Real estate is the only investment where you can actually borrow other people’s money to purchase and own an income producing property. As long as you have positive cash flow overall in your portfolio, you can buy as much income property as you can. Leverage is a very powerful concept and real estate is probably the best place to leverage your investment capital because it’s a hard asset while fulfilling a need called housing. The following are some hard-earned rules presented by Marco Santerelli of Norada Real Estate, that we felt were informative enough to share:
- Be informed regarding the market. There is a lot of truth in the saying, “The more you learn, the more you earn.”
- Set investment goals, not wishes. You are far more likely to achieve financial independence if you write down clear, specific, and detailed goals than not doing anything at all.
- Never speculate. Always invest with a long-term perspective in mind.
- Don’t chase appreciation. It will happen in the right market and the right neighborhood because real estate is a hard asset made up of commodities and over time it will appreciate because of inflation.
- Keep in mind that the equity growth in the property will always far surpass the cash flow.
- Don’t be married to any particular market. Each and every market is local and will move up and down completely independently of one another due to various local factors.
- Always first choose the market, the city, the town that you want to focus on based on the health of that market and the local economy.
- It [can be] wise to have a management company handle your real estate investments. It can be a tough, full-time job and your time is more valuable and should be spent on things more important to you.
If you are looking for a pathway to passive real estate investing, give Sun Pacific Mortgage a call. We offer trust deeds in well vetted properties in California and Hawaii. As little as $100,000 can have your earning interest as high as 12% or higher.
You can find us at www.sunpacificmortgage.com or call us at 707-523-2099.