Real Estate Investing News and Advice!

Welcome to your source for real estate investing news, insights, and guidance.

As industry experts, we stay up-to-date with real estate market trends, and actively work to stay ahead of changing market conditions. We’re excited to share our research and analysis with you! With these market insights, and real estate investing tips, you’ll have a competitive advantage over other investors in your local market.

The topics we cover include real estate news, interesting market trends, buying and selling real estate, and managing rental properties. We also share company news from Gatsby Investment, so you’ll have the inside track as Gatsby continues to expand operations.

Want to learn even more? Click the links to view educational articles, press releases, and explainer videos.

Work Doesn’t Build Wealth

I’m a big fan of hard work. A strong work ethic is the backbone of the American economy. Without it, the whole system falls apart. But work doesn’t build wealth.

Very few people will ever get wealthy from their income. For starters, there are only so many hours in the day. So your income potential is limited by how many hours you can commit to work and how much you can accomplish in those hours.

Secondly, most jobs just don’t pay enough to create wealth. Even an attorney making $100 an hour with a standard workweek only earns $208,000 per year. It’s a lot, sure. But once the taxes are taken, bills are paid (including those expensive student loan payments), and reasonable needs are met, there’s not a ton left.

So what does it take to build wealth?

The secret to building wealth and achieving financial freedom is to make your money do the work.

How to Make Your Money Work

When you put your money to work, it can work round the clock, generating wealth while you’re sleeping, handling projects around the house, or working your day job.

The way you make your money work is by using it to buy or create assets that will appreciate over time and/or generate passive income.

Here are a few examples of making your money work for you:

Use your income to purchase or build a business. Many business models are fairly passive. For example, automatic car washes, laundromats, and vending machines can bring in fairly good money without requiring much time. If you’re interested in a business model that requires more active management, you can hire a manager to oversee operations so that you don’t have to invest too much of your own time in the venture.

Invest your income in rental properties. Rental properties come with several financial benefits, including passive rental income, long-term appreciation, and tax breaks. Turn-key properties typically require very little active management once the renters have moved in, but the upfront financial investment is substantial.

Invest your income in a real estate syndication project. If you want the benefits of investing in real estate, but you don’t have the funds to purchase a property on your own, syndication may be a good fit for you. Similar to crowdfunding, syndication pools funds from multiple investors to finance a single, professionally managed project. It could be a quick fix-and-flip, a multi-family development, or a long-term rental. And, because the deal is professionally managed, there is no industry experience or knowledge needed.

What Happens When Your Money Works for You?

Let’s crunch some numbers to compare building wealth with income vs. building wealth with investments.

Let’s assume you make $100,000 per year. And you budget your money so you can save $12,000 per year.

If you consistently save $12,000 of your income every year for 10 years, you’ll have $120,000 at the end of year 10. Keep this up for 20 years, and you will have $250,000. That’s not bad. But it’s also not wealth.

Now, what if you take the $12,000 saved at the end of Year 1 and invest it in real estate syndication projects earning 15% per year? (By the way, 15% per year is realistic, given that the average annualized return for syndication from Gatsby Investment is currently 23%.)

At the end of Year 2, you would have your original $12,000 plus the 15% return ($1,800) plus the $12,000 accumulated over Year 2. That gives you a total of $25,800.

At the end of Year 3, you would have your total from Year 2 ($25,800) plus 15% on that ($3,870) plus the $12,000 accumulated over Year 3. That gives you $41,670.

The pattern repeats each year, and by the end of Year 10, you have $243,645! Now, keep this up for 20 years, and you end up with $1,229,323!

This magic wealth-building strategy takes advantage of compounding interest. It allows you to grow your wealth exponentially by reinvesting your investment earnings until you have a large enough portfolio that you can literally live off the returns. That’s wealth.

Start Building Wealth Today

Your income will never make you wealthy. But when you put your money to work, you can build wealth that can bring you financial independence and even provide for future generations.

The longer you wait, the less time your dollars have to work their magic, so put them to work today. Start building your business, buying your rental properties, or choosing your real estate syndication projects now.

What the NAR Settlement Means for Real Estate Investors

Real estate agent fee structures may be changing. And that could have a big impact on real estate investors…or not.

