Get Our Exclusive DFW Fortune Mag Headquarters Maps!

<p>Watch your email and check your spam!</p>


Real Estate Versus The Stock Market

Episode 026

John Larson and the Real Estate Cowboys talk passive income real estate investing.

Hear new episodes every Sunday morning at 8 a.m. The Cowboys talk the pros and cons of both real estate and the stock market. How do you diversify and what is best for your long-term strategy?

Keep the #CowboyCoffee hot while listening to John, and the Cowboys talk about how to #BeACowboy and earn passive income in real estate.

Episode Transcript

Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red-hot Texas market. John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John. 

John Larson: Welcome, welcome, welcome back to another episode of the Real Estate Cowboys podcast. This is your host, John Larson. I’m about to catch a plane to go to London for the week on the weekend. I’ll be out there for a big real estate investment conference, uh, but still got to get the episode out. Can’t leave my Real Estate Cowboys hanging. So recording this episode really quick before I jump on the plane. This week we’re going to be talking about the battle between real estate and the stock market; which is the better investment? What are the pros and cons of each? And talk a little bit about why I like investing in real estate so much. Um, I’m not saying that investing in the stock market’s bad. Uh, it’s honestly, I believe in diversification. Um, I believe in, yeah, sure, having some money in stocks and having some money in real estate. I think that if you’re uh, you know, in both, it diversifies your money and it kind of also shields you from, you know, any actual risk out there. If you have some money in real estate and some money in stock market, maybe the real estate market’s doing really well and the stock market is not doing so well and vice versa. And then there’s a lot of times when both are doing really well and you’re just killing it. And that’s what we’re going for. But uh, yeah, my family, uh, invests in the stock market heavily. My uncle’s got a couple of million dollars in the market and you know, just in the traditional investments that are out there, stocks, bonds, annuities, you know, mutual funds, uh, things of that nature. And so I’m talking to them more and more about potentially putting some of that money into real estate as well, just so he can, he doesn’t have all his eggs in one basket. Because I have had family members of mine, very successful, uh, family members who had a lot of money in the stock market and 9/11 happened. And then the crash of ’08 happened. And so on and so forth. And many of my family members lost all their money in the stock market. So everything that they had invested in the stock market was gone just like that. So, you know, I believe that if you’re investing in real estate and you’re investing in the right markets, I think you can shield yourself from a lot of the common risk that’s out there and also shield yourself from a market re-correction, which we’ve been talking a lot about on recent episodes of the Real Estate Cowboys because I do believe that a recession and a market correction is looming.  

We’ve just been running so hot for so long. This is the longest that the markets ran hot like this. And so something is going to change. It’s going to have to change. You already see the interest rates rising, which is slowing down some buying in a lot of markets across America. Uh, we also know there’s many markets across America right now because the market’s been running so hot for so long that they’re just way overvalued. Um, and when I was out in California speaking to a lot of homeowners and investors out in California, you know, they’re starting to get worried. They feel like there’s no way that the market can go any higher. They’re starting to see some signs of slow down and they are thinking about selling these homes, and I think it’s a perfect time to sell them and take advantage of that 1031 exchange.  

Just be careful about the next market that you put your money in because we’re coming up on the tail end of a really, really hot housing market and the last thing you want to do is pull the trigger on a property in a market that’s just going to tank in the next 18 months. You know, you want to be very, very careful and select the markets that, that make the most sense and the ones that are going to be as close to recession-proof as possible. And those are going to be markets where there’s a lot of jobs that are continuing to drive in people. Because as other areas across the U.S. become depressed, as other areas are seeing job loss, there’s no manufacturing going on or very little manufacturing going on in a bad economy. With people losing jobs in those markets, they’re going to run for the hills and run to the markets with jobs and opportunity; in Dallas and Austin, Houston, San Antonio, and those are the those are the cities where things are happening.  

