Archive for the 'General Real Estate' Category
Since the Great Recession, crowdsourcing and the sharing economy have become increasingly popular, especially among younger people who were especially hard hit by the collapse. Millennials have been using crowdsourcing to fund artistic endeavors, art projects, and now — real estate.
New commercial real estate crowdfunding firms have emerged with a bang, with estimates placing the industry’s income around $3.5 billion in 2016, just years after it began to appear.
The principal tool for crowdfunded real estate is Electronic Real Estate Investment Trusts, which have allowed companies to greatly expand their pool of investors.
Traditionally, real estate has been a very popular investment vehicle, but often cost prohibitive for young people. However, among those who have invested in real estate, 96% credit it with their financial success. But for most people, securing enough financing for the down payment alone, which can be as high as 25% the cost of the property, can be a challenge.
For a long time, non-traded REITs were the best bet for lower income investors to diversify their portfolio with real estate. The high front-end fees, which can range from 10% to 15%, still discouraged many investors from buying in.
Now, eREITs have a significant advantage. Because their online platform allows them to cut out the middleman, crowdfunded real estate firms are able to significantly lower the fees required, or eliminate them all together.
For crowdfunded firms, the ability to appeal to lower income investors might represent the key to success. Real estate investor Jay Maddox told National Real Estate Investor Online that while institutional investors shy away from crowdfunded real estate, the sector is on the brink of massive expansion.
“I also think it is really going to be the best fit for properties that are well below institutional investor’s radar screen.”
That means that, in order for crowdfunded real estate businesses to thrive, they will need to pick their targets carefully. A Florida based business, for instance, might not be able to compete in the major Florida destinations towns like Miami or Orlando, but there are still 1,200 miles of sand beach and 1,800 miles of coastline for them to find a less competitive space to develop.
The proliferation of crowdfunded real estate firms has been beneficial for more people than just the investors, or even those in the real estate industry. The rapid acceleration of online investment platforms has also been a boon for the information and technology industry, which is responsible for the design, operation, and security of such sites.
At the same time, there have been signs of trouble within the industry. Crowdfunding platform iFunding, in particular, has garnered a great deal of negative attention lately, with investors and real estate professions bemoaning the poor organization structure and operations.
Still, the future looks bright for crowdfunded real estate. Tore Steen, CEO and co-founder of CrowdStreet Inc, is especially optimistic.
When speaking to National Real Estate Investor Online, he said, “There could be a day down the road where players that have traditionally raised money for institutional investors could be looking at this retail channel as a supplement, or even as an alternative when it gets big enough.”
Before you can become rich, you must decide whether you want to be secure, comfortable, or rich. These are called core values, or the reasons you want to invest.
The first reason most people invest is because they want to feel more secure. That’s why Social Security or a retirement plan is very popular with people whose core value is the need for security. Security is a very important aspect of investing. You don’t want to be a destitute out on the streets with nobody taking care of you.
We are all too familiar with the sobering statistics on marriage. Around 50% of marriages end in divorce, and oftentimes the root of all that unhappiness is money.
But there’s some good news on the horizon. According to a recent study by Ameriprise, “a remarkable 77% of American couples report they are on the same page with their finances.”
How will the real estate market be impacted by Donald Trump’s victory and Republicans controlling both chambers of Congress?
Though Mr. Trump is a real estate man, his policy platform has been largely vague on real estate proposals. Here are my thoughts on how certain real estate issues may play out under President Trump and of their potential impact to consumers.
1. “Identify your problems but give your power and energy to solutions.” — Tony Robbins
2. “You live longer once you realize that any time spent being unhappy is wasted.” — Ruth E. Renkl
3. “The only true wisdom is knowing that you know nothing.” — Socrates
4. “If you are not willing to risk the usual you will have to settle for the ordinary.” — Jim Rohn
Children learn by asking questions. Students learn by asking questions. Investors learn by asking questions. People who think that they know it all no longer ask questions – why should they?
The most successful people in life never stop asking questions because they know it’s the best way to gain deeper insights, solve problems, and achieve greater success.
The number of people considered to be ‘High Net Worth’ (those with assets of more than $30 million) is predicted to increase by 95,000 over the next ten years. With this in mind, it is expected that a growing number of people will be dipping into the luxury real estate market. So where countries hold the most expensive real estate in the world?
Regardless of where you choose to invest, there are two opposite ends of the investing spectrum when it comes to your involvement and required resources.
Do-it-yourself real estate investing puts all the risk and responsibility squarely on your shoulders. Typically that involves everything from sourcing the property, acquiring it, funding it, renovating it, managing it, selling it, and coordinating every other step in between.
What has always fascinated me about real estate investors is how differently we analyze rental properties. While we all use (mostly) the same ratios and numbers, the sheer number of available calculators, spreadsheets and other analysis tools is incredible. And it often takes a lot of trial and error to find the method or tool that works well for you.
I was honored to be invited as a guest on the FlipNerd Real Estate Investing podcast show with host Mike Hambright. (You can listen to the episode below.)
Mike has a great podcast with lots of interesting guests, ideas and tips. I had a lot of fun being on the show. It is a “must listen” podcast for new and seasoned real estate investors.
On the show we discussed in some detail each of my 10 Rules of Successful Real Estate Investing. We also covered a few other topics as we went off on tangents. Be sure to listen to the show.
Once again, I was honored to be invited back as a guest on the Investing Coast-2-Coast radio show with Pete Asmus and Ivan Oberon.
These two guys broadcast a great daily radio show and have a ton of fun doing it. It is a “must listen to” radio program for new and seasoned real estate investors.
On the radio show we went into depth on each of my 10 Rules of Successful Real Estate Investing. We also covered a few other topics as we went off on tangents. Be sure to listen to the program.
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When most of us think of investments we think of the stock market, maybe our retirement fund, and maybe that “business opportunity” last year with a colleague. It is easy to describe investments one-dimensionally; something we invest money in today that we intend to sell for a larger sum years later.
Investment real estate however builds wealth simultaneously four ways:
Incomes are dropping. And that’s not good for the real estate industry, nor is it good news for the American Dream of home-ownership. More Americans view themselves as slipping out of the middle class according to a recent survey by the Pew Research Center.
The trend began in the 1970s, Pew claims, but it has accelerated since the Great Recession. In the past five years, the percentage of Americans who consider themselves middle class has fallen sharply, dropping from 44% in the latest survey from 53% in 2008. 40% now identify as either lower-middle or lower class compared with just 25% in February 2008.
As entrepreneurs find success with their primary business ventures, many search for the right investments for their profits.
Of course, we can and should all start traditional tax preferred vehicles like an IRA and 401k. These are the bedrock of good ‘benefit’ planning for ourselves and our employees. I’m also convinced more entrepreneurs should consider rental real estate as an important part of their portfolio.
I realize many business owners shrug off this concept after the recent downturn in real estate values, but let me list a few reasons that may change your mind:
Many new homeowners are looking for ways to save on their home insurance. Although some seem obvious because they are so highly advertised (bundling with auto, shopping online), there are others that are more subtle. You can get discounts on your home insurance just by making some minor changes to your home. Here are some of the things that you can do to help lower that insurance bill.