Last month, the NAR (National Association of REALTORS) proposed a settlement to resolve litigation brought by home sellers regarding real estate agent commissions. Home sellers accused NAR members of colluding to keep real estate agent commissions high and to force sellers to pay the fees for the buyer’s agent as well as their own agent.

In reality, agent commissions have always been negotiable between the seller and the seller’s agent (aka, the listing agent). There was never a “6% rule” stating that the seller had to pay 6% of the sales price in real estate fees. It just happened that most local markets settled at the 5-6% range, which is the amount sellers were willing to pay, and agents willing to accept. The seller’s agent would then split this fee with the buyer’s agent. This is because most buyers don’t have liquid funds to pay their own agent after paying the down payment, closing costs, and moving expenses. But we, as a society, felt buyers deserved professional representation. That’s why this commission structure has been in place for so long.

So it was surprising when the NAR proposed a $418 million settlement and agreed to make some changes in how agent commissions are handled.

Let’s look at those changes and what they could mean for real estate investors.

What Are the New Rules Under the Settlement?

The settlement hinges on two new commission rules:

Listing agents can no longer publish a buyer’s agent fee on the MLS (Multiple Listing Service). The MLS is the database of homes listed for sale. Traditionally, the listing agent would publish the commission a buyer’s agent could expect to receive once the deal closed. This information is no longer allowed. However, there is no rule saying that listing agents can’t offer a buyer’s agent commission. The information simply can’t be listed on the MLS.
Buyers must have a signed agreement with a buyer’s agent before seeing any property. Traditionally, buyers could have an agent show them properties without committing exclusively to that agent (although experienced buyer’s agents typically requested a commitment early in the home search process to protect themselves). The settlement requires buyers and agents to have an agreement in place upfront, and this agreement must address the agent’s compensation.

What the Proposed Rule Changes Mean for Investors

It’s difficult to say at this point how the market will respond to these changes, but here are the likely scenarios:

Scenario #1: Business as Usual

There is nothing in the settlement rules preventing sellers from helping cover the cost of the buyer’s agent. And, with so many buyers struggling to purchase homes due to high upfront costs, motivated sellers are likely to offer concessions to buyers to help them pay for their agent so they can complete the purchase. This would incentivize other sellers to do the same to remain competitive.

Instead of paying 5-6% to their agent, who would split the commission with the buyer’s agent, the seller might pay 2.5-3% to their agent plus another 2.5-3% to the buyers so they can pay their agent.

For real estate investors, this would mean that some of the language in the purchase agreement would change, but this would make no tangible difference to the transaction.

Scenario #2: Real Estate Commissions are Dramatically Disrupted

Some of the home sellers who brought suits against NAR are aiming to force buyers to pay for their own real estate agent fees. In fact, as of mid-April, there is some concern that the Department of Justice (DOJ) will step in to amend the settlement and require buyers to pay their own agents.

This would be a major disruption to the real estate industry, which could lead to any or all of the following:

Real estate agents could accept lower commissions. Real estate is a more difficult profession than outsiders realize. Most industry insiders believe a 5-6% total commission is fair because the amount is split between buyer and seller agents, each of whom must pay a large cut of that (often 25-50%) to their supervising brokers. And, since agents are not employees, they cover their own self-employment taxes, retirement, and healthcare expenses from their earnings. Many agents are not in a position to work for less. However, we could potentially see more tiered packages from buyer’s agents.

More buyers would be forced out of the market. Vulnerable first-time buyers would have another substantial hurdle to homeownership. Military service members, veterans, and their surviving spouses would be unable to use VA funding to purchase a home because the VA prohibits VA buyers from paying any real estate fees.

Property values could drop. The attorneys in the suits against the NAR argued that home prices would fall if sellers didn’t have to pay such high real estate commissions. One could argue that it’s more likely the sellers would pocket the extra money saved on real estate fees rather than voluntarily reduce the home price. However, with more buyers forced out of the market, it would be possible to see falling home values.

For small-scale real estate investors, this type of disruption would make it harder to buy an investment property. On top of the down payment, closing costs, and renovation expenses, you would have to pay out-of-pocket for your real estate agent.

For larger-scale investors, this would increase your acquisition costs if you have to pay your own buyer’s agent, but it is possible that home prices could come down if there is less buyer competition.

