Why are You Investing in Real Estate

[Don Konipol]

Why ARE you investing in real estate?  
My thoughts are that the main reason 90 % of the people who claim they want to invest never do is because they can not adequately answer this question.  

Unless an investor, especially a "wanna be" investor has absolute clarity on this question, any investments they do make will be a random series of unfocused "dreams", off chasing the latest fad someone posted a YouTube video about. STR, fix n flip, rent by the room, subject to, nothing down, Lonnie Scruggs, whatever is being heavily promoted.

This is why so many, claiming they want to “learn real estate” end up trying (unsuccessfully) to wholesale, rather than becoming a licensed agent; it’s why we have numerous posts from investors that state they now own two or three properties and ask some version of “what now?”.  If it seems as if they purchased the property with no idea, plan, strategy or goal it’s because that’s exactly what they did. 

Back a couple of hundred years ago, after 2 years as a commercial real estate broker, I accumulated enough capital and built up enough credit to purchase my first investment (already owned my residence) property.  Because my goal was very simply WEALTH BUILDING, I was drawn to an office warehouse complex where ownership was selling off individual 7500 square foot units, at very discounted values.  I first obtained a tenant by soliciting potential “fits” in the neighborhood, and enticed the tenant to move his business by offering an option to purchase included in the lease.  I’m happy to say it worked out very well, and 3 1/2 years later I had a (to me) good amount of capital to deploy BUILDING WEALTH. 

So, wealth accumulation had been my sole goal for 30 years.  At that point I wanted to be able to live off my investments.  Although I only ended up retiring for less than one year, I had dual goals from that point t on: enough FREE cash flow to cover my living expenses, AND wealth accumulation.  Obviously, you can’t maximize both, you end up with (hopefully) the optimal combination. 

As of a year ago my purpose for investing is changing once more.  I’m now adding preservation of capital (safety of principal) as at least 50% of the equation.  Also adding ease of inheritance, which in my mind greatly reduces individually held properties.  As a result I’m reinvesting proceeds of asset (as they liquidate, nothing being “forced”) into carefully selected publicly traded REITs.  

I’d like to hear about other investors.  When you started investing did you have a clear understanding of WHY?  Do you clearly understand WHY now?  Is your investing “strategy” aligned with your goals? 

[Chris Seveney]

I will keep my response very short - I invest in real estate because I feel like I have the experience and skill set to manage it and invest in it.

the opposite for me is crypto- I don't get it so I don't invest in it.