Being a smart investor.

Yes! Real estate happens to be an excellent inflation hedge.

If you read my Inflation, Illustrated post, you learned that inflationary periods tend to punish holders of growth stocks (that’s why we’ve seen so much volatility in the stock market) and reward holders of tangible assets like real estate (residential, commercial, land), commodities (oil, natural gas, precious metals, wheat and corn), art, and jewelry.

This means that during inflationary periods, real estate prices tend to go up as people are looking for a good place to park their cash.

This is coupled with the already-hot market due to the housing supply shortage we’ve been experiencing for years.

(Are you starting to get an idea of why real estate prices are going up so much?)

Aside from the value of parking your cash in a tangible asset, there’s another benefit to getting into real estate in inflationary periods if you’re a borrower on a fixed-rate mortgage…

You essentially get to repay your mortgage with cheaper dollars due to inflation.

What this looks like…

— The bank gives you your $200k today to buy a rental property

— You put that money into a rental property that will likely increase in value as inflation increases (even though we primarily invest for the cash flow, not the capital appreciation)

— You pay the bank back with weaker dollars over time, but you were able to secure the full inflation-protected value of that house on day one.

So in other words, if you were to wait another year to buy a house, inflation alone would likely make it effectively cost more, since your money can buy less stuff in general.

This adds up to make now a great time to get started in real estate investing.

If you were to get started investing now, with a fixed-rate mortgage, you’d essentially get “triple-dipped” benefits…

• 1. An asset that performs incredibly well in inflationary periods
• 
  
• 2. A locked-in fixed-rate mortgage that you secured before interest rates increased further
• 
  
• 3. Repaying your mortgage with cheaper dollars

No! Fun fact:

Recession ≠ housing crash

A lot of people have it in their head that recession = a crash in the real estate market.

But if you pause and think about it critically, these two things don’t correlate.

A recession essentially means that companies are making less money.

A real estate crash essentially means that real estate prices are deflationary.

Quick definitions:

Inflationary = prices tomorrow are HIGHER than today. A bag of coffee that costs $5 today will cost $6 tomorrow.

Deflationary = prices tomorrow are LOWER than today. That bag of coffee that costs $5 today will cost $4 tomorrow.

If companies make less money, does this correlate with deflationary real estate prices?

Nope. It doesn’t.

During the 2008 Great Recession, the housing market specifically became deflationary.

In other words, a house that cost $500k in 2007 might have cost $400k in 2009.

This happened because flippers and speculators with irresponsible leverage became the market price-setters and were responsible for significant deal volume.

Flippers were flipping houses to other flippers, and the market grew due to artificial demand from these speculators hot-potatoing houses between each other.

When this hot-potatoing stopped (because mortgage-backed securities collapsed due to defaults, which dried up the free-flowing credit that these speculators were using to finance their flips), the demand for housing plummeted and we saw a crash in the real estate market.

This consequences of the crash – specifically, the subprime mortgage crisis – rippled out into the rest of the economy and caused a recession.

Quick comparison:

— 2008’s recession was caused by the subprime mortgage crisis.

— Today’s inflation (and potential recession) is caused, in part, by the forces of supply-demand shifting dramatically due to Covid, which led to stimulus payments and bond-buying — followed by subsequent belt-tightening — by the Fed

It’s temping to think that when one part of the market is deflationary (i.e. a real estate crash), it affects the entire market, and that everything becomes deflationary. But this isn’t true.

Certain sectors can experience inflation or deflation, and can experience it in a self-contained way that doesn’t ripple out and affect the whole market.

Think about technology — in the 80s, computers were extremely expensive. But thanks to constant innovation, technology tends to get cheaper over time, i.e. deflationary. It used to be that only very wealthy people could own a computer. Now, most Americans can.

In 2008, we experienced a recession that was triggered by a subprime mortgage crisis. The supply of homes (built by speculators) exceeded demand, many major banks failed, and borrowing restrictions tightened. The cumulative effect of this was to exert deflationary pressure on the housing market, which led to a housing price collapse.

In 2022, by contrast, we’re living with the highest levels of inflation in 40 years, triggered in part by the bond-buying and balance sheet growth that the Fed undertook in order to spare us from the economic calamities of the pandemic.

The upstream supply cost of goods remains high: the cost of lumber is 80 percent higher now than it was pre-pandemic, partly due to the increased price of diesel (which is exacerbated by the war in Europe) and partly due to the need to pay higher wages, spurred by a labor shortage.

