In this episode of the Alchemist Nation Real Estate Podcast, I talk to Johnny Wolf who says that cash flow is trash flow but appreciation. He explains what this means and they have always advised their investors by letting them know that return on investment is king. When one looks at what it is going to do for his life like $ 100 a month and how many times you have to stack that up to get the freedom that people are promising, mostly the turnkey companies and entirely the whole real estate. He says that the ecosystem is kind of built around this premise that is not as powerful when it comes to building wealth like appreciation. He is not saying that go buy negative cash flow properties, that is a mistake which he has done like the properties he owns in Austin, Texas are negative cash flow which is challenging but as long as you break even like when you buy in areas that are appreciating super quickly that is how you’re going to make 6 figures. The amounts of months you have to stack up hundreds of dollars in cash flow to make 6 figures are years and years which is wrong to be a wealthy individual.
To listen to Johnny Wolff’ Alchemist Nation Real Estate Podcast on Anchor: #106 Alchemist Nation Real Estate Podcast W/ Johnny Wolff Who Believes in Appreciation Not Cashflow
When my business partner and I look at what he is saying like what is $100,000 a year looks like which may be equivalent to 80 units each going for $100. Those are a lot of units, a lot of management, a lot of time. I wanted to know what Johnny Wolf is looking out for appreciation, what properties is he suggesting for his investors to take, and also what properties should they takedown. He says that when it comes to helping their investors, they want them to be on the appreciation side, and focusing on appreciation is kind of speculative which is like the other methods. It is pretty obvious that Austin, Texas has appreciated 5% for the last 10 years and Kansas City will be 3% just as last year. Using those appreciation numbers to focus on the future based on trends is not difficult maths but it doesn’t take his background to that kind of stuff which is one of his bigger frustration with some sort of other real estate ecosystems.
I ask Johnny what is he selling right now, is it single-family or multifamily? what kind of asset class? He says that they help investors to buy single-family properties and convert them to co-living properties. His team does the analysis, they do a pro forma for you, they show you how much exactly you’re going to make, they do the full management too and in the end, they help you sell it on their market.
Johnny explains what co-living means because I heard him talk about it in terms of the asset class they have for their investors. He says that Co-living is roommate living managed by a company that has luxury packed amenities, they have yard care, do social events throughout the community, they do have an app where you can talk to people throughout. You can talk to your neighbor through the intranet provided, you can also transfer from any bedroom from any house near their cities to anywhere. It is really cool for average demos like 26-year-olds that are young professionals, not college students whose average credit score is in the 700s.
Johnny offers 3 pieces of advice to 20-year-old Johnny that will speed up his acceleration to success and happiness.
1) – In the end, the truth comes out depending on your time, effort, and hustle.
2) – Take risks sooner, travel more, and get out of the city to try something new.
3) – Get valuable business mentors.
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