How to Quit Your Job Through Investing in Real Estate

No matter how many jobs you’ve had or how far down the career path you are, facing any workplace transition brings up emotions, fears, and possibly, some sleepless nights. The bittersweet feelings of quitting a job include guilt, worry, anxiety, excitement, adrenaline, and gratefulness. 

It only seems sensible that a cushion of cash in the bank might make any transition less worrisome. In this article, we’ll share 3 steps toward making the leap from the ol’ 9-5 through real estate investing so you can spend less time behind a desk and more time doing things you love.

Why Leave Your Job

Unlike generations prior, it’s rare for anyone these days to remain with a single company or industry throughout their career. There’s a massive work-from-home, remote position, freelancer, and small business shift happening at the same time. 

There are many professionals (you included) who want to take the leap and are aware of the freedom they desire, but feel the guilt and fear associated with abandoning a career path, reducing their income, and still being able to afford a life they love. Some of these fears can be because of their need to support a family or because the cost of living in their area is high. 

For some people, they actually like their jobs. Maybe resigning isn’t for you right now, but it doesn’t mean there won’t be a moment down the road when you might consider it or even think about taking a sabbatical to just travel or spend time with loved ones.

The simple solution to all of the above is passive income. Income you earn without actually having to step foot in an office or head to work even a few hours a day seems like a dream, but we’re here to share with you how you can make this your reality. 

Step 1 – Find Your Freedom Number

The first step toward building a strong financial plan toward quitting your full time job with confidence is finding your freedom number. This number is the amount of money that would more-than-cover your regular monthly expenses based on your current lifestyle. 

This is the amount of income you need to earn passively in order to quit working and still cover all your bills worry-free. You can easily find this value by looking at your expenses from the past six months. 

Let’s pretend your expenses for the last six months look like this:

Month 1 – $ 9,500

Month 2 – $ 12,300

Month 3 – $ 8,700

Month 4 – $ 10,800

Month 5 – $ 9,100

Month 6 – $ 9,600

The average of these expenses is $10,000. Now, add a 10% buffer. 

Your freedom number in this case is $11,000. This is how much you need to establish in consistent, passive income so you can leave your nine-to-five with confidence.

Step 2 – Build Passive Income

Now that you have your target, freedom number calculated, you can get to work building multiple streams of income that will equal that total.

Some ways to generate passive income include writing a book, creating online courses, or designing products to sell online. My favorite though, the one that requires much less time and effort, is real estate investing. 

Actually, did you know there are more people who become millionaires through investing in real estate than through any other path? 

It’s true! This is because you don’t need to know how to write, design websites, or create products and market them. With some capital and dedication to research, you can invest in cash-flowing real estate and build your streams of income, one deal at a time. 

Passive investments in real estate syndications can earn between 8 – 10% annual cash-on-cash returns, plus additional income upon the sale of the asset after an average of 5 years. 

So, as an example, you could invest $100,000 and earn about $9,000 in passive income per year while doing very little work. 

Get a few of these going, and you build, brick-by-brick toward your income goal /freedom number ($11,000 per month in the example above). Even just an extra one or two thousand a month relieves some financial pressure and allows for more flexibility in your personal schedule. 

No matter how you choose to build your financial cushion – through real estate or online products or both, the main goal is to create multiple streams of passive income to reach your freedom number. 

Step 3 – Track Your Progress

As you build each stream of income, it’s actually quite fun to track your progress and see that passive income number increase over time.  Whether you’re an excel nerd or not, you’ll want to establish a way so you can easily see how much passive income you’re earning each month and which investments are out-performing others. 

If you were to choose real estate syndications, for example, you could see that for every $50,000 investment, you’ll earn about $350 per month in passive income. By this math, you might consider moving the $200,000 you have in the stock market over to syndications and begin generating $1,400 per month. 

While $1,400 is quite far from $11,000, it’s a building block. Plus, it will probably more than cover your groceries for the month – one less thing to worry about. 

Each additional passive income stream you add covers another current living expense and acts as one more tile to your freedom number mosaic. One day soon, you’ll reach the tipping point where you feel comfortable reducing your work hours or quitting your job altogether, without experiencing a true reduction in income. 

Recap

Drastic changes and quick transitions can easily stir up fear or worry in any responsible adult, but even more so if you feel the weight of providing for a family or achieving steep lifestyle/income goals. The biggest thing to remember though, is that countless others have built passive income like we discussed here, and you can too. 

The steps outlined herein will help you identify your personal, passive income goals, create a path toward creating that passive income, and track your progress. No matter your reasons for wanting to build passive income, following the three steps above will help you build the financial assurance you need to quit your job with confidence. 

Real Estate Investing: Understanding Syndication Structures

When evaluating commercial real estate syndication, most investors start by identifying an asset class in which they would like to invest (multifamily, office, retail, etc), and then within that class, they may focus on a specific category (Class A, Class B, etc)

However, when you are reviewing a potential deal, it’s important to also consider the syndication structure so you can determine whether a specific property or investment is a good fit.

Real estate syndication structures dictate how the returns in the deal will be split up between you and all the other passive investors (limited partners) as well as the real estate syndicators (general partners).

Understanding real estate syndication structures, specifically: splits, preferred returns, and waterfall structures, is crucial to your success in finding real estate investments to help generate the most passive income and help you build your wealth over time.

In this article, we’ll walk through how to evaluate deal structures so you are prepared when reviewing your next opportunity.

Real Estate Syndication Structures

Every real estate syndication deal is structured differently. So depending on which investment group you’re working with, you could be looking at widely varying investment opportunities simply because of the syndication structure. 

At Noblivest, we prefer to keep the structure of our real estate deals simple. For the sake of this article, we’re explaining the type of real estate syndication structures we typically see in real estate investment opportunities.

Keep reading to learn more about these three main components generally used to structure a real estate syndication deal.

  • The split between the limited partners and the general partners
  • Preferred returns
  • Waterfall structure

The Split Between The Limited Partners And The General Partners

The split in a real estate syndication deal is a simple percentage. As a passive investor, you’re likely wondering what rate of return you can expect to receive from your investment capital if you were to participate in our next syndication.

Again, while every deal is different, most often, you’ll see a 70/30 split, with 70% going to the limited partners and 30% going to the general partners as compensation for their hard work in managing the asset itself.

The split structure in a real estate syndication deal considers both cash flow and profits from the sale. During the hold period, the primary proceeds are cash flow dollars from tenants’ rent. 70% of the cash flow goes to the limited partners and 30% to the general partners. Upon the sale of the investment property, the profits are distributed in the same way.

Regardless of how the split ratios are structured, they should always add up to one hundred. While a 70/30 split is the most common, sometimes syndicators who are just starting out may offer an 80/20 split to incentivize more prominent institutional investors to invest a more significant capital amount.

Preferred Returns in Real Estate Syndications

So, you might be wondering, “Does the general partner group or the passive real estate investor pool get their money first?”

