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Old 11-04-2024 | 10:05 AM
  #148  
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Originally Posted by notEnuf
While this timeline can be true, it requires more time and education to perform the due dillegence bercause the consequences are high if you don't. The index fund is reliable and completely free from time and effort consumption. Once I got to the realization that my SFR investments would never yield anywhere near the value of my time, I was at an inflection point. While there are opportunities for commercial deals and larger properties the learning curve can be steep and costly. You really have to be all in at that point and operate as a business. Lack of knowledge and failure to comprehend all aspects of a deal have cost me. I got burned and realized my education was lacking, and the time and effort to gain that knowledge was a greater commitment than I was willing to make. This isn't an argument with your RE investing but a warning to those who might consider the next level from SFR when their time becomes the trigger point. The 10 year investment timeline still requires a great deal of time commitment but it centers around learning the business and deal structures. Admittedly, it was too much for me. The SFR world was a great start but transitioning to a passive investor took me back to equities. DYODD indeed and know that it will be time consuming.
These are two nuggets of wisdom worth highlighting. The % return on money can be great in SFR, the return on time depends on what your alternatives are. When the tradeoff is a 3 day trip (even at straight pay) the calculus changes. As income grows, Return on Time becomes a bigger factor. SFR is very forgiving and the 30 year fixed rate mortgage is a life perserver if you jumped into the deep end of the pool. It is rare to find an equivalent financial tool in the commercial space, so conservative underwriting is a must. One huge plus side on the commercial space excluding apartments is that you don't have judges, politicians and attorneys advocating free rent for deadbeats. Your tenants are mature adults that don't have a government babysitter playing Robin Hood.
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