🏡 Real Estate is a better investment than stocks, and we can prove it. We know that we could get a lot of heat 🔥 from this one...but the math doesn't lie. Let's get into it... Depending on which numbers you use, the S&P 500 has given an average rate of return, since its inception, of somewhere in the ball park of 9.9% - 10.26%. That's not bad actually. As long as you never need to sell the stocks. Hopefully they didn't tank right as you planned on retiring. Oh, and don't forget about fees. If you have a financial advisor you can reduce 📉 that by 15%-20%. So, net gain lands you between an AVERAGE of 8.4% to 8.71%. Decent. Now let's look at real estate... Remember that you get to pick the purchase price ✅ . Let's suppose that you selected a perfectly average 😑 house with an ARV of $250,000, that generates, net of all expenses, a perfectly unimpressive 8% annual return. Many investors won't even buy a property unless it nets over 10%. And this is net of all expenses, including property management. But wait...there's more! Suppose your family makes $100,000 a year, including your rental income, and have 2 children 👨👩👧👦. Assuming you take the standard deduction, (because it's easier to calculate, and more conservative), you'll owe ~$8,236 in taxes, before credits. Now, consider something called 'depreciation'. Through IRS code, you are able to use depreciation to reduce your taxable income by roughly $9,000, reducing your tax liability to ~$7,156, an improvement of ~$1,080. Your property is no longer returning 8% a year. It's now returning 12% a year in usable income, every single year. Including expenses, like taxes and vacancies. Right off the bat ⚾ , your single rental property is performing ~50%ish better 📈 than whatever is in the S&P 500. Keep in mind, we haven't even discussed the increased deduction of... - Paid mortgage interest - A cost segregation analysis - Home office, Travel, or regular business ownership expenses - The possibility of deferring those gains when you move into a better performing asset - Pass through deductions on your income But wait....THERE'S MORE ❗ ... 🙊 Because we forgot about APPRECIATION... Suppose you decide to sell the property. If it were to appreciate at a measly annual rate of 3%, you would cash out (or put into your next investment, thereby increasing your cash flow)... After 5 Years... ~$40,000 of equity After 10 Years... ~$85,000 of equity Suppose you planned ahead and purchased an asset for your child, instead of investing into a 529... After 18 Years... ~$175,000 of equity And at this point...we haven't even talked about borrowing tax free against the equity (that someone else paid down)...to purchase another...and another...and another... 🖋 🤑 *Obligatory disclaimer that I'm not a CPA or attorney. You should consult your own.
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How Adam Makes Passive Income in Real Estate Without Being a Landlord If You're a Doctor, Business Owner or High Earner, You Will LOVE This True Story! Adam G. is an executive for a bank. He makes very good money (more than $300K/year). Adam made the right decision of NOT being a landlord. Instead, he invests in syndicated multifamily deals. Instead of spending his time being a landlord, he spends his time improving his skillset and being part of the right network as a banker. As a result, his income grows by 10-20% per year. Adam G. has TRULY PASSIVE income from his investments as an LP (limited partner or passive investor). The multifamily syndications he invested in started with 6% cash on cash return but as those investments mature, he has syndicated multifamily deals with 8% to even 12% cash on cash return! That's a whole lot better than investing in stocks with yields of 1-2%, or bonds with 2-5%. Moreover, due to depreciation and cost segregation, the 6-12% returns Adam makes on his syndicated real estate investments are TAX FREE (technically tax deferred but there's a way to defer it forever - not financial or tax advice). Lastly, what Adam did was reinvest all that 6-12% cash on cash return to invest in more real estate. The result? Over the 10 years he has been investing, his syndicated multifamily investments MORE THAN QUADARUPLED! An investment of $1M 10 years ago is now worth $4M. At an average of 8% cash on cash, that's $320,000 a year in TRULY PASSIVE income! If you're a doctor, business owner or corporate executive and you want MASSIVE, PASSIVE income from real estate, you should ATTEND my special ZOOM call tonight at 8 PM eastern. In my MASSIVE PASSIVE INCOME Masterclass (via Zoom), you will learn: 1. Why & how multifamily investments can QUADRUPLE your money 2. How to invest as much as $69,000 per year in a "Roth" even though your income is way past the limit 3. How depreciation and cost seg results in TAX DEFERRED investments that allow your money to QUADRUPLE without the IRS taking a dime of it! 4. How to use a certain form of real estate investment so you don't pay any capital gains taxes on all your investments (real estate, stocks or even crypto) and many more! Comment "PASSIVE" to get the Zoom link and I will see you tonight. #realestateinvesting #passiveincome Information presented is for educational purposes only and is not intended as, or may not be relied upon as tax, legal, investment or real estate advice. Consult your tax, legal, investment or real estate professional before investing. Information presented is not an offering.
