Why is Real Estate the Best Path?

Three ways that you can leverage Real Estate:

PEOPLE

By leveraging people, you have:

• Real Estate Agents
• Title companies
• Mortgage people

MONEY

Obviously you get a loan. You put 20% down, 10% down, 50% down on a property. You’re leveraging the other half. So you put 20% down, you’re getting 80% leverage from a bank. That’s 80% you don’t have to come up with. I like the fact that you can leverage money. If you buy a stock, you cannot buy $100,000 worth of stock and get a loan for $80,000, and only put $20,000 down on the stock. I like real estate about that.

TIME

That’s the one thing that I think investors as well as new entrepreneurs have a hard time understanding is that you don’t get more time. You don’t get that time back. With doing real estate, you can be doing other things; and if you have the right systems, policies, procedures in place, you can leverage time so it can run without you. The definition of a business is a profitable enterprise that makes money without you. You want to make sure that this profitable enterprise not only makes money but runs without you. There’s very rare businesses that you could leave, come back maybe a year later, if you have the right systems in place and you put the right tenant and all that, you could actually have an investment that’s worth more money. The rents go up so you have a lot of ways. You have a tenant paying down the debt. There’s a lot of things that you can do by owning real estate that you can’t do with other things.

Real Estate – the lowest barrier to entry.

I like those things. I like stocks. But the problem with stocks is, if you sell it, there’s very large capital gains. Intellectual property is another way that you can invest, but you have to have a product to invent intellectual property. Real estate, I believe, is the lowest barrier to entry. It’s the safest because you have it tangible. That’s why banks will loan on real estate, and they won’t loan on stocks. It’s not tangible. Real estate is tangible. It’s safe. You know it’s safe because banks will loan on it. It’s just something to think about.

Real Estate isn’t for everyone.

Sometimes people get into it, and they don’t like dealing with people. They don’t like dealing with tenants. You get a management company for that.