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Real Estate or Business?

A very common meme on IG is the “more millionaires were made in real estate than anything else” or some other variation of the buy real estate and get rich meme. I love it. I love that so many of us are thinking ownership. While I love real estate though, I also really love business.

So I was sitting here thinking about how business is so powerful. Many of us generate in one week and sometimes one day more money than our real estate generates in months. But nobody talks about business being the pathway to riches as much as they talk about real estate.

I know that business can get your way more wealthy than real estate. But I also know that you can’t turn your back on real estate. Real estate is the foundation. Business builds your wealth. Real estate frees you. Business increases you.

Business and real estate go hand in hand in the wealth building race. I realized this because I realized that when you invest like we invest you don’t truly get rich but you definitely get free. I believe that rich follows activity not passivity and that is why flippers get rich, landlords get wealthy. Wealth is never ending, rich comes with a clock attached to it. Rich is for the moment. Wealth is never ending.

We see examples in Juan Pablo. Juan freed himself by purchasing a ton of rentals which he then parlayed into a business that earned one million in one month.

See when you are bogged down in job you can’t get rich. The problem with your day job is that it keeps you from getting rich. If you are stuck trading time for money at wholesale you have to free yourself from that trap so you can then get to the world and make big money. This comes through real estate. Big money then follows your business.

You retire yourself and then you get rich. So many equate rich with retirement when its really the other way around. Retirement is freedom from the need to work. That doesn’t mean rich. that is a much lower bar. A much more attainable bar. If you can just aim for retirement and not for some far out goal like rich then you can actually get rich because you own your time. Ownership of time is a lot more lucrative than merely the money to buy things. This is why I push frugality and working when others aren’t working.

So the key to this post is that its not just real estate. I’m building a business along side the real estate. Its also not just business. Many people fail at business not because the idea is bad but because they didn’t have the resources that would allow them to patiently build a mega company. They put unrealistic timelines on it because they are broke, eating off the business and not reinvesting the profits.

I encourage you to build your real estate and your business side by side. Yes a business can generate more but the business is up an down. The stability and predictability of rental income that comes at the same time your bills are due is what liberates you and with that liberty you can create the life you want. Milli out.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  

You can join either through one of these links: 

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

The investment club is more about action and less about picking the best

The market is crazy right now. Every morning I get alerts about drops in price, big drops in price.  This is the kind of stuff that might make you want to avoid investing. 

I bring this up because as an investment club, a club that systematically invests our money whether the market goes up or down we are in position to do some great things because on lows like we are seeing we have cash. 

One thing that is very important though is that we don’t romanticize the perfect stock picks.  I always tell people that your grandparents failed to leave you massive wealth and it isn’t because they picked Pepsi stock when they should have picked Coke.  Its because they didn’t pick either stock.

I want to get back to the true essence of the club which is investing because it’s the right thing to do, period.

That said, I think we need to do a lot more buying.  I think its great that people are proposing trades, lets get back to that.  I would like for us to have one-point person per club who can have a better handle of new members and proposed trades. 

Just an FYI, most of you can’t see both clubs but I can.  We have about 50k working in the TD, 30 in club A and another 20 in club B.  Altogether that is about 100k.  On the real estate side we also own and control about 150k worth of property.  That gives us 250k on the balance sheet with no liabilities (debt).  We have been doing well and as we start to introduce leverage into our real estate portfolio and maybe even investment portfolio we will go even higher.

So we have a great thing working here.  You can go off and invest on your own if you want to, you should invest on your own, but there is a distinct advantage that comes when you work with a team that you don’t get when you separate yourself from said team.  None of us has a monopoly on good ideas.

The general idea of this post is that we own things like BYND and UBER and other IPOS that are getting slammed in the media.  People are now suddenly aware that they lose money.  Now they are critics.  I think this is exactly when we buy more of the IPOs that we own and lets buy them hard.  Let’s go all in and go big on the IPOs now when others are looking the other way.

