Today’s first caller asked about using annuities to begin investing in real estate. Is this a good strategy, and what’s the best way to get started? That’s the first question I’m answering on this Q&A episode!
Before I get to your questions, I’m sharing the latest data on the housing market and giving an update on what’s coming in terms of real estate pricing and interest rates. Then I’ll answer your questions about annuities, LLCs for real estate, and using a HELOC to pay down your mortgage. Press play to hear my A’s to your Q’s!
On this episode you’ll learn:
- How to use annuities to buy real estate.
- What you should know about LLC structuring.
- How to use a HELOC to reach your financial goals.
How to Use Annuities to Buy Real Estate
I don’t personally invest in annuities, but I believe you can use the cash flow or a lump sum payment in any way you see fit. It can be used just like cash. If I were in this position, I’d use that lump sum payment as a down payment on a rental property. I think that’s a great strategy, and if you need help getting started, you can schedule a free call with my team to set up a game plan.
What You Should Know About LLC Structuring
I’m not an attorney, so I can’t give legal advice on setting up your legal entities. I’d suggest speaking to a legal team that specializes in real estate, such as Corporate Direct. That being said, this has been my experience in my real estate investing career: most attorneys will advise you to keep a certain value in each entity. My experience has been in the $250-300k range. The reasoning for not using one LLC for all of your properties is for liability. If your LLC is sued, the entire value of your portfolio would be at risk. However, of course this depends on many factors, such as how many properties you have.
How to Use a HELOC to Reach Your Financial Goals
Personally, I love using the HELOC as a vehicle for paying off debt and investing. However, this strategy takes a lot of discipline, so it may not be for everyone. I’d suggest checking out my book, How to Pay Off Your Mortgage in 5 Years, to learn more about how this strategy works and to decide which option is right for you.
Ask Me a Question at morrisinvest.com/clayton
Episode Resources
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Corporate Direct
How to Pay Off Your Mortgage in 5 Years
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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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