All real estate investors could be hurt by falling home prices, which would reduce the value of their real estate portfolios. A declining market could be a good opportunity to buy new properties, but the savings could be offset by the buyer’s agent fees. And all investors could save money on the back end if they don’t have to pay for the buyer’s agent when they sell a property.

The Bottom Line

With the uncertainty about how real estate agent fees may change in the next few years, now is a good time to diversify your real estate portfolio. You might consider buying a property before the NAR settlement rules go into effect (estimated for July 2024). Or you might choose an alternative real estate investment like real estate syndication to give yourself some protection against changing markets.

Follow Gatsby Investment for meaningful insights into evolving real estate conditions!

10 Actionable Ways to Improve Your Finances Today!

Are you feeling powerless to improve your financial life in the face of uncontrollable circumstances like macroeconomic trends, illness, and missed opportunities?

While some things are outside of your control, you are in control of the most important driving factors in your life. You get to choose your responses to your circumstances and your behaviors going forward. This can be the difference between poverty and prosperity decades from now.

By focusing on what you can control, you can enhance your overall well-being and navigate life's uncertainties more effectively.

With that in mind, here are 10 actionable ways to take control of your financial life today:

1. Set clear financial goals

Define your goals based on your values and the lifestyle you want to build for yourself.

2. Create a budget

Establish a budget that tracks your income, expenses, and savings. Categorize spending to identify areas where you can cut back without much sacrifice.

3. Improve your credit score

You can boost your score simply by paying your bills on time and using less than 30% of your available credit.

4. Reduce high-interest debt

Prioritize paying off high-interest debts, such as credit cards, to save on interest expenses.

5. Carry appropriate insurance

Insurance is a risk management tool that can protect you against financial losses. This is especially valuable when it comes to factors you can’t control.

6. Start saving and investing

Build an emergency fund to cover 3-6 months of living expenses. Then you can shift your focus to investing for financial growth.

7. Live below your means

Don’t spend more than you earn. Focus on covering your essential needs first, such as housing, utilities, groceries, and transportation. Then add in the wants that matter most to you.

8. Create multiple income streams

Explore side hustles or passive income investments to increase and diversify your income.

9. Educate yourself

Learn more about personal finance and investing. This will help you make informed decisions that serve your goals.

10. Practice patience and discipline

Building financial freedom takes time. Stay disciplined in adhering to your financial plan, even during market fluctuations.

When you’re ready to learn more about investing for financial freedom, the real estate syndication experts at Gatsby Investment can help. Visit our education center for helpful resources.

5 Key Differences Between Real Estate Syndication and Crowdfunding

Syndication and crowdfunding are two similar ways of investing in real estate. High net worth individuals have been using these models to fund real estate projects with friends and family for a very long time. But the JOBS Act of 2012 made it possible for investment companies to promote their offerings to the general public, which ultimately opened the door for everyday investors to invest in real estate, with no prior experience requirements and less money down.

Real estate syndication and real estate crowdfunding are both methods of pooling capital from multiple investors to invest in real estate projects. But they have some key differences to be aware of. So before you start looking for your next investment, let’s do a syndication vs. crowdfunding comparison to find out which model is right for you.

1. Structure:

Real Estate Syndication: In a real estate syndication, a group of investors forms a partnership or joint venture which is typically led by a sponsor or syndicator. Each investor becomes a direct owner in the property and has a share of the responsibilities and potential returns. This is often a more traditional structure where investors have a more active role in decision-making. However, some of the larger syndication companies may offer an ownership in the deal and a complete passive experience, in which the sponsor/syndicate makes all decisions on behalf of its investors.

Real Estate Crowdfunding: Crowdfunding often involves a larger number of investors, contributing smaller amounts of money through an online platform. Investors usually invest in a specific project or portfolio without direct ownership. The platform acts as an intermediary, and investors typically have a more passive role, relying on the sponsor or platform to manage the investment.

2. Investor Involvement:

Real Estate Syndication: Investors in a syndication typically have more direct involvement in the decision-making process. They may have voting rights on major decisions, and their level of influence depends on their ownership stake.

Real Estate Crowdfunding: Crowdfunding investors are generally more passive. They invest in a project but often have limited influence on the day-to-day decisions. The platform or sponsor manages the property, and investors receive returns based on the terms set forth in the investment.

3. Minimum Investment:

Real Estate Syndication: Syndications often require larger minimum investments. The barrier to entry can be higher, making it more suitable for investors with some larger capital available. Most syndication companies are only able to offer its investment opportunities to Accredited Investors.

