Passive Real Estate Investing in Real Estate Development-with Mike Brown

Passive Investing in Real Estate Development & How to Build Retirement Income-Podcast Episode Highlights

Red Fox Capital& Red Fox Real Estate Co-Founder and real estate developer, Mike Brown joins us on this episode where we discuss passive real estate investing, real estate development, & building retirement income. As a real estate pro with a CCIM designation, Mike surprisingly excludes multi family residential real estate deals from his target, and instead focuses on commercial properties.  Mike just released his book on investing:  The REAL Perspective: Secret Investments Your Financial Advisor Won’t Tell You About.   Here are a few highlights from the show:

Target Real Estate Markets

Red Fox Capital focuses on buying investment property for the long term, and prefers secondary & tertiary markets over primary markets. His reason is lack of deal flow at reasonable prices-as the primary market attracts institutional real estate investors with low cost of capital willing to buy, or even develop assets at significant premium to market. The ideal markets should be located in areas of the country where population is migrating.

Target Real Estate Investments

As mentioned, Red Fox targets commercial properties over residential properties. Mike has found the market to have less competition and I’m inclined to agree. I personally invest exclusively in residential real estate-mostly single family or 1-4 unit properties, and I’ve found plenty of competition therein.

The residential real estate asset class attracts the largest portion of the real estate investor marketplace because it’s familiar. Think about it: people buy houses to live, then buy houses and collect rent from people living there. Everyone does lives somewhere and has either paid rent or owned their house during their life, so it’s not a stretch to invest in real estate in this familiar fashion.

On the contrary, in the commercial real estate market, owners are leasing business space to very unique businesses. There are many barriers to entry in the commercial real estate market including lease up time & financing challenges. Some properties remain vacant for a year or more in commercial while residential real estate is usually leased in a month or two. Banks realize this longer timeline is a risk to many investors, and for that reason, commercial real estate investment financing is difficult to obtain. These circumstances create the perfect environment to thrive in Mike’s opinion.

Passive Real Estate Investing to Build Retirement Income

Mike prides himself on offering “Secret Investments Your Financial Advisor Won’t Tell You About”, also the Tagline of his recent book, The Real Perspective. Those secret investments are often passive real estate investments in either long term holds, such as a portfolio of Dollar General stores Mike is currently amassing or 5-10 year real estate developments allowing investors to participate in upside normally reserved only for real estate developers.

While recent crowdsource platforms such as FundRise & CrowdStreet offer investors participation in commercial real estate projects, they are also fraught with issues such as investments failing to close due to lack of full funding, among other issues.  Like many things in business, knowing the RIGHT person can make a big difference.  In Mike’s case, knowing the commercial real estate world and being the developer offer significant advantages.

When I asked Mike to build the ideal retirement plan, he did deflect a bit, with a standard, but truthful, “it depends on the situation.” However, Mike added that often asset allocation might include index funds, mutual funds, other rental properties, in addition to some of his own passive real estate investment deals. I respected Mike’s answer for the simple fact that many real estate operators present their deal as a one-stop plan for retirement building, instead of a small piece of a multi asset class approach to supplement any social security benefits a retiree may be entitled. Enjoy!

This Episode of The REI Diamonds Show is Sponsored by the Deal Machine.  This Software Enables Real Estate Investors to Develop a Reliable & Low Cost Source of Off Market Deals.  For a Limited Time, You Get Free Access at http://REIDealMachine.com/

 

Mike & I Discuss:

  • Passive Real Estate Investing
  • How to Invest $100K in Real Estate
  • How to Build Retirement Income

Relevant Episodes: (There are 175 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.RedFoxCapital.co

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

How to Avoid Capital Gains Tax Using a Deferred Sales Trust or Like Kind Exchange with Carl Worden

Carl Worden is the founder of DeferTax.com.  Carl & I discuss how to avoid capital gains tax using a deferred sales trust on this real estate investment podcast.  There are several other ways of deferring capital gains tax including the 1031 exchange.  Real estate investors maximize their long term gains by using IRS Tax Code strategies to keep their entire seed capital growing.  This is true even when assets are sold.

