Real estate investing news and advice!

Find tips and resources that every real estate investor should know. Learn about market trends, buying, selling, managing rental property, and Gatsby Investment company news. Click the links to view educational articles, press releases, and explainer videos.


The Difference Between ROI and ROTI and Why it is Important!


We talk to investors every day, and the majority of them are very focused on their Return On Investment (ROI). This is very understandable, and it should be a key factor to look at before making any investment. However, most investors forget about the importance of their “Return On TIME Invested.”   

Let us give you an example. Let’s say you have decided to invest in a house flipping project yourself. You are going to handle all renovations from start to finish and try to get the highest return possible. You have done all the due diligence needed and have purchased a home to transform. Now, you need to start the design and permit process, find all vendors, complete the remodeling, and then finally put it up for sale. Let’s say your project went very well, you sold the house, and you ended up with an ROI of 20%. 

Now, let’s look at a different example. Let’s say you decided to invest passively in a house flipping project with a syndication firm, instead of completing all the work yourself. The syndicate has all systems in place, with experienced professionals handling every detail of the house flip project from start to finish, and you can make your investment online with a few clicks. You didn’t put any work in, and by the time the house sold, you end up with an ROI of 15%.

Which one really generated the best Return On Investment? The first example where you did all the work yourself had a higher ROI%. But you need to take your time and effort into consideration as well! If you calculate the time and work spent to complete the project, was all that worth an extra 5%?

With the passive investment option, you leveraged the knowledge, time, and skills of real estate experts, so you had all that time and effort to put somewhere else. This is the biggest difference between ROI vs ROTI.

Always consider your “Return On TIME Invested” when making your next investment.

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Be the First Person in Your Family to Build Generational Wealth 


Wealth gives you financial freedom and more options in life. Many parents strive to build wealth in order to create a better future and for the generation coming after them. But building wealth that last generations is not an easy task!

Did you know that an estimated 70% of generational wealth doesn’t make it past the second generation? And 90% disappears by the third generation!

Let's say you work hard and invest your money right in order to pass down assets to your children. But how can you then balance the challenge of giving them financial freedom and also teach them to be financially responsible adults that understands the value of money? 

Here are a few ways to build sustainable generational wealth:
 
1. Invest in Your Child’s Education
 
Education can provide a way for your children to support themselves. A degree will allow them to pursue higher-paying jobs which can help them navigate their own personal finances. 

Raise your children to become financially independent and responsible adults so they know how to handle money by the time they leave the house. Education is one of the key factors to consider if you want the wealth to last. 
 
2. Invest in Real Estate
 
Real estate is a great way to build and sustain generational wealth long-term. Properties appreciates in value over time and provide steady cash flow from rental income. 

Building a diversified real estate portfolio that can be passed on to generations is one of the most reliable ways to grow and protect wealth. It is a great hedge against inflation, and since real estate is a hard asset, it is also one of the safest investments you can make. 
 
3. Build a Business to Pass Down
 
If your interests and abilities align with your children’s, it is possible they will want to take over the business you built one day.

Over 30% of family-owned businesses are estimated to have made it to the second generation. It is a good idea to get your children involved in the business at a young age to teach them how the business operates and how to successfully continue the business. It is also a good way to encourage them to want to take over the company one day.

4. Teach Your Children About Personal Finance
 
Knowing how hard it is to keep the wealth for multiple generations, it can seem pointless to save for a legacy of wealth. However, this can be prevented through financial education. If you don’t teach your children about financial literacy, then it is likely the wealth you leave for them will dwindle throughout their lifetime.
 
Be open about financial topics at home, buy children books about finances, include them in financial discussions, and let them listen to you talk through financial decision. 
 
5. Set Up a Trust
 
A trust is a legal entity you can use to hold and transfer assets to your beneficiaries. It is a great option to consider for parents of minor children. Trusts also provide benefits such as avoiding or reducing estate and gift taxes depending on the size of your estate.

