ABOUT THE GUESTS

Your Money, Your Wealth guest Joel Larsgaard of the Pour Not Poor podcast
ABOUT Joel

Joel Larsgaard lives life on the cheap, but that doesn't equate to a boring existence! He loves helping people focus on frugality without giving up the things they truly enjoy. By day that passion plays out as a radio/web producer for the Clark Howard Show. That's also why he created the podcast Pour Not Poor with his best friend, Matt. [...]

ABOUT HOSTS

Joe Anderson
ABOUT Joseph

As President of Pure Financial Advisors, Joe Anderson has led the company to achieve over $2 billion in assets under management and has grown their client base to over 2,160 in just ten years of the firm opening. When Joe began working with Pure Financial in 2008, they had almost no clients, negative revenue and no [...]

Alan Clopine
ABOUT Alan

Alan Clopine is the CEO & CFO of Pure Financial Advisors. He currently leads Pure Financial Advisors along with Michael Fenison and Joe Anderson. Alan joined the firm about one year after it was established. At that time the company had less than 100 clients and approximately $50 million of assets under management. As of [...]

Published On
April 3, 2018
6 Things to Look For When Buying Investment Property with Joel Larsgaard6 Things to Look For When Buying Investment Property with Joel Larsgaard

Buying investment property: Joel Larsgaard from the Pour Not Poor podcast talks about drinking beer and simplifying your life to save money that you can put towards buying rental real estate. And, some things to drink about – er, think about – before you commit to that investment property. Plus, the best places to invest in commercial real estate, and why early retirement might kill you.

Show Notes

  • (01:17) Why Early Retirement Might Kill You
  • (09:44) Joel Larsgaard: Simplify Your Life and Save
  • (17:56) Joel Larsgaard: What to Look For When Buying Investment Property
  • (31:11) The Best Places To Invest in Commercial Real Estate

Transcription

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“One of my primary points that I make to people when they are thinking about buying something – make sure it’s something you would want to live in. I wouldn’t buy it if I wouldn’t live in it because I want to be able to know that I can attract the kind of tenant that is going to respect the property that I’m putting them in.” – Joel Larsgaard, Pour Not Poor

That’s Joel Larsgaard from the Pour Not Poor podcast. Today on Your Money, Your Wealth® he talks to Joe and Big Al about drinking beer and simplifying your life to save money that you can put towards buying rental real estate. And, some things to drink about – I mean, think about – before you commit to that investment property. Plus, the best places to invest in commercial real estate, why early retirement might kill you, and Joe reminisces about his experiences at a foam party in Mazatlan. Wait, what?! Here are Joe Anderson, CFP® and Big Al Clopine, CPA.

1:17 – Why Early Retirement Might Kill You

JA: So what, early retirement can cause death?

AC: Well, this caught my attention, Joe. Because now I’m 60, and it says, “why early retirement can be a killer.”

JA: What do they consider early retirement?

AC: 62.

JA: That’s early retirement or just early retirement due to Social Security?

AC: Yeah. Now, under the FIRE moment, financial independence, retire early, you could retire at 35 or 40. But no, this is, we’ll call it the baby boomers. And a lot of people pick their retirement age based upon Social Security. And there are three key ages. There’s 62, that’s the earliest you can take Social Security, then there’s your full retirement age which is age 66, where you get your full benefits, and then you can wait till age 70 and get even more benefits. So the sooner you take it, the less income you get for the rest of your life.

JA: Yeah, but then you look at, you got it at 62, so you had those lower dollars. Let’s say 62 to 70, I can have this income for eight years.

AC: Yeah, that’s right. And it depends, when you look at all kinds of analysis, depending upon when you take it – if you take it later rather than early, the breakeven point is somewhere around 80 years old, give or take, depending upon what assumptions you make.

JA: Yeah, you can run all sorts of crazy assumptions. “I’m going to take my Social Security at 62 and invest it in a tax-free bond getting 8%.”

AC: Right. We don’t find that happening too often but anyway, so this is the National Bureau of Economic Research. A couple authors did this study, and they found, Joe, that there’s an increase in mortality among men who retire at age 62.

JA: How many people did the survey?

AC: Doesn’t say. I’m just going to take this at face value.