Homes in the U.S. are built in a lumber-heavy manner (as opposed to homes in some other nations, which are built primarily with concrete or cinder block.) When lumber prices in the U.S. jump by 80 percent, it’s no surprise that home prices climb along with it.

All of this is to say — the likelihood of deflationary pressure on the housing market is incredibly low.

Housing is likely to remain inflationary, meaning it’ll cost more tomorrow than it does today.

Takeaway: No, we’re not heading for a housing market crash.

“But Paula! The housing market crashed during the last recession. These two events are linked in my mind. Don’t recessions correlate with home price crashes?”

Fun fact! Historically, in many recessions, real estate did not become deflationary. In fact, it’s often been the case that real estate prices go UP in recessions.

Here’s a chart of the Case-Shiller U.S. National Home Price index showing home prices over the course of our past 3 recessions. In 2 out of 3 recessions, home prices rise.

I hope now we’re on the same page that a recession does not directly correlate with home prices crashing (aka becoming deflationary.)

Far from home prices becoming deflationary, what we’re seeing now is the exact opposite.

We’re currently experiencing the most dramatic upward spike in the history of the Case-Shiller index.

And these soaring real estate prices are happening due genuine supply issues.

There are far more qualified buyers than the market can meet with supply.

There’s less of the speculative hot-potatoing we saw in 2006 prior to the crash.

For reference, let’s take another look at the chart from yesterday’s email of new housing completions — look at how much less housing is being built now than 2006. (something like 60 percent)

Meanwhile, there’s more legitimate demand now from owner-occupants (as opposed to speculators).

We also have record-low unemployment, and higher wages driven by inflation.

These factors combine to explain, in part, why prices are climbing so much.

That being said, does our potentially being in/headed for a recession change my mind about real estate being an awesome investment vehicle?

Not at all.

In short, the busier you are, the MORE you need a system you can follow to get results instead of having to waste time going down rabbit holes and learning lessons the hard way.

And I get it.

You’re super busy, with a million things on your plate on top of your day job, and you’re looking to build passive income, not take on a new side hustle that’s going to eat even more into your limited time.

I’ve laid out all the steps in the process to be implementable ASAP as efficiently as possible. The course can also optionally be self-paced to accommodate any schedule.

Once you have all of the systems (and a team) set up, and have acquired your properties, running your rental real estate business really doesn’t take much time at all — often 30 minutes to two hours a MONTH — but it will naturally take more time at first while you’re building your base of knowledge, getting started, and adding properties to your portfolio.

Supposing you were sitting on millions in cash and your only limiting factor for acquiring new properties was time, you could very feasibly be growing your portfolio by four or five properties a year in just a couple hours a week. (With the weeks where you close on a new property taking more like 5 hours.)

Once you have the knowledge and system, you can really knock these things out like bowling pins.

It’s also worth keeping in mind that if you’re ridiculously busy and want something as hands off and easy as possible, there are ways you can modify your approach to sacrifice potential returns in exchange for ease and convenience. (Remember Deepak, the self-proclaimed “lazy investor?” That’s exactly what he did.)

Is this process as easy as Vanguard auto-withdrawing your monthly ETF purchase from your bank account? Of course not.

Is the asset + passive income worth the time it takes to get set up?

Heck yes.

The time you invest here now gets paid back to you down the line through no longer having to work a job every day just to pay your bills.

Your First Rental Property gives you the option of going through the curriculum at the same time as all the other students in your cohort OR going self-paced.

If you want to complete the program in the 10 weeks alongside the other members of your cohort, you’ll probably want to commit 2-5 hours a week, depending on your learning style, speed, and how much you leverage the tools and resources. A small time commitment when you consider all the time you’re going to get back as a result of your earlier retirement.

We offer all of the lessons in audio, video, and text format, so you can fit the learning into your existing schedule — like listening to the YFRP core content while you drive or work out — to make the most of your time.

If you’re super-duper busy and you’re certain that finding a couple hours a week isn’t realistic, even with you matching the learning format to best fit your life, remember that you have lifetime access to ALL of the current and future content, as well as lifetime access to all of our support.

If this sounds like you, know that you’re in good company — you’re what we affectionately call a “turtle,” and many of our students are in the same boat: steadily and consistently chipping away at the curriculum; knowing that their slow and steady pace is the difference between them working towards building an awesome portfolio vs. continuing to stand on the sidelines hoping that “maybe one day” they’ll have the time start taking action.