Real Estate Crowdfunding: Crowdfunding platforms typically have lower minimum investment requirements, allowing a more diverse group of investors to participate. Those platforms and offerings are often times open to non-accredited investors.

4. Deal Sourcing:

Real Estate Syndication: Syndicators often source deals through their network, relationships, and industry expertise. The syndicator may also contribute their own capital to the project.

Real Estate Crowdfunding: Crowdfunding platforms act as intermediaries that source and vet deals. Investors select from the projects listed on the platform, and the platform handles the administrative aspects of the investment.

5. Risk and Return:

Real Estate Syndication: Investors in a syndication generally take on a more active role and, therefore, may have the potential for higher returns. However, they also bear a proportionate share of the risks and responsibilities.

Real Estate Crowdfunding: Crowdfunding investors typically have a more hands-off approach, which may result in more moderate returns. However, they also have less direct exposure to the day-to-day management of the property.

Which Type is Right for You?

Both real estate syndication and crowdfunding have their advantages and are suitable for different types of investors based on their preferences, accredited status, and investment goals.

How to Start Investing in Real Estate Syndication

To get started, do your research of finding a crowdfunding/syndication service that is right for you.

Gatsby Investment, is a Los Angeles-based real estate syndication company, with a history of providing exceptional returns to investors. With a strong niche of focusing on value-add and ground-up construction projects, Gatsby has generated an average annualized return of 23% to its investors between 2017-2023.

Sign up with Gatsby today and choose your real estate investment project(s) to be part of the real estate crowdfunding and syndication revolution.

The Big Advantage of Capital Gains Taxes for Investors

As an investor, you are taxed on your profits (which are commonly called realized gains or simply, gains). The good news is that your gains might be taxed at a lower tax rate than you’re used to. This is thanks to capital gains taxes. Capital gains tax rates are one of the many tax benefits of real estate investing, but this benefit can apply to other investment types as well.

Let’s take a look at capital gains taxes: what they are, how they work, and why they are such a big advantage for investors.

What are Capital Gains Taxes?

Capital gains taxes are a special category of income taxes specifically levied on the profit made from selling an investment.

It’s important to understand that you are not taxed on the full sales price of your asset; only on the profit. So, for example, if you purchased stocks five years ago for $10,000 and sold them today for $15,000, you would only be taxed on the $5,000 gain.

Capital Gains Tax vs. Earned Income Tax

Earned income taxes are taxes levied on your normal income (like salaries, hourly wages, or commissions you receive from your job).

If you hold an asset for under a year, the profits are taxed at the short-term capital gains rate, which is equal to the earned income tax rate.

However, if you hold an asset for one year or longer, it is considered a long-term investment for income tax purposes, so it is taxed at the long-term capital gains rate. This rate is significantly lower than the earned income rate in the US.

While income tax brackets can reach as high as 37% (as of 2024) for earned income, the maximum tax rate on long-term capital gains is just 20% (although there is a special 28% capital gains tax on the sale of collectibles).

This differential can result in substantial tax savings for investors.

How are Capital Gains Taxes Calculated?

Calculating capital gains tax depends on how long you hold the asset before selling and which tax bracket you fall into.

Short-Term Capital Gains

As mentioned, short-term capital gains apply to assets held for less than a year. These are taxed as ordinary income.

So, for example, let’s say you earn $12,000 in profit from the sales of a short-term house flip. If you fall into the 24% income tax bracket, your tax on this gain would be $2,880 ($12,000 x 24%).

Long-Term Capital Gains

Long-term gains, for assets held for over a year, benefit from lower capital gains tax rates.

For the 2024 tax year, long-term capital gains are taxed using the following schedule:

0% for profits up to $3,150.
15% for amounts between $3,151 and $15,449.
20% for amounts over $15,450.

Let’s say you invest $30,000 in a syndicated multi-family build-to-rent project, which takes 24 months to build and is held as a rental for 12 months before being sold. If you earn a 15% annualized return your capital gains on this deal would be $13,500. You would pay 0% on the first $3,150, then 15% of the remaining $10,350, giving you a capital gains tax total of $1,552.50.

That’s a savings of $1,327.50 compared to earned income taxes on the same amount (if you’re in the 24% income tax bracket)!