JA: Because it’s probably 1000 people. (laughs)

AC: 5000. (laughs) But they’ve got two authors, one from Cornell University and one from University of Melbourne in Australia. They must be smart. But here’s what they found. They found that the increase in death rate is quite large, particularly among males who retire and claim Social Security at age 62. In fact, there’s about a 20% blip. In other words, for the average 62-year-old, and it doesn’t really go into how they measure it, I’m just going to assume that they kind of looked at maybe the next year. But there’s a normal death rate for a 62-year-old. And those men that retired and took Social Security at age 62, there’s 20% more likelihood that they’ll pass away.

JA: So how do they do that? So at the funeral, they’re asking, “hey, when did he retire?” (laughs)

AC: Yeah. They got all the mortuaries and they just go around these funerals. (laughs)

JA: They read the obits. (laughs)

AC: And I guess they, I’m not a statistician…

JA: Or an economist.

AC: Yeah, clearly. (laughs) But this article basically says that this is not a fluke. This is not a statistical fluke. So I’m going to take that at face value for right now. And then they try to figure out, well why is this happening? Because it’s not so much in women, it’s men. And here’s what they say. This is circumstantial evidence, so this isn’t scientific, but this is what they came up with: that that male retirees become sedentary. They often watch more television. They often drink more alcohol. They often smoke more tobacco.

JA: There you go. That sounds like a great retirement. (laughs)

AC: (laughs) Where do I sign up for that?

JA: Can I retire tomorrow? (laughs)

AC: Furthermore, unlike women, they appear to have fewer social interactions when they stop working. And I’ve seen that in the men and women that I know. And you and I, Joe, I think most of the people that we know well we work with. And then once we stop working, it’s not that that relationship is severed. But you don’t have that constant contact anymore.

JA: And I think at any age, let’s say if I go to a house party. I’ll talk to two or three guys. You know what I mean? Like your close-knit friends. And then you see, let’s say if I bring a date, she’s talking to like 30 women. And they’re going crazy!

AC: And they’re exchanging their e-mail addresses, cell phone numbers. “Let’s get coffee together. Glass of wine.”

JA: I’m like “this guy’s kind of a… get me the hell outta here.” (laughs)

AC: (laughs) Are we too judgmental? Is that the problem?

JA: I don’t know.  think maybe we get stuck in our ways a little bit differently.

AC: Yeah maybe. So anyway, so I guess I won’t be retiring at 62. Because I don’t necessarily want to sit on the couch and watch television and smoke and drink. (laughs) I’ve never smoked, so that doesn’t really sound very appealing. I do like a beer every now and again.

JA: Yeah. Because it’s Saturday every day. And so when it’s Saturday it’s like, yeah, I could have a couple cocktails because tomorrow’s SundayThere are no real huge responsibilities. But then all of a sudden if it’s Tuesday yeah you’re sitting at the bar at noon… (laughs)

AC: Something’s wrong. Although I do know when I go on vacation, and Someday when you actually go on vacations, you’ll notice that you did drink more on vacations. (laughs)

JA: Yeah right. That’s why I don’t go on vacation, Al. (laughs)

AC: (laughs) It would be too tough on your body.

JA: But I think that’s a good point, that people have to take a look at. The softer side of retirement is that we spend a lot of time on the show on taxes, talking about money. Do you have enough money, how do you create the income, Social Security, everything else. But if you have all the money in the world and you’re sitting on the couch watching reruns of The Family Feud, you know? (laughs)

JA: Yeah, one of our clients I saw about year ago, I was riding up the elevator with them and, “hey, how’s retirement going?” He said, “a lot different than I thought.” He was about a year into it, and I said, “oh, why is that?” He goes, “well, my wife and I love to play bridge. And I thought we’d be playing all the time, but she has these bridge groups, they’re mostly women, so I’m not really invited to them, and I’m just – there’s nothing to do.” So he thought he’d be playing bridge with his wife, and she’s thinking oh no way. I got my own friends. We’ve been doing this for years. (laughs)

JA: You’re not invited to the club. (laughs) Poor guy. I think it’s just looking at before you retire, of course, you want to make sure that you do have enough capital to maintain the life that you want. But also, start writing things down and what you want to do, what you want to accomplish, what your social circles going to look like and everything else.

AC: And I would say even taking it a step further is start that before you retire. So it’s like let’s say you love to play trumpet. (laughs)

JA: (laughs) Oh my god we gotta take a break.

AC: So if you want to play trumpet then why don’t you get involved with an orchestra.

