Is that why you got into real estate? And how much did the detail work bother you? Managing properties can be stressful. Tenants never call to say thank you for providing this great place they live in. They never send you the rent early.
I know this mistake well, because I practiced it for four solid years. I managed my own property and was very good at it. No one will ever take care of your business or manage your property as well as you will yourself.
He lets them take most of the depreciation on the properties for their tax returns because he doesn’t need it. Do you know any doctors, lawyers, or businesspeople who wouldn’t mind benefiting from the depreciation of those rental properties?
For example, people can lend you money tax-free through their self-directed IRAs. Educate investors about this option. Explain that you can buy houses with their IRAs and sell them; they can lend you money at 8 or 9 percent interest and earn that interest tax-free, secured by real estate.
I didn’t have any control over that. If I didn’t have other sources of funds at the time, I’d have been pushed out of business. In fact, you’ll never have enough sources of funding, so you ought to get them now.
I work with some very wealthy investors. One man I know keeps $8 million in his checking account, just in case a deal comes around. That’s small change to him, like keeping $100 handy for groceries. He owns thousands of rental units across the country.
But if you don’t use your own cash, could you lose it? Could you get killed by investing in real estate? Short of being a landlord in a slum neighborhood, probably not. Could you go to jail as a result of being a real estate investor? Not unless you’re committing fraud over and over and ripping people off. What’s the worst that can happen?