It is important to note that, while long-term investments benefit from lower capital gains rates, short-term investments often come with higher yields. So don’t ignore strong short-term investments just because of the tax rate.

Which Investments are Taxed as Capital Gains?

Generally speaking, profits from the sale of any appreciating asset can be treated as capital gains. This includes investment types like:

Stocks and bonds.
Real estate investments (your primary residence is granted an even higher capital gains exemption than investment properties).
Mutual Funds, ETFs, and index funds.

Profits from the sale of collectibles are also charged as capital gains, however, these fall into a special 28% capital gains rate.

The Bottom Line

The US government awards investors with lower tax rates on the sale of investments held for a year or longer. Whether you’re selling stocks, bonds, funds, or real estate, you could potentially benefit from this big advantage of capital gains taxes for investors!

Disclaimer: This post is for informational purposes and is not to be considered legal advice. It is always advisable to seek advice from a licensed tax professional before making investment decisions.

What the Rise in Multi-Generational Tenancy Means for Real Estate Investors

A 2022 study conducted by the Pew Research Center found that around 18% of the American population live in multi-generational households.

The study defined multi-generational households as those with at least two generations of adults over 25. For example, parents may have adult children over 25 who still live at home. Or adult children may have elderly parents living with them. Pew’s definition of multi-generational households also includes those with a “skipped generation,” meaning that grandchildren live with their grandparents.

According to this data, the percentage of multi-generational households has been steadily climbing since the 1970s.

This raises important questions about how housing needs to change to accommodate multi-generational households. And not just in terms of housing inventory for homebuyers. We’re starting to see a growing need for multi-generational rentals as well.

Let’s take a look at the rise in multi-generational tenancy and what it means for real estate investors.

Why Multi-Generational Households are on the Rise

First, it’s helpful to understand why more families are choosing the multi-generational lifestyle.

Data from the Pew study shows that there is a cultural element to multi-generational living. For example, respondents who identified as either black or Hispanic were twice as likely to live in a multi-generational household as respondents who identified as white. Similarly, foreign-born residents were 52% more likely to live in a multi-generational household than native-born residents. This discrepancy may be because of the value some cultures place on staying with family. But it can also be a financial necessity.

The cost of housing has skyrocketed in recent years, especially compared to more modest increases in income. And many families view multi-generational households as a smart, cost-saving measure. In fact, the Pew study confirms that residents of multi-generational households are less likely to be in poverty than those in other living situations.

How We Arrived at Multi-Generational Tenancy

In decades past, multi-generational households were typically resident-owned. The homeowner may have allowed adult children to remain in the home or invited elderly parents to move in. But today, we’re seeing more demand for multi-generational rental housing, particularly in expensive cities with a high percentage of renters.

Take Los Angeles, for example. We recently found that rents in Los Angeles increase nearly 2% more than the national average each year. And we know that 63% of Angelenos rent rather than own. In a multi-generational household study conducted by the US Census Bureau, researchers found that 8.3% of households in Los Angeles were multi-generational as of 2020, compared to a nationwide average of 3.8% of households. (If you’re wondering why the Census’ estimates are so much lower than the Pew study, it’s because the Census Bureau defines a multi-generational household as having three or more generations living under one roof.)

There is a clear correlation between cost of living, income rates, and multi-generational tenancy. So investors in areas with high rental rates may want to meet the growing demand for rental units that can comfortably accommodate multi-generational families.

How Investors are Meeting the Growing Multi-Generational Tenancy Demand

Investors and developers have already started accommodating multi-generational tenants in several ways, including:

Adding accessory dwelling units (ADUs) to homes. ADUs, also known as guest houses, in-law suites, and casitas, are simply additional living quarters on a property. California ADU regulations effectively allow property owners to convert a single-family home into multiple living spaces, which is ideal for multi-generational households.

Multi-generational build-to-rent homes (BTRs). As more would-be buyers have been priced out of the housing market, there has been an increase in houses that are designed and built as long-term rentals. These units feel more like homes and less like apartments, giving residents the lifestyle of a homeowner without the upfront financial requirements. With more bedrooms and bathrooms than traditional apartments, BTRs can be more comfortable for multi-generational families.

