"All five of these different pillars create wealth on their own, but the beautiful thing about real estate is that we combine all five of these at the same time," Allred explained in a recent interview with Insider."This is the beauty of a compounded effect of investing in real estate — it continues to create more and more wealth, repeatedly, while you're sleeping."
With mounting volatility ahead for real estate markets, Allred believes that default risk will increase in 2023, meaning that now is an especially important time for investors to focus on maximizing their cash flow so they can retain their assets for the long term."I think there's going to be a lot of distress in the markets and quite a few assets that owners lose due to not having liquidity to be able to service those debt payments," he said.
"When people look at 2023, they talk about a housing correction and all these scary things. To me, it's actually so much more of a healthy reset to being more in line with what's normal," he said.Allred believes that tax benefits — or depreciation, as he calls it — are among the most underappreciated aspects of real estate investing, especially given how favorable the US tax laws are for real estate investors.
The depreciation benefit is recaptured down the road upon the sale of the asset, but this is where the time value of money can really benefit an investor."In the meantime, you're able to go out and acquire more and more property, and that additional property is going to have more cash flow, more appreciation, additional depreciation benefits, and principal reduction, and therefore creating more and more wealth," Allred explained.
because it can make investors eligible for residential owner-occupied financing such as FHA loans, which lower interest rates and decrease the amount required for a down payment, according to BiggerPockets' Dave Meyer.As someone who was raised to fear debt, Allred has since come a long way in understanding the difference between bad debt and good debt.
guy looks atleast 50
Making millions by dealing in basic human needs is such a good look but perhaps he’s a philanthropist and has helped build affordable housing.
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