Preferred returns dictate who gets paid first when it comes to cash flow and distribution of proceeds from the sale. As a way to incentivize the investors on both sides of a real estate syndication deal, sometimes preferred returns are introduced into the equation. 

The passive investors are given preferred returns, meaning they’ll get their cut first, which reduces fears and hesitations around contributing capital. Meanwhile, if passive investors are the only ones getting any returns until the property exceeds 7% in returns, for example, the general partners and incentivized to ensure the property becomes profitable in excess of 7% as quickly as possible so they can earn a little money too!

At Noblivest, we like to show our passive investors that they are our priority, and one way to do so is by offering preferred returns on the majority of our real estate syndications.

Waterfall Structure

A waterfall structure simply means that as an asset’s performance increases, the percentage of its return, the general partners and management team will be compensated more as payment for their expertise in making that asset perform at a higher level.

A typical market real estate syndication structure is a 7% preferred return with a 70/30 split. To explain it further, the first 0% to 7% of returns go directly to the limited partners, and the general partners receive zero. However, if the returns reach 7% to 14%, the 70/30 split kicks in, with 70% of the proceeds going to the limited partners and the remaining 30% to the general partners.

Most passive investors don’t realize that nearly all real estate syndications have a waterfall structure. Once a particular return is achieved, the format changes from a 70/30 split to a 50/50 straight split. 

A waterfall structure incentivizes the general partners to expertly manage the asset, getting it above and beyond their initial projections. In this situation, returns of 14% and above and any cash flow or profits from the sale would be a 50/50 straight split between limited and general partners.

Be sure to read the fine print of your PPM and investment summary to verify whether the real estate syndication structures you’re considering include a distribution waterfall because usually, they do.

Understanding the Cash Flow in a Real Estate Syndication

Passive investors need a solid working knowledge of how best to evaluate the structure of a commercial real estate syndication so they can determine whether the projected returns are aligned with their financial goals. Understanding the typical real estate syndication deal structures can help you know what to expect as you embark on your vibrant journey as a real estate syndication investor.  

When you have clarity around general syndication structure elements such as splits, preferred returns, and waterfalls, you’ll better be able to determine whether a particular deal is a good fit for you and your financial goals. Furthermore, the goal is to have confidence when selecting a deal. So, through understanding these fundamental concepts, investing in syndication opportunities becomes less intimidating, which better positions you to start building your wealth and your portfolio.

House Hacking 101: How To Start Living For Free

Mortgage and rent payments make up a good chunk of many people’s budgets.  But what if you had a way to live for free?  Many people have found a way to do that through “house hacking”.  It’s a simple concept that anyone can do, and you might already be doing it without realizing it!

If you’d like to reduce your living expenses or if you’ve been trying to figure out how to have renters pay down your mortgage for you, you may be a great candidate for house hacking. 

In this article, you’ll learn what house hacking is, find out how to decide if a property is a house-hack-worthy purchase, discover how to get started, and learn how to stockpile your earnings from one property to buy the next and continue to build your wealth. 

House Hacking Defined

If you live in one portion of a property and rent out another room, unit, or space on the same property, you’re essentially house hacking. You can become a house-hacker with any small multifamily unit like a duplex, triplex, or quad, and, surprisingly, you can even do it with a single-family home!

Basically, your renters pay a monthly equivalent close to, equalling, or greater than your mortgage payment on the property, rendering your housing expenses near or at zero. This way, you’re earning equity and paying down the mortgage without actually having to pay it yourself!

This frees up your budget, reduces the likelihood you’ll remain in a job you hate and decreases your stress. When you can have good, paying tenants in your units and live with $0 housing expenses, you free up your finances to accomplish more, grow your wealth faster, and earn passive income to fund the lifestyle you want.

How Do You Know If A Property Is A Good Purchase For House Hacking?

If you want to get started house hacking, first, you need the “perfect” house-hacking property. 

That doesn’t mean you’re in search of a fully renovated, adorable property or even one that has excellent curb appeal. Perfect, in this case, means that the rental rates you could theoretically charge a tenant will cover or come close to covering the mortgage payment on the entire property. 

To get to that point, you must first consider how much rent each unit of the property is likely to provide and compare that with your expected mortgage payment. Look at the price of duplexes, for example, and see if the overall cost of the property would render a mortgage payment that could be covered by the rental income from one unit alone. 

An Example: 

If you find a duplex for $400,000, you’ll likely apply a down payment of $80,000 in cash (20%). That leaves you with a $320,000 mortgage. At about 5% interest on a 30-year mortgage, your payments will be about $2,000 each month. 

With this knowledge, you’ll scope out the rental market and see what renters generally pay for units comparable in size to one you anticipate having for lease. This is as simple as looking at Craigslist or any other online hub where people share and shop for a place to live. Don’t overcomplicate the research process!  

If the rental rates you see in the market are at or near $2,000 per month, then it’s likely you’ll be able to get a paying tenant in one side of your duplex for that amount. Then, you can live “for free” in the other side while your tenant’s rent payments build your equity in the home by covering the mortgage payment. 

If the rent rates in the area are a little less, say $1,800 per month, then you’ll have to pitch in $200 a month to cover the mortgage on the property. But, hey, I’ve never found rent for $200 a month before, so I’d still say you worked yourself a great deal!

On the other hand, if you find out rental rates in the area are $2,200 per month, your renters will be paying more than your mortgage payment, leaving you a little cash flow right away!

Either way, you’ve reduced your living expenses to essentially zero and gained a significant advantage toward being able to save for your next real estate endeavor. 

What Else Does It Take To Get Started House Hacking?

Getting started house hacking is easy! All you need is your down payment in cash (20% of the market price of the property is required) and some basic knowledge of the area and types of property you’re searching for. 

You may want to stash a little extra cash in a reserve account for things like anticipated renovations, lawn services, and pest control. Some unanticipated costs of becoming a landlord may be repairs, tenant damage (intentional or not), and notary or attorney fees. 

You can easily find templates for tenant applications, leasing forms, and even contractor agreements online. Take advantage of services like Angie’s list or similar to find reliable handymen for repairs. 

Once you have your savings goals met, simply expand your property search to include small multifamily units like duplexes or triplexes in the area. You can easily do this on any home listing site like realtor.com or by asking your agent. 

How To “Snowball” Your Real Estate Purchases And Keep Living For Free While Investing More

Once you see the magic in having your tenants pay your mortgage while you live for free, you’ll probably want to do it again and again, accumulating real estate properties, growing the number of units you have rented out, and building your equity and passive income as you go. 

The primary way to accomplish this is, as your tenant is covering your mortgage with their rent payments, continuing to “pay rent” to yourself. Set aside at least $1,000 per month into a separate savings account as if you were still paying a mortgage payment or rent. In time, this account will accumulate enough savings to cover a down payment on your next rental property. 

As you move out of your first duplex, for example, and get another tenant to rent your old space, you’ll suddenly have two people paying $1,600 per month, effectively doubling your rental income. Meanwhile, you’ll be moving into a new triplex, for example, living in one unit and finding paying tenants to live in the other two. 