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Have you ever dreamed of owning a piece of prime real estate, but the thought of managing properties or dealing with huge down payments sounds too intimidating? I was today years old when I learned about Real Estate Investment Trusts (REITs). What is a REIT? Think of a REIT as a way to invest in real estate without actually buying, managing, or financing properties yourself. A REIT is a company that owns, operates, or finances income-producing real estate. This can include everything from office buildings and shopping malls to apartments and hotels. Instead of buying a physical property yourself, you invest in shares of the REIT, essentially becoming a part-owner of its diverse real estate portfolio. Benefits of REITs: - Diversification: By investing in a REIT, you get a piece of a large portfolio of properties. This spreads out your risk compared to putting all your money into a single property. - Liquidity: REITs are traded on major stock exchanges, so you can easily buy and sell your shares whenever the market is open. This is way easier than selling a physical property, which can take months. - Regular Income: REITs are required by law to distribute at least 90% of their taxable income to shareholders as dividends. This means you get regular payouts, which can be a great source of passive income. - Professional Management: REITs are managed by professionals who handle everything from property acquisition and leasing to maintenance. This means you don’t have to worry about the hassles of being a landlord. - Accessibility: You don’t need a ton of money to start investing in a REIT. You can buy shares with a relatively small amount of cash, making real estate investment accessible to more people. Capital Gains Exemption Through REITs: One of the cool tax benefits of investing in REITs is the potential for capital gains exemption. Here’s how it works: - Long-Term Capital Gains: If you hold your REIT shares for more than a year, the profits you make when you sell them can be taxed at a lower rate than your regular income. This means more money stays in your pocket. - Qualified Dividends: Some of the dividends you receive from a REIT may be considered "qualified dividends," which are also taxed at a lower rate than ordinary income. - Return of Capital: Part of the dividends might be considered a return of capital, which means they reduce your cost basis in the investment. This portion isn’t taxed immediately, which can lower your tax bill in the short term. Understanding REITs can be a unique way to participate in the real estate market without the complexities of direct property ownership. Plus, the potential for capital gains exemption makes REITs an attractive option for tax-conscious investors. So, if you’re looking to add some real estate to your investment portfolio, REITs are definitely worth considering. #realestate #investing #capitalgainstax #financialliteracy
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6 REASONS WHY I WOULD RATHER INVEST IN REAL ESTATE THAN SAVE MY MONEY🎯 There are several compelling reasons why investing in real estate can be a more advantageous option than simply saving money. Here are a few key factors to consider: 1. Appreciation : Real estate investments have historically proven to appreciate in value over time. While savings accounts may offer minimal interest rates, real estate investments have the potential to provide significant returns. Over extended periods, properties tend to appreciate, which means your investment can grow substantially, allowing you to build wealth. 2. Cash flow and passive income : Real estate can generate cash flow through rental income. By owning rental properties, you can receive regular income without needing to actively work for it. This passive income allows you to supplement your earnings and achieve financial independence. 3. Diversification : Investing in real estate provides diversification, reducing your risk exposure. By having a diverse investment portfolio that includes different asset classes, such as stocks, bonds, and real estate, you can protect your savings from the volatility of any single market. This diversification helps in mitigating potential losses and increasing the overall stability of your portfolio. 4. Tax benefits : Real estate investments offer numerous tax advantages that can significantly benefit your financial situation. Expenses related to property management, maintenance costs, and mortgage interest payments can become tax deductions, reducing your taxable income. Additionally, profits from the sale of investment properties held for a certain period may qualify for capital gains tax rates, which are typically lower than income tax rates. 5. Inflation hedge : Real estate investments can act as a hedge against inflation. As the value of money declines over time, real estate tends to keep pace, if not outperform, inflation rates. By investing in properties, you protect the purchasing power of your money and ensure that your investment retains its value in the face of rising prices. 6. Tangible Asset : Unlike other investments such as stocks or bonds, real estate provides investors with a tangible asset. Owning physical properties can offer a sense of security and a feeling of control over your investment. Additionally, real estate properties can be leveraged as collateral to access financing for other investments or personal needs. By investing in real estate, you can not only preserve your savings but also benefit from appreciation, generate passive income, enjoy tax advantages, and diversify your investment portfolio. Real estate offers these advantages, making it a more attractive option for those looking to build wealth and achieve financial security. #realestatetips #wealthbuilding #investment #investmentopportunity #passiveincome #returnoninvestment #assets #goodlife #nigeriansincanada #nigeriansindiaspora