If we win we will win big.  If we lose we lose a few thousand but we learn a whole lot.  NO losses only lessons.  Let’s buy some stuff and keep it forever.  I am optimistic that we will win no matter the outcome.

To learn more sign up for our webinar this upcoming Friday: www.gumroad.com/toddcapital

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  

You can join either through one of these links: 

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

All Money In

A lot of us heard Nipsey make this statement.  He wore it on his chain. He turned it into his brand.  He practiced it in his daily life.  Nip lived by the mantra and that is why he saw the success that he saw.

When you hear all money in what does that make you think about? 

When I think of All Money In it reminds me that ALL profit must be reinvested.  Especially when you are working with a group and in the early stages of a company.  This is what Dame was talking about when he mentioned that he keeps his money in the streets, flipping for the next play.

Too often we get a few bucks from a property or some stocks and we then use the profit to buy nice things and stunt.  We use the profit to go on trips, to buy Yeezies, to buy Louis Vuitton.  That’s not “all money in” fam.

All money in looks like making big money and plowing it back into the entity, no matter how big the money. No matter how small the money. Emphasis on ALL. All money in looks like using your rental income to buy more homes that bring you more rental income. All money in looks like plowing profit back into more advertising, better graphics, better media, etc.

You must build the empire not just the lifestyle.

I am reminded of this as my business kicks off cash.  Its always tempting to pull out cash and buy those shoes or that belt or that trip.  Instead, I invest in professionals who replace the little mediocre work I did to get the ship rolling.

What is interesting I have found is that throwing money at real estate and your business isn’t really spending money.  When you go ALL money in you are really just investing and forcing yourself to invest. It doesn’t disappear, you get it back, either over time or in the long run. 

An example is I had an issue with permits this week.  I just pulled cash I had on the side and threw a grand at the problem knowing it will come right back. Ill refi it, cashflow it or get it through appreciation. Got to keep the money alive and moving in the business not dead in the brokerage..


The same is true with your business.  Spending money on advertising isn’t really spending money if the money you spend comes back 10 times. If you spend 100 on ads you could make 1000 back. If you spend 100 on sneakers you just get sneakers that are worth less and less the more than you wear them. Ads matter.

The same is true in your personal life.  Just because you are making decent money on the job or get a tax refund or live at home doesn’t mean you blow it on the good life.  All money must be reinvested.

All money in isn’t a punishment, all money in is the reward.  When you put all money in you build your company bigger and a bigger company pays bigger money.  A stronger company pays you for longer.

Personally I have seen my company grow the more I invest in experts and a sales team and less on doing it all myself. 

The key is that it can be tempting to pull big money when  you get it. You want to live the good life. You want distributions and you want an ROI.  This is great but its about the big vision not about small potatoes. 

I think that is what it comes down to though.  A lot of this is goal driven.  This is why some of us punt vacations and leisure even though we do well.  People look at me and wonder why I still work weekends despite the things I have going and sometimes I don’t know why until I meet with Ashley Hamilton and she talks about how she works a part time job as a teller despite being financially free. 

Sometimes when you are around people who don’t have the same vision as you they will make you feel weird for not doing what everyone else is doing.  But then you connect with real winners and realize your goals are what drove you do live like no one else, you are focused on the later part and living well above what other people will be doing.

I am frugal but I like nice stuff.  Like really nice stuff.  My goals are a lot higher than those around me so their actions can’t be my actions. Call it what you want. Criticize it. Condemn it. But they just can’t’ see the big vision and that’s ok. 

If you are aiming for big big money you can’t pull out and play with the small money you might be generating, even if its “passive income”.  You gotta put it right back in.  Knowing that you are building an asset.  You build a business by reinvesting the money in. You build a real estate portfolio by investing the money back in. You create a life by reinvesting the money back in.  All ot if. Not jst working income and not just rental and business income but every cent you touch needs to go back in.  RIP NIP. You will be forever missed.