And we talked about, a couple episodes back, some markets that were predicted to go through a housing crisis and there’s actually, I did a top 10, but there was actually 54 cities named in this list. And none of those, none, no Texas cities made that list, which was not surprising to me, but might be surprising to some that aren’t very familiar with the Texas housing market, the Texas economy, uh, the Texas population growth. Uh, it’s insane. So with that being said, I was not shocked to see that no Texas major cities were on that list. No Texas cities at all made that list. And so that tells me that, you know, if you’re looking to do a 1031 exchange still and you know, you’re chasing cash flow, it’s going to be in some of these markets that are gonna be very effected during the downturn.  

You know, so maybe you might have to swallow your pride a little bit, take less cash flow for a market that has better potential growth and a market that should be, and history has proven, safe during an economic shift; an economic downturn. Okay, and then you know when the economy isn’t doing very well, that means that stocks typically aren’t doing very well. So, you know, deciding where to invest your money is hard and there are pros and cons to putting your money in real estate or the stock market. It goes beyond the annual returns. When you hear the word invest, you typically are conditioned to think the stock market, right? Stocks, bonds, annuities, mutual funds. Although investing in the stock market is a perfectly viable way of making some side change, there is a better way, and obviously that is real estate. Now the stock market is less predictable than real estate and stocks are more likely to change from day to day as opposed to property values, right? Property values aren’t necessarily changing day to day. They’re usually kind of changing year over year, maybe in six months; it’s a little bit more predictable. So according to the data pulled by the New York University Stern School of Business, the SNP 500 annual return landed at one point, just under 1.4 percent in 2015 and then over 21 and a half percent in 2017 when the market was rocking. So that kind of fluctuation is not necessarily passive for the investor. Imagine, one year you only make a point and a half on your money and then there’s years where you’re making over 20 percent and everybody’s just doing great, right? But with the stock market, it’s just not as predictable as real estate. Um, it’s a lot tougher to forecast, um, you know, we have no control over what these corporations are doing, what type of policies they’re putting in place, who the new CEO is that it’s announced, so on and so forth. We don’t have any control over that, but all those things, a lot of outside factors manipulate the numbers and the shares in the stock market price of shares. And most people that are looking for passive income, they hire a financial advisor who puts their money in stocks and they watched the stock market for the investor. You know, I know a lot of people that make good money in the stock market, but they’re very active with it. They’re trading daily, they’re really in tune with it and you know they’re able to make a lot of money, but it’s not a passive model. It’s not like a rental property where you hire a management company and they take care of the day to day stuff that’s needed; the upkeep, the maintenance, dealing with the tenants. So on and so forth. That’s what makes, you know, owning rental properties, very passive.  

That’s what makes becoming a private lender extremely passive. It’s almost like investing in the stock market, but you’re getting a fixed rate of return. But it’s a very, very passive experience, which is why we’ve been talking so much about hard money lending and becoming a hard money lender. We just believe that in today’s market, with the prices running so high with the real estate, the cap rates becoming compressed due to that, um, and investors that are strictly looking for cash flow and are not really interested in up to six ways real estate can pay you and are strictly cash flow driven. Well, private lending is such a great, great way to make that passive income. You know, what you’re getting each month to the penny. Um, it’s not like the stock market where it can fluctuate and go up and down. You know, what you’re getting and you’re in first lien position. You know banks know that we’re going to be going, uh heading into a recession, but they’re still lending money.  

They’re not afraid of lending money. Why? Because if anything, they can foreclose on it and they can take that property back because they have first lien position. So by you becoming a private lender on a project, and like I said, lending in good areas, lending in Texas, lending in Dallas, lending in Houston, Austin, these areas that are booming, you should be pretty safe because that development should still be in demand even in an economic downturn because there’s so many jobs and people moving to this market. And when other areas across the country — I know I say this all the time — but other areas across the country, as they become depressed, I expect even more population growth coming to Texas. And right now just Dallas is at about 7.2 million people. 7.1, 7.2; By 2025 they’re predicting that Dallas is gonna grow to over 9 million people.  

