How to Invest In Real Estate without Having to Buy Houses?
- 1. Equity Crowdfunding. Equity crowdfunding is when you invest in equity in a company - typically a startup. The most common way equity crowdfunding ...
- 2. Real Estate Crowdfunding.
- 3. Peer To Peer Lending.
- 4. Specialty Crowdfunding Investments.
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Land is one of the oldest investment classes in existence, producing vast wealth over generations. { (14) Crowd Funding Foundation | Facebook }
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, in modern times typically via the Internet. { Crowd Funding / Social Lending / Crowd sourcing-Peer 2 Peer Lending (knowledgefinancialgroup.com) } { Crowd Funding / Social Lending / Crowd sourcing-Peer 2 Peer Lending (knowledgefinancialgroup.com)} Participants, or “backers” as they’re often called, pledge a minimum amount to the fund and may receive a reward for their contribution.
Real estate crowdfunding is a modern way of financing a real estate project by attracting several investors
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REITs: REIT: Real Estate Investment Trust. A GREAT WAY TO INVEST IN REAL ESTATE WITHOUT TAKING A MORTGAGE LOAN
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Real estate investing is a business, not a hoby or a pastime, and it should be treated like it is.
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Real estate is a very lucrative asset classes and should be a component of every well-diversified investment portfolio.
Real estate investments offer capital gains and investment income while having a low correlation with the traditional asset classes stocks and bonds.
That makes real estate an excellent alternative asset class for portfolio diversification, but also aids in boosting your
portfolio returns.
Nonetheless, many small investors stay clear of real estate as an investment because of the need to take out a
mortgage on an investment property and then having to deal with tenants and property maintenance.
Nowadays, however, if you want to invest in real estate but you don't want to have .
Funds, REITs, Stocks, Commercial Real Estate.
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How to Invest in Real Estate Investing Funds..?
Investing in a real estate investment fund can be a lucrative business. The limited partners provide the capital and are passive investors who have trusted their sponsor’s real estate investment offering. The partners receive returns on investments, and the sponsor earns fees, depending on performance.
However, like any business, this comes with financial risks. To make sure you get the best from investing in a real estate investment fund, here are some key things to consider: Building wealth perfectly, = fruital investment group = facebook.com/fruitalinvestment
1. Target Properties
The first step is to identify the kind of assets the fund you are considering wants to venture into. A suitable property will appreciate and be profitable to the investors. If the fund has been dealing with the same properties for a while, ask for supporting documents on previous performance.
2. The Sponsor
You are giving the sponsor your hard-earned money when investing in a real estate investment fund. Therefore, ensure that the fund’s sponsor is trustworthy, with experience in and knowledge of real estate funds. Also, the management should be transparent about previous ventures and the returns.
3. Structure of the Fund
A real estate investment fund can either be an open or closed fund, and the structure determines how investors leave the fund. For open funds, you can opt-out of the fund before the completion of the project. On the other hand, investors cannot leave a closed fund until an agreed-upon time.
In addition, you must be aware of acquisition and selling timelines, how payouts will be made, and whether you will be required to make additional payments to cater to unplanned financial needs.
The regulations on real estate investment funds vary by state. Be sure to follow all local laws and regulations to ensure a successful investing venture.
REIT vs. Real Estate Fund
There are many strategies for investing in real estate. Other than buying or flipping properties, two of the most common are private real estate investment funds and real estate investment trusts (REITs). Understanding the differences between the two can help you as an investor choose the option that best meets your expectations and financial goals.
A REIT is a company that owns or finances real estate by investing in income-producing properties, such as commercial buildings that are leased out, and other types of real estate. You can buy a share of a REIT portfolio, similarly to how you purchase stocks. Like stocks, REIT shares pay dividends to you instead of appreciating like private real estate investment funds do.
There are three main types, including equity REITs, which own and operate real estate that produces income. Mortgage REITs provide lending through loans and mortgages. Hybrids do a little of both. In general, REITs are better suited for investors who are looking for short-term profits or passive income from dividends. Private real estate investment funds are better choices for long-term investments.
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Real Estate Investment Trusts (REITs)
What are REITs?
Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans. Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.
What types of REITs are there?
Many REITs are registered with the SEC and are publicly traded on a stock exchange. These are known as publicly traded REITs. Others may be registered with the SEC but are not publicly traded. These are known as non- traded REITs (also known as non-exchange traded REITs). This is one of the most important distinctions among the various kinds of REITs. Before investing in a REIT, you should understand whether or not it is publicly traded, and how this could affect the benefits and risks to you.
What are the benefits and risks of REITs?
REITs offer a way to include real estate in one’s investment portfolio. Additionally, some REITs may offer higher dividend yields than some other investments.
But there are some risks, especially with non-exchange traded REITs. Because they do not trade on a stock exchange, non-traded REITs involve special risks:
- Lack of Liquidity: Non-traded REITs are illiquid investments. They generally cannot be sold readily on the open market. If you need to sell an asset to raise money quickly, you may not be able to do so with shares of a non-traded REIT.
- Share Value Transparency: While the market price of a publicly traded REIT is readily accessible, it can be difficult to determine the value of a share of a non-traded REIT. Non-traded REITs typically do not provide an estimate of their value per share until 18 months after their offering closes.
- This may be years after you have made your investment. As a result, for a significant time period you may be unable to assess the value of your non-traded REIT investment and its volatility.
- Distributions May Be Paid from Offering Proceeds and Borrowings: Investors may be attracted to non-traded REITs by their relatively high dividend yields compared to those of publicly traded REITs.