JA: Get in a band, join a marching band. (laughs)

AC: Well I say that because my dad loved to play French horn, and he actually did get in some bands while he was working, which continued when he retired. So Joe, do you play a trumpet? I said trumpet because that’s a cool one.

JA: It’s cool.

AC: I could see you doing that. Or saxophone, ever played a sax?

JA: Nope, not musically inclined.

So Joe doesn’t play any musical instruments and he doesn’t go on vacations – sounds like a fun guy, eh? We’ll learn more about Joe’s vacation experiences later in the show. In the meantime, if you already know how you plan to spend your time in retirement, it’s time to make sure you’re ready for retirement. Learn little-known secrets about controlling your taxes in retirement, and preparing for market volatility, increased longevity, rising healthcare costs and Social Security uncertainty in retirement: visit the white papers section of the Learning Center at YourMoneyYourWealth.com and download our free Retirement Readiness Guide. It won’t cost a dime to learn strategies that’ll make your money last a lifetime. Download the Retirement Readiness Guide from the White Papers section of the Learning Center at YourMoneyYourWealth.com.

9:44 – Joel Larsgaard: Simplify Your Live and Save

JA: Alan. It’s that time of the show, bud.

AC: It is and we’ve got a special guest today, because he not only likes financial planning, investing, things finances, but he likes beer.

JA: Which you and I both enjoy.

AC: Both of those.

JA: It’s Joel Larsgaard. That’s an awesome name, too. It’s like a Viking. (laughs)

AC: It is, Larsgaard. (laughs)

JA: Joel, welcome to the show my friend.

JL: Thanks for having me guys. Don’t worry, I won’t go too crazy Viking on you. (laughs)

JA: Well so your podcast is called Pour not Poor. So what is the genesis behind this?

JL: So really the genesis behind it was I love drinking beer and I love talking about money, and my best friend Matt loves the same. And so at least once a week, we have this excuse to tell our wives that we could, “you know what honey, we’ve got to go do this podcast.” And really it’s just an excuse to talk about what we love and drink a good beer. So that was the genesis behind it, and really, Matt and I love talking about money, talking about real estate, talking about helping people save money. And so every week, we get to drink an awesome beer and do we love, and we’re building this awesome community of people that love the same things we do.

AC: Yeah you drink the beer right on the podcast right?

JL: Yes. We tell people what we’re drinking. We kind of talk about it a little bit, and we drink something new and different every week. And that’s really fun.

JA: What are you drinking right now? (laughs)

JL: Well so, I’m not opposed to starting drinking early in the day, (laughs) but today it really a little too early for me.

JA: So what what kind of beers? I don’t want to talk about finances. Let’s talk about beer. (laughs) Because Joel, you probably won’t like me, because I’m just kind of the Coors Light kind of guy. So maybe you can change some of my tastebuds.

AC: Yeah, enlighten Joe.

JL: All right, well we can still get along, and I can take you out drinking, and we’ll find something else that you enjoy. I’m really into IPA’s, sours, barrel aged stouts – I run the gamut. I’m a huge fan of craft beer in general, and I wanted my life to be involved in the craft beer scene in some way or fashion, maybe run my own brewery one of these days. But for now, at least, drinking craft beer and talking money on a podcast is where it’s at. But yeah, I like really beer that runs the gamut.

JA: You know we are in Southern California. You are in Atlanta, Georgia correct?

JL: Yeah that’s right.

JA: And in Southern California craft beer is pretty popular.

JL: You’re pretty much in craft beer heaven.

JA: Yeah you should have came here instead of this Skype interview, you should’ve just came in the studio.

AC: Yeah, we got Ballast Point, we got Stone, we got all kinds of stuff out here.

JL: Man, I screwed up. I’ll come there in person for the next interview.

AC: So Joel, I will tell you, I love craft beer as well. But you being an expert maybe you can give me a tip – because when I drink, maybe, more than two craft beers I get a headache the next day. Is there a way around this or is that just my genetics?

JA: Well, just stop being an alcoholic. (laughs)

AC: (laughs) Yeah maybe don’t drink ten of them.

JL: Well you know, the guy that founded one of the first craft breweries in the nation, the guy that founded Sam Adams, his name is Jim Koch, and he would eat a ball of yeast, essentially, before going into his day of having to taste test beers. So that would kind of sit on his stomach and absorb some of the alcohol. I don’t do that. Usually I just kind of limit myself to two. (laughs) If I go beyond that two, I get a head ache. But apparently, there are ways around this. There’s this drink called Biolyte, which is like Pedialyte for adults, and apparently, that helps. But I don’t drink enough.

