Investing Basics

Category: Investing Basics

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Apr 6, 2022

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18 Best States for Real Estate Investing

Ask the average person for some passive investment ideas and ten out of ten times, they’ll list real estate in their top three. Why? Real estate is part of our lives. Everyone lives somewhere. It’s quite easy to think that your mortgage provider or landlord must be earning lots of money. Well, most times they are, especially if you're residing in a real estate hot spot.Here, you’ll learn about 18 of the best states for real estate investing in 2022. Uncover why each of these states is a great housing market to invest in. See current housing market statistics for every state and what makes each of them stand out. Best States for Real Estate Investing in the US Before we head into our rankings of best real estate markets, there are some things you'll need to know.Unless otherwise stated, recent housing market data used here is from Zillow, Census Reporter, Data USA (2019 census data), redfin, and November 2021 statistics from Apartment Guide for rent trends. These rankings are in alphabetical order. These are the 18 best housing markets in America.Arkansas Arkansas provides a great real estate investment opportunity, with promises of a high quality of life for homeowners and real estate investors in 2022. The average home here sells for $159,714, with a median increase of 15.3%year-over-year. Of all housing units 84% are inhabited, with tenants occupying 35% of that number. The average rent here is less than you’d find in most other states, sitting at $914 per month. When compared to the previous year, the average rent reduced by a massive 15.3%.What’s more? Population growth in "The Natural State" was up by 0.13%, pushing the numbers to 3 million residents. The property tax rate for the largest households is below $800, putting Arkansas alongside the lowest property tax states in the US. Notably, Arkansas is expected to come out strong as a seller’s market in 2022 with buyer's and rental demand greater than there are available properties. California Also known as "The Golden State", California is the most populous state in the country with 40 million residents. The median price for a home in California is $772,406, with a year-over-year increase of 21%.  Nine out of every ten houses in CA are occupied, with renters inhabiting half of the housing units.The average rate of rent increase year-over-year in CA is 19.0%, with single-family properties increasing by 22.3%. The median rent in this diverse economy goes for $3,123 per month, amid a job growth rate estimated at 1.37% last year. Taxpayers with the largest share of households pay $3,000 in property taxes. Georgia Georgia’s median price for a house is $269,441 according to Zillow, with a year-over-year increase of 18.9% in December according to Redfin. Intending sellers had to wait for an average of 26 days, with 36% of the housing units occupied. Again, single-family units account for the biggest percentage of housing units in the Peach State's housing market.Property taxes are, on average, less than $800, with the average rent at $1,666 per month. Home to more than 10.7 million people, Georgia ranks sixth in the US for net immigration. The state added 284,541 people in 2019, consequently increasing the diversity of its population. Furthermore, the real estate market is expected to follow suit in increasing potential and dynamism.Florida Many millennials (and consequently, young professionals) are moving out of big cities like Chicago and Los Angeles for less noisy suburbs. Helpfully, Florida's housing market presents an attractive alternative with its welcoming beaches, coastal cities and warm year-round weather. The average home in the state sells for $328,576, and is increasing year-over-year by 23.9%. Median rent is at $2,271 per month, with an average year-over-year rent increase of 37.56%. Per employment opportunities, job growth is at 2.57% against a population growth of 0.84%. Of houses, 82% are occupied, while the average taxpayer (with the largest share of households) pays $3,000.Experts believe that interest rates will rise in 2022. Generally, the figures are favorable for potential investors, with single-family homes holding the highest promise. Idaho Next on this list of best real estate markets is Idaho. Home to one of the hottest real estate markets in the nation (Boise), Idaho has a median home value of $446,550. The average home’s worth increased 38.2% year-over-year with a total of 87% of its houses occupied. The average rent in this state comes in at $1,429 per month, with an average year-over-year rent increase of 21.72%.Employment chances in Idaho grew by 4.32% in the last year, against population growth of 1.87% bringing the total population to 1.7 million. Per the property tax rate, the largest households in Idaho will pay between $800 and $1,499. Illinois The average home in Illinois' housing market sells for $243,355, growing by 13.6% year-over-year. While 90% of housing is occupied, about 34% of total housing units are renter-occupied. Reasonably, with the relatively small amount of vacant total housing units, the prospects of successive investment properties and new real estate portfolios are bright. Population slightly declined by 0.5%; while jobs grew by 0.84% in the previous year. Median rent in "The Prairie State" goes at $1,619 per month, increasing by 15.05% year-over-year. Per the property tax rate, the largest share of Illinois households pays over $3,000. According to data from Illinois REALTORS®, Oak Park and Schaumburg have the highest monthly rental growth rates, both up 4.8%. Aurora and Chicago are close behind, with a 3.3% rent increase each.  Indiana Homes sell in Indiana for $197,767 on the average—a 17.4% year-over-year increase from the previous year. With an occupied housing rate of 89% in Indiana, 31% of its occupants are tenants. Job growth rate in the state is at 1.53% against a population increase of 0.6%. Renters pay an average of $1,208 per month, with a 7.15% year-over-year increase. On the tax front, the property tax rate (for the largest household share) is pretty fair at less than $800 per month. More specifically, realtor.com singled out Indy-Carmel-Anderson metropolitan area at #4 in its rankings of housing markets across America in 2022. According to the report, the area hosts healthy local economies and reasonable job growth rates, both of which are expected to continue into the New Year.Iowa Iowa offers her residents ample opportunities to enjoy outdoor living. Its top cities include Des Moines, Cedar Rapids and Davenport, with the largest share of households paying over $3,000 in property taxes.The average home in "The Hawkeye State" sells for $174,916, with a median value increase of 111.1% year-over-year. 91% of properties in Iowa are occupied, with tenants taking up 29% of the total housing units. Housing prices across the state were up 7.8% year-over-year in December according to Redfin. During the same period, the number of homes sold fell 10.8%, while the number of homes for sale dipped by 19.8%. Kentucky The average home in "The BlueGrass State'' today sells for $178,523, with a 13.9% year-over-year increase. About 87% of housing units are currently occupied, with 33% of those houses having tenants. Tenants, on average, part with $1,082 each month, a 6.8% increase from the previous year. Per the property tax rate, Kentucky residents have a more modest property tax rate of less than $800, for residents with the largest share of households. Evidently, the housing market offers affordable investment opportunities, with regards to both rental markets and property sales.Kentucky's housing market is set to remain a seller’s market in 2022, with more people looking to buy than there are sellers. Notably, the trend is largely the same all across the US, as the country seeks to master the reins of the recalcitrant pandemic. The state’s population dropped by 0.02%, now standing at 4.5 million residents. Maine The median price for a home in Maine goes for $326,024, with a 0.67% month-over-month increase. Her current 30-year mortgage is at 3.14% of a median sale rate of $304,000. Investors in Maine's housing market can expect to sell their investment property on the average in less than two months. What’s more? The average income in the lobster hub of America is $49,469.Across the nation, home prices are up by about 18%, and getting relief in the property market might take a few years. With its 1.3 million people, Maine's real estate markets bear a deficit of around 25,000 housing units, making it predominantly a seller’s market. In one word, Maine remains a hot real estate market for potential investors with mortgage rates expected to increase even more. Michigan Over the last year, houses sold for $218,051 on the average, with a 17.4% year-over-year increase. About 86% of houses are occupied, with 28% of the housing occupied by tenants. Median rent in Michigan is at $1,318 per month, up 12.63% from the previous year. The population in Michigan dipped slightly by 0.09% to stay at 10 million residents. The state’s property tax rate is near the highest in the U.S., with the largest households having to pay $3,000. High housing demand and low supply led to high sale prices of homes in Michigan last year. Notably, The Great Lakes State's housing market is expected to remain a seller’s market in 2022.Nebraska The average home in the Cornhusker State is valued at $217,232 while increasing year-over-year by 14.4%. Average rent is at $1,316 per month, with an average year-over-year rent increase of 9.29%. Housing market statistics from Redfin show that home prices statewide increased by 7.1% year-over-year in December, 2021. During the same period, the number of houses rose 8.1% while the amount of houses available for sale reduced by 28.7%.Per employment opportunities, jobs growth in Nebraska is at 1.17% against population growth of 0.27%. About 91% of houses are occupied, with renters living in 34% of all available units. Lastly, the average taxpayer (with the largest share of households) parts with $3,000 at tax time. New Mexico The average home in New Mexico sells for $259,771, growing by 18.7% year-over-year. While 84% of the housing market is occupied, about 32% of total housing units are renter-occupied. The population slightly increased by 0.07%, while jobs grew by 5.59% over the previous year. New Mexico has a population of 1 million people.That said, median rent in The Land of Enchantment is at $1,619 per month, increasing by 15.05% year-over-year. As for the property tax rate, the largest share of New Mexico households pays less than $800.  New York New York’s real estate market has continued to thrive without any signs of slowing down in the New Year. The median home price in NY is $850,000, trending flat year-over-year. Data from Redfin says that the average price of a home was $780,000, increasing by 7.6% from the previous year.New York’s housing affordability index decreased by 3.7%, implying that home prices have gone northward. According to NYSAR.com, NY’s total active listings fell by 12.3% in December, 2021. Despite being one of the most hard hit by the pandemic, NY remains a favorite destination for long-term real estate property investment. North Dakota The average home in North Dakota today sells for $257,423, with an 8.3% year-over-year increase. About 85% of housing units are currently occupied, with 39% of those houses having tenants. Renters part with $1,006 each month the average in ND, a 6.8% increase from the previous year. On ND's property tax rate, residents pay about $3,000. Job growth over the last year was at 3.01%, against a slight population rise of 0.26%. One of the least populated in America, the population in North Dakota sits at 774,948 inhabitants. Investors looking to ply their trade here might want to consider markets in Fargo--ND's most populated city--or Bismark. Ohio Ohio’s median home value is $190,984 with a home value increase of 16.4% year-over-year. The current average rent is at $1,213 each month, with a year-over-year median rent increase of 9.06%. About 9 out of 10 Ohio homes are occupied, with 34% of that occupancy made up by renters. Jobs here rose by 0.67% in the last year, with the largest earning household paying $3,000  in property taxes.That said, a study by some researchers reveals that Ohio properties are among the most overvalued in America. Ranked the fifth hottest housing market in 2022 by realtor.com, Ohio’s looking to stabilize and increase its potentials for investors. Pennsylvania According to this report, limited inventory and an increasing median sale price are the most notable metrics in PA for December 2021. Homes in the Keystone State have a median home value of $245,153. The average home’s worth increased 15.9% year-over-year with a total of 89% of its houses occupied. Median rent in this state comes at $2,060 per month, with an average year-over-year rent increase of 24.75%.Job opportunities grew in Pennsylvania by 4.32% in the last year, against a slight population dip of 0.04% to 12.8 million. Per tax rates, residential properties within the largest household share in PA will pay property tax of  about $3,000.  Utah If you have a real estate investment property in Utah, your tax should be between $800 and $1,499. Average home prices in Utah are at $505,789, which increased year-over-year at 29.6%. Utah boasts an employment growth rate increase of 4.14%, inviting businesses and professionals.Top-rated in economic rankings, Utah ranked #1 for economic outlook in the country according to the American Legislative Exchange Council. With its scenic beauty and nearby top-rated ski resorts, Salt Lake City (Utah’s capital) readily offers tremendous opportunities and prospects for real estate market investors. What Makes a Good Real Estate Market? The truth is, in the marketplace, sentiment doesn’t decide what a good deal is—facts do. But here, you want the best returns on investment from your portfolio. So you need to know what metrics determine a favorable real estate market in America. The following factors often determine which housing market is best—or better—for real estate investing. Job Growth RateJob market growth is one of the main reasons why people and businesses migrate across states. For starters, employment gains are part of why states like Utah and Maine remain hotspots for real estate investing. Increasing Property PricesStates which have a long history of rising property prices are strong contenders for better market ratings. New York State, for instance, has seen properties rise in value steadily since 2010. Moreover, the trend looks to continue in the New Year, further strengthening the state’s real estate market profitability. It’s the same story for similar states with rising home prices. High Occupancy Rates of Rental PropertiesIf a high number of rental properties in a state are occupied, it’s a good indicator of a virile market. I mean, who wants to invest in a city with most of its apartments currently vacant. In our list, California and Nevada stand tall with renter-occupied housing rates of 45% and 43% respectively. Increasing Share of Renter-Occupied HouseholdsYes, we’ve seen that high rental occupancy rates motivate investors. It’s also worth adding that a growing share of renter-occupied households helps improve a market’s viability for investment. Why? The metrics further accentuate how attractive the real estate market is for renters. Low Property TaxesThe states with lower property taxes help reduce the cost of living. Invariably, it means that the investor or real estate business owner gets more cash in hand, after all necessary deductions, at the end of the day. On our list, Indiana and Georgia have among the lowest  property taxes (below $800). Consistent Population GrowthAn increasing number of residents means that there’s more demand--home sale and rental demand--for real estate in the market. Idaho and Nevada show the highest population growth indices here—1.87% and 1.51% respectively.Of course, usually, it’s a combination of these factors that tip a state as a favorite destination for America’s real estate pros. The Hot Passive Investment Option If you’re considering investing in the housing market or starting up a real estate business , you want to know the best markets out there. As you probably already know, location is one of the topmost priorities when planning to invest in the market. What are the best states for real estate investing? What makes these states the “best” for real estate investing?Most real estate stats predict that the market will get more relief from the turbulence of the last two years. These predictions alone make great news for intending or current real estate investors. Moreover, experts believe that both fixed mortgage rates and home sales will rise later in the year. It’ll remain a seller’s market— and that’s largely good news for current or intending passive investors. In Summary While this article covers the best states for real estate investing, it's still imperative to conduct thorough research and investigation before staking your hard-earned money. Some other parameters to watch out for are how prone an area is to natural disasters or crime. That said, why lose your sleep over an investment decision when a real estate expert can guide or manage your portfolio? The volatility of the market, an unstable economy, and taxes are among the biggest headaches for intending investors.Holdfolio offers top-notch property management services, having developed proven proprietary technology that assists non-accredited investors in navigating the commercial real estate market.That is, you don’t need to own $50,000 as an accredited investor to enjoy the benefits of passive real estate investing. Holdfolio deals have a lower barrier to entry and engage in high quality perfect for the average person seeking a consistent and passive monthly cash flow from real estate.We’re talking about having a trusted, experienced, and proven investment partner by your side, throughout your investment journey. You’re not just assured of predictable cash flow to grow your savings for your retirement. Holdfolio's property management services ensure you receive current industry knowledge on finding the best investment, and subsequently on the progress of your portfolio.Book a call with TJ Lokboj, Managing Partner at Holdfolio, to explore your options!
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Apr 2, 2022