- Unlike publicly traded REITs, however, non-traded REITs frequently pay distributions in excess of their funds from operations. To do so, they may use offering proceeds and borrowings. This practice, which is typically not used by publicly traded REITs, reduces the value of the shares and the cash available to the company to purchase additional assets.
- Conflicts of Interest: Non-traded REITs typically have an external manager instead of their own employees. This can lead to potential conflicts of interests with shareholders. For example, the REIT may pay the external manager significant fees based on the amount of property acquisitions and assets under management. These fee incentives may not necessarily align with the interests of shareholders.
How to buy and sell REITs
You can invest in a publicly traded REIT, which is listed on a major stock exchange, by purchasing shares through a broker. You can purchase shares of a non-traded REIT through a broker that participates in the non-traded REIT’s offering. You can also purchase shares in a REIT mutual fund or REIT exchange-traded fund.
- A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing properties.
- REITs generate a steady income stream for investors but offer little in the way of capital appreciation.
- Most REITs are publicly traded like stocks, which makes them highly liquid (unlike physical real estate investments).
Special Tax Considerations
Most REITS pay out at least 100 percent of their taxable income to their shareholders. The shareholders of a REIT are responsible for paying taxes on the dividends and any capital gains they receive in connection with their investment in the REIT. Dividends paid by REITs generally are treated as ordinary income and are not entitled to the reduced tax rates on other types of corporate dividends. Consider consulting your tax adviser before investing in REITs.
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'' Ways To Invest In Real Estate Without Buying Property... How to Better Investing in Real Estate With No MORTGAGE? =
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'' Here's How To Get Your Retirement Money Early -- Without Penalty ''Commercial Real Estate Investing 101: How to Get Started
Investing in real estate is a great way to build wealth. Commercial real estate investing, in particular, is known to provide some of the highest income streams. If you’ve been investing in residential real estate for a few years and have been wondering how to invest in commercial real estate, this guide serves to break down everythingRetail Stores: Several retail and department went bankrupt in 2020 and even more are expected to go empty in the first half of 2021. As more and more consumers shop online, experts predict up to 25% fewer retail stores by 2025. Retail stores in urban areas, like New York and San Francisco, are expected to be replaced with healthcare, grocery, and other alternative stores.
Offices: According to CBRE, office demand could be permanently cut by 15% as more companies shift to work-from-home policies. As a result, office building supply will continue to increase. However, it is predicted that offices will stabilize by the end of 2021 as around 85.7% of companies plan to return to the office.
Hotels: Hotels are predicted to struggle all throughout 2021. Most are not expected to recover until 2023, and upscale hotels that offer amenities for travelers won’t stabilize until 2025. Hotels in more populated cities will suffer the most as many try to steer away from densely populated areas.
Warehouses: Warehouses are expected to be the leading performer among commercial real estate investments. Their success is due to companies trying to keep up with the growing demand for e-commerce orders. Real estate experts predict an additional demand of 250 million square feet for warehouse space in 2021.
Apartments: Initially, apartments were expected to struggle during the pandemic as many would be unable to pay rent. However, multifamily properties are performing well as the demand for housing has not decreased. With apartments at more attainable prices and historically low-interest rates, they are expected to remain stable in
Commercial Real Estate Investing Trends In 2020
Commercial real estate, much like the rest of the industry, will face some big changes in the year to come. Most notably, this property sector will be affected by smart building technologies, changing homebuyer preferencesyou need to know to get started.
Investors should also be aware of how changing homebuyer demographics and preferences are beginning to impact the commercial real estate industry. Many millennials are interested in moving to the suburbs but are still hesitant to sacrifice the benefits of living in an urban area. This signals the rising popularity of mixed-use buildings and the potential to reach new suburban markets. Millennials want walkable resources, and commercial investors would be wise to anticipate these preferencesWhat Qualifies As “Commercial Real Estate?”
Commercial real estate is a property that is typically leased out for business and retail purposes. Investing in commercial real estate involves the purchase or development of properties that have been designed with the intent of housing commercial tenants. Unlike a residential real estate investor, commercial real estate investors lease out and collect rent from the businesses that occupy their properties rather than from residential tenants. It should also be noted that raw land purchased for commercial property developments is also included in this definition. Commercial properties can generally be categorized into five main types. Keep reading to learn more about each one.
Many professionals in the commercial property business got their start through single-family rentals, including Paul Getty, president and CEO at First Guardian Group in San Jose, California.
"Well over 90% of commercial real estate investors start with single-family rentals and use it as a way to get educated, accumulate wealth and work their way up to investing in other properties," he says.
While investing in residential real estate is much different than investing in commercial property, building a foundation in residential real estate can prepare you for commercial property investments.
When a commercial property has a long-term contractual lease, you don't have to worry about near-term market exposures.
"It's an insulator from economic volatility," Buss says.
"The longer-term they are, typically that means a higher value for the property because you have the certainty of fixed income, and that creates a higher valuation in the marketplace," Buss says.
Since the value of real estate deteriorates over time, there is a tax code that allows commercial property owners to depreciate the value of the property and receive an annual income tax deduction. This allows the investor or property owner to be compensated for property improvements needed to address wear and tear as the property is used.
Depreciation allows you to hold on to more of your money by saving it from taxes. For nonresidential properties, the IRS allows depreciation over 39 years, which can add up to significant benefits over time.
Another reward that comes with commercial real estate investing is through the 1031 exchange, a tax instrument that allows capital gains to be deferred. When you sell an investment, you usually have to pay capital gains tax, but a 1031 exchange allows real estate investors to hold off on capital gains tax when selling a property to provide more capital when buying another investment property.
