Creative Real Estate Investments (REIT And Fundrise)

Is it true that you can buy real estate with no money down? The answer is, yes, it is possible. If you go back to some of my posts, I think I’ve shared with you how I could expand from zero to 24 just by doing a cash-out refinance.

For those who don’t know what a cash-out refinances is when you take the equity out of a property, it’s typically done on a rental, or you can also do a HELOC. If you take a HELOC out, it has to be done in a house where you live, but you do a home equity line of credit, and then you take the money out. You only pay interest based on that amount you take out, and you use that money and invest it in another real estate.

Some of you might think, “Well, I still have to pay fees for it” Yes, you’re not taking that money putting into real estate. People are getting work done for you. They still have to do the appraisals for the property. 

You are paying the band for the service that they’re providing. Nevertheless, you’re buying real estate property without using money out of your pocket because it’s been taken out of the equity from rentals that you already own, or maybe from a partnership that you managed to work out or just as I did in the purchase of my 17 units.

There are other ways that you can buy real estate with as little as $5 or even $500. Depending on what you liked the most, I’m going to share two additional options where you can invest in real estate with very little money, starting from $5, going all the way to 500. The first one is called REITs. REITs stands for Real Estate Investment Trust. 

REIT

Some companies own and operate income-producing real estate. What does that mean? They own a portfolio. They own commercial real estate ranging from offices, apartment buildings, warehouses, etcetera. You can come in, and as an investor, you can buy shares of it. Think of it as a company. You want to invest in the Facebooks of the world or the Googles, the Amazons of the world. You want to put equity, and you want to help them out to continue to expand. You buy certain shares and their company in exchange for equity, in exchange for dividends for those companies who offer dividends, and you continue growing.

It’s very similar to a REIT. You buy, you watch the performance. If they lose money, then you lose money. If they make money out of it, you make money out of it. Some of you might think, “Well, I don’t know anything about real estate investing and stuff like that. Why would I ever want to invest in a REIT, knowing that it has a chance of losing money?” It’s very easy, Tax purposes. Just like in real estate, if you lose money, you have the opportunity to take those tax losses. Those REITs that you invested in and applied those towards your annual taxes so they can reduce your taxable income.

reit

REIT stands for Real Estate Investment Trust. They own commercial real estate ranging from offices, apartment buildings, warehouses, etcetera.

Fundraise

The second option is a company that is called Fundraise. Earlier this week, I was about to open an account in Fundraise, and I figured, “You know what, let me just hold off on it and do a video about this so you guys can take a look at how they work and what is it that I look for.” It’s very similar. They are a portfolio,, and You know what? Let’s just dive into my screen, and I’ll show you.

I found this website that I thought was pretty cool. It did not exist, or at least I haven’t come across it when I first started looking into REITs. It’s very comprehensive, REIT.com

This website walks you through everything that you need to know about REITs. It tells you that individuals can invest in a variety of different ways. Real estate investment trusts are even a way to do that. They’re listed on major stock exchanges. We’re going to get to that in a minute, and the values that they’re typically assessed for, and they explain to you a little bit about the analysis and how you should go about it and understanding how, whether they’re going to perform or not and how they measure their earnings and stuff like that.

Then they offer you data. They give you the option to explore a REIT company. Some of them are investing in data centers; some of them are in infrastructure, residential, real estate, mortgage companies, healthcare. Some of them are diversified. You can buy REITs at different prices. Even last year, when I was looking into it, you can find REITs starting at $5 all the way to like a hundred. 

Ads

This is like a repository where they show you all of the inventory of available REITs that you can buy in the market. Be aware of how much you can afford. Whether you want to do the analysis based on prices, just focus it solely on numbers or do the research based on the news and see the historical performance.

Robinhood.com

Let’s say you go ahead and you want to buy EQR. It stands for Equity Residential and is a publicly-traded real estate investment trust that invests in apartments. There’s a platform that’s called Robinhood.com. I do have a referral code, so when you use my code to sign up, we both get a free stock.

It appears on this platform, and it’s up to you whether you want to buy it or not. Whether you want to finance it, they do give you the option to finance that or give you credit. I’m not sure what they typically require because you should have what I do. I just transfer funds, and I just started buying it. You are more than welcome to check out their credit options. 

Robinhood Gold is that financing package that I was telling you about. This is an advanced version of it. The application and the account are free to create. The reason why I am suggesting or recommending Robinhood in this case, there’s not so much for the free stocks that you and I can get. It’s more about the fees. The majority of the trading platforms, charge you a fee and Robinhood is actually free of charge last time I checked.

If you get started with it and want to learn, that’s something that can save some fees here and there, definitely do that. The only disadvantage about Robinhood is that they don’t give you the tools to do the analysis like companies like Vanguard or Charles Schwab will normally do. 

You have the option to get up to two times buying power with the extension over credit, without even depositing any money of your pocket. I’ve never applied for this program. I think they recently launched it last year, in the middle of last year, If you don’t have options on your own and you would like to leverage their credit line, feel free to go ahead and do that.

best reits

The only disadvantage about Robinhood is that they don’t give you the tools to do the analysis like companies like Vanguard or Charles Schwab will normally do.

Fundrise.com

They are a real estate investment platform. What they do is that they take a pool of various investment types, and they just pull them all together into the site. Depending on your investment plans, they will help you or you can actually decide the best program or the best portfolio that will work for you. 

Are you looking for some supplemental income? Are you looking for a consistent income stream that’s coming besides whatever you’re making already, or you’re looking for something that’s more of a balance investing, so you building walls but then through that certification, or you’re looking for long-term growth?

In my experience, whenever is long-term growth, you’re not going to see much in return in the early years because you’re just riding through the entire roller coaster of investment, but then long-term, past 10 years, 20, whatever your definition of a long-term means, it’s going to show that you are going to have the highest return. As you can see, they even show you in the graph. For example, dividends is when they pay you, depending on the company, depending of the portfolio, typically, they do that on a quarterly basis.

Every quarter, you’ll receive credit, like guarantee quarterly payments through dividends.

As you go through the different folders or the various portfolios, you will see that dividend bars start decreasing a little bit. But then, in terms of appreciation, these are typically for real estate portfolios that focus solely on cash-flow and not so much for appreciation. As you can see, they’re not growing as fast, or maybe because you’re investing for the short-term, so you’re not giving it sufficient time for the portfolio to season long enough to appreciate over time.

Ads

Those are some of the factors that you should consider. Then as you can see, appreciation starts going to the max if you’re doing it long term. Same thing with the total return. On average, this is how much you get; it’s all that you’re looking for. If you’re looking for something today, and you need money today, then yes, you should go with this portfolio. Suppose you’re looking for money most likely tomorrow. In that case, you’re planning for retirement, you have a good job where you make good money with your rentals or your flipping business, and you just simply don’t need additional supplemental income, then you go ahead and invest this in the long-term.

If you want to start investing in automotive because you want them to invest some money for you, go ahead. I prefer not to do that because I like to learn all about the portfolio, all about the investment, and then besides doing baby steps, what’s best for me. I like to get a handle of things. Some other people are more relaxed and laid back and they just decide to invest it in automotive because they’ve done the proper due diligence, the analysis long-term, and they just let the money sit there and have it reinvested.

RESOURCES & LINKS MENTIONED IN THIS EPISODE:

RobinHood (Claim You Free Stock): https://join.robinhood.com/gladysp160

– Fundrise: http://bit.ly/2OALwW9

– How I grew my portfolio from 0 to 24 properties: https://youtu.be/Z2yubZzAIFI

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