Investing in real estate is a marathon, not a sprint.
Paul Levine
Commercial Real Estate Advisor and Managing Member @ LS Property Partners LLC| Retired CPA with over 50 years of income tax experience that no other Commercial Realtor has, Income Tax Consultant and unmatched Creatively!
Investing in real estate is a marathon, not a sprint. Your next 7 years could look like this?? // Year 1: While the first year may not be that exciting, it’s definitely an accomplishment to invest your first $50,000. You should then start earning a 4% - 6% annual cash return. // Year 2: In the early Spring, you receive your first Schedule K-1, which is the tax document that shows your income and losses from your first investment. The same year you invest another $50k. // Year 3: Now you get 2 Schedule K-1s showing paper losses you can claim. The same year you make another $50K investment. Congrats! // Year 4: You're now collecting quarterly distributions on 3 deals! Sometimes, the cash flow from properties can be less in the beginning, but as more value is created, distributions can increase more and more. The property in Year 1 is now performing really well! // Year 5: The property from Year 1 investment has finished renovations and is sold. You receive your original investment of $50K back plus another $40K from sale profits. You're in a good spot financially, so you reinvest that $90k into another deal. Plus you wanted to make a new investment anyway, so you invest another $50K into a syndication. // Year 6: You’re now collecting cash flow on 4 deals! The market is in a great spot. The property from Year 2 sells. You reinvest the profits again and invest an additional $100K into another syndication. // Year 7: You’re currently invested in 4 deals! Now the property from Year 3 is done with the business plan and sells. See how powerful this strategy can be? - - You see that most syndications last between 5 and 7 years. You haven’t had to do any of the heavy lifting and you’re able to claim tax write offs along the way. ?? It's similar to building your own real estate conveyor belt!
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I found this article on LinkedIn this morning, October 17, 2023, and I sort of laughed when I read it.? I cannot say that I agree with anything specifically, but I applaud the concept that the author is trying to get across.