That is insane. In that amount of time, in the next seven years I imagine we’re going to be going through a shift in the economy. I don’t see that population declining in Texas or Dallas specifically. So great, great market to invest in. Like we say, we’re the Real Estate Cowboys and private lending is just a great way to make a fixed rate of return and fixed passive income, especially through an IRA or 401K, which we talk about quite a bit. Self-directed retirement funds and putting that money instead of the stock market or leave some in the stock market, keep it just locked into a traditional retirement accounts, self-direct some of the funds. Get that money working for you by being a private lender. I’m going to tell you right now, you’re going to be happy that you did. And so we have projects right now that we’re currently raising for; one in Houston, one in Dallas, one’s an office building here in Dallas. The Houston opportunity is single family lots; basically replicating another large 488 lot development that we did down in Houston. That project has been so successful that the builders who have been buying lots in phase one, we’re about to start phase two. It’s five total phases. The builders are prepared, once phase two is completed, to just purchase phase three, four, and five from us. We’re not gonna make as much money on the project, but we were able to exit out and it was just a hugely successful project. We’re actually replicating a smaller version of that project right across the street, right across the highway and the builders have already told us that the those lots are in such huge demand that they’re ready to take down all those as well if we start that development. So we’re raising money for that. We’re raising money for another office building here in South Lake Texas, one of the wealthiest cities in the entire U.S., right here in the Dallas market.  

Even like I said, in an economic shift. I don’t see one of the wealthiest cities in the U.S. taking too much of a hit, especially yet not out here in Dallas. So excited about that project as well. So if you’re interested in learning how to become a private lender with us on those projects, you can simply visit or and a member of my team can get you set up and get you started as a private lender. If you’re not self directed, don’t worry. We have solutions to get your account self directed. That’s no problem. Work with many groups across America. Main one, Equity Trust. If you’re interested in self directing funds, look into them. I’m going to have a member of their team on the show here in the next week or two so we can talk more about how to self direct your funds, get those working for you in real estate or in private lending. Um, but that’s a great way. We got all the solutions for you. We can get the account self directed and we can get that money working for you. We got great, great, safe projects that pay double-digit fixed returns. Alright, but that’s enough about that. Let’s take a quick commercial break. When we come back, we’re going to talk more about the benefits of real estate investing versus the stock market.  

And welcome back to the Real Estate Cowboys, I’m your host, John Larson. I’m recording this episode right before I’ve got to head out the door to London for a big real estate investment conference. We are talking about real estate versus the stock market, which is the better option? I wouldn’t say one is better than the other. I really do like to stick on the side of real estate. It’s what I know really well. It’s what’s made me money in my life. I’ve seen more of my family members successful by putting their money to work in real estate as opposed to the stock market. I gave a little bit of some insight into some of my family members that really lost a lot of money back in 9/11 and and you know, the great recession, a lot of money was lost in the stock market. So, you know, I’m really pro real estate, but you know, once again the benefits of investing in real estate versus the stock market. You know the idea of investing in stocks is pretty straightforward. You purchase a share with the company you think is doing well or heading in the right direction, watch the stock and cash out whenever you want. Preferably when it’s riding high, right? In general, when you invest in the stock market though, you’re tied to the success or failure of every company which you invest in.  

Real estate investors use many different strategies to generate a return on their investment. In the short term, investors buy homes, fix them up and sell them usually within 60 to 90 days or before the market takes a seasonal turn like we’re in right now coming into the fall. Other investors may buy properties and hold them for a long period while collecting passive income by renting those properties to other people and taking advantage obviously of five other ways that real estate’s going to pay you, and that’s through the tax benefits, which the stock market’s not giving you that unless obviously, you’re investing in stocks with the IRA or 401K, the dividends or the payments that come out are going back into the account tax free or tax-deferred. Same thing with the private lending model through a self-directed IRA or 401K, which is why a lot of our investors are really going towards that option.  

