To that I just want to say, so much of real estate investing is a learn as you go experience. Of course you need to learn about the strategy you want to pursue. You need to evaluate the market you want to implement your strategy in. You need to have your finances and reserve finances all ready to go. But the truth is, the biggest chunk of your learning will happen once you actually start investing. That’s why I recommend having a coach, mentor, or community to connect with whenever you have questions. Because once you’re in it, it can feel daunting when things don’t go exactly as planned. So, please please please don’t plan to go it alone. Please get some support, okay?
The next reason I hear that so many of you haven’t been able to take action is because of time or money. I totally understand, and that is why I am doing this series we’re now in the middle of. The thing I love about the strategies we are talking about is that they don’t require much of your time or money. But they allow you to start getting involved in the real estate market. They allow you to dip your feet in and start to get comfortable with investing in real estate.
But when we talk about not having enough money, that is subjective. For some of you that means you have only a few hundred dollars. But for some of you that may mean you have a couple HUNDRED thousand dollars, but you don’t know where to put it or how to invest it, and you’re scared to put it all in one place. Or you’re just too afraid to get started. That’s all okay. I know the fear is real. But that doesn’t mean you can’t get started.
No matter how much money you have, a little or a lot, you can get started in real estate investing using the strategies I am discussing in this series. You can just put a little in to get your feet wet. You can put a bit in several strategies to test them, see which ones you like best, and to diversify your portfolio.
The other thing many of you ask me is that you want to invest in real estate, but you are in the process of saving up for that first investment in a property. So you want to know where to put the money you are saving. And preferably you’d like to invest in real estate assets because they are safer and more stable than the stock market and mutual funds, and they make much more than just putting the money in a savings or money market account. Well, in this series I am sharing several places you can put that money to help it grow and also keep it liquid. Liquidity is important because that way as soon as you have the money saved to buy your first property, you can get immediate access to it. You don’t need to wait to sell a property or get an equity loan or line. Instead, you can liquidate your investment and use the money usually within a week. And in the meantime, you’ve been getting safe returns to help those saved dollars increase in value faster (without a high risk of losing your principle). It is true that no investment is completely risk free, so you’re not guaranteed to not lose money, but in these strategies, you have a significantly better chance of holding onto your principle, and growing it, than if you put it in more volatile investments like stocks and mutual funds.
And, in other safe investments like savings accounts, money market accounts, and bank CD’s most of the time you will actually lose money. How? Because they don’t keep up with inflation. This means that property values will increase over time at a much faster rate than these investments. Which could mean you will never have enough money to invest in the kind of property or location you are interested in.
But if you are investing real estate money in real estate assets, your money should grow in line with the increases in real estate appreciation. Not exactly, but more closely, depending on the strategy you pick.
I don’t want to be doom and gloom here. There are lots of markets to buy property in, so you can always find a place to invest in properties. But you know for me I like to keep things blissful, so I like to be able to choose what and where and for whom I buy my properties. So, having more cash available gives me more options to do that.
Over the last many years, as we’ve been holding or stashing and growing our real estate money to make investments, we have been investing in Ginnie Mae’s directly through our account with Vanguard. The Ginnie’s track the current mortgage rates. So when mortgage rates went so low, this investment no longer made any sense. Real estate prices were skyrocketing, but our money was making like 2-3%. We were definitely losing headway with this strategy. So I started searching for other options of where to put our money and keep it liquid. That’s how I started to learn about all the strategies I’m talking about in this series. And I thought this would be good information to share with all of you too, whether you have a lot of money or not.
I just wanted to give you some perspective on why I’ve been doing this series. I hope today I’ve given you not only context, but some things to think about. And more importantly, some inspiration to look at what you can take action on. Whether it’s one of these strategies, or one of the many others I’ve talked about on this show over the years. Because nothing happens without action.
Okay, that’s it for today. I look forward to seeing you next week and until then remember, goals without action are just dreams. So go out there, take action, and create the life your heart truly desires.