Michele Cagan > Quotes

“investors who pay attention to the economy can be more successful because they can take advantage of impending changes. While everyone else is focused on what’s happening right now, economically savvy investors can focus on what’s coming”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“To track your money, write down or digitally capture every dollar you spend for one month. Include everything, from your $1,800 mortgage payment to the $4 coffee you grabbed on your way into work. Here, savings counts as an expense, so remember to include any money you put into a savings or retirement account (unless it was taken out of your paycheck—don’t include that). Record each expense regardless of whether you pay by cash, check, debit or credit card, automatic payment, or online transfer.”
― Michele Cagan, Budgeting 101: From Getting Out of Debt and Tracking Expenses to Setting Financial Goals and Building Your Savings, Your Essential Guide to Budgeting

“The key to true wealth is putting your money to work for you. Practically speaking, that means spending money on income-producing assets that will supply cash and continue to grow in value over time. The most common assets used to build wealth include: • Stocks • Bonds • Real estate”
― Michele Cagan, Budgeting 101: From Getting Out of Debt and Tracking Expenses to Setting Financial Goals and Building Your Savings, Your Essential Guide to Budgeting

“Many new investors, eager to see quick profits, need to develop the patience and research skills necessary for successful long-term investing.”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“Diversification, the easy accessibility of funds, and having a skilled professional money manager working to make your investment grow are the three most prominent reasons that mutual funds have become so popular.”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“the utilities and services sectors tend to perform well during an economic downturn; and as that downturn segues into a full recession, the technology, cyclicals, and industrial sectors will start to flourish. As the economy begins”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“To create a budget that will help you meet your goals, you first have to figure out what your goals are and define them.”
― Michele Cagan, Budgeting 101: From Getting Out of Debt and Tracking Expenses to Setting Financial Goals and Building Your Savings, Your Essential Guide to Budgeting