They really like that, they know what they’re getting each month to the penny, no fluctuation, and have first lien position on the project, so pretty safe investment model. But the other ways obviously that real estate’s going to pay you, which just said tax benefits, passive income, cashflow through the rental income, appreciating values, equity growth, principle pay down if you’re getting a loan on these homes by the tenant that’s living in the property, not you, principal and interest, pay down on the loan, and also inflation hedging. Your hedging your bet against inflation by locking in long-term fixed finance for 30 years. So we all know how inflation works each year, especially in a healthy economy. The purchasing power of the dollar diminishes; well you locked in a loan at five percent for 30 years. So that’s how you’re able to hedge against inflation by taking advantage of a long-term leverage that’s available to you by investing in real estate.  

And there’s a whole, you know, America is one of the only countries, I think there’s three total countries that gives you 30-year loans, fixed-rate loans. So take advantage of it. Here’s some more comparisons that relate, you know, the stock market and the passive real estate investment. Let’s look at the benefits of the stock market first. So it’s going to be flexible investments. Stocks are easy to buy and easy to sell. Stocks are easy to liquidate or move to a retirement account, tax-free until retirement. Um, fluctuating market. Uh, the market is volatile, but it can produce returns as big as 20 to 50 percent. So can real estate, um, if done right and bought in the right market, if you’re hedging your bet on a real estate investment and your plan is to do a short-term hold, which I do that pretty frequently.  

Um, targeting markets that are on the up and up. We’re in a healthy economy, so I was able to do this very successfully the past five years. But buying properties, holding them for a short term, letting them appreciate. Then once the tenant moves out after two, three, four years, five years, put it back on the market and sell it retail. Which is why I talk a lot about buying the high B to A class inventory because it’s in retail areas, retail neighborhoods where retail home buyers want to buy homes and they are buying properties, not based on cap rate and not based on cash flow, but strictly based on the desirability of the area. So those are the properties that are going to appreciate. So I do a lot of short-term hold scenarios where I’m just holding the property for three to five years. In Dallas with a market that was appreciating like crazy year over year, I was purchasing properties for 150,000 back in 2013, 2014 and today they’re worth over 200,000.  

We also had Graham Parham on the show. He talked about the success that he had with the two properties that he purchased from me in Dallas only just under two years ago. They’ve already appreciated over $30,000 a piece. So if you do that and you factor in the fact that you only put 20 percent down to purchase an asset and it appreciated 20 to 30 percent over that period of time, plus the cash flow, plus the tax benefits, you’re actually technically seeing 100 percent returns or greater on your money. And there’s really no investment option out there that can provide you those type of research returns outside of real estate. So let’s consider the cons now of the stock market and you know, fluctuating market can also play into one of the cons. Uh, the volatile market can work in your favor, but it, it also can work against you. Uh, the fluctuation in the economy can negatively impact the performance of your stock portfolio as much as 30 percent or more. So. And that’s something that I’m really worried about right now. I think that we’re coming into an economic shift. The market correction, economy’s been running hot for a long time. The housing market’s been running hot for a long time. What goes up must come down. So. It might be a good idea to start moving around some of those funds, the money that you have in the stock market. Not saying pull it all out, but maybe look to start putting it elsewhere, in other investments, some safer investments. Also, you have the risk of bankruptcy. A company declares bankruptcy, your stake in the company essentially disappears. This has happened to people before who invest in the stock market. As a general shareholder, you typically don’t have any right to the liquid value of the company. The possibility of bankruptcy should always be in the back of your mind. Just like, um, markets can completely tank. Companies can completely tank and if you were invested in a company that just out of nowhere it could file bankruptcy, the money essentially is gone.  

So, you know, with real estate it’s looking more tangible. You can look back; you can drive to it, fly to it, look at it, drive by it, touch it, feel it. You know, which is why a lot of my investors really like this private lending model, you know. Even though they actually don’t own that land, they have first lien position on that land or that project. And they know they have recourse, first lien position. So if the borrower, us or whoever that they’re loaning money to defaults, you have a deed of trust, you can file for foreclosure. So that’s a way that you can at least recoup some of your funds, right? But the stock market company files bankruptcy, or you’re invested in a crooked company, and it goes down, that money is gone.  