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How to Become an Investor in 2022

It's no secret that becoming an investor can be a great way to secure your financial future. In fact, many people become investors in order to achieve long-term stability and growth for their money.If you're interested in becoming an investor but don't know how to get started, don't worry! In this blog post, we will discuss the different investment opportunities available to you and how you can get started in 2022.If you are thinking about investing in real estate, contact us today to check out our exclusive deals. How to Become an Investor? To begin with, becoming an investor entails, well, investing. You are an investor if you utilize your money to purchase an asset with the potential to rise in value. Obtain the Appropriate Investing Resources Let's get this party started. The first step is to locate the appropriate investment resources.The advantages and disadvantages of being an investor are that no formal schooling is necessary. This implies that the entrance hurdle is low—anyone can learn this subject, and there is no one-size-fits-all approach. As a result, there is a great deal of misinformation floating around.You'll have to sift through the terrible in order to uncover the good. Learn the Basics of Investing Once you've obtained the necessary finances, you can begin to understand the fundamentals of investing.Before you can become an authorized investor, you must learn certain phrases, understand the foundations of the stock market, and complete certain tasks.To become an investor, you must master the business language, just as you must study the language of code to become a developer. Get Rid of Your Bad Investing Habits You undoubtedly had some preconceived notions about investing before you came here today, and you may have even made some investments.Even if you're a new investor, you may already have certain negative habits that you need to recognize and eliminate.Bad investment habits include short-term investing, investing without studying what you're investing in, and investing at the wrong time because you don't know what's going on in the world.Even your thoughts may become negative habits, such as believing you'll get wealthy quickly or that a TikTok influencer understands what they're talking about.Recognize these habits, then toss them aside and continue reading for tips on how to replace them. Adopt Beneficial Investing Habits You must embrace positive habits that will help you become a great investor, just as you must abandon poor behaviors.For one thing, reading a lot is an excellent investment habit. The more you read, the more you'll learn, and the more you learn, the better your investments will be.In reality, most of the negative investment behaviors outlined above may be avoided just by reading. Read about current affairs, news on firms you're interested in buying, or articles about topics you're passionate about—the point is to read anything.Real Estate Investments Real estate investments have been very popular with both new and seasoned investors. The reason for this is that real estate is considered to be one of the safest investment decisions.There are different real estate investments that new investors can choose from. Multifamily Investments Multifamily real estate is a type of housing that includes numerous units in a single structure. The word multifamily real estate, often known as multi-dwelling units, is generally used to describe apartment complexes, as each structure has numerous rentable living areas. However, the term "multifamily" can be applied to duplexes, triplexes, townhouses, and other structures that are built to accommodate many families in distinct apartments.New investors, by no fault of their own, are automatically stigmatized when they hear the words multifamily real estate investment. They are certain that their lack of expertise will prohibit them from creating a reputation in the multifamily market.After all, the term implies a level of intricacy that only seasoned investors are capable of. Investing in multifamily real estate is no more complex than implementing the most basic real estate exit strategy. Multifamily real estate investment is the finest method for new investors to get their feet wet.Multifamily real estate investing is anything but daunting, despite its menacing moniker. For a variety of reasons, it continues to be one of the greatest ways for new investors to get started. Let's look at some of the most compelling reasons why novice investors should pursue multifamily real estate:Tenants can assist investors in paying off their own debt. It allows investors to reside in one property while renting out the remaining units.Many facilities are shared across multifamily rental homes, lowering possible maintenance expenses. Investors can reduce vacancy risks by having many tenants. Because multifamily properties are seen as less risky than single-family houses, they often have better financing options.For starters, multifamily real estate investing allows astute entrepreneurs to reside in one apartment while concurrently renting out the others. If you own a two-unit structure, for example, there's no reason why you can’t live in one half while renting out the other.In the correct market, the rent you earn might be enough to cover your mortgage debt and then some. It's logical to believe that if the numbers add up, you'll be able to live without a mortgage while your renter pays down your principal. It's almost too good to be true: you might be able to have your renters pay off your first rental property's mortgage. REITs REITs (real estate investment trusts) allow you to invest in real estate without really owning it. They're similar to mutual funds in that they own commercial real estates such as office spaces, commercial shops, residences, and hotels. REITs are attractive retirement investments because they pay out large dividends. Dividends may be automatically reinvested to raise the value of an investment for investors who do not need or seek monthly income.Is it wise to invest in real estate investment trusts (REITs)? They might be simple, but they can also be complicated and varied. Some, like stocks, are traded on a stock market, while others aren't. Because non-traded REITs are difficult to sell and value, the type of REIT you buy can have a major impact on the amount of risk you take on. In general, new investors should stick to publicly traded REITs that may be purchased through brokerage companies.You'll need a brokerage account for this. If you don't already have one, it takes less than 15 minutes to get one, and many firms don't demand any upfront money (though the REIT itself will likely have an investment minimum).Flipping Houses House flipping is only for those with broad knowledge in real estate assessment, renovation, and marketing. House flipping necessitates money and the skill to do or supervise repairs as needed.As they say, this is the "wild side" of real estate investing. Day traders and buy-and-hold investors are similar to real estate flippers and landlords who buy and rent. Real estate flippers, for instance, usually try to sell the properties they buy at a discount in less than six months.Property flippers seldom spend time renovating their homes. As a result, the investment must already have the inherent value required to earn a profit without any changes, or the property will be eliminated from consideration.Flippers who are unable to quickly sell a home may find themselves with problems since they often do not have enough uncommitted cash on hand to pay a property's mortgage over time. This might lead to a downward spiral of losses.Another type of flipper is the investor who earns money by purchasing low-cost houses and refurbishes them to increase their worth. When investors can only afford to take on one or two homes at a time, this might be a longer-term investment. Rental Properties Individuals with do-it-yourself (DIY) and remodeling abilities, as well as the patience to manage renters, may find that owning rental properties is a terrific option. This technique, however, necessitates a significant amount of money to cover up-front maintenance expenditures and unoccupied months.According to data from the United States Census Bureau, new house sales prices (a rough measure of real estate values) grew steadily from 1940 to 2006, before dropping during the financial crisis. Following that, prices began to rise again, eventually approaching pre-crisis levels. The long-term impacts of the coronavirus epidemic on real estate values have yet to be determined.Stock Market The stock market has been a hot topic of conversation, especially in recent years. You would believe that stocks like Gamestop, which have gave consumers 10 times their money in a matter of days, are the best place to start. It is vital to recognize, however, that the financial industry has been thrust into a new regime.A lot of money has been pursuing equities as a result of government stimulus programs. A lot of money has gone into stocks and low-interest rates on bonds have encouraged consumers hoping for positive returns to hunt for assets like stocks. However, if governments raise interest rates and sell bonds (as in the US), part of that money will be removed from the market, potentially causing stock values to rise.The equities that will be affected are the growth stocks that have made investors a lot of money in the previous two years, as outlined here. Cathie Wood's ARK Innovation ETF (ARKK), one of the top growth ETFs, lost 22% in 2021, its worst yearly performance since its launch in October 2014.However, if you stay invested for the long term (decades), high-quality firms that will be there for a long time will still provide excellent returns.Mutual Funds and Exchange Traded Funds (ETF) You may also put your money into a mutual fund, which is basically a pool of money collected from various sources and invested in a predetermined vehicle. A group of people or corporations, for example, can pool money to acquire stocks in numerous energy firms.An ETF, or exchange-traded fund, is a mutual fund that is traded on a stock exchange, such as the Vanguard S&P 500. They can payout anything from 1% to over 30% per year, depending on the performance of the assets in the fund. Mutual funds are able to invest in a wide range of assets. Bond ETFs, stock ETFs, and, more recently, cryptocurrency ETFs are all possibilities. Brokerages are where you can purchase mutual funds.In conclusion, there are various investment types that new investors can choose from. Starting your investment journey can be stressful but with enough studying and working with reliable investment companies like Holdfolio you can have a steady start.Contact Holdfolio today to start your investment journey by checking out our exclusive multifamily investment deals!
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Mar 31, 2022

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The Best Ways to Invest One Million Dollars in 2022