Remember, the journey of a thousand miles begins with a single step. It’s far more important that you start and take consistent small steps than to feel so pressured to dive in fully that you never find yourself in a good position to actually start taking action.

Yes!

Having a comprehensive guide with all the knowledge you need in one place is going to save you tons of time vs. going it alone and picking tidbits up from blogs and podcasts.

Additionally we have a huge suite of 50+ tools & resources that allow you to shortcut time spent.

Beyond getting lifetime access to the course material, you also get lifetime access to all of our support. Our forums stay open year-round, and our support staff are always available to help you, and you'll be able to join office hours live with Paula for all future YFRP cohorts as part of your lifetime access.

By the way, lessons are available on-demand so you can watch them whenever you want. The only aspect of the course that happens in "real time" is our Office Hours and Study Hall sessions. Both are recorded so that you can watch them later.

Yes! The best deals are found by building a team and investing out-of-state, which you'll be able to confidently do by the time you complete the course.

Yep!

You get access to all the current content, as well as to all of the updates that we regularly make to it.

Additionally, you get lifetime access to all of our tools & resources, our community, and our support.

Yep!

All YFRP students and alumni get lifetime access to all of our support methods and community.

You also get lifetime access to all of our tools & resources, as well as the course content, and all of the updates that we regularly make to it.

Yes. This course is designed for both local and out-of-state investors. Our only assumption is that you live in the U.S. and that you want to invest in residential rental properties anywhere inside the U.S.

Many of our students want to (or need to) invest out-of-state, and we have an entire section in our Find module for out-of-state investors. There are several in-depth lessons that show exactly how I researched Indianapolis before buying a duplex there.

Great question — the answer is a whole-hearted "yes!"

In fact, if you're not quite ready to invest yet, the course is arguably even more helpful for you than if you were actively trying to invest *today*.

Why? Two reasons:

1. Education and preparation pair perfectly with saving for a down payment. By the time you are ready to invest, you'll have a solid foundation of knowledge to serve you (and lifetime access to all of YFRP's education and support to keep serving you for years to come)

2. If you're a ways out from being able to actively start investing, it can be difficult to maintain excitement and momentum if you're going it alone. The weeks can bleed into years, and before you know it, a decade's passed and you still haven't bought your first rental. By joining YFRP before you're ready to invest, you get instant access to support and accountability to keep yourself moving forward.

Fun fact, we surveyed our students a couple years ago on when they plan to buy their first rental, and they said…

As you can see, most of the students in the course don’t plan on buying their first rental property right away. They joined because they saw the value in building a solid base of knowledge before they were ready to lay down the cash for a place.

Further, buying the right property is crucial to this process. Rushing to buy a property just for the sake of having one goes against everything I teach in the course.

Getting spared from buying the wrong property is as important — if not more important — than buying the right one.

Yes! The group pacing is an option, not a requirement, and you have lifetime access to the course. You’re welcome to revisit the lessons anytime you’d like, or re-experience the class with a future cohort.

Many students find themselves off-sync with the student cohort midway through the material, usually after they take a vacation or get busy at work — and that’s normal and expected. We call it “Turtle Power.” You’ll see.

Beyond getting lifetime access to the course material, you also get lifetime access to all of our support. Our forums stay open year-round, and our support staff are always available to help you, and you'll be able to join office hours live with Paula for all future YFRP cohorts as part of your lifetime access.

By the way, lessons are available on-demand so you can watch them whenever you want. The only aspect of the course that happens in "real time" is our Office Hours and Study Hall sessions. Both are recorded so that you can watch them later.

We've had many international students in the course who have had a fantastic experience learning the fundamentals of real estate investing. If you're international and you want to learn the principles behind how to analyze deals and become an intelligent real estate investor, this course will help you. But if you're looking for specifics about taxes or financing, we can't help. We can't tell you how to hire a contractor in Malaysia, and we don't know the specifics about banking or financing in Russia. However, what we cover at a high level, you can apply anywhere. 

Heitor, a student who lives in France, went through the course and still found it valuable. He says, "If your goal is to buy a house, wherever it is, for an investment, and you're asking yourself if there's any missing piece of knowledge today that blocks you from going and doing it, the course is going to help you clarify each and every point...You get a crystal clear vision on all of the process. And I mean it because I was somewhere else where the process is not the same, but the building pieces are still so well-structured, that you can still sit through and do all the parallels that are necessary to build the base to go on and just crush it." 

