REAL ESTATE
My journey into Real Estate started the day of my high school graduation. My interests have always been in design and construction. When passing by development sites I would often take tours of the space with project manager and architects. I found the opportunity to approach a peer, who I had heard was in the business, I reached out about shadowing him for the summer. Given the chance to do clerical work, I quickly became curious about the process of where to find distressed assets.
My first summer was a chance to learn the basics, however the following summer I had prepared for a more intense role at the business. Driving in and out of neighborhoods and talking with residences, I found deals that I passed along to my mentor. Quickly becoming familiar with the area, I started participating in the deals that I had brought into the business. This grew from single family homes to multiunits and eventually plazas in the commercial space.
Fast forward to my second year at University, I found myself busier with school and other business-related interests. I quickly found two deals in Woodland Hills, CA and Yucaipa, CA that were ripe for restructuring. Partnering with my mentor, I sourced many contractors who were experts in financing deals, marketing the process, and agents who were top performers in the area. Growing my mentor’s portfolio, while growing my own capital was the perfect opportunity to plant my own investments in Land. Currently, I own 2 acres in San Bernardino, CA as well as a 2,000sqft lot in Chino Hills, CA.
While I have spent time away from Real Estate, I’m excited to explore the commercial side of real estate investments.
Advantages of Single Family Homes over Multi-Unit Properties
No tenant(s) issues: Because you wont be dealing with multiple tenants on a day to day basis, you'd be working with a single tenant on a month to month basis. Less stress & complaints of other tenants.
Less to Maintain: Statics have shown, in recent years, that residents who live in houses have less conflicts with property management than those who live in multiunit properties.
Easiest To Transition Too: So many resources are available to first time home buyers. FHA Loans, USDA Loans, Veteran Affair Loans, and sometimes Fannie Mae Loans. The government encourages new families and individuals to purchase homes. From low down payments to little interest rates, lies opportunity to become a real estate investor.
Advantages of Multi-Unit Properties to Single Family Homes
Safety Net of Loss: During the downturns of the economy, where tenants are likely to vacate after their lease expires or worse, eviction, the property owner will have other units that they can use to balance their monthly income.
Quality of Quantity: By the level of multi-units, it’s common to have a designated team that runs the property. (i.e Property Manager, Handymen, agents who comp local markets) Rather than maintaining your investment with a singular entity, having a team ready to fix or maintain puts omits less stress.
Less Money Out: While there are better programs to help you finance your investment, there are also less expensive property taxes and utilities for a larger building.
Most commonly used in the transfer of commercial assets, the 1031 Exchange (Section 1031 of the IRS code) is a tax strategy many investors use in order to avoid paying taxes on properties. While it sounds advantageous, there are conditions that MUST be met in order to execute the 1031 Exchange. An investor must find another building, of equal or higher value to roll the "untaxed" gains into within a 6 month period. The tax strategy must be used by a corporation in order to execute. This is a method that many of the worlds most successful Real Estate investors have used in order to build and grow their wealth.
