Join our guest experts, Courtney Poulos, Gretchen Pearson, Liz Faircloth for this phenomenal session in our Wisdom Series.
“Wealth” means different things to different people. Are you interested in developing a stable investment portfolio allowing you to live with a sense of financial security and look confidently toward retirement?
Or are you interested in generating steady monthly cash flow over the top of your regular income, for an additional income stream to help you meet other financial goals and dreams?
The good news is investing in real estate can absolutely be a way to build wealth.
Depending on your threshold for risk and goals for retirement, real estate investing can be anywhere from a solid piece of your retirement portfolio to an aggressive opportunity to build substantial wealth.
Real estate is very stable, historically. Over time, properties tend to appreciate thanks to inflation and demand.
These three powerhouses shared their investment journeys, the different types of real estate investments, and tips on how to determine your comfort level with risk to help you decide if including real estate in your investment portfolio is the right fit for you.
We are blessed by these three powerhouses who are here to share their investment journeys, the different types of real estate investments, and tips on how to determine your comfort level with risk will help you decide if including real estate in your investment portfolio is the right fit for you.
Would you start by explaining the types of investment options out there?
Flipping, multifamily, building an ADU or guest house. You can literally buy for the short term return by adding value to an existing home by flipping, you need to check what the acquisition and return would be in the areas where you are searching. If you live in a city that has been seeing a hot market this year, perhaps look outside the city, or in other parts of the country, to see if there may be a profitable place to acquire and improve. Buying a multifamily comes with a different set of considerations - local rent control laws, for example, or airbnb restrictions. One thing I look for is what the difference between acquisition/holding costs are and the average airbnb rates per night in a particular area. You can use FHA financing for up to 4 units IF you intend to occupy one of the units yourself. Another possibility is converting a garage or building a guest house on your primary residence, this is a great option if you live in an airbnb friendly city. You want to make sure that you have control over the tenancy, too, particularly if you live on site and want to avoid a potential eviction situation.
What investing niche should we begin with?
Before choosing the real estate investing niche you want to focus your time and resources on, you need to answer a few questions that will help determine the RIGHT investing niche for YOU and your goals. The most important question to begin with is "why" real estate investing? There are a lot of ways and strategies to make money, so you need to answer the WHY question. Once you answer it, it is imperative to become emotionally connected to the answer. If you answer "just to make money" that might not be significant enough when faced with challenges. The next question to ask yourself is "what are your current money goals?" Are you looking for recurring income each month? Are you looking for chunks of cash? Are you looking to supplement your income or replace your income? Are you looking to passively or actively invest? These are critical questions to begin to answer and gain clarity with before jumping into a niche. Once you have gained clarity with these questions, the next area to answer for yourself is your strengths and interests. Everyone has something to bring to the table. Investing is a team sport. You need to know what you bring to the table. Some people bring money, some bring finding deals, some bring construction knowledge, etc.You need to get crystal clear on what you bring to the table. And don't undersell yourself, YOU do bring something needed to the table! Once you get some of these questions answered, you can then begin to look into the various investing niches to see which one will best fit your WHY, money goals, strengths and interests!
How often should someone be buying an investment property?
This might be a bit of a trick question, but typically of the lender feels comfortable with giving you money - then buy. The ability for someone to save the cash needed to buy is most of the battle. As you purchase, it gets easier to save but harder for the bank to finance you..
Take Action Steps: How much can you save in a month? Part of our current buying frenzy is due to the reduced consumerism forced or elective.
Why is it so important to diversify streams of income?
Especially at a time like this, Covid 2020, it becomes very clear that people who have invested in real estate are at the very least able to collect some income even if their regular job has been impacted by the pandemic, or local restrictions. For example, if you own a Section 8 property, the government will still pay the rent, you’ll still have that cash flow even if your work has slowed/halted, and even if the government stimulus has run out. So investing in real estate now goes from perfect passive income maker to potential survival strategy in the event of unforeseen, dramatic and immediate economic changes.
What are the real estate opportunities out there we should be watching?
Answer: Land is undervalued. Interest rates are exceptional, housing is still the segment; owner carry financing as the baby boomers are now finally selling and they cannot get a strong return with a measured risk. How to get started investing in real estate with no prior knowledge.
Check out this site for commercial real estate finds: https://www.loopnet.com/
Books to read:
Break Up! With Your Rental:
The Book on Rental Property Investing (bigger pockets)
All of the BiggerPockets books are amazing.
Think And Grow Rich
Connect with these experts:
Learn more and connect with Courtney:
Learn more about Liz and her partner:
More on Real Estate Investher:
Learn more about and connect with Gretchen: