Financial Planner w/ Real Estate Investment Focus

Financial Planner w/ Real Estate Investment Focus

Member since 2022 · 7 posts · 2 votes

Hello all, I just joined Bigger Pockets. Been listening to the podcasts for about a year after my wife and I purchased our first STR in Maine in October 2020 and have (thankfully) enjoyed incredible success. We have been hunting for the second property. Finished as backup offer on 3 properties and had another fall out of closing because of a really bad appraiser and a seller who refused to budge off their number.

Despite the setbacks our interest/passion for real estate investment has only grown.  As we continue to property hunt we're taking a step back and looking at this investment strategy from a broader perspective.  Which brings me to today's post.

We currently have a financial planner. And have spoken with him about our plans to focus our investment strategy around real estate (likely a STR focus initially with plan to expand thereafter). No fault of our financial planner, he just doesn't have the background and experience in this area. His response is always in some form or fashion - "you're too leveraged in real estate and should spread out to other investment areas".

It's not wrong.  But it's also not what we want.  We want to be leveraged in real estate.

With that in mind, have any others experienced these same sorts of conversations with their financial planner?  How did you respond?  

Has anyone found a financial planner with specific experience in a real estate investment focus?  Have you found that to be beneficial?  How did you find them?

Thanks in advance and looking forward to collaborating in the forums!!

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Realtor · Ogden, UT · Member since 2019 · 338 posts · 415 votes
3y

The tricky part of most financial planners is that their compensation comes as a percent of the money invested in their offerings.  Therefore, their advice is almost always going to be to invest in funds or programs offered by their establishment.  The other issue is that they're not always well versed in real estate and don't have the RE license to steer you towards specific purchases or offer direct RE investing advice.  

Maybe there are financial planners out there that do both but I'm yet to find them!  My advice would be to make your personal retirement plan and pursue it like crazy.  Having both stocks and real estate is awesome but only you can make the decision on how to create your portfolio!

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  • Garret GetchBusiness Member
    Real Estate Agent · Lisbon Falls, ME · Member since 2018 · 37 posts · 22 votes
    3y

    Hey Gary!

    Nice to meet a fellow investor in the Great State of Maine.  

    Leveraging in Real Estate, especially right now, is always a wise idea.  Unlike other forms of investing, this is an asset that you can reach out and touch, is in your control, and never loses its value completely (though of course markets go up and down, but real estate is never worth $0).  That being said, most financial planners tend to focus on diversification above all else and are trained to think that way.  I was watching an interview with Kevin O'leary (Sharktank) where he was making the same observation to a young investor and how he personally wouldn't leverage as much in real estate as that investor was doing; however, he ended the conversation by saying that we do invest in what we understand and that investor, that Kevin was talking to, had been a real estate agent before so he understood that form of investing.

    We shouldn't put all our eggs in one basket, but I would definitely target real estate as a prime place to put your finances for long term wealth and growth.  Sadly, every financial planner is going to say the same thing and that is where you smile and thank them for their opinion and do what you ultimately believe is correct for you and your family.

  • Realtor · Ogden, UT · Member since 2019 · 338 posts · 415 votes
    3y

    The tricky part of most financial planners is that their compensation comes as a percent of the money invested in their offerings.  Therefore, their advice is almost always going to be to invest in funds or programs offered by their establishment.  The other issue is that they're not always well versed in real estate and don't have the RE license to steer you towards specific purchases or offer direct RE investing advice.  

    Maybe there are financial planners out there that do both but I'm yet to find them!  My advice would be to make your personal retirement plan and pursue it like crazy.  Having both stocks and real estate is awesome but only you can make the decision on how to create your portfolio!

  • Daniel JohnsonPro Member
    Financial Advisor · Winston Salem, NC · Member since 2016 · 195 posts · 161 votes
    3y

    Hey @Gary Langlais and others! Believe it or not, there are fee-only, non-asset management focused financial planners out there. XY Planning Network and NAPFA are great places to search for potential options. You are unlikely to find someone locally that has this setup, but there are a few of us across the country that are RE investors and flat fee financial planners! Hope this helps!

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