@Alex Gerondale
Thank you for the kind words. I'm glad to hear you've found all our educational content beneficial! We really put a lot into presenting topics and interviewing guests that we feel will benefit our community. This is one example of interviewing an interesting concept that most have not thought about yet. Feel free to shoot me a message if you would like to jump on a call sometime. I am busy, but never too busy to find time to speak with someone eager to get started in real estate investing. I remember what those days were like. All I ask is that you take action as it wears me out to spend time passing advice to people when they end up never acting on it. To answer you question as straight forward as possible, if you have funds to buy a rental property, you 100% should do that! Tardsus is an interesting concept for people that want to take out credit lines to invest in short term notes (2-3 years), pay the note off sooner, and then repeat. It does not take a lot of capital to get started and you can start seeing some returns rather quickly. However, you need to fully understand how real estate builds true wealth over time and how the tax benefits work of real estate investing. When you combine cash flow, depreciation, leverage, appreciation, etc., you are growing your net worth with an asset in addition to cash flow. An asset that at some point in the future you will be able to trade up to future properties, sell for a large amount, pass to future generations, etc. So I encourage you to educate yourself to look beyond just creating cash flow. It's interesting to me because most new investors come in only thinking about cash flow because it's easy for them to apply a simply math equation of "if I earn x amount of dollars a month from x amount of properties or investments, I can retire by the time I'm X amount of years." They never talk about net worth growth investing in assets. I'm guessing because they don't really understand how wealth is built in things like real estate. On the contrary, when you speak to people who have created tremendous wealth in real estate, they never focus on cash flow. They talk about things like appreciation, tax benefits, accelerated tax benefits/depreciation, leverage, etc. That is how a true asset builds wealth for you over time. So I encourage you to make sure you fully understand the short and long term evaluation of anything you invest in.
Now, if you wanted a different answer about how you could do both as a more aggressive strategy, here it is. You could put your money down on a rental property and then use a LOC to invest in the program. Alternatively you could also put less down on a rental property with a portfolio lender that allows all the way down to 5% (depending on your qualification criteria) to invest earlier and have more capital. Just make sure you understand the loan and the cash flow scenario.
Main point in all of this: Nothing is going to beat real estate long term to create wealth predictably (so accept that), fully understand anything you invest in, be creative to know how you can do more than an either / or scenario, and ultimately take action. The worst thing you could do is nothing. Good luck!
To your success,
Zach!
