The Domus Group Real Estate BlogRecently posted or modified blog posts in the category - Investorhttps://www.thedomusgroup.com/blog/Copyright TheDomusGroup.com2023-12-07T15:57:18-07:00tag:thedomusgroup.com,2012-09-20:15929Here's How to Fund Your First, Second or Greater Investment DealIf I presented you an opportunity to purchase an investment asset (real estate, business or other) for a reasonable to great price, would you be able to do it?
Would you be interested in doing a deal?
One more question: if you had disposable money back during the 2007-2009 mortgage default crisis, or the months following the outbreak of Covid, would you have bought something then?
Because if your answer is no, then move on to the next website, marketing message or email in your inbox.
<img src="https://assets.site-static.com/userfiles/1947/image/jon/weekly_emails/E0854971-CD26-45B3-B6AC-9FBB361CE8FF.JPG" alt="Highland Park" width="600" height="1066" />
* See the P.S. below for more info on the images pictured here
The goal of this blog post is to identify those who are looking to grow their net worth…and if you’d be uninterested in making a move when everything looked dire and distressed, then you’re probably comfortable with the predictable returns of a bond or CD (yawn).
Do you understand that those who have become truly wealthy have done so when everyone was running away from an opportunity disguised as a disaster?
Three of my favorite Warren Buffet quotes make the point I’m trying to get across:
"Widespread fear is your friend as an investor because it serves up bargain purchases."
"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."
"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
If the idea presented here makes sense to you, the question I have for you - the purpose for my post today - is this: are you in a position to buy if the opportunity presented itself at a moment’s notice? Could you even put the funds together?
And for me, the answer just 18 months ago was no. NO I couldn’t put enough spare change together to buy an opportunity.
I had some knowledge, but I hadn’t yet moved beyond the “just-enough-info” stage to taking action steps.
Today the answer is absolutely YES I know how to put the funds together. I have and I am currently doing so.<br />
In fact, as I’ve alluded to in the past, I have purchased multiple properties over the past year using money that was essentially floundering in a tepid stock market where I had little control in managing the direction of the funds.
I’m not here to diss the stock market. I have money there.
But my knowledge of and experience in real estate has taught me that the stock market is not the only choice available to those looking to grow their retirement.
So back to the question: how might you put funds together to buy an opportunity when it becomes available?
SDIRAs.
Everyone’s heard of 401k, 403b and every other type of retirement account out there. But have you heard of SDIRAs?
If you’re still reading this, I would love to have you post a comment and let me know if you have ever heard of SDIRAs.<br />
I don’t want to get all conspiracy theory crazy on you, but there’s a reason why it’s not a part of the main retirement option mix. Suffice it to say that the financial industry out there managing your retirement funds puts your money where they tell you it should go. I don't like the limitations, the excess fees, etc.<br />
Nah! Not for me. I have options.<br />
Enter the Self Directed Individual Retirement Account (SDIRA). The essence of this type account is that you get to direct your funds toward the investment(s) of your choice:
business loans
real estate
businesses
tax liens/deeds
precious metals
brokerage accounts
The good news is the vast majority of people out there have 1) retirement accounts they may not know about; 2) changed jobs and have left a pot of money sitting in their account with their old company or 3) retired and sitting on funds that may or may not be yielding the returns they want or need. This money should not be sitting around inactive and losing money to inflation.<br />
I’m not trying to be your financial planner here, but I would ask you this: has your financial planner presented you with this as an option?
There may be a reason for that...<br />
I realize I’ve raised a lot of questions, opportunities, potential concerns, etc. here. My goal here is to ensure those in my sphere are successful with the funds they’ve worked hard for and been blessed with. I feel there is so much more that we could be doing to increase our financial foundations and future. And the time to start addressing that is now.
If you’re content with the status quo, then don’t do anything.
If you’d like to take next steps and explore what you might with SDIRAs, reach out and let's talk.
Best,
<img style="margin: 5px;" src="https://assets.site-static.com/userfiles/1947/image/jon/Jon_Signature.jpg" alt="Jon Tripp signature" width="65" height="92" />
Jon Tripp
P.S. The photos above are the before and after of a property I bought with an SDIRA. I’m currently getting just under a 17% annual return on this property with a goal and potential of 21%. And this is based on income from rents. It’s not factoring appreciation and depreciation.
P.S.S. The photos below represent a property I purchased in the past year (not through an SDIRA - but easily could have been). My returns are .0309% monthly. Sounds boring until you multiply that annually for a 37% return. Yes it took sweat equity and hustle to get it there, but when you think of scaling that return by multiple properties, does that sound interesting? Better than mediocre.
