Why Did You Become a Real Estate Investor?
Each week, we post a new question to the Best Ever Show Community on Facebook. The Best Ever Show Community is a place where real estate entrepreneurs of all stripes and sizes can come together to interact with each other, me, and the guests featured on my podcast with the purpose of everyone helping each other reach the next level in their businesses and their lives.
What better way to add value than to ask you, the community, for your Best Ever advice on a variety of different real estate topics. This week, the question was what was the first thing that piqued your interest in real estate investing?
The polls are closed, the responses are in and here are your answers:
1 – Taxes
Mark Slasor became interested in real estate investing because of the various tax benefits. More specifically, because of the tax write offs allowed against his W2 income.
However, tax write offs, also referred to as deductions, are just one of many tax benefits that come from investing in real estate. Brandon Turner over at BiggerPockets wrote an in-depth article on the tax benefits that come from investing in real estate, which include deductions but also long-term capital gains, depreciation, 1031 exchanges, no self-employment or FICA (Federal Insurance Contributions Act) tax and “tax free” refinances. For more details on these six tax benefits, you can read his post here.
2 – Control
When compared to other investment avenues, like a 401k, stocks, bonds, money market account, etc., investors have more control over real estate.
The investor decides which of the many strategies to pursue. They select the property. They pick the type of financing. They control the entire business plan. Etc. Because of all of this control, the investor has the ability to directly influence the profitability of their investment project.
Jeremy Brown became interested in real estate because of this control factor. He realized the stock market was a lot like gambling. Generally, the value of the stock is tied to factors over which the individual investor as little to no control. Conversely, you have the ability to directly affect the returns of a real estate project.
Chris Mayes became interested in real estate for similar reasons. Not only did he love the thought of passive income and an early retirement, but also his ability to be actively involved in the investment in order to directly impact the returns.
3 – Opportunities
There are such a variety of opportunities in real estate, whether it’s different investment strategies, property types, business plans, etc., that investors frequently suffer from shiny object syndrome. “I want to fix and flip houses. But oh look, what if I kept the house as a rental? Or I could just skip single-family investing in general and jump straight to apartments. Hmmm. Maybe I should just take my capital and privately invest in a syndication…WHAT SHOULD I DO?!”
For the past 50 or more years, investors have reached the highest levels of success using every investment strategy and investing in every asset type, which far outweighs the drawbacks of shiny object syndrome
Stevie Bear became interested in real estate because of this abundance of opportunities. He was attracted to the innumerable potential avenues to pursue for profitability in nearly any market or economy.
4 – Friends or Family
Some investors were lucky enough to be born into the real estate business. Leilani Moore was a property manager for her family’s business, learning the value of real estate investing over the years. Similarly, Barbara Grassey’s father was a real estate investor, and she enjoyed hanging around the properties he was renovating.
Another personal relationship that leads investors into real estate are friends. Harrison Liu became interested in real estate because of a close friend who had been investing for years. In fact, this friend helped Harrison find his first deal and he’s been investing ever sense.
Theo Hicks also became interested in real estate through a friendship. One night, over pizza and videogames, two of his buddies mentioned the value of real estate investing. In particular, they said “sometimes, I forget I even own the property until I receive a check at the end of the month.” He was intrigued and ended up putting his first property under contract in less than a week.
5 – Infomercial
Infomercials may be a fading industry, but many active investors became interested in real estate from these flashy 30-second advertisements. Robert Lawry II is a perfect example. He saw guru Tom Vu’s infomercial when he was 14 years old. He learned that once he bought his first investment, he could drive fancy cars, go on expensive boats and, most importantly, meet beautiful girls in bikinis! How do you say no to that?
6 – Financial Independence
Lastly, one of the main reasons why people are attracted to real estate is due to the prospect of financial independence. Purchase enough cash flowing real estate to replace your corporate income and you’re FREE. Stone Pinckney became an investor to pursue financial independence. Dave Van Horn wanted a way out of a dead-end job and a life of mediocrity. Eddie Noseworthy wanted the ability to create his own epic life and have more time to do the things he loves to do.
How about you? Comment below: Why did you initially want to become a real estate investor?
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