Category: Uncategorized
Jan 27, 2021
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The Pros and Cons of Investing in Multifamily Real Estate
Investing in multifamily real estate is a smart way to diversify your portfolio. Investors find multifamily real estate attractive because it lends itself to a slow and steady return on investment. Between Covid-19 and rapid changes in politics, today’s economic outlook is uncertain and rookie and seasoned investors alike are looking for investments that will grow their capital. Multifamily real estate is less complicated than other commercial real estate opportunities and can generate a strong cash flow. Keep reading to explore the key pros and cons of multifamily investing. What is multifamily real estate? A multifamily property contains more than one rentable unit - like an apartment complex or high-rise. Investing in rental properties, like multifamily units, is a preferred strategy for investors who want to generate an additional monthly income at a relatively low cost. What are the pros of investing in multifamily real estate? Investing in a multifamily property holds its fair share of advantages. Large demand = lower risk. Multifamily investing is considered a safer investment than other real estate assets. Even in the face of economic uncertainty and poor job markets, people need a place to live. During an economic downturn, rental properties may see a boom as people sell their homes, relocate, or move into a rental. Grow your portfolio faster. Investing in multifamily real estate is a unique opportunity to expand your portfolio in a short period of time. It’s a lot easier and timelier to acquire 30 apartment units than to acquire 30 single-family homes. Avoid the headache of multiple loans, sellers, and inspections by investing in a multifamily property. Streamline your property management. Investing in a multifamily property improves daily efficiencies in your property management. By managing one property with multiple units, you save time and money traveling between properties to perform maintenance duties. Also, it makes more financial sense to hire a property manager for a multifamily property rather than a string of single-family homes. Increase your cash flow. One of the biggest advantages to investing in multifamily real estate is the ability to significantly increase your cash flow. Investors are attracted to multifamily properties because of the predictability of income each month. In both bull and bear markets, rents are collected each month, and units are easily turned over for new leases leading to a steady cash flow. From lower risk to higher rewards and increased efficiencies in your property management, put your investment capital to work with multifamily real estate. View open investments with Holdfolio. What are the cons of investing in multifamily real estate? Despite the strong advantages of investing in multifamily properties, we wouldn’t be doing our due diligence if we didn’t share some of the drawbacks of this investment strategy. Increased competition. The advantages of multifamily real estate draw attention from new and experienced investors alike, creating strong competition in the market. This can pave the way for more experienced investors to crowd out the market because they may be more likely to pay in cash or appeal to sellers. Newbie investors may find luck partnering with experienced investors or joining a real estate crowdfunding platform like Holdfolio. Higher upfront cost. Depending on where you’re investing, multifamily properties can be extremely expensive, much more expensive than a single-family home. Cost tends to be the biggest barrier to new investors, even for seasoned investors. Most banks look for investors to put down at least 20% as a down payment. However, banks are more likely to grant loans for a multifamily property than a single-family because there is less risk involved. Despite the higher upfront costs and competition, avenues like real estate crowdfunding platforms have become attractive to multifamily investors. Crowdfunding platforms allow investors to put a small amount of capital into a property to become a shareholder. Diversify your portfolio and increase your cash flow with multifamily real estate in 2021. Assess the pros and cons and seek the best investment for your wallet. Start investing with Holdfolio today.
Nov 20, 2020
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The Impact Of The Coronavirus on Real Estate Investing in 2021
It’s been more than six months since COVID-19 hit the country, and ever since then millions of Americans have been affected by the financial, economic, and social implications of the pandemic. From national lockdowns to financial insecurity, the real estate industry has been dramatically impacted. But, what does real estate investing look like in 2021 as we begin to gain more certainty on the path forward? Keep reading to learn about investing in real estate in 2021. The Impact Of Coronavirus On Real EstateWhen the coronavirus shut down businesses and schools across the country in March, the effects of the pandemic on real estate and investing were felt almost immediately. Tenants fell behind on rent, mortgages went into forbearance, vacation rentals were canceled, and property sales decreased. Despite the effects of a national lockdown, the real estate market has seen a rebound in the second half of 2020. In fact, home prices were up 15% year over year at the start of November and Zillow predicts that home values will increase 4.1% in 2021 due to renewed market optimism and spikes in sales this summer and fall. While the long-term effects of the coronavirus on real estate are still uncertain, rebounds in the market this fall have given investors and buyers hope for 2021. Real Estate Investing Opportunities In 2021New and experienced real estate investors may be unsure where their best investing bet lies in 2021. While there are housing booms in cities across the country, many Americans still find themselves in precarious financial situations and may not be in a position to buy a home. This poses a unique opportunity for house flippers. With lower demand in some areas, prices are driven down and the opportunity to flip houses is valuable and lucrative. Access to capital and loans may be an issue for some investors with lenders slower to give out loans at a time when many people’s finances are in a sensitive position. This positions real estate crowdfunding platforms at the forefront of real estate investing in 2021. Crowdfunding platforms allow investors to invest in real estate in a low-risk high-reward model. The initial investment is low, it’s mainly passive, and is a simple way to diversify your real estate portfolio. Learn more about real estate crowdfunding platforms for accredited and non-accredited shareholders like Holdfolio. Vacation rentals also provide a way to make some extra cash on the side. With people in between jobs or considering relocation, the demand for short-term living arrangements is on the rise. Rental platforms like Airbnb and VRBO can also be more lucrative as you charge guests more for a short-term stay versus traditional renting. Lastly, the value of apartment complexes continues to rise. With cities converting office spaces into apartments and young people looking to rent instead of buy due to job insecurity, expect multi-family investing to be on the rise in 2021. Real estate investing in 2021 may seem uncertain. But, there are many unique opportunities to diversify your portfolio with real estate in the new year. Assess your options and seek the best investment for your wallet.