With House Hacking, Who Knows What Your Future Contains!?

I’m sure you can continue to project a growing number of units and the passive income that goes with them by repeating this formula every few years. The good news is, you’d be on your way to ever-increasing net worth, tax benefits, and a diverse portfolio of recession-resistant assets too!

If you’ve been wanting to quit your job and travel full time, creating passive income through real estate investments could be the key to making that happen. Of course, it all starts with your first small multifamily property purchase. 

I have to share this caveat now – being a great landlord is hard work and requires your time and attention to daily decisions about what’s best for the property and your tenants. Even if you choose to use a property management company, you’re still responsible (and liable) for every repair, tenant complaint, rent raise, and eviction. 

If passive income and real estate investments sound great, but you’d rather not move every few years or deal with tenants and other landlord responsibilities, you might be more inclined toward group investments called syndications. When you invest as a limited partner in a real estate syndication, you reap all the benefits of real estate like tax deductions, passive income, and property value appreciation without dealing with any landlord-type headaches. 

Real estate syndications have become my favorite way to passively invest in stable, tangible assets, earn passive income, and limit my liability so I can live the life I’ve always dreamed of with and for my family. 

Neither house hacking nor real estate syndication investing requires any experience, degrees, or certifications. You don’t have to be experienced in one to do the other. Start by identifying your lifestyle and investment goals first, then decide if you’re willing to try to manage a property as a landlord. 

Giving The Gift Of Financial Literacy To The Next Generation

Raising the next generation is one of the most rewarding things we could ever experience. Along with seeing our children go through all of life’s many milestones, thinking about the future for our children can bring a little anxiety too. For many of us, our families and children are our biggest “why” in life.

While some of us might think about legacy or passing on wealth to the future generations, what is even more important and certainly a massive way of showing our love is to teach them how to be responsible with their finances as well. Taking this a step further beyond just financial responsibility, it’s about investing money into assets that generate passive income. This is the key to becoming financially independent in the future and for many generations ahead.

It is critical to talk openly with our kids about spending, saving, and investing; all of which help to instill positive financial values while they’re young. We want them to be equipped with the tools to not only care for themselves and their daily living expenses, but to also build wealth and responsibly use wealth to positively impact the world. 

In this article, you will discover a few simple concepts you can teach your kids and tangible lessons you can implement as part of your plan toward creating generational wealth.

When Kids Can Grasp Financial Concepts

Of course, you’re not going to begin your first conversation teaching compounding interest to your 4-year-old! Children can understand a little more with each year, and you slowly build on their math skills and present simplified financial concepts based on their age, the situation, and the lesson you’re shooting for. 

Young kids between the ages of 5 and 9 just need to learn basic arithmetic and have practice earning money, saving some, and spending some. This teaches them the basics of how the world works – you earn $10, you save $2, and you can buy a new toy for $8. Simple, right? 

When kids can connect that each thing we do or have is paid for somehow, they’ll start to be more considerate of your household budget.  Leaving the lights on, for example, might make the electric bill higher, and you have the opportunity to present and share the statement from the electric company and discuss this financial obligation that exists month in and month out. 

Between the ages of 9 and 15, children can understand adult-like financial concepts like credit cards, compound interest, investing, and compute complex equations. At this point, it’s highly recommended that you share much more about your income, your bills, mistakes you’ve made, and, yes, your investing choices with them. 

Teaching concepts to our children while they’re young, while they have time to practice and experiment with money under your wing instead of when it matters (like with rent or their credit), provides them an even greater chance at financial success. 

Teach Your Kids To Save AND Invest 

The most important thing, no matter the tools you use, is that your child gets access and experience with money. That means earning it, making choices whether to spend or save it, losing it, investing with it, borrowing it, paying it back, and everything that we adults do with our money but on a child-size scale. 

Provide opportunities for them to earn some cash, and walk them through what to do with those earnings. As you encourage them to save some, spend some, donate some, and invest some, talk to them about why these choices are important and share about similar decisions you’re making with your own money. 

Don’t be afraid to share more significant concepts like the impact they could make on a large scale with donations, mistakes you’ve made and what you learned from them, or how they can double their money investing as you do now in real estate syndications. The real lightbulb moment will be when they begin to understand that investments provide passive income – so much so that, if done well, they can choose whether or not to work. 

You get this beautiful opportunity to guide them in earning their first several thousand dollars, building up their savings, and gaining exposure to the fantastic world of investing. Just imagine how much more opportunity for freedom and impact they have just by exposure to these concepts. Amazing!

The #1 Mistake Parents Make With Kids About Money

In general, talking to your kids about money is a million times better than avoiding the subject. It doesn’t matter how much or how little of an expert you think you are on the subject. They need to know about your financial mistakes to learn from them just as much as they need to know about the great decisions you made so they can emulate them. 

Either way, discussing finances and allowing your child some exposure and experience with money and financial conversations provides them more knowledge and confidence with money than if it were never discussed at all. 

Unfortunately, there is one glaring mistake we’ve probably all made. 

Most of us can admit that we’ve said, “We can’t afford that,” at least once to our kids in response to their request for something.

While that may be the easiest, most automatic quip, it’s a missed opportunity for a teachable moment. Sometimes you’re just tired of saying “No,” but it’s important that we lean into that conversation about why we’re not buying it and why/how we’re making different choices with our money.

The truth is, we probably can afford that. So, instead of accidentally frightening your kid into a scarcity complex (yep, that’s what really happens), intentionally replace that phrase with a new, more precise, more truthful expression like, “That’s not why we’re at the store today,” or “That’s not in the budget right now,” or “The money I’m spending today is only for groceries.”

It’s okay to tell your kiddo the truth about why your answer to their request is no, and it’s even more okay to have an in-depth discussion about budgeting, spending money on meaningful purchases, and investing for the future instead of instant gratification. Honestly, we adults struggle with these concepts too, so it’s a great idea to introduce them at a young age.  

If you replace the ‘we can’t afford that’ thoughtless response with an open conversation about financial choices, you and your kids will be much better off. 

What Should You Do Instead

The best thing you can do toward teaching financial literacy to your children is to model your own financial choices openly for them. Talk them through the options you have, why you’re making one decision over another, what bills you’re paying and why, and even the trade-off we all face in spending money versus saving it versus investing it. 

They need a taste of reality while still living at home to learn about decisions they will have to make when they are out on their own. Allow them to exercise their own spending habits and make the $20 or even $100 mistakes now because those are much better to learn from than the $1000 + mistakes they could make with rent money when they’re older. 

Share about your income and bills so they can see what it costs to live their current lifestyle. At the same time, share openly about what it was like for you when you first started out. Although it might be hard to talk about your mattress-on-the-floor and ramen noodle days, they need to know that your life wasn’t always cashflow positive. 

This openness can help them realize that it’s okay to start small and that, realistically, they won’t be living their current lifestyle when they move out. While that might be scary to some, you must help them see the value of that independence. With your help, they’ll begin their independent financial life with accurate expectations and knowledge of what utilities, transportation, food, and other necessities cost, and they’ll be less likely to feel like a failure in comparison to the lifestyle you’re able to provide. 

