POV - Why do you believe in real estate investing?

[Logan Ryan]

Please share your "Why?"

Here's mine: Personally, I believe in real estate investing  because I don't believe in job security.

This has been my experience...I have worked since I was 15 years old, mostly for small businesses and I have had paychecks bounce and have shown up to the office to find the electric bill wasn't paid and the lights and phone systems were down, to name a few. I dedicated over 20 years to these businesses and learned that I cannot rely on a paycheck.

Real estate had been my "side gig" for many years, as an agent. I've been fortunate to work with investors and have learned a lot from helping them over the years. I've studied the market and seen many shifts and changes over the last 18 years. I've also seen my clients investments grow and many times thought, I wish I'd bought an investment property for myself, then...then...then...

I see owning property as a more secure source of income in the long run.

So, Why do you believe in real estate investing?

[Abel Curiel]

Great post, @Logan Ryan!

I totally agree with you regarding relying on someone else for a check.

My reason for believing in REI is seeing it work for my family since the 80'-90's.

My grandparents, parents, aunts and uncles came to the US in the 70's with little-no english and little $.

My grandfather was a househack investor. He owned a MFR in Queens near Shea Stadium (Now, CitiField) and had 0% vacancy for about a decade by renting to family and friends of family.

My dad later did the same by investing in his own MFR househack in 1996. Put a ton of work into it, then sold it to finance his next property AND set him and my mom up for retirement.

Not knowing what I was doing (but just following the trend), I househacked my first property in 2010. Tons of headaches, lessons and tenant issues but it has been totally worth it! The property has appreciated over 40% and rents have almost doubled.

Even if you don't speak the language & don't know what you're doing (NOT recommended), you can benefit from RE investing!

[Logan Ryan]

That's awesome @Abel Curiel!! Real estate investing runs in the family :)

[Jeff Roth]

Hi Logan-

Great question.

Real estate is the most effective way for the average person to build wealth--that is why I believe in real estate.

I heard someone say recently that real estate is a get rich slow game and you should have an active source of income as you build your property portfolio. I agree with this statement and my active source of income is helping people buy, sell, and invest as an investor friendly Realtor.

To your success!

[Denis Ponder]

Because it is working to help me reach my goals.  Can't wait to look back on this journey in 5 years and see where we are.

[Jake Andronico]

@Logan Ryan

Great post. 

I whole heartedly believe in it because I am still yet to find someone that has said "I'm so bummed that I have this property that is free and clear 30 years later..."

It has completely changed my family tree and has changed my life already in a short period of time. 

I know that I'm making decisions now that my 45 year-old self will say "THANK YOU". 

And, now being a realtor I'm really looking forward to helping others do the same and keeping up to date on their journey's as well :)

To your point on job security, when I had to quit my job back in December, knowing that I could survive from my properties was absolutely huge for my mental and financial health. 

Diversity of income is not talked about enough IMO. 

I wish you incredible success and thank you again for posting!!

[Cliff Benner]

Yes! I love the WHY talk!

I grew up watching my mom work a low pay job for 25 years and my dad get bounced from job to job because of lay offs even though the man puts his all into everything he does. This was a life where they felt like OT was a gift from God. I hated seeing this and was raised to be independent at an early age and when I started working I was the employee who felt OT was the best thing until I put myself first and started saying no to extra shifts then my boss gave me one shift a week "because there are no hours needed for your position" so I learned I need to rely on myself. Real Estate is my Long Term financial retirement plan. I cant control stocks and I don't trust elected officials to make the right calls so relying on Mutual funds doesn't sound like a great way to live. 

This leads to more of my WHY, if I am going to work for 80 years I am going to work a W2 as little as I need to and put the rest of what would be my OT hours into my own businesses to grow them and reap the rewards in the future. Then once they are going I can live on low amounts of income IF I WANT TO, to have more freedom with kids and things I actually want to do.

[Grant Perkins]

Why I believe in real estate investing: When executed correctly, it is one of the most effective long-term strategies for accumulating wealth. By employing leverage, you have others paying your debt down and increasing your equity.

All the other benefits that come with it are simply the cherry on top, including appreciation, regular cash flow, and the perks of tax benefits related to investment properties.

Furthermore, it's a surprisingly creative career path. Real estate investing compels you to find inventive solutions when confronted with challenges. For instance, when conventional financing fell through due to a vacant rental property and insufficient time for rehab before closing, it spurred the search for an alternative. Numerous options were considered, but ultimately, a DSCR (Debt Service Coverage Ratio) loan was secured. While it came with a slightly higher interest rate, it still resulted in a positive cash flow.

There are also so many different strategies to choose from that are so interesting and lend to the creative nature of the field. 

[Kyle Lee]

Love this thread.

As an agent, real estate itself is a concept that is quite simple to understand. Now, are there a ton of different ways to tackle real estate investing which is why so many people love it! Everyone believes in different things, in real estate, some people prefer one strategy over the other, but guess what, they ALL work if YOU work it.

That's why I believe in real estate because everyone has a chance to win in their own way with their own methods. The real estate industry is evolving daily, and we in the real estate community have adjusted periodically to accommodate different obstacles. 

Real estate is fun, simple, and worthwhile if you put the time in. However, simple does not mean EASY. Hope this helps.

[Don Konipol]

Quote from @Logan Ryan:

Please share your "Why?"

Here's mine: Personally, I believe in real estate investing  because I don't believe in job security.

This has been my experience...I have worked since I was 15 years old, mostly for small businesses and I have had paychecks bounce and have shown up to the office to find the electric bill wasn't paid and the lights and phone systems were down, to name a few. I dedicated over 20 years to these businesses and learned that I cannot rely on a paycheck.

Real estate had been my "side gig" for many years, as an agent. I've been fortunate to work with investors and have learned a lot from helping them over the years. I've studied the market and seen many shifts and changes over the last 18 years. I've also seen my clients investments grow and many times thought, I wish I'd bought an investment property for myself, then...then...then...

I see owning property as a more secure source of income in the long run.

So, Why do you believe in real estate investing?

1. Over time value of real estate increases, in general
2. No prohibition about “insider information” so due diligence, market knowledge, etc. can be rewarded
3. Use of leverage not only magnifies returns but if used correctly (subject to, non recourse, options, etc ) can lower risk.
4. Knowledgeable, experienced person with verifiable track record can syndicate large deals and earn a “promote” or large success fee.
5. Diversified portfolio should beat inflation over time.
6. Local knowledge can trump larger national investors
7. Ready market of professional property managers available for day to day operatiins
8. MLS and Loopnet provide easy online access to finding renters
9. Network of real estate agents, if used correctly can find quality investments or market properties for sale efficiently. 
10. I can utilize my financial background and education in deal analysis.
11. I just flat out ENJOY the work of deal making! 

[Russell Brazil]

Because it makes me money. 🤷

[Michael Margarella]

Great post! My reason for believing in REI is because it is the only inflation-resistant investment - specifically self-storage. With month-to-month leases, operators can more frequently adjust pricing to pace inflation.

One of the drivers of self-storage is the “four Ds”: downsizing, displacement, death, and divorce. All of those things, unfortunately, increase during a recession, providing a safer base case for self-storage than some other assets. Storage occupancy rates during past recessions has remained relatively stable. For example, during a recession, when folks downsize from a 3 bed/1 bath to a 2 bed/1 bath, those people, historically, keep their belongings and put them in storage.

With this, we pivoted to self-storage a few years ago. Now we syndicate larger self-storage deals and work with passive investors.

These syndication can provide an 8%+ cash-on-cash return - providing you monthly cash flow - and a 15-20% IRR over the length of the project.

[Matthew Masoud]

Real estate is one of the more tangible pathways to freedom.

Some do it through stocks, others through exiting a large business, but I believe the clearest path to freedom is with real estate.

[V.G Jason]

Everyone that says freedom has no understanding what freedom is. They literally get themselves tied into a knot.

I buy into real estate cause my cash needs to go somewhere. I am not keeping it in the bank, and I am not investing in garbage. 

[Mohammad Parwez]

Most advantages of real estate investing as per my experience is as below:

1. Massive tax advantage - taxes are your biggest expense and having an investment property saves you a big chunk on this.

2. Semi passive - You don't need to be involved in day to day operations and with automation you are just collecting rent automatically when you have long term tenants. 

3. Wealth building - Your properties appreciate in value over time. The only regret you will have is that you didn't buy more when you could have.

4. Helping society in general - You can see some desperation in people who apply for being your tenant. I used online forms to screen tenants even before they apply. If you provide better value and service you are doing a service to people in need. 

Thanks for reading

Mohammad Parwez

Investor friendly 
NC Licensed Agent

[Timothy Howdeshell]

What a fun question! 

I like real estate as it is a "sexy" industry. Everyone loves watching the flipping shows and it is really fun to see your own project come to life! Real estate is also a very common industry. No matter where you go, people need homes and someone is making money there. The strategies may change over time, but real estate has proven itself to be a fantastic wealth builder for the middle class. 

Lastly, I love the tax benefits. I'm not aware of another easily accessible vehicle which allows you to offset your income to such a large degree. All other things being equal, having REI income equal to W2 income, the REI wins every time!

[Scott Mac]

Well there are people and more people--and what do they know (???)

They go to work in some high rise and vacation down in the Gulf of Mexico.

They have an interstate running through their front yard and believe they’re going to be president of their company some day.

They think they have it good, oh yeah!

Well there are winners, and there are losers--but they’re no big deal

Because they still have to pay the rent.

And that’s America for me.

Just my 2 cents.

[Gavin Smith]

Great post Logan! Here's my "Why" 

Today is my first day here at BP. I have been a general contractor for over 30 years. I've worked with many types of investors over the years, Multi family, commercial, single family investors etc. I was responsible for making their properties worth so much more money than when they bought them. The time was never available to get involved in investing myself- until now. I've relocated to AZ from the NYC area in 2022 and I am ready. I am going after Multi families and hope to have a giant ring of keys in a year or two! 

I'm searching for private lenders for some creative financing deals and anyone like minded to network with in the future.  

[Alecia Loveless]

@Logan Ryan My dad started buying real estate around the local college campus in the 60s and continued through the 80s picking up property after property that came available. As soon as he was able he would pay each one off and while he and my mom were not the best at property management they still received a tidy cash flow each month.

Fast forward to around 1995 when a large developer came into the area with a big city vision for growth and the future much like had already happened in Dallas, Austin, and Houston. The developers started quietly buying up the remaining properties that my dad didn’t own and finally approached my parents. While they weren’t really looking to sell my father saw the upside to selling and realized he had the upper hand. He let the developers make the first offer and said they’d think about it and after some time came back with a ridiculous counter offer and got it accepted.

At the time I was taking real estate classes towards a real estate degree at this university and this transaction really made me realize how much I lived real estate. For the next 20 years I dabbled in real estate but it was after selling my business that I realized I had to find a way to fund my retirement and got really involved in real estate investing.

[Bobby Paquette]

Quote from @Logan Ryan:

Please share your "Why?"

Here's mine: Personally, I believe in real estate investing  because I don't believe in job security.

This has been my experience...I have worked since I was 15 years old, mostly for small businesses and I have had paychecks bounce and have shown up to the office to find the electric bill wasn't paid and the lights and phone systems were down, to name a few. I dedicated over 20 years to these businesses and learned that I cannot rely on a paycheck.

Real estate had been my "side gig" for many years, as an agent. I've been fortunate to work with investors and have learned a lot from helping them over the years. I've studied the market and seen many shifts and changes over the last 18 years. I've also seen my clients investments grow and many times thought, I wish I'd bought an investment property for myself, then...then...then...

I see owning property as a more secure source of income in the long run.

So, Why do you believe in real estate investing?

 I think working with the end in mind is the best way to figure this out! What can real estate do for you! 

[Joel Owens]

Commercial real estate for about the last 20 years.

What have I learned talking with thousands of millionaires over the phone through the decades and some billionaire families?

Without time and health the wealth doesn't mean squat.

People get some success in real estate or their job or business and pour into that when working on their health, family, etc. is much harder so they become very unbalanced and do not have harmony in their lives.

What you pass on what you leave is experiences and memories that live on in pictures, videos, and in the souls and hearts of your friends and family. It's the legacy of the life you led and not what your number was in the pecking order against anyone else.

Stuff is nice to have and can make life more comfortable in certain aspects but it's mainly stuff that is sold off at estate sales to churn the money. Very little of that is kept by family members.

So the question I ask my investors is ( What life do you want to live on a daily basis that gives you harmony, fulfillment, and happiness?)

If they are not able to fully live it now or only partially live it then they work to get there. There is a big difference in investing between ACTIVE income and PASSIVE income. One can free you and the other can hold you down with strong chains that affect how you mentally live and feel on a daily basis. Did the residential thing and not for me. No investment asset class is without items to deal with. It comes more down to what flavor of ice cream you say blah to when tasting and which one you like.

Some investors say they will make money at any cost but that is short lived and burn out occurs fast because when you do not enjoy it on some level then it wears you down. If you are passionate about something marriage, job, business, investing then the passion can carry you through the tough times to the other side when things get better again.

So before investors just start buying stuff to get going really spend more time thinking about the life you want for yourself and your family and make sure the spouse has the same vision. The spouse might go about the definition of the success differently which can cause great friction on how to arrive at the same destination.