The 5 Types Of Commercial Real Estate
Before we get into the mechanics of how to invest in commercial real estate, it’s important to understand the various types of commercial properties. This way, you can start thinking about the commercial asset type in which you want to specialize. Commercial properties serve a broad range of purposes but are generally grouped into the following types:
Office - Retail - Industrial - Multifamily - Special Purpose
1. Office
The most common commercial real estate type is office space. These buildings, which can range from single-tenant offices to skyscrapers, are defined by one of three categories: Class A, Class B, or Class C.
Class A commercial real estate properties are typically newly built or extensively renovated buildings in excellent areas with easy access to major amenities. Professional real estate management companies typically manage them.
Class B commercial real estate properties are often older buildings requiring capital investment. Although they are well-maintained and managed, these properties require minor repairs and upgrades—making them a popular target for investors.
Class C commercial real estate properties are typically used for redevelopment opportunities. They are generally poorly located, require major capital investments to improve out-of-date infrastructure, and their high vacancy rates are much higher than higher-classed buildings.
2. Retail
Another popular commercial real estate type is retail buildings. These properties, ranging from strip malls and community retail centers to banks and restaurants, are often located in urban areas. The size of these real estate properties can extend anywhere from 5,000 square feet to 350,000 square feet.
3. Industrial
From warehouses to large manufacturing sites, industrial buildings are typically geared towards manufacturing industries, as they offer spaces with height specifications and docking availability. Also, these commercial properties generally lend themselves more to investment opportunities.
4. Multifamily
Multifamily properties are comprised of apartment complexes, high-rise condominium units, and smaller multifamily units. Property is qualified as multifamily real estate any time it has more than one unit, but can also be considered a commercial property if it has more than four units. Many residential investors get their start in commercial properties by expanding into larger multifamily properties. Residential tenants tend to have shorter lease terms than office and retail tenants, so tenant turnover is a factor that should be considered.
5. Special Purpose
In general, special purpose properties are designed for a specific use, so much so that it would be difficult to repurpose the property for another use. Car washes, self-storage facilities, and schools are all examples of special-purpose properties. The leisure and tourism industries represent a large proportion of special purpose real estate as well. Common examples within the industry include hotels, airports and sports stadiums, and amusement parks.
Mixed-use development properties are also prevalent in the commercial real estate sector and continue to grow in demand. These properties represent different uses, such as residential, retail, and even the public sector. A mixed-use building could have shopping and services on the first floor with apartment units on the upper floors. Read our guide to mixed-use developments to find out why they have become so popular in recent years.
What Is Owner Occupied Commercial Real Estate?
Owner-occupied commercial real estate (OOCRE) is when investors purchase commercial real estate to utilize the building for their own purposes. This strategy can be applied to any of the five commercial real estate types discussed above.
The option to occupy the commercial real estate you invest in is just one of the many benefits of commercial investing. Keep reading to find out some of the other benefits that may pique your interest.
The Many Benefits Of Commercial Real Estate Investing
Investing in commercial real estate can be very rewarding, both personally and financially. For many, the objective of investing in commercial real estate is for future wealth and security; others utilize it for tax benefits and investment portfolio diversification.
A commercial redeveloper can also take advantage of the following benefits:
Higher Income: The hallmark benefit of investing in commercial real estate is a higher potential income. Generally speaking, commercial properties have a better return on investment, an average of six to twelve percent, while single-family properties fetch between one and four percent. Secondly, commercial real estate provides a lower vacancy risk, as properties tend to have more available units. (Consider this: one vacancy in an office building with 25 commercial spaces will negatively impact an investor’s bottom line more than one vacancy in a residential duplex.) Also, commercial leases are generally longer than those you will find in residential real estate. This means that commercial real estate owners have to deal with far less tenant turnover.
Cash Flow: Commercial real estate has one very distinct advantage: a relatively consistent stream of income due to longer lease periods. In addition, commercial properties often have more units than residential properties, which means you can achieve economies of scale and multiply your income streams much more quickly. Known in the industry as a triple net lease, many commercial tenants also pay the building’s real estate taxes, property insurance, and maintenance costs, thus increasing your owner benefits.
Less Competition: Another advantage associated with commercial real estate is relatively less competition. Because of the perceived difficulty of commercial investing, the commercial space tends to be less saturated with other investors.
Longer Leases: Perhaps one of the biggest perks of commercial real estate is the attractive leasing contracts. Commercial buildings generally have longer lease agreements with tenants compared to residential properties, which, as previously stated, offer investors impressive returns and significant monthly cash flow. In many cases, lease agreements for commercial properties are signed for multiple years.
Business Relationships: The world of commercial real estate offers investors the unique opportunity to participate in business-to-business relationships. This can lead to more professional, neighborly interactions with your tenants when compared to residential real estate. In some cases, you may even be able to build relationships with the business owners renting in your building. This can be great for expanding your network and getting involved in the community you are investing in.
Limited Operational Hours: One of the lesser-known perks of operating commercial real estate is that, for the most part, you share working hours with your tenants. While business hours can vary slightly, commercial property owners typically won’t find themselves answering around-the-clock maintenance requests or other tenants’ communications. On the other hand, residential real estate can demand an on-call staff member to deal with issues 24/7. Many commercial investors who choose to manage their own properties enjoy this benefit, as it helps allow for a sense of separation between property ownership and regular life.
Commercial real estate investing offers investors an array of opportunities and advantages that other investment strategies do not. Once the benefits of commercial real estate investing are recognized, the next step is to dive in. Read the following to receive tips on how to get started in commercial real estate.