Here are my questions back to you.

First, how clear is your strategy? Do you have a clear plan for the number of properties you want to acquire, the cash flow and other profits that you want to meet for each property, the speed at which you'll make these acquisitions, and the metrics you'll use?

Second, how efficient are your processes and systems? Are you running a well-oiled machine with a strong team? Could you scale?

The answer to those two questions will shed light into whether you’re operating an efficient system that can continue to grow, in which case you don’t need any course, or whether you could benefit from structure, guidance, metrics, and systems.

That said, because Your First Rental Property is specifically aimed at beginners who are buying their first or second rental property, we DON’T recommend it for experienced real estate investors.

As the name implies (actually, as the name blatantly states), this is for beginners. Don’t enroll if you’re looking for overly-advanced strategies.

That leads to our next commonly-asked question ….

OMG give me a break.

There are no “secrets” shared in the course, and if any of those other “gurus” out there claim that they have “secrets,” they’re shady AF because that’s a gigantic load of baloney hogwash.

There are no “secrets” to real estate investing, just like there are no “secrets” to learning calculus or dental hygiene or trumpet playing.

You don’t take a class because the teacher will reveal (imaginary, nonexistent) “secrets.” You take a class because you want a guided, curated set of lesson plans that covers everything you need to know in logical, sequential order. You take a class because you want support and accountability from the teacher, the teachers assistants, and your fellow students. You take a class for access to the resources, spreadsheets, checklists, word-for-word scripts, email canned responses, and the business-in-a-box setup. You take a class for the quizzes that test your knowledge along the way and provide real-time feedback about your strengths and weaknesses. Duh, that’s what a class is.

That’s why you take classes in high school and college, and that’s why you take classes online.

You don’t take classes because someone is going to teach you the “hidden secrets” to anthropology or statistics or dog training. Right?

So please do me a favor and never believe anyone who claims that they’ll sell you a class that holds the “secrets to real estate success.” Barf. If anyone claims to have these, they’re spammy and they’re lying.

Okay, rant over.

Short answer: that's not what the course is intended for. 

Long answer: Maybe.

If you’d like to learn about how to find, analyze, finance and renovate those properties, yes. But if you’d like to learn about the management, staging, furnishing and advertising of those properties, as well as specific vacation rental-related tax and legal implications, no.

My philosophy on vacation rentals is the following:

Have multiple exit strategies. Buy a vacation rental only if it also makes sense as a traditional 12-month rental.

You can earn additional money using it as a vacation rental. But if for any reason you can no longer rent the property on a short-term basis (e.g. if your city council outlaws short-term rentals in your area), you can revert the property to a 12-month rental and still be okay. In other words, you minimize risk by finding a property that could satisfy both uses.

For that reason, the sections in this course on finding, analyzing, financing and renovating apply regardless of your use of the property. But the sections on tenant management would not.

We also don't cover the unique needs of a vacation rental owner, like how to resupply consumables, manage cleaners, monitor utility usage, and handle sales and occupancy taxes.

That said, quite a few students have purchased vacation rentals with the knowledge they gained in the course, but we're primarily focused on long-term, buy-and-hold residential real estate. 

Heck NO!! If you are financially struggling, please do not enroll in this course. If you’re stressed about bills and you’re in a tough financial situation, this course is not right for you at this time.

We recently surveyed our past students, and 48.18% of the respondents have already gone on to acquire one or more rental properties!

Some of our students enroll when they have immediate investment plans, and other enroll knowing they won't be ready for a year or more.

But for the ones that are chomping at the bit to get started, we've noticed that they tend to take the first 3 modules of the course immediately (Analyze, Find, and Finance) and then get started implementing and use the rest of the course as a reference as they need it.

(All students get lifetime access to all of the course materials and support)

It's up to you how you want to utilize YFRP; it's built to be a companion for you on your real estate investing journey, regardless of your style.

Build a team! This course shows you how.

Investing out-of-state (without traveling there) is common. It's been a time-tested practice for years. Many investors purchase properties from out-of-state, using the time and talent of their local team. We’ve been Facetiming, Zooming, and Slacking since before it was cool.

We teach you how to build a team of agents, property managers, inspectors and contractors who will be your eyes, ears and boots-on-the-ground … so that you never have to leave home.