  • Rent-to-own model.
  • Allows families to prepare to buy the property while providing steady income.
• Wholesaling: Getting property under contract and selling to another investor for a fee.
• Fix and Flip: Renovating properties for resale at a higher price.
• Rentals: Holding property and renting out to tenants.

Best Strategy for Beginners

• Compassionate Financing and Lease Options:
• Least time and effort required.
• Less risky with higher returns.
• Essential Actions:
  • Pick a strategy: Lease options suggested.
  • Choose a mentor to avoid costly mistakes.
  • Copy proven systems to maximize success.

Further Learning and Support

• Subscribe for more educational videos.
• Access free resources and mentors for personalized advice.
• Kris Krohn’s free book and personalized game plan for real estate beginners.

Conclusion

• Real estate is a pathway to significant financial success with the right strategy.
• Mentorship and copying successful models are crucial steps to becoming a millionaire in real estate investing.