Investing in commercial real estate 5X’d my net worth in six years

• tons of experience

• fancy business degree

• small $1M loan from my parents

I’ll teach you 5 “Cheat Codes” that real estate investors leverage for wealth.

A thread:

1) Investing w/ a Self-Directed IRA

Self-directed IRA lets you invest your retirement $$ in asset classes like real estate.

• Open a self-directed IRA

• Rollover funds from IRA or 401(k)

• Invest funds in a rental property

The income from the property (rent, sale proceeds, etc.) goes back into the IRA tax-free.

Example: use self-directed IRA to buy a $200K property and later sell it for $250K, the $50K profit goes back into your IRA tax-free.

2) Cash-Out Refinance

Refi your mortgage for more than you owe and take the delta in cash. 

For Example:

• Bought at $300K, valued $400K

• Refi the property for $350K

• Pay off original $300K mortgage

• Take the remaining $50K in cash

• Use to invest in another property

3) Vacation Rental Arbitrage

Short-term rentals offer a alternative to traditional long-term leases.

For example: 

You rent a condo for $2K a month and list it on Airbnb for $150 a night. If you rent the condo for 20 nights a month, you’d earn $3K netting a $1K monthly profit.

4) Opportunity Zones

Opportunity Zones are a tax incentive that spurs economic development in low-income communities.

• Invest in a qualified Opportunity Zone

• Defer capital gains taxes on the sale of any property – if gains are reinvested in Opportunity Zone Fund

5) Real Estate Syndications

This is an ideal strategy for those who want to invest in real estate but don’t want to be a landlord.

You can invest as a passive LP investor, leaving property management to the pros (like me) while still getting benefits of real estate.