If you’ve read any of my writing, you know that I love real estate as an asset class. Generally speaking it is:
- Easy to understand
- Stable and predictable
- Inflation protected
- Able to provide outsized returns through both yield and appreciation
All attributes I look for in my passive income investments. I recommend allocating a good share of your assets to real estate, to both balance your portfolio and reach Ramen Retirement sooner:
But if you’ve never invested in real estate, how do you get started? The world of investment real estate is vast. There are a seemingly endless array of options you can choose from. There’s also a lot of noise created by the Financial Industrial Complex, who want to steer you back into the publicly traded assets they can profit from. It can be both confusing and overwhelming for someone new to the game.
To start, go read ‘The Real Estate Game’ – by William Poorvu, an apparent legend in the real estate world. That will give you a good grounding in the ‘real estate game’ – the playing board, players, pieces, strategies, and most importantly the psychology and drivers that influence each of those variables.
Once you’re done there, you can get a good overview of residential real estate from the Bigger Pockets Guide to Real Estate Investing, it’s a good very high level summary of real estate investing that will give you only the basics. If you’re interested in commercial real estate investing (and I think you should be!), I would recommend checking out the Comprehensive Guide to Commercial Real Estate Investing, by Ian Formigle, VP Investments at Crowdstreet (one of the top online commercial RE platforms).
After you’re done with those, read through the following guides to help make your first investment:
- Choose your investment strategy
- Choose a market for investment
- Follow the real estate investing rules to live by
- Understand the detailed economics of a midwest single family rental
- Find and buy your first single family rental
- Consider the benefits of investing through a syndicate
In the future I’ll address a few more topics worth considering, so sign up for the Ramen Review if you want to stay in the loop:
- The real estate cycle
- Key players in the real estate game
- Financing real estate investments
- What’s better, turnkey or direct investment?
- Identifying ’emerging markets’, what does that actually mean?
Lastly, check out these other resources if you want to dig deeper:
- IRR Research including the 2018 Viewpoint National Multifamily
- Freddie Mac is a lender, but they provide some good information, including their 2018 multifamily outlook
- Housing Trillemma sheet created by this Oregon economist
- US Census building permits survey
- Zillow Research – a wealth of housing and rental data
- Market information from the National Association of Home Builders (requires membership fee in the ~$1K range – here’s a sample of what that provides)
As a final thought, if you have questions you don’t find answered here, or just can’t figure out what the right next step is, drop me a line at firstname.lastname@example.org, and we can discuss your situation and options. I’m not a financial advisor, I’m just someone with experience worth sharing, who will tell it as I see it. Too many people out there have an agenda or are trying to sell something. All I’m offering is practial advice on what has worked for me.
Get started today. Your future self will thank you!
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