[ Ready to take the next step in your real estate education? Learn how to get started in real estate investing by attending our FREE online real estate class. ]
How To Invest In Commercial Real Estate: Getting Started
The question of ‘how to invest in commercial real estate’ has only one answer: due diligence. Regardless of what sector or niche you’re in, doing your homework and minding your due diligence is critical in ensuring your success in real estate. Besides learning the ins and outs of commercial investing, make sure you understand the commercial real estate market and how it can differ from the residential real estate market. If you’re ready to embark on your first commercial endeavor, be sure to abide by the following tips:
1. Understand How Commercial Real Estate Is Different
The first step as a commercial investor is understanding that commercial real estate is valued differently from residential properties. Unlike residential real estate, the income from commercial real estate is typically related to usable square footage. Also, commercial property leases typically last longer than residential leases. These two factors help illustrate why a commercial real estate investor has a better potential to earn a higher income.
Location is an important factor regardless of your investing niche, with commercial investing as no exception. However, commercial investors also need to pay close attention to their tenant type. The location and intended tenant type are two factors that intersect closely when determining demand. For example, a space intended for corporate offices will likely perform better in an urban center than a primarily residential neighborhood. Analyzing recent comparables can provide you with a better clue of how your property of interest might perform.
2. Analyze Comparables
The next step is to analyze comparables in the area and research future developments. Otherwise known as “comps,” these assets refer to prices paid for recently sold properties that are similar in location, size, and style. Analyzing comps will help you determine the current market value of a property. When determining comps, a general rule of thumb is to choose a property where the square footage does not go beyond 10 percent higher or lower than that of the property being evaluated. This will allow for the most accurate comparables possible. Read more on tips for pulling the most accurate comparable sales.
3. Use The Right Success Metric
Commercial real estate investing involves a wide array of calculations and an understanding of real estate finance. To be a player in commercial real estate, there are several formulas you should know.
Net Operating Income: This is a calculation that equals all revenue and costs from a particular property. Configured before taxes, this number gives investors an idea of how much they’ll make from an investment minus all necessary operating expenses. Operating costs typically consist of insurance, property management fees, utilities, repairs, janitorial fees, and property tax.
Cap Rate: Used to calculate the value of income-producing properties, the “cap rate” — short for capitalization rate — will provide investors with an estimate of future profits or cash flow. This is essentially the ratio of net operating income to the property asset value.
Cash On Cash: Cash on cash is a metric that provides investors with a rate of return on their commercial real estate transactions. It’s typically used by investors who rely on financing to purchase their properties. Cash on cash measures the return on out-of-pocket cash invested relative to the portion that was financed. This will provide an accurate analysis of an investment’s performance.
The above formulas serve as an introduction to complement our complete guide to real estate calculators that every investor should know.
4. Commercial Real Estate Investing Mistakes To Avoid
As a commercial real estate investor, it’s just as important to know what not to do as it is to know what to do. Today’s best investors already know it, and it’s about time you did too: mitigating risk is the single greatest thing a real estate entrepreneur can do for the success of their business. Mitigating risk exposure is the best way to increase the likelihood of success. That said, here’s a list of some of the most common mistakes commercial real estate investors need to avoid: Do You Want to Improve Your Financial Knowledge?
Would you like to learn more about the world of finances? If you would, then you're at the right place knowledgefinancialgroup.com and www.twitter.com/knowledgegroup1.com - can and will help you with all of your financial questions. Do you need a finance tutor today? We have tutors who are available to teach you anything you ever wanted to know about the subject. knowledgefinancial.blogspot.com and facebook.com/knowledgefinancialgroupImproper Valuations: Every single commercial property is unique, and investors need to be able to account for variances that may be found in each asset. Failure to account for every detail involved in an asset’s valuation could lead to financial ruin. Therefore, commercial real estate investors must be fully aware of what they are buying and for how much. The inability to account for the true value of a property will impact nearly every step moving forward, so it’s important to get things right at the time of acquisition.
Financial Ignorance: Failing to understand the financial intricacies of commercial real estate investing can be devastating. IF for nothing else, commercial deals are not the same as residential ones. Investors will need to learn the differences, not the least of which include the loan-to-value (LTV) or debt service coverage ratio (DSCR).
Neglecting Due Diligence: While today’s market requires decisive decision making, it’s important to mind due diligence. It’s better to lose a deal to someone else than to buy into a deal you aren’t prepared for. As a result, more investors need to take the appropriate time to learn as much about a property as they can before they buy it.
Not Working With a Team: Far too many investors want to save money by doing everything themselves. However, working with a team is unequivocally better than working alone. While you may appear to save money on the surface, chances are you are losing both money and time by working alone. That said, align your services with a competent team and trust them to do the job you hired them for. There’s a good chance they know more about every process than you do.
- Making Money Using These Popular Investing Methods Just as there are many property types, there are also many ways you can make money with those properties..
What is the 70% Rule When Flipping Houses?
The 70% rule states that an investor should pay no more than 70% of the after-repair value (ARV) of a property minus the repairs needed. The ARV is what a home is worth after it is fully repaired.The formula is: To use simple math, if a property’s ARV is $100,000, and it needs $25,000 in repairs, then the 70% Rule suggests that the most an investor should pay for it is $45,000: $100,000 times 70% = $70,000, minus $25,000 = $45,000. The idea is that chopping out that 30% will leave room for both your profits and miscellaneous expenses like soft costs.Types Of Commercial Real Estate Loans
How To Get A Commercial Real Estate Loan
How To Invest In Real Estate Without Owning Property...
