Carole Ellis serves as Editor-in-Chief of Self Directed Investor News, the top news publication in America for self-directed investors. She is also co-host of Self Directed Investor Talk.
CoronaVirus has created more abject terror than anything I’ve ever seen. If we’re to believe Warren Buffett, then wise investors are to be “greedy when others are fearful”. So how, exactly, can you be wisely greedy right now? I’m Bryan Ellis. I’ll tell you RIGHT NOW in Episode #325 of Self-Directed Investor Talk.---The world changed radically a few weeks ago. Free countries went on total lockdown. The hottest commodites in the world became hand sanitizer, toilet paper and medical masks. And the stock market went on a volatility spree never seen before or since.And yet, the whole time, savvy investors kept hearing the famous words of Warren Buffet echoing in their minds: "Be fearful when everyone else is greedy, and greedy when everyone else is fearful."The question, my friends, is how to be very wisely greedy during a time when the prevailing emotion all around us is, without any doubt, not mere fear... but abject terror.The one clear answer - well supported by history and the leadership of current experts - is to invest in well-vetted, well-operated RV Parks.Now, in case you're not a user or owner of RV's yourself, I understand. I'm not either. Just in case you don’t know, RV stands for “Recreational Vehicle”… the big rolling hotel rooms like Winebagos.But whether that’s “your thing” doesn't matter. Kind of like you don’t need to live in an apartment in order to justify investing in a great apartment complex.So I’m going to make a very quick, but rather overwhelming, case to you right now that RIGHT NOW, in the height of this epidemic of terror and infection, that RIGHT NOW is the right time to jump into RV parks.And as always, I don't expect you to take my word for it. In fact, I insist that you don't take my word for it... that's because history makes this case for me in such a compelling, unquestionable way.Before CoronaVirus, the pinnacle example of economic downturn during most of our lifetimes was the Great Recession of 2007 & 2008... if any economic event was going to doom an industry where "recreation" is the literally first word in the name, the Great Recession would have been that phenomemon. But what actually happened?Well... not much. As the economy of the United States slowed and weakened with each passing week, the data shows us that average length of stays at RV parks got LONGER. Not shorter… LONGER.And I take this from a deeply authoritative source. It’s a report called “Effects of COVID-19 on the Campground Industry”. It’s written by American Property Analysts – the absolute leading valuation experts in America for the RV Park and campground industry. This report was written last week, at the request of and for the benefit of the banking industry. As the economic carnage began to mount from the CoronaVirus scare, banks who finance RV parks wanted to know where their exposure stood in connection with COVID-19, and of course, they hired the most knowledgeable experts in that field at American Property Analysts, Inc.And according to that report, when looking at the Great Recession, it’s all summed up in this quote: "What campers did not do was discontinue using their RV's." That report goes on to say that "In most locales, demand exceeded available supply" and that "attendance held fairly steady".Now remember... the setting here is the aftermath of the Great Recession, when our country suffered the worst economic contraction since the Great Depression. It was a time when, according to the respected California-based newspaper called the Orange County Register, nearly 9 MILLION jobs were lost... 4 million homes were foreclosed EACH YEAR... and 2.5 million businesses were shuttered.It was the worst of times for the American economy.But what happened in the RV park industry? Well, I remind you: "attendance held fairly steady" and "in most locales, demand exceeded available supply."But it's better than that still: To further quote the American Property Analysts report, "Waiting lists for seasonal sites popped up nearly everywhere, and many of those lists remain in place today at the more desirable properties. Some folks even paid non-refundable fees just to be on certain lists, and some of those campers are just now nearing the front of their lines."If you understood me to say that the backlog of demand created during the LAST recession still exists to this day, you understand me correctly. I can't imagine how much demand and backlog the economic fallout of the CoronaVirus pandemic will create for the RV park industry... but history suggests it will be HUGE.Am I suggesting to you that every RV park in America did a booming business during the Great