Real Estate Investing
Investing in Real Estate is one way for wealth building. There are several ways of investing in real estate.
- REITS-Think of this as investing in Mutual Funds.
- Investing with people that you know and forming a LLC.
- Investing by yourself with 20-25%.
- Using your IRA and converting it to a Self Directed IRA.
- Cash Flow-this is one of the most evident benefits of investing in real estate. Cash flow is the income left over after paying the mortgage and other expenses.
- Appreciation-historically real estate values have increased over time.
- Leverage-Unless to pay all cash, you are using the banks money to leverage your investment.
- Taxes & Deductions-One of the benefits in investing in real estate is that you can deduct expenses when renting the property.
- 1031 Exchanges-For information on this click here.
- Depreciation-This is another tax benefit of owning real estate investments and is how you recover the cost of income producing property.
There are different types of investors.
- The first time investor-they have saved up enough down payment or they are using their IRA.
- Move-up investor-they will be using their current home as a rental and buying another home to move into.
- Portfolio Investor-they either are buying investments with a group (LLC) or they have been investing for years and are holding onto the properties.
- Rehab & Resell-Known as flips. They buy properties in need of repairs and fix them up and resell immediately for a profit.
Whether you are trying to buy your first rental or your an experienced investor, I am here to help. Feel free to contact me if you have any questions about real estate investing (916) 791-9073.
Buying Real Estate investments with your IRA (Self Directed IRA) is a great way to start. For questions on the self directed IRA SelfDirectedIRARealEstateFAQs.docx.
Like anything else in life there can be pitfalls in real estate investing.
- Emotion vs Logic-the numbers have to make sense.
- Overpaying.
- Over Leveraging-I have seen people lose everything because of this. It's better to own 1 or 2 properties and having a good cash flow compared to owning 5-6 and having a negative on them.
- Management Problems-I recommend finding a good property manager.
- Getting advice from the real estate agent only-you need to have a sit down with your CPA or tax attorney and be sure this is right for you.
- Bad Tenants-everyones worst nightmare.
- Trying to get rich quick-real estate investing is meant for a long term investment. 3-5-10-15 yrs.
When buying real estate investments be sure to have some kind of game plan, what are your goals and what's your exit strategy.
Real Estate Investing- Power Point Presentation RealEstateInvesting.ppt.
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2998 Douglas Blvd., #125
Roseville
CA
95661
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