When you think of investing in real estate, you might envision purchasing a property to rent or buying and flipping a home. Yet, both of those options put you in the financial hot seat because you have to come up with a down payment and closing costs, which averages between 6%-12% and 3%-5%, respectively. Plus, you’ll have either the responsibility of being a landlord or have to deal with the headaches of fixing and flipping a property.
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The good news is that you can still invest in real estate — you just won’t actually own the property. Here are five expert-approved ideas to help you get started.
Wholesaling:
When you think of investing in real estate, you might envision purchasing a property to rent or buying and flipping a home. Yet, both of those options put you in the financial hot seat because you have to come up with a down payment and closing costs, which averages between 6%-12% and 3%-5%, respectively. Plus, you’ll have either the responsibility of being a landlord or have to deal with the headaches of fixing and flipping a property.The good news is that you can still invest in real estate — you just won’t actually own the property. Here are five expert-approved ideas to help you get started.
Wholesaling:
“One of the most common ways real estate investors invest in real estate without owning any property is through a method called wholesaling,”
“This is when you have a contract to buy a property, but instead of buying, you sell your right to the contract to another investor for a fee. Wholesaling can be done with lower amounts of capital because you don’t actually purchase the property, which is one reason it is taught to so many would-be real estate investors.”
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Subleasing:
“A more creative way to actually invest in real estate without actually owning property is to lease a property with a one- to two-year lease and then subsequently sublease the property for use as a short-term rental or STR,” said Hager. “This can be done when the property is located in an area conducive to short-term rentals but is being offered for lease long term. An investor wishing to follow this strategy must do their diligence and make sure they aren’t breaking their original lease by using this investment strategy.”
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REITs
“You don’t have to directly own real estate to profit from the upward trends in the market right now,” said Deidre Woollard, real estate expert at Millionacres. “One of the best ways to diversify within the vast world of real estate is to buy real estate investment trusts (REITs). Publicly traded REITs can be bought just like other stocks on public markets. They are subject to a few special rules including that they have to pay out 90% of taxable income to shareholders in the form of dividends. REITs cover a wide range of real estate from industrial warehouses to apartment buildings, so you can diversify within the real estate space.
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When you think of investing in real estate, you might envision purchasing a property to rent or buying and flipping a home. Yet, both of those options put you in the financial hot seat because you have to come up with a down payment and closing costs, which averages between 6%-12% and 3%-5%, respectively. Plus, you’ll have either the responsibility of being a landlord or have to deal with the headaches of fixing and flipping a property.
The good news is that you can still invest in real estate — you just won’t actually own the property. Here are five expert-approved ideas to help you get started.
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Fruital Investment Group And Wealth Management. facebook.com/fruitalinvestment
Real estate investments in general are considered solid additions to any portfolio. But real estate funds specifically offer several unique advantages. Here are some of the top reasons to consider real estate funds over REITs or direct ownership of rental property.
- Diversification: Stocks and bonds may be the obvious go-to choices for a portfolio, but real estate adds a new dimension of diversification. Because real estate has a low correlation to stocks in general, it allows you to balance out the risk. Real estate funds themselves can also be highly diversified — a fund like U.S. Diversified Real Estate ETF (PPTY), for example, invests in real estate in a number of locations and across a variety of property types.
- Volatility hedge: When the stock market becomes volatile, real estate funds can act as a stabilizer in your portfolio. Since real estate performance and returns aren’t necessarily dictated by the direction stock prices move, real estate funds can continue to do well even when stocks falter.
- Inflation hedge: Inflation and rising prices for consumer goods can be problematic for investors, since stock prices may drop. But if demand for real estate remains high during inflationary periods — and consumers aren’t in a position to buy — real estate investors can benefit from rising rents.
- Professional management: Whether a real estate fund is actively or passively managed, there’s a fund manager behind the scenes directing the investment strategy for you.
- No landlord duties: Owning a rental property can be a headache if you have to chase down rent, not to mention having to keep up with required maintenance. Owning a real estate fund, on the hand, comes with none of those stressors.
- Low costs: Your primary investment cost in a real estate fund is its expense ratio. Some of the top real estate funds have low expense ratios, allowing you to keep more of your returns. The iShares Core US REIT ETF (USRT), which invests in U.S.-based REITs, has an expense ratio of just 0.08%, for example.
- Performance: Real estate funds deliver stable returns to investors that may match or even surpass what you’d get with other real estate investments or mutual funds. The T. Rowe Price Real Estate Fund (TRREX), for instance, notched a 10-year return of 12.69% as of October 31, 2019. VGSIX boasted a 10-year return of 13.39% through the close of November 2019. The average 10-year return for the S&P 500 is 13.60%, suggesting that real estate funds are capable of holding their own against stocks
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Wholesaling -
“One of the most common ways real estate investors invest in real estate without owning any property is through a method called wholesaling,” said Colby Hager, CEO of Capstone Homebuyers. “This is when you have a contract to buy a property, but instead of buying, you sell your right to the contract to another investor for a fee. Wholesaling can be done with lower amounts of capital because you don’t actually purchase the property, which is one reason it is taught to so many would-be real estate investors.”
Costly Errors: 10 Most Expensive Investing Mistakes, According To Experts
Subleasing
“A more creative way to actually invest in real estate without actually owning property is to lease a property with a one- to two-year lease and then subsequently sublease the property for use as a short-term rental or STR,” said Hager. “This can be done when the property is located in an area conducive to short-term rentals but is being offered for lease long term. An investor wishing to follow this strategy must do their diligence and make sure they aren’t breaking their original lease by using this investment strategy.”
