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 more information on the Self Directed IRA. This is one of many custodians that deal with the Self Directed IRA.
Like anything else in life there can be pitfalls in real estate investing.
- Emotion vs Logic-the numbers have to make sense.
- 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.
Curious about Rental Values in the Roseville Ca Area