So be careful with that. Daily check-ins; you need to remain up to date with your stocks to anticipate a prime selling or trading time. People that make a lot of money in the stock market. As I said, they’re watching it every day. If it’s a financial advisor that’s looking at it for you, you know, it might be more passive, but it’s not going to produce the same type of returns that you could make by watching it yourself. Um, there’s some people and some friends of mine, they’re very good at it and very good at predicting things, and they’re very much involved with the stock market. They’re involved in it daily, and they do it as a part-time job or full-time job. So you know, me myself, I already have a full-time job, I have more than a full-time job, um, so I don’t really have time to be dealing with my investments on a day to day basis, which is another reason why I like real estate.  

You versus the broker. That’s one thing that I would consider a con. Some people do this for a living, working 80 hours a week, watching the stocks go up and down. There are large scale companies dedicated to that task and the individual stock market investor is a small fish in the middle of an endless ocean. So true. Although it is possible to make money off the stock market, the method can require much more participation than you’re able to give. And that is very true. With the investors that are just doing this passively, my uncle says that it’s been producing as high as six percent for him, the money that he has in the market, which is not bad. It’s not bad at all. I think he could make more if he was watching it on a day to day basis, but see, he still has a job, too, and travels a lot. So he’s got his money in the market, he’s got his money with a financial advisor, they’re taking care of everything for him.  

He’s making a moderate six percent. Some people are happy with that. Some people you can make more, um, but you just have to be more involved. Or you can make more by becoming a private lender, once again. So I’ve been trying to talk him into that. I’m like six percent; I can get you double-digit returns by loaning me some money on a project in Dallas. And so you know, there’s other options out there, which is all I’m saying to people. That’s why we do this podcast. There are other good options available too. You just need to be educated on them. I understand people grow up, well, my grandfather invested in the stock market, my father invested in the stock market. I’m gonna invest in the stock market. It’s just the most common thing. But if you’re educated on other opportunities out there, you will find that there’s better opportunities that are more passive and produce better results.  

Associated fees is another con with the stock market. If you decide to trade, you must consider fees. You also have to pay income taxes on your stocks each year if they’re outside of a retirement account. And it’s the same thing with private lending. Uh, you’ll have to pay income taxes on those as well. Um, interest payments are taxable. Uh, but if you’re loaning out of an IRA or 401K, that’s self-directed funds. The returns will go back into the account tax-free. So yeah, income taxes on the stocks, sorry to get off track there, income taxes on the stocks each year, and capital gains tax if you’ve held onto them for more than a year. So you also have to pay capital gains on anything that you make in the stock market if owned for more than a year. So I’m not saying that you can’t make money or even a lot of money from the stock market, but what I’m saying is there’s a better place to put your money. So now let’s talk about the pros of real estate investing. When we come back, we’re going to take a quick commercial break, and we’ll be back here shortly. We’re going to get into real estate and talk about the pros and cons.  