Positively Impacting The Next Generation With Financial Literacy

Create open lines of communication between you and your kids about money and financial subjects so that they can always come to you with questions, dilemmas, wins, and losses, and so that you’ll continuously have the chance to guide and teach even as they grow into early adulthood. 

We’re always learning, right?  So, again, it’s a great idea to model that for and discuss your journey with your kids. You don’t need picture-perfect finances to be an authority on the subject with your children. They’ve already looked to you for every answer they ever needed their whole lives, and they aren’t stopping now. 

In fact, it’s better if things are a little messy because they need to see firsthand that you’re always learning, winning, failing, researching, and trying again. Remember, reveal your wins and your losses so that the lesson you’re teaching is realistic and they can develop accurate expectations for their own financial life. 

The big thing is that you teach them the power of investing and help them get the correct accounts set up to practice and begin getting financial experience. Just imagine how different your trajectory would have been if you’d known about compound interest, passive income, and real estate syndication investments when you were their age!

Most of us didn’t get much of a financial literacy lesson from our parents, if at all. Fortunately, most of us are also absolutely determined to teach our children about money and break the cycle of financial illiteracy, struggle, and living paycheck-to-paycheck. With the simple tips and encouragement in this article, now we all have an opportunity to positively impact the next generation by teaching financial literacy to our kids!

How To Cultivate A Financially Successful Mindset

Sometimes, our investing journey may feel like a roller coaster. There are times with extreme highs, lows, and multiple medium-intensity moments occurring all in the same day.

Luckily, when you invest in commercial real estate, that roller coaster experience is a bit less volatile when compared to the stock market, but the highs and lows still exist. 

Every investment requires you to take on risk in exchange for the potential upside. 

The truth is, only 10%-20% of your success hinges on your knowledge, tactics, and the mechanical details you implement.

And that 80%- 90% of your success depends on your mindset.

You read it correctly!

Mindset has become quite the hot topic lately, but how do you cultivate a grit-oriented growth mindset that fosters investing success?

Make Your Dreams and Wishes Physically Visible

I heard a story recently about a real estate investor and how he made millions, lost it all, and then rebuilt it. His strong conviction in the power of a physical vision board really got my wheels turning. I can only imagine what it must have been like to have $50 million to lose in the first place!

I, too, have made vision boards and pasted pictures of objects and locations that I thought were far-fetched at best. Some of you practical, analytical folks may be questioning my sanity right now, but I’m telling you: vision boards work

Ready for a science fact? The reticular activating system in your brain recognizes the goals you make physically apparent (by cutting and pasting pictures onto a poster board) and subconsciously draws you toward those individuals, locations, and things in real life.

When you have an on-paper visual depiction of your greatest objectives and aspirations, you’re less likely to forget why you’re striving and more inclined to take tiny steps in the direction of achieving those goals.

Maybe those hopes and dreams will come true after years of hard effort, or perhaps you take baby steps toward your major objectives and achieve them in five or ten years. Nonetheless, gazing at your goals every day has scientific, yet seemingly magical power.

Use Your (Potential) Pain As A Tool

Intentional journaling may help you achieve a major objective-setting endeavor. I’m not talking about waking up and jotting down your feelings, disappointments, and daydreams over a cup of coffee every morning. Instead, this is a very focused 30-minute goal setting exercise.

Here we go!

Get a 10-minute timer, two sheets of paper, and a pencil. Within the next ten minutes, you’ll brain dump all of your greatest wishes and aspirations on one piece of paper. Write as quickly as possible without analyzing what you’re writing. Fill the paper with the most amazing places you want to visit, the most expensive items you wish to own, and the most prestigious events you want to attend. Hold nothing back, even if it feels completely out of your league, crazy or even impossible at this time.

When your 10-minute timer is up, underline your number one over-arching goal and circle your top three one-year objectives. On another sheet of paper, write each of those four items with plenty of space between them.

Set your 10-minute timer for another go, and this time, write a short paragraph under each objective about why you must accomplish it. Perhaps you want to show your kids what’s possible, break a family trend, or that one of those objectives has been a life-long ambition of yours. Use emotionally charged phrases to convey feelings and emotion as you write.

When the timer dings, set it for the final 10 minutes. This time, write beneath each goal what horrible agony you’ll suffer if you don’t achieve it. Will you let someone (or yourself) down? Will you be trapped in a cycle of failure? Will you allow yourself to be proven inferior by the world? Detail the immensely painful assumptions and feelings you’ll experience around failure.

People don’t make daily choices out of comfort, they do things to solve a pain point. Customers purchase items, participate in events, and undertake journeys in order to alleviate their problems. This technique works because, by using pain as motivation,  you’ll react eagerly to alleviate perceived suffering.  So don’t just read this through; Stop right now and complete the exercise; these next 30 minutes may alter your trajectory.

Make Your Dreams a Reality by Verbalizing Them

Claiming your goals aloud is one approach to developing a positive mental attitude toward money. Whether your friends or family think you’re nuts doesn’t matter. If you speak your objectives verbally, in full confidence that they will come true, you’re more likely to achieve them.

This is where a daily writing practice might be useful, or you may use affirmations every morning to boost your confidence in yourself as someone who can achieve the goals you’ve set. Many celebrities, including Oprah Winfrey, have utilized similar measures, whereas others, such as Demi Lovato or Jim Carey, have taken more action-oriented approaches by writing themselves a large check or posting on social media that they’ll sing the National Anthem at the Superbowl.

Another method to make progress using verbal power is to replace negative phrases in your everyday speech with ones that convey confidence, hope, and possibility. As an illustration, replace “I just can’t seem to get over this issue” with “I’m grateful for the chance to learn something new and develop.”

I’m not telling you to be a happiness robot, but rather, that you be aware of your thoughts and the language you use internally and externally. Start speaking as if your goals are attainable and have already been fulfilled.

Implement A Gratitude Practice

Gratitude is at the core of every achievement. Practice expressing gratitude for where you are in life, what you’ve learned from your experiences, and for the accomplishments that lie ahead.

A gratitude practice may be done through meditation, where you take 5-10 minutes each day to close your eyes and think about all the wonderful things you have. Journaling your appreciation is another excellent method to express your thanks.

Have you ever heard of a gratitude vision board? You can create this powerful tool by pasting pictures of your children, accomplishments you’re proud of, and experiences you enjoyed onto a posterboard. This is just like a vision board, except it’s full of things you already have and are thankful for. Each day, allow yourself to be emotionally engrossed in thanks when you see this board – for the individuals, places, and things who have added value to your life.

A gratitude exercise can be done at any time throughout the day, during a morning or evening routine, or even while exercising! Make a strategy to be grateful for all that has happened and all that will come your way, and put it into practice in your daily life.