To learn more sign up for our webinar this upcoming Friday: www.gumroad.com/toddcapital

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  

You can join either through one of these links: 

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

Live where you want to live and invest where it makes sense to invest

There is so much money to be made when you find the market you can afford to invest in.  

A lot of us live in high cost markets where it could take years to save up the 20% down payment. While this might seem like a good move it is keeping you on the side lines.  

You could have used that money to invest in a market out of state and been cash flowing right now. You must begin investing now. 

The key to all of this is knowing that there is always a market that you can afford to invest in, you just have to find that market.  This is true because America must adjust to the income levels of the job market surrounding it.  This is how real estate works. It adjusts to the budget of the people. 

This is why property in the bay is expensive, because people are making a ton of money there.  This is why property in the inner city is not, because income is lower.  The key though, is to be smart and invest your money from your high cost of living area into that low cost of living area with the help of the internet.  This is how you take advantage.  I call this cost of living arbitrage.  

To do this you have to do two things.  

Make friends. 

These days with the internet and social media you can make friends that don’t even live in your same state that you have a deeper bond with than those people you have known for years in the same city.

The key with this is that these friends become your boots on the ground, they inspect the property, handle maintenance issues and show the property if need be. You need friends. 

Leverage technology. 

These days with technology you can browse the inventory of any state or zipcode that you want to without having to call realtors and beg them to show you stuff.  All from whatever device you want to. You can use tech to meet people, to find deals, close them and manage them. These days technology closes the gap of distance. 

That is really it. Those two things.  But in tapping into those this creates a world of opportunity if leveraged correctly.  

For example, a great home in Cali cost a half mil.  The mortgage on that is 3k a month.  That is three homes in Detroit that Cashflow and pay the mortgage.  That is how the wealthy thing.  What asset can I get to pay for this mortgage liability. 

Some might say “I need to see my investment; I need to be able to drive past” to that I ask you what are your priorities?  Do you want passive income and financial freedom or are you committed to the emotional feeling of driving by? 

So in conclusion, investing isn’t a local thing, investing is a numbers thing.  Your responsibility is to ensure that you chase flows not comfort. Its not comfortable investing locally but it works.  Don’t limit yourself to your own backyard.  Be willing to reach into the backyard of others. You might have an advantage. Smarten up.  Open the market up.

To learn more sign up for our webinar this upcoming Friday: www.gumroad.com/toddcapital

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  

You can join either through one of these links: 

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

We back

Family,

Good evening to you all.  I want to start off this email with first thanking Jamaal for taking on the task of running the club for the last eight and one half months.  Jamaal did an amazing job.  As you all know he will be leaving the day to day operation of the Investment Club for Stocks but I hope he will continue to function within our organization in an advisor role on the board of directors.  I value his insight and wisdom. Thank you brother. 

So now we are at a turning point.  We have about $100k in assets (amazing), strong returns in certain holdings but some laggards.  I think we need to do some soul searching to figure out how we can reposition our portfolio for the next nine months heading into the holiday season.  We need to be aggressive in cutting what sucks and doubling down on what we have faith in.  No passive stuff over here.  

Part of me wants to liquidate and close the TD Ameritrade side of things but a part of me thinks we just need to close what we own and start over.  We can discuss that on an upcoming conference call.  Nevertheless, great things are happening and I am happy that you all are here focused on the long game, learning and growing with us.  

For those that are in the LA are we are holding out monthly meet up at Nixon Lounge at the Luxe hotel so I hope to see you all there.  It is free for members and $10 for non members.  Appetizers will be provided. Register here: https://www.eventbrite.com/e/todd-capital-los-angeles-real-estate-meetup-tickets-66699753759?aff=ebdshpsearchautocomplete

I want to thank you all for riding with this vision.  We are about 400 members strong and growing day by day.  The real estate side of the club has been blowing up and we are even now getting into other ventures like our barbershop.  This is truly black wealth in action. 

If you have any questions please reach out to me or Candace. I look forward to seeing what we can accomplish this next few months. 

