Here's How to Fund Your First, Second or Greater Investment Deal
If 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.
* 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.
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?
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.
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.
Nah! Not for me. I have options.
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
- 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.
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...
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.
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.
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.