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### **Real Estate Investing for Beginners: A Comprehensive Guide 🏠📈** (part -1) to be continued.... Real estate investing is a powerful way to build wealth, diversify your portfolio, and achieve financial independence. However, for beginners, it can seem overwhelming. This guide will provide a comprehensive overview of real estate investing, offering practical steps and tips to help you get started confidently. --- #### **1. Understanding Real Estate Investing 📚** **What is Real Estate Investing?** Real estate investing involves buying, owning, managing, or selling properties to generate profit. Investors can earn income through various means: - **Rental Income:** Monthly payments from tenants renting the property. - **Property Appreciation:** Increase in property value over time, leading to profits when sold. - **Tax Benefits:** Deductions for mortgage interest, property taxes, and depreciation. Investors can focus on different types of real estate, each with unique characteristics: - **Residential Real Estate:** Includes single-family homes, apartments, and condos. These properties are rented out to individuals or families and are often the entry point for new investors due to their straightforward management. - **Commercial Real Estate:** Includes office buildings, retail spaces, and industrial properties. These tend to offer higher returns but also come with greater risks and complexities. - **Industrial Real Estate:** Properties used for manufacturing, warehousing, and distribution. They are essential for businesses and often provide stable income through long-term leases. - **REITs (Real Estate Investment Trusts):** Companies that own, operate, or finance income-generating real estate. Investing in REITs allows you to participate in real estate markets without owning physical properties. **Why Invest in Real Estate?** Real estate investing offers several benefits: - **Cash Flow:** Rental properties provide a steady stream of income. This can cover mortgage payments, maintenance costs, and provide additional income. - **Appreciation:** Real estate generally appreciates over time, offering potential for significant gains when selling. However, market conditions can affect property values. - **Tax Advantages:** Investors can benefit from tax deductions related to mortgage interest, property taxes, and depreciation. These deductions can enhance overall profitability. - **Diversification:** Real estate adds diversity to your investment portfolio, reducing reliance on stock markets and spreading risk. - **Leverage:** Real estate investments often use borrowed funds, such as mortgages. This leverage can amplify returns but also increases risk. **#RealEstateInvesting #PropertyInvestment #FinancialIndependence #RealEstateTips #InvestmentStrategies #PassiveIncome #REITs #PropertyManagement #InvestmentGoals #WealthBuilding**
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Multifamily investing isn’t just about cash flow—it’s also about keeping more of what you earn. One of the greatest advantages of real estate investing is the **tax benefits** that can significantly enhance your overall returns. Here are a few key tax advantages you can enjoy as a multifamily investor: 1. **Depreciation**: Even though your property may be appreciating in value, the IRS allows you to depreciate it over time. This means you can deduct a portion of the property’s value every year, reducing your taxable income—even as your property’s actual value increases. 2. **Mortgage Interest Deductions**: The interest you pay on your property’s mortgage is tax-deductible. This is a major benefit, especially in the early years of your mortgage when interest payments are highest. It allows you to offset income and reduce your tax liability. 3. **Operating Expense Deductions**: Property management fees, maintenance costs, insurance, property taxes, and repairs—all of these operating expenses are deductible. This means that much of the cost associated with owning and managing a multifamily property can help reduce your taxable income. 4. **1031 Exchange**: Want to sell a property and reinvest the profits? A 1031 exchange allows you to defer paying capital gains taxes by reinvesting the proceeds from a sale into a new, like-kind property. This strategy can help you continue growing your portfolio without being hit with immediate tax burdens. 5. **Cost Segregation**: This advanced strategy accelerates depreciation by separating out individual components of a property (like appliances, fixtures, and landscaping) to depreciate them over shorter periods. It can lead to significantly higher tax savings in the early years of ownership. These tax advantages are some of the reasons multifamily real estate investing is such a powerful wealth-building tool. It’s not just about cash flow—it’s about maximizing returns by keeping more of your money in your pocket. If you want to explore how these tax benefits can work for you, let’s connect and discuss multifamily investment strategies. #RealEstateInvesting #TaxBenefits #MultifamilyInvesting #FinancialFreedom #WealthBuilding