<img style="margin: 5px;" title="See the P.S. for more" src="https://assets.site-static.com/userfiles/1947/image/jon/weekly_emails/3EF47D1A-9515-4062-9F74-249B842895BA.JPG" alt="Furnished property" width="600" height="1066" />
P.S.S.S (is this even a thing all these pssssss?) you think I’m some high-rolling real estate mogul, I’m not. I have costs, expenses and time that I've paid to create these opportunities. And the gains are not realized in the here and now. My goal is to create generational wealth for our kids, grandkids and beyond. Check out my favorite book in the Bible: Proverbs. Specifically Proverbs 22:7 and Proverbs 13:22. IYKYK.
Let me know if you knew what an SDIRA was and any other questions you have after reading this. I’m always happy to catch up over coffee.2023-04-25T08:55:37-07:002023-12-07T15:57:18-07:00Jon Tripptag:thedomusgroup.com,2012-09-20:10953Question 19: How do I buy an investment property?
“How do I buy an investment property?”
This is the question I’ll answer today, Day 19 of a 30-day series examining the top questions in real estate.
So how do you buy an investment property? Well, it’s kinda like putting pants on. The jeans go on just like the suit pants.
There’s a lot about the buying process that is exactly the same.
Let’s talk as if you’re the – I’ll call it a “retail investor” – where you’re investing in residential property – or 1 to 4 units – the buying process doesn’t really differ.
The lender is likely the same as the one you used for your primary home. Title will transfer the same way. Appraisal, yep the same.
But there’s always the exception. When you’re looking for residential properties, you want recent sales comparables – or comps - to compare your property against and make sure you’re not overpaying for it – and an appraisal supports the sales price.
The challenge comes in when the property is being sold as if it were a commercial property – or 5+ units where recent comps don’t matter but the overall financials of the actual property portfolio. This is where an appraisal may not – probably won’t support the sales price.
I recently went through this so it’s fresh in my mind.
OK. Don’t want to get too heavy at the beginning of this question. The point is, if you’re a newbie investor, please make sure you’re working with an agent who has done this many times before.
The most basic step is to just start looking around and asking questions. For example, you can go to my website <a href="https://thedomusgroup.com/investor" title="Investor alerts" target="_blank">thedomusgroup.com/investor</a> and sign up for alerts and browse searches on pre-set price points.
My <a href="https://www.thedomusgroup.com/property-search/results/?searchtype=3" title="The Domus Group" target="_blank">website</a> is an IDX site – which means it is essentially pulling in real-time data – as opposed to the Zillows, Realtor.com and other sites which are lead generators and just throw a lot of listing – eye candy I call it – and don’t really distinguish if they’re even available.
But when you fill out the form only to be called up by an agent telling you the home isn’t available, it’s frustrating.
You can have the confidence of browsing an IDX site like mine and actually seeing fully available properties. Go ahead.
Take a browse and feel free to sign up for alerts based on the criteria you outline. So you’ve started poking around and asking question.
Much like buying a primary home, once you’ve spoken with a lender and have your money lined up, you can then schedule property tours.
Let me say that being an investor takes a little different mindset than the retail buyer. You’ll need to have a little more intestinal fortitude, long-term thinking and overall flexibility than someone buying a safe, comfortable home they’ll live in.
Depending on your goals, identifying entry-level properties become a challenge for many because they look at it as they would their own place.
And you can’t.
Many of these things are hard to explain and must be experienced for it to make sense.
Plan for a 20-25% down payment and don’t forget 2-3% for closing costs. When you’ve secured your funds, identified potential properties, run your analysis on rents, and toured properties, you’re ready to make an offer.
Be sure to have a plan for your investment property. The odds are in your favor for long-term financial profitability if you can buy the first couple right.
Be sure to lean on your Realtor and lender for their expertise. Successful investing is made so by a team. This is not an individual sport.
When it comes to real estate, it matters who you work with. If I can answer any questions you have or assist you with buying or selling a home or investment property, reach out to me directly at <a href="tel://7035525259" title="Call Jon" target="_blank">703-552-5259</a>.
If this information is helpful, give me a thumbs up and share with a friend. To get my updates, take a moment to follow me on all the social channels @thedomusgroup. My name is Jon Tripp and I’m a Realtor in Northern Virginia. As always, thanks for joining me.
<a href="https://youtube.com/playlist?list=PL2BD7sxLU5Iy-8b9PQkQkvo1OPavi_dHc" title="30 top real estate questions" target="_blank">View the full 30 question playlist here.</a>2021-10-26T19:25:00-07:002021-10-29T22:17:11-07:00Jon Tripp