Real Estate Investing's 3 Biggest Mistakes (and How to Avoid Them Yourself)

People flock to real estate in droves because it is one of the greatest wealth creators of all time. What's more appealing is the flexibility: you don't have to be a billionaire or even a full-time investor to considerably boost your income and network with a powerful group of people.

Do you aspire to be a passive investor, a hands-on entrepreneur, or a budding business mogul? Whatever your goal is, there are a few frequent blunders that might endanger your real estate business before it even gets off the ground.

"I have not failed," Thomas Edison declared famously. I've just come up with a thousand ways that aren't going to work." While there are thousands of blunders that real estate investors have made (including ourselves), let's start with the most common ones.

MISTAKE #1: Taking a Long Time to Make a Decision

There is no better time than the present for individuals who want to break into this industry. We observe a lot of would-be entrepreneurs dragging their feet, waiting for the "right" time or enough zeros in their bank account before taking the initial move. "Analysis paralysis" is the term for this syndrome. Real estate is a business that will inevitably necessitate a (well-researched and risk-assessed) leap of faith.

Decide on your investment approach first, and then look for deals that fit that strategy. Don't hold back once you've found that perfect fit, even if it means rearranging your travel plans or working weekends. Those efforts will be rewarded. Then, rinse and repeat to diversify your portfolio and make additional revenue.

The train does not, in the end, wait for you alone. Those profitable first deals will continue to blow right past you if you spend years twiddling your thumbs waiting for enough money to invest in numerous homes at once.

MISTAKE NO. 2: Taking Off on Your Own

This may seem obvious, but it's always worth remembering. Many real estate investors are encouraged to believe that entrepreneurship is a one-person show, and that this is a viable business model. However, every successful person has a team of consultants or a highly trained staff working behind the scenes.

Your network is your net worth, as the saying goes, and this is especially true in the real estate market. You can learn a lot more about transactions, strategy, and new collaborations by tapping into your network than you could otherwise. It's not just about sharing trade secrets when it comes to networking; it's also about exposing prior blunders. Don't make the same mistakes as those who have gone before you.

There are also a plethora of free instructional resources. (You're looking at one right now, after all.) Make use of your resources! If you don't yet have a network or want to expand your current one, this is the place to be. Join a mastermind group, find a mentor, and go to conferences—the relationships won't happen quickly, but the time and effort will pay off tenfold.

MISTAKE NUMBER THREE: LOSS OF ENERGY

This is an all-too-common occurrence: investment careers on autopilot. We cut corners and make blunders. Deals always go bad at some point. Fully commit to your due diligence process and never take action before thoroughly researching it. Yes, even those seemingly risk-free or *chef's kiss* ideal investing opportunities.

This mentality affects passive investors as well. Sure, your sponsor will do the legwork, but you must keep up with the newest real estate industry trends, news, and market patterns, among other things.

These errors can cost you a lot of money, time, and energy. The good news is that these career-killers are simple to avoid, and we're here to assist you.

Through proprietary analysis, technology, and access to off-market deal flow, Saint Investment Group has ushered in a new age of real estate investing. You can join the movement in the following ways: Join our mailing list right now! and Like us on Facebook and Twitter.

🎧 Listen to our podcast: https://pod.co/podcastlive/7-ways-to-manage-real-estate-funds

How To Invest In Real Estate Syndication And How It Works

What is Real Estate Syndication, and how does it work?

In the area of real estate investing, real estate syndication is analogous to mutual funds. The entire investment risk is based on a single asset with individual property investment, similar to stock in a single company.

Real estate syndication funds, like mutual funds, allow investors to purchase a piece of a corporation that owns several properties in a single investing entity, dispersing risk and increasing portfolio diversity while often receiving more steady returns. Real estate syndication funds allow a group of investors to pool their money to buy, build, or restore a variety of real estate properties, usually commercial and on a bigger scale than any single person could afford.

Syndication of real estate isn't a new concept.

The investment group that purchased the Empire State Building in the early 1960s is a well-known example of property syndication. The syndication needed $33 million to purchase the 102 storeys of the extremely sought Manhattan property, thus nearly 3,300 shares of ownership were sold for $10,000 apiece. The investors were given access to a far wider opportunity than they would have had otherwise, and they reaped tremendous gains as a result.

The Securities Act of 1933 gave real estate investors new possibilities to collaborate. Syndication real estate sponsors were compelled by certain provisions of the Act to form secret networks of like-minded investors. Individuals who were successful in their communities, as well as highly esteemed and frequently rich professionals such as doctors and lawyers, were usually part of these networks. For a long time, real estate syndications were mostly developed on the basis of good personal relationships in the community.

Syndication Funds for Real Estate

Investing in real estate syndication funds, such as those offered by Saint Investment Group, can provide better capital preservation and lower risk than buying individual properties one at a time. Having seasoned investment specialists curate a real estate fund's portfolio of properties frees up your time and energy. Offices, retail space, industrial buildings, and even student housing on college campuses are examples of syndication real estate projects.

