How Real Estate Investing Can Support Entrepreneurial Efforts

As a starting 18 year old entrepreneur, one of the best decisions I made was asking 33 banks to lend me money. They all said no. But it taught me tenacity, and it was number 34 that ignited my first real estate deal.

Looking back 20 years later, I am grateful for this wide-eyed believer and his precepts. Because without understanding the ins and outs of real estate in particular, I would not have been able to run my business successfully. Here are his three tips on how to use real estate to support entrepreneurial endeavors so you don’t make the same mistake.

1. Leverage passive investing

Starting a business takes a lot of time, so any form of passive income is very valuable. For those wondering what passive income means, it’s the income generated by a ride that doesn’t involve a lot of active time. One person I have worked with and followed in the past is Justin Donald, a passive investing educator. After reading his content, it is clear that real estate can be one of the popular vehicles for passive investing.

From mobile home parks to massive skyscrapers, there are many different versions of real estate investments that can provide consistent passive income. So you don’t have to start with a skyscraper, you can start small. As your unearned income grows, not only will you be able to have a better cash position, but ultimately it will save you time to focus on your entrepreneurial endeavors.

2. Consider financing options

One smart investor I know is in the middle of a pretty complicated deal. But after talking to him, I learned that he doesn’t own much real estate. It struggles. This is because banks usually prefer collateral. Bank understands real estate, but most of the time he doesn’t understand how valuable his other businesses are.

Real estate can be used as collateral for large business transactions that require financing. Banks speak this language. They understand and love it. Another lesser-known option to consider is the Debt Service Ratio (DSCR) loan. DSCR loans are based solely on cash flow generated from the investment property, not on personal income.

3. Realize that it doesn’t have to be long term

One of the misconceptions about real estate is that it is a long-term investment because you need to hold onto it for a while to be worth buying. I have to admit, most of my investments have been long-term real estate investments. However, that’s not how it’s always done.

I’ve been reading information about wholesale real estate investing lately and am intrigued that real estate is also a short-term investment, sometimes taking less than 30 days and requiring no money. Whether you are an investment newbie or an enthusiast, you can find success leading to more and often greater opportunities. In today’s market, the opportunities that can lead to long-term investments seem endless.

It took me a while to finalize my first real estate deal, but since then I’ve been able to understand how real estate investments play into the long game of entrepreneurship. Not only can this kind of investment help fuel other projects, but as digital currencies become more leveraged, it can create other opportunities that may not have been available before.

The opinions expressed herein by columnists are their own and not those of

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