Jun 15, 2020
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Q&A for New Investors: Part 2
Here is Part 2 of our Q&A Interview for new investors. How long will the investment be? Holdfolio’s goal is to own our real estate over the long term to collect rental income & take advantage of the benefits of owning real estate. It is in the best interest of everyone that we sell the property at the right time, this event may occur sooner or later depending on market conditions, performance factors, and desires of the investor members. If it is not the right time to sell, then Holdfolio will continue to hold onto the property for cash flow. Do investors share in any of the tax benefits of owning real estate? Yes. We will be writing off depreciation on the property and all other business expenses related to the operation of the rental properties. So, the taxable income you earn from the investment will be reduced by these tax benefits. What makes Holdfolio different from other crowdfunding platforms? Holdfolio is operated by full-time real estate investors. This means there are no middlemen and all the opportunities on the platform are sourced by Holdfolio. How do the legal agreements describe the relationship between investor members and the manager? For the most part, the manager retains the right to make all day to day decisions, however there are certain decisions that will be made through a vote of the investor members in order to reach a majority consensus. The partnership is facilitated by a limited liability company & the manager is the responsible party for the acts of the company. Investor have zero liability. When are profits distributed to investors? Holdfolio disburses profit to investors quarterly. This means that you will receive profit from your investment deposited directly into your account during the first couple weeks of January, April, July, & October. To date the average return to partners is 10.17%. *This return does not take into account possible increases or decreases in the value of current investments. Further, the performance of our portfolios in the past does not guarantee that they will be successful in the future. More information about our track record is available to registered users. How do I get my invested capital back? After Holdfolio holds the property to collect rental income, the property can be sold for a profit or refinanced with long term debt. In the event the property is sold, you will receive the return of your invested capital plus the profits from the sale. If the property is refinanced, you will receive a return of your invested capital & still keep ownership in the property. It is also possible for you to sell your ownership to recoup your investment. In this scenario, either Holdfolio can purchase your ownership, or we can assist in a match-making effort to find someone interested in purchasing your ownership. Holdfolio retains a first right of refusal to purchase your ownership should you decide to sell. In general, you cannot sell your ownership within 12 months from your initial investment date.
Jun 15, 2020
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Q&A for New Investors: Part 1
Here at Holdfolio, it is common for us to receive similar questions from new investors. This interview was conducted with one of our investors. What kinds of questions did you have for Holdfolio during the brief introduction call? The call mostly was getting to gain a better understanding of how Holdfolio operates. What is the minimum investment? It can vary depending upon the specific investment opportunity but is typically $20,000. Why did you choose Holdfolio? It is a passive approach and the returns are attractive. I'm not looking to spend time managing the investment and didn't want the liability and potential headache that comes with owning real estate myself. What were the steps and processes to invest with Holdfolio? It was pretty simple. I went through a 3-step process online to invest. After signing the investment agreement I was able to fund my investment. I had the option of sending a wire or mailing a check which was deposited to Holdfolio's escrow account. How much time do you spend managing your investment with Holdfolio? I log on to my dashboard every so often to check the status of investments. Everything is updated quarterly. I was get email updates and distribution details so it's really nice.