Is Syndication of Real Estate a Good Investment?

Accredited investors have recently discovered that investing with a qualified manager on larger scale real estate possibilities can greatly boost their profits and diversity.

Investors may now participate in institutional-quality real estate assets around the country thanks to access to best-in-class real estate syndication sponsors.

Real Estate Syndication's Advantages

Project sizes that are larger

Often Because there are more units and good locations, there is more stability.

Typically, you'll spend significantly less money on the types of homes you can invest in.

On performing real estate investments, passive real estate investment cash flow is generated.

Professional management means you won't have to deal with tenants directly.

Numerous tax advantages

Real Estate Syndication Funds Have Many Advantages

With the enactment of the JOBS Act in 2012, accredited investors were given a huge opportunity. The SEC was allowed to begin allowing syndications to participate in public solicitation with fewer restrictions under the JOBS Act, under the condition that each investor be accredited. This development was a critical milestone in the real estate crowdfunding business, allowing investors easy access to possibilities they would not have had otherwise.

Real estate syndication investing strategies have grown in popularity as inventive new technologies connect individuals more effectively than ever before, offering investors more access to high-quality real estate asset investments. All of this while enjoying significantly more openness than was previously possible, thanks to robust reporting and easy-to-access financials that enable them to keep a close eye on their investment holdings. Real estate investors now have a more informed, financially safe, and secure option for making real estate investments.

A real estate syndication fund can also invest in assets all around the country, regardless of where the investor is. This allows investors to live wherever they like, rather than being constrained to live in locations where local real estate markets are particularly thriving. While some parts of the country are growing at multiple times the rate of others, this means that some markets are a much safer and higher-yielding bet than others. For investors looking to reduce risk, investing in a high-quality real estate syndication fund gives them many more options.

🎧 Listen to our podcast: https://pod.co/podcastlive/should-you-consider-real-estate-syndication

Investing in First Trust Deeds: An Overview

First trust deeds can be a fantastic alternative for investors looking for novel ways to diversify their portfolios without significantly raising the risk. With first trust deed infusing, you can generate a consistent stream of passive income while also reducing risk.

While funding in first trust deeds comes with many upsides, there are some drawbacks that can prove complex for those less experienced in the real estate world, assembling investment funds that hold the first trust deeds a more secure recourse for those who place safety and security at the top of their priority list for investing.

We'll go through the different benefits of first trust deeds, as well as how to minimize your risk to a minimum when starting started, to help you decide if investing in first trust deeds is suitable for you.

What Is The Distinction Between A First Trust Deed And A Trust Deed?

To start, let’s speak about what a first trust deed is. When someone directs to a trust deed as a “first” trust deed, this simply implies the deedholder holds the first lienholder position if the effects are defaulted on. In other assertions, they’re the FIRST to get paid rear, and the FIRST to have a claim against the collateral.

A first mortgage is similar in idea. If the homeowner has a 2nd mortgage on their effects, and they insolvency on their first mortgage, the lender on the 1st mortgage will collect any proceeds from the foreclosure sale of the property first. Only once the first mortgage debt is entirely satisfied will the second mortgage lender get revenues from the sale. This means that if the property has been neglected or the market is weak, the second mortgage lender may suffer a loss. In these cases, it's obviously preferable to be in the first place.

It's worth noting that trust deeds aren't always the first lienholder, so when someone says "first trust deed," they're emphasizing the fact that the deed takes precedence over any other claims to the property in the case of default. A first trust deed, then, is one of the most certain rights to property, helping minimize investment risk greatly.

What Is A First Trust Deed Used For?

First trust deeds are equivalent to mortgages in that they are a claim on a property that gives the lender legal action if the borrower defaults. While first trust deeds and mortgages are equivalent in form, there are several benefits to first trust deeds that mortgages don’t possess from a legal standpoint, which has an influence on risk to individuals who finance in these financial instruments.

When a property with a mortgage is in default, the mortgage lender must go through a legal process known as "judicial foreclosure," which can be long and cause considerable delays in the lender recouping costs. A judicial foreclosure can take years to complete in some situations.

Conversely, first trust deeds have a lot more favorable legal process involved when it comes to borrower default. This procedure is known as "non-judicial foreclosure," and it has significantly fewer legal hurdles and time limits than judicial foreclosure, making it the better alternative for real estate investors looking for the lowest possible risk.

In essence, first trust deeds are a real estate lending alternative to mortgages, with slightly different legal repercussions that benefit the risk profile of the investors who back the loans.

To know more about trust deed investing, visit Saint Investment Group.

What Are The Benefits Of Investing In First Trust Deeds?

Those wishing to diversify their portfolios while decreasing risk exposure can profit from investing in first trust deeds.

Creating Consistent Cash Flow

The attractive returns and continuous cash flow that first trust deeds may give are perhaps the main reasons why investors choose them for their portfolios. Investors typically receive a fixed monthly dividend until the underlying loan is completely paid off.

