BiggerPockets is arguably the richest source for aspiring real estate investors. And real estate, itself, is the richest asset class in the world.
Yet many who read this haven’t done their first deal, are in the middle of their first deal, or may still be on the fence about investing.
Some may be procrastinating, piling up roadblocks or waiting for the stars to align. (What are you waiting for?!)
Some may think the barrier to entry is too high. They might think that you need a lot of seed money. (You don’t.)
Either way, if you’re still on the fence about investing, here are five figures that’ll have you ready to do your first deal today. (If this does indeed get you started, please leave me a comment below! I’d love to hear it.)
Numbers That Will Make You Want to Start Investing
This is the amount a bank will give you on an FHA mortgage for a property up to four units. I know it’s been said a million times here, but FHA is the first-time investor’s best friend.
I’m not sure if this fully sinks in with people. But yes, the bank will actually lend you almost 97 percent of the entire amount it will cost you to buy something.
What you have to put up in cash to buy and OWN a turnkey, cash-flowing apartment building in the capital of Connecticut. According to LoopNet, this is for three units at a 9 percent cap rate.
At $169,000, 3.5 percent down equals $5,915. That’s all it takes to get in the game. Some college courses cost more than that.
What it will cost you to own a piece of Sam Zell’s Equity Residential (EQR), the third-largest multifamily landlord in the country. They own 307 properties with over 79,400 apartment units in various top markets (D.C., N.Y.C., San Francisco, etc.).
For $75, you can own a piece of that. Aside from the portfolio itself, the stock might actually be a good deal, period.
Valued at $27.97 billion, EQR is actually undervalued at the moment. Their net operating income is $117.19 million, which means—if you go by a 4 percent cap rate (reasonable for N.Y.C.)—a more accurate valuation is a cool $29.30 billion.
Over the past three years, EQR sold $8.5 billion worth of apartment properties. Half of it was distributed to shareholders. (The rest was reinvested.)
Buying into that, even if it’s one share, gives you ownership in that entire portfolio.
4. $87 (The Best Bet)
If you’re more into mutual funds and exchange-traded funds (ETFs), you can pick up the number one REIT ETF Vanguard. It’s as safe a bet as any.
The fund owns $61 billion in assets. It yields 3.96 percent and has a YTD return of 17.89 percent.
It’s rock solid; no crazy ups and downs. VNQ is $87/share today (April 12, 2019). It was $81 on Jan. 1, 2007.
Despite this consistent, almost predictable output, VNQ has outperformed the S&P 500 by over 54 percentage points on a total return basis over the last decade.
In fact, Investopedia calls this very stock “the best bet for most novice investors.”
5. 10% (The Billionaire’s Benchmark)
This is the share of the world’s wealthiest people who have built their fortunes from real estate, according to Forbes.
This means simple real estate investing beat out billionaires from tech, oil, crypto, stock trading, or any other lucrative field.
Perhaps the most impressive stat from this list? Many of the wealthiest real estate billionaires trace their lineage to generational wealth that’s compounded over time.
Fred Trump was a developer, blazing the trail for his son to become a billionaire.
Richard LeFrak joined his father Samuel LeFrak’s company, paving the way for him to amass a $6.5 billion fortune.
Why does this matter?
Well, by starting early—or starting now—by the time your children’s children grow up, they could be billionaires, too.
If you’re hesitant to invest, what’s holding you back?