When it comes to investing, there are a multitude of options to choose from. You can invest in the stock market, bonds, real estate, and more. So, how do you decide which option is right for you?In this blog post, we will explore several different investment options and explain the pros and cons of each one. Let's get started! Before Investing Regardless of how much you have saved up for investing there are a couple of things to consider before you do. Determine Financial Goals If you've already surpassed the $1 million mark, you'll need to think about your long-term financial objectives. Do you wish to amass a fortune of $2 million, $10 million, or even more? Or do you want to relax and take it easy? There are numerous tools available to assist you in achieving your financial objectives. Pay off Personal Debt Paying off debt provides the best return on investment. Pay off any high-interest loans, such as credit cards, first. A vehicle loan or school loan debt makes no sense if your net worth is more than $1 million. Invest in an Emergency fund If you have a million dollars, it may seem absurd to talk about an emergency fund, however, all emergency funds are relative. You'll need one regardless of your financial situation. In your emergency fund, you should have enough money to cover three to six months' worth of living expenses. This will protect you against unforeseen emergency bills and short-term income problems. Between you and your investments, an emergency fund functions as a buffer. A large portion of your emergency cash should be kept in a high-yield savings account.Invest Towards Your Retirement Plan Before you start making alternative investments, make sure your 401(k), IRA, or SEP-IRA retirement accounts are properly filled. Contributing the maximum amount to your retirement plan each year can provide you with a sense of security that there will be money there when you need it, as well as additional tax-free cash for real estate investment through a self-directed IRA. Determine Your Investment strategy What are your Investment Goals?It is much easier to achieve your financial objectives if you have a clear aim in mind. You could wish to retire at a particular age, earn a certain amount so that you can reduce your working time, or quadruple your money in five years, for example.What will be your investment timeline?How long do you think it will take you to achieve your objectives? You may take greater risks with your investments if you have a larger scope, such as 20 or 30 years. This is because you'll have more time to recover from any short-term losses.If your investing horizon is shorter, such as five or ten years, you should be extra cautious. You may want a particular level of investment growth. However, capital appreciation may be your primary goal.What is your Risk Tolerance?Your risk tolerance refers to your readiness to take a loss in return for a bigger prospective profit. Younger investors, on the whole, are more ready to accept risks because they have more time to seek prospective rewards.However, investment advice that is appropriate for someone else may not be appropriate for you. Understanding your personal risk and return tolerance will aid you in selecting the best investments for you. In this case, you should seek advice from your own adviser. Real Estate Investment Properties Some investors feel that owning rental properties is one of the finest things to buy if you have $1 million to invest and want diversity as well as excellent risk-adjusted returns. You can produce income and expand your investment money in real estate in three ways:Recurring cash flow generates passive income. Equity appreciation occurs when the value of a property rises over time. Deducting operations and business expenditures, as well as depreciation expenses, can help you lower your taxable net income.You may invest in a variety of asset classifications, including residential, commercial, industrial, and land. Remote real estate investment is also possible with today's technology, and it's a wonderful alternative for investors who live in cities with a high-cost-of-living like New York or San Francisco.If you invest in real estate online, you may identify low-cost property in locations with greater yields while leaving the day-to-day minutiae of property management to your local real estate team.Because real estate may be leveraged or funded, your one million dollar investment might theoretically go further and create better profits while spreading out the risks.Instead of spending $1 million on a tiny apartment complex in one location, you might invest in a far bigger portfolio of single-family homes in a number of high-growth cities throughout the country.Real Estate Crowdfunding Crowdfunding is when a big number of people pool their money to support a new business initiative, such as video game development, electric automobiles, television programs, or real estate ventures. One of the most appealing aspects of crowdfunding is that you may invest tiny amounts of your one million dollars in various industries and asset classes.Real estate crowdfunding platforms, like Holdfolio, allow you to participate in high-quality assets like condominium buildings and new residential subdivisions, as well as debt investments through developer mortgages.Accredited investors are frequently excluded from the most profitable crowdsourcing initiatives. The good news is that if you have $1 million to contribute, you'll most certainly qualify as a high net worth accredited investor, allowing you access to crowdfunding investments that others don't. While most crowdfunding platforms do not allow non-accredited investors to partake in crowdfunding deals, Holdfolio helps both new and seasoned investors to participate in exclusive crowdfunding deals.Keep in mind, too, that many crowdfunding deals promise a large return in exchange for a high amount of risk. There's no way of knowing when or even if a new building project will begin construction. Crowdfund investments may also be illiquid, meaning you won't be able to purchase and sell them like you would stocks, bonds, or even traditional real estate. REITs Compared to crowdfunds, real estate investment trusts (REITs) are a safer and more secure alternative to invest in real estate.REITs are funds that own and operate income-producing real estate such as office buildings, retail shopping centers, apartment buildings, and single-family homes. REITs are publicly traded on major stock exchanges and are established as funds that own and lease out real estate such as office spaces, retail shopping areas, apartment complexes, and single-family residences. You may also focus on specialty asset types like mobile phone tower locations, data centers, and self-storage sites with some REITs.Because 75 percent of a REIT's capital must be invested in real estate and 90 percent of net income must be returned to shareholders as dividends, buying shares of a REIT might be the next best thing to owning real estate directly.REITs, on the other hand, do not have the same advantages as physically buying real estate, such as the ability to deduct investment business expenditures from taxable net income. Furthermore, because real estate investment trusts are shares, they may have a stronger link to broader stock market returns than direct property ownership. As a result, if the stock market falls, REIT share values may fall as well. Stocks Dividends and share price increases are two ways that stocks can create income. Diamondback Energy, The Williams Companies, and ConocoPhillips, according to Kiplinger.com reports from October 2020, have the highest dividend yields, with payouts of 4.9 percent or more. Keep in mind that certain high-yielding investments might also be high-risk.Even without the aid of a Betterment Robo-advisor, investors who acquired shares in the S&P 500 four years ago have experienced gains of over 80%. The stock market, like any other market, may be extremely volatile. Over a four-year period, shares of the S&P 500 were acquired in 2016 and sold when the market bottomed out in March 2020 yielding a total return of only 3%.Bonds Many financial advisors feel that a classic balanced portfolio should contain 60% equities and 40% bonds. While specific equities like Amazon can give good growth (more on that later), buying bonds is mostly about capital preservation, particularly in today's low-interest-rate climate. Bonds come in a variety of shapes and sizes, including corporate, municipal, and treasury bonds.Bonds pay interest and have a full face value at maturity, but their price might fluctuate due to interest rate fluctuations. Bonds are frequently considered safe and secure investments, but they can lose value if you sell them for less than you bought them for or if the issuer fails to make  their payments. EFTs Vanguard, for example, offers a wide range of exchange-traded funds (ETFs). They're a wonderful way to get access to equities and bonds without needing to make particular investments.ETFs invest in stocks, bonds, or index funds based on prominent indices such as the S&P 500, Nasdaq 100, or Russell 3000. You can also invest in certain industrial sectors such as software, medical, precious metals, foreign corporations, and real estate by purchasing shares of an ETF.When you add an ETF to your investment portfolio, keep in mind that exchange-traded funds are meant to mirror, rather than beat, the performance of the market sector in which they invest. Private Lending Online platforms make private or peer-to-peer (P2P) financing extremely simple, while the risk is substantially greater than standard real estate transactions. However, depending on your risk profile, the potential gains from private lending may be enough to balance the risk if you invest small sums and don't devote too much of your own resources to private and P2P lending.Consumers can get private short-term loans for debt settlement or home improvements, while small companies can get private short-term loans to grow their firm, buy equipment, or buy real estate.Yields can be significantly greater than those of traditional equities and bonds, making them a viable alternative to these traditional assets. Private loans, on the other hand, are less liquid because your money is typically locked up for several years.Unless the loan is secured by an asset such as real estate, you also risk losing your money if the borrower fails. That's why discussing the amount of money you plan to set aside for personal loans with your CFP or financial adviser is a smart idea.CDs Certificates of deposit (CDs) and money market accounts are two of the safest methods to generate a return while keeping your money accessible.CD and money market account annual percentage yields (APY) are nearly equal to inflation, which means you won't make any money on your savings.On the bright side, they're similar to having a deposit account and may be an excellent method to secure your money while keeping it liquid. Invest in a Business Purchasing stock or ETF shares is one option to invest in a company. However, many investors with a million dollars to invest choose to bypass the public market and invest directly in a company. Buying a business may be one of the most beneficial ways to invest your money if done right.There are two primary methods for investing in a company. You may either acquire or create your own firm, or you can become a partner in an existing one. Starting your own company might be risky, but it can also pay you handsomely. Investing in an existing firm is less risky because the company already has a track record, but you must have total faith and confidence in the company.In either case, purchasing and investing in the appropriate firm may outperform traditional assets like CDs, annuities, bonds, and stocks for a one-million-dollar investment. Fixed-Rate Annuities Fixed-rate annuities are a form of the insurance contract that offers to pay a set interest rate on the payments made to the account. They are sold by insurance companies.They are not connected to the success of other assets and are meant to offer a reliable fixed-income source when payments commence.Fixed annuities may be recommended by your financial advisor as a crucial allocation component of your retirement portfolio, but you'll wind up paying an insurance company a premium for the risk reduction. Yields are higher than those offered by a US Treasury bond or CD.However, the rates on A-rated or better-fixed annuities are roughly equal to the rate of inflation, which indicates that investing in a fixed rate annuity is effectively breaking even. Final Thoughts A diversified portfolio and hedging against economic volatility such as inflation are two crucial factors when learning how to invest a million dollars securely. As a result, we recommend that you invest in real estate.Real estate investments provide you with a tangible asset that grows in value over time, therefore safeguarding your money from inflation. Real estate also has a low connection with the stock market, so if you're already invested in stocks, adding real estate to your portfolio can help you diversify your portfolio during economic downturns.Holdfolio is a private online real estate investing platform based on the idea of forming partnerships to invest in multifamily properties. Holdfolio, like any other crowdfunding platform or site, allows a group of people to pool their money to invest in a single project.Call us at 866-206-8933 today to start investing in exclusive real estate deals and grow your wealth! 
US Dollars

Feb 14, 2022

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How to Invest 500k: Investment Mediums to Consider for Maximum Returns in 2022

