Advice on a low complexity 1st investment to get started?

Question

I’m interested in diversifying from stocks and bonds to real estate but my wife sees it as “spending $” on a house not as an investment. She asked “why not mutual funds” any advice for a relatively simple low risk entry method. I’ve heard about companies that do turnkey rentals. Maybe that’s a good starting point to her her comfortable?

Thanks for any advice.

Louis Zameryka · Answer

@Zach Lemaster

Thanks for the reply Zach. I’ve heard your company commercials on the podcasts and have been considering it. Also I believe you do business in a market or markets I’ve considered before even learning about Bigger Pockets or Rent to Retirement. I’d love to set up a call. Send me a message and let’s get it scheduled.

Zach Lemaster · Answer

@Joseph Crunkilton Thank you for the shout out!

@Louis Zameryka

We've helped many investors just like yourself build a successful rental portfolio across numerous cash flow markets. It's all a numbers game, and the most successful investors invest in the markets where they get the best returns!

Please let me know if you have any questions on anything. I typically like to start with an initial phone call to discuss your investment goals/experiences, answer any questions you have, and tell you all about what our company has to offer. Please let me know if this is something you would like to schedule.

Also for your reference, here are some other forum discussions from investors that have worked with us in the past like Joseph. I'm sure you'll find this informative. Looking forward to hopefully connecting in the near future!

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/users/ZacharyCole/references

Rodney Robinson · Answer

@Louis Zameryka Great question. When I first started, my wife had concerns about real estate (admittedly, I did as well). It is new and less familiar. This may not directly answer, your question, but what I found useful was educating myself so well that I could answer her questions and communicate the power of real estate in a simple and understandable manner. If I could do that, I was growing in knowledge and she would follow my lead.

Secondly, we got started by purchasing a primary residence that would make for a great rental (it ended up being our second, since while living their we bought an SFR and rented it out). That ease into real estate, as well as the knowledge sharing and ongoing discussions in our everyday life, allowed us both to become more comfortable in this new lifestyle.

Hope this helps.

Alex Olson · Answer

@Louis Zameryka I would recommend investing in a market that you have lived in, frequented, have close family or close friends that have ties to that market. I am in KC and we have a lot of coastal investors that we take care of. Near turn key is the way to go and buy, at a minimum, a duplex sized property in a growing sub market. Find a good agent that can get a team together that has a great reputation. There are some on this site that can help you out (I am one of them). If you buy something and don't like it after a year and a day you can 1031 exchange into something else at the exact same price you are selling it for and suffer no tax consequences. Real estate is a smart move but is slightly more complex than investing in the stock market but your wealth gains are significantly more. Hope that helps!

Joe R. · Answer

@Louis Zameryka from my experiences in wealth management, I can understand your wife's reservations about jumping into real estate. It took me a while to get comfortable with the idea of owning an asset rather than a ticker. After having managed and analyzed variety of value and growth portfolios (including equities and fixed income), real estate as an asset class has outperformed all other asset classes. Things to keep in mind when comparing RE vs your securities portfolio are: principal and interest paydown, taxable benefits (depreciation, operating expenses), higher coupon (cashflow from rent) than most high yield bonds, and 1031 exchange - to list a few! But that doesn't mean RE doesn't have inherent risks, which is where its important to work with a quality provider, especially if you are looking to invest passively to diversify your existing investments. Take a look at our website, www.excellerenthomes.com, we offer couple different strategies within the passive cashflow space. If you have any further questions, feel free to reach out!

Darius Ogloza · Answer

Have you considered dipping your toe in through one of the crowdfunding websites?

Louis Zameryka · Answer

@Alex Olaf that’s the plan eventually Alex. At the moment I just need to get my wife comfortable with Real Estate as an investment vs “spending money”...

Louis Zameryka · Answer

@Joseph Crunkilton thanks Joe I will connect with Zach!

Louis Zameryka · Answer

@Joe R. Wow that is certainly an entire world to dive into! Thanks for all the food for thought!

Louis Zameryka · Answer

@Jim Goebel hi Jim and thanks for the reply. I know time is precious and I am grateful you spent some of yours to help me.

I plan to do some things locally eventually, even thought NY is expensive. I do want to get more hands on over time. The first goal though is just to get my wife comfortable with the asset class. There is a lot of history for her in her upbringing around financial and investment management.

Thanks again.

Advice on a low complexity 1st investment to get started?

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