Recession? No. Not at all. There will always be the superstars and the laggards, and doubtlessly that's true here as well.But what I am telling you... scratch that... what the historical data cited by the American Property Analysts report is telling you is that, overall, RV parks as an industry hardly - if at all - noticed that a recession happened at all.And my friends, history is repeating itself right now. And if you think about it, it makes complete sense for at least 3 strong reasons:Reason #1: One of the immediate results of the national shutdown from CoronaVirus was the closing of National Parks. Now that's an awful thing because I, for one, realy love and frequently visit the parks in my area. But as owners of RV Parks, we aren't sad to see it. Why? National parks are one of our biggest sources of competition. Right now, that competition is completely GONE... Kaput... poof. It'll return someday, but for now, it's GONE.Reason #2: The totally justified concern over the risk of infections connected with hotels, cruise ships and other recreational destinations likely will drive growth in the RV industry, as one's RV is a completely private space, not subject to the risk of exposure from third parties.and Reason #3:  I'm happy to report to you that our EXPERIENCE is matching the THEORY I've shared with you, because presently, we've seen exactly ZERO cancellations at any of the RV parks that we already own... and there has DEFINITELY been an uptick in interest since CoronaVirus was declared a pandemic and the nation was put on lockdown.My friends, I return again to Buffett's famous advice: Be fearful when others are greedy, and greedy when others are fearful. Now here’s what you might not know about RV parks: Even average ones can be incredibly profitable. Imagine if you had all of the benefits of owning a great apartment complex, but your cash flow was more like a mobile home park. Well, it’s like that, only better. Well-vetted, well-operated RV parks don't merely compare favorably to other real estate asset classes, RV Parks dramatically outshine them and the data makes that overwhelmingly clear.So where does that leave you? If you're savvy enough to take seriously the advice of Warren Buffet, the man widely considered to be the greatest investor of our lifetimes, then the only reasonable conclusion you can draw is this: These are times of great fear... and that's your signal to be wisely greedy. And there's no better asset class - as proven by history - for that wise greed he recommends than RV Parks.The time is now.Thank you for listening in today. Every now and again, we encounter exceptional RV park investment opportunities. Best for well-qualified investors, these opportunities always fill rather quickly as only a small number of openings for outside investor partners are made available. If you'd like to be considered for participation in the next such project, please send an email now to feedback@sditalk.com, that’s feedback@sditalk.com., `to set an appointment to speak with me or a member of the team. Happy investing! See acast.com/privacy for privacy and opt-out information.
There’s an asset class that affluent investors REALLY love… extraordinary cash flow is the norm and the tax benefits are the best around. But there’s a HUGE LANDMINE just waiting for affluent investors who try this in their self-directed retirement account. I’m Bryan Ellis. Today, you affluent investors learn how to sidestep certain disaster in Episode #324 of Self-Directed Investor Talk.-------Hello, Self-Directed Investors, all across the fruited plane. Welcome to the show of record for savvy self-directed investors like you, where in each episode, I help you to find, understand and profit from exceptional alternative investment opportunities.For you folks with a bit higher net worth, you need to pay close attention today.So for those of you who may not yet quite be in the high net worth world, something you should know about your wealthier brethren is that one of the most popular asset classes among them is one I’ve mentioned here before, but only very briefly… and that is oil well drilling.It makes perfect sense because the cash flow beats the heck out of basically everything else, and the tax benefits makes real estate and other supposedly tax efficient investments look like child’s play. Yes, the risk is theoretically higher, and that’s why this is the domain primarily of accredited investors.But to set up this dilemma, and the brilliant solution for it, let’s consider a scenario, with real numbers.  