Big Idea: Avoid Capital Gains by:
1031 or Like Kind Exchange:

  • Defer Tax on the Entire Gain
  • Real Estate Investor Tax Strategy
  • Short Deadline on Reinvesting Proceeds
  • Like Kind-Limits Asset Types

Deferred Sales Trust:

  • Avoid Capital Gains on Sale Proceeds
  • Real Estate Investor Tax Strategy
  • No Deadline on Reinvesting Proceeds
  • Works with ANY Appreciated Asset

Listen Now:

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Carl & I Discuss How to Avoid Capital Gains Tax:

  • Legal Structure of the Deferred Sales Trust

  • Conservation Easement: How Donald Trump Avoids Tax

  • Sell any Highly Appreciated Asset and Defer Tax

 

Relevant Episodes: (172 Content Packed Interviews in Total)

 

Resources Mentioned in this Episode:

Interested in Becoming a Tax Deferral Consultant?
Avoid Capital Gains Using Deferred Sales Trust & 1031 Exchange

Go to: https://taxdeferralstrategies.com/contact-tax-deferral-strategies/

Schedule a Tax Deferral Consult: https://calendly.com/chris-defertax/tax-deferral-consultant-introduction-phone

www.DeferTax.com

www.CarlWorden.com

 

The transcript of this episode can be found here.

Transcripts of all episodes can be found here.

How to Take HUGE Depreciation using Cost Segregation with Yonah Weiss

Yonah & I Discuss:

  • Generating Tax Deferred Income using Depreciation

  • Bonus Depreciation exceeding all of RE Pro’s Income

  • How to do Cost Segregation

  • How Cost Segregation Helps You Raise Capital


Listen Now:

Google Play

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Relevant Episodes: (There are 158 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.MadisonSpecs.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Deferring Taxes on ANY Highly Appreciated Asset Sale with Brett Swarts

Brett & I Discuss:

  • Deferring Taxes on Highly Appreciated Asset Sales

  • NOT a 1031 Exchange

  • Buy Stocks, Property, another Business, etc.

  • NOT Limited to Real Estate


Listen Now:

Google Play

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Relevant Episodes: (There are 155 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.CapitalGainsTaxSolutions.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

From House Hacking to $300 Million in Commercial Real Estate with Ivan Barratt

Ivan & I Discuss:

  • Progression from Developer to Long Term Owner/Operator

  • Latest Revelation-Multi Asset Syndication

  • Equity Splits when Funding a $20 Million Deal

  • Property Management Company as Key Asset in Machine


Listen Now:

Google Play

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Relevant Episodes: (There are 141 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.BarrattAssetManagement.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Benefits of Scaling to $350 Million in Self Storage with Kris Benson

Kris & I Discuss:

  • How to Select the RIGHT Asset Class for Investing

  • Buying the RIGHT Property is a Sharp-Shooter skill

  • Evolution of Self Storage Business to 2nd Generation

  • Knowing this is “Retail” as much/or more than Real Estate


Listen Now:

Google Play

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Relevant Episodes: (There are 140 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.KrisBenson.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Million Dollar Wholesaling & Multi-Family Apartments with Aaron Fragnito

Aaron & I Discuss:

  • Short Sales Still Getting Approved?

  • Tax Advantages of Buying/Operating Larger Rental Property

  • Advantages of Geographically Focused Portfolios

  • Managing the Property Manager-Skill Set


Listen Now:

Google Play

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Relevant Episodes: (There are 139 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.PeoplesCapitalGroup.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Anna Barsky on Deferring Capital Gains

Anna & I Discuss:

  • Planning Your 1031 Exchange to Close Successfully

  • Impact of Refinance on Your 1031 Exchange

  • Entities suitable for the Replacement Property

  • Details on My Recent 1031 Exchange

  • Improvement/Build to Suit Exchanges


Listen Now:

Google Play

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Relevant Episodes: (There are 138 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.ipx1031.com

anna.barsky@ipx1031.com request “Reference Guide”

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Lane Kawaoka on Scaling up to 2,600 Units

Lane & I Discuss:

  • Bonus Depreciation-Writing Off an Investment

  • Conservative Approach to Multi-Family Investing

  • Benefits of Scale in Multi Family Deals

  • Managing the Property Manager for Stellar Results


Listen Now:

Google Play

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Relevant Episodes: (There are 137 Content Packed Interviews in Total)

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Ashley Micciche on Creating Your Business Continuity Plan Long Before it’s Necessary

Ashley & I Discuss:

  • Dan Breslin’s (Me) Business Continuity Plan

  • Horror Story of NOT Planning for Estate Transfer

  • 3 Keys for Business Owners to Plan for an Exit


Listen Now:

Google Play

stitcher

Relevant Episodes: (There are 134 Content Packed Interviews in Total)

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.