I DON’T KNOW HOW TO INVEST IN BIG REAL ESTATE AND I’M AFRAID OF MAKING EXPENSIVE MISTAKES
Updated: Dec 18, 2020
The secret is out. Normal people can buy apartments (multifamily) with little effort and make passive income like the rich do.
Fear of the unknown has kept normal investors out of the multifamily investing market.
Buying apartments seems scary, but with less market volatility than single family houses, better tax advantages than the stock market, and less brokerage fees than ETFs or mutual funds it's how the rich stay rich.
What the heck is "multifamily" real estate anyways?
Multifamily real estate is a building with 5 or more units. It could be a large or small apartment complex, mobile home park, tiny home development, or even a eco-commune.
Multifamily real estate is a building that produces income from tenants, so in effect you are buying real estate and a business that produces cashflow.
Cashflow is simply the amount of money per month the owner makes after expenses are paid. Expenses include the mortgage, taxes, insurance, maintenance, property management fees, and an estimate of capital repairs (things such as budgeting for when the furnace needs replacement).
There are some major differences between single family home investing and multifamily - - mainly multifamily is a team sport and hard to do alone. However, there are huge economies of scale that save you time and increase your profits.
Today's post will be the BLUF and short and sweet teaser. Next week, we will get more in depth for you curious people.
Multifamily Real Estate Investing: The 5 Part Summary
Here’s the five-sentence answer:
Invest with partners or a real estate syndication company you fully trust.
Buy apartments in a region with population and job growth.
Hold these in tax-advantaged accounts, such as your solo 401(k), life insurance policy, or self directed IRA. Switch to taxable accounts only after: (1) you’ve exhausted these other options, or (2) you need to access the funds relatively soon within the next 5-10+ years but before retirement.
Keep investing regularly (monthly, yearly, every other year), regardless of whether the market is up or down, people will always need a place to live.
Feel neither excited about highs nor depressed about lows; trust in this process.
That’s it. That’s everything you need to know. You can stop being afraid and start your journey into "big real estate". Just kidding. Stay tuned for our next post on the nitty gritty on how to build wealth with apartment investing with a twist: worthwhile wealth building.
Build Great Wealth with Multifamily Green Real Estate!
Now that you have the quick view of impact investing and the benefits of multifamily real estate, I hope you dive into the next step by making it a reality. Green Real Estate is emerging and you want to be at the beginning of the green wave to build your wealth and beat market expectations. If you would like to talk to one of our team members about how to move forward with investing in a cash flowing multifamily property, feel free to schedule a complimentary call. We would love to set you on the path to financial independence.
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By Morgan Fielder
Author profile: Morgan Fielder is an evangelist for sustainable investing. Join her eating, playing, and loving on nature around Europe exploring sustainability & husky powered oddesseys. She is living in Germany raising two gorgeous girls, wife of a rebel, serial expat, and is actively involved in the German community through several organizations. Visit her community project at cornholeuropa.com and cravetheplanet.com.