Bottom Line 

The process of building wealth is challenging in itself. But with education and proper estate planning, you increase the chances of wealth to last. Make it a priority to pass your financial knowledge down to your children. This knowledge will be the best way for you to build and protect generational wealth.


J.P. Morgan, El Segundo real estate company to invest $1 billion in build-to-rent homes


BY JOSEPH PIMENTEL EL SEGUNDO
PUBLISHED 10:57 AM PT NOV. 22, 2022
EL SEGUNDO, Calif. — With so many people unable to buy their own homes in this current market, real estate investors are capitalizing on a growing housing market segment: renters.

J.P. Morgan Global Alternatives is teaming up with El Segundo-based real estate developer Haven Realty Capital to acquire and develop more than $1 billion in new build-to-rent communities, the companies announced last week.

What You Need To Know


  • A joint venture between J.P. Morgan and Haven Realty plans to invest $1 billion to acquire and develop build-to-rent communities

  • The JV has already targeted three communities of about 250 homes in Atlanta for their initial investment

  • With so many people shut out of buying a home, many have opted to rent, fueling the demand for build-to-rent homes

  • Some of the main reasons for renting single-family homes over apartments is that it provides more space and privacy

Joint venture officials said J.P. Morgan's $415 million equity investment would "provide long-term capital for Haven to continue to execute its business plan in the BTR space, working with homebuilders."

"The for-sale housing market has been significantly hampered by recession fears, inflation and rising interest rates, placing a burden on homebuilders and their ability to add to the housing stock," said Sudha Reddy, the founder and managing principal at Haven. 

Reddy said the partnership would allow them to continue working with homebuilders, many of whom will sell the newly built community to Haven to lease to residents. 

The joint venture's partnership and $1 billion target highlight the growth and high demand for build-to-rent communities across the U.S. The number of single family build-to-rent homes under construction has increased 106% year-over-year, according to Fixr.com, a home remodeling news site.

Citing data from RentCafe, there are more than 13,900 build-to-rent homes currently under construction in the U.S. 

The coronavirus pandemic, historically low mortgage rates and low supply created an inflated housing market that shut out many first-time homebuyers and prospective buyers. 

The red-hot housing market has dipped in recent months since mortgage rates have increased, but affordability remains a crucial issue for many prospective homebuyers, leaving many to renting. 

RentCafe officials said some of the main reasons for renting single-family homes over apartments is that it provides more space and privacy. It's ideal for families.

Based in El Segundo, Haven Realty has a $1.2 billion portfolio of 35 communities, totaling 3,500 units across nine states in various construction phases. 

Haven Realty officials said they plan to leverage their existing relationships with homebuilders.

Officials said the joint venture would target 50 to 200 homes, ranging from 1,500 to 2,500 square feet, primarily with three- and four-bedroom and two- and three-bathroom floor plans, including two-car garages.  

The joint venture has already targeted three communities, totaling approximately 250 homes in the Atlanta area. That acquisition expects to close within the next 90 days, officials said.

"We're pleased to be able to partner with Haven to continue to provide the attractive, newly-built, larger single-family homes for rent that more and more American families seek," said Ryan Holgan, executive director, Real Estate Americas, at J.P. Morgan Asset Management.


Here are 5 reasons why you should start investing


1. POWER OF COMPOUNDING
Compound interest is growth earned on growth. This implies that as your principle grows, you will earn more money in each cycle. By continuously reinvesting your investment earnings, you are exponentially increasing your return on investment.
 
2. OPPORTUNITIES
Sometimes life presents us with incredible opportunities that necessitate capital backing. Opportunities arise periodically in life, and when you have capital on your side, you can seize them and expand your wealth.

3. RETIREMENT
Your employment will provide for you until you reach a particular age. Allow your retirement to be everything you have envisioned it to be. Work towards creating a pool of resources, so that finances are the least of your concerns at an older age.

