3 Reasons Why Investing in Real Estate Is Easier Than Ever

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According to a study conducted by Morgan Stanley, more millionaires today have invested in real estate than any other asset class. While real estate investing may seem intimidating or out of reach, new technology is changing the game by increasing access and decreasing investment minimums.

Upside Avenue started 16 years ago as a family office, acquiring multi-family buildings alongside other individual and institutional investors. Previously, this type of investment was only available for accredited, or wealthy, investors, but now Upside Avenue has opened their investments to the public at a minimum investment as low as $2,000.

To get a better understanding for how new and younger investors can begin building their real estate portfolios, I had a phone interview with Joy Schoffler, Chief Strategy Officer at Upside Avenue, a spin-off of traditional real estate investment companies that let’s the little guys in.

With the early stage investor in mind, Schoffler recommends the following three tips for getting ahead in real estate:

1. Start conservatively.
“When you’ve worked hard to save money you can finally invest, you need to be careful to not just invest it anywhere. I recommend starting out by investing with a more conservative approach because I’ve done it the other way and lost.”

” If you adopt the investment concept of compounding– the process of increasing your return based on reinvested earnings– you might be surprised what you could earn over time. You need to be comfortable playing the long, rather than short game. Make sure your investments will perform well in both an up and down economy.”

2. Don’t worry about diversification– just start.
A lot of people (including myself) are so worried about investing intelligently and maintaining diversification that they never begin investing. Schoffler suggests, however, “If the minimum buy-in is $5,000 for an investment you understand and really want to get into, don’t wait until you have $100,000 built up to participate. If you are fairly conservative with your early investments, you can earn while you learn.”

3. Technology is changing the game and inviting new players.
Before the passage of the JOBS Act in 2012, it was illegal for unaccredited investors to invest in non-traded REIT offerings. If you were willing to endure the hassle of being a landlord, the only options were the stock market and possibly a fixer upper.

” Compared to traditional private offerings, they are also required to file a great deal more information, sharing it publicly through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR). This can help investors in their due diligence, process. The additional annual filings requirements also allow investors to keep better track of their investments, which gives investors way more information about these non-traded REITs.”

Transparency, information and technology are removing the intimidating shroud that has historically covered the real estate investment market– making that leap from saver to investor that much easier for the future generations of millionaires.

” If you adopt the investment concept of compounding– the process of increasing your return based on reinvested earnings– you might be surprised what you could earn over time. Schoffler suggests, however, “If the minimum buy-in is $5,000 for an investment you understand and really want to get into, don’t wait until you have $100,000 built up to participate. If you are fairly conservative with your early investments, you can earn while you learn.”

And as a result, now large established investment firms such as BlackRock, Carlisle Group and others are launching online investment platforms, some with extremely low minimums.”

And as a result, now large established investment firms such as BlackRock, Carlisle Group and others are launching online investment platforms, some with extremely low minimums.”

The additional annual filings requirements also allow investors to keep better track of their investments, which gives investors way more information about these non-traded REITs.”

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