Aug 23, 2017
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Foreclosures 101: What They Mean For Investors
Foreclosures continue to be one of the hottest items in the world of real estate. How do they work. What is the appeal for investors? What ways are there to participate?Foreclosures 101 A foreclosure is a legal proceeding which seizes real estate from an owner and liquidates it through a sale to compensate creditors. The most common reason for foreclosure is when a homeowner fails to pay their mortgage payments. Once a loan payment becomes 30 days late, it goes into default. Depending on where the property is, it may move into the legal foreclosure process once that payment is 90 days late. Although some lenders have dragged their feet on foreclosing when there are a lot of them, in order to preserve their own balance sheets. There are other reasons for foreclosure too. This includes past due property taxes, HOA liens, federal tax liens, and condemnation due to property condition or eminent domain, or other breaches of contract with a mortgage lender. Sometimes the owner is genuinely at fault for failing to keep their end of the deal. In many other cases lenders have fraudulently foreclosed to seize assets, or it is the result of paperwork glitches. Once a foreclosure is granted, properties are generally offered at auctions. If no winning bids are received, the creditor gains control of the property.What Foreclosures Mean for Real Estate Investors In one word – it means ‘opportunity’. Foreclosed properties need to be sold, and are typically offered by motivated sellers who are in need of selling that asset fast. This normally means they can be purchased at a discount. As of August 2017, Realtytrac reports there were 626,631 properties in the US in some stage of foreclosure. Discounts mean that real estate investors can buy these properties, and acquire them in a good equity position. They can sometimes be immediately resold for a profit. Though many may require significant repairs and updating before they are fit for renting or resale.How to Buy Foreclosure Homes There are a variety of ways to acquire foreclosure properties.In pre-foreclosure directly from the owner Via the MLS At foreclosure auctions Buying non-performing loan notes and foreclosing Via real estate wholesalers Participating in a fund or partnership which buys, rehabs, and rents themForeclosures continue to be a popular topic in real estate investing. They can still offer value to investors. There are many reasons homes get foreclosed on. There are several ways to participate in these opportunities for all levels of investors from brand new to highly experienced.
Aug 9, 2017
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What Real Estate Investors Would Do Differently If They Could Go Back
If you talk to experienced investors today, you’ll find a few common threads in what they would do differently if they could go back and start over. Learning from their mistakes now can certainly help in making the most of your investment opportunities.Invest EarlierOne of the biggest and most common regrets of experienced investors is that they didn’t begin investing earlier. How soon you start investing makes a massive difference. Even a small amount invested now can grow into the millions by the time you retire. Whereas if you put it off, you’ll have to work harder, and give up a far larger percentage of your earned income, and take more risks in order to try and catch up. The earlier you invest, the more time you give yourself to make mistakes and learn. Hold, Hold, HoldAnother frequent regret is not having sold properties. Eventually real estate assets increase in value and have more income producing potential. At times, it is wise to exit to get the most cash out of a home, but that may pale in comparison to the potential gains of long term hold properties. Buy Less Junk, Invest MoreWhether it was putting off investing to buy junk that ‘promised’ instant gratification, or blowing all the gains from flipping houses on car leases and partying, most would go back and splurge less on items that just rust or accumulate dust, and reinvest it instead. Invest in LearningIn investing it is what you don’t know that gets you. And you never know it all. Every moment spent learning can pay vast ongoing returns. No matter what the market and weather does, no one can ever take that from you. Make Bolder MovesThere is probably nothing worse than getting old and realizing all those ‘safe’ plays you made, all the years spent watching TV in comfort, and times you didn’t go somewhere because it was too adventurous, was all a waste. Decades were wasted, often without any rewards for it, and with little real financial security gained. Make bold moves while you are young, and while you can enjoy it. Even if they don’t work out you’ll have plenty of time to catch up. Think Longer TermA five year plan simply isn’t long enough. To really be able to enjoy the fruits of your investing and to hold onto them you’ve got to think and plan a lot longer than that. The most successful think 100 years or more ahead. DiversifyNo single thing, strategy or asset will perform amazingly all the time, forever. Not house flipping, not your favorite rental, not the stock market, not your business. The key is diversifying. Diversify into different assets, strategies, and locations. There is a lot of benefit to be found in learning from the mistakes and regrets of others. Learn from these clues, so you don’t make the same mistakes, so you can enjoy the journey more, and be pleased with the end result.
Jul 20, 2017
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Three Keys to Successful Investing
Want to be successful in your investing? Focus on these 3 keys... There are a lot of factors that we look at when digging into investments. Yet, we often get distracted from some of the most important elements. Here are three critical keys to truly profiting from investments, and creating sustainable results that will last. Minimize Fees In his recent book ‘Money – Mastering the Game’, Tony Robbins reveals that one of the biggest threats to our financial futures and profitable investments are fees. In the world of real estate, individuals could face a barrage of multiple layers of fees with mortgages, brokerage, and banking: Many of which don't make sense or are confusing. This can be what depletes potential double digit gross returns, down to what may actually be negative yields once you count inflation. It is important to differentiate junk fees from legitimate fees in your investments and obtain quality, professional advice. You usually get what you pay for. However, by investing smarter we can strip away many of these layers, and get good returns, with good management. Minimize Taxes Smart investors prioritize taxes when investing. They take them head on, instead of just burying their heads in the sand. Taxes can take a 30-40% chunk right off the top of your returns. That dramatically changes what you thought you were going to get from an investment. Fortunately, there are some investments which offer tax breaks, and vehicles for investing which the IRS has established to allow investors to enjoy tax deferred or tax-free investments. Use these and you will not only stay in the black when others fall into the red, but you can generate out-sized returns, and build wealth and income much faster. Imagine being able to invest 40% more each year? Diversify No matter how carefully you select investments things can happen. Markets can change, corrections can happen or even natural disasters can come along. If you have all your money in one type of investment, or one asset, you are facing risks every day. Even within the same sector or asset class, you want to hold multiple units. When you are in multiple locations you’ll most always be able to generate income and have a cushion, no matter what happens externally. SummaryWe can use all types of fancy calculations and weigh all kinds of metrics when evaluating investments. If you are not watching the fees, watching the taxes, and fail to stay diversified, you could find your profits not being so profitable!A lot of getting the best ROI comes down to smart due diligence, intensive research and knowing ALL the numbers.
Jul 14, 2017
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20 Habits of the Smart Investor
What good habits will you find common among the most successful real estate investors? Goal Setting Setting goals is critical to get where you want to go. Everyone you know who has achieved great things has set clear goals. Think about applying SMART goals: Specific, Measurable, Achievable, Relevant and Time bound. Ongoing Education Going deep into debt for a college degree is only part of your education. Much of what you learn is self-taught by life experience. Being a lifelong learner is a sign of true intelligence. Focus on Your Process Having goals and a good investment strategy is the start. The real success comes in focusing on the right process and improving on it. Process and protocol can simplify how you operate and give you a clear roadmap that you can gather data with. Compete with Yourself Real leaders focus on getting better and improving themselves and their results year over year. Don’t spend all your time worrying about competition, compete with yourself. Eliminate Time Wasters Identify the time drains in your day and put a plan in place to remove them. Look at how often you answer your email, look at social media, take unnecessary phone calls and shuffle paper. This applies to both people and activities which are a waste of your time. Adapt If one thing is for sure, it is that things are constantly changing. Those best at adapting have the best chance to stay ahead. Remember the only constant in life is change. Be Persistent Persistence is the difference between the successful and the rest of society. Remember the story of Thomas Edison? “I have not failed. I've just found 10,000 ways that won't work.” Focus on the Positive You manifest what you think about. Stay positive and get positive results. This is a daily choice. You can’t control everything that happens, only how you look at it and react. Good Health Habits Good health habits help your mind work optimally and gives you the ability to stay positive. This increases your energy levels and stamina. You don’t have to become a bodybuilder, just practice healthy habits daily. Morning Rituals Smart investors have good morning rituals. They might include stretching, a cold shower, a meditation or quiet time or simply breakfast! These help them focus on their goals, stay positive, and stay healthy. Planning Ahead for the Day Create your own schedule, or you’ll always have your life and results controlled by others. Elite entrepreneurs like Elon Musk schedule their time down to segments of just a few minutes. Visualize Success Setting goals aren't enough. The real change happens when you apply visualization. This engages emotion and positive thinking and puts your goals into action. Practice Thankfulness Intentionally contemplating thankfulness daily makes a big difference in our mindset. Operating from a mindset of gratitude will change your outlook, reactions, and can really help when it comes to building relationships. Get Enough Sleep Sleep is underrated. It affects our metabolism, how we feel, and our ability to think well. Getting enough sleep is actually more critical than the amount of time you put into your waking hours. Nurture Positive Relationships Who you hang out with matters, a lot. Make sure you are spending time with positive people who will lift you up. Work on building real relationships and connections. Generate Multiple Streams of Income No matter how smart you are markets and individual investments can take some wild turns. If all your eggs are in one basket that can be a problem if the market corrects. If you have multiple streams of income you are setting yourself up for a better outcome. Work Smarter Work efficiently, and know when you are at your peak effectiveness. The question of putting in 12 hour days when your peak ends at 8 hours is something you need to gauge. Learn how to make the most of those 8 hours instead. That’s when you’ll get the best ROI on your time. Master Self-Reliance If you want good things to happen, it’s on you. It comes down to you to solve problems and take action. Take ownership of this fact, and look for ways to be self-sustaining to cover yourself financially. Make Time to Play Along with sleep, and hustling hard during your active hours, taking the time to play and actively de-stress is critical. Why work so hard on everything else on this list if you aren’t going to take the time to enjoy the journey too? Give The pinnacle of success isn’t really just amassing a fortune and hitting ‘your number’. The most successful go on to give big, pay it forward, donate, and volunteer. You don’t have to wait either. Make this a part of your process now. You may not be able to implement all of these at once. Take one at a time and focus on mastery and then move to the next. Each goal that is achieved and reward reaped gives you the motivation to push forward toward success in not just real estate investing but in your everyday life!
Jul 6, 2017
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Mar 30, 2021
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