As interest rates rise and the market shifts, are single-family homes still the best investment type? Or are syndicates a better investment in today’s economy? This is an excellent question, and it’s the first one I’ll be answering on today’s Q&A!
This episode of Investing in Real Estate features three great listener questions on the best investment type in 2022, transferring properties into an LLC, and deciding on what banking product to use to buy properties. I hope you enjoy this Q&A episode!
On this episode you’ll learn:
- My thoughts on single family investments vs. syndicates.
- What you need to consider about transferring a property into an LLC.
- How to decide what interest rate is worth using to invest.
My Thoughts on Single Family Investments vs. Syndicates
As the Fed continues to hike interest rates, I understand the concern about investing in real estate. However, it’s important to realize that these rates are actually returning to normal. I also understand the appeal of investing in syndicates, but for me personally, there are not enough tax incentives in comparison to residential real estate.
For me, single-family residential real estate has worked for me and it will continue to work. In the long run, interest rate shifts are pretty insignificant and I won’t allow them to distract me from the strategy that has allowed me to build wealth. That being said, there is no one-size-fits-all strategy for investing.
What You Need to Consider About Transferring a Property Into an LLC
Many investors wonder if transferring a financed property into an LLC will trigger a due-on-sale clause. I’m not a lawyer, but many lawyers I’ve talked to have said that this rarely (if ever) happens. If you’re worried, I’d suggest reaching out to a real estate lawyer (like Corporate Direct). Another great resource is the book, Loopholes of Real Estate by Garrett Sutton.
How to Decide What Interest Rate Is Worth Using to Invest
Robert Shaman once told me that if his return rate is higher than his interest rate, he would take that deal any day of the week, and I agree! It’s all a numbers game. If you’re deciding between two products, you could either go with the lower interest rate or utilize both!
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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