Real estate is unique in that it is the only asset class that meets all of the following 8 criteria:
(1) Can purchase under fair market value (FMV), unlike most other asset classes.
Real estate can be purchased well below fair market value, unlike most other asset classes. It is possible to purchase a property worth $70,000 for $50,000 or less under the right circumstances. This gives us as investors the comfort of having downside protection to our investment. Unfortunately, we cannot purchase stock, bonds, mutual funds, CD’s, and most other asset classes under fair market value. For example, if one were to try to sell shares of stock less than 2 minutes after they purchased them, they would lose money the vast majority of the time because of transaction costs.
(2) Have the ability to influence value, unlike most other asset classes.
We have the ability to personally influence the value of real estate, unlike most other asset classes. For example, we can remodel and/or upgrade the property to increase its market value. This provides investors with a level of control that is not seen in other asset classes. As an “outside” investor, there is nothing we can do to personally influence the value of other asset classes. For example, if I were to purchase 500 shares of Apple stock, there are no number of iPhones I could personally purchase that would influence Apple’s stock value.
(3) Tangible asset that provides a hedge against inflation.
Real estate is a tangible asset that provides a hedge against inflation. Many people believe our country will be soon heading into a period of accelerated inflation due to all of the money that is being printed to bail out banks, Fortune 500 companies, Social Security, and Health Care. Unfortunately, our investments lose real value if they are held in “paper”, like stocks, bonds, mutual funds, CD’s, annuities, and money market accounts.
(4) Only asset class considered safe enough to obtain an 80% purchase money loan from a bank.
Real estate is the only asset class deemed a low enough risk, that banks are willing to loan up to 80% of its value to investors. Banks do not view stocks and mutual funds a low enough risk to loan money at these LTV’s to investors.
(5) Offers unique tax advantages.
Real estate offers unique tax advantages. Real estate rental income is considered passive income from an IRS standpoint, while interest, dividends, and capital gains are considered portfolio income. Passive income is taxed more favorably than portfolio income, because real estate offers 10 of the best legal tax loopholes in the entire IRS tax code. This is one of my favorite areas in my consulting practice: helping families restructure their investment tax affairs to legally minimize taxes.
(6) Provides immediate cash flow (unleveraged).
Real estate, when purchased in cash, can provide immediate cash flow through rental income. If one invests in an oversubscribed market, there are always tenants needing a place to rent.
(7) Offers more predictable, better returns.
Real estate offers more predictable, better returns, since the majority of its financial performance is based on rental income. Since we focus on government-insured housing, the local governmental housing authority guarantees the majority of the rent payment every month, providing additional predictability to the investor.
(8) Provides a benefit to the community.
Finally, real estate provides a benefit to the community, as it helps people that need a place to live. After all, shelter is one of our three basic needs as humans, and there will always be demand for shelter.
More millionaires were created as a result of the Great Depression than in any other period in American history. The smart investors knew the housing market would recover and they where handsomely rewarded. As a result more millionaires were created than ever before! History will repeat itself and we are living it right now. Will you be positioned to take advantage of this tremendous opportunity? Visit www.UltimatePassiveIncome.com for exclusive access to our detailed market research and analysis as well as professional recommendations. Ultimate Passive Income offers completely remodeled, professionally managed properties for $46,000 to $60,000 in the markets best positioned for short term appreciation (Based on our EMERGING MARKET ANALYSIS located here) and maximum government-insured cash flow. Every property purchased comes with a 20+% equity guarantee, a 1 year rental guarantee, and a 1 year warranty on all of the major systems addressed during the remodel (e.g. HVAC, plumbing, electrical, and roof).
To learn more on how busy professionals are leveraging Ultimate Passive Income’s scientific, data driven approach to secure their retirements, please visit www.UltimatePassiveIncome.com
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