“Learning is earning.”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“Eleven Questions to Ask During your interview with any prospective property manager, make sure to cover all of these key questions: 1. How long have you been managing properties? 2. What types of properties do you manage? 3. What licenses and certifications do you hold? 4. Do you have a thorough understanding of landlord-tenant law, including fair housing practices, eviction procedures, and safety codes? 5. How long does it typically take you to fill a vacancy? 6. How do you vet prospective tenants? 7. How many tenants have you evicted in the past six months? 8. What services do you provide? 9. What are your fees and how are they charged? 10. Where are the property funds held and how are they handled? 11. How often do you perform property inspections and do preventive maintenance?”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Many real estate investing clubs assign roles to members based on their personal background and abilities. Those responsibilities could include: • Keeping club records • Bookkeeping and taxes • Property maintenance • Tenant management • Member communications • Scheduling meetings • Representing the club at closings • Researching potential investments By keeping these jobs “in-house,” the club can direct more funds toward building its real estate portfolio or increasing equity.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“The 70 percent rule is a guideline to help real estate investors make the best deals. According to this rule, the purchase price shouldn’t be more than 70 percent of the after-repair value (ARV, how much the house should sell for after all the repairs are made) minus the total cost of those repairs.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Amortization is a method used to calculate the principal and interest portions of payments on a mortgage loan based on the current loan balance. As the loan balance decreases, the interest portion shrinks and the principal portion grows. In partial payment situations, the interest portion always gets paid first.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Every cycle has four phases: expansion, peak, contraction, and trough.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“To get this special exemption from the passive loss rules, you (or your spouse) have to meet both of these requirements: 1. Spend more than half of your total working hours for the year in real estate activities 2. Spend more than 750 hours in real estate activities where you “materially participate” (which means you are regularly, continuously, and substantially involved)”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“The TCJA also offers an added “bonus depreciation.” Before TCJA, business owners were limited to bonus depreciation of up to 50 percent of the cost of a new asset in the year it was purchased. Now bonus depreciation has been expanded to 100 percent and can be used for existing assets as well. I know it sounds like Section 179 and bonus depreciation are the same, but they have two very important differences: there’s no annual limit on bonus depreciation (unlike the $1 million limit under Section 179), and bonus depreciation is not limited to the profits (meaning it can create a net loss). These deductions can be tricky to maneuver, so talk to a pro.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“The first and most important rule of physical real estate investing—meaning you buy property—is to never purchase property in your own name.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“• Lodging REITs (e.g., Hospitality Properties Trust [HPT]), which hold properties such as hotels, resorts, and travel centers. • Self-storage REITs (e.g., Public Storage [PSA]), which specialize in both owning self-storage facilities and renting storage spaces to customers. • Office REITs (e.g., Boston Properties [BXP]), which own, operate, and lease space in office buildings. • Industrial REITs (e.g., PS Business Parks [PSB]), which own and manage properties such as warehouses and distribution centers. • Data center REITs (e.g., Equinix [EQIX]), which own data centers, properties that store and operate data servers and other computer networking equipment. • Timberland REITs (e.g., Rayonier [RYN]), which hold forests and other types of real estate dedicated to harvesting timber. • Specialty REITs, which narrow in on very specific properties such as casinos, cell phone towers, or educational facilities.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“The basic premise of 1031 exchanges is the asset swap: you’re essentially trading one asset for another. To qualify here, the assets have to be real estate and be “like-kind.” Here are some examples of real estate assets that you could swap and benefit from the 1031 rules: • Single-family rental property • Multi-family rental property • Apartment building • Office building • Strip mall • Self-storage facility • Hotel • Raw land”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“The most common certifications include: • LEED (Leadership in Energy and Environmental Design), an internationally recognized green building rating and certification system • HERS (Home Energy Rating System), a nationally recognized rater of a building’s energy efficiency • Energy Star, a US government-backed symbol for energy-efficient products”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Examples of publicly traded healthcare REITs include: • National Health Investors (NHI), which specializes in a variety of senior-related properties such as skilled nursing facilities and memory care facilities and has a yield of 5.01 percent. • Medical Properties Trust (MPW), which holds properties including women’s and children’s hospitals and community hospitals and yields 5.90 percent. • Physicians Realty Trust (DOC), which holds strategically located healthcare properties associated with hospitals or physician organizations and yields 5.25 percent.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“LTV stands for “loan-to-value,” a ratio that determines the maximum loan amount based on the value of the property. For example, if a property was worth $100,000 and the lender’s maximum LTV was 75 percent, the borrower could not get more than $75,000 of financing.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“When you’re ready to sell your rental property, you may be in for a very large windfall. That could produce a substantial tax bill, unless you take some steps to reduce that tax burden. There are three main ways to do that with rental properties: • Sell off some losing assets (like stocks that have plummeted) to offset the gain • Structure a special deal called a 1031 exchange • Turn the property into your primary residence for a couple of years before you sell”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Baby boomers own about 40 percent of homes in the US; that could lead to a sell-off of larger family homes as they downsize to maintenance-friendly condo-style properties, increasing the number of single-family homes for sale. More homes on the market could lead to a sharp decline in home prices—bad for homeowners but a benefit for real estate investors looking to snap up residential properties.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“A thorough flip budget includes: • Investment property purchase price and settlement costs • Loan costs (such as application fees, points, and lifetime interest) • Repair and renovation costs (based on estimates from experienced contractors) • Inspection fees • Staging costs • Selling costs (including real estate agent commission and other closing costs) • Professional fees • Insurance • Property and school taxes • Utilities • Income tax provisions”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“MBS are bonds that use pools of mortgages for collateral. The bond issuer buys up thousands of mortgages, and then repackages them into bonds. As payments are made on the mortgages, the bond issuer passes those payments through to the bondholders (minus their fee, of course). That’s why MBS are considered to be “pass-through securities.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“Then come the fees: virtually all interval funds charge a sales fee (or “front-end load”) when you buy shares, and those fees typically hover around 5.25 percent. So if you invested $1,000 in a real estate interval fund, you only end up buying $947.50 worth of shares (and paying a sales charge of $52.50). With most funds, you’ll also pay a redemption fee (usually around 2 percent) when you sell your shares. Interval funds also charge more in ongoing fees than managed mutual funds (and substantially more than ultra-low fee index funds). The ongoing expense ratios range from about 2.25 percent to more than 5 percent annually. So for every $1,000 you have invested, you could pay more than $50 in annual fees.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“From a strictly investment perspective, commercial real estate has several benefits over residential real estate: • More stable cash flow • Longer leases (usually five to ten years) • More opportunity for cash flow (more rental units than even a multi-family home) • Economies of scale (lower per-unit costs, like buying in bulk)”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate

“There’s an old joke about the key to success: Put aside eight hours a day for work and eight hours a day for sleep, but make sure they’re not the same hours.”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“The intelligent investor is a realist who sells to optimists and buys from pessimists.” —Jason Zweig”
― Michele Cagan, Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

“You can see how the stock price has performed over a variety of periods, the company’s earnings per share (EPS), how earnings compare to the stock price (the P/E, or price-to-earnings ratio), historical dividend payments, and much more.”
― Michele Cagan, Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate