5 Ways For Real Estate Investing – Investing In Real Estate For Financial Independence Retire Early

5 Ways For Real Estate Investing – Investing In Real Estate For Financial Independence Retire Early


– Who doesn’t eventually
wanna be financially free? I think we can all agree that
this is the ultimate goal. But, the real question is, what is the path you’ll take to achieve financial freedom in your life. In this video I’m gonna go
through five ways to invest in real estate to help
you decide which method is going to be best for
you and your life style. If this is one of the ways that you decide to
build financial freedom. I’ll touch on some traditional
real estate investing ideas, as well as some alternatives that I like. Hey, I’m Jarrad, and on this
channel we like to talk about all things personal finance and investing. Please, Hulk-smash that thumbs up button because you’re kind of
like fanny pack of life, you were cool but kind of in your own way. The fun part about setting yourself up financially for the future is that you don’t have to
only choose one path. If you’re able to stay organized, focused and create proper habits then you give yourself the ability to use many different methods
to spread out your risk and generate multiple streams of income. The first thing you need to know about investing in real estate, is that it can be as passive
or as active you want it to be. Although I’d argue that it’s gonna take a little bit more time to get it be a truly passive investment,
going the traditional route. It’s still worth noting that it’s possible and can be extremely lucrative. Think about it, you could
create a real estate empire. Not like the empire from Star Wars, a good kind of empire
that can create income for yourself and give people
a place to actually live. Sorry not sorry, Darth Vader. I’ll have links down in the
description for resources if you’re interested
in learning more about investing into real estate. On paper the over all benefits
of investing in real estate sound amazing, owning a
peace of physical property that generates you a
return on consistent basis is like the Holy Grail of investing. Unlike investing in the stock market you actually have more control over how each property or little business is run on a day-to-day basis. On the other hand it does have its risks. Investing to real estate isn’t
something you can research for an hour tonight then
hop into it tomorrow. Now, there are some alternative ways to invest in real estate to
where you can basically do this. But the traditional ways are going to take a little bit more time and effort. And in turn, will most likely have a higher return on investment. Towards the end of the video
I’ll point you in the direction of different resources you can check out if you do wanna pursue
investing in real estate. Let me know in the comments down below if investing in real estate
sounds interesting to you or if it’s just kind of not for you. First up, we have house flipping. Now, most people are
familiar with flipping houses through shows we’ve all seen on TV. You’ve got those really good lookin’ host that just walk into a house, point somethings out that
they’re gonna fix and update. Then have their contractors
spend the next 15 minutes of the episode fixing up those things, show you the final result and
that’s the end of the episode. And of course, they always make money. They kind of glamorize the whole thing and make it look a lot
easier than it actually is. Let’s bring it back to reality though. I don’t know if any real house flipper would ever say that
these projects are easy, kinda like that show on TV. It takes a lot of
upfront knowledge to know what is a good property to buy and the type of price that makes sense to hopefully turn a profit in the future. It also take having the right connections when it comes to contractors
that know what they’re doing to help you turn a ugly property into one that can sell for
enough to make some money. When flipping a house, speed is the key. Having to pay the mortgage
is gonna eat up into profit. So being able to get the renovations done as quickly as possible so that you can get that house listed is extremely important. The goal of flipping a home is to buy it for an extremely cheap price update it just enough add enough value, so that you can turn around and hopefully make 20,
30 or 40 percent profit. Every deal is gonna be different and it doesn’t always work out as planned. This is where the knowledge
and education come into play. The more you know the better you can evaluate a potential investment. If you wanna learn more
about flipping houses from a real life, real estate investor then check out the YouTube
channel of one of my buddy’s his name is John, he does it full-time and he shares all of his
experiences on his channel. He absolutely knows what he’s doing and can help show you what it’s
really like to flip houses. I’ll throw a link to his
channel down in the description. Next we have REIT’s or real
estate investment trust. These are a whole lot easier to invest in with less knowledge. REIT’s are traded on the stock market. So, you can buy and sell shares of them like you would in individual
stock or index fund. A REIT is essentially a
company that you invest in who is already investing in
real estate on regular basis. They own, operate or finance
income producing real estate. The cool thing about a
REIT is that they have abid by certain regulations and laws when it comes to what
they do with the profits. They’re required to return at
least 90% of a taxable income to the share holders in the form of dividends every single year. This is why you’ll see that the dividend return on
a REIT is usually higher than most publicly
traded stocks out there. For example Apple offers
a dividend of around 1.8%. Well it’s not uncommon to see a REIT offer four, five, six or even
a seven percent dividend. Since a REIT is traded on the stock market that means that this
investment is highly liquid since you can sell your
shares at any point in time. This is important to know since a traditional real estate investment is a lot less liquid
since it’s not that easy to kind of go sell a property tomorrow and have the cash in your
bank account right away. Keep I’m mind though, that
no real estate investment is safe when it comes
to declining in price. Because a REIT is traded on a stock market the price per share always
has the potential to fall. I personally have a little
bit of money invested in REIT’s through M1 Finance, which I’ll talk about in a future video. If you’re interested in
investing through M1 Finance then I’ll through a
link in the description to open up an account with them. I’ll also leave a link
down in the description of my review on the M1
Finance investing platform. The next way to invest in real estate, is through rental properties. Owning rental properties
is appealing to most people because the potential it gives you to receive a regular stream of income every single month through rent payments. Another possible upside, is when one of your rental
properties appreciates and ends up worth more
than you bought it for. You of course won’t benefit
from this appreciation unless you sell the property, but it’s still a nice little perk. I should also remind that
while you have people renting from you they are paying
down the mortgage. Keep in mind there is some education and hands on experience that you need before getting started with this. But the good news, is that
there are more than enough resources out there to
show you the exact steps that you need to take
to kind of get started. A barrier to entry that
holds most people back from investing in rental properties is the amount of cash that
you need for a down payment, especially on your first property. You’d ideally wanna put at least 20% down. While there are different
ways to get around having to put down a decent
chunk of money at first, most people wanna make sure that they have enough
cash on hand for that 20%. Also, have some money left
over to do any kind of upgrades that are needed to get the
house ready to be rented. Most homes that you buy with
the intention to rent out could need a lot of work or a little work. It’ll all very from property to property. I’ve heard of people out there who only invest their money
into rental properties and use the money generated
in place of their 401k or other retirement accounts. Investing in income producing real estate also has a potential to create generational wealth for all of your heirs. It’s a physical asset that you can pass on forever and ever and ever. Housing is never going anywhere. If I had to guess and I’d
say that 95% of people will rent at least one house or apartment at some point in their life. The odds are in your favor
when you invest in real estate with the soul purpose of
renting your properties out. If you’re interested
in learning more about investing into real estate
then I highly recommend The Book On Rental Property
Investing by BiggerPockets. I’ll throw a link down in the description to purchase that book. The next way that you can invest
your money into real estate is through crowd funded real estate. Sometimes referred to as EREIT’s. Crowd funded investing
gives you the opportunity to invest in larger projects that you wouldn’t
normally be able to afford since you don’t have millions
of dollars sitting around and because you don’t have knowledge or contacts needed to make
one of those deals happen. If there was a 1.5 million dollar real estate project out there and you’re someone like
me then there is no way that you could afford to
invest in that right now. That is where crowd funded
real estate comes into play. A company like Fundrise will basically have a bunch of people throw their money into a pot then go out and invest in
real estate with that money. There’s all kinds of
companies that do this. But my personal favorite is Fundrise. I actually have a little
bit of my money invested through them and I’m
really enjoying it so far. I’ll throw a link to sign up with Fundrise down in the description. Another nice feature about investing in crowd funding platform is that the minimum to invest
is usually really small. For fundrise their minimum
investment is just $500’s. Your investment rises based
on the properties appreciating in dividends the they distribute to you. I can’t speak for other
crowd funding websites but I know the Fundrise actually shows you every single piece of property
your money is invested in. You can go in and get a little summary and kind of update as to what’s
going on with each property. I’m a weird-o so I’ve even gone as far as searching for the properties
I’ve invested on Google Maps just to actually see it
from the street view. It sort of makes it feel a
little bit more real for me. Since real estate should
always be looked at as a long term investment, these crowd funding
websites we’ll expect you to keep you money invested
for a longer period of time. While they can and are willing
to sell off your shares if you decide that you want out, it’s not as easy as selling
your shares of a REIT, since those are publicly
traded on the stock market. Real estate investing
should not be looked at as a liquid investment, unless you’re trying to flip a house and even then it’s still not
guaranteed to be very liquid. Investing through crowd
funding is very passive way to invest in real estate
for the long term. Always keep that in mind. The next option you have
to invest in real estate is probably the most attainable
by everyone watching this and that is through something
called house hacking. This is one I wish I would of done for my first investment
property, but I didn’t, so I’ll be trying to do
that for my next one. House hacking is when you
buy a multi-unit property. Basically anything with two or more units, so a duplex, triplex, four-plex,
or anything like that. And you live in one of the units while renting out the remaining units. The important thing to keep in mind here is that you have to
live in one of the units within 60 days of closing and live there for at least one year. This will give you the ability to get owner occupied financing, which means that you’d have
to put less money down, you get a lower interest rate, and those types of loans
are usually easier to get. And if you just bought a house
for investment purposes only. The goal here is usually for you to live in the less desirable of
all the units that you have, so you can get the nicer ones or the ones that need the less work. Rented out to tenants as soon as possible. If you are someone who is handy then you can live in the unit
and fix it up on your own. And if you’re not then
you’d rather be the one dealing with living in
that mini construction zone to get it fixed up as opposed
to making one of your renters live in a unit that’s under
construction all the time. The math will usually work out to where you essentially live somewhere with no rent or mortgage
to pay every single month. On top of that all of your renters are paying down the mortgage for you. This would remove one
of the larges expenses the majority of people have
to deal with on monthly basis. Now keep in mind that even though you don’t necessarily
have a mortgage payment it may still be wise
to set some money aside every month like you do have one. Because the more units that you have, the more units you need to tend to if something needed repaired. Sure it’s less likely that
they’ll all need fridges repaired or replace and the plumbing
serviced at the same time, but it’s still a possibility, so it’s better to be safe than sorry. It is possible that the
numbers work out so well in your favor that you don’t actually need to set money aside every month. It’s all going to vary
from property to property. So who else is pumped to start
investing in real estate. I think it sounds really exciting. Let me know in the comments down below if this something that you’d
like to pursue in the future. If not then I’d love to hear why it doesn’t sound appealing to you. Make sure to Hulk-smash
that thumbs up button, subscribe to get more
personal finance videos just like this one. Check out all of these
videos around my head and I have links in the
description to help you out with all of your personal finance needs. I’ll see ya in the next one friends. (speaking foreign language)

