Yes, I’ve moved 16 times in 20 years. I’m married to a video game developer, and we have a history of moving every time he finishes a game so he can start a new project with a new studio.
We’ve bounced around Southern California, Arizona, the Midwest, and Europe, giving me a unique perspective on real estate investing. Plus, as a professional content writer in the personal finance space, I have a clear view of real estate’s role in a diversified portfolio.
After navigating so many moves as both a homeowner and investor, I’ve identified three key lessons that can help any investor make smarter real estate decisions (no matter where life takes you!)
1. You Can Invest without Owning Your Own Home
This may seem obvious, but I see so many investors avoiding real estate investments because they feel that owning a home is the entry point to this asset class.
But when you move frequently, renting often makes more sense than buying. You can rent your primary residence while investing in real estate (through rental property acquisitions or via the multiple ways to invest in real estate without buying property).
Real estate can even be used as a vehicle for renters to save enough for the down payment on their home. Through low-investment-minimum options like REITs (real estate investment trusts), you can start investing in real estate on any budget and use the magic of compounding to grow your funds far faster than you could save enough for a down payment.
Don’t let your renter status keep you from capitalizing on the housing market!
2. Direct Ownership May Be Overrated
I’ve owned multiple single-family rentals in Los Angeles and San Diego Counties. While we lived in the US, our strategy was to purchase a home as a primary residence, using favorable primary residence financing, live in the home as long as we could, then place it in service as a rental when we had to relocate for work (where we would repeat the process).
While this was a lucrative strategy, I didn’t love the hassle of being a landlord. With a background in luxury property management, I was able to manage the rental portfolio myself, screening tenants, handling renewals, and addressing maintenance requests, even while living a few hours away. But it did take more time and contractor connections than I expected.
Once we moved abroad, I chose to hire a local property manager who could serve the residents better than I could, given the distance and time difference. While this lightened the load, I am still responsible for many decisions, including approving tenants, lease renewal offerings, and maintenance contracts, based on my review of quotes collected by the property manager. Of course, as the owner, I am still financially responsible for all rental property expenses. I cover the mortgage, maintenance emergencies, and property management fees, even if the rent is late or the unit is vacant.
If you love being a hands-on property owner, direct ownership may be a good fit for you. The rest of us should explore other options.
3. Real Estate Syndication Offers More Benefits with Fewer Risks
I first became acquainted with real estate syndication through my work as a finance writer. And I fell instantly in love.
Syndication pools funds from multiple investors to finance a specific real estate project (a rental, a new development, or anything in between). The project is entirely professionally managed, so investors don’t have to invest any time or energy in supervising the property. You don’t even have to go out and source properties yourself; the sponsor presents you with pre-vetted deals. So you just choose which project(s) you want to invest in, wire the funds, and track the progress of your investment online!
Here’s why syndication is so brilliant:
- Multiple investors mean lower investment minimums. You can buy into a multi-million dollar deal for as little as $25K.
- Professional management means purely passive returns. Your syndication sponsor handles every detail, so you don’t have to spend any of your time on the project. This also means you can invest from out of state or even from abroad (so you’re not limited by your local market conditions).
- You get access to next-level deals. For example, I would never have the time or skill to manage a multi-family ground-up development on my own. But with syndication, I can invest in this type of project without any experience. And without shouldering the cost alone.
- You still own equity. You become a limited partner in the company that owns the property, so you hold a legit ownership claim to the equity.
- There are no ongoing expenses for investors. Once you place your investment, the sponsor becomes financially responsible for ongoing property expenses. It’s their job to allocate rental income to cover vacancy losses, maintenance, and emergencies.
- Sponsors have the experience, systems, and connections to maximize return potential while minimizing risk. You get to leverage your sponsor’s resources for better outcomes.
So, what’s the downside?
The main downside of syndication is that you have to be an accredited investor to access it, so those who don’t meet the SEC’s income or net worth requirements don’t qualify. There are a few other potential cons of syndication to consider, such as the lack of direct control over the property and the exit strategy limitations (you typically have to commit funds for the duration of the project, which could be 12-60+ months, depending on the project type).
Why Gatsby is My Go-To Syndication Platform
As a finance writer, I’ve done deep dives on multiple syndication platforms. And there’s only one I choose to work with: Gatsby Investment.
Here’s why I personally choose Gatsby:
- History of impressive returns. Over the last decade, Gatsby has provided average annualized returns of 22.3% to investors. They also have a 100% profitable track record.
- The strong LA-focused niche. Gatsby specializes in developing small multi-family structures in Los Angeles. The ongoing LA housing market shortage means there is consistent local demand for this property type. And with zoning law changes, there is more opportunity for multi-family development.
- The people behind the business. Syndication requires that you trust the people managing your investment projects. Dan Gatsby and his team continuously advocate for their investors, their builders, and the LA community. And Gatsby invests alongside investors, aligning incentives to maximize returns for everyone.
Whether you’re a digital nomad who’s always on the move, a working parent who doesn’t have time to manage a rental portfolio, or a retiree who simply doesn’t want to shoulder the expense of direct ownership, real estate syndication with Gatsby Investment may be the right fit for you. I highly encourage you to explore syndicated investment opportunitiestoday!