Are you worried about inflation?
In this video, we will discuss with you how to make money during high inflation and why the financial market are in distress.
We’ll discuss how to take advantage of the volatility in the markets and have a profitable time.
Arianne Lemire 00:00
As you guys know, inflation is crazy. But we also have this all the financial market, distress that’s everywhere. When I talked to just friends, family and investors, everybody, like nobody really kind of knows what’s happening, right? Like, we’re kind of in this, what do I do with my money? Right? Because if I leave it in the bank, it’s getting inflate. The inflation is just killing my purchasing power. How do I actually fit what to invest in?
Because I think we all know that, at some point, some assets aren’t going to make it right, like stocks obviously aren’t doing very well right now. We’ve invested in some alternative assets like cryptocurrency that’s obviously not doing well, right now. Really, the only thing that’s doing well, in our portfolio is a real estate portfolio. That’s, but it’s not all real estate portfolios, right. I think some people still think of real estate, like the stock market, where I’m going to buy a house, I’m gonna sell it in five years, and I’m gonna make a lot of money on the sale. That has been prevalent over the last two to five years, right, especially the last two, because if you want anything in 2020, like you sold it for 20% or more in 2021.
Chris Bounds 01:25
You could throw a dart and land on a good deal.
Arianne Lemire 01:28
I think that because that’s what we’ve seen the last few years, people forgot what the fundamentals of real estate actually are. People are scared about this asset class, even though it’s really the only one that’s still kind of holding right now.
Chris Bounds 01:42
Yeah, I was talking about some folks on Tik Tok which to me, you’ve got a great which live stream on Tik Tok so follow Arianne, if you’re not already. If you take Houston, for example, in 2008. That is a worst case scenario, at least it has been in our lifetime financially. Prices didn’t really fall. I know they did in some markets. But in Houston, they didn’t.
They flatlined, and they flatline for several years. Investors that bought during that time and still own today, like multi million dollar portfolio. I noticed some of them. It just goes back to the fundamentals. You’re just buying purely on appreciation, especially hyper appreciation. It’s kind of you’re putting yourself in a lot of risk. Are you having a conversation with flippers? I know, we were both in a flipping mastermind.
Arianne Lemire 02:42
Mainly just normally investor. Because again, I feel like-the last few years, everyone kind of thought the money was in the appreciation. But we have to remember, there’s actually four ways to make money in real estate and all investments. Some other investments don’t have the four ways right. One is appreciation. The other is cashflow. When we have a property, people pay rent, we pay all the expenses and the mortgage and we have a little bit extra, so that’s cash flow.
Then there’s tax benefits, which is a hidden way to make money. But that’s why a lot of millionaires really wealthy people have real estate is because a lot of it is tax benefits. Then we also have the loan pay down. Most of us buy real estate with a loan, every year we cut off a chunk of that loan principal and that increases our equity. Even in an environment like this, where you said, maybe we’re gonna flatline for the next two years, some investor and thinking, Oh, I don’t want to invest in anything, because we’re just going to flatline what’s the point?
Well, even if appreciation is flat, you can actually still make through those other three ways cash flow, low and pay down and the tax benefits. You can still generate a good return. Even if from the outside looking in from the asset price. Maybe you’re not making a whole lot of appreciation. But if you invest in real estate with thinking of cash flow, tax benefits and loan pay down, that’s still going to beat inflation, and you’re going to be in a better position.
Chris Bounds 04:11
Yeah. And appreciation is different depending on the class. I mean, single family appreciations? There’s different fundamentals at play than multifamily. Multifamily is primarily its income driven. You’re buying a business, single families more just based on Lifetime comps, or around the community.