Do you honestly believe that your 401K is the best pathway to your retirement?
Are you sure that you’ll have enough to live off when you retire?
However, after the real estate market crash and subsequent great recession. Many people found themselves looking at their 401k statements and realizing they had lost up to 60% of their portfolio.
This was a shocking eye-opener for those that were still working and contributing to a plan that was literarily losing money every month. It was even worse for those retirees that were living off their 401k plan and social security. Many retirees had to go back to work part-time or even full time to help make ends meet. At the time these plans were designed, life was very different and the US was a different country. Many homeowners lost their homes and had to move into an apartment to reduce costs. So, what is the secret to becoming financially free in life, particularly during our working years?
What is the right investment that will provide us with enough cash flow so we can live a happy life, even after we retire? Is there a single investment that will produce enough benefits, all while reducing our tax burden? We already know that a 401k plan isn’t going to get us far enough, and unless you have the knowledge and know-how, neither is investing in the stock market. Time is critical and therefore we have to ask “What can we do right away to change the way we invest our money in order to position ourselves in order to have the life we want”.
The answer is “MULTIFAMILY REAL ESTATE!” Why MULTIFAMILY Real Estate?
- Did you know that Multifamily real estate was the most resilient during the great recession?
- Most people that lost their homes during that period became renters.
- Did you also know that as home values rise apartments benefit by getting more renters? This is because as values rise, a whole sector of buyers no longer qualify for the down payment requirements and higher loan payments. This is great news for multifamily real estate owners.
Over the past twenty years each of the partners of Crown Capital, at some point, climbed the corporate ladder. As we climbed up the ranks in our career, our level of responsibility climbed as well. Our checks got bigger while our free time diminished. The more we expanded our career, the more freedom shrank. We each participated in and maxed out our company’s 401k plan and at the time, thought the stock market would be our means of retirement. We learned after years of contributing to our company plans that our 401k’s would never be enough for us to retire and live financially free without downsizing our lifestyles. That’s when we each went on separate journeys to find what we now love and will use as our means of retirement…MULTIFAMILY Real Estate!
There are several reasons to invest in MULTIFAMILY Real Estate.
The first reason to invest in MULTIFAMILY real estate is “CASH FLOW”. Every month the rent must be paid by your tenants or they run the risk they will be evicted for failure to pay the rent. The beauty of multifamily real estate is that every year, the property cashflow should increase with the minimum cost of inflation in most markets if the asset manager is doing a good job executing the property’s business plan.
The second reason is “LEVERAGE”, you can leverage the majority of the cost to invest in multifamily real estate by obtaining a loan. You can’t leverage a single share of stock to buy more stock. You can use a margin account to buy stock, but if the market has a bad day, week, month, or year. Your stock portfolio losses value, and you will have a margin call.
Which, brings me to the third FANTASTIC reason to invest in MULTIFAMILY real estate. Since your annual cash flow is increased by the cost of inflation. This creates a hedge against inflation. It is also important to note that investing in MULTIFAMILY properties, far exceed the national rates of return in savings and money market accounts. While not all markets are created equal, it is important to have the necessary data to determine which markets to invest in.
The 4th important reason to invest in real estate is LOW RISK and LOW ENTRY barrier. Investing in MULTIFAMILY real estate has a relatively low risk in comparison to investing your money in stocks or other risky investments. Plus, you can have multiple investors buy a MULTIFAMILY property. Therefore spreading the risk amongst other investors.
The 5th reason is one of the most important to invest in MULTIFAMILY real estate. Unlike other real estate investments. In MULTIFAMILY properties you can control the appreciation of value. A single annual rent increase of $25 for a 100 unit property, can create an immediate increase in the value of $600,000. This is known as the “INCOME APPROACH” valuation.
$25 per month rent increase X 100 Units = $2,500 total rent increase per month over 12 months = $30,000 of annual increased income. At a 5% Cap Rate, the valuation has increased by $600,000 ($30,000/.05).
We’ve taken what we’ve learned over the past decade and created a book for you to read.
You’ll learn all about apartment syndications and understand the pros and cons with investing in them. You can learn what it takes to invest in a business that will grow over time, and more importantly, provide you with a lifetime of income and wealth.
To learn more from us, be sure to check out our FREE EBOOK!