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Optimal Finance Daily - Financial Independence and Money Advice
3279: [Part 1] Why You Should Invest in Real Estate by ESI on Investment Advice for Retiring Early
00:09:22
ESI shares how real estate investing transformed his financial life, from acquiring multiple rental units to retiring at 52 without touching his savings
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Thanks for selling your car to Carvana. Here's your check.
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Whoa. When did I get here?
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What do you mean?
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I swear it was just moments ago that I accepted a great offer from Carvana online. I must have time traveled to the future.
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It was just moments ago. We do same day pickup. Here's your check for that great offer. It is the future.
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It's.
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It's the present and just the convenience of Carvana. Sorry to blow your mind.
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It's all good. Happens all the time.
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Sell your car the convenient way to Carvana. Pick up. Times may vary and fees may apply. You're about to make a trade which you do you listen to. Is it get optioning those options or let's do a little research. Learn more@finra.org TradeSmart this is optimal Finance Daily. Why you should invest in Real Estate Part 1 by esi of esimoney.com I've been meaning to do a real estate post for some time now. I'm finally getting to it with this one. In my walks around the neighborhood, I've been listening to the ABCs of real estate investing, the secrets of finding hidden profits most investors miss, and I'm really enjoying it. The book is a good, solid primer on real estate investing and I wish I had read it before I got involved in real estate. Anyway, listening to it has got my real estate juices flowing again and thus I had to post on the subject. Many of you know my real estate background, but just to be sure everyone's up to speed, here's a quick review. FYI, there are even more details later on in this post. In 2011 or 2012, I can't recall when I first started thinking about real estate as an investment option. I began putting together what would ultimately be my real estate investing objectives. Not too much later, I found a mentor who showed me the ropes and we began buying properties. He was my agent. I purchased places in 2012 and 2013 and ended up with three properties, five buildings and 14 total rentable units. In all, these real estate investments have performed quite well. In addition to the monthly income they generate, they have also appreciated nicely. That said, it all hasn't been rosy. I made lots of mistakes, the biggest being I should have been more aggressive and bought more places and have taken some cost hits, but overall the experience has been a winner for me. This past year was particularly good. I had several strong months of solid income and low expenses, maybe my best year yet in owning these places. I'm still working through the final numbers as I prepare my taxes. But I'll include additional thoughts when I give my 2019 financial review and 2020 projections, like I do every year. No matter the specifics, the conclusion will be the same. Real estate has been very, very good to me. And it's not just me. Millionaires love real estate too. The ones I've interviewed invest at three times the rate of the average American. Coincidence that they do and are wealthy? I think not. But there are some who don't share our views Almost three years ago, my friend and fellow blogger Barbara Friedberg wrote a post titled Being a landlord sucks why you shouldn't invest in real estate. It was an interesting title that showed up in my feed reader. Since I'm a big fan of real estate investing. I clicked through, read the piece and left this comment. I hear you. Real estate is not for everyone. On the plus side, real estate was the main reason I retired at 52. It's managed by a company for me, so I have very few hassles with it. I actually live over a thousand miles away from my properties. End quote. Barbara saw the comment and sent me a note asking if I'd expand on my thoughts. I said I'd love to and wrote a guest post for her on why people should consider investing in real estate. As I said in 12 books that will make you a financial expert in a year, I think everyone needs to at least know enough about real estate to consider it as an investment option. I strongly believe this. Maybe real estate investing is for you and maybe it's not, but you owe yourself at least investigating it honestly, without preconceived notions to make your own decision after not buying enough properties. Taking so long to get into the game was my biggest real estate investing mistake. But I had objection after objection, all of which either were non existent or handled relatively easily. I wasted all that time being limited by my own beliefs and fears when I could have been buying a place each year and building up a fortune. The following is the post I wrote for Barbara in an attempt to keep others from making the same mistake I did. It's mostly as it originally ran, but with a few minor updates. As noted. The downsides of Real Estate let's begin by addressing Barbara's concerns. Her objections to real estate investing basically boil down to lots of time and hassles. She listed 26 steps to buying and managing real estate. There's also the hassle of bad tenants, 3am toilet repairs, and all the rest. The end of her post also talked about a better alternative for investing in real estate, which she hasn't posted on yet. Let me begin by saying that there's a time investment required in real estate investing. That's for sure. There are also bad tenants and 3am calls, but there are also steps that can be taken to minimize these issues. Given the upside, I think real estate investing is great. I think it's especially great since it allowed me to take early retirement and not spend a penny of my savings. How real estate allowed me to retire at 52 hear that on tomorrow's episode. You just listened to part one of the post titled why you should invest in real estate by esi of esimoney.com this message is brought to you by Apple Card if you're like me, you might be considering getting a new iPhone, but have you considered upgrading your credit card? When you use your Apple card with Apple Pay or the laser etched titanium Apple card, you can earn unlimited 3% Daily Cash back on everything you buy from Apple, whether it's a new iPhone, an iPhone case, or even a service like Apple Music or Apple TV. Earning 3% back on the Apple products and services you love. It's an easy decision. You'll only wonder why you weren't doing it sooner. 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There are so many ways that we can invest our money, but I think we need to pick the ways that best align with our unique skills, preferences and circumstances. This article reminded me of a breakout session that I participated in at a Camp Mustache event a few years ago. Four of the attendees, including me, opened up our books and showed the group our finances in the form of case studies. We outlined our income expenses, investment strategies and overall plan to reach Fi, and then the audience was welcome to poke holes in our plan or offer suggestions for improvement. Two of the other case studies had real estate investing as the crux of their strategy. And despite the fact that their yearly salaries were half of what mine was at the time they were still projected to reach 5 faster than me due to their aggressive investment in real estate. It made me reflect on my own investment strategy and question if I should be investing in real estate like they were. So I grilled them I on how they were doing it, how much time they were putting into it, what stressors they were experiencing that they didn't expect, how they were navigating the risks, et cetera, et cetera. And I walked away from those conversations perfectly content with my decision not to invest in real estate. Reaching 5 faster isn't a good enough reason for me to add the additional stress of an investment style that doesn't align with my unique skills, preferences and circumstances. Remember, personal finance is personal and reaching financial freedom is not a race. Well that should do it for today. Have a happy rest of your day and I'll see you on the Friday show tomorrow where we'll finish up this post and where your optimal life awaits.