When you buy an income property, you’re getting more than just a house.
For well over two decades, I’ve hammered home a concept that I call Packaged Commodities Investing.
When you look at a property, you need to determine whether it’s a house, an apartment complex, etc.
From there, you’ll realize that you’re actually buying two components.
One component is the land. And the other component is the structure sitting on the land.
Any house or housing structure you acquire is going to be made up of commodities. These same commodities are traded worldwide and are not indexed to any specific currency.
Commodities of this nature have intrinsic value. So if the Dollar, Yen, Euro or Peso were to disappear, people could still trade in concrete, glass, lumber, petroleum products, and steel. These are all ingredients of a house.
When you think about a house, you need to think about it as investing in commodities.
However, there is a key difference. Unlike commodities investors, who buy commodities on the mercantile exchange, we get to finance the packaged commodities included in this house for three decades with artificially cheap fixed rate debt that is tax deductible.
One commodity that all houses are made up of is lumber. Over the last few years, lumber prices have soared. According to the U.S. Bureau of Labor Statistics, the real prices for lumber were 37% above the historical average from 2020 to 2021.
As a result, lumber prices have placed upward pressure on new home prices.
Believe me, lumber is only just one piece of the puzzle.
Copper is another commodity that your house is made up of. Just open the walls of any property you own. You’ll find a lot of copper.
Copper prices have also witnessed significant upward surges in the last two years. According to sources like the International Monetary Fund, Copper prices reached an all-time high of $10,512 per metric ton last May, which represented a 130% increase since March 22, 2020.
In sum, my strategy is to use the components of rental real estate to invest in the commodities used for home construction.
By following this strategy of Packaged Commodities Investing, you gain ownership of important commodities such as concrete, petroleum products, wood, and other building materials. On top of that, you obtain the advantage of gaining leverage from the bank and tax advantages from the state.
Packaged Commodities Investing, isn’t some fancy jargon that I’m throwing around. I use it because the commodity products are packaged into a residential home as opposed to sitting in a warehouse. Moreover, these commodities that are packaged into real estate investments can effectively be rented out to tenants.
As an empowered investor, this allows you to buy commodity products while shifting the interest payments to a tenant. In addition, you’ll be hedging against inflation with fixed rate debt while also delaying tax payments through section 1031 exchange.
I teach the benefits of packaged commodities investing at the Empowered investor Inner Circle.
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- An exclusive community of proven investors who help each other with their investment projects and prevent avoidable mistakes.
- Monthly LIVE training with special guests on the latest investments and techniques that produce consistent cash flows.
- Frequent updates and articles on the real estate world so you’re up to speed on the latest happenings in this space.
- Insider access to my team so they can quickly answer your most urgent questions.
Rolodex of proven resources (contractors, electricians, plumbers, property managers, etc) so your real estate management venture operates smoothly.
And that’s not all!
Here are some bonuses that come with an Empowered Investor Circle membership:
Bonus #1: ONE year access to the Empowered Investor Inner Circle and then just $97/month for there on out.
Your first investment of $1298 will cover your access to the Empowered Investor Inner circle for a whole year!
Here’s what you’ll have access to:
Complete access to the Empowered Investor Inner Circle Community
1-on-1 support with our Investment Counselors for a full 365 days!
Monthly Zoom Meetings
I’m VERY active in the group so you’ll receive answers to your questions directly from me or many of our members who have been there and done it when it comes to real estate investing.
Bonus #2: Unlimited Access to Property Tracker ($397 value per year)
Property Tracker is a simple to use online tool. It will help you track and manage your real estate investments. This tool will allow you to easily plug in all of your properties’ data and measure how they perform.
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