11 thoughts on “5 Ways For Real Estate Investing – Investing In Real Estate For Financial Independence Retire Early

  1. Wow. This video came at the right time. I've been looking into real estate investing.

  2. Great video Jarrod! Thank you for the shout out šŸ¤—. The Jarrod statistic šŸ¤£

  3. Please keep these videos coming!!! These are the exact topics I want to learn more about.

  4. I just added a vanguard reit to my Roth IRA- VNQ!šŸ’ŖšŸ»šŸ”„šŸ”„šŸ”„

  5. Nothing wrong with my deadbeat tenants feeling the blade of my red lightsaber. šŸ¤«šŸ¤£ just kidding, great video!

  6. Great video explanation my friend! There are many ways to invest in real estate, I think Iā€™d want to get involved with rentals for that income šŸ™Œ

  7. I love real estate because it has cash flow, appreciation, equity buildup, and tax benefits. All with the benefit of low cost leverage! šŸ™‚

  8. Love these ideas! Wish I could invest in real estate as my full-time gig lol ā™„ļø

  9. Thanks Jarrad, I'm new here and really enjoyed this video and the few others I have seen. Just subscribed! Trying to learn as much as I can about real estate and investing in general so I can start in a few years. I came here from Jon Schoeller's channel šŸ¤£

  10. Invest In Partial Shares With M1 Finance For Free (where I invest my money) https://www.debtfreeblueprint.com/M1Finance

    Get a FREE stock worth up to $200 when you open an account with Robinhood through this link: https://share.robinhood.com/jarradm14

  11. I love your videos

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