REITs
“You don’t have to directly own real estate to profit from the upward trends in the market right now,” said Deidre Woollard, real estate expert at Millionacres. “One of the best ways to diversify within the vast world of real estate is to buy real estate investment trusts (REITs). Publicly traded REITs can be bought just like other stocks on public markets. They are subject to a few special rules including that they have to pay out 90% of taxable income to shareholders in the form of dividends. REITs cover a wide range of real estate from industrial warehouses to apartment buildings, so you can diversify within the real estate space. Over the long term, REITs can outperform the general S&P 500.”
Crowdfunding
“Real estate crowdfunding enables the connection between investors and real estate developers without needing to actually own property,” said Andy Kolodgie, owner of Cash Home Buyers Georgia. “As an investor, you would be funding real estate development projects in return for equity in the project along with distributions. There are several online crowdfunding platforms, but unlike REITs, the investment is long term, making the investment less liquid.
“Crowdfunding used to have a higher barrier to entry (investors typically had to be accredited), but online platforms are changing that. Search online for some of the larger competitors in the crowdfunding space such as Fundrise, which does not require investors to be accredited to get started.”
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Partner With Other Investors
“You can passively invest in real estate by partnering with other investors,” said Brian Davis, a real estate investor and founder at SparkRental. “The classic model to do this is through real estate syndications, but those typically only allow accredited investors to participate.
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Be the Bank and Get the Return
“There are quite a few ways to invest in real estate without owning a property, and one that I always recommend when someone asks me is to be a money lender,”
“Getting loans is not the easiest or most convenient for a lot of people because it has to do with income, and credit. However, if you have a lot of cash, and know a few real estate agents you really trust, you can be their hard money lender.
“Depending on where you live, you don’t even need to be an agent to invest in real estate, so if you know a few people who have been wanting to get into the industry without dealing with buyers, sellers or even being a landlord, being the bank might be a good option. The goal is to lend money for a transaction that is short term. This isn’t for the traditional purchase of a home for someone to live in, but for a home that is going to be flipped, then sold after that.”Visionone Capital Management. // www.facebook.com/visiononecapital // www.visiononecapital.blogspot.com
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile.========================
How Does Real Estate Crowdfunding Work?
Realty Mogul allows investors to become equity holders in real estate opportunities that were historically difficult to access
Manage and track how your money is performing.
See up to date information on your real estate investments with detailed performance charts, including coverage of commercial, multifamily, or residential investments.
Real estate investing, made easy
The Online Marketplace for Real Estate Investments
Create an account.
A Realty Mogul membership is free and gives you insider access to invest in real estate
Select an investment.
Members of Realty Mogul can browse the marketplace and learn more about specific investments. For every opportunity, there is detailed information including estimated length of the investment, estimated annual return, property and location information and a profile for any companies or individuals involved in the investment. Realty Mogul also moderates a Q&A forum and provides email updates.
Finalize your investment.
Once you decide which investment you are interested in, you can easily and securely sign legal paperwork online and submit payment for your investment via check or wire.
Wait for the funding process to be complete.
In order to finalize your investment, the full amount for the opportunity must be reached. Realty Mogul will keep you up to date via email and your investor dashboard. In the event the investment is oversubscribed, the first investors who have funded their portion of the investment will have preference.
If the funds are reached
You are officially an investor and can expect to receive frequent updates and your share of cash distributions. You will also have access to your investor dashboard to watch how your money is working for you and receive exclusive invites to…
If the funds are not reached
100% of your money will be returned to you with no fees or hidden charges.
5 Reasons for Passive Real Estate InvestingHere are the top 5 reasons why passive real estate investing is one of the best ways to make your money work for you:
#5 – Let Uncle Sam work for you
In an equity structured investment, passive real estate allows tax-deferred cash returns that lets you keep more of your earnings. Unlike interest payments or stock dividends that can be taxed at your highest bracket, your share of depreciation expense works to offset your income thanks to the pass-through benefit of real estate ownership
#4 – No tenants, no toilets and no trash
When you are a passive real estate investor, you do not deal with the hassles of day-to-day-management. Leaky faucet? You’re not getting a call at 2am. Broken gate? It’s not your responsibility to call the handyman.
#3 – There is no bank to deal with
Dealing with banks is just plain hard. Since the economy went south, banks have started to require even more documentation to get loans and the process is both time-consuming and mind numbing. When you are a passive real estate investor, your investment is tied to a professional private real estate investment company that already has relationships with select banks. They navigate the bank financing waters on your behalf so you don’t have to.
#2 – Leverage the “smarts” of other people
You always have the option in any investment to go at it alone, whether that means investing in stocks through an online brokerage like eTrade or buying your own investment property, but there is something to be said for leveraging the intelligence of the people around you. Some real estate investors devote their lives to learning the in’s and out’s of the market and passive real estate investing allows you to benefit from their deep education.
#1 – Make money while you sleep
Passive real estate investing can be incredibly quick. You do diligence, sign legal paperwork online and transfer funds almost immediately. It is not intended to become a second job and you can literally make money while you sleep. Primarily when investing in properties with existing tenants where there is existing cash-flow, your money is working for you 24/7.
MAJOR BENEFITS OF INVESTING IN REAL ESTATE
If You've Decided To Sell, Or Purchase a Home This Year, Or Next Year.