AC: Joe, I think I think that’s the key. Just drink two.

JA: Well wait a minute, what’s this? Biolyte? I’m learning something! (laughs)

AC: (laughs) You need to get some! Well anyway, I guess we should talk some finances. So you’ve got this podcast, and how long has it been going?

JL: So we’ve been around for about three months now.

AC: And you talk about investment properties, you talk about saving money, you even talked about simplifying your life, right?

JL: Yeah we run the gamut, we really, ultimately we want everyone to live a rich, rewarding life and be conscious about the choices they’re making so that their life reflects their values. And I think – I mean, you guys know this – there’s just a lot of people that sleepwalk through life. They don’t stop to think about, “hey, what do I want to get out of this life?” And you’ve only got one. So be thoughtful about it, be intentional. Money is the number one thing that’s going to influence that in so many ways. And so you want to make sure you got your money house in order.

AC: So I want to talk to you about simplifying, because I just went on a trip to Chile, and I was drawn to the people – they were living a much simpler life than I was, and they were very happy. So what tips can you give our listeners on simplifying their life?

JL: Yeah, I think the first thing is live in a smaller space. I think that the easiest thing you can do – it’s less clean, it’s less to maintain, it’s less money every month that comes out of your paycheck to go towards a mortgage payment or towards rent. So I think if you can simplify by living in a smaller space. If you look at the numbers the way they’ve gone over the last 30 years, we’ve upped our home sizes by an insane amount in the United States. And so my family, we’re a family of four, we live in a two bedroom, one bath house. And it’s essentially a duplex and we rent out the back of it. And for us, that just makes a lot of sense momentarily, and it makes a lot of sense lifestyle-wise. We spend a lot of time together, we hang out, and I think the larger your house gets, the more out-of-control you can feel, because there’s more to heat and cool, there’s more to maintain. And then it just costs more money every month, too.

JA: I can attest to that.

AC: Yeah, you and I have four bedroom homes.

JA: I have five. I grew up in a one bedroom house – er, two bedroom. And there was my mother and father, and then my brother and sister – so there was three of us, so my dad made a bedroom out of the attic. But it was really small. But we always spent a lot of time together, we had dinner as a family every night. It was a very close knit family, I’m very close with my mother, I’m very close with my siblings. My father passed, but now, I don’t know – maybe I went the opposite. I was like, “I’m single, and I’ve got a five bedroom house. What the hell am I thinking here?” But I can just see that if you have a family and you’ve got a larger house, you probably never see your kids.

JL: Yeah, I think that’s the beauty of a smaller house. My two girls, they share a room and we’re always there when they’re playing, they’re in either the dining room or the family room. And those are the only other two rooms in the house besides the bathroom and the kitchen. And so we’re constantly up in each other’s grill, and maybe when they’re older I’ll hate that, I don’t know. (laughs) But right now it works out really well for us. And I think too, another thing – simplify your car, simplify your commute. People don’t think very hard about where they live and where they live in relation to where they work. And the more time you spend in the car, the more time you spend on the road commuting – first off, traffic’s a pain. I hate traffic. You guys live in Southern California, I live in Atlanta, high traffic cities – so I hop on my bike, and I bike to work a lot. And that typifies my mind as well as simplifying my life. Just have less need of a car and it can bring down the cost of owning a car at the same time.

Education is another great way to simplify your life. Why reinvent the financial wheel when the knowledge and expertise of others is freely available for you at YourMoneyYourWealth.com? Access our previous podcast interviews, educational video clips from the Your Money, Your Wealth® TV show, as well as white papers, articles, webinars and hundreds of videos on tax planning, investing, retirement planning, Social Security, estate planning, small business strategies and just about any other personal finance topic that affects you. Check it out at YourMoneyYourWealth.com. And if you can’t find what you’re looking for, just email us your money question at info@purefinancial.com.

17:56 – Joel Larsgaard: What to Look For When Buying Investment Property

Welcome back to the show, the show is called Your Money, Your Wealth. My name is Joe Anderson, Certified Financial Planner, Big Al Clopine, he’s a CPA. Thanks so much for tuning in. We’re talking with Joe Larsgaard. It’s an interesting podcast it’s called Pour not Poor. You know, speaking of small homes, I did live in a very small home when I graduated college. I did live in Atlanta for a small stint. I went to the University of Florida, and I lived in the Darlington. I don’t know if you’re familiar with the Darlington.