Allow the Universe to Return The Favor

Now, you’re probably wondering what this has to do with money, financial freedom, or real estate. When your mindset is in a good place, you’re clear on your objectives, and have implemented gratitude exercises, energy (typically in the form of money) flows to assist you in achieving your goals.

So, no matter how silly you feel, start employing mindset work to build the life you desire. Create a personal regimen that leaves you feeling like your lofty ambitions are now real and feasible. You’ll be more likely to conduct research, spot possibilities, seize opportunities, and build relationships if your objectives are in view.

Perhaps you’ve decided to invest a million dollars in real estate one day, and you come across a strategy that encourages you to put $50,000 at a time into various stable commercial assets. WINK WINK

Then you come up with a brilliant idea to save (or earn $50,000 more) each year, specifically  and strategically toward your big goal.

Practice gratefulness, go through the 30-minute goal-setting session, state your objectives verbally with the universe, and make a vision board; if you don’t, you’ll never know what might have occurred if you did.

Real Estate Investing: A Great Hedge Against Inflation

All over the world, people are reeling from record-high inflation. In the U.S. alone, inflation hit 9.1% in July – the highest in 40 years!  

So what exactly is inflation?

Inflation is defined as a general increase in prices which results in a fall of the purchasing value of money.  Put simply, inflation is when the prices of essential goods and services are rising but our income remains the same. 

But the silver lining of this situation is real estate. In a time of uncertainty, real estate remains certain. This is because inflation actually impacts real estate in a positive way, especially commercial real estate. So how exactly does inflation affect commercial real estate, and why is it a great time to invest in it to hedge your risk?

#1 – Housing Prices

Along with everything else, housing prices rise with inflation. For owners, this means their assets will appreciate more quickly. In the current financial climate, property owners are seeing record highs in appreciation. Prices will eventually even out, but even then owners can expect 6-9% increases to remain in many markets. 

#2 – Mortgage Payments

Fixed-rate mortgage payments don’t change, but over time the equity in the property grows. During inflationary periods, as housing prices soar, the asset appreciates at an increased rate, yet the monthly payment never changes. Rents on single family homes have been on a steady upward swing over the last year. CoreLogic reported that September 2021 data showed a national rent increase of 10.2 percent year over year, and inflationary pressures will hit the rental market as well. 

How Is Real Estate A Hedge Against Inflation?

At first glance, our discussion here about inflation and real estate investments doesn’t seem to have a positive connotation. In actuality, investing in real estate, more specifically investing in rental properties creates a natural hedge against inflation. In most cases, the investors are not only protected but actually benefit from inflation. 

Rental Income Increases

With most investments, like stocks, for instance, the value dwindles during an inflationary period. With real estate investments however, home values and rental prices increase during inflationary times. Having a place to live is a necessity, not a luxury. So, even when prices are at an all time high, people aren’t able to avoid the expense of viable housing. 

According to Forbes, the winning formula to profit as a real estate investor during an inflationary period is to tie a cash-flowing property to a long-term fixed interest rate debt. With a fixed rate mortgage on your rental properties, inflation raises the rent payments but the interest payments stay locked at the same low rates, resulting in an increase in cash flow from the property because of inflation.

Rent increases are expected in commercial real estate leases. There’s typically a clause stating that the rent will increase at regular intervals or annually. As rent increases, the value of the property rises as well. If the rent increase outpaces inflation, investors’ return is positive.  

As a result, real estate investors typically enjoy an acceleration of returns during periods of inflation. Inflation causes home values to rise, increasing the equity in the asset. The owner of the property then gets an increased rate of appreciation relative to the debt.

Take a look at this example: If, for instance, you invest in an asset with 10% down and inflation rises to 10%, you just doubled your down payment, as well as doubled your equity in the property. At first you might wonder how a 10% increase in profit benefits you if dollars are worth 10% less. 

Here’s how it works – the debt on the mortgage is outsourced to the tenants. When you receive a higher return on your equity, despite inflation, and you’re leveraging the fixed-interest on the bank’s loan and the tenants’ income, you ultimately come out ahead. 

Property Scarcity

The price of commercial real estate property is partially driven by scarcity. This is especially true in metropolitan areas where population growth has created a limited supply of space. When demand is high and inventory is low, real estate investors are positively affected, as long as price increases outpace the rate of inflation. Property scarcity is at an all time high in the U.S. currently, and real estate investors are benefiting greatly from the rise in prices, as well as the increased need for adequate housing. 

How Real Estate Compares To Other Investments

Real estate investing typically holds less risk than other investments, particularly the stock market, while continuing to deliver good returns and the opportunity to build wealth. For a broadly diversified portfolio, holding commercial real estate is highly recommended. The higher returns gained from real estate investments can offset volatility and/or the lower returns for bonds and mutual funds during inflationary periods. 

Building Wealth In A Poor Financial Climate

The sustainability of real estate investing is, particularly during periods of inflation, is one of the top reasons investors are flocking to real estate. According to Forbes, “real estate has made more ordinary people wealthy than any other investment vehicle.”

During inflationary periods, the value of your debt diminishes right along with your equity. Many people are turning their equity into debt by implementing cash-out refinances. 

While the general population is searching for some type of hedge of protection against the inflation we’re experiencing in this country, real estate investors are thriving. Investors who understand the advantage of relying on real estate are currently building their wealth at an increased speed. Investing in real estate allows you to use debt to your advantage and continue to build wealth even in a poor financial climate. 

Cash flow or Appreciation: How To Decide On An Investment Strategy

As an investor, it is a smart move to know “What’s the best investment strategy in today’s environment?”. We can’t help but get caught up in economic news  and make assumptions about where the market is going, especially with the current situation happening.

Once you decide to invest in a real estate syndication deal, and you work through questions about risk, rates of return, and how real estate syndications work, the next step would be to determine what investment strategy is best. 

It’s important to know what to look for, what is a “red flag”, and what you should or shouldn’t do based on the current market cycle and the most recent economic conditions. This year, the market climate is different than any other so your investing strategy should compensate you for that, right?

Well, the only constant in life is change. The most important thing is that you know what the main two strategies are and why each is important. From there, you can make an informed decision no matter what the economy and the market are doing. 

Two Investing Strategies

The two most common and most widely discussed, overarching investment strategies are:

1. Appreciation Strategy

2. Cash Flow Strategy

Both strategies are essential to the bigger picture, and you’ve got to be informed about each one and how it might affect your financial situation in order to strategize appropriately. 

An appreciation-focused investment strategy is focused on buying low and selling high, creating a gap of profit (gain) between the two transactions. Some great examples of this in residential properties are foreclosures and fix-and-flips.  

In real estate syndication properties, the business plan may give you details such as buying an undervalued property at a low cost basis, executing light renovations, and selling at a much higher market price. This may or may not be a quick turnaround deal and the cash flow might be on the lighter side. 

On the other hand, in cash flow focused strategies, you buy and hold for a longer period of time with the expectation of constant distributions month after month. Rental properties with existing, faithful tenants like in large apartment complexes are great examples. There might be some natural appreciation in the deal, but the most attractive quality highlighted in the business plan is the predictable returns. 