Congratulations! www.facebook.com/AntonyrealestateAnthony, a Knowledgeable South Florida Real Estate agent Who's
Ready, Willing o Help And To Assist you.. 786-631-7740The process of Selling, or owening a home is an exciting one.Real Estate Professional is here to help, and to guide you through your
home selling process, and or home buying process from the start to finish...The Advantages To Owning Real Estate...One of the advantages of home-ownership is the ability to deduct certain costs associatedwith home ownership from federal income tax. Most homeowners itemize their deductions.Knowledge Financial Group suggests to everyone to consult with a tax professional for an accurate and up to date understanding of the full tax advantages of home ownership.Some of advantages of owening real estate property...1. You have tax advantages - Depreciation, or advantage with appreciation2. You are building equity every month and every year, preferably said year after year.3. You can refinance and cash out your equity.4. You can use your property as collateral to obtain financing to open businesses.5. You have your absolute privacy6. You are building a retirement nest eggs..Home-ownership, what can be better than that?- Continuous Income. Investors can make money from renting real estate.
- Rental property usually provides continuous steady income over a relatively long period.
- Real Estate Hedges Against Inflation. Inflation refers to a decrease in your purchasing power.
- An inflation hedge protects you from this. ...
- Real Estate is a Hedge Against Inflation
Real estate is one of the few assets that reacts proportionately to inflation. As inflation goes up, housing values and rents go up. - Though real estate in general is a good hedge against inflation,
- Financial Leverage. When people purchase a real estate property, they attain financial leverage. By using OPM, or OPIUM.
- OPM = OTHER PEOPLE'S MONEY
- AND OPIUM = OTHER PEOPLE INACTIVE UNDERSUSED MONEY
The Benefits of Real Estate Investing...
This is a no brainer! The majority of people invest in real estate for the steady flow of cash they earn in the form of rental income. This passive income is a huge incentive to get you started and buy your first rental property.
Steady Income
Steady Income
This is a no brainer! The majority of people invest in real estate for the steady flow of cash they earn in the form of rental income.
This passive income is a huge incentive to get you started and buy your first rental property
Long Term Financial Security
The benefits of investing in real estate provide investors with long term financial security. When you have a steady flow of cash in succession, the rewards of this investment bring on financial rewards for a long time
4. Mortgage Payments Are Covered And Equity Is Built up..
The benefits of investing in real estate include your tenants as well. Simply put, the rental income you receive each month is more than enough to cover your expenses, including your mortgage payments. Essentially, your tenant is actually the one paying your mortgag
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Today, early retirement is a top goal for many, and it can be achieved by changing spending habits and efficient planning.
Retirement: Retirement is something that most of us look forward to after a lifetime of working. Whether it’s retiring abroad or moving somewhere with a warmer climate, we must save and plan in order to make our post-work dreams a reality.
Retiring early. This is no easy task, and requires important sacrifices and careful, efficient planning. Cutting Down on Spending, And Multiplying Income.
In order to enjoy financial independence in early retirement, you’ll need ample savings to live off of. Controlling and most importantly, cutting down on how much you spend will help you save
Cutting down on your spending ultimately reduces the amount of money that is required to live on and to meet daily life requirements.
In order to retire early, one needs to have enough resources to ensure solid cash flow in their nest egg years. Continuous cash flow is vital and can be achieved through wise and proper investing. Many financial experts believe that heavy investing should begin when one is in their 20s, as this will give you the benefit of compound interest, one of the best incentives for early retirement.
For early retirement, proper planning is important. One of the first things you’ll need to think about before retiring early is your house. Do you pay off your mortgage and retire with no mortgage debt?
A Simple Way to Build Wealth
No matter what your financial goals are, #1 investing in real estate. This produces more welth faster and the best thing is you don’t absolutely need to use your own money. You can use OPM – OPIUM Other people’s money – or other people inactive under-used money.
#2 is investing in quality stocks is an option worth considering. Stocks have produced better returns than other kinds of investments over the years and generated significant wealth for shareholders.
- ======Landlord tax write offs... Interest
Interest is often a landlord's single biggest deductible expense. Common examples of interest that landlords can deduct include mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity.
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2. Depreciation for Rental Real Property
The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the property over several years.
---- Buyheremarket Enterprise // www.facebook.com/buyheremarket // www.buyheremarket.blogspot.com
Femkonsa Capital Investment // www.facebook.com/femkonsa // www.femkonsa.blogspot.comRepairs
The cost of repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows
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Pass-Through Tax Deduction
Starting in 2018, most landlords will qualify for a new pass-through tax deduction established by the Tax Cuts and Jobs Act. This deduction is a special income tax deduction, not a rental deduction. Depending on their income, landlords may be able to deduct (1) up to 20% of their net rental income, or (2) 2.5% of the initial cost of their rental property plus 25% of the amount they pay their employees. This deduction is scheduled to expire after 2025
----------Travel
Landlords are entitled to a tax deduction for most of the driving they do for their rental activity. For example, when you drive to your rental building to deal with a tenant complaint or go to the hardware store to purchase a part for a repair, you can deduct your travel expenses. However, you can't deduct the cost of travel you do to improve your rental property--these expenses must be added to the property's tax basis and depreciated over many years.
If you drive a car, an SUV, a van, a pickup, or a panel truck for your rental activity (as most landlords do), you have two options for deducting your vehicle expenses. You can:
- deduct your actual expenses (gasoline, upkeep, repairs), or
- use the standard mileage rate (check the IRS website for current rates).
To qualify for the standard mileage rate, you must use it in the first year you use a car for your rental activity.
Website like: knowledgefinancialgroup.com The information and analysis provided through hyperlinks to third party websites and social media pages like: Visionone Holding Company // www.facebook.com/visiononeholdingFruital I nvestment Group // www.facebook.com/fruitalinvestment========
Did you know that:
- Landlords can greatly increase the depreciation deductions they receive the first few years they own rental property by using cost segregation.
