Has the ship sailed to start investing in real estate?
Hi there, this is Michael Dominguez with the Doors To Wealth Real Estate Group, and I have another question asked to me:
“Is real estate investing a dying field? Is it worth breaking into real estate investing?”
Everyone always tells the story of saying,
“It’s not as good as it used to be. If I’d have invested five years ago, ten years ago, twenty years ago, it would have been so much better than it is today.”
That’s the common thing you hear from so many people. Yes, the prices are different than they were back then, but real estate still makes sense as a financial vehicle.
Is real estate investing the investment vehicle for you?
The first thing I always say to somebody is, “If you could find a better investment vehicle, definitely consider it.”
We’re talking about what the numbers are today in comparison to investing in a business, investing in a restaurant, investing in stocks or mutual funds, whatever. That’s what you’re comparing it with, and the answer is that there simply isn’t a safer vehicle that I know of other than real estate. Especially if you pick it in a primary location where it has a lot of good upside.
Will the cash-flow be as good in a primary market? Possibly not, but at the same time, if you find a good location and good quality tenants, the beautiful thing of real estate is you’re still only putting down in most markets as little as 20% down on a property. Really, your down payment is not going to be that substantial. You can actually even borrow that down payment money with your own principal residence if you want to.
Keep yourself focused on the end goal.
Really, you’re financing this investment pretty much totally, and the rental income that’s coming in on a good investment such as a legal two-unit dwelling that I’m standing behind now, it can actually still make financial sense. The cash-flow is small, but then you see the mortgage pay-down, you see the appreciation, at the end of the day, you could really start building some wealth.
What my wife and I have done is we focus primarily on taking the proceeds that we make when the property appreciates enough, re-financing it one more time, and then we use that to buy another property and another property. That’s how we’ve built our portfolio the way we have, so I still think it’s a really strong investment.