Here’s an insightful post by CrowdStreet, a leading real estate investing platform, explaining the capital stack and the difference between debt versus equity investing in commercial real estate. CrowdStreet is a leading real estate crowdfunding platform focused mostly on secondary cities with lower valuations and higher cap rates.

Most individual investors tend to buy physical real estate and hope the equity in our property grows over time. We tend to take all the risk and bear all of the reward or failure. However, if you are more risk-averse, you may want to invest in real estate debt instead. In other words, you can act more like the lender to make a return.

Where you invest on the capital stack matters with regards to when and how you get paid. Let’s take a deeper dive into debt versus equity investing in real estate. I’ll then share some concluding thoughts.

In 2020, we bought a forever home. We found a relatively good deal as panic set in during the first month of lockdown. We decided that if we are going to be cooped up for an unknown period of time, we might as well live in a more comfortable space.

The forever home is about 35% larger than our previous home. It has a nicer layout for two children and a guest. There should be no problem living in our current home until our kids become adults.

However, based on my track record of buying properties since 2003, I have my doubts we’ll be living in this home for the rest of our lives.

In a strong real estate market where you might be constantly getting outbid, buying one and done has its benefits. If you’re debating about whether you should buy a forever home or whether to upgrade to a forever home, this post is for you.

I’m bullish on the housing market over the next three years. It’s one of the reasons why I’ve invested $800,000 in a real estate fund focused on Southern and Midwestern properties.

In addition to my real estate fund investment, I’m buying San Francisco ocean-view rental properties as well. Real estate is one of the most attractive asset classes to build wealth in a low-interest rate environment.

In this article, you will read 16 reasons why the average homeowner will likely be richer through 2024 than poorer. I have so much conviction in my housing market thesis that I’ve not only put my money where my mouth is, I’m also planning on re-retiring soon.

With the expected rise in real estate prices and rents, there’s no reason to work as hard to make money anymore. Having your investments make money for you so you can win back your time is what financial freedom is all about. The pandemic was an exhausting time with two young children at home. It’s time to

However, before I share all the reasons why the housing market won’t crash any time soon, let me first share some more background so you know where I’m coming from. After all, we all have our biases, and I am positively biased towards housing.

Brief Real Estate Background

Roughly 40% of my net worth is exposed to real estate. If I only owned stocks and real estate, real estate would account for a 60% weighting. My real estate portfolio consists of properties in San Francisco and Lake Tahoe, three publicly traded REITs, and a real estate crowdfunding fund focused on heartland real estate.

These assets generate roughly $150,000 a year in relatively passive income. If it wasn’t for real estate, I’d probably still be working a traditional job.

I’ve been buying real estate since I first came to San Francisco in 2003 because I found valuations to be cheap compared to Manhattan real estate. I had worked in Manhattan from 1999-2001 and never imagined being able to find a 2/2 park-view condo for under $600,000.

I kept buying real estate because I also realized U.S. real estate was, and still is, cheap compared to international real estate. Working in international equities enabled me to explore various countries while working. And I always checked out the various local real estate markets while on business trips. Not only is U.S. real estate cheap on a global context, we also have jobs that make U.S. real estate affordable.

Take a look at the real estate statistics from one of our biggest foreign buyers, Canada. Cities like Vancouver and Toronto are equally as expensive as the most expensive cities in America. Yet, there are hardly any big Canadian companies that come close to paying as much as U.S. companies.

Go ahead. Try to name just three Canadian companies that pay new college graduates over $100,000 a year.

At the start of COVID in 2020, I encouraged readers to buy real estate through posts such as:

• How Are Real Estate Prices Impacted When Stocks Decline (March 16, 2020)
• Real Estate Buying Strategies During COVID-19 (April 19, 2020)
• The Best Near-Term Real Estate Buying Opportunity: Your Own City (June 2, 2020)
• It’s Time To Focus On Big City Real Estate Again (Sept 8, 2020)

Finally, I followed my own advice and bought a forever home in 2Q2020. I put my money where my mouth is. Otherwise, there’s no point talking so much about finances.

A recent WSJ piece entitled, If You Sell Your House, The Buyer Might Be A Pension Fund, caused some commotion. The article highlighted how competition is heating up for single family homes due to demand from institutional real estate investors.

When I read the article, I was surprised to see Fundrise, my favorite real estate investing platform, mentioned in the second paragraph. Usually, you hear institutional real estate investors like BlackRock in the news. The article is behind a paywall, but here’s the snippet the WSJ allows non-subscribers to read.

A bidding war broke out this winter at a new subdivision north of Houston. But the prize this time was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market.

D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.

The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class—an encouraging debut in the business of selling entire neighborhoods to investors.

“We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” the builder’s finance chief, Bill Wheat, said at a recent investor conference.

Well folks, I decided to take my revenge spending seriously and buy myself a beachfront dream house. I was going to wait until my family moved to Hawaii before making the splurge. But after such a rough 12+ months, I asked myself, why wait? I’m not getting any younger!

Ever since I landed my first job post-college in 1999, I’ve been diligently saving and investing most of my money. Despite a couple of downturns over the past 22 years, overall returns have been solid.

When it came to renting or owning, I always spent the least amount possible on my housing expense because I was working so much. For example, the first apartment my roommate and I rented was a studio at 45 Wall Street. For privacy, we just used a $20 paper room divider between us.

When I bought my first property in 2003, I spent half my budget on a two-bedroom condo instead of a much larger three-bedroom condo or a single family house. In retrospect, I wish I went all-in back then.

After being frugal for so long, I decided I would buy a dream house if one ever popped up. And amazingly, one did!

As we gradually come out of the pandemic, let’s to take a look at the best places to invest in commercial real estate in 2021 and beyond. We’ll also look at the best types of commercial real estate to buy.

Commercial real estate is a lagging asset class that has some of the best upside opportunity in my opinion. With the S&P 500 at record highs, more capital will naturally flow to commercial real estate.

Inflation has become one of the top issues for investors this year. If inflation does begin to accelerate, I believe owning real assets is one of the best ways to profit. Inflation not only whittles down the cost of debt, it also boosts the principal value of you real estate holdings.

Stocks have already had a great run. Single family homes and the residential housing market is really strong. A recovery in commercial real estate seems like a high probability, especially as travel picks up and people go back to work. As a result, I think it’s worth focusing on hospital and office commercial real estate investments.

I’ve invited CrowdStreet, my favorite real estate crowdfunding platform for accredited investors to share their thoughts on what’s going with commercial real estate today. CrowdStreet will also reveal the best places to invest in commercial real estate for the future.

Should you remodel with permits or without permits? This is a dilemma thousands of homeowners face in order to save time and money.

As a multi-property owner who has done a dozen home remodels myself, my recommendation is to always do the big jobs with a permit. In the long run, remodeling with a permit tends to products better and safer work. Further, remodeling with a permit helps with your home’s resale value.

One of the benefits of property ownership is that you can remodel based on your tastes. Further, you can increase the value of your property by expanding its livable space. When the time comes to remodel, you will face a dilemma of whether to remodel with permits or without permits.

In this post, we’ll go over:

• My history remodeling with permits
• How long it takes to get a permit
• Additional costs of remodeling due to permits
• The different types of permits
• Trying to pass final inspection
• Why you should remodel with permits
• Why you may want to skip remodeling with permits
• How remodeling with or without permits might affect the value of your home