$500,000 is a lot, and investing such an amount paves the way for generational wealth — if done right. However, it's easy to lose this sum, thanks to the countless investment opportunities at your fingertips.So, what do we advise? A diversified portfolio consisting of widely proven investment vehicles. In this piece, we'll recommend twelve vehicles in which you can invest your half a million dollars in 2022 for the best results. However, before we proceed, let's consider the possibilities of keeping this money instead of investing it.  The Basics of Investing $500,000 - Just Before You Take That Huge Leap Before you invest 500k, it's essential to consider the reason why you're making this decision. Since $500,000 doesn't come out of the blue, it's possible that you obtained such a large sum through savings or inherited it from a rich relative.If you take a cautious look at things, you'll realize it's possible to live off $25,000 a year for 20 years, or if you'd like to go farther, $20,000 yearly for 25 years. This plan sounds great for settling your monthly expenses, but there won't be a dime left after this period elapses. On the other hand, did you know that you could invest 500k in something tangible and turn it into 700k, 900k, or even a MILLION dollars? While it might seem like a long shot on paper, it's possible. By making suitable investments and not putting all your eggs in one basket, you can enjoy positive results in almost no time at all. With the proper investment decisions, you can convert your $500k into legacy wealth, which can benefit your family tree significantly.In a nutshell, spending this $500k over a year can ensure you'll live a comfortable life, while investing it wisely helps ensure your kids (and even their kids) enjoy it too. What's your preference?Suppose you choose the latter option. Here's another equally important question: what mediums are available to invest 500k to yield bountiful rewards? We'll see below. How to Invest 500k: 12 Viable Alternatives for Investors Looking Towards a Breakthrough in 2022 Defining the ideal investment strategy is a challenging task. Why? Risks are a constant theme in investments. Consequently, we advocate a portfolio with low-risk assets (for some security) and high-risk vehicles (for higher profits). Such an approach will likely keep your investment profitable even when some assets fall in value. Considering this possibility, the following are investment vehicles that have performed profitably in recent times.  Real Estate InvestingOver time, real estate has become a hotspot for investors looking for low-risk investment vehicles with significant returns.Properties have high demand levels, particularly in the right locations. Even better, the industry now offers numerous diversification options. You can now become a real estate investor without performing the duties attached to a traditional property owner. As such, the real estate market is an excellent vehicle to invest part of your $500k, notwithstanding your investment preferences.The following are four common ways to earn decent ROIs through real estate. Real Estate Crowdfunding Crowdfunding brings numerous small-time investors together to foster sizable real estate investments they'd probably never be able to make alone. Although 500k is enough to invest in good rental properties, this technique helps to "test the waters." Thanks to crowdfunding, you can invest less and earn well.While crowdfunding was for the select few in the past, the Jumpstart Our Business Startups (JOBS) Act passed in 2012 marked a change in proceedings as advertising and marketing barriers were removed, allowing more investors to get in on the action. Thanks to this increased accessibility, online platforms, such as Holdfolio, now offer investors ease of access alongside decent profits. Holdfolio is an online multifamily crowdfunding platform where anybody can sign up with as little as $20,000 and start investing in significant real estate deals and grow their wealth. What's more, the interest rates are client-friendly, and there's a package to suit everyone! Real Estate Investment Trusts (REITs) Real estate investment trusts oversee real estate investments and other similar structures. With REITs, rather than spending a large chunk of your 500k to secure a real estate property, you can invest half or less.What's more, REITs guarantee steady income without any effort on your part. Just find a trustworthy company to trust with your funds.However, you may consider publicly traded alternatives featured on stock markets like the New York Stock Exchange (NYSE) if you have reservations about REITs.REITs are growing in popularity as over 145 million Americans made a sizable investment via a 401k, pension funds, and Individual Retirement Accounts (IRAs) in October 2020. Two years on, we expect this value to increase due to the profit margins. Raw Land Raw land refers to a piece of undeveloped real estate. While developed real estate might come off as expensive, raw land is a great investment alternative due its relatively low cost.So, with 500k, you can secure a parcel of land and have a decent amount of money remaining. You have two options when you acquire raw land. First, you can develop the land and sell it off for a profit. Alternatively, you can lease it out to farmers looking to bolster their agricultural produce.  House Flipping House flipping is when an investor purchases a home, makes some renovations, and sells it for a higher price. For some investors, this approach has been a medium for fixed income over the years, so it's no surprise people are turning towards this alternative.The vehicle comes in several formats. For starters, you could hire a building contractor for the renovations. Besides the hands-off experience, you get to execute decisions without doing anything daunting.On the other hand, you could flip a home while living there. While this might sound weird to some, investors on a tight budget prefer this method as they can buy a home, live in it, and make renovations at their own pace. By incorporating this strategy, investors don't have to worry about rental payments.  The Stock MarketWith great power comes great responsibility. When you have $500,000 at your disposal and don't want to risk losing money in a flash, it's possible to cast your mind to trendy and profitable companies like Tesla, Microsoft, Apple, Google, and more. However, these giants shouldn't be your sole area of focus as financial advisors recommend smaller companies to achieve astronomic profit margins.Irrespective of what part of the divide you land on, the stock market has several advantages and disadvantages. If you're able to seek out companies with decent growth percentages, you'll be able to receive a decent ROI. Nevertheless, making the right choices isn't a constant as you can make a wrong decision that could adversely affect your financial situation.Despite its "topsy-turvy" nature, one of the best ways to invest $500,000 is through the stock market. We advise creating a brokerage account. Although it doesn't offer you the tax advantages for regular retirement plans, you can trade stocks here without encountering a penalty. Due to this provision, funds stored here are more liquid. Exchange-Traded Funds (ETFs) and Mutual Funds Exchange-Traded Funds (ETFs) are highly recommended for stock diversification. Fortunately, diversification doesn't require anything too detailed, as you can get it done in a single transaction. For context, Exchange Traded Funds can track the market in one go since the stocks attached are diversified.It's worth noting that ETFs work like regular mutual funds. A mutual fund, like an ETF, brings several investments together, regardless of their form or size. Although both index funds look the same, investors favor mutual funds due to their rewarding nature. While this preference has seen the prices of mutual funds skyrocket. They're easily accessible. Despite the pros of ETFs and mutual funds, you have to understand that they pose several risks. For instance, you can get a market value less than the purchase price when you redeem the shares on these index funds. As such, you're better off investing 10 - 20% of the entire $500,000 on these assets. Annuities Annuities are a decent way to invest and get something rewarding long-term.These are insurance contracts you can enter to gain a fixed amount of money over the rest of your life. It gets better! There's practically no risk involved in buying one!Investors planning their retirement might want to consider fixed annuities as long-term investment vehicles. Engaging the services of a top-notch financial advisor is critical for effective portfolio management. High Yield Savings Account While it might seem convenient to get $500,000 and put it into a savings account, it's possible to get more profits through high yield savings accounts. High-yield savings accounts accrue 20 - 25 times the average returns on regular savings accounts. However, what high yield savings account should you choose? According to several financial experts, the "Savings Builder account" by CIT Bank is an excellent high yield savings account. For context, investors that enter this plan are eligible for an Annual Percentage Yield (APY) up to 40%.You need to have a $25,000 minimum balance or make a $100 deposit at least once every month to get these returns. Devoid of account opening and maintenance fees, CIT Bank's Savings Builder account ranks as one of the best high yield savings account alternatives countrywide. Hedge Funds A hedge fund is pooled from the contributions of numerous investors. The fund is then invested in certain assets to increase investors' ROI  and minimize risks. Hedge funds, unlike mutual funds, are more aggressive with their returns.  The name "hedge fund" came about due to the trading techniques used by fund managers. If they expect a rise in market value, they'll decide to go long. On the flip side, when there's a drop on the horizon, they resort to "shorting stocks."While a hedge fund's goal is to eliminate risk, the aggression on this investment strategy increases the stake, resulting in huge risks. With some hedge funds requiring huge buy-ins reaching amounts of $500,000 and above, it's necessary to research thoroughly before investing in this vehicle.  Emergency Funds The COVID-19 pandemic took everyone by surprise. However, while some people were looking towards where their next meals would come from, others lived in comfort and affluence. The difference between these sets of individuals? Planning.As such, you may consider investing in an emergency fund with a sum of $500k. Life is full of uncertainties, and you'd need to be able to counter adverse conditions with relative ease.When you're investing in an emergency fund, you can either diversify your investments or choose a specific medium known for its positive dividends. You don't have to invest $500,000 in one go. You can start out slow. Whichever you do, you'll appreciate this strategy as it protects you from inflation and other adverse economic conditions. Treasury Bonds With $500,000 in hand, you might want to secure some treasury bonds. Over the years, this investment class has become popular due to its exceptional stability. Unlike corporate bonds released by private entities, governing authorities issue treasury bonds. These bonds are outstanding for those nearing retirement and looking for a stable income, and it’s decent for young investors seeking to make good ROI values. However, due to the varying forms of bonds in the United States, things can become confusing for beginners.  Let's take a look at the four primary forms. Treasury Bills Treasury bills (T-bills) are short-term securities that mature in less than a year. However, note that these bills have varying maturity timelines on each. Besides the 52 week variation (one year), consider those ranging from four to twenty-six weeks. Treasury Notes These securities aren't long-term or short-term. Instead, they're in the middle and get to their maturity in periods from two to ten years.  Treasury Bonds Tagged T-bonds, treasury bonds mature after 10 to 30 years. Your financial advisor might recommend these bonds to you if you're looking towards a functional and beneficial retirement plan. Treasury Inflation-Protected Securities Also classified as TIPS, treasury inflation-protected securities are other treasury bonds. The only difference? Their valuation follows inflation trends.  Max Out Retirement Accounts Is maxing out your retirement account a valid way to invest 500k? Yes. You can invest in both mutual and index funds with your retirement account. Suppose the company you work for offers a 401(k) retirement account that matches your contributions, and you see that you aren't contributing enough. In that case, your 500k at hand is instrumental in bolstering your input.Alternatively, you can decide to put these contributions into a traditional IRA account. Nonetheless, there's a limit on these accounts. As directed by the Internal Revenue Service (IRA), you can only make a yearly $6,000 contribution (this value increases to $7,000 if you're above 50).With these limits, combining different index funds is instrumental in preparing for your retirement journey. By investing 500k in these funds, you stand a greater chance of receiving a decent ROI upon maturity. Buy a Business With your personal finance reaching the $500,000 threshold, you'll probably have numerous business ideas running through your head. You can decide to engage a franchisor or invest in online platforms with a proven track record.Nevertheless, understand that buying a business doesn't yield earnings from the get-go. In the beginning, you'll have to implement a groundbreaking idea to ensure the company has a solid foundation. As you continue, you won't need to put in those long hours as you can finally hire people and run affairs at the comfort of your home. Running that entity successfully for years to come is feasible when you get to this point. If you'd like to leave the reins of power, you can put the business up for sale and receive astronomic profits when the purchase agreement goes through. Invest in Gold While other precious metals are available for financing, many people turn to gold as a "hedge" to fight inflation. Gold's market value tends to skyrocket when there's an economic downturn. So, if you want to invest $500,000 on a recession-proof medium, you might want to secure gold ASAP. You can head towards web-based platforms like Oxford Gold Group, Goldco, and Lear Capital to enable seamless transactions.  Invest in CryptocurrenciesCryptocurrency has undergone significant growth in the last decade, with several institutions now looking to invest in this decentralized blockchain vehicle.Some industry experts believe that Bitcoin's value will rise 400% in the foreseeable future. With primary forms like Bitcoin going for almost $50,000 at the moment, investing a decent amount of your $500,000 could see you on the receiving end of decent profits.Regardless of Bitcoin's potential, other crypto currencies are making waves in the market. By diversifying, you ensure that you don't get the short end of the stick if things go haywire.However, it's noteworthy that cryptocurrency is arguably the riskiest venture on this list—approach with extreme caution.   Your Investment Style or Risk Tolerance The investment alternatives listed above all have a decent reputation amongst seasoned investors. However, risk tolerance is key to success in all investments. Therefore, you must consider this variable before making decisions.  Some people are willing to invest more money than they're afraid of losing, while others would rather not risk anything at all. However, no one can predict what will happen with an economic forecast or political climate change - which means there isn't "one" perfect strategy for everyone!As you commence this process, you might want to answer the following questions:What timeline do I have for this investment? What's my risk tolerance level in times of uncertainty? Will I need my money back in five, ten, or fifteen years? Am I techy enough to engage modern forms of investment? Do I need assistance to make a suitable investment?You'll be asking these questions to one person you can trust — YOURSELF. If you have $500,000 lying around and are scared of losing the funds to some financial misstep, it might be time to seek advice from experts in real estate or any other investment form that catches your interest. For those who prefer the DIY (Do It Yourself) route, you have the leeway to do what you think will yield decent returns in the long run. Major Takeaway There are numerous ways to invest $500K in 2022. Some are high-risk, others are not so risky. As such, the smart thing to do is to diversify your portfolio. Take your time to assess the 12 investment classes we've discussed. Answer the above questions to define your risk tolerance level and find the ideal vehicle for your objectives (short or long-term).Would you like to start with real estate? Holdfolio offers multiple investment types from as low as $20k that could help you reach your financial goals.There’s the ideal package for everyone at Holdfolio — whether you want to invest with other people in a syndication project or prefer to purchase a property independently. It's financial freedom for EVERYONE.
Sale House