Be great,

Charles L Oglesby III JD

Consultant 

213 590 8633

www.capitaltodd.com

www.instagram.com/toddmillionaire

www.twitter.com/toddmillionaire

www.facebook.com/charles.oglesby

T Pain lost 40mm because he lacked financial education not because he made bad investments

As I type out this title I actually believe that both elements of the title are true. I believe that he lacked financial education and he made bad investments, because he lacked the education to make wise ones.

I’m sure we have all seen the post about T Pain on the Breakfast Club. In that post he claims to have lost 40mm through terrible habits and bad investments.

A lot of people are using this article to bash real estate. I think they are foolish.

In the article T Pain claims to have lost money in real estate that he intended to flip. He said that he lost all his money because the deal went bad. He said they couldn’t salvage the market. He said it was because the areas they were investing in were so bad that nothing could save them.

This was the most idiotic thing I have ever heard as it pertains to real estate.

It was foolish because there is no such thing as real estate that cannot be saved. I believe that the problem with T Pain is that he lacked financial education and this allowed him to be taken advantage of. This naiveté made three things obvious to me.

  1. He didn’t have the tools to create other strategic wins: Being an investor requires more knowledge than merely buy low sell high. This is the basic element of investing but it isn’t the only way to win. You need to know of all the tools in your belt otherwise you will throw your hands up at the screw in the wall because all you know how to do is pound nails in the wall with a hammer (metaphorically). If he had a screwdriver he could have accomplished the same task. Know your tools fam. T Pain could have rented out the homes, refinanced the homes, sold them and taken a small loss, held them as a form of land banking, anything but taking a big L. The problem is when you barely know something its tough to really get in the weeds, most novices float around at a basic level which gets them hustled when the world turns. Be smarter than T Pain.
  2. He wasn’t evaluating the deals he was just providing the money: The problem with this is then you have to take someone else’s word for it. This is very dangerous especially when working with syndicators and sponsors. These sponsors will work in fees and expenses that kill the deal but enrich them. Its important to know what you are doing not just blindly throw money and expect an ROI. Imagine if you took your numbers from wholesalers. These folks mark up the ARV, lowball the rehab and get in bad deals, because they just want their wholesaler fee. They take it and move on to the next bad deal. If you want to get a good deal from a wholesaler you have to know the market just as good if not better than them. When you take their word for it you will lose. Remember to take advice from rich people not salespeople.
  3. He wasn’t smart enough to determine if the play was successful or not: The big problem here is that T Pain just deemed the project a failure because he didn’t get paid. Meanwhile the contractors got paid, the brokers got paid, the lenders got paid and the person who came behind them got paid. Entertainers and Athletes have to be smart because people are looking to take advantage of you. They will eat all the meat off the bone and then tell you the deal failed because of things outside of their control. They are lying and you are losing. Educate yourself so you can determine if its a win not your adversary.

As an investor/money partner its important that you know as much about the fundamentals of the deal as your deal sponsor (the person coordinating the deal). It is not enough to just “be the money”. This is how you get taken advantage of.

T Pains story was troubling because I could tell he didn’t know what he was talking about. He didn’t speak in numbers when it came to real estate only to ideas. The market was bad. We planned to buy them and fix them up. None of that reeks of an actual analysis. The only time he dug into the numbers was when he was talking about his Bugatti.

I write this because real estate is a good investment if you are educated, wise and patient. If he was educated he would have known whether the deal was good or not. If he was wise he would have pivoted, turned them into rentals, refinanced them, rented out rooms, done anything but be a little b taking someone else’s word for it. If he was patient he could have waited for the market to come to him.

I write this blog because I see a lot of T Pain traits in others. They throw money at sponsors blindly, they only know how to BRRRR or to wholesale and they don’t have the patience to build actual wealth. We see how it ended for T Pain though. Don’t’ fall into the same trap through the same acts. Use his story as motivation to do real estate smarter not to avoid real estate altogether. Milli Out.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. 