The Appreciation Plan

The caveat to pursuing gains only, is that you have to know the asset’s actual value and the market trajectory, almost guaranteeing you’re getting a great deal on the buy. 

In real estate, there’s a saying – 

“You make your money when you buy, not when you sell.” 

It means that you can’t rely on what you think the price should be, that you can’t rely on market appreciation, and that you definitely shouldn’t be expecting renovations to make the deal profitable. In other words, you must buy at a discount so that you can sell for a profit. 

The gains strategy also requires that you have a separate income to support your lifestyle and the asset throughout the time you own it. Assuming the property isn’t providing you any monthly income, you still have your own bills, transportation, and food to pay for, including mortgage, insurance, and any repairs that come up before you sell. 

A narrow focus on investing for gains comes with an inherent business risk since you must be prepared to hold and sustain the asset through market dips, without any returns from the investment, until you can sell for your desired gains. 

One more thing, if your goal is to sell when the property appreciates 20%, you have to be disciplined enough to sell right then. Some investors get hung up when they decide to “just hold it another year, ‘cause the market’s skyrocketing right now” but things crash six months later. 

The Cash Flow Plan 

Planning solely for cash flow is about consistent monthly or quarterly distributions over the long term. It’s not about trying to time the market, buy low, or create a big spread. In an ideal cash-flowing investment, there’s enough distributed each month to cover property costs like the mortgage and insurance, plus renovations or repairs needed, and still have profit leftover. 

On cash flowing properties, you always have to assess sustainability over the long term. Meaning, how sustainable is the profit each month? If you’ve got $100 after the mortgage and insurance is paid, awesome, and yes, the property is cash-flowing. But what happens when you have to replace the hot water heater for $800? That means for eight months you have $0 in profit. So you have to assess if the profit made after expenses each month is really sustainable and if the investment property will still be profitable if you have a repair or two. 

Another consideration is, for example, with that same $100 in profit on a residential rental each month, what if the market contracts and you have a hard time finding a tenant? Lowering rental rates to fill the unit might make it so the property is no longer cash flowing. You have to know ahead of time how you’ll handle that and decide the rate of cash flow you require on a property so ownership is sustainable long-term. 

A caveat to an only cash flow-focused investment plan can leave you blind to the long-term wealth-building potential of appreciation, especially if the cash flow is funding your lifestyle instead of being reinvested. 

Why Not Both?

The good news is that the answer to the question, “What’s the best investment strategy for me in today’s environment?” is not binary. You can pick both!

You can absolutely earn steady passive cash flow AND enjoy the wealth-building power of appreciation by pursuing real estate investment syndications featuring both benefits at the same time. 

Don’t corner yourself into cash-flowing properties that have little to no long-term expected appreciation.  

AND

Don’t hamper your cash flow by investing in properties that are only focused on gains.

Here at Noblivest, we believe the best way to build wealth and freedom simultaneously is to invest in real estate syndications with cash flow and appreciation built into each deal. 

Deciding Which Plan Is Best For You Right Now

Ultimately your personal situation and your investing goals will determine what features you prefer in an investment opportunity. If you need $0 in cash flow now and are focused on building your retirement account that you won’t touch for another 30 years, then aggressive appreciation-focused (gains) deals might be your focus. 

On the other hand, if cash flow would allow your spouse to ditch the corporate stress and fulfill dreams of being more present with the family, then a reliable, cashflow-focused syndication might bring you joy. 

Before you choose a particular strategy, consider what might be in your life’s near and distant future and then explore how investing in real estate syndications might support that vision. Ask yourself about any significant shifts that might occur within the next five years, like graduations, weddings, daycare, public schools, new cars, moves, additional education, or career changes. 

With a clear plan for where you’re going, it will be much easier to determine which investment strategy is best for you. Only then will you know to invest real estate syndication deals aligned with the appreciation plan, the cash flow plan, or a mix of both. 

3 Options For Funding Your Real Estate Syndication Investment – Which Will You Choose?

Congratulations, you have decided to invest! 

Your next thoughts might be, how and where to get the money to fund your investment decision? 

Passive income really sounds fantastic, but you’ve got to set up your personal finances strategically, so the distributions benefit you in the way you imagine. 

Fortunately, there are at least a few options for funding your real estate syndication investment. The option you choose will depend on your family situation, your investing goals, what you plan on doing with the distributions, and more. There’s not a one-size-fits-all answer, and you’ll want to sort through the details here so you can make the corresponding moves before our next deal opens up.

So, which of the three ways is right to fund your real estate syndication investment? 

Let’s take a look!

1. A Courageous Individual Investor

The quickest and easiest way to invest is solo with cash. This means entering the deal as an individual (no partner) with capital from your savings or other liquid assets. As a sole signee, you’re entirely in control of selecting the deal, signing and completing documents on time, and simply wiring the money from your savings into the deal. 

As an individual, you’ll receive distributions from the syndication deal directly into your personal account and reap the tax benefits of owning real estate. There is no need for bookkeeping either because you’ll receive a K1 each Spring with all the information you need for your taxes. When you invest personal money, all the benefits, tax breaks, distributions, and other joys of being a real estate syndication investor are directly yours!

Some things you want to think about as an individual investor are alternative forms of asset protection like insurance or trust. You should ensure there’s a will in place with a designated beneficiary. The operator team doesn’t collect beneficiary information, so if something unexpected occurs, you want to have that clearly stated in your own legal documents. 

2. A Powerhouse Team

Suppose you wanted to invest jointly with a partner or a spouse. Yep! You two can pool your resources together to amass the fifty-thousand and invest in a real estate syndication deal together. It happens all the time!

Many people live in community property states, which ensures all marital assets are jointly owned. So, spouses are required to invest together, reap the distributions, and enjoy the tax benefits jointly. 

This gets slightly more complicated since now two signees are required, and both of you have to agree on an investment deal together,  but it’s still a pretty straightforward process. However, both partners must consider asset protection strategies and put legal beneficiary designations in place. Whether this is state-determined or if it can be designated in a trust or will, it should be set up by the spouses or partners ahead of time, just in case.

3. Invest As An Entity

The third way you might choose to invest is through an entity. You can invest through a retirement account like a self-directed IRA or a QRP, through a trust, or via LLC. Depending on your state’s rules and the advice of your CPA, any one of these could be an option to invest in a real estate syndication with retirement funds or as a way to harness the protections of a business intentionally set up for investing. 

This typically requires one signee, so it’s simple, but it requires filing some paperwork, which makes it slightly more complicated. You always want to check with a tax professional familiar with your financial situation and the applicable tax laws to see which choice might be most beneficial to you. 

Distributions and any benefits from the investment apply to the entity, meaning the deposits will go back into your retirement or business accounts. If investing this way, it’s important to keep funds separate – you don’t want unexpected taxes or fees from the accidental withdrawal/use of retirement or business funds. 