Investing in real estate syndication projects that serve multi-generational tenants. You may not have the funds, resources, or knowledge to build your own ADU or BTR, but you can still capitalize on this growing trend while providing better housing options for multi-generational families. Real estate syndication pools funds from multiple investors to fund a project (like an ADU build or a BTR development). The project is professionally managed, so you get to leverage the experience of real estate experts and earn completely passive returns.

Get in on the ground floor of this emerging multi-generational tenancy trend. Start planning your ADU, developing your BTR, or investing in real estate syndication today!

Gatsby’s Formula for Short-Term Real Estate Investment Success

We have found that today’s real estate investors are looking for more flexibility in their investment portfolios. They want short-term investment options that allow for greater liquidity and strong returns. While traditional real estate investments force investors to choose between either short timeframes or solid yields, Gatsby Investment has found a way to offer both!

This article explores the unique model to uncover how Gatsby is able to achieve such strong returns on short-term investments.

Why Short-Term Investments are in Demand

With high interest rates and economic uncertainty creating a sense of unease in the marketplace, many investors are hesitant to lock up their funds in long-term investments. They want the flexibility of short-term investments, which allows them to access their cash more quickly.

The problem is that traditional short-term investments offer lower-than-average returns. Treasury notes, municipal bonds, and real estate investment trusts (REITs) are all relatively liquid, but they barely provide better yields than a savings account. And during periods of high inflation, these investments can actually cost you money if the rate of inflation outpaces the interest earned.

The solution is high-yield, short-term real estate investments. And Gatsby has created a system to make this type of investment available to investors.

Gatsby’s Specialized Knowledge and Market Niche

Gatsby has chosen the dynamic Los Angeles real estate market and have a specialized knowledge in specific LA areas. We have a strong market niche of focusing on high-demand property types and ground-up construction projects with high return potential.

By focusing on smaller builds that can be completed quickly and appeal to a larger pool of buyers, we are able to complete them in a short timeframe.

Our experienced industry professionals and proprietary software streamlines each project from start to finish, increasing efficiency and maximizing return potential.

Instead of having to rely on market appreciation over time, Gatsby’s team can force appreciation in a short amount of time by building brand-new multi-family properties from the ground up.

How Gatsby’s Unique Investment Offering Cater to Investors

Gatsby allow a wide range of real estate investors to take advantage of this high-performing strategy, by making it available on the Gatsby platform.

With the Multi-Family Development projects, investors get in on the ground floor of the investment. Gatsby then handle each step from purchasing, architectural design, city permits, construction, to the property sale, and finally the investor disbursements.

Since these multi-family properties are “Built-to-Sell,” investors get out as soon as the development of the project is complete, and the property has sold. And because these projects typically take less than two years to build, they are a good option for short-term investors.

Take Advantage of Los Angeles’ Lucrative Multi-Family Market

Building multi-family units on lots that were formerly zoned for single-family helps to ease the housing shortage, make housing more affordable for shared-living households, and generate enviable returns for investors!

Just as importantly, Gatsby offers a stable ownership structure, in which each investor becomes a member of the LLC that owns the property. This means that each investor owns a stake in the underlying real estate. And this is different from most crowdfunding platforms, in which investors only own a share of the debt financing the property.

When you invest with Gatsby, you get to own a piece of valuable Los Angeles real estate, with a low minimum investment, while leveraging Gatsby’s experts to handle every aspect of the deal for you.

While traditional multi-family investing in LA was cost-prohibitive, real estate syndication company, Gatsby Investment, make it possible for investors from across the US to get a piece of this hot market with a low minimum investment.

Schedule a call with a Gatsby representative today to learn more!

Should I Take a Student Loan or Pay Cash Out of Pocket?

It’s no secret that college in the US is expensive. Even after scholarships and financial aid programs, American parents and college students paid an average of $25,313 toward annual college costs, including tuition, fees, and room and board. Whether you’re going to school yourself, or you’re looking at options for your children, you have a difficult financial decision to make: should you take a student loan or pay cash out of pocket?

To answer this question, we’re going to start by assuming that both options are available to you. You have the cash available to pay now, and you can qualify for a student loan if you opt for that route. Given those assumptions, which is the better option: paying out of pocket or taking a student loan?

The Case for Paying Cash for College

Many financial “experts” say you should always pay with cash when possible. They apply this rule to all debts, including credit cards, auto loans, home loans, and yes, student loans. The idea is to keep your debt to the absolute minimum and to work to pay off any necessary loans as quickly as possible so you can live “debt-free.”