You can join either through one of these links:

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

After THAT rehab I can do anything

Last year we bought a home from the Detroit Land Bank. It looked great on the outside but it needed a full gut rehab on the inside. It was bad. People came in and stripped it of everything. The furnace, the plumbing, the electrical, all the fixtures in the bathroom. What they left was deteriorated and gross. This house was in bad shape.

I was a newb to all this but not completely new. We had bought something close to turn key ($1k to get going), then we bought something that was a cosmetic rehab (paint, floor, furnace – $8k to get going). We did all of that successfully. Why not bump it up a notch and try something that needed a full gut job?

For some reason, in real estate, after you conquer one challenge you go after a bigger, “badder” challenge. We jumped right off the deep end with this one.

We bought this home for approximately $4k from the land bank after closing costs, travel etc. On the same weekend we closed I scheduled multiple contractors to walk the property. One contractor gave us a bid for $100k. Another told us it could get done for $30k. I finally settled on one that said he could do it for $15k. This is where the problems started.

We ran through so many problems in this deal but each of them made us better investors. Once you solve a problem you systematize the solution and then you have a business.

Our first issue was a squatter. When our first contractor showed up he said it looked like someone had made a cot up stairs and was camping out. He was right. We trashed his stuff but he still found a way to get back in. I immediately installed an alarm. This guy broke in with the alarm but he wasn’t expecting it so when it went off he freaked and ran out. He came back and broke in again and this time he destroyed the arm box. I then purchased some door and window guards. These are metal door and window guards that make the house impenetrable. The squatter got the hint and went somewhere else. Imagine getting notifications when you are sleep that someone broke into your rehab??? Crazy stuff.

The next issue was the roof. We paid money to have the roof repaired but it was still leaking. I didn’t know it rained that hard in Detroit but Detroit rain is like none other. It is punishing rain. Nothing like this light Cali stuff. This shortens the lifespan of a roof and for a house like ours that had holes in the roof I could only imagine the damage it would do to the dry wall and insulation. The roof is the very first thing you have to handle in a rehab. We tried to go cheap but that didn’t work we had to get a whole new roof.

One gem here for the folks is that when we started this we didn’t have all the money to get it done. We just started with what we had and more money found us. I walked into some large limit business credit and I used that to handle the entire roof and some other items. The amazing thing about real estate is that you get the money to do real estate while you are doing real estate, not before. Last night I just casually flicked over $1800 to get something done where I couldn’t even afford to invest in our deals when we first started. You might not be able to afford to get started but you must still get started. Soon you will be a player.

Back to the story. While we were doing all of this roof stuff don’t forget that the entire house still looks trashed.

The problems continued to come though. One day I got a call from the contractors cell phone. It was a hysterical man who was looking for his son. His son was our contractor. He called me because he saw he was calling me a lot. He thought I had info on his whereabouts. Apparently his son was in jail. This means we now don’t have a contractor.

I had to gather myself and realize we just needed to get new bids and interview new contractors. That is what we did. In doing this we actually found a way better contractor who does better work and at a fair price. We settled on the guy we work with now. He reads my online content so I have to make sure I don’t say anything crazy. But he is a good guy and he looks out for us in sending us much better deals than what wholesalers send us.

This weekend I went out there to see that the entire house is in great shape. I personally felt comfortable walking around the house even by myself. Where at first I wouldn’t. I would live there. The before and after pictures are night and day.

That said, this experience, the stress, the fear, the pressure, the uncertainty all make me look at the worst of Detroit homes like “that’s it?” We did a gut rehab which means I know how much every item in a home will cost. This time Ill do it better, faster and more profitably. No book prepares you for that and I have read more real estate books than anyone but Brandon Turner.

In doing this, I also realized that a lot of myths were untrue. The entire time we did this I was scared to invest money because I thought the furnace would just get jacked (again). There are ways around this though. You gotta be smart and you can’t just take anyones advice. This rehab took us a full year because of fear.