JL: Yeah, of course!

JA: Yeah, right across the street from the Piedmont Hospital there. I think it was maybe 200 square feet. I could barely fit in it. I could open up my fridge, flush the toilet and open the door all sitting in one spot.

AC: And were you happy back then?

JA: I was so happy. (laughs) I was so happy, and I got notices every day, please don’t eat the paint chips because there’s lead. (laughs)

JL: Well it is amazing right, when you think about the good old days. Life was simpler then, and the older we get, the more we think we need, the more we think we need to work, and all these things – I think work is a good thing. On our podcast, we talk about work. I think it’s an uplifting, it’s a beautiful thing, and it’s a necessary thing. But in America, we’ve taken work to a new level. And I think when you look back at “the good old days,” usually it meant more time with family, more time with friends, smaller spaces, just more time to hang out and build relationships and build community. And I think that’s really important, and something that as a whole in our culture, we’re kind of missing right now.

JA: Speaking of real estate, so how did you get into real estate investing? Big Al over here, he’s a real estate investor. What are some things that got you motivated to start being a real estate mogul here?

JL: The thing that initially prompted me to want to be a real estate investor was, I wanted my wife to, if she wanted to, to be able to stay at home instead of working when we had kids. And I thought, man, real estate. It’s like passive income. Essentially it’s going to provide a secondary job, so we don’t have to be a two income family, and we can still live the lifestyle that we want. And so we started investing in real estate. And the way that we did it, we would live in a house for two years, and then we would move into another one as our primary residence and rent out the prior house. And so at this point, I have three rental homes, and like I said, we rent out a small portion of the home that we live in currently too. And just every two years, slowly but surely I saved up 20% down to put down on the next home and rent out the prior house. And they’re all in a really small vicinity around where I live so I can keep tabs on them, I can even mow the lawns myself, so I’m kind of like one of those down-home, small time landlords, but it’s really fun and it’s been really big in allowing our family to live the kind of life we want to.

AC: So what are some of the tips you might give our listeners on what to look for in a rental, or what are some of the rules of thumb?

JL: So I think for me there are three things. It’s very location dependent, but for me, I look for three particular things: I want to buy a house that’s undervalued. The person that’s selling it doesn’t know exactly how much it’s worth, doesn’t know this neighborhood is up and coming, things are changing, and they have priced it too low. The second thing – the neighborhood is up and coming. I want it to be a place that is going to appreciate. And I think most landlords don’t think enough about the appreciation factor. Depending where you’re living, you might not be able to think about the appreciation factor, you might be in a small town somewhere, and appreciation is just really slow. Where I live, that’s something I do focus on, and I know the area well enough that I’m not being speculative, but I’m buying a house because I know that this house is going to go up in value, because the area is highly desirable. And the third thing, I want to meet the 1% rule. So if I am buying a house that cost $100,000, I want the monthly rents to be a minimum of $1,000 a month. And so if I hit all three of those rules, buying something undervalued, making sure it’s a hot part of town that I think is going to continue to trend upwards as a quick growth rate and then meeting that 1% rule, I’m happy.

AC: Yeah I think those are really good rules. I will say, in Southern California, it’s pretty hard to get the 1% rule – because I’ve tried for 30 years and I don’t think I’ve ever found one. And my rentals are actually in Phoenix as a result of that. (laughs) Which I’m not necessarily recommending, because it’s really better when the properties are near your home so you can check up on them more often. But the cash flows, when I was buying rentals, if you got half a percent you were lucky.

JL: Yeah I think it depends on what kind of landlord you want to be. I think there’s a lot of people I know and that I respect out there that have rental properties in completely different parts of the country and it works really well for them, and they’re buying purely based on the numbers. For me and for my lifestyle, I kind of want it to be local, I want it to be small, I want it to be manageable. I just kind of build slowly. And I think maybe at some point I’ll be willing to jump into something a little bit bigger. I’m actually kind of currently looking at a nine-plex that’s not too far for me, because the numbers make sense, and I think I’m ready to get into something – just a little bit bigger pond when it comes to real estate. But for the most part, yeah, I personally like buying local and being able to lay my eyes on those properties every week or two.

AC: Yeah I think that’s important. And so talk about why you would go from, say, a single family home to an apartment. What are some of the advantages?