Feb 8, 2022

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How to Invest 250k: Our Guide

Many people want to invest for retirement but feel they need to have millions to start. The truth is, $250,000 is enough to begin your journey towards an early retirement. However, you might want to consider longer-term investment strategies for growth. With such a big amount, you'll be relatively comfortable during retirement and might not need to leave your money in ISAs or savings accounts. The question is, what investments should you make with your $250,000? Presently, savings interest rates are below two percent, bonds are bubbling, and the stock market is volatile. While you may need the money for paying off your debts, helping your loved ones, or furthering your education, it's best to invest it and watch it grow, making you millions. Suppose you came into money through selling a business or inheritance you'll need to come up with an investment plan. When investing, the primary thing to consider is whether your investments will grow and continue to yield profits in the long term. The following investment ideas will keep increasing in value rather than fall.Property investment Investing in assets Investing in stock market Peer-to-peer investingHowever, before starting, it’s best to do your due diligence while considering other relevant factors like risk capacity and tolerance. The following are ways to invest $250k, grow your funds, and enjoy financial freedom. Investing in Real Estate Property Property investment is a great way to make long term wealth once you pick an area of preference like residential or commercial real estate. While 250k might not get you a great property in megacities like New York City, consider buying in a small city or an area with a growing and thriving student population. There are numerous properties to buy in these areas. You might decide to rent your properties out to young professionals in newly industrialized areas or students if you buy close to a school. Suppose you invested in a flipping project, you'll need to make some improvements which will take time before selling the house for cash. So, does a new investor make wise investment property decisions? Firstly, note that investing in a property isn't the fastest way to make money except through crowdfunding. You've got to invest time, pay attention to your investment, and ensure you're not buying a money pit. Secondly, consider researching the area you intend to buy in to avoid making mistakes.Property prices tend to rise sometimes, but in some megacities, they increase faster. Look for "up and coming" cities, and you're on your way to making money.An investment property will your tenants to pay off your mortgage overtime before their monthly rent payments will serve as a source of passive income for you. There are also numerous platforms to invest in, or you might consider looking into Real Estate Investment Trusts (REITs).One of the upsides of crowdfunding platforms is that they allow you to earn without being saddled with landlord responsibilities.  How to Get Started A platform like Holdfolio makes investing easy without looking for new tenants or taking a mortgage. With Holdfolio, you're eligible to invest with as little as $20,000. Your investments will be spread across many residential and commercial properties expertly chosen by the platform managers.While there are varying profits, Holdfolio investors enjoy an average return of ten percent or more. Thus, investing $250,000 in real estate through a crowdfunding platform like Holdfolio will ensure you earn more income passively. On the other hand, you might also want to look for an attractive 2 bathrooms, 2 bedroom rental property to buy. Rental properties were attractive investment options in 2021 due to low-interest rates, a trend we are hoping to continue seeing in 2022.The rental income value has also gone up. Peer-to-Peer Investing  You might want to consider peer-to-peer lending as an investment option. This lending option cuts out the middleman (the bank), allowing individuals to lend or borrow money for many reasons. Investors might want capital for a startup or investment purposes. Some lenders might want to support their vision. With peer-to-peer lending, you'll keep the interest for yourself rather than allow banks to take it. Interest rates are usually high with peer-to-peer lending, and presently, there's a low basic interest rate, so you might want to consider this investment option. The borrower's reliability is likely to determine how much you'll make in interest. You might earn more profit by lending to less reliable borrowers; however, you're taking more risk. Some peer-to-peer lending groups rate their borrowers according to their reliability. That way, you know who you want to lend your money to before deciding to proceed.Note that this isn't the only risk with peer-to-peer lending. Ensure you research the group you're using before making any real commitment or invest your money in safe options like real estate. Invest Your Solo 401(k) Into Real Estate  If you have a kind of self-employment income or own your own business, consider stashing away a considerable chunk of your income for retirement in a Solo 401(k). This account enables investors to save more for retirement than the standard 401(k). You'll make your contributions on a tax-advantaged basis to enable you to become eligible for lowering your tax bill when you contribute. What's more? It allows you to contribute close to the annual limit in Roth or traditional tax loans and savings. This way, you get to invest money directly into real estate funds or properties of your choosing. You can also use leverage when you have up to a quarter of a million dollars. Consider moving part of your funds into your portfolio. It helps if you invest in rental vacation homes, apartments, raw land, multiple investment properties, multifamily homes, or commercial properties.Finally, consider mixing promissory notes and hard money loans to other investors in your retirement account.  Investing in the Stock Market$250,000 is a large sum and will afford you the opportunity to spread your investments across many portfolios, which is best if you intend to invest in stocks and bonds. You don't want to invest your money in a single business or sector and risk losing it when there's an economic meltdown, do you?Don't forget to do your homework. While a business might appear exciting now, you need to check if it has the potential to succeed in the long term? Check the sector and its growth, management, and the founder's ambition. Are their ambitions realistic?It's best to conduct this check for every business you intend to buy shares in and ensure you monitor the stock market closely. If you use a broker, make sure to read their reviews.In the past, many investors preferred buying stocks to save for retirement through tax-advantaged retirement plans, like SEP IRA, Solo 401(k), or 401(k). More so, you might want to invest in bonds, index funds, growth stocks, and other securities using a brokerage account.Although you don't have any upfront tax advantages with brokerage accounts, you'll get the opportunity to invest in many ETFs, stocks, and others. More so, the account is more liquid than a tax-advantaged retirement plan. Contrary to the practice of retirement accounts charging penalties when an investor makes a withdrawal before their retirement age, it's easier to sell securities like stocks and bonds and to access funds without any penalty whenever you want. However, you'll need to pay capital gain taxes when you sell your securities.  Buy a Business While buying a business is a good investment option, it isn't for everyone and requires a hands-on approach compared to other options already mentioned. However, owning a business allows you to build something that could offer you long-term income for years to come. Suppose you buy a business, consider building it big that others can run it. You'll be responsible for overseeing the big picture planning while enjoying a passive income stream. How to Get Started While you might want to buy a local business or franchise, it's best to do your due diligence. Consider buying an online business with a fully-developed website, affiliate marketing, ads, product sales, etcetera. Another option is to start your own business. However, it requires extensive research to run an online or offline business and monetize over time. Who It’s Best For Owning an online business is a wise investment option for investors who don't mind putting in extensive effort to scale it. Thus, it's perfect for people who intend to build something and sell it later or earn passive income.  Investing In Assets Suppose all the options discussed above don't interest you; you might want to consider investing your money in assets. However, you've got to be sure you're buying what will increase in value over time. Some material assets to invest in which will continue to increase in value include the following:Antiques Art Precious metals like diamonds or gold Rare musical instruments Collectible items like rare vinylBefore embarking on any investment journey, consider talking to a financial advisor. Don't forget that no investment is entirely secure, and you might lose or make no profit. Given the USD volatility resulting in a depreciating or weak dollar sometimes, you might want to look offshore for stable but high-yielding assets to buy. Also, decide on the municipal bond ETFs for example: SMB, PVI, HYMB, CMF, PWA, NYF, CXA, INY, SFI, PWZ, and SHM.  Invest in CryptocurrencyLast but not least is investing in cryptocurrency. Although people thought crypto would not gain mainstream acceptance, that hasn't been the case. Presently, cryptocurrencies like Bitcoin are being adopted as a payment option, and Bitcoin ATMs have sprung up in some countries. Due to the large-scale adoption of crypto, investors are beginning to see it as a great way to grow their funds. Thus, cryptos like Bitcoin will soon hit $200,000 per coin. Suppose you'd like to invest in cryptocurrencies, you might want to start with Bitcoin. However, other coins like LiteCoin and Ethereum are cheaper but great too. You'll need a crypto app to safely store your coins until you want to conduct a transaction.Note that cryptocurrencies are volatile and fluctuate. An investor can gain today and lose everything tomorrow, unlike investing in real estate that will only continue to increase in value.  Investing In Real Estate for Extra Passive Income With $250,000, you're eligible to invest in real estate. Experts believe that real estate prices and rents will continue to increase in 2022, and the housing market will continue to grow stronger. Thus, now is the best time to enter the industry. While one investor might want to get personal loans to buy property, make a down payment, rent the property out and earn monthly income and regular cash flow, another may prefer a hands-off option like crowdfunding. If you want to earn passive income through real estate crowdfunding platforms, these are the top three to explore. Holdfolio As an expert in equity investment in multifamily value-added deals, Holdfolio sources all its deals personally. Fortunately, there are no extra fees like other platforms sourcing third-party deals charge. Investors enjoy direct access to talk with the sponsor, which is also the platform, unlike some platforms serving as middlemen between sponsors and investors. Previously specializing in single-family residential rentals, Holdfolio currently focuses on multifamily value-added deals. However, each transaction comes as a single property, meaning there aren't multi-property funds. Holdfolio invests its own money alongside investors' funds and offers complete bankruptcy protection with projected returns varying from 15 to 19 percent IRR.  Fundraise This crowdfunding platform offers a way for both non-accredited and accredited investors to invest in real estate properties through private funds. Since its establishment in 2012, Fundraise has consistently generated regular returns, regardless of the state of the stock market at any given period.  CrowdStreet CrowdStreet offers accredited investors the opportunity to invest in private real estate opportunities in 18-hour cities (secondary towns with higher rent yields, lower valuations, and higher growth potential due to demographic trends and job growth).The three platforms are free to sign up to and deliver passive income.  Step-by-Step Guide to Turning 250k to $2 Million in No TimeAchieving a seven-figure investment portfolio is often a long-term game unless you win the lottery. Thus, you'll need a roadmap to help you achieve your goal. Consider starting with the following steps:  Assess Your Starting Point Before starting your journey towards growing your $250,000 into $2 million, ensure you take stock of your finances. While you're already doing well with your savings, you'll need to consider things like the amount of debt you have, your earning and income potential, and overall financial goals. Also, consider your investing time horizon. An investor with 30 years until retirement and another with ten years won't have the same success rate. Suppose you have only $250,000; it's best to make provisions for emergencies before plunging the rest into investments. Gauge Your Risk Tolerance Risk capacity and tolerance are two significant factors to consider while determining your approach to investing. Normally, taking more risks brings the potential for earning higher returns. However, you might experience a higher potential for losses. Risk tolerance is the amount of risk you're comfortable with as an investor. On the other hand, risk capacity is the quantity of risk you need to meet your goals. To determine the investments you'll need to turn your $250,000 into $2 million, you've got to learn how to balance your risk capacity and tolerance.  Certificates of deposit, bonds, and cash are examples of safe investments with a low potential to lose money. However, you aren't going to witness spectacular growth from these investments.On the other hand, stocks have the potential to deliver better returns, mainly if your investment is in small-cap companies with tremendous growth potential. Nevertheless, you'll need to accept the volatility the stock market offers. Determine the risk you'll take to hit the two-million-dollar mark and see if you've got the stomach for that kind of risk.  Run the Numbers After gauging your tolerance level, your next step will be to do some math while considering certain factors. Notably, there are three things you'll need to keep in mind, including your investment's rate of return, how long the investment will last, and the amount you intend to add every month.Assuming you're 35 years old and planning to retire at 65, and thanks to your diligent savings or inheritance windfall, you have $250,000 to invest, the fastest way to grow your capital to $2 million is to increase the amount you invest every month. The other option is to exceed the seven percent annual investment return. However, the second option is harder to achieve. The market could make you lose if you aren't as proficient in picking great investments as you thought. Note that the sooner you want to retire, the more you will need to invest each month. For instance, if you're over 45 years old and will be retiring in 20 years or less, you'll have to boost your monthly investment amount to achieve your goal.  Allocate Your Assets WiselyRegardless of your investment window, it'd be best to consider asset allocation while growing your $250k to $2 million. Allocating an asset entails determining the balance you have in your portfolio and the corresponding return and risks. The way you allocate assets might largely depend on whether you want a passive or active investment strategy. If you prefer being more hands-on or involved in your investments, consider going for mutual funds, trading individual stocks and bonds, or exchange traded funds for the best returns. Conversely, if you intend to be hands-off and inactive, it's best to invest in passive mutual funds like index funds. The key to succeeding with either option is wisely allocating your liquid assets, meaning you need to rebalance periodically to ensure your asset allocation meets your investment goals while reserving a specified amount in your emergency fund.For instance, suppose you're aiming for a 70 percent to 30 percent split of bonds to stocks, consider checking your portfolio a minimum of once a year. That way, you're sure not to drift away too much from those numbers.If you're utilizing a Robo-advisor platform for your investments, you might want to consider and take advantage of automatic rebalancing. Robo-advisors help you determine the perfect asset allocation depending on your goals, time horizon, and tolerance level. After that, it automatically adjusts your budget to enable you to stay on course and make more money. Minimize Taxes and Fees When investing $250,000 to get $2 million, don't focus entirely on growth and forget taxes and fees. You'll need to keep your investment tax liability and costs low to enable you to hang on to your investment returns. When it comes to the fees, you might want to understand some concepts like: Trading fees for people buying and selling stocks Expense ratios for exchange-traded funds and mutual funds Asset management fees to the management company in charge of handling themFor taxes, your tax liability will be determined by the amount of time you hold the investments and whether you intend to invest in tax-advantaged retirement accounts or taxable brokerage accounts. In an IRA, 401(k), or other tax-advantaged accounts, you defer taxes on investment growth till you're ready to make withdrawals when you retire. However, a Roth IRA allows for a tax-free distribution when you retire. With taxable accounts, you'll need to pay long-term or short-term capital gains tax on your investment gains. However, it depends on the period you hold the investment. The rate for long-term capital gains tax applies to ventures held longer than a year. The best part is, it's more favorable to investors. However, you can manage taxation by using tax-loss harvesting (underselling stocks to offset reported gains). Ensure you don't buy similar investments within 60 days after selling to avoid triggering the wash-sale rule and wiping out tax benefits.  Investing Tips to NoteAlthough any of the investment options mentioned above will be an excellent choice for your $250,000, you'll need to think about your investment purpose. Are you considering a long term investment without having to change your strategy? Do you want a quick profit? Don't forget to think about how soon you might need to access your initial investment amount or decide whether you plan to allow your $250,000 investment fund to stay for ten to 20 years. Suppose you intend on making a long term investment, consider a brokerage account or Solo 401(k). Other options include cryptocurrency, buying your own business, or investing in properties.Suppose you're a new investor, consider consulting a financial adviser for financial advice on how to turn your $250,000 into $2 million. Ensure you find a qualified financial expert by doing your due diligence.  Calculators are also ideal in estimating the amount you'll need to invest before reaching $2 million. However, ensure you get the best calculator to get a correct estimate.  The Bottom Line There's no secret formula or magic wand to wave to turn your $250,000 into $2 million. Everything boils down to strategy and how involved you want to be in the investment. The further you're from retiring, the better. However, even if you have less than 20 years before you stop working, it's possible to reach $2 million. Having $250k to invest will ensure you enjoy a financially successful future. However, your work isn't entirely done. Investing your $200,000 in a viable and strategic way will help you build your finances and attain financial freedom in the years or decades to come. Now you don't have to wait till you have millions before starting your investment journey. Don't allow your money to languish in a savings account where it won't grow due to inflation. Investing in any options mentioned above, especially real estate, is a surefire way to turn your $250,000 into $2 million. However, consider your life goals, ability to take risks, and age to find an investment option tailored specifically for your needs. When you finally decide to invest your money, ensure you make the best choice. You might decide to invest all your money into one of the options we discussed earlier or split it into two, with one half for stocks and bonds and the other half for buying property.However, investing in property through real estate crowdfunding platforms like Holdfolio is one fast way to grow your $250,000 and earn passive income.Do you want to start your real estate investment journey but don't want to be actively involved? Holdfolio is a real estate crowdfunding platform that enables you to put your money to work while earning a passive return. With zero active participation and as little as 20k, you can earn steady income from properties you wouldn’t be able afford as an individual investor.
Business Plan!

Feb 6, 2022

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The Ultimate Guide to Real Estate Syndication Business Plan in 2022