So here’s the deal.This investor… we’ll call her Tara… has decided to invest in an oil drilling deal. It looks like a pretty good one, I’m actually quite familiar with it… she’s got to invest $150,000 to buy into the deal, and based on the preliminary geological research, the expectation is that she’s going to bring in something on the order of $12 to $13,000 per month or so, based on current oil prices.Now if you’re doing the math, you know that $12,000 per month equals $144,000 per year, which is shockingly close to being a 100% cash-on-cash return. Well, that’s one of the reason high net worth investors love this stuff… the cash-on-cash numbers are just breathtaking, enough so that the additional risk is quite regularly totally worth taking.So that’s great, right? Tara makes this investment, and assuming it works like expected, then she yields a MASSIVE cash-on-cash return for 5-7 years until the oil well runs out… and then she’ll likely do it again, if she’s like most high net worth investors I’ve worked with.And to make it better, she’s doing this in her Roth IRA… so all of that juicy ROI is totally tax free! Right? Right? Isn’t it tax-free?Well… no.Here, my friends, we consider an important distinction between the two types of income: Earned and Unearned. Earned income is just what it sounds like… money you earn from a W2 job or a 1099 contracting position or something like that. You work, you get paid. That’s earned income.Unearned income, on the other hand, is profit from investments… it’s a more passive type of thing So if you buy stocks and they rise in value or pay dividends, that’s unearned income. If you buy real estate and it appreciates and/or generates cash flow for you, that’s unearned income.  If you make a loan and are repaid for that loan, that’s unearned income.So here’s the thing: it’s widely believed that IRA’s and 401(k)’s – particularly the Roth variety – are just not taxable. Unfortunately, that’s not true. It’s almost ENTIRELY true that any UNEARNED income – the kind from stocks and real estate and loans, for example – pretty much all of that will be tax-favored inside of a retirement account and that’s great!But this is where we return to Tara’s oil & gas deal. Yes, she’s going to make a lot of income from that deal. But there’s a catch. Federal tax law makes it abundantly clear that under most circumstances, the income generated from drilling an oil well and selling that oil is NOT UNEARNED income, but is EARNED income.That means two things: First, that the money is taxable. And second, that the tax rate that’s relevant in that case is NOT personal income tax rates, but is the income tax rates for TRUSTS, since both IRA’s and 401k’s are, under the law, types of trusts.And that, my friends, is BAD news. You see, income tax rates for trusts are, for all intents and purposes, 37%. That’s astronomical. If Tara brings in $12,000 per month on average as expected, that equates to $144,000 per year. 37% of that is over $53,000… so her IRA would have to stroke a check for over $53,000 to pay income taxes. That would leave her with a net of nearly $91,000 per year which is still just off-the-chain exceptional… but still… that’s a BIG tax bite.What to do, what to do? Most of the time, investors do oil & gas deals OUTSIDE of a retirement account because the VERY BEST tax benefits in oil & gas don’t really apply to IRA’s and 401k’s. But in Tara’s case, that’s where she happens to have the available capital, and quite justifiably, she doesn’t want to miss this opportunity.So here’s what I recommended to her: Since we can’t eliminate those taxes, why don’t we just slash them dramatically? You may remember that one of the thing that President Trump’s signature tax bill did was to slash corporate tax rates to 21% as the maximum. So I suggested that Tara form a c-corporation inside her IRA, and capitalize it with $150,000 from the IRA. She could then buy the oil & gas interest with that money, inside the corporation. That money – we’ll just say $144,000 per year – will still be taxed, but not at 37%. It’ll only be taxed at 21%. Bottom line… she’ll pay about $23,000 PER YEAR less in tax this way!Over the course of 5 years, that’s a very real saving of over $100,000… just by using the subtle brilliance you learned right here on Self-Directed Investor Talk!Now before I sign off for the day, I’ll go ahead and answer the question I know is coming: Maybe. The answer is maybe. The question, of course, is something like: “Bryan, I just heard you talk about the crazy results people are getting from oil and gas deals… can you hook me up with some of those opportunities?” Well, the answer is MAYBE.There are some qualification requirements. So the best path to take is this: If you’re interested in learning more, just text me now at 678-888-4000 and I’ll be happy to have a team member talk this through with you. Again, just send a text to me at 678-888-4000 and we’ll chat about it right away.My friends… invest wisely today and live well forever! See acast.com/privacy for privacy and opt-out information.
