Dear Pink Realtor,
When it comes to the market, all everyone seems to be talking about is getting into real estate investing. A friend tells me that I can do a self-directed retirement account and buy rental property myself. Is it true? I don’t know anyone who has done this. I have an IRA and some money in stocks that are doing nothing!
Sincerely,
Can I get some Honey for my Money?
Dear Money Honey (great sign-off, by the way!),
Real estate has historically been a sought-after investment vehicle primarily because of long-term stability (real estate has appreciated at a rate of 5.32 percent over the past 40 years including our recent bubble and subsequent bubble burst) paired with the ability of an investor to employ a higher degree of leverage than other segments.
Add to that the fact that we are at historical lows in terms of price, and voila, we have what I am calling the new “sexy factor” of private portfolio real estate.
The opportunity to buy an investment at all-time historical lows AND Real Estate investments available via Funds, ETFs, REITs, etc., can be more readily measured against an index and are one way to go. I am not a securities broker, but there is plenty of information online or available from your financial adviser, stockbroker, etc. The one thing about that style of investing is you have no control over any of the investing activities, while with a self-directed portfolio you can educate yourself and make decisions based on what is best for you.
There are several companies out there that can facilitate this style of investing and properly set you up with a self-directed retirement account. I like Equity Trust (www.trustetc.com).
In addition, you will want to speak with your tax adviser and a licensed real estate agent who has worked with this style of investing before. I recommend finding a Realtor with at least five years experience with investment grade transactions who carries the designation of Certified Investor Agent Specialist (CIAS). Find one at www.cias.com.
LeCavalier has an extensive background in land development, construction, mortgage banking, and real estate sales, marketing and management with more than 15 years experience in the industry. She is known as the “Pink Realtor” around South Florida where she and her team cheerfully serve the real estate needs of many clients. In addition, LeCavalier serves as Fund Manager for SISCO Limited Partners, a private equity fund that rehabilitates foreclosed properties and rents them via affordable housing programs in Broward County, and she is a licensed Real Estate Agent and an Accredited Residential Manager (IREM, ARM). For more information, visit www.pinkrealtor.com.