Looking to invest in real estate but don't know where to start? Have you considered syndication? Real estate syndication is one of the best and most secure ways to get into the market. It enables investors to get the benefits of owning an investment property without dealing with the hassles or stress of being a property owner.Before venturing into real estate syndication, you need to have a business plan to avoid getting lost. This blog post will discuss what syndication is, how it works, and how to create a business plan for 2022. So, whether you're a new investor or already experienced, read on for everything you need to know about real estate syndication! What Is Real Estate Syndication The term "real estate syndication" refers to an organization or group of investors pooling funds to invest in real estate. It's simply a mechanism for investors to pool their funds to purchase more significant and stable assets than they could invest in individually.Real estate syndication enables private funds for investment in real estate enterprises when no other financing is feasible or available. It’s long been a popular means of financing, purchasing, and selling higher-priced real estate. The Key Players Involved in Real Estate Syndications Because real estate syndications are an investment offering, the Securities and Exchange Commission (SEC) regulates them, and the SEC requires documentation and reports for each offering. Some investment opportunities available through real estate syndication include apartment buildings, mobile home parks, land, self-storage units, and other real estate assets.The syndicators and the passive investors are two crucial players in real estate investments. Let’s have a look at each of their roles below: 1. The Real Estate Syndicator The real estate syndicators are responsible for finding real estate syndication deals. The organization’s structure dictates the syndicator's responsibility, obligation, and relationship to the investment group and the investors' relationships with each other.Syndicators' primary responsibilities include handling the first deal, finding investors and properties, conducting the transaction, developing a real estate syndication business plan, raising funds, and managing the asset. In essence, the syndicator's job is to execute the business plan and provide substantial returns to the passive real estate investors. 2. The Passive Real Estate Investor In real estate syndications, the passive investor's job is to provide a fraction of the funds required to purchase the property, otherwise known as the real estate syndicate. Passive investors obtain ownership shares in the property in exchange for their money.These stakeholders also receive monthly passive income distributions from the asset and a return on their investment when they sell it. The Benefits of Real Estate Syndications Several benefits come with investing in real estate syndications. Let’s have a look at them below:Passive Income: Investors get passive income payments monthly or weekly. Hassle-Free: Participants can invest without worrying about managing their assets Tax Benefits: If you own a piece of real estate, you’ll receive tax benefits via your K-1 tax filings. Appreciation: Your property's worth should improve steadily over time, increasing the return on investments, as in any other real estate sector. Control Over Assets: Unlike real estate investment trusts or crowdfunding platforms, you have the option to invest in specific properties, giving you optimum control over your investments. Diversification: It also gives you the option of spreading your capital across various syndications.The Challenges of Real Estate Syndications Despite the multiple benefits you can derive from investing in real estate syndications, it has risks.When you invest your money, it's essential to know the risks of syndication. You may not receive returns as predicted by a given group, and there is always some risk of losing all or part of your investment!Another risk is losing your legal protection as a passive investor, therefore never take an active position in asset management. Finally, avoid ambiguity by speaking with the syndicator before investing and determining how frequently and in what manner they will keep you informed about your investment.Eliminating these concerns will result in a more profitable investment. Before investing, be sure you're working with a reputable and knowledgeable real estate syndicator. When looking for a real estate syndication company, it's crucial to assess them before finalizing your investment. Eligibility Requirements for Real Estate Syndication Investing Passive investors must meet stringent eligibility conditions before venturing into real estate investing. Generally, you must be an accredited or sophisticated investor to participate in real estate syndications.To be considered part of accredited investors, you must have an annual income of at least $200,000, or $300,000 if you have a spouse. On the other hand, sophisticated investors must have at least $1,000,000 to qualify. Likewise, they must have extensive knowledge and expertise to be eligible. Real Estate Syndication Fees Real estate syndication fees are often an unavoidable cost of doing business in the real estate market. The individuals managing an investment's finances and legal requirements are compensated with these charges - which is why you need them! Here are the different types of real estate syndications fees:Acquisition Fee: Typically 1-3 percent of the asset's purchase price, it covers the costs of the sponsor's efforts and due diligence in acquiring the asset. Asset Management Fee: This fee, which ranges from 1-2 percent of predicted gross income or capital invested, covers continuous bookkeeping, coordination, and communication required to manage the asset and execute the business strategy successfully. Equity Placement Fee: A fee imposed upfront by a real estate broker to cover the costs of finding investors and limited partners, as well as marketing, coordination, and behind-the-scenes communication and documentation. This fee, also known as the equity origination fee, is typically 1-2 percent of the funds contributed. Loan fee: This fee pays the sponsor for their efforts in getting the required finance. Typically, a loan fee is 1 percent of the total loan amount. Deposition Fee: Usually imposed to cover marketing expenditures and asset sales after business plan implementation. Typically, this fee is around 1-2 percent of the asset's sale price.How to Invest in Real Estate Syndications Knowing the eligibility requirements for real estate investing, you should have a basic idea of how to invest wisely in real estate syndication deals.For starters, ensure you’re actively collaborating with other passive investors, preferably those interested in the same asset class. Developing contacts with like-minded investors will assist you in providing suggestions for reputable real estate syndication companies with a proven track record in the sector.Meeting other investors, expanding your expertise, and finally finding your first deal may all be accomplished through attending events, interacting in Facebook groups, and attending real estate conferences.As previously said, a real estate syndicator will handle the majority of the heavy lifting, including sourcing the deal, establishing the syndication, and executing the business strategy. Your primary responsibility as a passive investor is to search for a reputable real estate syndicator for collaboration. Make sure to verify the syndicator's credentials. The Basic Business Plans Required to Start a Real Estate Syndication Company Having talked about the basics of real estate syndication, let’s dive into an overview of the primary components of the business plans you’d need to start a real estate syndication company below: 1. Define Your Target Market Understanding your business is the first step to starting a successful syndication company. You need an idea of who you're looking for, their needs, and how they interact with property ownership or rental agreements to put together this vital part of a real estate investment! Every player in the sector is primarily involved in acquiring, building, remodeling, and renovating the interiors and exteriors of residential buildings before selling them. 2. Research the Market and Execute Feasibility Studies Thorough market research and feasibility studies are significant components of your real estate syndication business plan. The truth is, a broad spectrum of clients are available to acquire, lease, or rent properties. In other words, your target market cannot be limited to only households in your area. Include all businesses in and surrounding the city where you have a presence. 3. Identify the Major Competitors in the Industry It is crucial to identify the major competitors in your industry so you can see who's ahead and try not to imitate them. Some brands are consistently better than others for a reason, like their long history of success or how smoothly they run things with positive outcomes delivered on time every month! 4. Choose Between Buying a Franchise and Starting From Scratch If you want to start a real estate syndication company, you might have to start from scratch because a franchise could be challenging to acquire. Besides, launching a real estate syndication firm from scratch is less stressful than starting other small-scale enterprises, which typically require extensive preparation before launch time. 5. Be Aware of the Risks and Challenges You May Face One of the significant hurdles you’ll likely face if you decide to start your own real estate syndication company is the presence of established companies and other players in the real estate industry. Only by creating your market will you be able to eradicate this challenge.An economic slump is another obstacle that you will almost certainly face. With a terrible economy, businesses and other players in the real estate market often have a hard time keeping their existing clients or even attracting new ones.Unfavorable government policies can also hinder your company's growth. In essence, you have no choice but to be optimistic that things will turn out well for you. 6. Select the Most Appropriate Legal Entity The legal entity you choose will significantly impact how big your company can become. Some real estate syndication companies tailor their services to the local market, while others use franchising to reach out to the national market.You can choose between a general partnership and a limited liability company when starting a real estate syndication company. A limited liability company (LLC) safeguards you from personal liability. Only the funds you put in the limited liability corporation will be at risk if something goes wrong in the firm. However, for general partnerships, that’s not the case. Generally, limited liability corporations are easier to run and more flexible, as they don't require a board of directors, shareholder meetings, or other managerial formalities. 7. Coin a Catchy Business Name How would you like your company to be perceived? The right name is half the battle, so think outside the box. Think of it this way: the words you choose for a company are like an identity card that tells people what they'll experience when interacting with YOU and YOUR services! 8. Consult Reputable Real Estate Brokers to Find Out Which Insurance Policies Are Best for You You can't conduct a business in the United States or other developed countries without having some fundamental insurance coverage required by the industry in which you intend to operate. Therefore, it's imperative to set aside money for insurance and potentially speak with an insurance broker to help you select the best and most appropriate policies for your real estate syndication business. 8. Get the Appropriate Professional Certifications Professional certification is one of the key reasons most real estate syndication companies stand out, aside from the positive outcomes they generate. If you want to positively impact the real estate sector, strive to get all of the necessary qualifications in your field. Certification verifies your ability and demonstrates that you are highly skilled, dedicated to your profession, and current in this competitive industry. 10. Gather the Legal Documents You Need to Run Your Business In the United States and other developed countries, you cannot run a profitable business without appropriate documentation. It won't be long before the law catches up with you if you do. 11. Raise the Required Startup Capital Even if you want to start small, starting a real estate syndication business requires a significant amount of capital. If you're going to establish a bigger firm, you'll need to search for sufficient money to fund it. A regular large-scale real estate syndication business is expensive to start. When looking for startup funds for your real estate syndication business, you may want to consider the following options:Raise money from personal savings, sell stocks or multifamily properties. Obtain funds through cash flow and equity investment. Receive funds from passive investors and business associates. Sell shares to interested investors. Apply for a bank loan. Collect low-interest loans from families and friends.12. Select an Appropriate Location for Your Business Your business’ location is critical to its success. Most entrepreneurs rent or lease a facility in a visible neighborhood with substantial real estate activity and households with the requisite purchasing power and lifestyle.Don’t rent or lease an office property for your real estate syndication company in a less prominent or unknown area because it is less expensive. If you do you can expect to spend more on marketing the company. So, before deciding on a location for your real estate project, make sure you undertake rigorous market research.  13. Hire Employees to Help With Technical and Workforce Issues Go for the right employees, build good relationships with potential team members, and market your properties using every marketing tool at your disposal, particularly the Internet.The right addition to your team can make all of the difference. Make sure you stay within budget when hiring and take advantage by enlisting financial advisors for their expertise. 14. Establish a Fair Price for Your Services and Products One crucial component that will assist you in selling/renting/leasing your properties at a premium is to get your initial capital from sources that won't put you under any strain or charge you a high-interest rate. It helps if you also bought your properties directly from property owners rather than third-party vendors.Another method that can help you get the best pricing is to keep your operational expenditures to a bare minimum, focusing your efforts on marketing and boosting your brand name. This method will help you save capital and help you establish the best price for your services. 15. Create a Corporate Identity and Develop Strategies to Increase Brand Awareness One of the secrets of larger firms is their willingness to spend vast sums of money to increase brand awareness.Marketing and advertising are critical if you want to go beyond the city where your business will be operating and become a global brand. You need money for this investment, of course!To stay on top of the market, you need a solid and consistent brand that will keep your target audience interested. Conclusion It’s time to stop dreaming and start doing. You have the power within you, now take it! We hope this ultimate guide has given you some insights into launching your own syndication business in 2022. Now is the perfect time to get started. Holdfolio can help make it easy for anyone with a smartphone to become an entrepreneur. Ready? Let's do this!
Property for sale

Feb 3, 2022

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How to Find Investment Properties

Are you an investor looking for your next big deal? If so, you're in luck! In this blog post, we will discuss several different ways that you can find investment properties. Each method has its own set of pros and cons, and it is important to understand them all before making a decision. Let's get started!Holdfolio offers exclusive deals to its investors, give us a call to have access to the hottest deals on the real estate market! How to Find Investment Properties Some people buy investment properties because they want to make money. Others do it for the potential of making more money than what they paid for it, or buying at below-market prices and making big returns on their investments--think historic renovations that increase value by bringing out a property’s beauty and history!The fix-and-rent approach is buying homes in need of repair, making needed renovations  and repairs on the property, and then renting it out. Look in areas with high growth or higher rental yields and low vacancy rates. This business model relies heavily upon finding the right property that will suit your needs as well!Investment properties are a great way to make money and invest your capital. You can earn rental income from converting an investment property into rent, make money when you sell it at a higher value than you bought it for, and take tax deductions for certain expenses relating to the purchase (such as mortgage interest or repairs)!The tax on real estate transactions is more complicated than many other taxes. A 1031 exchange, for example, allows you to defer taxes on the property - meaning that profits made off the sale are taxed only once instead of multiple times which usually happens with cash based accounting practices!It may seem daunting learning about all these options. That said, we're here to help you out. Just give us a call!  Searching Off-Market Deals In today's competitive housing market, finding a deal before it hits the marketplace is key. Invest in pre-approved properties with short closing times by networking through real estate agents and using the money you have available now rather than waiting for another opportunity that might not come!To get started, you should network with real estate agents and prove that your finances allow for the purchase of a property. After this has been established they will be more willing to help give you leads.When you want to buy an investment property, use a real estate agent that knows all about what properties meet your needs. Make sure when working together as partners you each allow for ample time to review and execute a deal–nobody likes dropped contracts. Look on MLS When you search real estate websites like Realtor.com, your searches will be distributed across many different listing services that are all included in the Multiple Listing Service (MLS). This information is widely available to help buyers find what they’re looking for without having an agent give them bad service or misleading results.The MLS is the largest database of properties for sale, but it can be difficult to find a good deal when you're competing with other buyers. Every potential client has an agent who helps them search and bid on houses - they all compete against each other so prices don't go up too high.When you submit your offer early, it can help get the property under contract before other bidders see what's available. Have everything ready to go with a financing pre-approval letter so as not to have competition which may force you to pay more than necessary for an investment property- hiring a competent broker is also essential!Look for For Sale By Owner Properties Another way to find investment properties is by looking for homes that are being sold by the owner. This can be a great option, since you may be able to get a better deal. However, it can also be more difficult to find these properties, and you will likely need to do some extra work to get the information you need.You can try to find investment properties for sale by the owner in two different ways.The first option involves driving around neighborhoods and taking note of any abandoned properties. You can get in touch with people who need to sell their houses quickly by sending them a letter via direct mail. This is because public records are available on all homeowners, which means you don't have to look up email addresses or other contact information - it's that simple!When you’re interested in multi-family residential properties, check the “for rent" ads. Are there developments that constantly have to advertise for new tenants? They may be willing to sell their buildings if they can get a buyer who will rehab and change how things are done.When property owners are ready to sell their homes, they may have a variety of challenges. For example, low-paying tenants that require extensive repairs, or high crime in the area can make it difficult for them to get prospective buyers interested. Regulations from local agencies such as code enforcement might also be an issue–especially if you need approval before making any changes! Spread the Word Word of mouth is one of the simplest ways to locate real estate investment properties before they are listed. Tell everyone in your social circle - your friends, relatives, coworkers, and neighbors – that you're looking to acquire real estate investment properties. Make a list of the kind of properties you're looking for and the areas you're interested in. They may know someone who is selling or see a house for sale in their area that you might be interested in. Hopeful they will think ofyou first when they identify a possible seller and notify you. They may even be interested in selling their own home but have yet to put it on the market. Look for Short Sales Another great option for finding investment properties is by looking for short sales. A short sale occurs when the seller owes more on their home than it is worth. This can be a great opportunity for investors since they can buy the home at a discount. However, it can be difficult to find short sales, and you will likely need to do some extra work to get the information you need. Look for Foreclosures There are various investment properties being sold at foreclosure auctions. One way to find them is by talking to banks. Let your local bank know that you are interested in buying a foreclosed home, and they might be able to give you some good advice on where to find one!The renovator's market is real! If you're looking for a property that needs some love, then banks are more than happy to give up their first dibs on it because they know how hard renovations can be. You could also get leads from multi-family homes in danger of foreclosure and other apartments not being occupied as often due to an increased demand by new residents moving into town.When ready to buy a house, talking with bankers is an excellent way of finding bank-owned properties that haven't been listed yet or were taken down off their website because they hadn’t sold. Better yet they can give you lists for short sales and offer discounts! Review Publicly Available Information One of the best ways to find a good deal is by reading public records. This includes everything from eviction notices published in newspapers and online databases that list property owners' names, addresses, or phone numbers.Look into the property itself to see if there are any warning signs. For example, reading lists published in newspapers can tell you which apartment buildings have trouble with non-paying tenants and what type of eviction notices they receive - this could be an opportunity! You might also want to perform some research online like using sites focused specifically towards searching existing foreclosures or researching real estate agents who work exclusively within that market.The for sale by owner or FSBO ads can be an effective way to find distressed sellers. These people are usually trying to save money on their property and may need major repairs that they cannot afford, which makes it hard for them to sell. You don’t want fresh listings but instead want those who have been up for months. These likely turn into expired properties.One side benefit of this approach is that you can get very creative in the financing terms. You might be able to take over someone else’s mortgage or make a private agreement, but we recommend getting conventional loans if possible. This will help pay off their loan quicker than something like an equity investment which would require monthly payments. How to Recognize a Good Investment Deal? The key to getting the best deal is following some simple rules.Define Your Criteria The criteria you use when looking for a new home is important because it will enable you to find exactly what you're looking for. You need to establish your needs, such as the neighborhood or area of town that the property resides in and how many square feet of space you want? Also how many bedrooms do you need?  Define Your Search Strategy The best way to find the perfect property is by being creative and devising a plan of action. I printed 1,000 flyers with my contact information on them which were distributed throughout each neighborhood for people who may want to sell their homes or businesses, but might not know how it works or where they should go next! This strategy paid off two years later when an interested buyer contacted me saying she had kept the flier all along! Keep in Mind that Finding Good Investment Properties Can Take a While The internet has made it easier than ever to buy or sell property. You can search for homes in your area and even get pre-approved before you visit them, which means that there's no need to wait around on hold with someone who may not be able to answer all of your questions about financing options!You'll want an experienced agent because this process does take some patience. What Questions Should You Be Asking? Once you've found the perfect property, you'll need to ask yourself the appropriate questions to clinch the deal. How Long Has the Property Been on the Market? It's important to know when a property has been on the market for an extended period of time. If you're thinking about investing in real estate, this should be one question that arises prior to making your purchase. Sometimes it makes more sense (and is more cost-effective) if developers wait until all potential buyers are gone before putting their properties back up for sale --especially if renovation costs could skyrocket due to new tenants moving into nearby buildings! When Did the Owners Buy The Property? The more information you have about when the seller bought their property, and what they paid for it in its current condition can really help with assessing its value.  Why Is the Property Being Sold? The seller's reasons for selling may help you make an informed decision when buying. You should always ask them this question.The right deal is out there, but you have to be proactive.To find the perfect property for your investment needs, look around and keep an open mind! The market changes quickly these days so don't settle on anything less than what's best suited towards fulfilling those requirements - even if it means going against popular opinion or other real estate investors' preferences. Conclusion Now that you understand the different ways to find investment properties, it’s time for you to get started. Remember to consider all of your options and choose the path that best suits your needs.With Holdfolio, investors have access to exclusive deals in some of the hottest markets across the country. So what are you waiting for? Invest with Holdfolio today and start growing your wealth! 
Multifamily Building