Here are some strategies we use to not become a target:

One thing we don’t do is put a sign in the yard. Another is we install an alarm immediately. What I realized is that they usually jack homes that have been sitting A LONG TIME not the fresh house with the alarm and with the view from the inside hidden. Our contractor also drives by the house every day. Most of our fears are based on assumption not reality.

So this experience, while still profitable, set me up. Now I know the process, now I talk the talk, now I am respected. Now I can look at a home and spot the rehab and negotiate/debate numbers with the contractor. Ignorance in real estate can cost you because people will take advantage of you. Not anymore. Now I can look at a home and have the contacts to send someone by to look at it on my behalf. Now I get WAY better deals than I did before I had a relationship with a contractor. Everything that I wanted to do got stronger by running through an impossible rehab.

Even my mentor. When I was starting out he wasn’t trying to invest in anything we had going on but now that he sees I can finish a project he is like “how much you need and how soon can I get it back?”

People are watching you. People might not say anything but they are inspired by your actions not your words. So I got to take more action.

Don’t miss the gem though. I have said it and Charm City said it. After you make an impossible rehab great again you get a superhuman mental strength as if you can do anything.

The number one thing that keeps people on the sideline is fear. By pushing through said fear I now feel like I can do anything no matter how big the challenge. Now I am aiming at what I want not what I think I can get. Now I am jumping into big problems attached to big money knowing that my being will find a way. Now, the thing I’m chasing happen to be attached to a lot of money.

I want to encourage you to take on the challenge. To take on the fear and relish in who you become on the other side of the unknown. That is where the wealth lies. The wealth isn’t in the knowledge but the applied knowledge and what the experience opens you up to. Its just like I say, the degree isn’t success even though we celebrate the degree. The degree sets you up to be successful. The work and projects you implement from said knowledge is the big win.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. 

You can join either through one of these links:

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

The three types of real estate distress that will help you find deals

Yesterday I gave an impromptu real estate lecture in the lunch room at the firm. I was teaching my Persian and Hispanic coworkers about how to invest in real estate. Me, the black dude, the dude you all said can’t build generational wealth because because because because because….. Stop that. Stop limiting yourself, we as a culture are leaps and bounds ahead of everyone else because that is just how we do. Anything we touch, we dominate.

That said, the question was posed about buying homes in Tallahassee Florida because it was a college town. To that I said it depends. See, every home isn’t a deal. We don’t buy homes we buy deals and deals follow distress. Here are the three main types of distress as taken from the BRRRR book that I am currently reading.

Personal Distress

Personal distress is distress from getting laid off, getting divorced, losing a loved one etc. This kind of distress is what you usually find from a wholesaler. They are mailing lists from divorce records and court records and they will likely locate these kinds of deals. I was listening to the BP podcast and the guests mails these lists. He said that sometimes the lists are so fresh that he actually informed someone that he was getting a divorce. He hadn’t received the papers yet but they were filed.

If you are looking to find deals you want to target people in these circumstances. People who need to get out from under their home quickly and in cash.

Property Distress

Property distress comes in the form of deferred maintenance. This can be a bad roof, a kitchen that needs updating, fire damage, water damage etc. I was talking to a friend on the property tour and he informed me that his first two flips were water damaged properties. We have turned a water damaged property and now we are on to fire damaged properties.

As I was walking through the triplex a friend sent a gross face. This property was obliterated. Paint was peeling, the floors were bad in certain areas and overall it was a mess. This is what a deal looks like fam.

Investors and entrepreneurs run toward the problems. Problems look like fire damage. Problems look like vacant homes next door. The key is looking at that problem with new eyes. We cannot solve the same real estate problems with the thinking used to create them. This is why you have an advantage being someone who isn’t from a certain area.

The more distressed the property the more likely you can get a deal, especially from a landlord that owns multiple doors.