When investing through an entity, your level of asset protection and heirship is based on the Operating Agreement of the LLC, Trust, or IRA you’re using. Check with your account provider about any rules or fees about real estate investments and understand the benefits of depreciation or loss as applicable to the account. There is a chance if you’re investing in real estate syndications through a self-directed IRA, for example, that you could become liable for UFDI or UBIT taxes. 

So, Which Funding Option Should You Choose?

Ultimately the question of which one is best for you depends upon when you’ll need the cash flow, how you’d like the tax benefits to be applied, and what level of asset protection you’re seeking. 

If you’re interested in the distributions and tax benefits being applied to you personally and want cashflow to boost your lifestyle now, then an individual or joint investment may be the way to go.

Are you planning on the investment distributions replacing some income or funding little Joey’s future soccer club dues? Funding your investment from your personal assets, either jointly or individually, may be best. 

If you’re more interested in building long-term growth and having the distributions bulk up your retirement account, then you may want to explore a QRP, a self-directed IRA, or even an LLC situation. 

Are you intent on tripling your retirement assets within the next 15 years so you can live out your dream lifestyle during those elder years? Then one of these entity-type options might serve you best.

Many factors might affect your choice, like if you’re married with kids, which state you live in, how old your kids are, if you have any large purchases on the horizon, when you’re hoping to retire, what you plan to do with the distributions, and what heirship designations you require. 

How To Find And Fund Your Next (or First) Syndication Deal

To invest in a real estate syndication, typically you have to be an accredited investor. However, a handful of our syndication deals have been available to sophisticated investors over the past year. 

In other words, you don’t have to be a big shot to get into this stuff! All you have to do is join the Noblivest and have a little chat with us about your investing goals, what you’re looking for, and how you see real estate syndications moving you toward the lifestyle you’ve been dreaming of. Then, and only then can we share our upcoming deals with you!

Whether you’re a sophisticated or an accredited investor, our deals tend to fill up fast, so take some time to think about whether you’d be best to invest individually, jointly, or through an entity first. Once that legwork is done, and you have your capital “in hand,” we can help you find a real estate syndication deal projected to best move you toward your financial and lifestyle goals.  

HOW TO MAKE THE MOVE: From Single-Family Rentals to Multifamily Investor

Many real estate investors start out investing in small, single-family homes. Some focus on fix and flips, other investors scope out rentals in hot markets, and others simply rent out properties as they outgrow them, 

Then, at some point in time, the thought arises: Why not shift from Single-Family Landlord to a Multifamily Investor?  

Before making this bold move, it’s helpful to learn the advantages and disadvantages of each type of real estate investment, understand how properties are valued, and to know the two methods you might use to scale your business from single-family landlord to multifamily investor. 

So to help you answer all your “what ifs”, and to reassure you that you can successfully scale your business from single-family landlord to multifamily real estate investor, continue reading this article. 

The Advantages Of Owning Single-Family Rental Real Estate

Financing for single-family real estate investments is easy to access, and the purchase process is pretty familiar because it’s how you probably bought your own home. You can obtain up to ten loans for residential real estate based on your credit and income, just like any other personal financial deals. Residential real estate can be purchased easily with a low down payment and a bank loan, private financing, or even 100% cash. 

Another advantage to single-family real estate investments is the various exit options. You can sell it at retail, do a lease-to-own deal with your tenants, sell it to an investor, or hold and rent it out.  On top of that, you can buy one single-family rental at a time or vary the property management companies used, allowing you to diversify in a purposeful way. 

So, let’s purport that over the past ten years, you’ve purchased a single-family home every two years in varying neighborhoods and cities within a metroplex. Your portfolio of residential rentals consists of various ages and styles of single-family homes, some large and some small, and you use three different property management firms to help you handle them all. Cool, it seems like you’ve diversified as much as possible, and you’ve probably learned some great lessons along the way! 

So what might be some disadvantages of owning single-family investment properties like this?

The Disadvantages Of Owning Single-Family Rental Real Estate

With rental real estate, when things are good, they are fantastic, and when things get rough, they can become real bad real quick. So, consider this, the more roofs you own, the greater likelihood of needing to replace one (or more) of those roofs. The more doors you own, the more water heaters, air conditioning systems, and basements or attics you own. For this reason, CapEx (capital expenditures) can be high. 

Furthermore, each property carries its own insurance, tenant lease, warranties, taxes, and management fees; plus, you must maintain bookkeeping for EACH property! I’m sure you can see how this might get out of hand quickly if you aren’t super organized or if you don’t have help with the record-keeping portion of these investments. 

When it comes to expanding your investment strategy with single-family real estate, you’ll discover there are a couple of little-known or little-considered hindrances that will curb your ability to reach the next level. For one, there is a cap on the number of conventional loans a single person can have on their credit. You can circumvent this for a while if your spouse is on board because each of you can have ten loans, giving you up to 20 loans total, but then what? You’ll reach a point where you can’t expand further. 

The other hindrance that we’ve all probably faced when trying to sell personal residential real estate, is that the value of your property is determined by the value of the neighbors’ property. Sure, you can make improvements in your single-family home, but “comps,” as they’re commonly referred to, are usually the most significant determining factor of your property value in the single-family realm. Unfortunately, with single-family real estate, you can raise rent and reduce expenses, but that does not change the value of your property.

The Advantages Of Owning Multifamily Rental Real Estate

As you look to level up from single-family rentals, there are, of course, advantages and disadvantages of owning multi-family real estate too. So, you might be wondering, what’s different about multifamily investing from single-family investing?

One noticeable difference is that a multifamily real estate deal can transfer ownership of multiple units in a single transaction. Talk about simplification!

Whereas you probably have a file cabinet full of documentation for those five properties we were talking about earlier, the purchase of 2-20 (or more!) units all at once would significantly cut down on paperwork. 

Similarly, since each multifamily property contains several units, it’s easier to form and leverage a team. A contractor, broker, property manager, and other service-oriented trades will jump at the chance to have a multifamily property owner as their client. Conversely, it’s much harder to find reliable help on each individual single-family property. 

The most significant advantage of owning multifamily rental real estate is your ability to control the property’s value. Commercial property is valued based on the amount of income it creates, so your rental income directly relates to the property value. 

You can assert control over the value by reducing costs, capturing efficiencies, and adding income streams to the property. These value-increasing opportunities might look like installing waste-reducing showerheads in the units, energy-efficient bulbs in all light fixtures, and providing paid lock-box options for residents. With multifamily real estate, you can increase rents and decrease expenses, and directly impact (increase) the value of your property.

The Disadvantages Of Owning Multifamily Rental Real Estate

On the flip side, yes, there are disadvantages to owning multi-family real estate, and most of them are in direct opposition to the advantages of owning single-family real estate. 

Perhaps the most considerable disadvantage to owning multifamily rental real estate as an investment is that you have limited exits. Not just any ol’ person on the street will be willing (or even able to) purchase the property. Your sale will likely be limited to other investors or corporations. 