On the surface, this makes sense. Loans charge interest, and interest expenses can add up.

Let’s say you take out a $100,000 loan with a 6% interest rate to cover tuition plus room and board for a four-year university. With a 10-year repayment plan, you’d be looking at over $33,225 in interest. Yikes!

By paying cash, you eliminate interest charges. But that’s not the whole story. There’s more to the question of student loans vs. paying out of pocket than just saving on interest.

The Case for Taking Student Loans

If you’re paying cash for your own education, or that of your child(ren), you’re going to be investing a large sum of money upfront. Paying out of pocket means sacrificing other financial goals, such as investing. And this is a bigger problem than most students and parents realize.

Take a moment to consider the opportunity cost of paying cash for college. Your money is sent off to the university, and you’re unable to invest it for the future. But what if you took a student loan and invested your cash instead of using it to pay for school out of pocket?

Let’s say you invest the $100,000 you would have spent on education in a passive real estate syndication project (these are projects that pool funds from multiple investors and are professionally managed by a real estate sponsor).

Real estate syndication can be extremely lucrative. Projects managed by Gatsby Investment, for example, have returned average annualized yields of 23% since 2017! Over the next 10 years, at 23% per year, compounded annually, your $100,000 would turn into $792,595.

This means that even after you pay off the $100,000 student loan plus the $33,225 interest, you would have made $659,370 by investing your money rather than paying cash for college.

Break the Pattern of Paying Cash and Missing Opportunities

Many Americans never get to the point where they can start investing. They buy a car, buy a home, pay for daycare, and pay for higher education for the kids. People who are constantly paying for things in cash never find the funds to invest. And, once retirement is in sight, they realize they don’t have the money needed to retire.

By making investing a priority, you can break this pattern.

Leverage low interest debts (like home mortgages and student loans) to pay for high-value assets. Then, invest in projects with strong returns, which will fully cover your debts plus interest, and put money back in your pocket!

Hot Lead-Gen Opportunities for Real Estate Agents in Los Angeles

With so many active real estate agents and brokers in Los Angeles, the competition for buyer and seller leads is fierce. But with a little creativity, you can find interesting ways to reach prospective clients and convert them to closings!

Here are five hot lead-gen opportunities for real estate agents in Los Angeles.

1. Host a Seminar, Workshop, or Course

Seminars and workshops allow you to position yourself as an authority in the space while introducing you to potential buyers, sellers, and investors.

There are so many options here:

First-Time Homebuyer Seminars
Home Seller Staging Workshops
Real Estate Investing 101 Course

You can offer your seminar, workshop, or course in person or online. Make it free if you want to cast a wide net or charge a fee if you want to limit your audience to serious prospects.

Don’t forget to record the presentation so you can use snippets for YouTube videos and social media reels!

2. Organize a Community Improvement Project

Local improvement projects help showcase your investment in the community you're selling people on. Can you think of anything you can do to improve your community?

Maybe there’s an empty lot that desperately needs cleaning. Or vacant storefronts that could use a fresh coat of paint (sure, it’s the property owner’s responsibility, but they might not have the physical ability or means to paint).

Or, get this, what if you get a team of volunteers to meet regularly to replace lightbulbs, weed lawns, and repair broken fences for senior and differently-abled homeowners who can’t maintain their homes on their own?

Any improvement project is a chance to establish your reputation as someone who cares about the community while meeting homeowners, local business owners, and/or other volunteers.

Of course, you can also share the experience on social. Maybe even get in the local news cycle!

3. Review Property Tax Assessments for Homeowners

The average homeowner doesn’t know how much their home is worth at any given time. So when they get a notice from the tax assessor saying that their value has gone up $50,000 since last year, and their tax bill will go up accordingly, most don’t question it. But assessors are often wrong because they apply a general formula to a wide region instead of assessing individual homes.

So here’s what you do: every July when new assessed values are released in LA County, you go to the Assessor’s website to review the values for your previous buyers (and any other strategic market you want). With your market knowledge, you can quickly tell by looking at the assessed value per square foot if the assessed value is a fair number for the neighborhood.