Economic Distress

The recession is coming the recession is coming. This is the distress everyone is always talking about. Everyone talks about how they are going to boss up and buy everything during the next recession. A lot of people don’t realize that in a recession credit is harder to get and people are less willing to invest their cash. Everything contracts during a recession, that is why the prices fall. As demand falls and supply increases the price must fall. Banking on a recession shouldn’t be the goal, finding a recession that nobody else sees or that everyone is overlooking should be the goal.

In the book when they mention economic distress (a recession) in the same vain as other forms of commonly discussed distress it made me realize that you create your own recession you just have to find it. You have to find that sub market or that property owner that is in their own economic distress and you can find a deal. This could look like Detroit, Baltimore, Philly, etc. Find the recession, find the high unemployment, find the tight credit and you have found opportunity.

Overall its important to realize that you don’t need a recession to find deals. Its also key not to bank on that. It is also key that you learn to see opportunity differently. The idea that real estate makes you money is a false statement to make. Real estate deals make you money. Buying turn key or in a great neighborhood or doing what everyone else is doing will keep you spinning your wheels. Most do that because they want to avoid problems. This is lazy and it will not end well for you. Successful people want the ugly stuff. Chase distress in real estate not just real estate.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. 

You can join either through one of these links:

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

Detroit creates a huge opportunity for those that know how to do real estate math

A lot of people want to use the one percent rule to determine how much rents should be but I like to use it to determine the true value of a property, especially in depressed markets like Detroit.

These days you can buy a property in Detroit for about $10k rehab it for $10k and rent it for $700-$800 per month. The problem is that the market value for these properties still hovers at around the all in for $20k and if you are lucky $40k. The problem with this is that from a mathematical perspective it doesn’t make any sense.

For those playing at home, there are certain numbers used to value a property that is held for income. This is the one percent rule and the cap rate.

The one percent rule says that the monthly rent for your property should be one percent of the total value. So if you have a $100,000 property your monthly rent should be $1000. People who get this are happy because these days folks are getting like .8 percent of the value.

The reason folks are getting low numbers and happy about it is because they have been sold the multi family hype by Grant Cardone and Bigger Pockets. Buy units, thousands of units, is the rally cry these days. All from the uneducated and ill informed. This is problematic. It is a problem because real estate isn’t just real estate. Real estate is finance, economics, taxes etc, not just construction costs and comps. It is a lot more technical than the little buzz words newbs have learned.

Back to Detroit. What I am finding is that we buy these homes for income so they should be valued based on their income not comps. Therefore we can approach this two ways; we can approach this using a cap rate and we can approach it using the one percent rule. Cap rate first.

Cap rate is the return that you get on a property if you bought it for all cash. This doesn’t take into consideration the debt you use to buy it which is another flaw I find in the multi family hype. So cap rate of 4 percent is par for the course in LA. On a 2mm dollar building that would yield you 80k per year in net income not including debt service. The mortgage on that building would wipe out your cashflow and that’s why I don’t invest locally, the numbers don’t make sense. You are working for free.

Lets use the same caprate analysis on a Detroit property. If you have a 4% cap rate on rents at $700 per month times 12 that gets you a valuation of $210,000!!! Meaning that if you invest $210,000 and get $8,400 per year that is a 4% ROI.

If we make the cap rate higher, which is typical when you have higher risk C and D class neighborhoods, the valuation of a Detroit property is $105,000 at an 8 cap and $84,000 at a 10 cap. But you can buy the property an be all in for $20k This is a huge opportunity if you know your math. The high end profit is $190,000 at the $210,000 valuation and $64,000 on the low end. All while you cashflow.

Now lets look at the 1% rule. If you rent it for $700 a month then the property is worth $70,000. If you rent it for $800 then the property is worth $80,000. Yet we still value single family based on comps? Maybe they do but I don’t. I make my own rules.

If the 1% rule says the home should rent for 1% then the reverse is also true. The value of the home should be 100% of the rents. Take what they are paying and multiply fam. Use math to your advantage not their opinions and their validation that surprisingly enough serves to give them an advantage when it comes to sliding over that low ball offer.