JL: Well the advantages are you’ve got some economies of scale going on there. There’s one lawn to mow. And when I show up at the house, I can get a lot of work done on multiple units in one day as opposed to driving all over town. And getting one loan at this point on a nine-plex would would allow me to do a lot of cash flow, basically in one transaction. So you’re going to get a different kind of tenant, you have to know what you’re getting into. I’m very particular about the properties that I’m looking at, especially when it comes to multifamily. That’s why I haven’t jumped yet. You have to be really, really careful to know what you’re getting into and know that the area and the property type is something that the kind of clients you’re trying to attract, the kind of tenant you’re trying to attract, are going to want to live in.

JA: But I think you’ve got to look at a few other things too. What are your ultimate goals? Are you looking for income? Are you looking for growth? We get a lot of people that say, “I want to buy a rental property for the tax benefits.” But there is no tax benefits because you make too much money. They’re phased out.

AC: And we have other people in Southern California that say, “I’m buying for cash flow,” and we actually know that, yeah, that’s actually one of the most important things I would say – make sure it cash flows at least decently. But in terms of in San Diego, in Los Angeles, the cash flow that you can get relative to the equity is not great. And so the way that these tend to work here is appreciation – although you can’t necessarily count on that, because you may buy at the wrong time in the market. But that is how a lot of people make money in real estate in California.

JA: Right, but that’s what blew people up too, because then they’re leveraged. They’re not making the cash flow, and then the market turns, and it’s like, “OK, now I have all these properties. The cash flow doesn’t work. I bought it for appreciation and the tax benefit. I don’t even get a tax benefit unless I sell it at a loss, and I’m underwater.” So I don’t want to paint the picture that it’s all rainbows and flowers, that there’s the other side of putting in the work. It’s almost like you’re a small business owner. Big Al tells the story of one of his rentals and the guy had parked a Harley Davidson in it.

AC: In the living room on my new carpet. (laughs)

JL: Oh, that’s tough times right there.

AC: Yeah. And that was me being a new landlord and not even getting enough rent. Yeah, the whole ball of wax.

JL: And I agree, I think there’s smart use of leverage when it comes to buying real estate, and there’s dumb use of leverage when it comes to buying real estate. I think if you’re going to buy a primary residence and not put 20% down, in my opinion, you should either put 20% down, or you should have a way to make sure that that property is generating income for you too, as opposed to just being a line item that’s negative against your net worth. I don’t like the idea of getting a 3.5% FHA loan on your primary residence, and then not making any money from it. I think the beginning of all of these things is frugality, is moving slow, is knowing what you’re investing in. A lot of people don’t take the time to know their market, to know the streets. Because you know real estate. It’s so hyper local. You need to know the streets, you need to know, what are the plans for that downtown area just around the corner over the coming years? Is it going to be built up, are there going to be massive changes? And so, you need to know your local market so well. And one of my primary points that I make to people when they are thinking about buying something – make sure it’s something you would want to live in, because if you’re buying something that you wouldn’t live in, like that for instance this nine-plex. I totally would have lived in it as a young professional. But I wouldn’t buy it if I wouldn’t live in it, because I want to be able to know that I can attract the kind of tenant that is going to respect the property that I’m putting them in.

AC: Yeah, I think that’s good advice. And I think you are right when you say real estate is very local, because every market’s a little bit different, and I think where you’re at, if you can buy homes cheap enough to get the 1% rule, I think that’s ideal. Because then you can kind of weather almost any economy. Although, I had some less expensive homes in Phoenix, and I would say during the Great Recession, when even though it penciled out when I bought it, but all of a sudden then the rents went way down, because people couldn’t afford them. And therein lies part of what you just said, is not get too much over leveraged. Maybe make sure you’ve got some equity in it. You’ve got some cushion in case things go wrong. Because when I was a young CPA in my 20s, I realized the people that I saw as clients that were making money, either had a business or they owned real estate. But I also saw the people that were the poorest had a business and real estate. So you just have to be careful.

JL: Yeah it’s true. There are so many people and there’s so many ways to buy real estate with very little money, and that’s gotten harder through the years since the Great Recession. But it’s still possible to put very little down, and to buy a piece of property to buy a house – and you just have to be really care. And it begins with frugality, and it begins with knowing your market, and not taking on more than you can bite off. And that’s why, for instance, the primary house we’re living in, we rent out part of it. Find other streams of income, make sure it can work, not just if the numbers hit perfectly if it stays rented out 100% of the time – you have to be realistic, and realistic about where rent prices are going too.

