SERIES: Investments Your Stock Broker Never Told You About – 4

In this series, I’m sharing “other” ways to invest beyond standard 401(k), 403(b), 457, TSP, Traditional or Roth IRA, mutual fund, stock, or bond investments.

Part Four  Invest In Real Estate

Real estate is another great investment opportunity available.  Land, residential and commercial rental properties, and flipping houses have helped many people become millionaires.  Of course, it is VITAL in any venture like this to maintain healthy financial margin!  “No money down” real estate deals have led to many more bankruptcies than they have yielded multi-millionaires.  While it is important to consider some risk, purchasing real estate without any financial margin is a recipe for a financial disaster!

Some keys to think about when considering real estate investments are:

  • Clearly understand what you will do with the property BEFORE buying it
  • Have a Plan B and a Plan C
  • Establish healthy financial margin – at least six months worth of expenses and operating costs
  • While a deal may look good “on its own”, but sure to look at your collective holdings and evaluate your ability – time and financial – to handle the project appropriately
  • If you are susceptible to taking extreme risks, establish accountability with someone who understands the business
  • You will generally make money by purchasing the property for the right price
  • Always be ready for a “surprise” – I see them happen all of the time to real estate investors

Questions To Ask

  • Do I have the time and energy to pursue this type of investment?
  • Is this something I am only doing for the financial gain or is this something that I love?
  • Is my spouse on board?
  • If I investment my money in real estate, where will I NOT be able to invest as a result?

Read the entire series (available after 9/30/2011)

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