And welcome back to the Real Estate Cowboys. This is your host, John Larson. We’re talking about real estate or the stock market. The ever-present always battle between real estate and stocks, which is better? Uh, we just went through the stock market pros and cons. Now we’re about to get into real estate pros and cons. And so here’s the pros of real estate investing. Number one, high potential returns, although some high-value markets in the country have already reached their max potential within the current economy, those are few and far between when you compare the number of emerging market, which I love. Investors who recognize the growth factors of a city or community, know that they can buy in at a reasonable low price and then sell 2 or 10 years later for a substantially higher price. Have a lot of investors from California market who have been doing this. Um, even a lot of investors that bought back in 2009, 2010, 2011 in Dallas, they’re seeing the same type of scenario where they’ve held the property now for, you know, three, four, five, six, eight years, and it’s appreciated so much that now they’re looking at it like, oh, how much higher can it go? Maybe it’s a good time to sell, right? If you’re able to identify markets that are on a growth spurt and get in early, get in on it at a good time, there’s a lot of profit, lot of returns to be made when investing in real estate. Um, the same idea goes for buy and hold option if the investor runs competitively. According to Bigger Pockets, uh, the area with the most favorable returns was Dallas. Now, this is back in 2016. A real estate investor in Dallas saw unleveraged returns of over 20 percent. So that’s obviously combining the cashflow and the appreciation that the market has seen. And Dallas, I can definitely see how that was the number one market for unleveraged returns. Imagine what they were leveraged. Uh, tax benefits. The many favorable tax benefits of real estate investors include deductions and depreciation. Also at 1031 exchange allows you to postpone paying capital gains if you use one to purchase your investment property. Leverage. Obviously, the stock market, $20,000 allows you to only buy $20,000 of stock, while in real estate you can use that same 20K to pick up $100,000 property. Leveraging an investment with a physical asset lends a feeling of security as well. So that’s one of the main things. That’s why myself and if you listen to Keith Weinhold’s podcast, Get Rich Education. That’s why we love leverage so much when it comes to investing in real estate. The leverage options that are available to you, at least for those first ten loans that Fannie Mae gives you, it’s just, it’s, it’s lights out a predictable market. The buying season is typically spring through the summer, and then numbers drop off during the colder months, especially in cold weather states, uh, that aren’t growing, aren’t seeing huge population growth like we’re seeing in Texas. It becomes cold in markets like Detroit, Cleveland, you know, any city in Ohio, any city in Michigan, Indianapolis, market slows big time. Okay. Which is not that many new people moving into the market to keep the market hot all year round like we experience here in Dallas. Now we do experience a little bit of a drop off in the winter because kids go back to school but not like you see in other areas across the U.S. Also, you know, mortgage rates do fluctuate daily, but only at about, you know, .01 to .03% on average.  

You’re looking at maybe one to three percent on average, so you’re not seeing huge fluctuations. And then control. You’re the only person who owns your investment property. If you want it to raise the rental price, then raise it. If you want to improve your investment by installing new appliances, go for it. Property investments are truly unique to the investor, so you, you have control of that property, which is another big selling point when it comes to investing in real estate. Now the kinds of real estate investing, it can be a challenging liquidation, but that depends on the type of asset you purchased. It can be difficult to liquidate a property in an undesirable neighborhood, which a lot of investors tend to gravitate towards because the properties, they look good on a spreadsheet. It looks like high cash flow because it’s a low acquisition price and while it rents for $800, and I’m only buying it for $50,000. Well above the one percent rule. The problem is that $50,000 property in that area, that market is in an absolute war zone. You know, there’s a lot of crime, there’s a lot of theft, there’s a lot of issues. It’s just not a desirable area, so it could be very challenging to liquidate a property, especially a property that “grows a tail.” And by growing a tail, I mean eviction results in a break-in, which results in a theft, which results in you having to re-renovate the property and maybe you just say, I don’t have the money to do it. Just sell it. Well, now you’re trying to sell a property that’s not even done or turnkey to an investor in an area that’s just not very good. And so it’s going to be very challenging to liquidate that property, especially at the price that you paid for it. So that’s where a lot of investors have a bad experience investing in real estate. You know, they buy the wrong property, they invest in the wrong market, and then it just gives them a total bad taste in their mouth, and they don’t want to do it anymore, but they went about it the wrong way the first go around. So you know, that’s why I prefer to buy the properties in the high B class to A class. That means targeting what the median value is or very close to it, median home price is in that market. I like to hang around what that medium value or median home price is in any market. Don’t like to deviate too far below that because that’s where you run into trouble. Okay? So when you purchase lower priced single family homes in primarily renter-occupied neighborhoods, your investment can be more difficult to sell due to the reasons I just stated. Retail home buyers generally do not target these more distressed neighborhoods. It can also be difficult to sell a multifamily or commercial building or buildings because these opportunities are primarily traded on cap rate, return on investment and not market value. So that’s another reason that liquidating, you know, large multifamily property or a commercial building, office building, those can be tough to liquidate sometimes. If they’re not performing, you know where they need to be, maybe they’re not fully occupied. Uh, you’ll have to give a discount to move those because obviously with these properties being treated on cap rate, if they’re not fully occupied, there’s not that high of a cap rate and investors are going to want a discount to purchase those properties as well for you to get them to move. Another con would be slow diversification with real estate. When investing in real estate versus the stock market, you’ll need much longer to create a large diversified portfolio because each residential property is going to require at least 20 percent down. Okay? And that’s in addition to closing costs and the growth and diversification can be slow. That’s true. And then once you’re done with your 10 Fannie Mae loans, you have to start looking for some alternative financing, which is gonna require even a larger down payment. You’re gonna be paying a higher interest rate, you know, so. And if you want to buy cash, which I don’t necessarily recommend unless you know, you just have so much cash, and you’re trying to take advantage of the tax benefits and maxed out your loans, maxed out any sort of finance. You know, at that point cash isn’t bad, but you know, it’s going to take a lot of cash to purchase. You know it’s $200,000 in cash to buy a $200,000 property if you’re not using leverage, so. Um, and then also property values fluctuate. They don’t fluctuate really like the stock market does on a daily basis, but there’s always risk of a fluctuating market if you borrow too much, or your closing costs are too high, you risk owing more than the property’s worth. And that is one of the red flags that I’m sending up to investors right now. You know, be careful about the markets that you’re investing in today because I’m telling you there is going to be a market shift and so you don’t want to overpay for a property today and have this huge mortgage on a property that’s not going to be worth that in 18, 24, 36 months.  

