Real Estate Investors are Investors First!

 

Over the years, I’ve been working with many different types of investors…  Brand new, seasoned, twenty-somethings, and even wily veterans!  I can’t tell you how much I’ve enjoyed this diverse element of my practice (very special).  And the one thing common to all is that they were already investors!

I know this sounds obvious because buying Real Estate requires hefty, upfront capital (15% to 25% minimum down payment) and the ability to qualify for financing…  and this is quite often after the buyer already has the burden of a home mortgage.

So, getting to the point of buying Real Estate for investment, absolutely means that you’ve already learned to be an investor.  And I’m not talking about having a complex/diversified stock portfolio or retirement account…  I mean that even if you’re just socking away cash or cleaning up your credit, you’re making that investment choice.  With all the things you have going on in your life, it is 100% for sure an investment in your future to be thinking and acting “like an investor” from the very earliest age.

So, when does one invest in Real Estate versus say municipal bonds, emerging-market stocks (not entirely sure what that is btw) or even crypto-currency?  The simple answer is I don’t know, but there is no question that this category needs to be in the portfolio, for sure.

Most of my articles over the years have been pointing out the various intricacies of the Real Estate investment process.  Cap rates, cash-on-cash, IRR, debt coverage ratio, etc.  Let’s face it, the basics of I-D-E-A-L (income, deductions, equity, appreciation, and leverage) aren’t that basic ?.  But as complicated as it might seem, this is the easy part…

The hard part is getting to the point of making the call.  Sounds like a sales pitch, I know, but it’s true.  In addition to loving the diverse demographics of my job, I really love giving high-fives to those that have already done the hard work of saving, qualifying, and making the right choice!

Over the years, I’ve got a lot of feel good stories and examples, but one of my favorites was when I met with a couple and I went through all the various benefits of investing in real estate.  Somewhere during the meeting, the wife turned to the husband and said, “now I know why every accountant I’ve ever met owns investment real estate”.

Yep.