If the assessed value is fair (or mercifully low), you can let the homeowner know that you completed a complimentary review of their property taxes and have confirmed that the value is fair. If it’s high, you can alert your homeowner so they can appeal the value themselves or hire you to do it! Making money in property tax appeals is surprisingly easy for real estate businesses. Just offering complimentary annual reviews is a smart way to stand out and a unique way to nurture potential seller leads!

4. Blog (Yes, Even in the Mid-2020s)

Imagine this: You publish an article on your site called “The 10 Best Neighborhoods for Homebuyers in Los Angeles”. A serious buyer searches online for the “best neighborhood to buy a home in LA,” and your website shows up on the first page of their search results. So the buyer reads your article, is blown away by your local market knowledge, and texts you to schedule a consultation.

This is the power of blogging. Every blog post you publish gives search engines, like Google, more content to index on your website. And this increases the chances that search engines will send traffic to your website.

Here’s the best part: a single article you spend a few hours writing can serve as a lead generator for years to come! Don’t sleep on blogging for real estate lead generation!

5. Partner with a Real Estate Syndication Company

Real estate syndication companies can be an amazing source of repeat business for LA-area agents and brokers. Syndication companies, sometimes called crowdfunding platforms or real estate sponsors, complete real estate projects on behalf of groups of investors.

Take Gatsby Investment, for example. This Beverly Hills-based syndication company has completed over 100 deals in Los Angeles! Gatsby is always looking for new acquisitions to continue the flow of deals to investors. And Gatsby allows LA-area real estate brokers and agents to submit suitable properties for consideration online. You could potentially earn a commission or referral fee on the acquisition of the property and the sale of the property upon completion of the project.

Time to Take Action

Lead-gen in real estate is about taking action. So choose the topic for your first seminar, publish your first blog post, or submit your first deal to a syndication company TODAY!

Gatsby Investment’s Formula for Success in an Evolving Housing Market

As we have just entered a new year, we wanted to give you an overview of our 2023 real estate investment performance as well as a sneak peek at our plans for 2024.

There’s no denying that 2023 was one of the hardest years we’ve seen in real estate since the 2008 recession. Mortgage interest rates nearly doubled from 2022 to 2023. We experienced high inflation, over-priced listings, and an extremely low supply of homes available. Gatsby Investment had to work harder and smarter than ever before to find deals with strong enough profit margins for our investors. We pushed our limits in every way to make our projects as successful as possible.

Many of the top real estate syndication companies in the country reported losses to their investors in 2023. These companies couldn’t pivot quickly enough to adequately deal with the interest rate changes, lack of inventory, or drop in demand for commercial spaces.

Despite the challenging conditions of 2023, Gatsby Investment is proud to report another year of 100% profitable deals! We managed to return an annualized average of 15.69% to our investors in 2023. And we found 16 new projects that met our strict requirements and acquired them for our investors.

A combination of factors contributed to our success in 2023 and continues to set Gatsby apart from othersyndicates. First, we have a strong market niche, focusing on high-demand property types and ground-up construction projects with high return potential in Los Angeles. Secondly, we shifted to smaller builds that can be completed quickly and appeal to a larger pool of buyers. Finally, our experienced industry professionals and proprietary software streamlined each project from start to finish, maximizing return potential.

Our plan for 2024 is to continue focusing on value-add and ground-up construction projects to force appreciation and limited risk for our investors.

At this point, the Federal Reserve has signaled an end to the interest rate hikes. This has incentivized more buyers to enter the market and encouraged more property owners to consider selling. This is a good sign that the most challenging phase of this market cycle is behind us. We have already started partnering with local real estate agents, brokers, and developers to find new deals throughout LA in the coming year.

We hope to see more inventory, offer more deals to investors, and produce higher returns in 2024!

As we all know, it is impossible to perfectly time the real estate market; by the time you think the timing is right; it’s already too late. That’s why Gatsby believes in consistent investing and focusing on strategies that make the most of variable market conditions.

We appreciate your trust in us as your local real estate investment experts. And we look forward to serving existing investors and new investors in 2024!

View our current investment opportunities and get started today.

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Gatsby Investment’s Performance

Since the start of the company in 2016, Gatsby has acquired over 64 deals. As of March 1, 2024, 46 of those offerings have been completed. This makes Gatsby Investment the leading real estate syndication company in Los Angeles. View completed deals.

Trusted Members

15k+

Average annualized net return from 2017–2023

23%

Acquired Deals