All Forum Posts by: Priyanshu Adathakkar

When buying a home, about 90% of your purchasing decision will be based on emotion and only 10% on logic. This is understandable, as your home is where you’ll raise a family. It’s your sanctuary.

When it comes to investing however, letting your heart rule your buying decision is a common trap to be avoided at all costs.

Two of the most common traits of budding real estate investors who never make it beyond their first property (or sometimes never even make it to their first!), are either acting too impulsively or being overly cautious and never acting at all. The first is being in too much of a hurry. They think they have to have it all yesterday. The second are procrastinators and their own worst enemy.

Long distance investments allows you to invest where the market makes the most sense for cashflow; not just your local market. You can live and work in California and invest in Ohio where your money goes a lot further with higher returns.

Getting rich on real estate with no money down is a great dream, but it's almost impossible to accomplish. Expect to need a sizeable down payment, reserves to pay for repairs and maintenance and a good income before you start investing.

Don't over-improve rental property. To keep your cash flow at optimal levels, don't spend too much on upgrades for a rental property that will likely need maintenance and repairs during turnovers anyway.

Becoming a Landlord is Not for the Faint of Heart - Buying the right rental properties is a challenge in itself, but the act of being a landlord is by far the hardest part. However, owning rental properties can be the key to a great deal of profit and financial freedom if you do things the right way from the start.

With a commercial property (office/retail/flex etc.), you have the opportunity to make more than you do with a residential investment. On average, commercial investors achieve an annual return of about 6-12%, whereas residential investors usually see smaller returns.

1. Possibility of higher repair costs: i.e. an overflowing bathtub on a high floor may require repairs to several units
2. Higher turnover rate - turnover is costly because property must be cleaned and repaired, plus the legal and other costs
3. Vacancies take a proportionally larger bite from your income

1. Requires more secure financing when more than four units, including higher down payment and reserves
2. Management fees eat into profits
3. Vulnerable to a downturn in the community, since all units are in a single place
4. Relatively illiquid investment, costly to dispose of
5. Possibility of deadbeat tenants
6. Frequent turnover

Investing in apartment complexes should be considered a longer-term and possibly deeper commitment than owning and renting out single-family homes. It takes longer to sell a building or large complex than a home and it may take some time to get the hang of managing such a large property. However, if it’s done right, owning a multifamily complex can provide a constant source of income for years to come with considerable upside along the way. Any investment is a balance of risk, work, and reward, but if you’re ready to take on a bigger challenge and move to the next level of investing, then a multifamily project might be the right bet.

Investment Tips

1. Have a property management firm screen your tenants
2. Require that your tenants have renter's insurance
3. Make sure your property is protected for vandalism due to the tenant not taking care of the rental
4. Make sure you have insurance that covers you for fair rental loss
5. Make sure you have adequate limits of liability

While as a result of the new tax plan signed into law recently biggest financial companies are moving into REI, if you are a commercial real estate investor, here are a few things you should take note of:

The full impacts of the GOP tax bill will take time to be felt, but commercial real estate investors look like major beneficiaries.

New deductions for pass-through entities benefit standard real estate investment vehicles.

Changes to capex deduction will make value-add strategies even more appealing.

Changes to carried interest will increase favorability of private real estate funds as compared with other managed funds.

The flood of private capital into real estate is likely to be spurred on in the year ahead, and private investment funds are likely beneficiaries.

For more information Read this article here