- Careful planning can permit you to deduct, in a single year, the cost of improvements to rental property that you would otherwise have to deduct over 27.5 years for residential property.
- You can rent out a vacation home tax-free, in some cases.
- Most small landlords can deduct up to $25,000 in rental property losses each year.
- A special tax rule permits some landlords to deduct 100% of their rental property losses every year, no matter how much.
- People who rent property to their family or friends can lose virtually all of their tax deductions.
If you didn't know one or more of these facts, you could be paying far more tax than you need to.
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- Wishing you a fresh start with renewed energy and confidence throughout the Year.The Year stands before us, like a chapter in a book, waiting to be written WWW.KNOWLEDGEFINANCIALGROUP.COMMay joy and peace surround you, contentment latch your door, and happiness be with you now and bless you evermore!MONEY WISERS GROUP - FACEBOOK.COM/MONEYWISERSMay the sun always shine on your windowpane;
May a rainbow be certain to follow each rain;
May the hand of a friend always be near you;
May God fill your heart with gladness to cheer you.May God shower you and your family with love and happiness!
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Welcome to our Web site, WWW.KNOWLEDGEFINANCIALGROUP.COM where you will find a wealth of information in the form of newsletter articles, calculators, and research reports. KNOWLEDGEFINANCIALGROUP.BLOGSPOT.COM
We hope your visit will help you understand the opportunities and potential rewards that are available when you take a proactive approach to your personal financial situation. We have created this Web site to help you gain a better understanding of the financial concepts behind insurance, investing, retirement, estate planning, and wealth preservation. FACEBOOK.COM/KNOWLEDGEFINANCIALGROUP
Most important, we hope you see the value of working with skilled professionals to pursue your financial goals. KNOWLEDGE FINANCIAL GROUP
We’re here to help educate you about the basic concepts of financial management; to help you learn more about who we are; and to give you fast, easy access to market performance data. We hope you take advantage of this resource and visit us often.
Be sure to add our site WWW.KNOWLEDGEFINANCIALGROUP.COM to your list of "favorites" in your Internet browser. We frequently update our information, and we wouldn’t want you to miss any developments in the area of personal finance. WARNING - WARNING - WARNING!
This material is intended to provide educational information regarding the features and mechanics of the product and is intended for use with the general public. It should not be considered, and does not constitute, personalized investment advice.
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Essential legal documents you may need soon...
http://www.knowledgefinancialgroup.com/financialplanning.html
You never know when you might need a will, or an advance health care directive. Illness, disability, or death can strike at any-time.You've just to prepare in advance.
http://www.knowledgefinancialgroup.com/retirementplanning.html
This documents will help ensure that your assets go to the right people, your wishes be respected and your medical care will be honored the way you expected it to be. http://www.knowledgefinancialgroup.com/PENSION-PLANS.html
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Elder law and estate planning attorney can help!
http://www.knowledgefinancialgroup.com/livingtrust.html
Preparing a will, or living trust means thinking about your own death, and that's a hot and cold subject pretty much nobody really wants to talk abouti even if we know for sure one day we must live... http://www.knowledgefinancialgroup.com/TRUST-ACCOUNT.html
Rollover Account Advice For Your IRA, 401k, 403b, or 457 plan etc
Rollovers of Retirement Plan and IRA Distributions...
Why roll over? http://www.knowledgefinancialgroup.com/rolloveraccount.html--------------
Important documents needed: Living will - End-of-life choices and or Living trust.
The healthcare proxy -
The power of attorney; that could be a limited power of attorney - General power of attorney - Or a Durable power of attorney.
The Digital Diary... http://www.knowledgefinancialgroup.com/RETIREMENT.html
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Learn the importance and benefits of life insurance in real life.
http://www.knowledgefinancialgroup.com/LIFE-INSURANCE.html
''What Are The 12 Great Benefits, And Advantages Of Owning A Life Insurance
Policy? http://www.knowledgefinancialgroup.com/insurancequote-----------
Steps for Getting Your Affairs in Order■
Put your important papers and copies of legal documents in one place. You can set up a file, put everything in a desk or dresser drawer, or list the information and location of papers in a notebook. If your papers are in a bank safe deposit box, keep copies in a file at home. Check each year to see if there’s anything new to add.■
Tell a trusted family member or friend where you put all your important papers.You don’t need to tell this friend or family member about your personal affairs, but someone should know where you keep your papers in case of an emergency. If you don’t have a relative or friend you trust, ask a lawyer to help.
■Discuss your end-of-life preferences with your doctor. He or she can explain what health decisions you may have to make in the future and what treatment options are available. Talking with your doctor can help ensure your wishes are honored, and the visit may be covered by insurance.
■Give permission in advance for your doctor or lawyer to talk with your caregiver as needed.There may be questions about your care, a bill, or a health insurance claim. Without your consent, your caregiver may not be able to get needed information. You can give your okay in advance to Medicare, a credit card company, your bank, or your doctor. You may need to sign and return a form
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Financial Records ■Sources of income and assets (pension from your employer, IRAs, 401(k)s, interest, etc.)
■Social Security and Medicare/Medicaid information
■Insurance information (life, health, long-term care, home, car) with policy numbers and agents’ names and phone numbers
■Names of your banks and account numbers (checking, savings, credit union)
■Investment income (stocks, bonds, property) and stockbrokers’ names and phone numbers
■Copy of most recent income tax return
■Location of most up-to-date will with an original signature
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