Coronavirus, real estate investors and the stock market… or, how real estate investors are making absolute jackasses of themselves during a very bad time. I’m Bryan Ellis. This is Episode #323 of Self-Directed Investor Talk.-----------Hello, self-directed investors, all across the fruited plane. Welcome to the show of record for savvy self-directed investors like you where in each episode, I help you to find, understand and profit from exceptional alternative investment opportunities.Today, my friends, I share with you my expectations about the REALITY of the coronavirus and how I see it affecting our economy and more importantly my and your investments. But first, a quick word about a clear way to identify some people who, at their very core, are clearly complete jackasses.Now, note that this isn’t a test for ALL jackasses, just some of them. But here we go:You probably know that, due to Coronoavirus fears, the stock market has taken a MASSIVE dive in the last two weeks. The Dow Jones Industrial Average has fallen by over 15%... it’s been just absolutely brutal. I’ll tell you when that ends in just a minute, but that’s a different story.So back to identifying jackasses:  If you see a real estate investor post something on Faceobok or elsewhere that basically says: “Hey, all you stock market investors, you’re really taking it on the chin now, aren’t you? I’ll bet you wish you had gotten into real estate instead of stocks now!”When you see something like that, what you’re seeing is a jackass. Someone who is childish, pathetic and heartless. Such a person, regardless of whether they’re successful in real estate, deserves to be ostracized and ridiculed for their short-sighted and juvenile attitude.So to all the jackass people out there, remember: You’ll get yours. I don’t wish it on anybody, but nobody bats 1.000. Where financial market losses are concerned, your attitude should always be: There but for the grace of God go I.”Now, as for the Coronavirus, the stock market and the economy?Totally overblown. I see stocks beginning to recover today, frankly. Is it a serious thing? Yes… but almost entirely for psychological reasons… because the media has scared people so badly that there’s a lot of irrationality out there.Remember this: We all keep hearing that 2% of the people who get this disease die from it, compared to the flu, which kills only 0.1% of the people who get it.That would be disturbing, for sure. BUT there are 3 facts you should know.Fact #1: The actual mortality rate in China, according to a report from China published in the New England Journal of medicine 3 days ago, is much lower, at only 1.4%. That’s a significant difference.Fact #2: The mortality rate is almost certainly much lower than that because most of the cases of it are so mild that they are never caught or reported. That’s not my opinion… but the opinion of Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases… the one guy who everybody agrees is THE authority on these matters here in the U.S.And finally, Fact #3: Whatever the mortality rate, that’s the mortality rate in CHINA… not in America. CHINA! That’s a country that literally is happy to execute their citizens as a matter of convenience… an evil regime that exists to protect the Xi Xinping and the Communist Party as it’s highest priority… a place where the health of the citizenry is the last thing they care about.So how you SHOULD think about this is as follow: Even in China, the death rate of coronavirus is, at worst, 1.4%. We don’t really know how many people are killed by the flu in China. I’ll bet it’s quite comparable.Does that mean Coronavirus isn’t serious? Nope. Be careful, of course. But what it does mean is that while it is highly contagious, it’s more likely to be a pain in the rear rather than an issue of fatality.As for the effect of Coronavirus on stocks?I think we saw the bottom on Friday. I wouldn’t bet the farm on it… but I’d be willing to bet a barn door or two.By the way… if you’re looking for an astoundingly powerful tax break that happens to be coupled with an investment offering a potentially exceptionally high yield… well, drop a note to me at bryan@sditalk.com and I’ll fill you in. This is crazy good stuff, folks.Well my friends, that’s all for now… invest wisely today, and live well forever! See acast.com/privacy for privacy and opt-out information.