4. ACHIEVE YOUR GOALS
Once your goals are set, you may devise an investment strategy to achieve them. Take your existing assets, reserves, and cash flow cycles into consideration as you plan your investments. While it is important to plan for the future, you should also enjoy the present!

5. FINANCIAL FREEDOM
Money is the means to an end - not the end itself. Achieve financial independence so that you can focus on things that are actually important to you. Invest one step at time. After all, slow and steady often wins the race!


The Real Deal’s Annual Real Estate Event – Sponsored by Gatsby Investment


Miami, FL – November 10, 2022 – Gatsby Investment sponsored The Real Deal’s annual South Florida Showcase + Forum, the most anticipated real estate industry event of the year! 

The event brought together over 4,500 attendees and hundreds of exhibitors including the most prominent names in real estate, including top brokers, agents, developers, investors, syndicators, to discuss the current state of the housing market, upcoming market trends and opportunities, best real estate investments for the upcoming year, and potential pitfalls to avoid.

The event was TRD’s largest ever, headlined by a fireside chat between TRD founder and Publisher Amir Korangy and Compass CEO Robert Reffkin. 

Gatsby was happy to sponsor the lanyards for the event, printed in Gatsby’s iconic blue logo, that was worn by all 4500 attendees. 

To read more about the event and view more photos, click here. 









More Homeowners Using Helocs as Financial Safety Net


Home-equity lines of credit were up 40% in the second quarter from a year earlier. Here’s what homeowners should know before taking out Helocs.


By Veronica Dagher Length (7 minutes)
Updated Nov. 16, 2022

As high interest rates drive up the cost of borrowing money, more people are tapping the equity in their homes.
Americans took out $66 billion in home-equity lines of credit, or Helocs, in the second quarter, a 40% increase from a year ago and the largest amount in almost three years, according to data from real-estate analytics firm Attom Data Solutions. These accounts, which allow homeowners to borrow against the value of their house, are making a comeback as higher rates make it less favorable to refinance a mortgage.

A Heloc works like a credit card, but since it is backed by your property generally offers a much more favorable interest rate. The average Heloc rate is 7.7%, according to Bankrate.com, compared with the average 19.04% APR on a credit card and 10.64% average personal loan rate. Owners get a credit line based on their home equity, but don’t have to use all or even any of available funds.

Click here to view the full article.


ADUs increasingly popular among new housing stock in LA


LOS ANGELES — It’s a vision months in the making as Los Angeles resident Michelle Mitchell walks through the frame of her home she is remodeling.

BY RENEE ENG LOS ANGELES
UPDATED OCT. 28, 2022

“All of this is getting torn down and you’ll have just glass walls here, where you’ll be able to look out into the backyard with all the trees, swimming pool and it will be a kind of indoor, outdoor feel,” she said.

Mitchell, a tech professional, moved to LA from Northern California for work last year and quickly noticed the limited housing supply.

“Even as I’ve been in LA during this period of construction, I found it really hard to find places to stay, especially in west side neighborhoods where prices are through the roof,” she said.

Besides remodeling her home, she also converted her garage into an ADU, or accessory dwelling unit, adding housing stock that her family, friends or renters can take advantage of. It’s a trend that Danny Shuster, Chief Construction Officer with Construction Consulting Services, sees more homeowners opting for.

He’s working with Mitchell and said they work on 20 ADUs at a time and have worked on over 2,000 of them in the last six years in the LA area and San Diego area.

Click here to view the full article.

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Gatsby Investment’s Performance

Since the start of the company in 2016, Gatsby has acquired over 58 deals. As of November 7, 2022, 44 of those offerings have been completed. This makes Gatsby Investment the leading real estate syndication company in Los Angeles.
Since the start of the company in 2016, Gatsby has acquired over 58 deals. As of November 7, 2022, 44 of those offerings have been completed. This makes Gatsby Investment the leading real estate syndication company in Los Angeles. View track record.
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