Real Estate Investing - Rentals vs Syndications vs REITs

I like to have a piece of my investment pie in real estate.  There are multiple ways to invest in real estate.  Owning rental property, Syndications and REITs or Real Estate Investment Trusts is what we cover in this episode.    

➜Owning a RENTAL takes a lot of capital (your hard earned money) as a down payment, a lot of work to fix up and find a tenant but you can build a lot of wealth doing this.  Hiring out the repairs and management can make it more passive but reduces your cash on cash returns.  Leverage is what makes the returns possible in real estate and borrowing against an appreciating asset to put your next down payment on another property is the snowball to wealth.  However, leverage really sucks when the market drops 30% or 50%.  I bought my duplex for 75k and I made 75k in 6 years and almost all of my rental income went to the cost of owning it.  Not a bad return but required a lot of work and I would have made more in the stock market.   I sold it because I'd rather slackline and it is too much of my money in one asset.  I prefer more diversification now.    

➜A SYNDICATION is a group of people pooling their money together to buy a larger property.  The syndicator finds the deal, gets everyone's money collected, fixes up property and gets the management of it on auto pilot.  I found one that has a minimum of $25,000 and I don't have to do anything and about $500 a month gets deposited into my bank account 4x a year for a return of about 8%.  After several years they sell the property, hopefully at more than we bought it for and we aim to make about double on our money that we put in originally.  If the manager and syndicator is bad, there isn't much I can do about it so that is risky.  And I cannot easily sell my slice of the investment unless I find someone to buy it myself so my money is very tied up.  

➜REITs are Real Estate Investment Trusts or stocks in companies that specifically buy property and are required to pay out 90% of their rental income as dividends.  You don't get the great tax breaks owning direct gives you and because it looks and feels like a stock, it is more volatile and is not just based on the underlying asset but on people's emotions.  Because they are so easy to buy, they typically pay a lower dividend but if you can get a good one at a discount, the dividend (relative to what you paid for it) is going to be higher.  I don't have many of these in my portfolio but can be an easy way to expose yourself to the real estate sector.  

➜➜➜I am not a financial advisor.  This is not financial advice.  This is for entertainment purposes only.  Don't make critical financial decisions after watching strangers on youtube talk about it.   

➜➜➜Sorry, no links or stock suggestions!  Do your own homework and leave in comments below what you want to see next.  Bolts, highlining and community stuff is all free at https://www.slackline.com/ High net worth people who climb/slackline and those who love investments... hit me up.  I'd love to network with you guys (and for business inquiries) ryan@slackline.com  

Editor Credit: @robertomoore Slackline Festival video credit: https://youtu.be/IisOV1syRS4