Feb 2, 2022

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Best Multi-Family Real Estate Markets in 2022

If you're looking for the best multifamily real estate markets in 2022, you've come to the right place. In this blog post, we will discuss some of the hottest markets for multifamily properties in the coming year. Whether you're a seasoned investor or just getting started in the industry, this information will be invaluable to you! Review of the Multifamily Property Market The US housing market is currently a seller's market, with yearly price increases hitting record highs and inventory continuing to decline. If you're shopping for a new home in 2022, expect a bidding battle because it's a seller's market. If you're a real estate investor, you'll need to review the statistics to figure out where to put your money in 2022. During the pandemic, prospective homebuyers around the United States are paying a premium for homes, with remote employees' need for more opulent properties driving the market.Many parts of the country are seeing massive increases in demand, which is causing housing prices to rise at a faster rate than inflation. As a result, many houses have become expensive. All of these considerations are pushing an increasing number of individuals to rent a home rather than buy one, or to stay in their rental longer than they had planned. The single-family rental market, which is prepared for investment possibilities in 2022, has benefited as a result of this.What Makes a Market Great for Multifamily Investing? When looking for the best multifamily real estate markets, there are a few key factors to consider. The most important of these is population growth. A market with strong population growth is likely to have a higher demand for rental units, which means good investment potential. Other important factors include job growth, rent prices, and development activity.So without further ado, let's take a look at the best multifamily real estate markets in 2022!Want to learn more about investing in multifamily markets call us today and let us help you grow your wealth with our expertise! How to Choose A Good Real Estate Market for a Multifamily Investment? When choosing among multifamily markets, there are a few key things to look for:Population growth: A market with strong population growth is likely to have a higher demand for rental units, which means good investment potential. Job growth: A market with healthy job growth is likely to have stable demand for apartments. Rent prices: A market with high rent prices can be a good indicator of strong demand for multifamily units. Development activity: A market that is seeing a lot of development activity may be a good opportunity for future investment.Real estate investment necessitates extensive study. Market timing is also important since certain cities have excellent rental revenue potential but limited inventory. In such a case, finding and closing a purchase that meets your investing requirements becomes extremely tough. As a result, you must respond quickly and carefully. Best Multifamily Markets to Invest in 2022 If you're thinking about making a real estate investment this year, there are a few cities worth looking into further because of expected price hikes. To compile this list of the 21 best areas to invest in real estate in 2022, we analyzed data and trends from around the United States. Here are the finest areas to acquire rental houses and invest in real estate. They all have their own set of benefits and drawbacks, but many are cheaper than the national average.Houston, Texas Houston is a city that has everything you need to invest in real estate. With seven million citizens, it's the fifth-largest metro region in Texas and home to 53 Fortune 1000 companies. Its population growth rate is just over double that of other parts of AmericaIn addition, this area also offers job opportunities with approximately 1 out every 10 jobs held by people who live here being an oil engineer or geologist!Houston has a very active real estate market, which makes it an excellent investment location. A typical house is worth $412,000 and the property values indicate that rental income could be low at only 1/2 of what you'd make in more expensive areas like New York City or Los Angeles. Although it may still be enough for most people's needs with additional perks such as lower cost-of-living expenses! Las Vegas, Nevada Throughout its history, Las Vegas has had various booms. During the Great Recession, it had a massive real estate crash. The comeback in Las Vegas hasn't generated the same headlines as the house value drops of 50% or more a decade ago. Its rebound, though, should not deter investors. The Las Vegas real estate market is both solid and predictable for astute investors. Throughout 2019, the housing market in Las Vegas was the hottest in the country.The real estate market in Las Vegas is bursting at the seams with new enterprises. Its welcoming business climate is bolstering the economy and has contributed to the positive Las Vegas real estate market trends of 2021. The pace of new firms starting up is substantially quicker than the national average. According to the S&P's Corelogic Case-Shiller Index in 2018, Las Vegas house values saw the biggest year-over-year improvements, with a 13 percent rise (the leading measure of U.S. home prices). It's a terrific moment to buy rental properties in Las Vegas.Tampa, Florida Tampa, Florida is also on the list of greatest real estate investment locations for 2022. Tampa, FL, is not only a beautiful metropolitan region but also one of the most popular tourist destinations in the United States, with a population of over 4 million people. This market has various economic and development opportunities, and it was recently named one of the hottest multifamily markets in the United States. In Tampa, there's a lot of unsettled demand for entry-level single-family houses. The median property price in the area is $251,287.The housing market in Tampa is constantly improving–prices are cheap, and houses have a good possibility of appreciating significantly in the next few years. The value of a home has also increased by 5.3 percent in the last year. On the whole in the Tampa metro region there are less than two months of inventory, down about 21.4 percent from last year. One of the main causes of rising housing prices is this: A balanced market has 5.5 months of stock on hand (favoring neither sellers nor buyers). Anything with less than 5.5 months of inventory is considered a seller's market. Boise, Idaho The city of Boise has been one of the top long-term real estate investments in America for years. Home prices are continuing to rise due to a combination of available supply and demand factors, which makes it an excellent time if you're looking into buying your next house or investment property! Realtor's metro level housing prediction ranks this area as number 1 on their list - meaning that homes will likely experience 8% growth (and possibly more). As seen by these numbers alone there really isn't any reason why someone should not invest here.While the coronavirus outbreak may have caused some people to stay at home, it didn't dampen the housing market. In fact, prices are trending upwards thanks in large part due to increased demand from buyers as a result of historically low 30-year fixed mortgage rates that continue making this area more attractive than ever beforeA great example is how homes near schools or hospitals tend to gain value faster because they're considered "safe" investments! Dallas, Texas The Dallas real estate market is accessible for those who want to invest in property. There's a lot of housing stock available and the rental rates are high compared to the property prices, so it makes sense that this would be another great place to get your foot in the door! A local firm can help locate renters quickly!Dallas real estate is an excellent investment opportunity given the city's broad economy and affordable rent prices. Every day, 340 people relocate to Dallas-Fort Worth from all over America. Many are looking for cheaper housing options that won't break their budget too much (like buying). Rents have gone up 14% within just one year which means now may be your best chance ever at getting into this booming market while still keeping costs low enough where you'll make money off of renting rather than owning! The Dallas Metro Region is projected to accommodate up to 20,000 new houses and apartments with a total of 50,000 single-family homes in this area.Atlanta, Georgia Atlanta, Georgia is also a great area to buy real estate. For astute rental property investors, Atlanta provides appealing buying opportunities. In the last decade, the city's population has increased by more than 14%. The need for homes is being driven by the growing population. The city of Atlanta, which is located in the state of Georgia, is a center for real estate investing. Atlanta has exhibited encouraging population and jobs growth, both of which are indicators of a thriving multifamily market.Atlanta is a city that provides opportunities for those who invest in real estate. In the past decade, its population has grown by more than 14%. With this encouraging multifamily market and booming economy Atlantais one hot spot among many nationwide - buying property here can be an excellent decision! Conclusion  If you're looking for a long-term investment, multifamily real estate is one of the best options. Check out our list of the top cities to invest in in 2022 and let us know if we can help you find an investment opportunity that meets your needs.We have all the necessary tools available at Holdfolio so feel free to get started with browsing properties while we review your financial situation and help make recommendations on which type of property is right for you. Don't forget:  investing early could lead to greater returns over time!
Old Man Holding the Money

Jan 21, 2022

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How to Invest 100k for Passive Income

When it comes to investing, there are a lot of different options to choose from. You can invest in stocks, real estate, mutual funds, or even cryptocurrencies. But if you're looking for a more passive investment option, there are a few different choices you can make. In this blog post, we will discuss several different ways to invest 100K for passive income. We will provide detailed information about each one so that you can make an informed decision about which option is right for you! What is Passive Income? Before we discuss the different investment options, let's first define what passive income is.Passive income is defined as income that you earn without actively working for it. This can come in a variety of forms, such as rental income from real estate investing or dividends from stock holdings.With various investment options to choose from, how do you choose where to invest your money? This mostly depends on the investor but make sure you do your research on each investment opportunity. And don't forget that there are other things to consider before beginning to invest! Things to Do Before You Invest Before investing your $100K anywhere you should consider some more important financial strategies. Create an Emergency fund An emergency fund is simply money set aside for use in the event of an unexpected event. What would you do, for example, if you lost your job suddenly? Would you be able to cover the gap until you found another job using your savings? What if your automobile required major repairs or you became ill and had to pay for medical treatment?You should set aside money in an emergency fund to assist you to get through these difficulties. It's fantastic if you already have emergency money. Examine it once again to ensure that it is still adequate. A good emergency fund provides six months' worth of living costs for most people.Your risk tolerance will determine how much you put into your emergency fund and where you store it. The safest option is to invest for the whole six months and maintain the money in a low-risk deposit account (like a savings or money market account).Regardless of how you go about it, make sure you have a liquid emergency fund that will last at least a few months. Pay off your (high-interest) debt as soon as possible. If you have high-interest debt, your best strategy is to pay it off before making an investment. This covers debt owed on credit cards as well as the debt owed on other loans, such as payday loans. The average credit card interest rate is 16%, far greater than the average yearly stock market return. This indicates that paying off high-interest debt is a better investment than investing in the stock market... even if it's a bull market!Consider a balance transfer credit card if you have debt on many credit cards. This helps you to combine your debt and deal with it all at the same time. It may even offer a 0% APR for a limited time, allowing you to put interest on hold while you pay it off.Determine What Kind of Investor You Are Before Investing Before investing in any type of asset, you need to determine what kind of investor you are. Do you want to take a hands-on approach and actively manage your investments? Or would you prefer to invest more passively and let someone else do the work for you?If active management is something that interests you, then stock market investing or real estate may be a good option. But if you're looking for something that requires less work, then you may want to consider options like dividend-paying stocks or peer-to-peer lending.Each of these investment options has its own unique set of risks and rewards, so it's important to do your research before making a decision. Decide how you want your money managed When you invest your money, you are essentially hiring someone to manage it for you. This means that you need to decide how much involvement you want in the management of your portfolio.There are two main options when it comes to how your money is managed: passive or active management. With passive management, the manager of your portfolio will only make changes when the underlying investments are changed. This means that you will not be involved in the day-to-day management of your money.With active management, on the other hand, the manager will make changes to your portfolio based on their own judgment. This means that you will need to stay up-to-date on market news and be willing to make changes to your portfolio based on their recommendations.Which type of management is right for you? It depends on how much time and energy you are willing to put into managing your investments. If you want a hands-off approach, then passive management is the way to go. If you want more control over your money, then active management is the better option. Real Estate One of the most popular options for passive income is real estate. When you invest in real estate, you are buying a property and renting it out to tenants. Over time, the rent payments will add up and generate passive income for you!There are a few different ways to invest in real estate. You can buy a property outright, you can partner with another investor, or you can invest in a real estate investment trust (REIT). Each of these options has its own set of risks and rewards, so it's important to do your research before making a decision.One thing to keep in mind is that real estate investing requires a lot of hands-on work. You'll need to manage the property, find tenants, and deal with any problems that may arise. If you're not interested in doing this yourself, you may want to consider hiring a property manager. Invest in Real Estate Crowdfunding Another option for investing 100K for passive income is to invest in real estate crowdfunding. With this option, you allow a company to pool your money with other investors to purchase a property. The company will then rent the property out to tenants and return the profits to you.There are several things to consider when investing in real estate crowdfunding. First, you'll need to research the company to make sure it is reputable, like Holdfolio. Next, you'll need to estimate what fees you will be charged for their services. Finally, you'll need to factor in the risks associated with investing in real estate crowdfunding.Holdfolio enables both accredited and non-accredited investors to join crowdfunding deals! If you are interested in real estate crowdfunding give us a call and let us help you start generating passive income streams for your future! Invest in Dividend-Paying Stocks One of the most popular passive income investments is dividend-paying stocks. These are stocks that pay you a regular stream of dividends based on the company's profits. Many companies offer quarterly or yearly dividends, and some even offer special dividends occasionally.The amount of money you can earn from dividend-paying stocks varies depending on the company and how many shares you own. But it's not uncommon to see dividends paying out anywhere from $0.50 to $20 per share. And as an investor, you are eligible for special tax breaks on your dividend income!When looking for dividend-paying stocks, it's important to do your research. Not all companies are created equal, and some may be riskier than others. You'll also want to make sure the company is in good financial shape and has a history of paying dividends.You can buy dividend-paying stocks through a variety of different investment brokers, or you can purchase them directly from the company itself. Invest in Cryptocurrencies Another option for investing 100K for passive income is to invest in cryptocurrencies. With this option, you purchase units of cryptocurrency and hold them for the long term. Over time, as the value of the cryptocurrency increases, you can sell them for a profit.There are several things to consider when investing in cryptocurrencies. First, you'll need to do your research to find a reputable cryptocurrency to invest in. Next, you'll need to estimate how much the value of the cryptocurrency will increase over time. Finally, you'll need to factor in the risks associated with investing in cryptocurrencies.Peer-to-peer lending Another great way to generate passive income is through peer-to-peer lending. This is when you loan money to other people or businesses through a website like Lending Club or Prosper.When you invest in peer-to-peer lending, you're essentially becoming a bank. You're providing capital to borrowers who need it, and in return, you earn interest on your loan. This interest can be anywhere from 0% to 15%, depending on the risk level of the loan.One thing to keep in mind is that peer-to-peer lending is not without risk. You could lose your money if a borrower defaults on their loan. But with careful research, you can minimize your risks and earn a healthy return on your investment. Robo-advisors Robo-advisors are a great way to invest 100K for passive income. With this option, you allow a Robo-advisor to manage your investment portfolio for you. The Robo-advisor will use algorithms to select the best investments for you, providing you with continuous income.There are several things to consider when investing with a Robo-advisor. First, you'll need to research the Robo-advisor to make sure it is reputable. Next, you'll need to estimate what fees you will be charged for their services. Finally, you'll need to factor in the risks associated with using a Robo-advisor. Invest in EFTs, Mutual Funds & Index Funds Mutual funds and exchange-traded funds (ETFs) are both excellent options for diversifying your investing portfolio.ETFs are comparable to mutual funds, except they trade on the stock exchange like stocks. They are frequently, but not always, less expensive than mutual funds. You can invest in certain sorts of firms (for example, huge organizations), specific economic sectors (for example, technology or healthcare), or other types of assets, such as bonds and real estate. ETFs that promote a cause, such as green energy, are also available.Mutual funds are essentially investment combinations. They might be all stocks, all bonds, or a mix of both. A manager of a mutual fund is someone who decides what to put in the fund. This might be a good middle ground for those who wish to invest in individual funds but don't have the time or expertise to examine each stock individually. The major disadvantage is that certain mutual funds, particularly actively managed funds, have significant management fees.Index funds are a popular alternative in the world of mutual funds and ETFs. Index funds try to replicate the performance of a single market index rather than having management that actively chooses stocks and makes transactions. An index fund, for example, may track the S&P 500 index (the 500 largest publicly traded American companies). As a result, you can quickly (and often inexpensively) invest in a wide range of businesses. This gives some security in the event that specific enterprises or sectors of the economy face difficulties. Over time, index funds tend to outperform actively managed funds. Invest in a Dividend Reinvestment Plan One way to invest your money and receive continuous income is by investing in a dividend reinvestment plan (DRIP). With this type of investment, you purchase shares in a company that pays out dividends. The dividends are then automatically reinvested into more shares of the company, allowing you to compound your returns over time.There are several things to consider before investing in a DRIP. First, you'll need to make sure that the company is reputable and has a good track record. Next, you'll need to estimate what fees you will be charged for their services. Finally, you'll need to factor in the risks associated with investing in a DRIP.By choosing a DRIP, you can invest your money and receive continuous income for years to come. Just be sure to do your research first and weigh the pros and cons of this type of investment. Should You Invest All of Your Money at Once? When it comes to investing, one of the most important things you can do is to diversify your portfolio. This means that you should not put all of your eggs in one basket. By spreading your money out among several different investments, you reduce the risk that you will lose everything if one of them fails.However, this does not mean that you should never invest all of your money in one place. There are times when it can be advantageous to do so. For example, if you find an investment that has a high potential return, it may be wise to invest all of your money in it.So, should you invest all of your money at once? It depends on the situation. If you are comfortable with the risk, then go for it! Just make sure to spread your money out among several different investments as well.Invest to minimize taxes and fees When investing, it's important to keep in mind the taxes and fees that you will have to pay. By choosing investments that have low taxes and fees, you can minimize how much money you lose to these expenses.There are many different types of investments that offer tax advantages. For example, municipal bonds are a great option for investors who are looking for tax-free income. Similarly, index funds offer investors a way to invest in stocks without having to pay the high fees associated with actively managed funds.By choosing investments that have low taxes and fees, you can have more of your money working for you. This will help you achieve your financial goals faster. Conclusion $100K is a lot of money, and you want to make sure that it grows safely and steadily. We hope this article has helped introduce you to some of the many different types of passive income investments available, as well as the safest investment options for your $100K: real estate crowdfunding with Holdfolio.With our platform, you can invest in high-quality real estate projects around the country while enjoying all the benefits of passive income investing.Have questions? Feel free to reach out to us anytime. We are more than  happy to help get you started on your journey to financial independence!