If for every dollar you put into improving one of your real estate assets, you could get that dollar back within 12 months… and then enjoy decades of free and clear cash flow… wouldn’t you do that?  Right now, I’ll show you not 1, but 2 ways to do that in my current favorite asset class. I’m Bryan Ellis. This is episode #322 of Self-Directed Investor Talk.----Hello, Self-Directed Investors, all across the fruited plane.  Welcome to Episode #322 of Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like you.  Guess what’s going to happen today? Today, I’m going to help you find, understand and PROFIT from exceptional alternative investment opportunities!In yesterday’s exciting episode, I introduced you to the asset class that I think is stealing the crown from multi-family housing as the GO-TO real estate asset class.  If you missed that episode… you missed a great one! Drop me a text message to 833-212-2112 and ask for the RV Parks episode I’ll send you a copy so you can get caught up…...and you’ll certainly want to do that because today, I’m going to tell you two ways that, using that asset class - which is, of course, the high-cash-flowing world of RV parks - I’ll tell you not one but TWO ways that my partners and I - and maybe you, too, possibly - are planning to spend a bit of money on some of our RV park properties and generate a MASSIVE and rather immediate return of our capital… to be followed immediately by many years - possibly even DECADES - of free and clear cash flow.But understand this:  I’m not just bragging on our deals - though I’ve got to admit, maybe there’s a LITTLE BIT of that hehehe - but more importantly, I’m trying to show you what’s POSSIBLE… because deals like this are in much greater supply than financially similar deals in other asset classes like self-storage facilities and mobile home parks.And I’m also telling you because, who knows, maybe you can actually participate in these deals with us.  More on that in a bit.So what are these two crazy-powerful value adds we’re going to perform?So you may recall from yesterday, we’re acquiring 2 separate RV parks.  Specifically on the one in Wisconsin… we’re going to be able to add, at a cost of about $50,000 per cabin, about one dozen nice little cabins which will be available for rental in our parks.Now here’s the really CRAZY thing… based on the rates our clients are ALREADY PAYING for space in that park, it’s actually quite plausible to think that we’ll collect more than $50,000 of income per unit after just two, or maybe 3, seasons.  RV parks, you see, are seasonal, generally with 2 4-month high seasons per year. And after only 2 or 3 of those season, those cabins will basically be totally free and clear cash flow, with only minimal incremental expense for maintenance!That, my friends, is ASTOUNDINGLY WONDERFUL… super-high-ROI stuff.  I’m so excited about this deal!And that’s not allFor the property in Michigan, we’re going to add a particular water feature there which is an absolute super-powered electromagnet for attracting families with children.  This is just an amenity we’re adding to the water amenities already onsite. It won’t be cheap to do this… with the cost coming in around $150,000 or so, but get this:The evidence is absolutely overwhelming that this type of amenity brings more families with children to an RV park… and these are families who wouldn’t have otherwise come.  In other words… new customers!And what’s astounding is that there’s data - anecdotal, admittedly, but still relevant - that suggests that the presence of this type of water feature can, all by itself, increase the net income of certain well-run parks by 20-30% after 3 years.  With rates like that, it takes no time at all to recoup the $150,000 and investment and then be SOLIDLY in the money.And what’s EVEN BETTER is that I haven’t even begun to scratch the surface of what’s possible with RV parks.  If you find multi-family real estate attractive because of the potential to add value and create new income streams, then you’ll find RV parks to be like an absolute candyland of potential, much of which can be realized near term and at shockingly low costs.I couldn’t possibly be more excited about the future with these assets.  We’ve already begun the hunt for even more of them.If you’d like to learn more about investing in RV parks… and maybe even participate in some of the deals that my partners and I are doing, drop a text to me at 833-212-2112 and let me know.  We haven’t yet decided if we’re going to take on outside investors, and if we do, we’ll open up an application process, the first step of which is to be on my investor alerts list… and the way you make that happen is to text me at 833-212-2112 and let me know you’d like to be included.Oh… and  failed to mention… you can actually use your IRA or 401(k) to do this type of investing!  Want to know how? Well how about I give you those details in the very next episode of Self-Directed Investor Talk?!My friends… invest wisely today and live well forever! See acast.com/privacy for privacy and opt-out information.
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Creator Details

Location
Atlanta, GA, USA
Episode Count
482
Podcast Count
8
Total Airtime
2 days, 16 hours