JA: Hey Joel, we’re wrapping up here. It is the weekend. Give our listeners a couple of recommendations on some tasty beverages.

JL: All right, so I’ll pick a few national breweries so that you can find it in your local grocery store. Matt and I drank recently on the show a New Belgium Voodoo Ranger IPA, and it’s their take on a New England style IPA, which is like super hot right now. It’s super juicy, it’s tasty. It’s easy to drink. You know, I think both of you guys would enjoy that one, so check that one out.

JA: It’s called Voodoo?

JL: Voodoo Ranger.

JA: I don’t know if I can drink anything with the name Voodoo in it.

AC: You gotta try it, you gotta branch out. It’s not gonna say Coors Light on it. (laughs)

JA: Voodoo Ranger. What else. Got one more for me?

JL: Yeah I love IPAs from Stone. That’s where you guys are at, right near Stone. I love what they’re doing. And so many good beers in Southern California. My personal favorite brewery over there is Modern Times, those guys are awesome.

AC: I would agree with you on that.

JA: Never heard of it. (laughs)

AC: I’ve had several. But if I have more than two I get a headache. So that’s what I gotta work on. (laughs)

JA: Talking to Joel Larsgaard. Hey Joel, where can people check your blog, check your podcast out?

JL: So you can check us out at PourNotPoor.com – p-o-u-r like you’re pouring a beer. And you can listen to our podcast where you’re checking this podcast out, Apple Podcasts or any app you use to find your podcast.

JA: That’s Joel Larsgaard. That was awesome, brother. Thank you so much.

Southern California, there are plenty of ways to learn from our team in person at our free monthly Lunch ’n’ Learn events, or at our two-day retirement courses throughout Southern California. Get the tools and confidence you need to help you plan the retirement you’ve always dreamed of, in spite of market volatility. For dates, times and locations for our free Lunch n Learn events – lunch included – or our retirement classes in San Diego, Orange County or Los Angeles, just visit The Learning Center at YourMoneyYourWealth.com or call (888) 994-6257. That’s (888) 994-6257.

31:11 – The Best Places To Invest in Commercial Real Estate

AC: I had a follow up point, because we were talking about real estate investing, and I happened to see this last week. It’s an annual report from a commercial real estate firm called CBRE. They did a survey of multimillion dollar investment groups, from insurance companies to pension funds, and they asked where are they investing and why? And this was anywhere, it could be worldwide. And San Diego came in at number 11 of investment places worldwide.

JA: But they’re buying commercial.

AC: Yeah exactly. Yeah but I can tell you, if people are excited about commercial, there’s usually residential opportunities as well for the smaller investors. But the reason why CBRE thinks investors are drawn to San Diego is because of a low vacancy rates, and a diversified economy, and the fact that there’s not a lot of new development sites for office and industrial, which tends to translate to higher rents and higher profits. Which is not as good if you’re a renter, but if you’re an investor, it can be pretty good. And Joe, why this matters is that “real estate investing tends to pump money into the local economy from construction of a new building, or or maybe even buying an old structure and fixing it up,” says Chris Thornberg.

JA: Oh really?

AC: Economist and founding partner Beacon Economics – and we’ve had Chris on our show two or three times, and we have him sparingly, because we end up looking so dumb when we ask him questions.

JA: Yeah, he doesn’t want to come back on the show. I’ve asked. (laughs) No, he would like to resign from his guesting indefinitely. “Please never contact us again.”

AC: Well every single question we have to ask Chris, it goes something like this: “Well, I’m probably going to sound stupid,” which we could just say, “I am going to sound stupid.”

JA: Well, one time I didn’t say that, and I just said, “well, what do you think of this?” He goes, “that’s the stupidest thing I’ve ever heard.” (laughs)  OK. All right. Good chat.

AC: (laughs) I remember one time I said, “so now that we have a deficit of $20 trillion…” He goes, “Al, the deficit is the annual amount, the debt is…” OK, you’re right. I actually have never made that mistake since then. On live radio.

JA: Well yeah, we learned things. I learned about a couple of things today. The Pedialyte for men, or for adults. (laughs)

AC: (laughs) And you learned what beers to buy?

JA: And Voodoo Ranger, might have to try Voodoo Ranger.

