Take a moment to think about the process that you used to find the home you’re currently living
You likely had a checklist that included a specific area, school district, commute, and the number of bedrooms you were looking for. If you were looking for a three-bedroom with plenty of green space in mind for your growing family, it’s very unlikely you would have settled for a one-bedroom high-rise condo, even with a great view.
Well, it’s the same type of situation when you’re investing in real estate. Before you even begin to consider potential investment opportunities, it’s imperative you know WHY you’re investing and WHAT you’re looking to get out of it.
Without clear goals, you’ll easily be swayed (or paralyzed) by beautiful photos and well-marketed opportunities that don’t actually align with your investing goals.
As we walk through these examples, see if one resonates with you. With clear goals in mind, you’ll know just what to do when the right investment opportunity comes along.
If real estate investing seems interesting to you, but you’d rather avoid becoming a landlord, you’re not alone. Fixing toilet emergencies at 3am isn’t appealing to most people. Shocker.
The next logical step that many investors take is toward a real estate investment trust (REIT), which is easy to access, just like stocks.
What is a REIT, anyway?
When investing in a REIT, you’re buying stock in a company that invests in commercial real estate. So, if you invest in an apartment REIT, it’s like you’re investing directly in an apartment building, right?
Let’s explore the 7 Biggest Differences Between REITs and Real Estate Syndications:
Any time “investing” is brought up, peoples’ minds flash between images of Warren Buffet, memories of the Great Recession, and those #goals filed in their “someday” folder.
Unfortunately, 60 percent of Americans find investing to be scary or intimidating, according to a new independent market survey. Alternatively, 60 percent also recognize that “someday” they will need greater financial security than what they currently have.
Too many people are putting off to tomorrow what they should be doing (or investing) today.
For the next several minutes, set aside any preconceived notions you may have, and take an honest look at the risks associated with investing.
Let’s take a close look at investing in stocks versus real estate, the four basic risks of investing, how commercial multifamily real estate investments mitigate risk, and why the stock market can be much riskier than real estate.
A Primer on Risk
As with any investment, there’s an element of risk. Just as you could have been hit by a bus this morning, unexpected things come up in life, the stock market, and in real estate.
The key is not to look for investments that are risk-free (that doesn’t exist), but to understand the risks thoroughly, determine your threshold for risk, and ensure that you’re doing everything you can to mitigate risk.
When it comes to investing in real estate, most people are fairly familiar with the process of buying a single-family home or rental property. You choose the market and neighborhoods, determine how many bedrooms and bathrooms you’re looking for, get together with a lender and a broker, tour potential properties, and then make an offer.
However, when it comes to investing in a real estate syndication (group investment), the process can be entirely foreign, especially if you’ve never invested in syndications before.
For this reason, let’s explore the syndication process together, from start to finish, so you can invest confidently in your first real estate syndication.
Here are the basic steps of investing in a real estate syndication:
1. Determine your investing goals
2. Find an investment opportunity that fits
3. Reserve your spot in the deal
4. Review the PPM (private placement memorandum)
5. Send in your funds