Many investors choose to reinvest their profits, but they can also be received as dividend payments. For this reason, first trust deed investing appeals to investors seeking steady, predictable cash flow.

Enhanced Risk Mitigation

Because the foreclosure process is much speedier and there are fewer legal costs involved, first trust deeds are a more appealing investment than other types of mortgage-backed securities. As a result, the risk profiles of first trust deeds are extremely appealing to real estate investors.

Collateralized Real Estate

The fact that first trust deeds provide a tangible asset as collateral for the underlying loan on the property helps to reduce risk in investment portfolios. If the loan isn't paid back, the initial trust deed holder has the option to foreclose on the property and sell it to collect their investment. This is in stark contrast to stock investments, which can go to zero with little to no chance of recovery.

🎧 Listen to our podcast: https://pod.co/podcastlive/what-is-trust-deed-investing

What Does It Mean To Invest In Passive Real Estate?

Not everyone interested in real estate investment wants to be a landlord. Prospective renters must be vetted, maintenance issues must be addressed, and rent payments must be collected. This is particularly true for a novice investor.

Fortunately, there are successful real estate investment strategies that are similar to stock investments or annuities in that they provide a more passive function. In this post, we'll look at how to invest in real estate passively, the advantages of passive investing, and what to avoid when getting started in the realm of passive real estate investing.

How Can You Finance In Real Estate Without Putting Any Money Down?

Taking an active part in owning and managing properties isn't for everyone, even though real estate ownership can produce high risk adjusted returns and the chance to expand your wealth. Active real estate investment has a number of alternatives.

Directly active investor collaborations

Crowdfunding sites for real estate

Putting money into a real estate fund is a great way to diversify your portfolio.

To Partner With, Locate an Active Real Estate Investor.

The most typical way people get into real estate investing is through partnering with investors who are experts who play an active role in the market. In this structure, the active investor handles the drudgery of identifying opportunities, managing tenant relationships, and collecting rent, while you give the investment cash to allow the active investor access to larger or more properties than they would have on their own.

While these investments can be profitable, they also carry considerable dangers, particularly if the active real estate investor is inexperienced and/or does not have a large portfolio of properties to spread risk.

Platforms for Real Estate Crowdfunding

In recent years, the popularity of real estate crowdfunding has increased. Platforms like Fundrise enable small-scale investors to enter the real estate market with cheap initial deposits, similar to Kickstarter-style crowdsourcing.

Although these platforms don't always provide the same amount of transparency as individual property investments, several of them provide institutional-quality investments with very predictable returns.

Because you're only one of tens of thousands of investors in these types of real estate investments, the experience is often less thorough than alternatives like Saint Investment Group's real estate investment funds.

Visit: https://saintinvestment.com/real-estate-funds/

Consider arranging money into Real Estate Investment Funds.

Real estate investment funds are comparable to crowdfunding in that you combine your money with other investors to invest in larger real estate deals. The difference between real estate investment funds and crowdfunding is that you get access to institutional-quality investments with better insight into each opportunity and more sophisticated portfolios of properties.

Is Passive Real Estate Investing a Risky Business?

Although there are few disadvantages to passive real estate investing, they may be significant for individual investors. Passive investment roles aren't the finest alternative if you want to make the most money in the shortest length of time.

Long-term investors and those looking for steady, reliable passive income streams that can be reinvested for sustainable wealth growth may benefit from passive real estate investments.

Passive real estate investment isn't suited for folks who want to know every element of a property investment down to the plumbing. Many tiny nuances are typically left out of the decision-making process for investors in more passive positions (and most investors prefer it this way).

Acquiescent real estate investing, such as a fund from Saint Investment Group, is an excellent option if you wish to keep your involvement simple with only monthly statement reviews.

What Is The Best Way To Begin Investing In Passive Real Estate?

When considering whether or not passive real estate investing is good for you, you should ask yourself a few essential questions.

What are your objectives for investing in passive real estate?

• Do you want to build long-term riches or produce monthly passive income?
• What is the minimum quantity you must invest?
• What is your level of risk tolerance?
• Where Is the Rest of Your Money Going?
• Many people who are thinking about investing in passive real estate want to diversify their stock and bond portfolios. Your capital should be invested appropriately based on your investment goals and how soon you plan to retire. Saint Investment's staff is ready to assist you in determining the appropriate capital allocation strategy for your short- and long-term objectives.

Is it more reasonable to invest in real estate passively rather than actively?

No, being passive does not imply that you are not putting up any effort.

Even while passive real estate investment alternatives are a low-effort way to invest your money, they still require some effort.

Various levels of due diligence are necessary to achieve your investment goals, depending on whether you invest with an active partner or buy shares in a fund.

Investing in a fund needs the least amount of effort, but be sure the fund managers' investing aims are compatible with yours.

🎧 Listen to our podcast: https://pod.co/podcastlive/7-ways-to-manage-real-estate-funds