Some other disadvantages have to do with the diversity of markets and property managers. If you own a single property with 50 doors, you aren’t diversified in either the market or property management. You have all your eggs in one basket. *This is where syndications help because you can own a percentage of several multifamily properties instead of a single, multi-unit property.

Another challenge to owning multifamily property lies in obtaining financing. Generally, multifamily properties have a heftier price tag, and your standard lenders cannot finance that large of a loan on your personal credit. It’s likely you’ll need partner investors and to intentionally establish a solid track record of positive credit history as an LLC before you could qualify to finance the purchase of a multifamily property. 

Several of the disadvantages above filter down to one single, essential foundation of successfully owning multifamily rental property, and that is your tenant base quality. A high-quality tenant base who consistently pays rent on time, cares about the property, and remains loyal long-term will boost your odds of being profitable and your chances of significantly increasing the property value.

How To Transition From Single-Family to Multifamily Rental Real Estate

No matter how you slice the pie, it’s tough to become a millionaire off single-family rentals alone. Multifamily investing is the key to reaching that next tier of wealth, freedom, and experience. There are a few ways to do this, but the most common are “Stacking” and “Leverage.”

One gradual, potentially safe-feeling way to uplevel is to “stack” your real estate investments, doubling the number of doors you purchase with each transaction. In stacking, you start with a single-family home, and suppose every two years, you buy another piece of real estate. Well, every two years, instead of purchasing another single-family home, you buy a duplex, and then a quad, and then an 8-plex, and so on. In just ten years (in the blink of an eye), you’d own 31 units!

The other option is to leverage your earnings from your single-family investments into a multifamily real estate syndication deal. If you own five single-family properties, and each one cashflows $200 per month, you have $12,000 each year to funnel toward a syndication opportunity. Since the typical minimum on a syndication deal is about $50,000, you’ll quickly achieve that in less than five years, even with capital expenditures and maintenance on your five properties!

Is Becoming A Multifamily Millionaire In Your Cards?

With our experience in single-family rentals AND multifamily deals of all types, we always advise you to take a step back and look at your goals. Why are you investing? Does it make sense for you to personally own and manage 31 doors over five properties? Does it make sense for you to be more hands-off and collect disbursements without being a landlord?

Any choice is a great one, because you’re choosing your personal, family, and financial goals over everything else and using real estate investments to help you get there. If you’re interested in learning more about syndications because the “Leverage” route sounds interesting to you, you’re invited to join the Noblivest.

Inside, you’ll learn all the nitty-gritty details about real estate syndication deals, learn everything you need to embark upon your first syndication deal, and meet other fellow investors like yourself. We look forward to helping you learn how real estate syndications can help you achieve your investment goals!

Real Estate Investing Best Practices

If you’re interested in investing in real estate but aren’t sure how to get started, you’re not alone. Often, would-be investors know that real estate is a reliable, relatively low-risk way to build wealth but aren’t sure how to initiate the process. 

A typical path new investors take is starting small and building capital, then investing in more significant, more passive investment deals down the road. 

Here at Noblivest, we know many investors who started real estate by investing in short-term or vacation rental properties. By starting with a vacation rental or Airbnb in a desirable area, you can enjoy the property with your friends and family while building your capital and gaining valuable real estate experience.

If freedom is one of your top priorities, you’ll, at some point, likely move from active investment projects to more passive investments. For example, vacation rentals often lead to small multifamily properties and ultimately to completely passive commercial real estate syndications.

This is a great strategy, but there are a few things to do before getting started in real estate investing. Keep reading for a quick guide on how to take your first steps toward real estate investing success. 

Identify Your Strengths

The first step is to identify your strengths. While this might sound cliché, understanding your strengths and weaknesses is crucial to your success. Everyone has areas where they don’t perform well, areas where they’re average, and areas where they truly excel. 

As we all know, when we’re able to focus our efforts on our strongest areas, we perform better and are ultimately more fulfilled. The same holds true for real estate investing.

As an investor, it’s essential to identify your strengths. For instance, if you’re exceptional at seeing potential in properties and creating a renovation plan that brings a diamond in the rough asset to life but aren’t great at executing the plan, you need to focus your efforts where you’re the strongest. In this example, you should stick with finding rundown properties and creating an overall strategy for what needs to happen to bring them to their full potential. Since you’ve identified you’re not the best at executing a plan; you need to have someone on your team who does excel in that area. 

Identifying your own strengths is essential, but it’s just as critical to identify the strengths of others as well. As you build a team, everyone will bring their own unique talents and expertise to the table. When everyone is operating from their own personal zone of genius, everyone is more productive and creative, creating a deal that’s ultimately more successful. 

Design A Plan

Now that everyone’s strengths and passions have been identified, it’s time to design a plan to bring your real estate investment dreams to reality. 

Let’s face it, most of us want to design a life around our personal goals and desires. Real estate investing is a great way to get there.

When designing a viable plan, you must first do your due diligence. A real estate investment plan is not to be taken lightly. You, as the investor, must research what options are available to you, research markets, determine what type of investment best fits your lifestyle and personal investment goals. 

Here’s a pro tip, get a pulse on what other real estate investors are doing. By following other investors, you’ll quickly understand what’s working and what’s not. Also, be sure to stay up to speed on the current real estate market. 

While your plan may involve some trial and error down the road, do your part to establish a viable plan early on before you even need one. 

Take Action

Once you’ve put in the work to create a vision for your life and real estate investment journey, it’s time to get your hands dirty and start taking action. 

While this step seems obvious, it can also be the most difficult one to take. It’s not uncommon to get so wrapped up in the research and the due diligence of real estate investing that you suddenly find yourself stuck. You’re doing all the right things but not actually taking any action steps. 

A smart way to combat this counterproductive behavior is to set yourself up on a timeline. Starting with research, map out each phase that needs to be completed. Once you have all the stages mapped out, include specific action steps that need to take place. Then, most importantly, add dates to your action steps. When deciding how much time to allow for each task, a good rule of thumb is to create a time frame that’s realistic and doable but also challenges you. You don’t want to make your action plan so comfortable that it doesn’t get accomplished within a reasonable amount of time. 

Action, after all, is intended to get you from point A to point B, point A being where you are now, and point B is the lifestyle you’re dreaming of. The quicker you take action, the sooner you start progressing toward your real estate investing goals. 

Propel Yourself Forward

Investing in real estate can feel overwhelming, even intimidating, especially if you’re new to the process. However, it’s important to remember that progress doesn’t have to equal perfection. 

To make forward progress, you have to trust yourself. You have to trust your strengths and your instincts. As time goes on, you’ll start feeling more comfortable in your new role as a real estate investor, but until then, it’s up to you to continue to propel yourself forward.  

Remember, your first few real estate investments will likely be a work in progress. You’ll quickly figure out what works and what doesn’t. Then, as your expertise grows, you’ll know how to adjust your deals and your overall vision accordingly. 

By creating a vision, starting small, and taking action, you can develop a cycle of investments that you can enjoy, while living a meaningful, intentional life as you build your wealth.