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Capital gains are the bane of real estate investors. Imagine paying the capital gains tax on $3 million! Without the ability to immediately re-invest those funds through a 1031 exchange, the chances of a hefty tax bill go up. But what if you could sell property in 2024, hold onto those profits, and wait another two years to buy another property… What if you could do all that and not pay a capital gains tax? You can. Let me explain with an example: George owns a multi-family apartment building in a good area of town. He bought it 20 years ago for $5 million and it is now worth $10 million. He has a remaining mortgage of $2 million. The property has depreciation of $2.5 million and capital improvements of $500,000. George is tired of tenants, termites, teenagers, and taxes. He thinks he can get a better return on capital, so he wants to sell and look at different opportunities. George has a basis on his purchase price, plus capital improvements, less depreciation, or $3 million. When he sells his property for $10 million, he will have to pay capital gains taxes on $7 million. George knows now is a good time to sell but not a good time to buy. What can George do? He can do a 1031 exchange, but he would need to identify a replacement property of equal or greater value in 45 days and close the transaction in 180 days. This can be very difficult in a seller’s market with low inventory. In addition, many folks do not want to sell when prices are high and pay the commissions and fees only to turn around to invest right back into an elevated market. Instead, George can defer the taxes owed and place the entire $7 million into a Deferred Sales Trust. Not only does this trust defer the capital gains taxes, but there are opportunities for George to gain access to some of the funds inside the trust to purchase investment property down the road. Imagine being able to cash out of real estate in 2024 and then re-purchase real estate in 2025 and 2026? George knows that having a sizable amount of cash on hand allows him to pounce quickly on a favorable deal. However, he can just leave the money in the trust and at a conservative 6% rate of return, George would earn $420,000 per year while searching for a good deal or, he can just retire. With some minor modifications, the Deferred Sales Trust can be used to defer capital gains taxes on the sale of a business or appreciated assets. Solutions such as these can be as simple or as complex as the situation calls for. It’s incumbent upon us, as Financial Services professionals, to explore all the options available in an ever-shifting marketplace of financial tools. Can we help you? DM me or click on the Book an appointment link, and we can talk about it. #capitalgains #planningnetworkpartners #wealthmanagement #legacy #retirement #realestate #1031exchange #deferredsalestrust
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6 REASONS WHY I WOULD RATHER INVEST IN REAL ESTATE THAN SAVE MY MONEY🎯 There are several compelling reasons why investing in real estate can be a more advantageous option than simply saving money. Here are a few key factors to consider: 1. Appreciation : Real estate investments have historically proven to appreciate in value over time. While savings accounts may offer minimal interest rates, real estate investments have the potential to provide significant returns. Over extended periods, properties tend to appreciate, which means your investment can grow substantially, allowing you to build wealth. 2. Cash flow and passive income : Real estate can generate cash flow through rental income. By owning rental properties, you can receive regular income without needing to actively work for it. This passive income allows you to supplement your earnings and achieve financial independence. 3. Diversification : Investing in real estate provides diversification, reducing your risk exposure. By having a diverse investment portfolio that includes different asset classes, such as stocks, bonds, and real estate, you can protect your savings from the volatility of any single market. This diversification helps in mitigating potential losses and increasing the overall stability of your portfolio. 4. Tax benefits : Real estate investments offer numerous tax advantages that can significantly benefit your financial situation. Expenses related to property management, maintenance costs, and mortgage interest payments can become tax deductions, reducing your taxable income. Additionally, profits from the sale of investment properties held for a certain period may qualify for capital gains tax rates, which are typically lower than income tax rates. 5. Inflation hedge : Real estate investments can act as a hedge against inflation. As the value of money declines over time, real estate tends to keep pace, if not outperform, inflation rates. By investing in properties, you protect the purchasing power of your money and ensure that your investment retains its value in the face of rising prices. 6. Tangible Asset : Unlike other investments such as stocks or bonds, real estate provides investors with a tangible asset. Owning physical properties can offer a sense of security and a feeling of control over your investment. Additionally, real estate properties can be leveraged as collateral to access financing for other investments or personal needs. By investing in real estate, you can not only preserve your savings but also benefit from appreciation, generate passive income, enjoy tax advantages, and diversify your investment portfolio. Real estate offers these advantages, making it a more attractive option for those looking to build wealth and achieve financial security. #realestatetips #wealthbuilding #investment #investmentopportunity #passiveincome #returnoninvestment #assets #goodlife #nigeriansincanada #nigeriansindiaspora
