Working for half price?
Most real estate investors I know consider themselves more savvy than average folks. And for many, they may be right. Over time, real estate returns can be better than stocks…and real estate profits can be partially or completely tax sheltered. But many investors only realize half of their profit potential. Ask a welder who earns $45 an hour if he would work just as happily at $20 an hour, and they would say: “Heck, no!” or something more colorful, meaning the same thing. But investors commonly do a similar thing.
Strategy makes the difference
SELL!: I interviewed principals of 2 large multifamily investment firms this week, one with “several thousand units”, the other with as many “as 7,500 apartment units”. One said, “We always get over half of our total profit generated from selling.” The other said, “Profits from selling generate as much as 60% of our Internal Rate of Return on investments.
HOLD!: A long-time friend of mine and housing investor used a strategy of saving up enough money and buying properties cash and never selling.
RESULTS: The “HOLD” strategy investor has now retired with a comfortable income if he lives within his means. One of the “SELL” investors was able to retire decades younger with generational wealth and enough profit to support numerous charities. Selling and redeploying assets allows real estate investors to maximize their gains. Many don’t realize just how much perodic selling improves their bottom lined.
SUMMARY: The goals, stragegies, and tactics investors use to meet their goals are so varied and individual that investors are wise to use the best brokers, 1031 Accomodators, lenders, CPAs, and related resources. Rose City Commercial Real Estate is actively working with investors on multifamily acquistions of less than 10 units…and over 100 units. We have individualized suggested goals, tactics and stragegies for their respective needs.