AC: Now just if you’re curious, in this study, the best place to invest is Los Angeles. Second year in a row. Followed by Dallas/Fort Worth, New York City, Seattle and San Francisco. And also near the top was Phoenix, Minneapolis, Montreal, Toronto, Mexico City.

JA: Have you ever been to Mexico City?

AC: No I never have. Have you?

JA: No.

AC: I’ve been to Tijuana. I’ve been to Cabo San Lucas and I’ve been to San Felipe. And Ensenada. And Rosarito. (laughs) That’s where I’ve been. How about you?

JA: Tijuana. And then I went to Cabo a long time ago. And I had an awful spring break in Mazatlan.

AC: Why was it awful?

JA: I dunno, just wasn’t great.

AC: Wasn’t your cup of tea?

JA: I dunno, I was 40. Going on spring break with high school kids –  no, I’m kidding. (laughs)

AC: It was last year?

JA: I just got back. (laughs)

AC: (laughs) Oh that’s where you were last week? OK, now I get it.

JA: Yeah, high school spring break, it was a lot of fun. (laughs) No, it was a long time ago, and I don’t know. It just wasn’t my thing, I guess. Foam parties – I’m not into foam parties.

AC: I’ve heard about those, I’ve never been to one.

JA: Oh, it’s awful. I guess I could’ve not gone to the foam party.

AC: Is that where they turn the lights out and you’re walking through foam?

JA: They just pump out this foam and then you’re wet and your whole night is shot, people are doing something in the foam. It’s gross, get me the hell out of there.

AC: So you’re not into the foam thing.

JA: Not really in the foam parties. And so we were in this all inclusive place that was kind of dumpy, and then they would play these bingo games. And it would hit “number 69! My favorite number!” (laughs) Oh my God. That’s all it was for like 3-4 straight days, just hearing this guy yelling in a megaphone about how 69 was his favorite number. So that stuck with me.

AC: That’s so funny. So very original. ‘Cause I was going buy an all expenses paid vacation with a foam party in Mazatlan. (laughs)

JA: (laughs) Oh yeah, let’s do it. Let’s go to a foam party.

AC: I’m not sure. I think I’m too old for a foam party.

JA: Yeah, I think everyone is too old for a foam party. I’m pretty excited there, Clopine, because one of my favorite shows coming back, season 3. Billions. Have you seen Billions?

AC: No. (laughs) I don’t want to watch as much TV as you do. (laughs)

JA: (laughs) I watch like a couple of shows, what are you talking about? What do you watch? You got any recommendations for our listeners here, of what they should be watching?

AC: Yeah what do I watch? I like The Voice. I watch that. I like Stranger Things.

JA: Oh, I’ve never seen it, all right!

AC: See?? Stranger Things? You’ve not seen Stranger Things??!

JA: I wanted to! That’s impressive, Big Al! All right, Stranger Things. That’s like The Goonies, but it’s 80’s or something?

AC: Yeah, it is. It’s kids and their supernatural experiences, and it’s actually pretty good. I’m halfway through season 2 right now.

JA: I’m watching Crashing. It’s about a stand up comic. It’s pretty good. Do you have HBO Go?

AC: I do. I can watch all that stuff.

JA: Spend a half an hour.

AC: You know I’ll forget that, so text it to me. (laughs)

JA: Yeah, I’ll text you. All right. That’s it for us – for Big Al Clopine, I’m Joe Anderson, the show is called Your Money, Your Wealth®.

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So, to recap today’s show: some things to look for when you’re buying rental real estate would be an undervalued property in an up and coming neighborhood. If you can’t ask 1% of the purchase price as the monthly rent, make sure the property at least cash flows decently. Know the local area, and finally, make sure the property is someplace you yourself would want to live, so you can attract tenants like you. If you’re a man and you retire at 62, try not to sit in front of the TV smoking and drinking your retirement away. Actually, that applies to all of us, not just early retirees. We only have one life, let’s make the most of it. If we decide a foam party in Mazatlan is on our bucket list, who is stopping us?

Special thanks to our guest, Joel Larsgaard from Pour Not Poor. Check out his podcast and his blog at PourNotPoor.com

Subscribe to the podcast at YourMoneyYourWealth.com, Apple Podcasts, or your favorite podcatcher. And hey, have you seen those ratings and reviews on iTunes? Gotta love it. If you’ve got a burning money question for Joe and Big Al to answer live on Your Money, Your Wealth, just email info@purefinancial.com, or call 888-994-6257! Listen next week for more Your Money, Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.