Episode 14: Why Residential Real Estate Investing is Toxic

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If you love reality TV and don’t happen to be so great at math, then Sal and AJ have a fantastic investment opportunity for you: residential real estate. You’ve seen the shows—brilliant rehabbers, designers and decorators get together and turn a killer profit on a totally disastrous property. That’s real life, right?

In short, WRONG. Like, really, really wrong.

These guys are are taking a hard stance on NOT wagering your retirement savings on low-brow, non-paying, deadbeat renters—which, if you’re investing in single family property after single family property after single family property, you might be doing.

The alternative? Multi-family and other income-producing properties with rock solid net operating income (NOI). Why manage and maintain 10 roofs when you can manage two? Would you rather cut the grass in 10 yards or one? And, above all, would you rather have one hard up renter pay you $200 a month when he can, or a bunch of tenants keeping your building in the black?

It’s pretty simple, right? And, beyond that, it’s your money and your future. Don’t roll the dice and don’t take unnecessary risk. This episode dives into the ins and outs of residential, including why single family homes are meant for velocity and commercial is meant for portfolio-building. If you can embrace and act on that, then you’re good to go.

HERE’S WHAT YOU’LL LEARN:

  • Why holding residential rentals is very dangerous, and why hiring a property manager could break the bank.
  • How to value residential real estate the right way: with COMPS.
  • What influences cap rates—and why you care about cap rates.
  • The reasons banks and lenders make residential financing tough for real estate investors.
  • How to find and patch deals together, and put yourself in between—and in the money…
  • Why equity kickers matter, and what you need to understand going in.
  • Understanding what you’re getting in at, plus when and how you’re getting taken out of every commercial deal.

LINKS AND RESOURCES FOR THIS EPISODE

MakingTheYield.com
TheCommercialInvestor.com
ACPARE.org

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Salvatore M. Buscemi
A former investment banker for Goldman Sachs in NYC, Sal is one of the nation’s leading authorities when it comes to investing in residential and commercial real estate. He’s raised over $50 Million in capital for his real estate hedge funds.

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Salvatore M. Buscemi

About Salvatore M. Buscemi

A former investment banker for Goldman Sachs in NYC, Sal is one of the nation’s leading authorities when it comes to investing in residential and commercial real estate. He’s raised over $50 Million in capital for his real estate hedge funds.