My vision I have set out:

48 years old now

By the time I am 70 to be a billionaire and have been on 1,000 podcast shows and have bought 1,000 commercial properties working no more than 30hours a week. The rest of the time automate my system with employees and empower them to help grow the company as well as we scale. 

If by the time I am 70 I am worth say 500 million instead of 1 billion but I really lived life in all facets instead of just work,work,work with the business then I will be fine with that. My larger goal in life is to create lots of videos, pictures, and memories so that future family generations can see who I was and how I lived and hopefully inspire them in some way to get the most out of their lives on a daily basis.

Ray Dalio worth about 27 billion dollars said " You can do anything in life but you can't do everything."

So get focused and take precise action. Remember to still live and enjoy life along the way because tomorrow in this life is never promised.

[Ken Lacroix]

My WHY is my family and to build generational wealth where my sons will have more control over there lives.

It liberates me from linear income. If I am not able to fulfill my duties for my employer they will not hesitate to reduce my salary and eventually let me go. 

The people. It's about networking. Most real estate investors truly want to help you succeed no matter where you are in the world. In other industries people want to destroy you to get ahead.

Finally, real estate has no retirement age. At age 65 or sooner I will rewire from my 9-5 job.   

[Dion Huey]

My journey into real estate has been nothing short of a miracle for me. It all began prior to the financial crisis when I discovered the immense potential that lay within the industry.  I started with residential and then transitioned to commercial transactions. Fast forward to 2009, when I embarked on a transformative adventure that led me to the far East. I took a bold step, fully immersing myself in the creation of an educational services company. While the experience was invaluable, the daily grind of running a brick-and-mortar business left me yearning for greater financial freedom and flexibility.

Operating in a country known for its unpredictable policy changes, my partners and I found ourselves constantly struggling to keep pace with the shifting landscape. It became abundantly clear that I craved a venture that would transcend generations, one not bound by the constraints of daily physical presence. I longed for a business with timeless demand, and real estate emerged as the best choice.

Real estate fulfills our basic need for shelter and provides a haven for our cherished possessions. I am driven by the vision of building a legacy, a business that can be passed down through the ages. With real estate, I have found the perfect vehicle for this ambition.

Today, my team and I are proudly invested in 218 units across two states. Furthermore, I have rekindled my passion for the brokerage side of the business, serving as a real estate agent. This dual role allows me to not only assist fellow investors but also guide aspiring homeowners towards making sound, rewarding decisions.

[Joel Owens]

For those mentioning the kids one mistake I see parents do is say this " When they are gone and they get the money and assets they can do whatever they want with it but until then do not bother them".

That's one of the worst things you can say.

Instead you set up trusts with defined parameters. After someone passes the kids get a small stipend based on age to live on and be comfortable somewhat but not blow the money. The trusts then details metrics they have to hit to get more access to the money ( graduating college, growing their first million themselves, successful business for so many years, etc.).

This way the kids or adults know they aren't just going to bug mom and dad for money while they are alive or wait for them to kick the bucket with resentment hoping to finally get all their money and think it's going to solve all their life problems.

The kids or adults know whether parents alive or passed away they will need to work TODAY to meet goals and have the life they want. It's fine if they stay a blob but they will have to accept their decisions.

It's not foolproof but a pretty good plan that works out most of the time. The kids or adults see when my parents do pass I will have already met these metrics or working towards them so might as well get going today.

One of the number one problems parents face from wealthy families as they age is not their health but messed up kids that became adults that never valued anything as everything was given to them and never achieved self mastery and pride for paving their own way.

I will be there for my kid but I will need to see the effort to help them with a boost.

Some families try to not let the kids know they are wealthy and act like they are poor but often times is hard to mask that and the kids can harbor resentment from what seems like a deception of the parent thinking the kid could not handle the truth or would not act appropriately etc.

[Matt Powell]

My reasons: 

> It is insurance for the future.. that insurance pays for potential layoffs (if you're a W2 or 1099 employee), any health issues you or other family members may encounter 

> Freedom! To do what you want when you want! 

> The perks aren't too bad either, you meet great people, have an amazing portfolio/net worth, and of course the tax write offs 

[Andrew Syrios]

In the long term, I don't think there's a better way to become independently wealthy than with real estate. There are simply too many advantages, which I've heard summed up as IDEAL:

I: Income (cash flow)

D: Depreciation (tax benefits)

E: Equity Build-Up (Paying down principal)

A: Appreciation

L: Leverage (ability to finance 75-80%)

I sum it up better here: https://www.biggerpockets.com/blog/why-buy-hold-powerful-inv...