You have to remember that their values are fake fam. They downplay your value, steal your assets and then say its worth a bunch of money once they own it. This is what led me to start doing my own analysis and coming to my own conclusions. Based on this analysis our company is closing in on the million dollar number and will continue to do so, on the low, using what we know while just listening to them tell us its not worth anything. Ok boss.

The point of this post is that sometimes you have to challenge the rules you live by. Sometimes you have to place a high value on what you own without their appraisals or their approval. This is the choose yourself of real estate. Choose to see what you own as valuable even if they don’t agree. Choose to place a number on what you own that is in accordance with the math not the tarnished name and brand created by the media they own. Be smart fam not a pawn fam. In the words of Jay Z, set your price and live your life. The opportunity is in the things they tell you not to own and the places they tell you not to go. Load up while you can, dumbo.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. 

You can join either through one of these links:

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire

Buying what is popular with the expectation of it going higher is a great way to lose money investing

Last week I bought Netflix and boy did I lose a lot of money. Netflix is down about 20% and I didn’t throw a few hundred bucks at it. I threw big money and subsequently lost big money.

In doing this I am reminded of an investment principal that applies not just to stocks but to all investments. For some reason I forgot.

That principal is of course buy low sell high. The problem is that a high can also be a low. So sometimes we buy what is hot, what is popping, what is doing well in hopes that it will continue to outperform and move higher. This is almost always a bad strategy.

The problem is this: The downside on these high stocks far outweighs the upside. Think about it. A lot of people wanted to buy bitcoin at 20k in hopes that it would continue to run. Best case was that it would run to 22k, worst case is what happened, it got clobbered all the way down to 4k. People who bought at 20k lost about 70%.

When you are investing you must stick to your principles and be disciplined. Discipline protects you.

It is better to instead buy that bad, the ugly, the laughed at. This is what Dapper Dan did when he bought up the communities that were devastated by the crack epidemic. Interestingly enough it is what Jay Z didn’t do. Jay Z looked like Dumbo and Dapper Dan looked brilliant.

This is the same way I look at real estate in Detroit. I don’t want to buy what’s hot. I buy what is struggling, what is in terrible condition. In the end we look like geniuses.

Yesterday I made the point that a lot of people do real estate but a lot of people don’t invest. What I meant by this is that a lot of people do what I was telling you, they buy high and try to push it higher. Investors don’t do that, we find the overlooked and make it great again. It shocks me that people in Detroit don’t invest in the hood. Its like we don’t see the value in something until white people see the value in it. Then after they take it and make it great we cry gentrification. Silly rabbits. Learn to see value in your own hood and less in the opinion of others. Their valuations are fake bro.

So the purpose of this post is that investment principles apply not just to stocks but the same strategies and this analysis apply to bitcoin or real estate or art work. Find value and be patient. Don’t’ try to force something and don’t do something just because other people are doing it. You must be the maverick for your family in these financial markets. Do what others are not willing to do and shun what the masses do. Zig when they zag.

Enroll in the Trade and Travel course with Teri. Use the link www.investor101.org to sign up. 

Check out these great products from our partners

Hood Estates Trucking: bit.ly/2JQQnlZ
Hood Estates Elite Real Estate: bit.ly/2HCXD25
Ericka Real Estate: bit.ly/2HqKiLb

Lastly, the Investing 101 Class is on sale for half off at this link: https://www.udemy.com/what-they-didnt-teach-you-about-money/?couponCode=TODDCAP50

Check out the Todd Capital Store at www.gumroad.com/toddcapital

I encourage you to invest with us and join our partnership.  We are doing a great work and if we keep up the pace we can be into twelve doors before the middle of next year.  We are also going to buy a truck by midyear.  If you want to form your own contact us for a consultation and we will walk you through the process.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. 

You can join either through one of these links:

TC Stock Investment Club slack: launchpass.com/p/tcinvestmentclub
HBCU Capital Real Estate slack: launchpass.com/p/hbcurealtytoddcapital

Thanks for reading!

Be great, invest well,

Todd Millionaire