And then what happens if life happens and you need to sell that home. That’s why I really try to position investors in markets like Dallas because even in a down economy, I don’t expect, you know, this market in this economy to be depressed and go through a correction. There’s just too much diversity here. Too much job diversity. Real estate’s still affordable here. People are moving here daily. So I just don’t see, you know, really big red flags with this market. But there are many markets in America that I do see that, and we talked about that, you know, last week or the week before episode.  

Back to property values fluctuating. You know, like I said, if you borrow too much or closing costs are too high, you run the risk of owing more than your property is actually worth, which would be an issue if you made a not so great deal. Right? And once again, this is why I recommend investing with markets, investing in markets that are growing and have diverse economies. That’s what drives growth. That’s what keeps demand high. So you know, to end this, you know, many investors have seen excellent returns in the stock market and you know, it’s the traditional place to put your money to work for a reason. So you know, but if you want to take a different route by investing in real estate because of the passive income, the tangibility and the potential for appreciation or the fixed rate that you can make, the consistency with the private lending model. You know, I encourage the idea of purchasing high quality, single-family rentals, loaning money out in safe, predictable, and more predictable markets I would say that are growing exponentially. And you know, then that way you sit back and enjoy the cash flow without having to think about it. You know, I recommend all these things. So if you like what you heard on this episode and if you’ve been listening to the Real Estate Cowboys and you’re learning and educating yourself, if you want to purchase turnkey homes, I think Dallas is a great area to still do that. Um, if you want to get involved with private lending, like I said, we have two deals right now that we’re actively raising for. One’s gonna close at the end of this month. So you can start earning a return on your money as soon as November 1st. If that sounds good to you, double-digit fixed-rate returns as soon as November 1st, contact us, go to our website Go to, either or. There’s a bunch more information there for you. Um, private lending on vacation rentals, on turnkey rentals in the Dallas market or my Missouri markets, which are a little bit higher cash flow markets.  

Um, if you’re interested in learning more about this, go to our website, get as much information as you can, reach out to a member of our team, they’ll tell you how to get started. And like I said, two private lending opportunities that we’re raising for right now, both are excellent deals. We have more information on them. Just go to our website, put in your information. We will contact you and get you all the information that you need. Also The Passive Income Guide. My book is out on Amazon. Feel free to download that from Amazon or from our websites. There’s access to get the book there, too. Great book to read if you’re just starting to get into passive real estate investing. And I look forward to seeing you all or speaking with you all again next week. I’m off to London for a big real estate conference. I’ll tell you all how it went on next week’s episode. Once again, everybody, always remember, what is your return on life? This is John Larson signing off. Have a great week! 

Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments LLC and do not reflect the opinions of guests or sponsors. No personal or professional advice on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial tax, mortgage or real estate advisor, as the information is not guaranteed and investment strategies have the potential for profit or loss.