Dec 28, 2021

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Multifamily Real Estate Investing: Reasons Why You Should Start Investing in This Asset

More money? We could all do with some of that. Investments made simple? Check. Multifamily assets? I'll take three, please.Investors, old and new, are constantly searching for smarter, more efficient ways to grow their capital with real estate.If you want to secure your financial future, leave the hamster wheel in the dust with a passive cash flow stream, or escape the volatility of trading stocks, investing in multifamily properties is the way to go.Whether it's your first acquisition or you want to scale an existing real estate portfolio, buying a multifamily home is a low-risk alternative for you to grow capital passively and easily. But What is Multifamily Real Estate Investing? Buying multifamily homes for investment is a great strategy for those who want to benefit from a passive flow of monthly income, while their portfolio assets slowly and steadily appreciate.Residential building ventures involve purchasing real estate assets with multiple single-family units under one roof. Investors benefit from a higher revenue stream, greater flexibility with their investment strategy, and better property management alternatives, than single-family home owners. Single-family VS Multifamily Home Real estate investment properties are divided into two categories, each with distinct investment opportunities and advantages.On the one hand, traditional single-family homes are single-unit properties designed to accommodate one family. Investors can inhabit the property themselves, or transform it into a rental unit for profit.On the other hand, there are multifamily properties. What is a Multifamily Home? Multifamily property is any residential complex with more than one unit, separated by shared walls within the same structure. On the small scale, low-rise duplex, triplex, and four-plex homes respectively lodge two, three, and four families. Tenements with more than five units are considered commercial real estate, and can scale up to high-rise apartment buildings with hundreds of individual units.Multifamily assets are valued higher than single-family and require larger capital upfront.Investors often partner with other buyers to share holding payments, expenses, and property management, making the venture more accessible to individual investors.Another popular approach is to invest via multifamily crowdfunding platforms like Holdfolio, because entry minimums are low, and property management is undertaken by the syndicator.This means investors can enjoy a passive monthly cash flow without worrying about tenant acquisition or handover, maintenance, and other hassles associated with the process. Ah, stress-free investment at its finest!Here are our favorite six reasons to start your multifamily real estate investment journey today. Cash Flow and Passive IncomeIn real estate, cash flow is the amount of money that goes directly into an investor's back pocket each month, after accounting for operating expenses.With multiple rental units in commercial real estate, investors gain multiple streams of cash flow. Rents are predictable in strong markets and your income will be too.Passive income is any revenue stream that doesn't require active involvement. Because multifamily properties entail heavier maintenance and management responsibilities, it's important to secure property management for your income to be passive.That's why so many people opt for Holdfolio crowdfunding investment: their vertically integrated property management company takes care of the ongoing daily responsibilities so investment partners can enjoy hassle-free passive dividends. What is the 2% Rule in Real Estate? The 2% rule is a tool used by real estate investors to tell whether or not their investment is worthwhile.This real estate rule of thumb indicates whether property investments are fruitful by calculating the ratio of revenue to initial expenditure. If the rental yield is equal to or greater than 2% of the total investment value injected into the asset it's considered a healthy investment. For example, if you invest $50,000 in an asset, your monthly dividends should be $1000 or more. A Lot Easier to Finance Banks and financiers tend to base commercial real estate loan approvals on the asset's profitability because they generate higher revenue than single-family homes.For the average investor, this means multifamily loans are far more accessible than single-family home loans, simply because the individual's finances and employment situation are more lightly weighted.Moreover, commercial real estate requires fewer loans per unit than multiple individual home loans. Typically crowdfunding investment minimums are around $50k. Holdfolio undercuts this barrier to just $20K, so regular people can profit from the same opportunities as pro investors. SimplicityThrough basic reasoning, we can deduce that obtaining and managing one ten-unit property is simpler than ten individual properties. For example, if you purchase ten single-family homes, you need to negotiate with ten vendors, perform ten separate inspections in ten locations, obtain ten home loans, pay ten transfer fees, and manage ten properties.With multifamily, you only need to do this once. All units are in the same complex, so procurement and labour are simpler and easier.Property management in multifamily investing can be a full-time job. High-density housing provides greater flexibility to outsource professional management so you can enjoy passive revenue without lifting a finger, and without cutting into profit margins.This strategy is particularly attractive for those with little experience in managing rental properties.Insurance can become more complex as the number of investment units increases (particularly those with higher risk amenities like pools and rooftop terraces). However, most insurance providers are well versed in multifamily assets and assemble comprehensive policies with ease.As your portfolio grows, it's usually possible to get a blanket insurance policy encompassing all of your assets from the same provider. Lowered Risk People need somewhere to live. That's never going to change.Because multi-unit rental structures are more affordable and generally more centrally located than individual homes, there will always be a high demand for these facilities. Further, housing demand is relatively inelastic, meaning that when other economic factors change - such as local rental costs - the need for housing remains stable.Of course, occupancy rates can affect any property. But if three units of a 100-unit apartment are left vacant, the owners foot less cost than three unoccupied single-family homes.Buying multifamily homes for investment has a lowered risk, so it is considered a safe investment. Tax Benefits Multifamily real estate investing comes with a wealth of financial benefits and tax deductions.For example, if you have a mortgage to finance the property, you can take a deduction from the mortgage interest paid during the fiscal year. This tends to be higher in the first few years as the loan begins to amortize.Mechanical systems in multifamily properties, such as electrical, plumbing, and roofing are expensive and durable. But their condition naturally deteriorates over time with use and exposure.Depreciation is a concept that allows the property owner to account for the annual deterioration of these structures as an "expense." The depreciation span for multifamily properties is 27.5 years. So, for example, a property worth $1 million could depreciate $36,364 (1,000,000/27.5) per year, even if the property value is technically appreciating.Asset components devalue at different rates. For example, personal property can depreciate over five to seven years, and sidewalks can depreciate over fifteen years.Cost segregation is the process of assessing separate physical assets -personal property, land improvements, structures, and land - and calculating their depreciation rate over a shorter period. By splitting individual expenses, you can accelerate the year-on-year depreciation rates of property components, and gain additional tax savings.It's critical to have a professional top-to-bottom inspection of the property and leave the calculations to your accountant. This process can be complex, and costly if not done correctly. Potential Scalability If you're looking to grow your investment portfolio, multifamily takes considerably less time to scale than a single property. For instance, acquiring a 20-unit apartment building is much easier and more time-efficient than purchasing twenty separate properties.Plus, if you plan to buy more rental units in the same building in the future, you can continue to scale your portfolio with less work.Investors who can occupy a unit within their complex can potentially live expense-free while the other rental units in the property pay off the mortgage, rates, and utilities. Meanwhile, they plan their next multifamily purchase from revenue and equity built in their first investment. How to Buy a Multifamily Property?Let's be honest: the process can take some time and energy.First, you need to select and inspect your desired property. You choose your financing strategy, then make an offer. Afterward comes renovations to ensure the property is habitable for tenants. The last step is to assemble a management plan. If you wish to outsource to a property management company, make sure you account for this in your expenses.To many, this process can feel overwhelming. Don't fret–you still have options. If you want to avoid the menial steps in this operation, opt for crowdfunding.All you need to do is create an online account, select your investment, and deposit your money. If you prefer a simple and 100% passive investment (and want to skip out on property management responsibilities) sign up with Holdfolio to make the most of the advantages of multifamily real estate investing. How do you Value Multifamily Real Estate? Multifamily properties are valued using a simple formula:Value = Capitalization Rate / Net Operating Income (NOI).Let me explain:To determine the NOI, add all the gross rents and other forms of income generated by the property, then subtract annual expenses. In this case, expenses could be renovations, maintenance, property management, depreciation, insurance, and taxes.The remaining value is the NOI.A building's capitalization rate (also known as cap rate) is determined by 'Purchase Price / NOI.' Cap rates are variable because both the purchase price and NOI are variable.Location and local market performance determine the market cap rate, calculated by averaging all the cap rates for comparable properties in the area. To get an idea of what your cap rate should be, ask local brokers, appraisers, and commercial real estate lenders. Conclusion The benefits of investing in multifamily properties are undeniable. Assets come with low risk and high demand, scalable portfolios, slow and steady appreciation, and you spend less time dealing with multiple properties in multiple locations.However, a lot of work goes into selecting and acquiring investments, not to mention the ongoing management and maintenance expenses required to manage the property yourself.Don't be discouraged! Do you want to enjoy all the benefits of multifamily investment without lifting a finger? Holdfolio crowdfunding opportunities provide you with high-level investment latitudes without the day-to-day hassle.All you have to do is create an account, select your property, and make a deposit. It really can be that simple, so join Holdfolio's team of thriving investors today.