Many have watched how I used my real estate career as a stepping stone into my real estate investing business.  To this day, I still purchase properties so the tenants can amortize the loan with no out of pocket cost to me after taxes.  I am able to hold on during the bad times and cash flow with equity increases in the good times. 

Below are some questions from a real estate investor who is just beginning and my response to his questions:

Question:

Hi, Walter!  I’ve purchased your products in the past.  My question is in regards to buying investment properties for our own retirement. Starting from scratch, would you invest in SFR, Condos, 1 to 4 units, 5 units and above? Would you stay away from HOA’s or does that matter to you? Commercial property?

Also, I live in Southern California and prices are high…and getting higher.  Would you invest in another state and have someone manage it for you or keep your investments near you?  Thanks for your advice, it’s always been helpful.

Answer:

I don’t care so much as to the vehicle.  On the bad side, condos have H.O. dues, 5 or more units have less advantageous financing, and commercial has a propensity for higher vacancy factors.  That being said — price is the great equalizer. 

I currently own (and have done so for decades) all the types of property you mention.  They all serve me well as retirement vehicles.  I want you to invest where you can touch your property.  Lower prices say in Nevada or Arizona are equalized by higher management costs, less personal involvement, and less knowledge in the development of the deal.  Find a fantastic value locally.  They are all around you.  Make a lot of offers! 

In California, I used a simple qualifier to determine if I wanted to look at an investment property.  I would have to be able to live there and monthly rent had to be at 1% of sales price.  The deals are going fast, hurry before the fixed interest rates go up again!

It is not that hard when you take the “flipping” mentality out of the picture.  Buy a business that is your business while you are doing your business. Live off of it when you quit your real estate brokerage business. 

Walter Sanford has been designing and implementing real estate systems for 30 years.  One of the most successful REALTORS® and now wealthy from his systems, Sanford teaches his systems and strategies through his products, seminars, and personal coaching producing the best results in the industry.  Do what works, do what is proven.  Hire Walter Sanford.  Call our office at 800.792.5837, email walter@waltersanford.com, or chat with us online at www.waltersanford.com.